Proposed Rule2023-21078
Guidance for Grants and Agreements
Primary source
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Published
October 5, 2023
Issuing agencies
Management and Budget Office
Abstract
The Office of Management and Budget (OMB) is proposing to revise sections of OMB Guidance for Grants and Agreements. This proposed revision reflects comments received from Federal agencies and those received in response to the OMB Notice of Request for Information published in the Federal Register in February 2023. In response to Federal agency and public input, OMB is proposing revisions intended in many cases to reduce agency and recipient burden. OMB proposes both policy changes and clarifications to existing guidance including plain language revisions. OMB also proposes to update the guidance to reflect recent OMB priorities related to Federal financial assistance. Finally, OMB is proposing revisions to improve Federal financial assistance management, transparency, and oversight through more accessible and readily comprehensible guidance.
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[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Proposed Rules]
[Pages 69390-69500]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-21078]
[[Page 69389]]
Vol. 88
Thursday,
No. 192
October 5, 2023
Part III
Office of Management and Budget
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2 CFR Parts 1, 25, 175, et al.
Guidance for Grants and Agreements; Proposed Rule
Federal Register / Vol. 88, No. 192 / Thursday, October 5, 2023 /
Proposed Rules
[[Page 69390]]
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OFFICE OF MANAGEMENT AND BUDGET
2 CFR Parts 1, 25, 175, 180, 182, 183, 184, 200
Guidance for Grants and Agreements
AGENCY: Office of Federal Financial Management, Office of Management
and Budget.
ACTION: Proposed rule; notification of proposed guidance.
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SUMMARY: The Office of Management and Budget (OMB) is proposing to
revise sections of OMB Guidance for Grants and Agreements. This
proposed revision reflects comments received from Federal agencies and
those received in response to the OMB Notice of Request for Information
published in the Federal Register in February 2023. In response to
Federal agency and public input, OMB is proposing revisions intended in
many cases to reduce agency and recipient burden. OMB proposes both
policy changes and clarifications to existing guidance including plain
language revisions. OMB also proposes to update the guidance to reflect
recent OMB priorities related to Federal financial assistance. Finally,
OMB is proposing revisions to improve Federal financial assistance
management, transparency, and oversight through more accessible and
readily comprehensible guidance.
DATES: OMB invites interested persons and organizations to submit
comments on or before December 4, 2023.
ADDRESSES: Comments on this proposal must be submitted electronically
before the comment closing date to <a href="http://www.regulations.gov">www.regulations.gov</a>. In submitting
comments, please search for recent submissions by OMB to find docket
OMB-2023-0017, which includes the full text of the proposed revisions
and submit comments there. Please provide clarity as to the section of
the guidance that each comment is referencing by beginning each comment
with the section number in brackets. For example; if the comment is on
2 CFR 200.1 include the following before the comment [200.1]. The
public comments received by OMB will be posted at <a href="http://www.regulations.gov">http://www.regulations.gov</a> and be a matter of public record. Accordingly,
please do not include in your comments any confidential business
information or information of a personal-privacy nature. In general,
responses to the comments will be summarized and included in the
preamble of the final guidance.
FOR FURTHER INFORMATION CONTACT: Andrew Reisig or Steven Mackey at the
OMB Office of Federal Financial Management via email at
<a href="/cdn-cgi/l/email-protection#410c03196f0e0c036f0e07070c6f0633202f3532010e0c036f242e316f262e37"><span class="__cf_email__" data-cfemail="b5f8f7ed9bfaf8f79bfaf3f3f89bf2c7d4dbc1c6f5faf8f79bd0dac59bd2dac3">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Executive Summary
The Office of Management and Budget (OMB) proposes to revise
several parts of the OMB Guidance for Grants and Agreements located in
title 2 of the Code of Federal Regulations (CFR) to further clarify and
update guidance to Federal agencies on the consistent and efficient use
of Federal financial assistance. This document includes proposed
revisions to Part 1 (About Title 2 of the Code of Federal Regulations
and Subtitle A); Part 25 (Universal Identifier and System for Award
Management); Part 170 (Reporting Subaward and Executive Compensation
Information), Part 175 (Award Term for Trafficking in Persons); Part
180 (OMB Guidelines to Agencies on Governmentwide Debarment and
Suspension (Non-procurement)); Part 182 (Governmentwide Requirements
for Drug-Free Workplace (Financial Assistance)); Part 183 (Never
Contract with the Enemy); and Part 200 (Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards).
As explained in further detail below, OMB proposes revising 2 CFR
for reasons including: (1) incorporating statutory requirements and
administration priorities; (2) reducing agency and recipient burden;
(3) clarifying sections that recipients or agencies have interpreted in
different ways; and (4) rewriting applicable sections in plain
language, improving flow, and addressing inconsistent use of terms.
Consistent with these objectives, OMB proposes both policy changes and
clarifications to existing guidance including plain language revisions.
OMB also proposes to update the guidance to reflect recent OMB
priorities related to Federal financial assistance. Finally, OMB's
proposed revisions are also intended to improve Federal financial
assistance management, transparency, and oversight through more
accessible and readily comprehensible guidance.
OMB summarizes its proposals for policy changes in this document
below. OMB also explains its general methodology for plain language
revisions. OMB sought to maintain the existing structure of the 2 CFR
guidance, which remains generally intact and mostly consistent with
earlier iterations of the guidance--for example, in terms of the
structure of parts, structure of subparts, and section numbering.
Except in cases where OMB proposes policy changes or other edits for
consistency with statutory requirements, OMB also generally sought to
maintain the existing content of the 2 CFR guidance. In many cases
throughout the guidance, however, OMB proposes plain language revisions
to simplify the guidance text, avoid or reduce technical jargon where
feasible, provide greater consistency, and make the text more succinct.
The proposed revisions align with OMB's authority to: (i) issue
guidance promoting consistent and efficient use of Federal financial
assistance instruments; and (ii) provide overall direction and
leadership to Federal agencies on policies and requirements related to
Federal financial assistance. See 31 U.S.C. 6307 and 31 U.S.C.
503(a)(2). Additional authorities for the proposed revisions are set
forth below. Many of the proposed revisions reflect comments received
from Federal agencies and those received from the public in response to
the OMB Notice of Request for Information published in the Federal
Register in February 2023. See 88 FR 8480 (Feb. 9, 2023).
Background
Between 2012 and 2013, OMB worked with Federal agencies to revise
and streamline existing guidance to develop the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance) located in part 200 of 2 CFR. 79 FR 78589
(Dec. 26, 2013). This effort was intended to assist programs in
delivering better outcomes on behalf of the American people while
simultaneously reducing administrative burden and the risk of fraud,
waste, and abuse. The Uniform Guidance in part 200, which OMB
established in 2013, consolidated, streamlined, and superseded
requirements from several earlier OMB Circulars and guidance documents
related to grants management and implementation of the Single Audit
Act. OMB explained in 2013 that its guidance intended to improve both
the clarity and accessibility of these requirements across the Federal
government. Federal award-making agencies implemented the Uniform
Guidance through an interim final rule, which became effective on
December 26, 2014. 79 FR 75867 (Dec. 19, 2014).
OMB generally reviews the Uniform Guidance every five years in
accordance with 2 CFR 200.109. OMB made further revisions to the
Uniform Guidance in 2020. 85 FR 49506 (Aug. 13, 2020). The 2020
revisions addressed topics including program development and design, as
well as measuring recipient
[[Page 69391]]
performance to assist Federal awarding agencies and non-Federal
entities to improve program goals and objectives, share lessons
learned, and adopt of promising performance practices.
Based on feedback and ongoing engagement with Federal agencies and
the broader Federal financial assistance community, OMB believes that
additional revisions are now warranted to the Uniform Guidance in part
200 to further streamline, clarify, and update the guidance, including
raising certain thresholds, where permissible under law, in recognition
of inflation over time. Further information on OMB's objectives for the
proposed revisions is provided below.
In addition to proposed revisions in part 200, OMB also proposes
revisions to other parts in subtitle A of 2 CFR for similar reasons,
including parts 1, 25, 170, 175, 180, 182, and 183. OMB established
these parts at different times in the last 20 years. See, for example,
69 FR 26276 (May, 11, 2004) (establishing 2 CFR for guidance on grants
and other financial assistance and nonprocurement agreements); 70 FR
51863 (Aug. 31, 2005) (establishing part 180); 75 FR 55671 (Sep. 14,
2010) (establishing part 25); and 75 FR 55663 (Sep. 14, 2010)
(establishing part 170).
OMB Objectives
OMB's objectives for the current proposed revisions to several
parts of subtitle A of 2 CFR include: (1) incorporating statutory
requirements and administration priorities; (2) reducing agency and
recipient burden; (3) clarifying sections that recipients or agencies
have interpreted in different ways; and (4) rewriting applicable
sections in plain language, improving flow, and addressing inconsistent
use of terms.
The proposed revisions to the Uniform Guidance in part 200 and
other parts of 2 CFR generally support these four objectives. In
support of objective (1), OMB proposes to implement changes throughout
the Uniform Guidance and other parts to ensure consistency with
statutory authorities. For example, OMB proposes to revise Parts 25,
170, and 175 to ensure its guidance properly aligns with underlying
statutes, as amended. These potential revisions would reduce
inconsistencies between OMB's guidance and authorizing statutes to
ensure proper implementation. OMB has also made several structural
changes to individual parts within Chapter I to provide further
structural consistency throughout OMB's guidance in 2 CFR.
In support of objective (2), OMB proposes to increase several
monetary thresholds that have not been updated for many years. For
example, OMB proposes increasing the single audit threshold from
$750,000 to $1,000,000 and increasing the threshold from $5,000 to
$10,000 for determining items that are considered to be equipment. OMB
reviewed previous increases to the thresholds and considered current
economic data when making its determinations. In further support of
reducing burden, OMB is proposing a complete revision to the template
text for a Notice of Funding Opportunity (NOFO) located in Appendix I
of the Uniform Guidance in part 200. With this revision, OMB intends to
reduce administrative burden and unnecessary obstacles for applying to
Federal financial assistance.
In support of objective (3), OMB proposes revisions to 2 CFR to
clarify areas of misinterpretation. Many of these clarifications do not
represent a change in policy but serve to explain the intent of
specific sections of the Uniform Guidance in part 200, and other parts
in 2 CFR, with greater precision and clarity. OMB received feedback
from Federal agencies and the public stating that Federal agencies and
the recipient community interpret many sections differently. As one
example, OMB clarifies that Federal agencies approve costs requiring
prior approval when the Federal award is issued if the costs were
included in the recipient's proposal, and do not require subsequent
approval prior to expenditure.
In support of objective (4), OMB proposes to revise the guidance to
follow plain language principles. Plain language principles OMB focused
on included using simple words and phrases, avoiding jargon, using
terms consistently, and being concise.
Related to OMB's plain language revisions, throughout subparts A to
E of part 200, OMB proposes to use the terms ``recipient,''
``subrecipient,'' or both in place of ``non-Federal entity.'' OMB
believes that the existing usage of ``non-Federal entity'' in subparts
A through E of the existing CFR text in part 200 presents challenges to
readers and makes it difficult to quickly understand what entity is
being addressed, especially in situations in which Federal agencies
apply part 200 to Federal agencies, for-profit organizations, foreign
public entities, or foreign organizations under 2 CFR 200.101. In the
revisions to part 200, OMB uses the term ``non-Federal entity,'' as
defined in section 200.1, only when that entity is specifically
intended, such as in subpart F implementing the Single Audit Act. In
many cases in part 200 OMB proposes to replace ``non-Federal entity''
with either ``recipient and subrecipient'' or ``recipient or
subrecipient.'' In cases where the guidance in part 200 relates
specifically to only either ``recipients'' or ``subrecipients,'' but
not both, OMB refers specifically to the applicable entity. OMB invites
comments on this proposal and any effects it may have on specific
sections or paragraphs of the guidance in part 200.
OMB notes that these revisions related to the use of the terms
``non-Federal entity,'' ``recipient,'' and ``subrecipient'' do not
directly change the existing scope of applicability of the guidance.
The applicability provision for part 200 at section 200.101, continues
to provide Federal agencies with discretion on whether to apply
subparts A through E of part 200 to Federal agencies, for-profit
entities, foreign public entities, or foreign organizations. In the
same section, OMB proposes to encourage Federal agencies to apply the
requirements in subparts A to E of part 200 to all recipients in a
consistent and equitable manner, but does not require them to do so. In
cases in which Federal agencies apply part 200 to such entities, OMB's
proposal further clarifies how the guidance applies to those entities
as either recipients or subrecipients.
As another example of plain language revisions, OMB proposes to
replace the use of the general term ``OMB designated governmentwide
systems'' with more specific terms to reduce ambiguity for those
unfamiliar with the Uniform Guidance. In this proposed revisions OMB
specifically mentions the appropriate system, such as <a href="http://SAM.gov">SAM.gov</a>,
<a href="http://USASpending.gov">USASpending.gov</a>, the Contractor Performance Assessment Reporting System
(CPARS), or <a href="http://Grants.gov">Grants.gov</a>.
The overall goal of OMB's plain language revision effort is to make
the Uniform Guidance more accessible to the general public and ensure
more equitable access to Federal funding opportunities by making the
guidance on that topic easier to understand. OMB does not directly
address the proposed plain language revisions in this preamble unless a
revision represents a material change to the Uniform Guidance. However,
OMB invites comment on whether any of its plain language revisions in
part 200, or other parts, may have unintended consequences. OMB also
invites comments on whether further modifications or additional
precision is needed in any specific instance, such as in the case of
OMB's proposed use of the terms ``recipient,'' ``subrecipient,'' or
both in particular sections of the guidance.
[[Page 69392]]
Statutory Authority for OMB Guidance for Grants and Agreements
The Director of OMB is authorized under 31 U.S.C. 6307 to ``issue
supplementary interpretative guidelines to promote consistent and
efficient use of . . . grant agreements . . . and cooperative
agreements.'' The Deputy Director for Management of OMB is authorized
under 31 U.S.C. 503 to, among other things, provide ``overall direction
and leadership to the executive branch on financial management matters
by establishing financial management policies and requirements.'' 31
U.S.C. 503(a)(2).
OMB also relies on authorities including the Single Audit Act
Amendments of 1996 (Pub. L. 104-156, as amended, codified at 31 U.S.C.
7501-7507); the Federal Funding Accountability and Transparency Act of
2006 (FFATA or the Transparency Act) (Pub. L. 109-282), as amended; the
Digital Accountability and Transparency Act of 2014 (DATA Act of 2014)
(Pub. L. 113-101), as amended; the Federal Program Information Act
(Pub. L. 95-220 and Pub. L. 98-169, as amended, codified at 31 U.S.C.
6101-6106); the Federal Grant and Cooperative Agreement Act of 1977
(Pub. L. 95-224, as amended, codified at 31 U.S.C. 6301-6309); the
Office of Federal Procurement Policy Act (codified at 41 U.S.C. 1101-
1131); the Budget and Accounting Procedures Act of 1950, as amended
(codified at 31 U.S.C. 1101-1126); the Chief Financial Officers Act of
1990 (codified at 31 U.S.C. 503-504); the Trafficking Victims
Protection Act of 2000 (TVPA), as amended (codified at 22 U.S.C. 7101-
7115); and Executive Order 11541, ``Prescribing the Duties of the
Office of Management and Budget and the Domestic Policy Council in the
Executive Office of the President.''
Request for Information Issued by OMB in February 2023
On February 9, 2023, OMB published a Notice of Request for
Information (RFI) in the Federal Register. 88 FR 8480 (Feb. 9, 2023).
OMB received approximately 1,250 individual comments from all sources,
including 113 submissions from the public containing multiple comments
in each. In response to Federal agency and public input, OMB is
proposing the revisions discussed below.
Part-by-Part Discussion of the Proposed Revisions
OMB invites comments on the proposed revisions throughout subtitle
A of 2 CFR. OMB identifies areas below where comments may be
particularly useful.
Part 1--About Title 2 of the Code of Federal Regulations and Subtitle A
OMB proposes to revise the headings of title of 2 CFR and Subtitle
A and Chapter I to replace ``Grants and Agreements'' with ``Federal
Financial Assistance.'' This revision will help to ensure that the
Uniform Guidance is understood to be applicable beyond just grants and
cooperative agreements, unless noted differently in the applicability
provision for the Uniform Guidance at section 200.101 or relevant
provisions in others parts in chapter I.
OMB proposes to revise section 1.200 to remove paragraphs (b) and
(c), which are no longer accurate. When OMB first established part 1 in
2004, see 69 FR 26276 (May 11, 2004), it implemented the Federal
Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-
107). That legislation ceased to be effective on November 20, 2007
based on a sunset date included in the law. In addition, chapter II of
subtitle A in 2 CFR, which now contains part 200, was initially
intended to contain OMB guidance in its ``initial form'' before it was
``finalized.'' That statement no longer accurately reflects the
structure of subtitle A of 2 CFR nor status of the OMB guidance in part
200.
OMB proposes to provide a more succinct statement in section 1.215
explaining that some of the guidance was organized differently within
previous OMB circulars or other guidance documents before establishment
of title 2 of the CFR. Because 2 CFR has now existed for almost 20
years in its current format and location, OMB does not believe it is
necessary to continue to include the table showing earlier sources of
certain elements of the OMB guidance in 2 CFR. The Federal Register
notice establishing 2 CFR in 2004, see 69 FR 26276 (May, 11, 2004), and
other subsequent Federal Register notices establishing and revising
particular parts and provisions of subtitle A in 2 CFR, include that
information.
OMB also proposes to revise section 1.305 to further clarify
Federal agency responsibilities, such as coordinating with the Council
on Federal Financial Assistance (see OMB Memorandum M-23-19), the
Grants Quality Service Management Office (QSMO), and other governance
committees.
OMB also proposes to add section 1.231 to clarify its intent that
if any provision of this guidance, as finalized, were held to be
invalid or unenforceable, such provision, or combination of provisions,
are severable from the remaining provisions of the guidance, as
finalized.
Part 25--Unique Entity Identifier and System for Award Management
OMB proposes to revise the guidance in this part to ensure it
properly aligns with the authorizing statutes, as amended, including
the Transparency Act and the DATA Act of 2014. OMB first revises the
title of Part 25 to replace ``universal identifier'' with ``unique
entity identifier.'' In section 25.105, which is renamed
``Applicability,'' OMB proposes to clarify that the requirement to
obtain a Unique Entity Identifier (UEI) and register in <a href="http://SAM.gov">SAM.gov</a> does
not apply to second-tier subrecipients or contractors. In support of
Federal agency requests, OMB proposes to clarify that recipients of
loan guarantees must obtain a UEI and register in <a href="http://SAM.gov">SAM.gov</a>, while a
Federal agency may use discretion when determining to apply the
requirements to beneficiary borrowers.
In section 25.110, OMB proposes to clarify that, even if an
exception is granted, a Federal agency remains responsible for
reporting data to comply with the Transparency Act, as amended, except
that it may use a generic entity identifier in the circumstances
described.
Although not included in the proposed guidance in this document,
OMB is also considering other ways of reducing the administrative
burden associated with obtaining a UEI and registering in <a href="http://SAM.gov">SAM.gov</a> for
foreign organizations or foreign public entity receiving Federal awards
between $25,000 (the Transparency Act threshold for a ``Federal
award'') and $250,000 (the simplified acquisition threshold). Federal
agencies have explained to OMB that the process for obtaining a UEI and
registering in <a href="http://SAM.gov">SAM.gov</a> can present significant challenges for some of
their applicants for, and recipients of, awards in this limited
category. Based on this feedback, OMB is considering establishing a new
exception in section 25.110 that would allow an agency to grant a one-
time exception from the requirement to obtain a UEI, register in
<a href="http://SAM.gov">SAM.gov</a>, or both for foreign organizations or foreign public entities
applying for or receiving an award between $25,000 and $250,000 for a
project or program performed outside the U.S. OMB will work with
Federal agency partners to determine if this proposal can be
implemented in a way that is consistent with Transparency Act reporting
requirements. If included in the final revisions to the guidance, OMB
will also consider incorporating further
[[Page 69393]]
limits or safeguards in this exception to mitigate risk, such as not
allowing its application to awards that will include subawards above
$30,000--the threshold for subaward reporting established based on the
pilot program in section 5(b) of the Transparency Act, as amended by
the Data Act of 2014. Public Law 113-101; 85 FR 49506 (Aug. 13, 2020);
2 CFR 170.220. This proposed change would provide more flexibility--as
needed--to agencies operating in overseas environments where <a href="http://SAM.gov">SAM.gov</a>
registration presents particular challenges. If finalized, the
exception would only be available on a case-by-case basis in situations
in which the agency has conducted a risk-based analysis and deemed it
impractical for the entity to comply with the requirements(s). This
proposed change would only be finalized in a way that would allow
agencies to continue following Transparency Act reporting requirements
for this limited category of awards.
Related to the above analysis, OMB is also considering expanding
the exigent circumstances exception in section 25.110 to provide
recipients with additional time to obtain a UEI and complete <a href="http://SAM.gov">SAM.gov</a>
registration if exigent circumstances persist beyond 30 days. This
proposal is not included in the proposed guidance in this document, but
OMB is considering ways to provide this additional flexibility in the
final guidance. When exigent circumstances exist, the current guidance
at section 25.110 allows agencies to provide recipients up to 30 days
after the Federal award date to obtain a UEI and complete <a href="http://SAM.gov">SAM.gov</a>
registration. In recognition of the issues that sometimes arise when
organizations attempt to register in <a href="http://SAM.gov">SAM.gov</a>, particularly for new or
inexperienced applicants, OMB's proposal would provide Federal agencies
with the option to provide recipients an additional 90 days if exigent
circumstances persist. OMB will work with Federal agency partners to
determine if this proposal can be implemented in a way that is
consistent with Transparency Act reporting requirements. If included in
the final revisions to the guidance, OMB proposes to further clarify
that Federal agencies should not issue payments to a recipient that is
unable to obtain a UEI or complete registration in <a href="http://SAM.gov">SAM.gov</a>. OMB also
proposes to clarify that Federal agencies should include an award term
expressly providing that the recipient's eligibility to receive any
future payments under the award (such as outlays of cash) would be
contingent on the recipient receiving a UEI and completing
registration. Again, this proposed change would only be finalized in a
way that would allow agencies to continue following Transparency Act
reporting requirements for this limited category of awards.
OMB also proposes several clarifications in the part, such as a
proposed revision in section 25.205 explaining that the requirement to
have an active UEI does not apply to amendments to terminate or close a
Federal award.
Part 170--Reporting Subaward and Executive Compensation Information
OMB proposes to revise the guidance in this part to ensure it
properly aligns with the authorizing statutes, as amended, including
the Transparency Act and the DATA Act of 2014. OMB proposes to clarify
the specific Federal agency reporting requirements and to revise the
award term to resolve issues related to which entities the award term
applies to. OMB also proposes to revise certain sections to clarify
their intended meaning. For example, OMB proposes to move certain
requirements currently contained in section 170.110 to section 170.105,
which OMB proposes to rename ``Applicability.''
Part 175--Award Term for Trafficking in Persons
OMB proposes to revise the guidance in part 175 to ensure it
properly aligns with the authorizing statutes that have been amended
since it was published. See the TVPA of 2000, as codified at 22 U.S.C.
7101 to 7115. OMB proposes to update the policy and Award Term to
ensure alignment with the current statute and to further align with the
format of the CFR. For example, at section 175.105, OMB proposes adding
provisions related to a compliance plan and requiring notification to
Inspectors Generals under certain circumstances to further align with
statute.
Part 180--OMB Guidelines to Agencies on Government-Wide Debarment and
Suspension (Nonprocurement)
OMB proposes minimal revisions to this part based on feedback
received from the Interagency Suspension and Debarment Committee (ISDC)
in accordance with section 180.40. Considering the role of the ISDC in
recommending changes, OMB does not propose extensive plain language
revisions through this document in part 180. Sections in part 180 that
OMB proposes to revise include sections 180.635 and 180.640 to clarify
available administrative actions in lieu of debarment. OMB proposes
amending section 180.705 to include ``other indicators of adequate
evidence that may include, but are not limited to, warrants and their
accompanying affidavits'' for officials to consider before initiating a
suspension. OMB proposes additional clarifying edits to sections
180.710, 180.815, and 180.860, including adding text to section 180.860
to address factors influencing a debarment decision; this revision
proposes to add text on ``whether your business, technical, or
professional license(s) has been suspended, terminated, or revoked.''
OMB proposes changes to this part generally in response to an ISDC
recommendation to provide additional clarifications to 2 CFR to reflect
current practice. OMB is not proposing to establish new policy in part
180 that would negatively impact the ability of Federal agencies or
recipients to adhere to this guidance.
Part 182--Government-Wide Requirements for Drug-Free Workplace
(Financial Assistance)
OMB proposes limited plain language revisions to this part.
Part 183--Never Contract With The Enemy
OMB proposes limited plain language revisions to this part.
Part 184--Buy America Preferences for Infrastructure Projects
OMB established this part on Buy America preferences for
infrastructure projects through a separate process. 88 FR 57750 (Aug.
23, 2023). OMB does not propose changes to part 184 through this
document. OMB notes, however, that it may potentially make minor, non-
substantive changes to part 184 through its final guidance if necessary
to ensure consistency with any changes to the definitions in section
200.1. OMB notes that part 184, at section 184.3, states that acronyms
and terms not defined in part 184 have the same meaning as provided in
section 200.1. Certain terms used in part 184, such as ``Federal
awarding agency,'' may be affected by OMB's proposed changes under this
notice. Thus, it may be necessary to make minor conforming changes to
part 184 to ensure consistent use of terms.
Part 200--Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards
In the paragraphs below, OMB discusses proposed changes to each
subpart of the Uniform Guidance in 2 CFR part 200.
[[Page 69394]]
Subpart A--Acronyms and Definitions
OMB proposes to update section 200.0 to remove acronyms that either
appear only once or are used infrequently in the Uniform Guidance. At
the same time, OMB proposes to add several acronyms that are used more
frequently, but have been omitted from this section in past updates,
such as Unique Entity Identifier (UEI).
In section 200.1, OMB proposes to remove several definitions that
were used only once or on a limited basis and instead move such
definitions to the appropriate section of the Uniform Guidance where
they appear. OMB proposes this change to ease the experience of the
reader and avoid the need to review Subpart A for an understanding of a
single section or small set of sections. For example, OMB proposes
moving the definition of ``Cooperative audit resolution'' to the text
of Subpart F. OMB also proposes deleting the definition of ``Federal
awarding agency,'' which OMB now proposes to incorporate within the
definition of ``Federal agency.''
OMB also proposes adding several new definitions of commonly used
terms based on feedback from agencies and the RFI. Proposed new
definitions include ``continuation funding,'' ``for-profit
organization,'' ``key personnel,'' ``participant,'' and ``prior
approval.''
OMB proposes to revise several definitions to incorporate threshold
increases referenced in other sections, such as the threshold increase
for ``equipment'' to $10,000, the threshold for ``supply'' to $10,000,
and the definition of ``Modified Total Direct Costs,'' which now
proposes to exclude subaward costs above $50,000, as compared to
$25,000 in the existing guidance.
OMB also proposes to revise several definitions for other reasons.
For example, OMB proposes to shorten the definition of ``improper
payment'' to ensure that the definition references the appropriate
source in Appendix C to OMB Circular A-123, Requirements for Payment
Integrity Improvement. OMB proposes to update the definition of
``intangible property'' to include more information related to date and
licenses. OMB also proposes to clarify ``participant support costs''
with additional explanatory information and expand the definition of
``questioned costs'' to provide greater understanding of the terms
throughout the Uniform Guidance. In addition, other definitions that
OMB proposes altering include ``cost sharing'' (discussed below under
section 200.306), ``Federal agency,'' ``Federal award date,''
``financial obligations,'' ``Indian tribe,'' ``period of performance,''
``prior approval,'' ``real property'', ``recipient,'' ``special purpose
equipment,'' ``subaward,'' and ``termination.''
OMB also proposes a minor change to the definition of the term
``Federal financial assistance.'' OMB proposes the term to include
assistance received or administered by ``recipients or
subrecipients''--as compared to assistance received or administered by
``non-Federal entities'' in the existing guidance. In cases in which
Federal agencies apply subparts A through E of part 200 to for-profit
organizations, use of the terms ``recipients or subrecipients'' in this
definition may provide further clarity on the applicability of the
Build America, Buy America Act (BABA) (Pub. L. 117-58, 135 Stat. 429,
70901-70927, Nov. 15, 2021) to Federal awards made by that agency to
for-profit organizations. Section 70912(4) of BABA incorporates the
definition of Federal financial assistance from 2 CFR 200.1 or
successor regulations. For additional information on BABA and OMB's
guidance in 2 CFR part 184, see 88 FR 55750 (Aug. 23, 2023). OMB does
not, however, propose to materially change the sentence in the
applicability section at 200.101(a)(2) providing Federal agencies with
discretion on whether to apply the guidance to for-profit
organizations.
Subpart B--General Provisions
OMB proposes to revise this subpart, in section 200.101, to clarify
the applicability of the Uniform Guidance. In OMB's proposal, all
subparts of part 200 continue to apply to Federal agencies that make
Federal awards to ``non-Federal entities.'' Federal agencies also
retain discretion on whether to apply subparts A through E of part 200
to Federal agencies, for-profit entities, foreign public entities, or
foreign organizations--which are not included in the definition of the
term ``non-Federal entity.'' OMB proposes to add language encouraging
agencies to apply the requirements in subparts A through E of part 200
to all recipients in a consistent and equitable manner to the extent
permitted within applicable statutes, regulations, and policies.
In support of plain language principles, OMB proposes to convert
the applicability table in paragraph (b) of section 200.101 into
paragraph form.
OMB proposes multiple clarifying revisions in section 200.102 to
improve agency and recipient understanding of the availability and use
of exceptions to, or deviations from, OMB's Uniform Guidance in part
200.
In section 200.104, OMB proposes to provide a more succinct
statement that part 200 supersedes previous OMB guidance issued in 2
CFR on topics including cost principles and audits for Federal
financial assistance. Because part 200 has now existed for 10 years in
its current format and location, OMB does not believe it is necessary
to continue to include the detailed list identifying elements of the
Uniform Guidance in part 200 previously contained in OMB Circulars or
other parts of 2 CFR, subtitle A, chapter II.
In section 200.111 OMB proposes new guidance to permit Federal
agencies to request, receive, and distribute Federal award information
in a language other than English when it is appropriate for a specific
program or Federal award. This proposal would allow for more
flexibility when working in international environments or in
communities where English is the not the primary language.
Finally, based on feedback from the oversight community, OMB
proposes to revise the section on mandatory disclosure to clarify that
recipients and subrecipients must promptly disclose any credible
evidence of a violation of Federal criminal law potentially affecting
the Federal award. OMB also proposes to revise this section to require
recipients and subrecipients to provide written disclosure to the
agency's Office of Inspector General. OMB believes the proposed
``credible evidence'' standard is more appropriate because it would not
require recipients, subrecipients, and applicants to make a legal
determination that a criminal law has been violated before they are
required to make a disclosure of ``credible evidence'' of such a
violation to the Federal agency, pass-through entity (if applicable),
and the agency's Office of Inspector General.
Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards
OMB proposes to revise this subpart to clarify certain requirements
for fixed amount awards. For example, OMB proposes to clarify in
section 200.201 that recipients are entitled to any unexpended funds
under a fixed amount award if the required activities were completed in
accordance with the terms and conditions of the award. In the same
section, OMB also proposes to clarify record retention and post award
certification requirements. In addition--although no specific language
is proposed in this document--OMB is considering requiring additional
pre-award certifications for fixed amount awards to address the
potential
[[Page 69395]]
increased risk of fraud under fixed amount awards. OMB invites comments
on appropriate pre-award certifications for fixed amount awards and
notes that it may include a requirement for such certifications in the
final guidance document. OMB also proposes to more specifically
identify certain prior approval requirements that specifically relate
to fixed amount awards.
OMB also proposes to expand section 200.202 on program planning and
design to encourage agencies to encourage recipients to engage members
of the community that will benefit from or be impacted by a Federal
financial assistance program. OMB also proposes to encourage Federal
agencies to develop programs in consultation with the communities that
will benefit from or be impacted by a program. In section 200.202, OMB
also proposes to underscore that Federal agencies should consider all
available data and evaluation results from past programs and coordinate
with other agencies during program planning and design.
OMB proposes to revise section 200.203 on Assistance Listings to
reinforce the importance of communicating in plain language and
highlighting any program-related customer service initiatives.
OMB proposes to revise section 200.204 on notices of funding
opportunities in a number of ways to encourage Federal agencies to
focus more on communicating requirements to the public in an accessible
and comprehensible manner. For example, OMB proposes to include an
Executive Summary requirement and to encourage agencies to use plain
language when publishing opportunities. OMB also proposes that agencies
should communicate program requirements specifically and clearly, as
well as limit the length of program announcements. As noted in the
proposed changes to the guidance, this is particularly important in
consideration of applicants with less experience applying for Federal
financial assistance, such as applicants from underserved communities.
OMB also proposes to encourage Federal agencies to identify all
eligible applicants in the funding opportunity--for example, by
providing greater specificity on different types of nonprofit
organizations such as labor unions. In proposing these revisions, OMB
aims to make notices of funding opportunities more consistent and
transparent. OMB also aims to ensure that applicants are not
unintentionally excluded from funding opportunities.
OMB also proposes additional changes in section 200.204, such as
encouraging agencies to provide an anticipated award date and providing
additional clarifying guidance on the availability period for funding
opportunities.
In section 200.205 OMB proposes to clarify that a Federal agency
should consider diversity when developing policies and procedures for
merit review panels.
In section 200.206 OMB proposes to revise the section regarding
risk evaluation by using the term risk assessment as a standard term
and clarifying agency requirements to appropriately review eligibility
qualifications and financial integrity information. OMB also proposes
to clarify that agency processes may consider any risk criteria
pertinent to a program, such as cybersecurity risk or impacts on local
jobs and the community. OMB further proposes to clarify that an agency
may modify its risk assessment at any time during the lifecycle of an
award.
OMB also proposes to clarify in section 200.209 that those entities
who are exempt from the requirements of 2 CFR part 25 must still
complete the certifications and representations by submitting the
appropriate assurance form.
OMB also proposes to include several additions to section 200.216
on the prohibition of certain telecommunications and video surveillance
services or equipment to expand the guidance by incorporating
additional information from OMB's Frequently Asked Questions document.
Lastly, OMB proposes to include a new section 200.217 to expand on
the whistleblower protections and requirements for recipients of
Federal financial assistance, which had previously been referenced in
section 200.300.
Subpart D--Post Federal Award Requirements
OMB proposes to retain the guidance in section 200.300 on statutory
and national policy requirements, which explains the need to administer
Federal awards in full accordance with the U.S. Constitution,
applicable Federal statutes and regulations, and requirements of part
200. OMB proposes to streamline section 200.300 and to reinforce
existing nondiscrimination requirements under the Constitution and
other applicable law, consistent with Executive Order 13988 of January
20, 2021 (``Preventing and Combating Discrimination on the Basis of
Gender Identity or Sexual Orientation''), and Executive Order 14075 of
June 15, 2022 (``Advancing Equality for Lesbian, Gay, Bisexual,
Transgender, Queer, and Intersex Individuals'').
In section 200.305 on Federal payment, OMB proposes to provide
additional flexibilities for recipients when interest bearing accounts
are not accessible in a foreign country; and to provide a specific link
for returning funds to the Payment Management System, rather than
including the more extensive instructions in the guidance itself.
OMB proposes to revise section 200.306 on cost sharing, as well as
the definition of cost sharing itself, to clarify that ``matching'' is
one category of cost sharing overall--thus eliminating the need to
repeat the term ``matching'' throughout. In the same section, OMB also
proposes to provide additional guidance on voluntary uncommitted cost
sharing for institutes of higher education.
OMB proposes to revise section 200.307 on program income by
providing clarifications in paragraph (a) regarding use and expenditure
of program income, including allowing program income for certain
closeout costs. OMB also proposes to revise and provide further
clarifying guidance in paragraph (b) for each of the three methods for
use of program income.
OMB proposes changes to section 200.308 on revision of budget and
program plans by combining the requirements for construction and non-
construction awards to provide greater uniformity in the requirements
for all award types. OMB proposes to clarify that recipients do not
need approval of individual subrecipients under all circumstances, but
only when making subawards of programmatic activities not proposed by
the recipient in the application for an award. A Federal agency may
also require prior approval of subrecipients through the terms and
conditions of a Federal award. OMB proposes to further clarify that
agencies should not require approval of a change in a proposed
subrecipient unless the initial inclusion of a subrecipient was a
determining factor in the agency's merit review process. This change is
proposed to reinforce the role of the recipient as responsible for the
efficient and effective administration of the Federal award including
the selection of a qualified and capable subrecipient. OMB also
proposes to identify other items requiring prior approval, including
requesting additional funds, transferring funds, and no-cost
extensions. OMB proposes to clarify that no-cost extensions are
different from one-time extensions, which an agency is permitted to
authorize a recipient to do without prior approval.
[[Page 69396]]
In section 200.309 on modification to the period of performance,
OMB proposes to provide additional clarification that when an agency
decides not to continue an award with multiple budget periods, the
period of performance should be amended to end at the completion of the
currently authorized budget period. OMB also proposes to incorporate
the definition of ``renewal award'' in this section.
In section 200.311, addressing real property, OMB proposes to
include a new paragraph on appraisals to introduce additional guidance
on standards for conducting independent appraisals consistent with the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970, as amended, (42 U.S.C. 4601-4655) except as provided in
the implementing regulations at 49 CFR part 24, ``Uniform Relocation
Assistance And Real Property Acquisition For Federal And Federally-
Assisted Programs.'' OMB also proposes to include a definition of the
term ``encumbrance'' in sections 200.311, 200.313, and 200.315.
In section 200.313, relating to equipment, OMB proposes to increase
the threshold value for equipment from $5,000 to $10,000 and to provide
additional guidance on the meaning of a ``conditional title.''
Consistent with proposals in sections 200.311 and 200.315, OMB also
proposes a definition of the term ``encumbrance.'' Consistent with the
existing requirements for States, OMB also proposes to allow Indian
Tribe to dispose of equipment in accordance with tribal law. OMB also
proposes to clarify that agencies may permit the recipient to retain
equipment with no further obligation to the Federal government when it
is not prohibited by Federal statue or regulation. OMB also proposes to
reinforce the responsibility of recipients to maintain updated records
regarding equipment.
OMB proposes to revise section 200.314 on supplies to raise the
threshold from $5,000 to $10,000. OMB also proposes to clarify that the
requirements for unused supplies apply to the aggregate value of all
supply types, and not just like-item supplies. OMB also proposes to
include a definition of ``unused supplies'' in section 200.314.
In section 200.315 on intangible property, OMB proposes to
reinforce the potential requirement for recipients and subrecipients to
make intangible property publicly available on agency-designated
websites. Consistent with proposals in sections 200.311 and 200.313,
OMB also proposes a definition of the term ``encumbrance.''
OMB proposes several revisions to the procurement standards in the
Uniform Guidance. In recognition of Tribal sovereignty, and consistent
with the existing requirements for States, in section 200.317 OMB
proposes to allow Indian tribes to follow their own policies and
procedures.
OMB also proposes to revise the procurement standards in section
200.318. These proposed revisions include providing additional guidance
that contractors appropriately classify employees consistent with the
Fair Labor Standards Act. See the Fair Labor Standards Act at 29 U.S.C.
chapter 8.
OMB also proposes adding a new paragraph (l) in section 200.318 to
clarify that that the procurement standards in part 200 do not prohibit
recipients or subrecipients from using Project Labor Agreements or
similar forms of pre-hire collective bargaining agreements; requiring
commitments or goals to hire people residing in high-poverty areas,
disadvantaged communities as defined by the Justice40 Initiative OMB
Memorandum M-21-28, or high-unemployment census tracts within a region
no smaller than the county where a federally funded construction
project is located, consistent with the policies and procedures of the
recipient or subrecipient, provided that a recipient or subrecipient
may not prohibit interstate hiring; requiring commitments or goals to
individuals with barriers to employment (as defined in section 3 of the
Workforce Innovation and Opportunity Act (29 U.S.C. 3102(24)),
including women and people from underserved communities as defined by
Executive Order 13985; using agreements intended to ensure
uninterrupted delivery of services; using agreements intended to ensure
community benefits; or offering employees of a predecessor contractor
rights of first refusal under a new contract. The proposed paragraph
explains that Federal agencies may consider allowing recipients or
subrecipients to use such practices if consistent with the U.S.
Constitution, applicable Federal statutes and regulations, the
objectives and purposes of the Federal financial assistance program,
and other requirements of part 200. For example, any hiring preference
for a class or groups of persons would be permissible only to the
extent that it is consistent with the equal protection requirement of
the U.S. Constitution.
In section 200.319, OMB proposes to remove the prohibition in the
Uniform Guidance on using geographic preference requirements. In the
same section, OMB also proposes to state that subpart D does not
prohibit recipients and subrecipients from incorporating a scoring
mechanism that rewards bidders committing to specific numbers and types
of U.S. jobs, as well as certain compensation and benefits. OMB
cautions, however, that any geographic preferences or scoring
mechanisms must be consistent with the U.S. Constitution, applicable
Federal statutes and regulations, and the terms and conditions of the
Federal award. OMB also proposes to clarify that any such scoring
mechanism must be consistent with established practices and legal
requirements applicable to the recipient or subrecipient.
In section 200.320 on procurement methods, OMB proposes to change
``small purchases'' to ``simplified acquisitions'' to further align
with standard terminology. In paragraph (a), OMB proposes to clarify
that ``micro-purchases'' and ``simplified acquisitions'' are types of
``informal procurement methods for small purchases.'' OMB also proposes
to remove the requirements that local and tribal governments must open
sealed bids in public; this requirement may be inconsistent with State
or tribal policies and procedures.
In section 200.321, OMB proposes to add ``veteran-owned business''
to the types of businesses that recipients and subrecipients are
encouraged to consider for procurement contracts under a Federal award.
OMB proposes to add a new paragraph (b) in section 200.323.
Executive Order 14057 of December 8, 2021 (``Catalyzing Clean Energy
Industries and Jobs Through Federal Sustainability'') establishes that
it is the policy of this Administration to lead by example and pursue a
whole-of-government approach on sustainability and expanding American
technologies, industries, and jobs that support sustainability and
climate resilience. The Executive Order tasks the Federal government
with pursuing new strategies to improve the Nation's preparedness and
resilience to the effects of a changing climate, including financial
management strategies. In support of this policy, OMB proposes to add a
new paragraph (b) in section 200.323 encouraging Federal award
recipients, to the extent permitted by law, to purchase, acquire, or
use products and services that can be reused, refurbished, or recycled;
contain recycled content, are biobased, or are energy and water
efficient; and are sustainable.
OMB proposes to add additional language to section 200.324 on
contract cost and price to establish that the
[[Page 69397]]
recipient or subrecipient may consider potential workforce impacts in
their procurement analysis if the procurement transaction will
potentially displace public sector employees. OMB also seeks comment on
its proposal to delete the existing paragraph (b) in 2 CFR 200.324,
requiring the recipient to negotiate profit as a separate element of
the price for each contract in which there is no price competition.
In section 200.328, OMB proposes to provide additional clarity on
required deadlines for financial reporting to align with progress
reporting requirements.
In section 200.329, OMB proposes to revise the reporting of program
performance section to remind agencies of the importance of not
requiring information in programmatic reports that is not necessary for
the effective monitoring of the award. OMB also proposes additional
language that emphasizes the importance of measuring customer
experience as well as considering evaluation plans when outlining
reporting requirements. OMB further proposes to clarify that
programmatic reporting may not be required more frequently than
quarterly unless specific conditions have been applied to the award in
accordance with section 200.208.
In section 200.331 on subrecipient and contractor determinations,
OMB proposes additional language to emphasize that Federal agencies do
not have a direct legal relationship with subrecipients and contractors
of pass-through entities. OMB also proposes to clarify that the
characteristics indicative of a subrecipient or contractor
determination are not limited to the sample characteristics currently
provided in the guidance.
Based on feedback from the Federal financial assistance community,
OMB proposes to include in section 200.332 the requirement for pass-
through entities to confirm that potential subrecipients are not
suspended, debarred, or otherwise excluded from receiving Federal
funds.
In section 200.333, OMB proposes removing the current Simplified
Acquisition Threshold limit for fixed amount subawards to provide
agencies and recipients with increased flexibility in making
programmatic and budgetary decisions, while still allowing recipients
to establish their own award-specific thresholds with the prior written
approval of the Federal agency. Under the proposed revision, a
recipient's use of fixed amount subawards remains subject to the prior
written approval of the Federal agency.
OMB also proposes to revise and clarify the guidance pertaining to
termination and closeout requirements in sections 200.340 through
200.344. On termination, in section 200.340 OMB proposes to remove
language that allows a Federal agency or pass-through entity to
terminate an award ``if an award no longer effectuates the program
goals or agency priorities.'' This revision is proposed only for the
purpose of clarifying the guidance; the proposed guidance still allows
agencies to terminate a Federal award according to the terms and
condition of the award. OMB also proposes to clarify that a termination
does not include a Federal agency's decision to not provide
continuation funding. In section 200.341, OMB also proposes to clarify
requirements that must be included in a notice of termination.
In section 200.344 on closeout, OMB proposes to revise closeout
guidance to clarify that recipients must still submit a final financial
report even when the recipient does not have a final indirect cost
rate; and proposes to clarify that an additional final report must be
submitted when the indirect cost rate is finalized. In the same
section, OMB also proposes to provide additional flexibilities for
agencies and recipients to closeout Federal awards in a timely manner.
OMB proposes to allow an agency and recipient to mutually agree upon a
final indirect cost rate for an individual award. This proposed
revision is not intended to grant agencies additional authorities to
negotiate rates over cognizant agencies for indirect rates; rather, it
simply proposes to affirm the Federal agency's right to negotiate with
the recipient or subrecipient on a case-by-case basis with the goal of
closing out specific awards in a timely manner.
Subpart E--Cost Principles
In section 200.401 on applicability, OMB proposes to clarify that
the cost principles in subpart E do not apply to grants and cooperative
agreements for food commodities.
In section 200.403, OMB proposes to add language clarifying when
allowable administrative closeout costs may be incurred in paragraph
(h).
In section 200.407, OMB has removed ten items from the prior
written approval requirements to reduce Federal agency and recipient
burden. These proposed revisions include no longer requiring prior
written approval for such items as, real property, equipment, direct
costs, entertainment costs, exchange rates, memberships, participant
support costs, selling and marketing costs, and taxes. In this section,
OMB also proposes to remove the reference to requiring prior written
approval for use of grants agreements, cooperative agreements, and
contracts, but other requirements throughout the Uniform Guidance in
part 200 would continue to apply to use of these instruments.
In section 200.414, OMB proposes to revise several aspects of the
guidance pertaining to indirect costs. OMB proposes to clarify that
recipients and subrecipients may notify OMB of any disputes with
regards to a Federal agency's application or acceptance of a federally
negotiated indirect cost rates. OMB also proposes to revise the
guidance to clarify that pass-through entities must accept all
federally negotiated indirect cost rates for subrecipients.
In the same section, in response to feedback from the Federal
financial assistance community, OMB proposes to raise the de minimis
rate from 10 percent to 15 percent. This change would allow for a more
reasonable and realistic recovery of indirect costs, particularly for
new or inexperienced organizations that may not have the capacity to
undergo a formal rate negotiation, but still deserve to be fully
compensated for their overhead costs. The proposed changes still allow
recipients and subrecipients to apply a rate lower than 15 percent at
their own discretion. At the same time, the proposed guidance clarifies
that Federal agencies may not compel recipients and subrecipients to
use an indirect rate lower than the proposed 15 percent rate, unless
required by statute. OMB also proposes to clarify that the de minimis
rate may not be applied to cost reimbursement contracts and recipients
and subrecipients are not required to use the de minimis rate.
Finally, OMB also proposes to remove the existing requirement in
paragraph (h) of section 200.414 for all indirect cost rates to be
publicly available on a government-wide website--but this may be
revisited when applicable systems are updated to allow for the posting
of indirect cost rates. OMB seeks comments that include analysis on the
advantages and disadvantages of raising the de minimis rate in the way
proposed.
Based on feedback from the oversight community, in section 200.415
OMB proposes to require subrecipients to certify to pass-through
entities that financial information submitted to the pass-through
entity is complete and accurate.
Based on feedback from both Institutions of Higher Education (IHE)
and Federal agencies, OMB also proposes to remove the requirement in
section 200.419 for an IHE that receives
[[Page 69398]]
an aggregate total $50 million or more in Federal awards and
instruments subject to subpart E to submit a disclosure statement form
(DS-2) containing information on cost accounting standards. This
proposed change, if finalized, would likely reduce Federal agency and
recipient burden. OMB received a comment indicating that the DS-2 is
outdated, not needed for ensuring compliance with statutory authorities
related to Federal financial assistance, and not universally
implemented across the IHE community. The commenter also indicated that
the DS-2 is not used as regular tool by the audit or oversight
community to enhance compliance or oversight. This commenter also
stated that information contained in the DS-2 is readily available in
numerous policy portals at research universities and creates
unnecessary administrative and cost burden to research universities and
Federal agencies.
If finalized, this proposed change would not impact the requirement
for IHEs receiving Federal awards above the threshold to comply with
the Cost Accounting Standards Board's cost accounting standards. It
would only no longer require use of the DS-2 form. This proposed change
also is not intended to impact any FAR-based requirements related to
disclosure of cost accounting practices.
OMB seeks comments on the potential impact of this proposed change
to section 200.419, including analysis on the advantages and
disadvantages of removing the requirement for use of the DS-2 form. For
example, are there any advantages in retaining consistency and
uniformity in accounting practices followed by educational institutions
for both contracts under the FAR and Federal financial assistance under
part 200, which are achieved through use of the DS-2? For additional
background, see, for example, 58 FR 39996, at 39997 (Jul. 26, 1993)
(explaining OMB's initial plans to expand the Cost Accounting Standards
Board's regulations and standards for educational institutions to
Federal grants). Does the requirement to use the DS-2 at section
200.419 help ensure that each IHE's practices used in estimating costs
for a proposal are consistent with cost accounting practices used by
the institution in accumulating and reporting costs or serve other
functions? See 48 CFR 9905.501-20. How, if at all, could removing the
requirement to use the DS-2 from section 200.419 impact compliance by
research universities with the requirements of 41 U.S.C. 1502 or the
implementing regulations at FAR, Chapter 99 for government contracts?
To what extent would removing the requirement to use the DS-2 at
section 200.419 reduce burden if the statutory and FAR-based
requirements remain in effect?
OMB proposes to require several revisions to the general provisions
for items of costs. Specifically, in section 200.420, OMB proposes to
add further clarifying text explaining that the listed items of cost
are not intended to provide a comprehensive list and that failure to
mention an item, even as an example, is not intended to imply that is
allowable or unallowable. OMB proposes this clarification to address
numerous questions about allowability of costs that arise in the
Federal financial assistance community.
In section 200.422, OMB proposes to incorporate the definition of
an ``advisory council or committee.''
At section 200.431, OMB proposes to revise the section on fringe
benefits to require recipients and subrecipients to allocate payments
for unused leave as general administrative expenses or include them in
a fringe benefit rate with cognizant agency approval. Based on feedback
from the oversight community, OMB also proposes in section 200.431 to
clarify that recipients and subrecipients may not charge unfunded
pension and post-retirement health benefits to an award in a manner
that is inconsistent with the allocation principles of Subpart E. Also
in section 200.431, OMB proposes additional clarifying guidance on
pension plan costs and post-retirement health plans.
OMB proposes to clarify the description of conferences in section
200.432 to remove any limitations provided by the specific types of
events listed in the guidance currently. OMB also proposes to allow for
dependent-care costs associated with participants' attending or
partaking in program-related conferences.
OMB proposes to revise section 200.438 entertainment costs to
include prizes, which currently reside in Subpart B, despite the fact
that prizes are an item of cost.
In section 200.440, OMB removed the requirement for prior approval
of fluctuations of exchange rates. While a recipient or subrecipient
needs prior approval for additional Federal funding, no approval is
required because an exchange rate has fluctuated and resulted in a
necessary charge to available funding.
In section 200.454, OMB proposes to remove prior approval
requirements for the cost of membership in any civic or community
organization.
In section 200.455 on organization costs, OMB proposes to clarify
that any costs associated with either persuading or dissuading
employees from collective bargaining and related activities are not
allowable under Federal awards. OMB also proposes to add clarifying
language that certain costs related to data, evaluation, and other
related organization costs are allowable.
In section 200.456, OMB proposes to remove the prior approval
requirement of participant support costs. OMB proposes to clarify,
however, that the treatment of participant costs is ultimately the
responsibility of the recipient or subrecipient to determine, document,
and treat consistently across all Federal awards (and when negotiating
indirect rates).
In section 200.461, OMB proposes additional clarifying guidance on
publication and printing costs by adding reference to ``article
processing charges'' or ``similar open access fees.''
In section 200.467, OMB also proposes to remove the prior approval
option for selling and marketing costs, clarifying selling and
marketing costs are unallowable unless they meet the requirements in
section 200.421 and are required to meet the requirements of the award.
Finally, OMB proposes to revise the section on termination costs at
section 200.472 to also include closeout costs. Specifically, OMB
proposes to include guidance for recipients and subrecipients to charge
administrative costs specifically associated with the closeout of a
Federal award. OMB received feedback from the Federal financial
assistance community that the exclusion of closeout costs in the
Uniform Guidance has been problematic as recipients and subrecipients
have been unable to charge actual costs associated with closeout
actions, such as certain administrative or staff costs not covered
through indirect cost recoveries.
Subpart F--Audit Requirements
In this subpart, OMB proposes to raise the audit threshold from
$750,000 to $1,000,000 in section 200.501. OMB reviewed audit
submission data as well as economic data when determining the increase
to this threshold. Every two years, the Director of OMB is authorized
to adjust the dollar amount of this threshold consistent with the
purposes of the Single Audit Act, provided the Director does not make
such adjustments below $300,000. 31 U.S.C. 7502.
In section 200.502 OMB also proposes to clarify that, in
determining Federal awards expended, loan and loan guarantees retain
their Federal character through the end of the Federal award
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period of performance unless otherwise specified in statute or Federal
agency regulations. In response to feedback from Federal agencies, OMB
proposes to revise the guidance to require that the schedule of
expenditures of Federal awards for comprehensive annual financial
reports identify the State, municipal, or local entity recipient or
subrecipient of a Federal award. This change is necessary to provide
greater transparency and understanding of the information provided in
the schedule.
In section 200.510, at paragraph (b), OMB proposes additional
guidance explaining that, for audits covering multiple recipients (such
as departments, agencies, IHEs, and other organizational units), the
schedule of expenditures must identify the recipient of the Federal
award.
In section 200.513, OMB proposes to revise the responsibilities of
Federal agencies. Specifically, OMB proposes to encourage Federal
agencies to engage with external audit stakeholders and the Federal
agency's Office of Inspector General National Single Audit Coordinator
(NSAC) prior to submitting compliance supplement drafts to OMB. In the
same section OMB also proposes to clarify that a Federal agency's key
management single audit liaison must also coordinate with the agency's
Office of Inspector General NSAC when appropriate.
In section 200.514, on scope of audit, OMB proposes to revise
compliance requirements to specify that compliance testing must include
a test of transactions and other auditing procedures necessary to
provide the auditor with sufficient evidence to support an opinion on
compliance.
In section 200.516, based on feedback OMB received from the Federal
financial assistance community, OMB proposes to revise in the
definitions of known questioned costs and likely questioned costs and
provide further clarity on how they are identified in an audit report.
Appendix I to Part 200--Full Text of Notice of Funding Opportunity
OMB proposes to revise this appendix in its entirety in support of
the goal of simplifying and clarifying the grant solicitation and
application process, which is a key objective under Executive Order
14058 on Transforming Federal Customer Experience and Service Delivery
to Rebuild Trust in Government. The proposed changes to the notice of
funding opportunity in Appendix I are intended to improve the quality
and accessibility of funding opportunities. Specifically, the proposed
revisions to Appendix I intend to: (1) follow plain language
principles; (2) group similar items together to streamline content; (3)
align sections more closely to the application process; (4) include
basic information at the top of a funding opportunity so that
applicants can more easily make decisions about whether or not to
apply; (5) clearly define what must be included in a section of the
funding opportunity versus what is at an agency's discretion; and (6)
provide flexibility to agencies while also giving applicants a common
way to find information in every funding opportunity.
Appendix III to Part 200--Indirect (F&A) Costs Identification and
Assignment, and Rate Determination for Institutions of Higher Education
(IHEs)
OMB proposes to update this appendix to adjust the exclusion
threshold of subawards from $25,000 to $50,000 for modified total
direct costs.
Appendix IV to Part 200--Indirect (F&A) Costs Identification and
Assignment, and Rate Determination for Nonprofit Organizations
OMB proposes to update this appendix to adjust the exclusion
threshold of subawards from $25,000 to $50,000 for modified total
direct costs. OMB also proposes to clarify that under the direct cost
allocation method, joint costs include costs for information
technology.
Appendix VII to Part 200--States and Local Government and Indian Tribe
Indirect Cost Proposals
OMB proposes to update this appendix to adjust the exclusion
threshold of subawards from $25,000 to $50,000 under modified total
direct costs (MTDC). OMB also proposes to clarify the meaning of
``department or agency'' for State and local governments.
OMB also proposes a revision to underscore that Federal agencies
must accept indirect cost proposals developed by State or local
departments or agencies receiving less than $35 million in their fiscal
year. The proposed revision to this appendix also provides that Federal
agencies cannot compel these State or local governmental departments or
agencies to accept the de minimis rate, or any other rate established
by the Federal agency, in place of their indirect cost proposals. OMB
emphasizes, however, that any such indirect cost proposals must be
developed in accordance with the requirements of part 200 and
maintained for audit--along with related supporting documentation.
Appendix X to Part 200--Data Collection Form (Form SF-SAC)
OMB proposes to revise this appendix to clarify where audit
submission instructions are located.
Appendix XII to Part 200--Award Term and Condition for Recipient
Integrity and Performance Matters
OMB proposes to revise this award term to be consistent with the
statutory obligation and to reflect the appropriate location
(responsibility and qualification records) in <a href="http://SAM.gov">SAM.gov</a> for reporting
integrity and performance matters. OMB proposes to renumber the award
term to align to the requirements of the standard organization of the
Code of Federal Regulations.
Other Revisions Under Consideration for Future Updates
OMB may consider additional revisions for potential future updates.
Specifically, OMB welcomes additional comments from the public on the
following topics for consideration in possible additional revisions in
the future:
<bullet> Establishing specific audit requirements for for-profit
entities, which are not subject to the requirements of Subpart F;
<bullet> Incorporating the requirements of National Security
Presidential Management (NSPM)-33 on research security requirements;
<bullet> Providing additional guidance in 2 CFR concerning the
relationship of specific aspects of the guidance to loans and loan
guarantees;
<bullet> Establishing mechanisms to automatically adjust certain
thresholds due to inflation or other triggering events (where permitted
by law).
<bullet> Removing additional prior approval requirements.
<bullet> Challenges related to negotiating indirect costs, working
with cognizant agencies, or any other topics related to indirect costs
that could be addressed in future updates; and
<bullet> Expanding the guidance in Subpart F to include more
specific requirements on the scope of an audit (``proper perspective'')
so that agencies have additional contextual information to guide them
in resolving audit findings.
Request for Comments
OMB requests comments on all aspects of the propose guidance in
this document, including on any reliance interests that commenters may
have based on the existing text of 2 CFR, subtitle A that OMB's
proposal may affect, and that OMB should consider in deciding whether
or how to finalize this guidance.
[[Page 69400]]
Executive Order 12866 (Regulatory Planning and Review), Executive Order
13563 (Improving Regulation and Regulatory Review), and Executive Order
14094 (Modernizing Regulatory Review)
Executive Orders (E.O.s) 12866, 13563, and 14094 direct agencies to
assess all costs and benefits of available regulatory alternatives,
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
The OMB Guidance for Grants and Agreements published in subtitle A of 2
CFR is guidance to Federal agencies and not regulation. 2 CFR 1.100(b).
OMB has thus determined that the revision of 2 CFR is not a significant
regulatory action under E.O. 12866, as amended.
Regulatory Flexibility Act
This proposed guidance is exempt from the notice and comment
requirements of the Administrative Procedure Act (APA) because it is
guidance to Federal agencies and not regulation. See 5 U.S.C. 553(b).
Moreover, even if this proposed guidance were otherwise subject to 5
U.S.C. 553, it would be exempt from the notice and comment requirement
as a matter related to grants. See 5 U.S.C. 553(a)(2). OMB nonetheless
provides the following information for the information of the public.
For a rule subject to the notice-and-comment provisions of the APA, the
Regulatory Flexibility Act 5 U.S.C. 601, et seq., requires that an
agency provide a final regulatory flexibility analysis or to certify
that the rule will not have a significant economic impact on a
substantial number of small entities. Based on the nature of the
revisions proposed in this notice, OMB does not expect this guidance to
have a significant economic impact on a substantial number of small
entities within the meaning of the Regulatory Flexibility Act. There
are some proposed revisions that may impose a non-significant burden;
however, there are more proposed revisions that reduce burden to small
entities. When reviewing all proposed revisions, the burden that will
be reduced for recipients is much greater than the burden imposed.
Unfunded Mandates Reform Act of 1995
The proposed guidance would not impose unfunded mandates as defined
by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat.
48). The proposed guidance would not result in the expenditure by
State, local, and Tribal governments, in the aggregate, or by the
private sector, of $168 million or more in any one year (2 U.S.C.
1532).
Executive Order 13132 (Federalism Assessment)
This proposed guidance has been analyzed in accordance with the
principles and criteria contained in E.O. 13132, ``Federalism,'' 64 FR
43255 (Aug. 10, 1999). OMB has determined that this proposed guidance
would not have sufficient federalism implications to warrant the
preparation of a federalism assessment. The guidance in 2 CFR is
inherently national in scope and significance. Regardless, in
accordance with section 4(d) of E.O. 13132, OMB consulted with
appropriate State and local officials that may be affected by Federal
agencies' implementation of OMB's revised guidance by means of posting
the RFI prior to proposing revisions. OMB weighed carefully the
interests of those who submitted comments in response to the RFI in
proposing revisions to the guidance, which balance the State interests
with the need to provide Federal agencies with consistent, uniform,
efficient, and transparent guidance, which is consistent with
authorizing law.
Paperwork Reduction Act
This guidance does not contain a new requirement for information
collection. Rather, it streamlines requirements in specific sections.
Thus, the Paperwork Reduction Act does not apply.
Executive Order 13175 (Tribal Consultation)
OMB has analyzed this revised guidance in accordance with the
principles and criteria contained in E.O. 13175, ``Consultation and
Coordination with Indian Tribal Governments'' 65 FR 67249 (Nov. 9,
2000). On March 7, 2023, OMB held a two-hour Tribal consultation to
solicit feedback from Tribal representatives. OMB also proposes
providing greater flexibility to Tribal governments in the proposed
guidance centered on procurement standards and disposition of
equipment. OMB also proposes to clarify the definition of Indian
Tribes.
List of Subjects
2 CFR Part 1
Administration of Federal financial assistance, Administrative
practice and procedure, Federal financial assistance programs.
2 CFR Part 25
Administrative practice and procedure; Grant programs; Grants
administration; Loan programs.
2 CFR Part 170
Colleges and universities; Grant programs; Hospitals; International
organizations; Loan programs; Reporting and recordkeeping requirements.
2 CFR Part 175
Administrative practice and procedures; Grant programs; Indians--
tribal government; Nonprofit organizations; State and local
governments.
2 CFR Part 180
Administrative practice and procedure; Grant programs; Loan
programs; Reporting and recordkeeping requirements.
2 CFR Part 182
Administrative practice and procedure; Drug abuse; Grant programs;
Reporting and recordkeeping requirements.
2 CFR Part 183
Foreign aid; Grants administration; Grant programs; International
organizations; Reporting and recordkeeping requirements.
2 CFR Part 200
Administration of Federal financial assistance, Administrative
practice and procedure, Federal financial assistance programs.
For the reasons stated in the preamble, the Office of Management
and Budget proposes to amend title 2, subtitle A, chapters I and II of
the Code of Federal Regulations as follows:
0
1. Revise the heading of title 2 to read as follows:
Title 2--Federal Financial Assistance
0
2. Revise the heading of subtitle A of title 2 to read as follows:
Subtitle A--Office of Management and Budget Guidance for Federal
Financial Assistance
0
3. Revise part 1, consisting of Sec. Sec. 1.100 through 1.305, to read
as follows:
PART 1--ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND
SUBTITLE A
Sec.
Subpart A--Introduction to Title 2 of the CFR
1.100 Content of this title.
1.105 Organization and subtitle content.
1.110 Issuing authorities.
[[Page 69401]]
Subpart B--Introduction to Subtitle A
1.200 Purpose of chapters I and II.
1.205 Applicability to Federal financial assistance.
1.210 Applicability to Federal agencies and others.
1.215 Relationship to previous issuances.
1.220 Federal agency implementation of this subtitle.
1.230 Maintenance of this subtitle.
1.231 Severability.
Subpart C--Responsibilities of OMB and Federal Agencies
1.300 OMB responsibilities.
1.305 Federal agency responsibilities.
Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 31 U.S.C. 6307; 41
U.S.C. 1121; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR
10737.
Subpart A--Introduction to Title 2 of the CFR
Sec. 1.100 Content of this title.
This title contains:
(a) Office of Management and Budget (OMB) guidance to Federal
agencies on governmentwide policies for the award and administration of
Federal financial assistance; and
(b) Federal agency regulations implementing that OMB guidance.
Sec. 1.105 Organization and subtitle content.
(a) This title is organized into two subtitles.
(b) The OMB guidance described in Sec. 1.100(a) is published in
subtitle A. Publication of the OMB guidance in the CFR does not change
its nature--it is guidance, not regulation.
(c) Each Federal agency that awards Federal financial assistance
has a chapter in subtitle B in which it issues those regulations. The
Federal agency regulations in subtitle B differ in nature from the OMB
guidance in subtitle A because the OMB guidance is not regulatory.
Federal agency regulations in subtitle B may give regulatory effect to
the OMB guidance, to the extent that the agency regulations require
compliance with all or portions of the OMB guidance. See also Sec.
1.220.
Sec. 1.110 Issuing authorities.
OMB issues this subtitle. Each Federal agency that has a chapter in
subtitle B of this title issues that chapter.
Subpart B--Introduction to Subtitle A
Sec. 1.200 Purpose of chapters I and II.
Chapters I and II of subtitle A provide OMB guidance to Federal
agencies that helps ensure consistent and uniform governmentwide
policies and procedures for the management of the agencies' Federal
financial assistance.
Sec. 1.205 Applicability to Federal financial assistance.
The types of instruments that are subject to the guidance in this
subtitle vary from one portion of the guidance to another. All portions
of the guidance apply to grants and cooperative agreements, and some
portions also apply to other types of Federal financial assistance. For
example, the:
(a) Guidance on debarment and suspension in part 180 of this
subtitle applies broadly to all Federal financial assistance, and not
just to grants and cooperative agreements.
(b) Cost principles in subpart E of part 200 of this subtitle apply
to procurement contracts issued under a Federal award, as well as to
Federal financial assistance. Cost principles are implemented for
Federal agencies' direct procurement contracts through the Federal
Acquisition Regulation in title 48 of the CFR, rather than through
Federal agency regulations on Federal financial assistance in this
title.
Sec. 1.210 Applicability to Federal agencies and others.
(a) This subtitle contains guidance that directly applies only to
Federal agencies.
(b) The guidance in this subtitle may affect other entities through
each Federal agency's implementation of the guidance, portions of which
may apply to:
(1) The agency's awarding or administering officials;
(2) Recipients and subrecipients that receive or apply for the
agency's Federal financial assistance or receive subawards under grants
or cooperative agreements; or
(3) Any other entities involved in agency transactions subject to
the guidance in this chapter.
Sec. 1.215 Relationship to previous issuances.
Although some of the guidance was organized differently within OMB
circulars or other documents, much of the guidance in this subtitle
existed prior to the establishment of title 2 of the CFR.
Sec. 1.220 Federal agency implementation of this subtitle.
A Federal agency that awards Federal financial assistance subject
to the OMB guidance in this subtitle implements the guidance in agency
regulations in subtitle B of this title and in guidance documents,
policy documents, and procedural issuances, such as internal
instructions to the agency's awarding and administering officials. An
applicant, recipient, or subrecipient would see the effect of that
implementation in the organization and content of the agency's
announcements of funding opportunities and in its award terms and
conditions.
Sec. 1.230 Maintenance of this subtitle.
OMB issues guidance in this subtitle after publication in the
Federal Register. Any portion of the guidance that has a potential
impact on the public is published with an opportunity for public
comment.
Sec. 1.231 Severability.
The provisions of this subtitle are separate and severable from one
another. If any provision of this subtitle is held invalid or
unenforceable as applied to a particular person or circumstance, the
provision should be construed so as to continue to give the maximum
effect permitted by law as applied to other persons not similarly
situated or to dissimilar circumstances. If any provision is determined
to be wholly invalid and unenforceable, it should be severed from the
remaining provisions of this part, which should remain in effect.
Subpart C--Responsibilities of OMB and Federal Agencies
Sec. 1.300 OMB responsibilities.
OMB is responsible for:
(a) Issuing and maintaining the guidance in this subtitle, as
described in Sec. 1.230;
(b) Interpreting the policy requirements in this subtitle;
(c) Reviewing Federal agency regulations implementing the
requirements of this subtitle, as required by Executive Order 12866;
(d) Conducting broad oversight of governmentwide compliance with
the guidance in this subtitle; and
(e) Performing other OMB functions specified in this subtitle.
Sec. 1.305 Federal agency responsibilities.
The head of each Federal agency that awards and administers Federal
financial assistance subject to the guidance in this subtitle is
responsible for:
(a) Implementing the guidance in this subtitle;
(b) Ensuring that the Federal agency complies with their
implementation of the guidance;
(c) Coordinating with the Council on Federal Financial Assistance,
the Grants Quality Service Management Office, and other governance
committees as appropriate; and
(d) Performing other functions specified in this subtitle.
[[Page 69402]]
0
4. Revise part 25, consisting of Sec. 25.100 through appendix A to
part 25, to read as follows:
PART 25--UNIQUE ENTITY IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT
Sec.
Subpart A--General
25.100 Purpose of this part.
25.105 Applicability.
25.110 Exceptions to this part.
Subpart B--Policy
25.200 Requirements for notice of funding opportunities,
regulations, and application instructions.
25.205 Effect of noncompliance with a requirement to obtain a UEI or
register in <a href="http://SAM.gov">SAM.gov</a>.
25.210 Authority to modify agency application forms or formats.
25.215 Requirements for agency information systems.
25.220 Use of award term.
Subpart C--Recipient Requirements of Subrecipients
25.300 Requirement for recipients to ensure subrecipients have a
unique entity identifier.
Subpart D--Definitions
25.400 Definitions.
Appendix A to Part 25
Award Term
Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub.
L. 109-282; Pub. L. 110-252, Pub. L. 113-101, Pub. L. 117-40.
Subpart A--General
Sec. 25.100 Purpose of this part.
This part provides guidance to Federal agencies that:
(a) The unique entity identifier (UEI) is the universal identifier
for Federal financial assistance applicants, as well as recipients and
their direct subrecipients, and;
(b) The System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) is the repository for
standard information about applicants and recipients.
Sec. 25.105 Applicability.
(a) This part applies to a Federal agency's Federal financial
assistance as defined in Sec. 25.400. This part applies to all
applicants for and recipients of Federal financial assistance unless
exempted by Federal statute or Sec. 25.110.
(b) Subrecipients are required to obtain a UEI in accordance with
subpart C. This part does not apply to subrecipients of subrecipients
(second-tier subrecipients) or contractors under Federal awards.
(c) This part does not apply to an individual who applies for or
receives Federal financial assistance as a natural person (unrelated to
any business or nonprofit organization an individual owns or operates).
(d) Because this part applies to loan guarantees and other
guaranteed programs, recipients of the guarantee from the Federal
agency (for example, lenders of guaranteed loans) are required to
complete entity validations and acquire a UEI. Additionally, at the
Federal agency's discretion, non-individual beneficiary borrowers (for
example, small businesses or corporations) may be required by the
Federal agency to obtain a UEI or register in <a href="http://SAM.gov">SAM.gov</a>.
Sec. 25.110 Exceptions to this part.
(a) General exceptions. (1) Under a condition identified in
paragraph (a)(2) of this section, a Federal agency may exempt an
applicant or recipient of Federal financial assistance from the
requirement to obtain a UEI, register in <a href="http://SAM.gov">SAM.gov</a>, or both.
(i) If a Federal agency grants an exception under paragraph (a)(2)
of this section, it must use a generic entity identifier in the data it
reports to USAspending.gov if reporting for a prime award of Federal
financial assistance to the recipient is required by the Federal
Funding Accountability and Transparency Act (Pub. L. 109-282, as
amended, hereafter cited as ``Transparency Act''). Granting an
exception under paragraph (a)(2) of this section does not impact a
Federal agency's responsibility for reporting under the Transparency
Act, except that it may use a generic entity identifier in the
circumstances described.
(ii) Federal agencies should use generic entity identifiers rarely
as it prevents recipients from fulfilling reporting requirements such
as subaward or executive compensation reporting required by the
Transparency Act.
(2) A Federal agency may exempt either an applicant or recipient
when:
(i) The Federal agency determines that it must protect information
about the entity from disclosure in the national security or foreign
policy interests of the United States or to avoid jeopardizing the
personal safety of the entity's staff, partners, beneficiaries, and
participants;
(ii) (A) All of the following conditions are met:
(1) the entity is a foreign organization or foreign public entity;
(2) the Federal award or subaward will be performed outside the
United States;
(3) the Federal award or subaward will be less than $25,000; and
(5) the Federal agency deems it to be impractical for the entity to
comply with the requirements of this part.
(B) The Federal agency must determine this exemption on a case-by-
case basis while utilizing a risk-based approach; or
(iii) For applicants, the Federal agency determines that there are
exigent circumstances that prohibit the applicant from receiving a UEI
and registering in <a href="http://SAM.gov">SAM.gov</a> before receiving a Federal award. In these
instances, Federal agencies must require the recipient to obtain a UEI
and complete registration in <a href="http://SAM.gov">SAM.gov</a> within 30 days of the Federal
award date.
(b) Class exceptions. OMB may approve additional exceptions for
classes of Federal awards, applicants, or recipients subject to the
requirements of this part when exceptions are not prohibited by
statute.
Subpart B--Policy
Sec. 25.200 Requirements for notice of funding opportunities,
regulations, and application instructions.
(a) A Federal agency that issues Federal financial assistance (see
Sec. 25.400) must include the requirements of paragraph (b) of this
section in each notice of funding opportunity, regulation, or other
issuance containing instructions for applicants that is issued on or
after the effective date of this guidance. A notice of funding
opportunity is any paper or electronic issuance that a Federal agency
uses to announce a funding opportunity, whether it is called a
``program announcement,'' ``notice of funding availability,'' ``broad
agency announcement,'' ``research announcement,'' ``solicitation,'' or
any other term.
(b) The notice of funding opportunity, regulation, or other
issuance must require each applicant that does not have an exemption
under Sec. 25.110 to:
(1) Be registered in <a href="http://SAM.gov">SAM.gov</a> before submitting an application;
(2) Maintain a current and active registration in <a href="http://SAM.gov">SAM.gov</a> at all
times during which it has an active Federal award or an application
under consideration by a Federal agency. The applicant must review and
update its information in <a href="http://SAM.gov">SAM.gov</a> annually from the date of initial
registration or subsequent updates to ensure it is current, accurate,
and complete. If applicable, this includes identifying the applicant's
immediate and highest-level owner and subsidiaries, as well as
providing information on all predecessors that have received a
[[Page 69403]]
Federal award or contract within the last three years; and
(3) Include its UEI in each application it submits to the Federal
agency.
(c) For the purposes of this policy: the applicant meets the
Federal agency's eligibility criteria and has the legal authority to
apply and receive the Federal award. For example, if a consortium
applies for a Federal award to be made to the consortium as the
recipient, the consortium must have a UEI. If a consortium is eligible
to receive funding under a Federal agency program, but the agency's
policy is to make the Federal award to a lead entity for the
consortium, the UEI of the lead applicant must be used.
Sec. 25.205 Effect of noncompliance with a requirement to obtain a
UEI or register in <a href="http://SAM.gov">SAM.gov</a>.
(a) Unless an entity is exempt under Sec. 25.110, a Federal agency
may not issue a Federal award or amend an existing Federal award if the
entity is not in compliance with the requirements of this part. This
does not apply to amendments to terminate or close out a Federal award.
(b) At the time a Federal agency is ready to make a Federal award,
if the intended recipient has not complied with the requirements to
obtain a UEI and maintain an active registration in <a href="http://SAM.gov">SAM.gov</a> with
current information, the Federal agency may make a Federal award to
another applicant.
Sec. 25.210 Authority to modify agency application forms or formats.
To implement the policies in Sec. Sec. 25.200 and 25.205, a
Federal agency may add a UEI field to information collections
previously approved by OMB, with no further approval required.
Sec. 25.215 Requirements for agency information systems.
Each Federal agency that awards Federal financial assistance (see
Sec. 25.400) must ensure that its information systems are able to both
accept and transmit the UEI as the universal identifier for Federal
financial assistance applicants and recipients.
Sec. 25.220 Use of award term.
(a) A Federal agency must include the award term in Appendix A in
all Federal financial assistance agreements (see Sec. 25.400) to
accomplish the purpose of Sec. 25.100.
(b) A Federal agency may use different letters and numbers than
those in Appendix A to designate the paragraphs of the award term.
Subpart C--Recipient Requirements of Subrecipients
Sec. 25.300 Requirement for recipients to ensure subrecipients have a
unique entity identifier.
(a) A recipient may not make a subaward to a subrecipient that has
not obtained a UEI and provided it to the recipient. Subrecipients are
not required to complete full registration in <a href="http://SAM.gov">SAM.gov</a> to obtain a UEI.
(b) A recipient must notify any potential subrecipients that the
recipient cannot make a subaward unless the subrecipient obtains and
provides a UEI to the recipient.
Subpart D--Definitions
Sec. 25.400 Definitions.
Terms not defined in this part shall have the same meaning as
provided in 2 CFR part 200, subpart A. As used in this part:
Applicant means any entity that applies for a Federal award
directly to a Federal agency.
Entity includes:
(1) Whether for profit or nonprofit:
(i) A corporation;
(ii) An association;
(iii) A partnership;
(iv) A limited liability company;
(v) A limited liability partnership;
(vi) A sole proprietorship;
(vii) Any other legal business entity;
(viii) Another grantee or contractor that is not excluded by
subparagraph (b); and
(ix) Any State or locality;
(2) Does not include:
(i) An individual recipient of Federal financial assistance; or
(ii) A Federal employee.
Federal Award means an award of Federal financial assistance that
an entity receives from a Federal agency.
Federal financial assistance:
(1) Means assistance that entities receive or administer in the
form of a:
(i) Grant;
(ii) Cooperative agreement (which does not include a cooperative
research and development agreement pursuant to the Federal Technology
Transfer Act of 1986, as amended (15 U.S.C. 3710a);
(iii) Loan;
(iv) Loan guarantee;
(v) Subsidy;
(vi) Insurance;
(vii) Food commodity;
(viii) Direct appropriation;
(ix) Assessed or voluntary contribution; or
(x) Any other financial assistance transaction that authorizes the
entity's expenditure of Federal funds.
(2) For the purposes of this part, the term ``Federal financial
assistance'' does not include:
(i) Technical assistance that provides services in lieu of money;
and
(ii) A transfer of title to federally-owned property provided in
lieu of money, even if the award is called a grant.
Recipient means an entity that receives or administers a Federal
Award directly from a Federal agency.
System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) means the Federal repository
into which an entity must provide the information required for the
conduct of business as a recipient.
Unique entity identifier means the universal identifier assigned by
<a href="http://SAM.gov">SAM.gov</a> to uniquely identify an entity.
Appendix A to Part 25--Award Term
I. System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) and Universal Identifier
Requirements
(a) Requirement for System for Award Management.
(1) Unless exempt from this requirement under 2 CFR 25.110, you
must maintain a current and active registration in <a href="http://SAM.gov">SAM.gov</a>. Your
registration must always be current and active until you submit all
final reports required under this Federal award or receive the final
payment, whichever is later. You must review and update your
information in <a href="http://SAM.gov">SAM.gov</a> at least annually from the date of your
initial registration or any subsequent updates to ensure it is
current, accurate, and complete. If applicable, this includes
identifying your immediate and highest-level owner and subsidiaries
and providing information about your predecessors that have received
a Federal award or contract within the last three years.
(b) Requirement for Unique Entity Identifier (UEI). (1) If you
are authorized to make subawards under this Federal award, you:
(i) Must notify potential subrecipients that no entity may
receive a subaward from you until the entity has provided its UEI to
you.
(ii) May not make a subaward to an entity unless the entity has
provided its UEI to you. Subrecipients are not required to complete
full registration in <a href="http://SAM.gov">SAM.gov</a> to obtain a UEI.
(c) Definitions. For the purposes of this award term:
System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) means the Federal
repository into which a recipient must provide the information
required for the conduct of business as a recipient. Additional
information about registration procedures may be found in <a href="http://SAM.gov">SAM.gov</a>
(currently at <a href="https://www.sam.gov">https://www.sam.gov</a>).
Unique entity identifier means the universal identifier assigned
by <a href="http://SAM.gov">SAM.gov</a> to uniquely identify an entity.
Entity is defined at 25 CFR 400 and includes all of the
following types as defined in 2 CFR 200.1:
(1) Non-Federal entity;
(2) Foreign organization;
(3) Foreign public entity;
(4) Domestic for-profit organization; and
(5) Federal agency.
Subaward has the meaning given in 2 CFR 200.1.
Subrecipient has the meaning given in 2 CFR 200.1.
[[Page 69404]]
0
5. Revise part 170 to read as follows:
PART 170--REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION
Sec.
Subpart A--General
170.100 Purpose of this part.
170.105 Applicability.
Subpart B--Policy
170.200 Federal agency reporting requirements.
170.210 Requirements for notices of funding opportunities,
regulations, and application instructions.
170.220 Use of award term.
Subpart C--Definitions
170.300 Definitions.
Appendix A to Part 170
Award term
Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub.
L. 109-282; Pub. L. 110-252, Pub. L. 113-101, Pub. L. 117-40.
Subpart A--General
Sec. 170.100 Purpose of this part.
This part provides guidance to Federal agencies on establishing
requirements for recipients of Federal awards to report information on
subawards and executive total compensation, as required by the Federal
Funding Accountability and Transparency Act of 2006 (Public Law 109-
282), as amended by the Digital Accountability and Transparency Act of
2014 (Public Law 113-101), hereafter referred to as the ``Transparency
Act.''
Sec. 170.105 Applicability.
(a) This part applies to a Federal agency's Federal financial
assistance as defined in Sec. 170.300. This part applies to all
recipients and subrecipients of Federal awards who meet the reporting
requirements of paragraph (c) of this section, unless exempt under
Federal statute or by paragraph (d) of this section.
(b) This part does not apply to an individual who applies for or
receives Federal financial assistance as a natural person (that is,
unrelated to any business or nonprofit organization an individual owns
or operates).
(c) Reporting Requirements. (1) The names and total compensation of
an entity's five most highly compensated executives must be reported
if:
(i) In the entity's preceding fiscal year, it received:
(A) 80 percent or more of its annual gross revenue in Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act, as defined at Sec.
170.300; and
(B) $25,000,000 or more in annual gross revenue from Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act, as defined at Sec.
170.300; and
(ii) The public does not have access to information about the
compensation of senior executives of the entity through periodic
reports filed under section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal
Revenue Code of 1986.
(d) Class exceptions. OMB may approve additional exceptions for
classes of Federal awards or recipients when not prohibited by Federal
statute.
Subpart B--Policy
Sec. 170.200 Federal agency reporting requirements.
(a) Federal agencies must publicly report Federal awards that equal
or exceed the micro-purchase threshold (see 2 CFR 200.1). Federal
agencies must publish the required Federal award information on
USAspending.gov in accordance with the guidance provided by OMB and the
U.S. Department of the Treasury's DATA Act Information Model Schema
(DAIMS).
(b) Federal agencies should ensure that their agency-specific
requirements do not require recipients to submit data that is the same
as or similar to data required by the Transparency Act during a given
reporting period.
Sec. 170.210 Requirements for notices of funding opportunities,
regulations, and application instructions.
(a) A Federal agency that makes Federal awards subject to the
Transparency Act must include the requirements of paragraph (b) of this
section in each notice of funding opportunity, regulation, or other
issuance containing instructions for applicants under which Federal
awards may be made that are subject to Transparency Act reporting
requirements. A notice of funding opportunity is any paper or
electronic issuance that a Federal agency uses to announce a funding
opportunity, whether it is called a ``program announcement,'' ``notice
of funding availability,'' ``broad agency announcement,'' ``research
announcement,'' ``solicitation,'' or any other term.
(b) The notice of funding opportunity, regulation, or other
issuance must require each applicant, to which this part applies, to
have the necessary processes and systems in place to comply with this
part if they receive a Federal award.
Sec. 170.220 Use of award term.
(a) A Federal agency must include the award term in Appendix A to
this part in each Federal award to a recipient under which the total
funding is anticipated to equal or exceed $30,000 in Federal funding.
(b) Consistent with paragraph (a) of this section, a Federal agency
is not required to include the award term in Appendix A of this part if
the total amount of Federal funding under the Federal award will not
equal or exceed $30,000. However, the Federal agency must subsequently
add the award term if increases to the Federal funding result in the
award equaling or exceeding $30,000.
(c) A Federal agency may use different letters and numbers than
those in Appendix A to designate the paragraphs of the award term.
Subpart C--Definitions
Sec. 170.300 Definitions
Terms not defined in this part shall have the same meaning as
provided in 2 CFR part 200, subpart A. As used in this part:
Applicant means any entity that applies for a Federal award
directly from a Federal agency.
Entity includes:
(1) Whether for profit or nonprofit:
(i) A corporation;
(ii) An association;
(iii) A partnership;
(iv) A limited liability company;
(v) A limited liability partnership;
(vi) A sole proprietorship;
(vii) Any other legal business entity;
(viii) Another grantee or contractor that is not excluded by
subparagraph (2) or (3); and
(ix) Any State or locality;
(2) Does not include:
(i) An individual recipient of Federal financial assistance; or
(ii) A Federal employee.
Federal Award means an award of Federal financial assistance that
an entity receives from a Federal agency.
Executive means an officer, managing partner, or any other employee
holding a management position.
Federal financial assistance:
(1) Means assistance that entities receive or administer in the
form of a:
(i) Grant;
(ii) Cooperative agreement (which does not include a cooperative
research and development agreement pursuant to the Federal Technology
Transfer Act of 1986, as amended (15 U.S.C. 3710a);
(iii) Loan;
[[Page 69405]]
(iv) Loan guarantee;
(v) Subsidy;
(vi) Insurance;
(vii) Food commodity;
(viii) Direct appropriation;
(ix) Assessed or voluntary contribution; or
(x) Any other financial assistance transaction that authorizes the
entity's expenditure of Federal funds.
(2) For the purposes of this part, the term ``Federal financial
assistance'' does not include:
(i) Technical assistance that provides services in lieu of money;
(ii) A transfer of title to federally-owned property provided in
lieu of money, even if the award is called a grant;
(iii) Any classified Federal award; or
(iv) Any award funded in whole or in part with Recovery funds, as
defined in section 1512 of the American Recovery and Reinvestment Act
of 2009 (Pub. L. 111-5).
Recipient means an entity that receives or administers a Federal
Award directly from a Federal agency.
Total Compensation means the cash and noncash dollar value an
executive earns during an entity's preceding fiscal year. This includes
all items of compensation as prescribed in 17 CFR 29.402(c)(2).
Appendix A to Part 170--Award Term
I. Reporting Subawards and Executive Compensation
(a) Reporting of first-tier subawards--(1) Applicability. Unless
you are exempt as provided in paragraph (d) of this award term, you
must report each action that equals or exceeds $30,000 in Federal
funds for a subaward to an entity or Federal agency. You must
subsequently report an action if increases to the Federal funding
results in the subaward equaling or exceeding $30,000.
(2) Reporting Requirements. (i) The entity or Federal agency
must report each subaward described in paragraph (a)(1) of this
award term to the Federal Funding Accountability and Transparency
Act Subaward Reporting System (FSRS) at <a href="http://www.fsrs.gov">http://www.fsrs.gov</a>.
(ii) For subaward information, report no later than the end of
the month following the month in which the subaward was made. (For
example, if the subaward was made on November 7, 2025, the subaward
must be reported by no later than December 31, 2025).
(b) Reporting total compensation of recipient executives for
entities--(1) Applicability. You must report the total compensation
for each of your five most highly compensated executives for the
preceding completed fiscal year if:
(i) The total Federal funding authorized to date under this
Federal award equals or exceeds $30,000;
(ii) in the preceding fiscal year, you received:
(A) 80 percent or more of your annual gross revenues from
Federal procurement contracts (and subcontracts) and Federal awards
(and subawards) subject to the Transparency Act; and
(B) $25,000,000 or more in annual gross revenues from Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act; and,
(iii) The public does not have access to information about the
compensation of the executives through periodic reports filed under
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code
of 1986 after receiving this subaward. (To determine if the public
has access to the compensation information, see the U.S. Security
and Exchange Commission total compensation filings at <a href="http://www.sec.gov/answers/execomp.htm">http://www.sec.gov/answers/execomp.htm</a>.)
(2) Reporting Requirements. You must report executive total
compensation described in paragraph (b)(1) of this appendix:
(i) As part of your registration profile at <a href="https://www.sam.gov">https://www.sam.gov</a>.
(ii) No later than the month following the month in which this
Federal award is made, and annually after that. (For example, if
this Federal award was made on November 7, 2025, the executive total
compensation must be reported by no later than December 31, 2025.)
(c) Reporting of total compensation of subrecipient executives--
(1) Applicability. Unless a first-tier subrecipient is exempt as
provided in paragraph (d) of this appendix, you must report the
executive total compensation of each of the subrecipient's five most
highly compensated executives for the subrecipient's preceding
completed fiscal year, if:
(i) The total Federal funding authorized to date under the
subaward equals or exceeds $30,000;
(ii) In the subrecipient's preceding fiscal year, the
subrecipient received:
(A) 80 percent or more of its annual gross revenues from Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act; and,
(B) $25,000,000 or more in annual gross revenues from Federal
procurement contracts (and subcontracts), and Federal awards (and
subawards) subject to the Transparency Act; and
(iii) The public does not have access to information about the
compensation of the executives through periodic reports filed under
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code
of 1986 after receiving this subaward. (To determine if the public
has access to the compensation information, see the U.S. Security
and Exchange Commission total compensation filings at <a href="http://www.sec.gov/answers/execomp.htm">http://www.sec.gov/answers/execomp.htm</a>.)
(2) Reporting Requirements. Subrecipients must report to you,
the recipient, their executive total compensation described in
paragraph (c)(1) of this appendix. You are required to submit this
information to the Federal Funding Accountability and Transparency
Act Subaward Reporting System (FSRS) at <a href="http://www.fsrs.gov">http://www.fsrs.gov</a> no later
than the end of the month following the month in which the subaward
was made. (For example, if the subaward was made on November 7,
2025, the subaward must be reported by no later than December 31,
2025).
(d) Exemptions. (1) If in the previous tax year you had gross
income under $300,000, you are exempt from the requirements to
report:
(i) Subawards, and
(ii) The total compensation of the five most highly compensated
executives of any subrecipient.
(e) Definitions.
For purposes of this award term:
Entity includes:
(1) Whether for profit or nonprofit:
(i) A corporation;
(ii) An association;
(iii) A partnership;
(iv) A limited liability company;
(v) A limited liability partnership;
(vi) A sole proprietorship;
(vii) Any other legal business entity;
(viii) Another grantee or contractor that is not excluded by
subparagraph (2); and
(ix) Any State or locality;
(2) Does not include:
(i) An individual recipient of Federal financial assistance; or
(ii) A Federal employee.
Executive means an officer, managing partner, or any other
employee holding a management position.
Subaward has the meaning given in 2 CFR 200.1.
Subrecipient has the meaning given in 2 CFR 200.1.
Total Compensation means the cash and noncash dollar value an
executive earns during an entity's preceding fiscal year. This
includes all items of compensation as prescribed in 17 CFR
229.402(c)(2).
0
6. Revise part 175 to read as follows:
PART 175--AWARD TERM FOR TRAFFICKING IN PERSONS
Sec.
Subpart A--General
175.100 Purpose of this part.
175.105 Statutory requirement.
Subpart B--Guidance
175.200 Use of award term.
175.205 Referral.
Subpart C--Definitions
175.300 Definitions.
Appendix A to Part 175
Award term
Authority: 22 U.S.C. 7104(g); 22 U.S.C. 7104a; 22 U.S.C. 7104b;
22 U.S.C. 7104c; 31 U.S.C. 503; 31 U.S.C. 6307; 31 U.S.C. 1111; 41
U.S.C. 1121; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR
10737.
Subpart A--General
Sec. 175.100 Purpose of this part.
This part establishes a Federal award term for grants and
cooperative
[[Page 69406]]
agreements to implement the requirements in 22 U.S.C. 7104(g).
Sec. 175.105 Statutory requirement.
(a) Federal agencies are required to include in each Federal grant
or cooperative agreement a condition that authorizes the Federal agency
to terminate the award, without penalty, if a private entity receiving
funds under the award as a recipient or subrecipient engages in:
(1) Severe forms of trafficking in persons;
(2) The procurement of a commercial sex act during the period of
time that the grant or cooperative agreement is in effect;
(3) The use of forced labor in the performance of the grant or
cooperative agreement; or
(4) Acts that directly support or advance trafficking in persons,
including the following acts:
(i) Destroying, concealing, removing, confiscating, or otherwise
denying an employee access to that employee's identity or immigration
documents;
(ii) Failing to provide return transportation or pay for return
transportation costs to an employee from a country outside the United
States to the country from which the employee was recruited upon the
end of employment if requested by the employee, unless:
(A) exempted from the requirement to provide or pay for such return
transportation by the Federal department or agency providing or
entering into the grant or cooperative agreement; or
(B) the employee is a victim of human trafficking seeking victim
services or legal redress in the country of employment or a witness in
a human trafficking enforcement action;
(iii) Soliciting a person for the purpose of employment, or
offering employment, by means of materially false or fraudulent
pretenses, representations, or promises regarding that employment;
(iv) Charging recruited employees a placement or recruitment fee;
or
(v) Providing or arranging housing that fails to meet the host
country's housing and safety standards.
(b) Compliance plan and certification requirement.
(1) Certification. Prior to receiving a grant or cooperative
agreement, if the estimated value of services required to be performed
under the grant or cooperative agreement outside the United States
exceeds $500,000, a recipient must certify that:
(i) The recipient has implemented a plan to prevent the activities
described in paragraph (a) of this section, and is in compliance with
this plan;
(ii) The recipient has implemented procedures to prevent any
activities described in paragraph (a) of this section and to monitor,
detect, and terminate any subcontractor, subgrantee, or employee of the
recipient engaging in any activities described in paragraph (a) of this
section; and
(iii) To the best of the recipient's knowledge, neither the
recipient, nor any subcontractor or subgrantee of the recipient or any
agent of the recipient or of such a subcontractor or subgrantee, is
engaged in any of the activities described in paragraph (a) of this
section.
(2) Annual certification. If the recipient receives the award, it
must submit an annual certification consistent with paragraph (b)(1) of
this section for each year the award is in effect.
(3) Compliance plan. Any plan or procedures implemented pursuant to
paragraph (b) must be appropriate to the size and complexity of the
grant or cooperative agreement and to the nature and scope of its
activities, including the number of non-United States citizens expected
to be employed.
(4) Copies of the compliance plan. The recipient must provide a
copy of the plan to the grant officer upon request, and as appropriate,
must post the useful and relevant contents of the plan or related
materials on its website and at the workplace.
(5) Minimum requirements of the compliance plan. The compliance
plan must include, at a minimum, the following:
(i) An awareness program to inform recipient employees about the
Government's policy prohibiting trafficking-related activities
described in paragraph (a) of this section, the activities prohibited,
and the actions that will be taken against the employee for violations.
Additional information about Trafficking in Persons and examples of
awareness programs can be found at the website for the Department of
State's Office to Monitor and Combat Trafficking in Persons at <a href="http://www.state.gov/j/tip/">http://www.state.gov/j/tip/</a>.
(ii) A process for employees to report, without fear of
retaliation, activity inconsistent with the policy prohibiting
trafficking in persons.
(iii) A recruitment and wage plan that only permits the use of
recruitment companies with trained employees, prohibits charging
recruitment fees to the employees or potential employees and ensures
that wages meet applicable host-country legal requirements or explains
any variance.
(iv) A housing plan, if the recipient, subrecipient, contractor, or
subcontractor intends to provide or arrange housing, that ensures that
the housing meets host-country housing and safety standards.
(v) Procedures to prevent agents, subrecipients, contractors, or
subcontractors at any tier and at any dollar value from engaging in
trafficking in persons, including activities in paragraph (a) of this
section, and to monitor, detect, and terminate any agents, subgrants,
or subrecipient, contractor, or subcontractor employees that have
engaged in such activities.
(c) Notification to Inspectors General and cooperation with
government. The head of a Federal agency making or awarding a grant or
cooperative agreement must require that the recipient of the grant or
cooperative agreement:
(1) Immediately inform the Inspector General of the Federal agency
of any information it receives from any source that alleges credible
information that the recipient, any subcontractor or subgrantee of the
recipient, or any agent of the recipient or of such a subcontractor or
subgrantee, has engaged in conduct described in paragraph (a) of this
section; and
(2) Fully cooperate with any Federal agencies responsible for
audits, investigations, or corrective actions relating to trafficking
in persons.
Subpart B--Guidance
Sec. 175.200 Use of award term.
(a) To implement the requirements of 22 U.S.C. 7104(g) a Federal
agency must include the award term in Appendix A of this part for the
following Federal awards:
(1) A grant or cooperative agreement to a private entity, as
defined in Sec. 175.300; and
(2) A grant or cooperative agreement to a State, local government,
Indian Tribe, foreign public entity, or any other recipient if funding
under the award could be provided to a subrecipient that is a private
entity.
(b) A Federal agency may use different letters and numbers than
those in Appendix A to designate the paragraphs of the award term.
Sec. 175.205 Referral.
A Federal agency official should inform the agency's suspension and
debarment official if an award is terminated based on a violation of a
prohibition in the award term under Appendix A.
[[Page 69407]]
Subpart C--Definitions
Sec. 175.300 Definitions.
Terms not defined in this part shall have the same meaning as
provided in 2 CFR part 200, subpart A. As used in this part:
Abuse or threatened abuse of law or legal process means the use or
threatened use of a law or legal process, whether administrative,
civil, or criminal, in any manner or for any purpose for which the law
was not designed, in order to exert pressure on another person to cause
that person to take some action or refrain from taking some action.
Coercion means:
(1) Threats of serious harm to or physical restraint against any
person;
(2) Any scheme, plan, or pattern intended to cause a person to
believe that failure to perform an act would result in serious harm to
or physical restraint against any person; or
(3) The abuse or threatened abuse of the legal process.
Commercial sex act means any sex act on account of which anything
of value is given to or received by any person.
Debt bondage means the status or condition of a debtor arising from
a pledge by the debtor of his or her personal services or of those of a
person under his or her control as a security for debt, if the value of
those services as reasonably assessed is not applied toward the
liquidation of the debt or the length and nature of those services are
not respectively limited and defined.
Involuntary servitude includes a condition of servitude induced by
means of:
(1) Any scheme, plan, or pattern intended to cause a person to
believe that, if the person did not enter into or continue in such
condition, that person or another person would suffer serious harm or
physical restraint; or
(2) The abuse or threatened abuse of the legal process.
Private Entity means any entity, including for-profit
organizations, nonprofit organizations, institutes of higher education,
and hospitals. The term does not include foreign public entities,
Indian Tribes, local governments, or states as defined in 2 CFR 200.1.
Recruitment Fee means fees of any type, including charges, costs,
assessments, or other financial obligations, that are associated with
the recruiting process, regardless of the time, manner, or location of
imposition or collection of the fee.
(1) Recruitment fees include, but are not limited to, the following
fees (when they are associated with the recruiting process) for:
(i) Advertising;
(ii) Obtaining permanent or temporary labor certification,
including any associated fees;
(iii) Processing applications and petitions;
(iv) Acquiring visas, including any associated fees;
(v) Acquiring photographs and identity or immigration documents,
such as passports, including any associated fees;
(vi) Accessing the job opportunity, including required medical
examinations and immunizations; background, reference, and security
clearance checks and examinations; and additional certifications;
(vii) An employer's recruiters, agents or attorneys, or other
notary or legal fees;
(viii) Language interpretation or translation, arranging for or
accompanying on travel, or providing other advice to employees or
potential employees;
(ix) Government-mandated fees, such as border crossing fees,
levies, or worker welfare fund;
(x) Transportation and subsistence costs:
(A) While in transit, including, but not limited to, airfare or
costs of other modes of transportation, terminal fees, and travel taxes
associated with travel from the country of origin to the country of
performance and the return journey upon the end of employment; and
(B) From the airport or disembarkation point to the worksite;
(xi) Security deposits, bonds, and insurance; and
(xii) Equipment charges.
(2) A recruitment fee, as described in the introductory text of
this definition, is a recruitment fee, regardless of whether the
payment is:
(i) Paid in property or money;
(ii) Deducted from wages;
(iii) Paid back in wage or benefit concessions;
(iv) Paid back as a kickback, bribe, in-kind payment, free labor,
tip, or tribute; or
(v) Collected by an employer or a third party, whether licensed or
unlicensed, including, but not limited to:
(A) Agents;
(B) Labor brokers;
(C) Recruiters;
(D) Staffing firms (including private employment and placement
firms);
(E) Subsidiaries/affiliates of the employer;
(F) Any agent or employee of such entities; and
(G) Subcontractors at all tiers.
Severe forms of trafficking in persons means:
(1) Sex trafficking in which a commercial sex act is induced by
force, fraud, or coercion or in which the person induced to perform
such act has not attained 18 years of age; or
(2) The recruitment, harboring, transportation, provision, or
obtaining of a person for labor or services, through the use of force,
fraud, or coercion for the purpose of subjection to involuntary
servitude, peonage, debt bondage or slavery.
Sex trafficking means the recruitment, harboring, transportation,
provision, obtaining, patronizing, or soliciting of a person for the
purpose of a commercial sex act.
Appendix A to Part 175--Award Term
I. Trafficking in persons.
(a) Provisions applicable to a recipient that is a private
entity. (1) Under this award, you as the recipient, your employees,
subrecipients under this award, and subrecipient's employees may not
engage in:
(i) Severe forms of trafficking in persons;
(ii) The procurement of a commercial sex act during the period
of time that this award or any subaward is in effect;
(iii) The use of forced labor in the performance of this award
or any subaward; or
(iv) Acts that directly support or advance trafficking in
persons, including the following acts:
(A) Destroying, concealing, removing, confiscating, or otherwise
denying an employee access to that employee's identity or
immigration documents;
(B) Failing to provide return transportation or pay for return
transportation costs to an employee from a country outside the
United States to the country from which the employee was recruited
upon the end of employment if requested by the employee, unless:
(1) Exempted from the requirement to provide or pay for such
return transportation by the Federal department or agency providing
or entering into the grant or cooperative agreement; or
(2) The employee is a victim of human trafficking seeking victim
services or legal redress in the country of employment or a witness
in a human trafficking enforcement action;
(C) Soliciting a person for the purpose of employment, or
offering employment, by means of materially false or fraudulent
pretenses, representations, or promises regarding that employment;
(D) Charging recruited employees a placement or recruitment fee;
or
(E) Providing or arranging housing that fails to meet the host
country's housing and safety standards.
(2) We as the awarding Federal agency may unilaterally terminate
this award, without penalty, if any private entity under this award:
[[Page 69408]]
(i) Is determined to have violated a prohibition in paragraph
(a)(1) of this appendix; or
(ii) Has an employee that is determined to have violated a
prohibition in paragraph (a)(1) of this this appendix through
conduct that is either:
(A) Associated with the performance under this award; or
(B) Imputed to you or the subrecipient using the standards and
due process for imputing the conduct of an individual to an
organization that are provided in 2 CFR part 180, ``OMB Guidelines
to Agencies on Government-wide Debarment and Suspension
(Nonprocurement),'' as implemented by our agency at [agency must
insert reference here to its regulatory implementation of the OMB
guidelines in 2 CFR part 180 (for example, ``2 CFR part XX'')].
(b) Provision applicable to a recipient other than a private
entity. (1) We as the awarding Federal agency may unilaterally
terminate this award, without penalty, if a subrecipient that is a
private entity under this award:
(i) Is determined to have violated a prohibition in paragraph
(a)(1) of this appendix; or
(ii) Has an employee that is determined to have violated a
prohibition in paragraph (a)(1) of this appendix through conduct
that is either:
(A) Associated with the performance under this award; or
(B) Imputed to the subrecipient using the standards and due
process for imputing the conduct of an individual to an organization
that are provided in 2 CFR part 180, ``OMB Guidelines to Agencies on
Government-wide Debarment and Suspension (Nonprocurement),'' as
implemented by our agency at [agency must insert reference here to
its regulatory implementation of the OMB guidelines in 2 CFR part
180 (for example, ``2 CFR part XX'')].
(c) Provisions applicable to any recipient. (1) You must inform
us immediately of any information you receive from any source
alleging a violation of a prohibition in paragraph (a)(1) of this
appendix.
(2) Our right to unilaterally terminate this award as described
in paragraphs (a)(2) or (b)(1) of this appendix:
(i) Implements the requirements of 22 U.S.C. 78, and
(ii) Is in addition to all other remedies for noncompliance that
are available to us under this award.
(3) You must include the requirements of paragraph (a)(1) of
this award term in any subaward you make to a private entity.
(d) Definitions. For purposes of this award term:
Employee means either:
(1) An individual employed by you or a subrecipient who is
engaged in the performance of the project or program under this
award; or
(2) Another person engaged in the performance of the project or
program under this award and not compensated by you including, but
not limited to, a volunteer or individual whose services are
contributed by a third party as an in-kind contribution toward cost
sharing requirements.
Private Entity means any entity, including for-profit
organizations, nonprofit organizations, institutions of higher
education, and hospitals. The term does not include foreign public
entities, Indian Tribes, local governments, or states as defined in
2 CFR 200.1.
The terms ``severe forms of trafficking in persons,''
``commercial sex act,'' ``sex trafficking,'' ``Abuse or threatened
abuse of law or legal process,'' ``coercion,'' ``debt bondage,'' and
``involuntary servitude'' have the meanings given at section 103 of
the TVPA, as amended (22 U.S.C. 7102).
0
7. Revise part 180 to read as follows:
PART 180--OMB GUIDELINES TO AGENCIES ON GOVERNMENT-WIDE DEBARMENT
AND SUSPENSION (NONPROCUREMENT)
Sec.
180.5 What does this part do?
180.10 How is this part organized?
180.15 To whom does the guidance apply?
180.20 What must a Federal agency do to implement these guidelines?
180.25 What must a Federal agency address in its implementation of
the guidance?
180.30 Where does a Federal agency implement these guidelines?
180.40 How are these guidelines maintained?
180.45 Do these guidelines cover persons who are disqualified, as
well as those who are excluded from nonprocurement transactions?
Subpart A--General
180.100 How are subparts A through I organized?
180.105 How is this part written?
180.110 Do terms in this part have special meanings?
180.115 What do subparts A through I of this part do?
180.120 Do subparts A through I of this part apply to me?
180.125 What is the purpose of the nonprocurement debarment and
suspension system?
180.130 How does an exclusion restrict a person's involvement in
covered transactions?
180.135 May a Federal agency grant an exception to let an excluded
person participate in a covered transaction?
180.140 Does an exclusion under the nonprocurement system affect a
person's eligibility for Federal procurement contracts?
180.145 Does an exclusion under the Federal procurement system
affect a person's eligibility to participate in nonprocurement
transactions?
180.150 Against whom may a Federal agency take an exclusion action?
180.155 How do I know if a person is excluded?
Subpart B--Covered Transactions
180.200 What is a covered transaction?
180.205 Why is it important if a particular transaction is a covered
transaction?
180.210 Which nonprocurement transactions are covered transactions?
180.215 Which nonprocurement transactions are not covered
transactions?
180.220 Are any procurement contracts included as covered
transactions?
180.225 How do I know if a transaction in which I may participate is
a covered transaction?
Subpart C--Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
180.300 What must I do before I enter into a covered transaction
with another person at the next lower tier?
180.305 May I enter into a covered transaction with an excluded or
disqualified person?
180.310 What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?
180.315 May I use the services of an excluded person as a principal
under a covered transaction?
180.320 Must I verify that principals of my covered transactions are
eligible to participate?
180.325 What happens if I do business with an excluded person in a
covered transaction?
180.330 What requirements must I pass down to persons at lower tiers
with whom I intend to do business?
Disclosing Information--Primary Tier Participants
180.335 What information must I provide before entering into a
covered transaction with a Federal agency?
180.340 If I disclose unfavorable information required under Sec.
180.335, will I be prevented from participating in the transaction?
180.345 What happens if I fail to disclose information required
under Sec. 180.335?
180.350 What must I do if I learn of information required under
Sec. 180.335 after entering into a covered transaction with a
Federal agency?
Disclosing Information--Lower Tier Participants
180.355 What information must I provide to a higher tier participant
before entering into a covered transaction with that participant?
180.360 What happens if I fail to disclose information required
under Sec. 180.355?
180.365 What must I do if I learn of information required under
Sec. 180.355 after entering into a covered transaction with a
higher tier participant?
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
180.400 May I enter into a transaction with an excluded or
disqualified person?
180.405 May I enter into a covered transaction with a participant if
a principal of the transaction is excluded?
180.410 May I approve a participant's use of the services of an
excluded person?
180.415 What must I do if a Federal agency excludes the participant
or a principal after I enter into a covered transaction?
[[Page 69409]]
180.420 May I approve a transaction with an excluded or disqualified
person at a lower tier?
180.425 When do I check to see if a person is excluded or
disqualified?
180.430 How do I check to see if a person is excluded or
disqualified?
180.435 What must I require of a primary tier participant?
180.440 What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified person?
180.445 What action may I take if a primary tier participant fails
to disclose the information required under Sec. 180.335?
180.450 What action may I take if a lower tier participant fails to
disclose the information required under Sec. 180.355 to the next
higher tier?
Subpart E--System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) Exclusions
180.500 What is the purpose of the System for Award Management
(<a href="http://SAM.gov">SAM.gov</a>) Exclusions?
180.505 Who uses <a href="http://SAM.gov">SAM.gov</a> Exclusions?
180.510 Who maintains <a href="http://SAM.gov">SAM.gov</a> Exclusions?
180.515 What specific information is in <a href="http://SAM.gov">SAM.gov</a> Exclusions?
180.520 Who places the information into <a href="http://SAM.gov">SAM.gov</a> Exclusions?
180.525 Whom do I ask if I have questions about a person in <a href="http://SAM.gov">SAM.gov</a>
Exclusions?
180.530 Where can I find <a href="http://SAM.gov">SAM.gov</a> Exclusions?
Subpart F--General Principles Relating to Suspension and Debarment
Actions
180.600 How do suspension and debarment actions start?
180.605 How does suspension differ from debarment?
180.610 What procedures does a Federal agency use in suspension and
debarment actions?
180.615 How does a Federal agency notify a person of a suspension or
debarment action?
180.620 Do Federal agencies coordinate suspension and debarment
actions?
180.625 What is the scope of a suspension or debarment?
180.630 May a Federal agency impute the conduct of one person to
another?
180.635 May a Federal agency resolve an administrative action in
lieu of debarment or suspension?
180.640 May a settlement include a voluntary exclusion?
180.645 Do other Federal agencies know if an agency agrees to a
voluntary exclusion?
180.650 May an administrative agreement be the result of a
settlement?
180.655 How will other Federal awarding agencies know about an
administrative agreement that is the result of a settlement?
180.660 Will administrative agreement information about me in
<a href="http://SAM.gov">SAM.gov</a> be corrected or updated?
Subpart G--Suspension
180.700 When may the suspending official issue a suspension?
180.705 What does the suspending official consider in issuing a
suspension?
180.710 When does a suspension take effect?
180.715 What notice does the suspending official give me if I am
suspended?
180.720 How may I contest a suspension?
180.725 How much time do I have to contest a suspension?
180.730 What information must I provide to the suspending official
if I contest the suspension?
180.735 Under what conditions do I get an additional opportunity to
challenge the facts on which the suspension is based?
180.740 Are suspension proceedings formal?
180.745 How is fact-finding conducted?
180.750 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
180.755 When will I know whether the suspension is continued or
terminated?
180.760 How long may my suspension last?
Subpart H--Debarment
180.800 What are the causes for debarment?
180.805 What notice does the debarring official give me if I am
proposed for debarment?
180.810 When does a debarment take effect?
180.815 How may I contest a proposed debarment?
180.820 How much time do I have to contest a proposed debarment?
180.825 What information must I provide to the debarring official if
I contest the proposed debarment?
180.830 Under what conditions do I get an additional opportunity to
challenge the facts on which the proposed debarment is based?
180.835 Are debarment proceedings formal?
180.840 How is fact-finding conducted?
180.845 What does the debarring official consider in deciding
whether to debar me?
180.850 What is the standard of proof in a debarment action?
180.855 Who has the burden of proof in a debarment action?
180.860 What factors may influence the debarring official's
decision?
180.865 How long may my debarment last?
180.870 When do I know if the debarring official debars me?
180.875 May I ask the debarring official to reconsider a decision to
debar me?
180.880 What factors may influence the debarring official during
reconsideration?
180.885 May the debarring official extend a debarment?
Subpart I--Definitions
180.900 Adequate evidence.
180.905 Affiliate.
180.910 Agent or representative.
180.915 Civil judgment.
180.920 Conviction.
180.925 Debarment.
180.930 Debarring official.
180.935 Disqualified.
180.940 Excluded or exclusion.
180.945 System for Award Management Exclusions (<a href="http://SAM.gov">SAM.gov</a>) Exclusions.
180.950 Federal agency.
180.955 Indictment.
180.960 Ineligible or ineligibility.
180.965 Legal proceedings.
180.970 Nonprocurement transaction.
180.975 Notice.
180.980 Participant.
180.985 Person.
180.990 Preponderance of the evidence.
180.995 Principal.
180.1000 Respondent.
180.1005 State.
180.1010 Suspending official.
180.1015 Suspension.
180.1020 Voluntary exclusion or voluntarily excluded.
Appendix A to Part 180
Covered Transactions
Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub.
L. 103-355; Pub. L. 109-282; Pub. L. 110-252; Pub. L. 111-84; Pub.
L. 113-101; Pub. L. 115-232; Pub. L. 117-40; E.O. 12549; E.O. 12689.
Sec. 180.5 What does this part do?
This part provides guidance for Federal agencies on how to
implement the government-wide debarment and suspension system for
nonprocurement programs and activities.
Sec. 180.10 How is this part organized?
This part is organized into two segments.
(a) Sections 180.5 through 180.45 contain general policy direction
for Federal agencies' use of the standards in subparts A through I.
(b) Subparts A through I contain uniform government-wide standards
that Federal agencies are to use to specify:
(1) The types of transactions that are covered by the
nonprocurement debarment and suspension system;
(2) The effects of an exclusion under that nonprocurement system,
including reciprocal effects with the government-wide debarment and
suspension system for procurement;
(3) The criteria and minimum due process to be used in
nonprocurement debarment and suspension actions; and
(4) Related policies and procedures to ensure the effectiveness of
those actions.
Sec. 180.15 To whom does the guidance apply?
This part provides guidance to Federal agencies. Publication of
this guidance in the Code of Federal Regulations (CFR) does not change
its nature--it is guidance and not regulation. Federal agencies'
implementation of this guidance governs the rights and responsibilities
of other persons affected by the nonprocurement debarment and
suspension system.
[[Page 69410]]
Sec. 180.20 What must a Federal agency do to implement these
guidelines?
As Section 3 of Executive Order 12549 requires, each Federal agency
with nonprocurement programs and activities covered by subparts A
through I of the guidance must issue regulations consistent with those
subparts.
Sec. 180.25 What must a Federal agency address in its implementation
of the guidance?
Each Federal agency's implementing regulation:
(a) Must establish policies and procedures for that Federal
agency's nonprocurement debarment and suspension programs and
activities consistent with this guidance. When adopted by a Federal
agency, the provisions of the guidance have a regulatory effect on that
Federal agency's programs and activities.
(b) Must address some matters for which these guidelines give each
Federal agency some discretion. Specifically, the regulation must:
(1) Identify either the Federal agency head or the title of the
designated official who is authorized to grant exceptions under Sec.
180.135 to let an excluded person participate in a covered transaction.
(2) State whether the Federal agency includes as covered
transactions an additional tier of contracts awarded under covered
nonprocurement transactions, as permitted under Sec. 180.220(c).
(3) Identify the method(s) a Federal agency official may use when
entering into a covered transaction with a primary tier participant to
communicate to the participant the requirements described in Sec.
180.435. Examples of methods are an award term that requires compliance
as a condition of the award, an assurance of compliance obtained at the
time of application, or a certification.
(4) State whether the Federal agency specifies a particular method
that participants must use to communicate compliance requirements to
lower tier participants, as described in Sec. 180.330(a). If there is
a specified method, the regulation must require Federal agency
officials to communicate that requirement when entering into covered
transactions with primary tier participants.
(c) May also, at the Federal agency's option:
(1) Identify any specific types of transactions the Federal agency
includes as ``nonprocurement transactions'' in addition to the examples
provided in Sec. 180.970.
(2) Identify any types of nonprocurement transactions that the
Federal agency exempts from coverage under these guidelines, as
authorized under Sec. 180.215(g)(2).
(3) Identify specific examples of types of individuals who would be
``principals'' under the Federal agency's nonprocurement programs and
transactions, in addition to the types of individuals described in
Sec. 180.995.
(4) Specify the Federal agency's procedures, if any, by which a
respondent may appeal a suspension or debarment decision.
(5) Identify by title the officials designated by the Federal
agency head as debarring officials under Sec. 180.930 or suspending
officials under Sec. 180.1010.
(6) Include a subpart covering disqualifications, as authorized in
Sec. 180.45.
(7) Include any provisions authorized by OMB.
Sec. 180.30 Where does a Federal agency implement these guidelines?
Each Federal agency that participates in the government-wide
nonprocurement debarment and suspension system must issue a regulation
implementing these guidelines within its chapter in subtitle B of this
title.
Sec. 180.40 How are these guidelines maintained?
The Interagency Committee on Debarment and Suspension, established
by section 4 of Executive Order 12549, recommends to the OMB any needed
revisions to the guidelines in this part. The OMB publishes proposed
changes to the guidelines in the Federal Register for public comment,
considers comments with the help of the Interagency Committee on
Debarment and Suspension, and issues the final guidelines.
Sec. 180.45 Do these guidelines cover persons who are disqualified,
as well as those who are excluded from nonprocurement transactions?
A Federal agency may add a subpart covering disqualifications to
its regulation implementing these guidelines, but the guidelines in
subparts A through I:
(a) Address disqualified persons only to:
(1) Provide for their inclusion in the System for Award Management
(<a href="http://SAM.gov">SAM.gov</a>) Exclusions; and
(2) State the responsibilities of Federal agencies and participants
to check for disqualified persons before entering into covered
transactions.
(b) Do not specify the:
(1) Transactions for which a disqualified person is ineligible.
Those transactions vary on a case-by-case basis because they depend on
the language of the specific statute, Executive order, or regulation
that caused the disqualification;
(2) Entities to which a disqualification applies; or
(3) Process that a Federal agency uses to disqualify a person.
Unlike exclusion under subparts A through I of this part,
disqualification is frequently not a discretionary action that a
Federal agency takes and may include special procedures.
Subpart A--General
Sec. 180.100 How are subparts A through I organized?
(a) Each subpart contains information related to a broad topic or
specific audience with special responsibilities, as shown in table 1:
Table 1 to Paragraph (a)
------------------------------------------------------------------------
In subpart . . . You will find provisions related to . . .
------------------------------------------------------------------------
A........................... general information about Subparts A
through I.
B........................... the types of transactions that are covered
by the government-wide nonprocurement
suspension and debarment system.
C........................... the responsibilities of persons who
participate in covered transactions.
D........................... the responsibilities of Federal agency
officials who are authorized to enter
into covered transactions.
E........................... the responsibilities of Federal agencies
for entering information into <a href="http://SAM.gov">SAM.gov</a>
Exclusions.
F........................... the general principles governing
suspension, debarment, voluntary
exclusion and settlement.
G........................... suspension actions.
H........................... debarment actions.
I........................... definitions of terms used in this part.
------------------------------------------------------------------------
[[Page 69411]]
(b) Table 2 shows which subparts may be of special interest to you,
depending on who you are:
Table 2 to Paragraph (b)
------------------------------------------------------------------------
If you are . . . See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a A, B, C and I.
nonprocurement transaction.
(2) a respondent in a suspension action. A, B, F, G and I.
(3) a respondent in a debarment action.. A, B, F, H and I.
(4) a suspending official............... A, B, E, F, G and I.
(5) a debarring official................ A, B, D, F, H and I.
(6) a Federal agency official authorized A, B, D, E and I.
to enter into a covered transaction.
------------------------------------------------------------------------
Sec. 180.105 How is this part written?
(a) This part uses a ``plain language'' format to make it easier
for the general public and business community. The section headings and
text must be read together, as they are often in the form of questions
and answers.
(b) Pronouns used within this part, such as ``I'' and ``you,''
change from subpart to subpart depending on the audience being
addressed.
(c) The ``Covered Transactions'' diagram in the appendix to this
part shows the levels or ``tiers'' at which a Federal agency may
enforce an exclusion.
Sec. 180.110 Do terms in this part have special meanings?
This part uses terms throughout the text that have special
meanings. Those terms are defined in subpart I. For example, three
important terms are:
(a) Exclusion or excluded, which refers only to discretionary
actions taken by a suspending or debarring official under Executive
Order 12549 and Executive Order 12689 or under the Federal Acquisition
Regulations (48 CFR part 9, subpart 9.4);
(b) Disqualification or disqualified, which refers to prohibitions
under specific statutes, executive orders (other than Executive Order
12549 and Executive Order 12689), or other authorities.
Disqualifications frequently are not subject to the discretion of a
Federal agency official, may have a different scope than exclusions, or
have special conditions that apply to the disqualification; and
(c) Ineligibility or ineligible, which generally refers to a person
who is either excluded or disqualified.
Sec. 180.115 What do subparts A through I of this part do?
Subparts A through I provide for the reciprocal exclusion of
persons who have been excluded under the Federal Acquisition
Regulations and provide for the consolidated listing of all persons who
are excluded, or disqualified by statute, executive order or other
legal authority.
Sec. 180.120 Do subparts A through I of this part apply to me?
Portions of subparts A through I (see table at Sec. 180.100(b))
apply to you if you are a:
(a) Person who has been, is, or may reasonably be expected to be, a
participant or principal in a covered transaction;
(b) Respondent (a person against whom a Federal agency has
initiated a debarment for suspension action);
(c) Federal agency debarring or suspending official; or
(d) Federal agency official who is authorized to enter into covered
transactions with non-Federal parties.
Sec. 180.125 What is the purpose of the nonprocurement debarment and
suspension system?
(a) To protect the public interest, the Federal Government ensures
the integrity of Federal programs by conducting business only with
responsible persons.
(b) A Federal agency uses the nonprocurement debarment and
suspension system to exclude persons who are not presently responsible
from Federal programs.
(c) An exclusion is a serious action that a Federal agency may take
only to protect the public interest. A Federal agency may not exclude a
person or commodity for the purposes of punishment.
Sec. 180.130 How does an exclusion restrict a person's involvement in
covered transactions?
With the exceptions stated in Sec. Sec. 180.135, 315, and 420, a
person who is excluded by any Federal agency may not:
(a) Be a participant in a Federal agency transaction that is a
covered transaction; or
(b) Act as a principal of a person participating in one of those
covered transactions.
Sec. 180.135 May a Federal agency grant an exception to let an
excluded person participate in a covered transaction?
(a) A Federal agency head or designee may grant an exception
permitting an excluded person to participate in a particular covered
transaction. If the Federal agency head or designee grants an
exception, the exception must be in writing and state the reason(s) for
deviating from the government-wide policy in Executive Order 12549.
(b) An exception granted by one Federal agency for an excluded
person does not extend to the covered transactions of another Federal
agency.
Sec. 180.140 Does an exclusion under the nonprocurement system affect
a person's eligibility for Federal procurement contracts?
When a Federal agency excludes a person under Executive Order 12549
or Executive Order 12689 on or after August 25, 1995, the excluded
person is also ineligible for Federal procurement transactions under
the Federal Acquisition Regulations. Therefore, an exclusion under this
part has a reciprocal effect on Federal procurement transactions.
Sec. 180.145 Does an exclusion under the Federal procurement system
affect a person's eligibility to participate in nonprocurement
transactions?
When a Federal agency excludes a person under the Federal
Acquisition Regulations (FAR) on or after August 25, 1995, the excluded
person is also ineligible to participate in Federal agencies'
nonprocurement covered transactions. Therefore, an exclusion under the
FAR has a reciprocal effect on Federal nonprocurement transactions.
Sec. 180.150 Against whom may a Federal agency take an exclusion
action?
Given a cause that justifies an exclusion under this part, a
Federal agency may exclude any person who has been, is, or may
reasonably be expected to be a participant or principal in a covered
transaction.
[[Page 69412]]
Sec. 180.155 How do I know if a person is excluded?
Check the System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) Exclusions to
determine whether a person is excluded. The General Services
Administration (GSA) maintains <a href="http://SAM.gov">SAM.gov</a> Exclusions and makes it
available, as detailed in subpart E. When a Federal agency takes action
to exclude a person under the nonprocurement or procurement debarment
and suspension system, the agency enters the information about the
excluded person into <a href="http://SAM.gov">SAM.gov</a> Exclusions.
Subpart B--Covered Transactions
Sec. 180.200 What is a covered transaction?
A covered transaction is a nonprocurement or procurement
transaction subject to this part's prohibitions. It may be a
transaction at:
(a) The primary tier, between a Federal agency and a person (see
Appendix to this part); or
(b) A lower tier between a participant in a covered transaction and
another person.
Sec. 180.205 Why is it important if a particular transaction is a
covered transaction?
The importance of whether a transaction is a covered transaction
depends upon who you are.
(a) As a participant in the transaction, you have the
responsibilities laid out in subpart C of this part. Those include
responsibilities to the person or Federal agency at the next higher
tier from whom you received the transaction, if any. They also include
responsibilities if you subsequently enter into other covered
transactions with persons at the next lower tier.
(b) As a Federal official who enters into a primary tier
transaction, you have the responsibilities laid out in subpart D of
this part.
(c) As an excluded person, you may not be a participant or
principal in the transaction unless:
(1) The person who entered into the transaction with you allows you
to continue your involvement in a transaction that predates your
exclusion, as permitted under Sec. 180.310 or Sec. 180.415; or
(2) A Federal agency official obtains an exception from the agency
head or designee to allow you to be involved in the transaction, as
permitted under Sec. 180.135.
Sec. 180.210 Which nonprocurement transactions are covered
transactions?
All nonprocurement transactions, as defined in Sec. 180.970, are
covered transactions unless listed in the exemptions under Sec.
180.215.
Sec. 180.215 Which nonprocurement transactions are not covered
transactions?
The following types of nonprocurement transactions are not covered
transactions:
(a) A direct award to:
(1) A foreign government or foreign governmental entity;
(2) A public international organization;
(3) An entity owned (in whole or in part) or controlled by a
foreign government; or
(4) Any other entity consisting wholly or partially of one or more
foreign governments or foreign governmental entities.
(b) A benefit to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits
received in an individual's business capacity are not excepted). For
example, when a person receives social security benefits under the
Supplemental Security Income provisions of the Social Security Act, 42
U.S.C. 1301 et seq., those benefits are not covered transactions and,
therefore, are not affected if the person is excluded.
(c) Federal employment.
(d) A transaction that a Federal agency needs to respond to a
national or agency recognized emergency or disaster.
(e) A permit, license, certificate, or similar instrument issued as
a means to regulate public health, safety, or the environment, unless a
Federal agency specifically designates it to be a covered transaction.
(f) An incidental benefit that results from ordinary governmental
operations.
(g) Any other transaction if:
(1) The application of an exclusion to the transaction is
prohibited by law; or
(2) A Federal agency's regulation exempts it from coverage under
this part.
(h) Notwithstanding paragraph (a) of this section, covered
transactions must include non-procurement and procurement transactions
involving entities engaged in activity that contributed to or is a
significant factor in a country's non-compliance with its obligations
under arms control, nonproliferation or disarmament agreements, or
commitments with the United States. Federal agencies and primary tier
non-procurement recipients must not award, renew, or extend a non-
procurement transaction or procurement transaction, regardless of
amount or tier, with any entity listed in <a href="http://SAM.gov">SAM.gov</a> Exclusions on the
basis of involvement in activities that violate arms control,
nonproliferation or disarmament agreements, or commitments with the
United States (see section 1290 of the National Defense Authorization
Act for Fiscal Year 2017). The head of a Federal agency may grant an
exception to this requirement under 2 CFR 180.135 and with the
concurrence of the OMB Director.
Sec. 180.220 Are any procurement contracts included as covered
transactions?
(a) Covered transactions under this part:
(1) Do not include any procurement contracts awarded directly by a
Federal agency; but
(2) Do include some procurement contracts awarded under
nonprocurement covered transactions.
(b) Specifically, a contract for goods or services is a covered
transaction if any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement
transaction covered under Sec. 180.210, and the contract amount is
expected to equal or exceed $25,000.
(2) The contract requires the consent of an official of a Federal
agency. In that case, the contract is always a covered transaction
regardless of the amount or who awarded it. For example, it could be a
subcontract awarded by a contractor at a tier below a nonprocurement
transaction, as shown in the Appendix to this part.
(3) The contract is for Federally-required audit services.
(c) A subcontract also is a covered transaction if:
(1) It is awarded by a participant in a procurement transaction
under a nonprocurement transaction of a Federal agency that extends the
coverage of paragraph (b)(1) of this section to additional tiers of
contracts (see the diagram in the Appendix to this part showing that
optional lower tier coverage); and
(2) The value of the subcontract is expected to equal or exceed
$25,000.
Sec. 180.225 How do I know if a transaction in which I may
participate is a covered transaction?
As a participant in a transaction, you will know that it is a
covered transaction because of the Federal agency regulations governing
the transaction. The appropriate Federal agency official or participant
at the next higher tier who enters into the transaction with you will
tell you that you must comply with applicable portions of this part.
[[Page 69413]]
Subpart C--Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
Sec. 180.300 What must I do before I enter into a covered
transaction with another person at the next lower tier?
When you enter into a covered transaction with another person at
the next lower tier, you must verify that the person with whom you
intend to do business is not excluded or disqualified. You do this by:
(a) Checking <a href="http://SAM.gov">SAM.gov</a> Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with
that person.
Sec. 180.305 May I enter into a covered transaction with an excluded
or disqualified person?
(a) As a participant, you may not enter into a covered transaction
with an excluded person unless the Federal agency responsible for the
transaction grants an exception under Sec. 180.135.
(b) You may not enter into any transaction with a person who is
disqualified from that transaction unless you have obtained an
exception under the disqualifying statute, Executive Order, or
regulation.
Sec. 180.310 What must I do if a Federal agency excludes a person
with whom I am already doing business in a covered transaction?
(a) As a participant, you may continue covered transactions with an
excluded person if the transactions were in existence when the Federal
agency excluded the person. However, you are not required to continue
the transactions, and you may consider termination. You should decide
whether to terminate and the type of termination action, if any, only
after a thorough review to ensure that the action is proper and
appropriate.
(b) You may not renew or extend covered transactions (other than
no-cost time extensions) with any excluded person unless the Federal
agency responsible for the transaction grants an exception under Sec.
180.135.
Sec. 180.315 May I use the services of an excluded person as a
principal under a covered transaction?
(a) As a participant, you may continue to use the services of an
excluded person as a principal under a covered transaction if you were
using that person's services in the transaction before the person was
excluded. However, you are not required to continue using that person's
services as a principal. You should decide whether to discontinue that
person's services only after a thorough review to ensure that the
action is proper and appropriate.
(b) You may not begin to use the services of an excluded person as
a principal under a covered transaction unless the Federal agency
responsible for the transaction grants an exception under Sec.
180.135.
Sec. 180.320 Must I verify that principals of my covered transactions
are eligible to participate?
(a) Yes. As a participant, you are responsible for determining
whether your principals of your covered transactions are excluded or
disqualified from participating in the transaction.
(b) You may decide the method and frequency by which you do so. You
may, but are not required to check <a href="http://SAM.gov">SAM.gov</a> Exclusions.
Sec. 180.325 What happens if I do business with an excluded person
in a covered transaction?
As a participant, if you knowingly do business with an excluded
person, the Federal agency responsible for your transaction may
disallow costs, annul or terminate the transaction, issue a stop work
order, debar or suspend you, or take other remedies as appropriate.
Sec. 180.330 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
Before entering into a covered transaction with a participant at
the next lower tier, you must require that participant to:
(a) Comply with this subpart as a condition of participating in the
transaction. You may do so using any method(s) unless the regulation of
the Federal agency responsible for the transaction requires you to use
specific methods.
(b) Pass the requirement to comply with this subpart to each person
the participant enters into a covered transaction at the next lower
tier.
Disclosing Information--Primary Tier Participants
Sec. 180.335 What information must I provide before entering into a
covered transaction with a Federal agency?
Before you enter into a covered transaction at the primary tier,
you, as the participant, must notify the Federal agency office that is
entering into the transaction with you if you know that you or any of
the principals for that covered transaction:
(a) Are presently excluded or disqualified;
(b) Have been convicted within the preceding three years of any of
the offenses listed in Sec. 180.800(a) or had a civil judgment
rendered against you for one of those offenses within that time period;
(c) Are presently indicted for or otherwise criminally or civilly
charged by a governmental entity (Federal, State, or local) with the
commission of any of the offenses listed in Sec. 180.800(a); or
(d) Have had one or more public transactions (Federal, State, or
local) terminated within the preceding three years for cause or
default.
Sec. 180.340 If I disclose unfavorable information required under
Sec. 180.335, will I be prevented from participating in the
transaction?
As a primary tier participant, disclosing unfavorable information
about yourself or a principal under Sec. 180.335 will not necessarily
cause a Federal agency to deny your participation in the covered
transaction. The Federal agency will consider the information when
determining whether to enter into the covered transaction. The Federal
agency will also consider any additional information or explanation you
elect to submit with the disclosed information.
Sec. 180.345 What happens if I fail to disclose information required
under Sec. 180.335?
If a Federal agency later determines that you failed to disclose
information under Sec. 180.335 that you knew at the time you entered
into the covered transaction, the Federal agency may:
(a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
(b) Pursue any other available remedies, including suspension and
debarment.
Sec. 180.350 What must I do if I learn of information required under
Sec. 180.335 after entering into a covered transaction with a Federal
agency?
At any time after you enter into a covered transaction, you must
give immediate written notice to the Federal agency office with which
you entered into the transaction if you learn either that:
(a) You failed to disclose information earlier, as required by
Sec. 180.335; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 180.335.
[[Page 69414]]
Disclosing Information--Lower Tier Participants
Sec. 180.355 What information must I provide to a higher tier
participant before entering into a covered transaction with that
participant?
Before you enter into a covered transaction with a person at the
next higher tier, you, as a lower tier participant, must notify that
person if you know that you or any of the principals are presently
excluded or disqualified.
Sec. 180.360 What happens if I fail to disclose information required
under Sec. 180.355?
When a Federal agency later determines that you failed to tell the
person at the higher tier that you were excluded or disqualified at the
time you entered into the covered transaction with that person, the
agency may pursue any available remedies, including suspension and
debarment.
Sec. 180.365 What must I do if I learn of information required under
Sec. 180.355 after entering into a covered transaction with a higher
tier participant?
At any time after you enter into a lower tier covered transaction
with a person at a higher tier, you must provide immediate written
notice to that person if you learn either that:
(a) You failed to disclose information earlier, as required by
Sec. 180.355; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 180.355.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 180.400 May I enter into a transaction with an excluded or
disqualified person?
(a) As a Federal agency official, you may not enter into a covered
transaction with an excluded person unless you obtain an exception
under Sec. 180.135.
(b) You may not enter into any transaction with a person
disqualified from that transaction unless you obtain a waiver or
exception under the statute, Executive Order, or regulation that is the
basis for the person's disqualification.
Sec. 180.405 May I enter into a covered transaction with a
participant if a principal of the transaction is excluded?
As a Federal agency official, you may not enter into a covered
transaction with a participant if you know that a principal of the
transaction is excluded unless you obtain an exception under Sec.
180.135.
Sec. 180.410 May I approve a participant's use of the services of an
excluded person?
After entering into a covered transaction with a participant, you,
as a Federal agency official, may not approve a participant's use of an
excluded person as a principal under that transaction unless you obtain
an exception under Sec. 180.135.
Sec. 180.415 What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered transaction?
(a) As a Federal agency official, you may continue covered
transactions with an excluded person or under which an excluded person
is a principal if the transactions were in existence when the person
was excluded. However, you are not required to continue the
transactions, and you may consider termination. You should decide
whether to terminate and the type of termination action, if any, only
after a thorough review to ensure that the action is proper and
appropriate.
(b) You may not renew or extend covered transactions (other than
no-cost time extensions) with any excluded person or under which an
excluded person is a principal unless you obtain an exception under
Sec. 180.135.
Sec. 180.420 May I approve a transaction with an excluded or
disqualified person at a lower tier?
If a transaction at a lower tier is subject to your approval, you,
as a Federal agency official, may not approve:
(a) A covered transaction with a person who is currently excluded
unless you obtain an exception under Sec. 180.135; or
(b) A transaction with a person who is disqualified from that
transaction unless you obtain a waiver or exception under the statute,
Executive Order, or regulation that is the basis for the person's
disqualification.
Sec. 180.425 When do I check to see if a person is excluded or
disqualified?
As a Federal agency official, you must check to see if a person is
excluded or disqualified before you:
(a) Enter into a primary tier covered transaction;
(b) Approve a principal in a primary tier covered transaction;
(c) Approve a lower tier participant if your Federal agency's
approval of the lower tier participant is required; or
(d) Approve a principal in connection with a lower tier transaction
if your Federal agency's approval of the principal is required.
Sec. 180.430 How do I check to see if a person is excluded or
disqualified?
You check to see if a person is excluded or disqualified in two
ways:
(a) As a Federal agency official, you must check <a href="http://SAM.gov">SAM.gov</a> Exclusions
when you take any action listed in Sec. 180.425.
(b) You must review the information that a participant gives you,
as required by Sec. 180.335, about its status or the status of the
principals of a transaction.
Sec. 180.435 What must I require of a primary tier participant?
As a Federal agency official, you must require each participant in
a primary tier covered transaction to:
(a) Comply with subpart C as a condition of participation in the
transaction; and
(b) Communicate the requirement to comply with subpart C to persons
at the next lower tier with whom the primary tier participant enters
into covered transactions.
Sec. 180.440 What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified person?
If a participant knowingly does business with an excluded or
disqualified person, you, as a Federal agency official, may refer the
matter for suspension and debarment consideration. You may also
disallow costs, annul or terminate the transaction, issue a stop work
order, or take any other appropriate remedy.
Sec. 180.445 What action may I take if a primary tier participant
fails to disclose the information required under Sec. 180.335?
As a Federal agency official, if you determine that a participant
failed to disclose information, as required by Sec. 180.335, at the
time it entered into a covered transaction with you, you may:
(a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
(b) Pursue any other available remedies, including suspension and
debarment.
Sec. 180.450 What action may I take if a lower tier participant fails
to disclose the information required under Sec. 180.355 to the next
higher tier?
As a Federal agency official, if you determine that a lower tier
participant failed to disclose information, as required by Sec.
180.355, at the time it entered into a covered transaction with a
participant at the next higher tier, you may pursue any remedies
available to you, including the initiation of a suspension or debarment
action.
[[Page 69415]]
Subpart E--System for Award Management (<a href="http://SAM.gov">SAM.gov</a>) Exclusions
Sec. 180.500 What is the purpose of the System for Award Management
(<a href="http://SAM.gov">SAM.gov</a>) Exclusions?
The <a href="http://SAM.gov">SAM.gov</a> Exclusions is a widely available source of the most
current information about persons who are excluded or disqualified from
covered transactions.
Sec. 180.505 Who uses <a href="http://SAM.gov">SAM.gov</a> Exclusions?
(a) Federal agency officials use <a href="http://SAM.gov">SAM.gov</a> Exclusions to determine
whether to enter into a transaction with a person, as required under
Sec. 180.430.
(b) Participants also may, but are not required to, use <a href="http://SAM.gov">SAM.gov</a>
Exclusions to determine if:
(1) Principals of their transactions are excluded or disqualified,
as required under Sec. 180.320; or
(2) Persons with whom they are entering into covered transactions
at the next lower tier are excluded or disqualified.
(c) The <a href="http://SAM.gov">SAM.gov</a> Exclusions are available to the general public.
Sec. 180.510 Who maintains <a href="http://SAM.gov">SAM.gov</a> Exclusions?
GSA maintains <a href="http://SAM.gov">SAM.gov</a> Exclusions. When a Federal agency takes an
action to exclude a person under the nonprocurement or procurement
debarment and suspension system, the agency enters the information
about the excluded person into <a href="http://SAM.gov">SAM.gov</a> Exclusions.
Sec. 180.515 What specific information is in <a href="http://SAM.gov">SAM.gov</a> Exclusions?
(a) At a minimum, <a href="http://SAM.gov">SAM.gov</a> Exclusions indicate:
(1) The full name (where available) and address of each excluded
and disqualified person, in alphabetical order, with cross-references
if more than one name is involved in a single action;
(2) The type of action;
(3) The cause for the action;
(4) The scope of the action;
(5) Any termination date for the action;
(6) The Federal agency and name and telephone number of the agency
point of contact for the action; and
(7) The unique entity identifier approved by the GSA of the
excluded or disqualified person, if available.
(b)(1) The <a href="http://SAM.gov">SAM.gov</a> Exclusions includes a field for the Taxpayer
Identification Number (TIN), or the Social Security Number (SSN) for an
individual, of an excluded or disqualified person.
(2) Agencies disclose an individual's SSN to verify an individual's
identity only if permitted under the Privacy Act of 1974 and, if
appropriate, the Computer Matching and Privacy Protection Act of 1988,
as codified in 5 U.S.C. 552(a).
Sec. 180.520 Who places the information into <a href="http://SAM.gov">SAM.gov</a> Exclusions?
Federal agency officials who take actions to exclude persons under
this part or officials who are responsible for identifying disqualified
persons must enter the following information about those persons into
<a href="http://SAM.gov">SAM.gov</a> Exclusions:
(a) Information required by Sec. 180.515(a);
(b) The Taxpayer Identification Number (TIN) of the excluded or
disqualified person, including the Social Security Number (SSN) for an
individual, if the number is available and may be disclosed under the
law;
(c) Information about an excluded or disqualified person, within
three business days, after:
(1) Taking an exclusion action;
(2) Modifying or rescinding an exclusion action;
(3) Finding that a person is disqualified; or
(4) Finding that there has been a change in the status of a person
who is listed as disqualified.
Sec. 180.525 Whom do I ask if I have questions about a person in
<a href="http://SAM.gov">SAM.gov</a> Exclusions?
If you have questions about a listed person in <a href="http://SAM.gov">SAM.gov</a> Exclusions,
ask the point of contact for the Federal agency that placed the
person's name into <a href="http://SAM.gov">SAM.gov</a> Exclusions. You may find the Federal agency
point of contact from <a href="http://SAM.gov">SAM.gov</a> Exclusions.
Sec. 180.530 Where can I find <a href="http://SAM.gov">SAM.gov</a> Exclusions?
You may access <a href="http://SAM.gov">SAM.gov</a> Exclusions through the internet, currently
at <a href="https://www.sam.gov">https://www.sam.gov</a>.
Subpart F--General Principles Relating to Suspension and Debarment
Actions
Sec. 180.600 How do suspension and debarment actions start?
When Federal agency officials receive information from any source
concerning a cause for suspension or debarment, they will promptly
report it, and the agency will investigate. The officials refer the
question of whether to suspend or debar you to their suspending or
debarring official for consideration, if appropriate.
Sec. 180.605 How does suspension differ from debarment?
Suspension differs from debarment in that:
------------------------------------------------------------------------
A suspending official . . . A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary Imposes debarment for a
status of ineligibility for procurement specified period as a final
and nonprocurement transactions, pending determination that a person
completion of an investigation or legal is not presently
or debarment proceeding. responsible.
(b) Must:
(1) Have adequate evidence that there may ............................
be a cause for debarment of a person; and
(2) Conclude that immediate action is Must conclude, based on a
necessary to protect the Federal interest. preponderance of the
evidence, that the person
has engaged in conduct that
warrants debarment.
(c) Usually imposes the suspension first, Imposes debarment after
and then promptly notifies the suspended giving the respondent
person, giving the person an opportunity notice of the action and an
to contest the suspension and have it opportunity to contest the
lifted. proposed debarment.
------------------------------------------------------------------------
Sec. 180.610 What procedures does a Federal agency use in suspension
and debarment actions?
In deciding whether to suspend or debar you, a Federal agency
handles the actions as informally as practicable, consistent with
principles of fundamental fairness.
(a) For suspension actions, a Federal agency uses the procedures in
this subpart and subpart G.
(b) For debarment actions, a Federal agency uses the procedures in
this subpart and subpart H.
[[Page 69416]]
Sec. 180.615 How does a Federal agency notify a person of a
suspension or debarment action?
(a) The suspending or debarring official sends a written notice to
the last known street address, facsimile number, or email address of:
(1) You or your identified counsel; or
(2) Your agent for service of process, or any of your partners,
officers, directors, owners, or joint venturers.
(b) The notice is effective if sent to any of these persons.
Sec. 180.620 Do Federal agencies coordinate suspension and debarment
actions?
Yes, when more than one Federal agency has an interest in a
suspension or debarment, the agencies may consider designating one
Federal agency as the lead agency for making the decision. Agencies are
encouraged to establish methods and procedures for coordinating their
suspension and debarment actions.
Sec. 180.625 What is the scope of a suspension or debarment?
If you are suspended or debarred, the suspension or debarment is
effective as follows:
(a) Your suspension or debarment constitutes suspension or
debarment of all of your divisions and other organizational elements
from all covered transactions unless the suspension or debarment
decision is limited:
(1) By its terms to one or more specifically identified
individuals, divisions, or other organizational elements; or
(2) To specific types of transactions.
(b) Any affiliate of a participant may be included in a suspension
or debarment action if the suspending or debarring official:
(1) Officially names the affiliate in the notice; and
(2) Gives the affiliate an opportunity to contest the action.
Sec. 180.630 May a Federal agency impute the conduct of one person to
another?
For purposes of actions taken under this part, a Federal agency may
impute conduct as follows:
(a) Conduct imputed from an individual to an organization. A
Federal agency may impute the fraudulent, criminal, or other improper
conduct of any officer, director, shareholder, partner, employee, or
other individual associated with an organization to that organization
when the improper conduct occurred in connection with the individual's
performance of duties for or on behalf of that organization, or with
the organization's knowledge, approval or acquiescence. The
organization's acceptance of the benefits derived from the conduct is
evidence of knowledge, approval, or acquiescence.
(b) Conduct imputed from an organization to an individual or
between individuals. A Federal agency may impute the fraudulent,
criminal, or other improper conduct of any organization to an
individual, or from one individual to another individual, if the
individual to whom the improper conduct is imputed either participated
in, had knowledge of, or reason to know of the improper conduct.
(c) Conduct imputed from one organization to another organization.
A Federal agency may impute the fraudulent, criminal, or other improper
conduct of one organization to another organization when the improper
conduct occurred in connection with a partnership, joint venture, joint
application, association, corporation, company, or similar arrangement
or with the organization's knowledge, approval, or acquiescence, or
when the organization to whom the improper conduct is imputed has the
power to direct, manage, control or influence the activities of the
organization responsible for the improper conduct. Acceptance of the
benefits derived from the conduct is evidence of knowledge, approval,
or acquiescence.
Sec. 180.635 May a Federal agency resolve an administrative action in
lieu of debarment or suspension?
Yes. A Federal agency may resolve an administrative action in lieu
of debarment or suspension by entering into an agreement at any time if
it is in the Federal Government's best interest.
Sec. 180.640 May an agreement to resolve an administrative action
include a voluntary exclusion?
Yes. If a Federal agency enters into an agreement to resolve an
administrative action with you in which you agree to be excluded, it is
called a voluntary exclusion and has a government-wide effect.
Sec. 180.645 Do other Federal agencies know if an agency agrees to a
voluntary exclusion?
(a) Yes. The Federal agency agreeing to the voluntary exclusion
enters information about it into <a href="http://SAM.gov">SAM.gov</a> Exclusions.
(b) Also, any agency or person may contact the Federal agency that
agreed to the voluntary exclusion to find out the details of the
voluntary exclusion.
Sec. 180.650 May an administrative agreement be the result of a
settlement?
Yes. A Federal agency may enter into an administrative agreement
with you as part of the settlement of a debarment or suspension action.
Sec. 180.655 How will other Federal awarding agencies know about an
administrative agreement that is the result of a settlement?
The suspending or debarring official who enters into an
administrative agreement with you must report information about the
agreement in <a href="http://SAM.gov">SAM.gov</a> within three business days after entering into the
agreement. The suspending and debarring official must use the
Contractor Performance Assessment Reporting System (CPARS) to enter or
amend information in <a href="http://SAM.gov">SAM.gov</a>. This information is required by section
872 of the Duncan Hunter National Defense Authorization Act for Fiscal
Year 2009 (41 U.S.C. 2313).
Sec. 180.660 Will administrative agreement information about me in
<a href="http://SAM.gov">SAM.gov</a> be corrected or updated?
Yes. The suspending or debarring official who entered information
into <a href="http://SAM.gov">SAM.gov</a> about an administrative agreement with you:
(a) Must correct the information within three business days if the
official subsequently learn that any information is erroneous.
(b) Must correct in <a href="http://SAM.gov">SAM.gov</a>, within three business days, the ending
date of the period during which the agreement is in effect if the
agreement is amended to extend that period.
(c) Must report any other modification to the administrative
agreement in <a href="http://SAM.gov">SAM.gov</a> within three business days.
(d) Is strongly encouraged to amend the information in <a href="http://SAM.gov">SAM.gov</a> in a
timely way to incorporate any update that the official obtains and that
could be helpful to Federal agencies who must use the system.
Subpart G--Suspension
Sec. 180.700 When may the suspending official issue a suspension?
Suspension is a serious action. Using the procedures of this
subpart and subpart F of this part, the suspending official may impose
suspension only when that official determines that:
(a) There exists an indictment for, or other adequate evidence to
suspect, an offense listed under Sec. 180.800(a), or
(b) There exists adequate evidence to suspect any other cause for
debarment listed under Sec. 180.800(b) through (d); and
(c) Immediate action is necessary to protect the public interest.
Sec. 180.705 What does the suspending official consider in issuing a
suspension?
(a) In determining the adequacy of the evidence to support the
suspension, the
[[Page 69417]]
suspending official considers how much information is available, how
credible it is given the circumstances, whether or not important
allegations are corroborated, and what inferences can reasonably be
drawn as a result.
(b) In making this determination, the suspending official may
examine:
(1) The basic documents, including grants, cooperative agreements,
loan authorizations, contracts, and other relevant documents;
(2) An indictment, criminal information, conviction, civil
judgment, or other official findings by Federal, State, or local bodies
that determine factual or legal matters constitutes adequate evidence
for purposes of suspension actions; and
(3) Other indicators of adequate evidence that may include, but are
not limited to, warrants and their accompanying affidavits.
(c) In deciding whether immediate action is needed to protect the
public interest, the suspending official has wide discretion. For
example, the suspending official may infer the necessity for immediate
action to protect the public interest either from the nature of the
circumstances giving rise to a cause for suspension or from potential
business relationships or involvement with a program of the Federal
Government.
Sec. 180.710 When does a suspension take effect?
A suspension is effective when the suspending official signs the
decision to suspend.
Sec. 180.715 What notice does the suspending official give me if I am
suspended?
After deciding to suspend you, the suspending official promptly
sends you a Notice of Suspension advising you:
(a) That you have been suspended;
(b) That your suspension is based on:
(1) An indictment;
(2) A criminal information;
(3) A conviction;
(4) A civil judgment;
(5) Other adequate evidence that you have committed irregularities
that seriously reflect on the propriety of further Federal Government
dealings with you; or
(6) Conduct of another person that has been imputed to you or your
affiliation with a suspended or debarred person;
(c) Of any other irregularities supporting your suspension in terms
sufficient to put you on notice without disclosing certain evidence in
the Federal Government's pending or contemplated legal proceedings;
(d) Of the cause(s) upon which the suspending official relied under
Sec. 180.700 for imposing suspension;
(e) That your suspension is for a temporary period pending the
completion of an investigation or resulting legal or debarment
proceedings;
(f) Of the applicable provisions of this subpart, subpart F, and
any other Federal agency procedures governing suspension decision-
making; and
(g) Of the government-wide effect of your suspension from
procurement and nonprocurement programs and activities.
Sec. 180.720 How may I contest a suspension?
As a respondent, if you wish to contest a suspension, you or your
representative must provide the suspending official with information in
opposition to the suspension. You may do this orally or in writing.
While oral statements may be a part of the official record, any
information provided orally that you consider important must also be
submitted in writing for the official record.
Sec. 180.725 How much time do I have to contest a suspension?
(a) As a respondent, you or your representative must either send or
make arrangements to appear and present the information and argument to
the suspending official within 30 days after you receive the Notice of
Suspension.
(b) The Federal agency taking the action considers the notice to be
received by you:
(1) When delivered, if the Federal agency mails the notice to the
last known street address, or five days after the agency sends it if
the letter is undeliverable;
(2) When sent, if the Federal agency sends the notice by facsimile
or five days after the agency sends it if the facsimile is
undeliverable; or
(3) When delivered, if the Federal agency sends the notice by email
or five days after the agency sends it if the email is undeliverable.
Sec. 180.730 What information must I provide to the suspending
official if I contest the suspension?
(a) In addition to any information and argument in opposition, as a
respondent, your submission to the suspending official must identify:
(1) Specific facts that contradict the statements contained in the
Notice of Suspension. A general denial is insufficient to raise a
genuine dispute over facts material to the suspension;
(2) All existing, proposed, or prior exclusions under regulations
implementing Executive Order 12549 and all similar actions taken by
Federal, State, or local agen
[…truncated; see source link]Indexed from Federal Register on October 5, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.