Rule2024-07496
Guidance for Federal Financial Assistance
Primary source
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Published
April 22, 2024
Effective
October 1, 2024
Issuing agencies
Management and Budget Office
Abstract
The Office of Management and Budget (OMB) is revising the OMB Guidance for Grants and Agreements, which is now called the OMB Guidance for Federal Financial Assistance. The final guidance reflects public comments received in response to the OMB Notification of Proposed Guidance published in October 2023 and comments received from Federal agencies. In response to comments, OMB is revising and updating the guidance to incorporate recent OMB policy priorities related to Federal financial assistance and to reduce agency and recipient burden. OMB is also incorporating certain statutory requirements and clarifying certain sections of the prior version of the guidance that recipients or agencies have interpreted in different ways. OMB is also making revisions to use plain language, improve flow, and address inconsistent use of terms within the guidance text. Finally, OMB is making revisions to improve Federal financial assistance management, transparency, and oversight through more accessible and readily comprehensible guidance.
Full Text
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[Federal Register Volume 89, Number 78 (Monday, April 22, 2024)]
[Rules and Regulations]
[Pages 30046-30208]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-07496]
[[Page 30045]]
Vol. 89
Monday,
No. 78
April 22, 2024
Part IV
Office of Management and Budget
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2 CFR Parts 1, 25, 170, et al.
Guidance for Federal Financial Assistance; Final Rule
Federal Register / Vol. 89, No. 78 / Monday, April 22, 2024 / Rules
and Regulations
[[Page 30046]]
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OFFICE OF MANAGEMENT AND BUDGET
2 CFR Parts 1, 25, 170, 175, 180, 182, 183, 184, 200
Guidance for Federal Financial Assistance
AGENCY: Office of Federal Financial Management, Office of Management
and Budget
ACTION: Final rule; notification of final guidance.
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SUMMARY: The Office of Management and Budget (OMB) is revising the OMB
Guidance for Grants and Agreements, which is now called the OMB
Guidance for Federal Financial Assistance. The final guidance reflects
public comments received in response to the OMB Notification of
Proposed Guidance published in October 2023 and comments received from
Federal agencies. In response to comments, OMB is revising and updating
the guidance to incorporate recent OMB policy priorities related to
Federal financial assistance and to reduce agency and recipient burden.
OMB is also incorporating certain statutory requirements and clarifying
certain sections of the prior version of the guidance that recipients
or agencies have interpreted in different ways. OMB is also making
revisions to use plain language, improve flow, and address inconsistent
use of terms within the guidance text. Finally, OMB is making revisions
to improve Federal financial assistance management, transparency, and
oversight through more accessible and readily comprehensible guidance.
DATES: The effective date for the final guidance is October 1, 2024.
Federal agencies may elect to apply the final guidance to Federal
awards issued prior to October 1, 2024, but they are not required to do
so. For agencies applying the final guidance before October 1, 2024,
the effective date of the final guidance must be no earlier than June
21, 2024.
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#b1fcf3e99ffefcf39ff6c3d0dfc5c2f1fefcf39fd4dec19fd6dec7"><span class="__cf_email__" data-cfemail="97dad5cfb9d8dad5b9d0e5f6f9e3e4d7d8dad5b9f2f8e7b9f0f8e1">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Executive Summary
The Office of Management and Budget (OMB) is revising several parts
of the OMB Guidance for Grants and Agreements, now called the OMB
Guidance for Federal Financial Assistance, located in title 2 of the
Code of Federal Regulations (CFR). These revisions provide clarity and
updated guidance to Federal agencies regarding the consistent and
efficient use of Federal financial assistance. This document includes
revisions to Part 1 (About Title 2 of the Code of Federal Regulations
and Subtitle A); Part 25 (Unique Entity 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 Government-Wide Debarment and
Suspension (Non-procurement); Part 182 (Government-Wide Requirements
for Drug-Free Workplace (Financial Assistance); Part 183 (Never
Contract with the Enemy); Part 184 (Buy America Preferences for
Infrastructure Projects); and Part 200 (Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards).
As explained in further detail below, OMB is revising its guidance
in 2 CFR for the purpose of: (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 within the guidance. OMB's revisions are intended to improve
Federal financial assistance management, transparency, and oversight
through more accessible and easily understandable guidance.
OMB summarizes its 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 in this final version. For example, OMB generally
maintained the structure of parts, subparts, and sections of the
guidance. Except in cases where OMB made 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 included 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 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 revisions are set forth below. Many of
OMB's proposed revisions reflected 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). In the final revisions
provided through this document, OMB responds to public comments
received in response to the OMB Notification of Proposed Guidance
published in the Federal Register in October 2023. See 88 FR 69390
(Oct. 5, 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 Federal financial assistance 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 periodically reviews the Uniform Guidance in accordance with 2
CFR 200.109. For example, 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 performance to assist Federal awarding agencies and
non-Federal entities to improve program goals and objectives, share
lessons learned, and adopt promising performance practices.
On February 9, 2023, OMB issued a Notice of Request for Information
in the Federal Register, which explained that OMB was beginning the
process of
[[Page 30047]]
seeking public input for its proposed revisions to OMB's guidance in 2
CFR. See 88 FR 8480 (Feb. 9, 2023).
On October 5, 2023, OMB issued a Notification of Proposed Guidance
in the Federal Register, which explained that OMB was proposing
revisions to parts 1, 25, 170, 175, 180, 182, 183, and 200 in 2 CFR,
subtitle A. 88 FR 69390 (Oct. 5, 2023). OMB established these parts of
the 2 CFR guidance 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).
Based on OMB's review of the many public comments received and
ongoing engagement with Federal agencies, OMB finds that revisions are
warranted to subtitle A of 2 CFR--including parts 1, 25, 170, 175, 180,
182, 183, 184, and 200--to further streamline, clarify, and update the
guidance, including raising certain thresholds, where permissible under
law, in recognition of inflation and other contributing factors.
Further information on OMB's objectives for the revisions is provided
below.
OMB Objectives
OMB's objectives for the current round of 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 revisions to the Uniform Guidance in part 200 and other parts
of 2 CFR generally support these four objectives. In support of
objective (1)--incorporating statutory requirements and administration
priorities--OMB made changes throughout the Uniform Guidance and other
parts of 2 CFR to ensure consistency with statutory authorities. For
example, OMB revised Parts 25, 170, and 175 to ensure its guidance
properly aligns with underlying statutes, as amended. These revisions
further align OMB's guidance with the authorizing statutes to ensure
proper implementation. OMB 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)--reducing agency and recipient burden--
OMB increased several monetary thresholds that have not been updated
for many years. For example, OMB increased the single audit threshold
from $750,000 to $1,000,000 and also increased the threshold for
determining items that are considered to be equipment from $5,000 to
$10,000. OMB reviewed previous increases to the thresholds and
considered current economic data in making these determinations. In
further support of reducing burden, OMB provided 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 to
applying for Federal financial assistance.
In support of objective (3)--clarifying sections that recipients or
agencies have interpreted in different ways--OMB made revisions to 2
CFR to clarify areas of misinterpretation. Many of these clarifications
do not represent a change in policy but are intended to eliminate
ambiguity and clarify the intent of specific sections of the Uniform
Guidance in part 200, and other parts in 2 CFR. In issuing its proposed
revisions, OMB had incorporated feedback from Federal agencies and the
public stating that Federal agencies and the recipient community
interpret many sections inconsistently. After reviewing comments
received in response to its proposed revisions, OMB is now implementing
many of these changes.
In support of objective (4)--rewriting applicable sections in plain
language, improving flow, and addressing inconsistent use of terms--OMB
revised the guidance to better follow plain language principles. OMB
focused on using simple words and phrases, avoiding jargon, using terms
consistently, and being concise.
As a result, throughout subparts A through E of part 200, OMB now
uses the terms ``recipient,'' ``subrecipient,'' or both in place of
``non-Federal entity.'' OMB found that using the term ``non-Federal
entity'' in subparts A through E of the prior version of part 200
presented challenges to readers and made it difficult to quickly
understand which entity was 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 now 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 replaced ``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.
Revisions in the final guidance relating to use of the terms ``non-
Federal entity,'' ``recipient,'' and ``subrecipient'' do not change the
existing scope or applicability of the guidance. The applicability
provision for part 200, at section 200.101, continues to provide
Federal agencies 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, the final
guidance encourages 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 final guidance
now further clarifies how the guidance applies to those entities as
either recipients or subrecipients.
Another example of plain language revisions is replacing 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 the final guidance OMB now 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 revisions was to make the
Uniform Guidance more accessible to the general public and ensure more
equitable access to Federal funding opportunities by making the
guidance easier to understand. OMB does not specifically discuss each
plain language revision in this preamble unless a revision represents a
material change to the Uniform Guidance or is otherwise connected to
OMB's response to a public comment.
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
[[Page 30048]]
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 Single Audit Act); the Federal Funding Accountability
and Transparency Act of 2006 (FFATA or the Transparency Act) \1\ (Pub.
L. 109-282), as amended (31 U.S.C. 6101 note); 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.''
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\1\ All references to FFATA or the Transparency Act in this
document refer to the Act as most recently amended by the
Congressional Budget Justification Transparency Act of 2021 (Pub. L.
117-40).
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Summary of Comments
On October 5, 2023, OMB solicited feedback from the public through
proposed guidance published in the Federal Register. See 88 FR 69390
(Oct. 5, 2023). The period for public comments closed on December 4,
2023. OMB received comments via <a href="http://Regulations.gov">Regulations.gov</a> at Docket No. OMB-2023-
0017. OMB received approximately 829 public comments from a broad range
of interested stakeholders, such as States, local governments, Indian
Tribes, labor organizations, industry associations, nonprofit
organizations, for-profit organizations, colleges, universities, and
individuals.
Section-by-Section Discussion
OMB developed the revisions for this final guidance following
review and consideration of comments received on the notification of
proposed guidance published in October 2023. In this document, OMB
summarizes significant comments received in response to its proposal
and substantive changes made to each section of the final guidance.
Generally, minor changes to the language of the guidance--such as minor
plain language revisions--are not discussed. Sections of the guidance
that OMB did not propose to revise in significant ways are also not
discussed in many cases, except in response to commenters. For sections
where no substantive changes or comments are discussed, the guidance
from the notification of proposed guidance was adopted.
2 CFR Subtitle A--General
In the proposed guidance, OMB proposed revising the headings of:
(i) title 2 of CFR; (ii) subtitle A of 2 CFR; and (iii) chapter I of
subtitle A of 2 CFR. In the case of each heading, OMB proposed to
replace ``Grants and Agreements'' with ``Federal Financial
Assistance.'' OMB explained that this revision would help to ensure
that 2 CFR is understood to be applicable beyond just grants and
cooperative agreements--unless provided otherwise in the applicability
provisions in the body of the guidance, such as section 200.101.
OMB received one comment questioning the proposal to revise the
headings. The commenter stated that the reference to grants in the
original heading was important to preserve the distinction between
grants and contracts. OMB also received several comments supporting the
revised headings. One commenter also questioned the inconsistent use of
``government-wide'' versus ``governmentwide.''
OMB Response: OMB finds that revising the headings to reference
``Federal financial assistance'' will not cause undue confusion or
change the specific applicability of parts and sections of the
guidance. The headings merely reflect the overall scope of 2 CFR. The
specific applicability of parts and sections of the guidance is
addressed within the body of the guidance, such as at 2 CFR 200.101.
OMB made several revisions in the final guidance to change
``governmentwide'' to ``government-wide'' for consistency.
Part 1--About Title 2 of The Code of Federal Regulations and Subtitle A
Section 1.200--Purpose of Chapters I and II
OMB proposed 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 the status of the OMB guidance in
part 200. OMB did not receive significant comments on this section and
included the proposed revisions in the final version.
Section 1.205--Applicability to Federal Financial Assistance
OMB did not propose significant revisions to section 1.205. OMB
received two comments indicating that paragraph (b) contained an error
regarding applicability to procurements under Federal awards. OMB also
received one comment inquiring if section 1.205 means that agencies
using Other Transaction Authority (OTA) instruments are permitted to
make an award to a de-barred or suspended entity.
OMB Response: In the final guidance, OMB removed both paragraphs
(a) and (b) from section 1.205. The applicability of specific parts and
sections of the guidance are best addressed in the relevant areas of
the guidance--such as in Part 180 and at 200.101. Paragraphs (a) and
(b) only provided a partial list of examples of the applicability of
specific parts of 2 CFR. OMB finds that the remaining text in the
introductory paragraph sufficiently addresses the topic of
applicability overall, with more specific information provided in
relevant parts and sections. The two examples in this section are not
necessary.
The guidance in part 200 does not specifically address OTA
instruments. Federal agencies using such authority are in the best
position to answer questions and provide guidance on what specific
requirements apply to OTA instruments--and under what circumstances any
parts, subparts, or sections of 2 CFR may apply. The commenter seeking
information on the applicability of 2 CFR part 180 to OTA instruments
may also consider the definition of ``nonprocurment transaction'' at 2
CFR 180.970.
Section 1.215--Relationship to Previous Issuances
OMB proposed to provide a more succinct statement in section 1.215
[[Page 30049]]
explaining that some of the guidance was organized differently within
previous OMB Circulars or other guidance documents, before the
establishment of title 2 of the CFR. Because 2 CFR has now existed for
almost 20 years in its current format and location, OMB did not find it
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. For example, the Federal Register notice establishing part
200 in 2013 explained that it superseded and streamlined requirements
from OMB Circulars A-21, A-87, A-110, and A-122; Circulars A-89, A-102,
and A-133; and the guidance in Circular A-50 on Single Audit Act
follow-up. See 78 FR 78590 (Dec. 26, 2013). OMB did not receive
significant comments on this section and incorporated the proposed
revisions.
Section--1.220 Federal Agency Implementation of This Subtitle
OMB did not propose significant revisions to section 1.220. OMB
received one comment seeking clarification on the implementation of the
2 CFR revisions by Federal agencies, particularly in situations when a
Federal agency has not specifically referenced the OMB 2 CFR guidance
in the terms and conditions of a Federal award.
OMB Response: OMB did not make substantial changes to the long-
standing structure of agency implementation of OMB's 2 CFR guidance.
OMB did not find it necessary to make additional revisions, but is
issuing a memorandum to Federal agencies with implementation guidance
concurrently with this document. OMB also provides some additional
responsive information in other parts of the guidance text and within
this preamble. In the case of individual Federal awards, the Federal
agency making the award is the best source of information on agency
implementation of 2 CFR and applicable agency regulations and
requirements. Federal agencies are responsible for implementing the
guidance for their Federal awards. The government-wide effective date
of the final guidance is October 1, 2024, but Federal agencies may also
elect to apply the final guidance to their Federal awards issued prior
to October 1, 2024. For agencies applying the final guidance before
October 1, 2024, the effective date must be no earlier than 60 days
from the date of publication in the Federal Register--as specified
above.
Section 1.231--Severability
OMB proposed to add section 1.231 to clarify its intent that if any
provision of the final guidance were held to be invalid or
unenforceable, such provision, or combination of provisions, are
severable from the remaining provisions of the guidance. OMB did not
receive significant comments on this section and made the change in the
final guidance. OMB made a minor revision to replace the word ``part''
with ``subtitle'' in the final sentence of this section, which is
consistent with other language in this section as both proposed and
finalized. This change reflects how OMB intends this provision to
apply.
In the final guidance provided through this document, OMB adopts a
unified scheme addressing how Federal agencies will consistently and
efficiently use Federal financial assistance in their programs across
the Federal government. While the final guidance best serves OMB's
objectives if left intact as adopted by OMB, the benefits of the
guidance related to coordination across the Federal government do not
hinge on any single provision. Accordingly, OMB considers individual
provisions adopted in the final guidance to be separate and severable
from one another. In the event of a stay or invalidation of any
provision, or any provision as it applies to a particular person or
circumstance, OMB's intent is to otherwise preserve the final guidance
to the fullest possible extent. The provisions that remain in effect
will continue to provide essential guidance and information to Federal
agencies on consistently applying requirements for Federal financial
assistance across the Federal government.
Section 1.300--OMB Responsibilities
OMB did not propose significant revisions to section 1.300. OMB
received a comment requesting that OMB establish a policy and process
for pass-through entities to submit questions to OMB. Another comment
requested additional technical assistance in support of Federal
financial assistance.
OMB Response: Pass-through entities should direct all comments and
questions pertaining to the implementation of specific Federal awards
to the appropriate Federal agency making the award. Federal agencies
are the best resource for questions related to specific Federal awards.
Section 1.305--Federal Agency Responsibilities
OMB proposed 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 received one comment expressing support for the proposed
revisions, such as including reference to the QSMO. OMB received
another comment suggesting OMB require Federal agencies to report on
subawards under their Federal awards. Another commenter recommended the
inclusion of additional language with respect to tribal sovereignty and
self-determination in this section.
OMB Response: In response to comments, the pass-through entity, not
the Federal agency, is responsible for subaward reporting. See 2 CFR
part 170, appendix A. OMB does not consider section 1.305, on Federal
agency responsibilities, to be an appropriate place to address issues
related to tribal sovereignty. Guidance related to tribal rights is
included in other sections of the 2 CFR guidance such as section
200.101(d). OMB incorporated the proposed revisions in this section
without additional changes.
Part 25--Unique Entity Identifier and System for Award Management
Part 25 of 2 CFR provides guidance on requirements for applicants,
recipients, and subrecipients to obtain a unique entity identifier
(UEI), as required by statute in the Transparency Act, and for
applicants and recipients to register in the System for Award
Management (<a href="http://SAM.gov">SAM.gov</a>) website of the General Services Administration,
which is the repository for standard information about applicants and
recipients of Federal awards. OMB proposed to revise part 25 to ensure
it properly aligns with the authorizing statutes, as amended, including
the Transparency Act and the DATA Act of 2014. OMB also proposed to
revise the title of part 25 to replace ``universal identifier'' with
``unique entity identifier.'' OMB received no significant comments on
these proposals. OMB incorporated these changes in the final guidance.
Part 25--General Comments
OMB received several general comments on 2 CFR part 25 that did not
apply to a specific section. One commenter recommended that the U.S.
[[Page 30050]]
government develop a national strategy on the use of persistent
identifiers (PIDs) to articulate how they can be leveraged in the U.S.
research ecosystem and globally to support American science leadership.
Another commenter remarked that clarification is needed under part 25
that pass-through entities and others should not require a UEI of
second-tier contractors. Another commenter asked OMB to remove barriers
to access for newer and smaller organizations for low-dollar subawards,
such as by removing UEI requirements.
OMB Response: The suggestion to develop a national strategy on the
use of PIDs is beyond the scope of OMB's proposed revisions. Section
25.300 requires a UEI for first-tier subrecipients receiving a subaward
from a recipient, as defined at section 25.400, but does not impose a
requirement for a second-tier subrecipient to obtain a UEI before
receiving a subaward from a subrecipient. OMB finds that additional
clarification is not needed within the text of the guidance on this
point.
On the final comment regarding removing additional barriers for
newer and smaller organizations: statutory requirements under the
Transparency Act and other laws put firm limits on OMB's ability to
provide additional flexibility. The exceptions provided in section
25.110 generally reflect the flexibilities permitted under controlling
statutory law.
Subpart A--General
Section 25.100--Purposes of This Part
OMB proposed only minor plain language revisions to section 25.100.
One commenter asked OMB to align the terminology used to describe
``direct'' subawards in 2 CFR part 25 with the ``first-tier'' subaward
terminology used in 2 CFR part 170 Appendix A. Specifically, the
commenter asked OMB to amend this section by replacing ``direct
subrecipients'' with ``first-tier subrecipients.'' The commenter also
asked OMB to change the reference to ``subawards'' at section 170.100
to ``first-tier subawards.''
OMB Response: In response to comments, OMB added first-tier
subrecipients in a parenthetical following direct subrecipients. OMB
otherwise made changes in this section as proposed.
Section 25.105--Applicability
In this section OMB proposed to clarify that the requirement to
obtain a UEI does not apply to second-tier subrecipients or
contractors. OMB also proposed to clarify that recipients of loan
guarantees must obtain a UEI and register in <a href="http://SAM.gov">SAM.gov</a>. OMB also proposed
to state that a Federal agency may use discretion when determining to
apply the requirements to beneficiary borrowers.
In response to OMB's proposed changes, some commenters expressed
concern that not requiring second-tier subrecipients to obtain a UEI
could potentially put certain recipients at risk because those
recipients have ultimate responsibility for monitoring all
subrecipients. Some commenters stated that obtaining a UEI should be a
universal requirement for subrecipients at any tier. OMB also received
multiple comments expressing concern that the new proposed language,
while exempting second-tier subrecipients from obtaining an UEI, did
not address audit requirements, which a commenter stated may require
subrecipients to have a UEI for submission. Other commenters also asked
OMB to further clarify language in this section.
OMB Response: In response to comments asking OMB to make obtaining
a UEI a universal requirement for all tiers of subrecipients, OMB
disagrees and did not make a change. The requirements for obtaining a
UEI do not flow down beyond the first-tier subawards of a Federal
award. This is consistent with prior OMB guidance on this topic in the
``2 CFR Frequently Asked Questions'' (2 CFR FAQ) published on May 3,
2021.
In response to the comment regarding audit requirements: OMB is not
requiring second-tier subrecipients to obtain a UEI under this section
of the final guidance, but if a UEI is needed or likely to be needed
for other purposes, second-tier subrecipients may still obtain one. If
second-tier subrecipients are likely to need a UEI for other purposes,
it would be best to obtain a UEI at the very start of the Federal award
process. It may be infeasible to retroactively apply a UEI to awards
made prior to obtaining one. After consideration of other comments
requesting further clarification in this section, OMB did not make
additional changes. OMB finds that this section, as revised, is
sufficiently clear.
Section 25.110--Exceptions to This Part
In section 25.110, OMB proposed to clarify that, even if an
exception is granted, a Federal agency remains responsible for
reporting data to comply with the Transparency Act, except that it may
use a generic entity identifier in the circumstances described.
Although not included in the text of the proposed revisions, OMB
also stated in the preamble that it was 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
entities. OMB described two potential revisions allowing expanded
exceptions for these entities. The first expanded exception would have
allowed 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. This would have increased the threshold in use under the prior
version of the guidance for this exception. The second exception would
have expanded the existing exigent circumstances exception to provide
recipients with additional time to obtain a UEI and complete <a href="http://SAM.gov">SAM.gov</a>
registration if exigent circumstances persisted beyond 30 days.
Specifically, OMB proposed to allow Federal agencies with the option to
provide recipients an additional 90 days if exigent circumstances
persisted. For both proposed exceptions, the preamble explained that
the exceptions would only be finalized in a way that would allow
agencies to continue following Transparency Act reporting requirements.
OMB received many comments in response to the proposed changes in
this section. One commenter simply noted that the process to obtain a
UEI number and maintain active <a href="http://SAM.gov">SAM.gov</a> registration is excessively
complicated. Another commenter recommended that OMB grant Federal
agencies the authority to exempt subrecipients from the requirement to
obtain a UEI under this section. Another commenter requested OMB to
allow recipients, rather than the Federal agencies, to make
determinations on providing exceptions for subrecipients. Other
commenters noted that obtaining a UEI and registering in <a href="http://SAM.gov">SAM.gov</a> are
major barriers for many foreign entities.
OMB also received many comments supporting the modified exceptions
for obtaining a UEI and registering in <a href="http://SAM.gov">SAM.gov</a> described in the
preamble to the proposed guidance. In general, commenters were
supportive of both the modified exception that would have allowed a
higher threshold of $250,000 for a project or program performed outside
the U.S., and the proposed expansion of the ``exigent circumstances''
exception, which would have allowed recipients additional time beyond
30 days.
Commenters also provided many alternative suggestions related to
raising the threshold for an exception above
[[Page 30051]]
$25,000. For example, some commenters requested clarification on why a
threshold of $25,000 is established in this section while a threshold
of $30,000 is used in 2 CFR part 170 for reporting subawards. Some
commenters suggested using a threshold of $30,000 for subawards in both
parts for consistency. Many commenters also requested a blanket or
class exemption to the UEI requirement for all entities receiving an
award or subaward valued under a specified amount, with many citing
$30,000 as the appropriate amount. Other commenters suggested
increasing the threshold for subawards to $50,000, which they stated
was the applicable threshold for subawards in certain programs under
the American Rescue Plan Act of 2021 (Pub. L. 117-2).
Other commenters also requested a variety of minor clarifications
and revisions to this section. For example, one commenter requested a
citation be changed from ``25.110(a)(2)(ii)(A)(5)'' to
``25.110(a)(2)(ii)(A)(4).'' Another commenter requested certain
language to be further clarified in paragraph (a)(1)(i). A different
commenter suggested adding ``by section 6202 of Public Law 110-252''
after ``as amended'' in paragraph (a)(1)(i) to provide more information
to readers. One commenter requested clarification that the requirement
to obtain a UEI does not apply to contractors that have a procurement
relationship with a recipient.
Lastly, a commenter asked for a complete exception from obtaining a
UEI for all foreign organizations or foreign public entities applying
for or receiving a subaward below the Transparency Act threshold of
$25,000 for a project or program performed outside the U.S. The
commenter explained that establishing a <a href="http://SAM.gov">SAM.gov</a> user account and
requesting a UEI is often extremely challenging for small foreign
organizations with limited internet access or limited English
proficiency.
OMB Response: In response to these comments, OMB policy on this
topic is constrained by the Transparency Act, which limits what
exceptions and deviations OMB can allow regarding the requirement to
obtain a UEI and the timeframe in which a UEI must be obtained. In the
final guidance, OMB allowed exceptions only within the parameters
permitted under the statute.
Within these statutory limits, OMB made some adjustments to the
proposed guidance in this section. First, OMB agrees with the comment
asking OMB to allow Federal agencies to exempt subrecipients from the
requirement to obtain a UEI in the circumstances described in paragraph
(a)(2). Recognizing that OMB already refers to subawards in the
proposed text at paragraph (a)(2)(ii), OMB made this revision to the
introductory paragraph. The exceptions in this section are based on the
statutory exceptions and other limited flexibilities under the
Transparency Act, which generally applies in similar ways to awards and
subawards.
Regarding the request to allow recipients rather than Federal
agencies to make determinations on granting exceptions under this
section, OMB did not make this change. OMB finds that Federal agencies
are able to apply a risk-based approach more consistently across their
programs when evaluating exceptions.
In response to comments requesting clarification on why a threshold
of $25,000 is used in this section for obtaining a UEI, while a
threshold of $30,000 is used in part 170 for reporting subawards, OMB
previously increased the reporting threshold for subawards under part
170 to $30,000 based on the pilot authority in section 5(b) of the
Transparency Act, as amended by the Data Act of 2014. See Public Law
113-101; see also 85 FR 49506 (Aug. 13, 2020); 2 CFR 170.220. However,
when OMB used that limited pilot authority in 2020 to revise part 170,
it did not alter the separate requirement for subrecipients to obtain a
UEI under section 25.300. The part 25 UEI requirement continues to use
the baseline threshold for a Federal award from the Transparency Act of
$25,000. The pilot authority used in part 170 is no longer active and
OMB did not identify alternative statutory authority that would allow
increasing the threshold above $25,000 in part 25 in the final
guidance. Thus, subrecipients receiving subawards of $25,000 or more
must continue to obtain a UEI before receiving an award.
In response to the many comments about UEI and <a href="http://SAM.gov">SAM.gov</a> registration
being a barrier to foreign organizations and foreign public entities,
OMB cannot allow all of the requested exceptions related to UEIs. OMB
must ensure that part 25 remains aligned with statutory requirements in
the Transparency Act, which place limits on what exceptions are
allowable. Section 2(b) of the Transparency Act requires a unique
identifier or UEI for any entity receiving a Federal award above
$25,000. To comply with Section 2(c) of the Transparency Act, the UEI
must be obtained, at the latest, within 30 days of the Federal award.
Thus, the final guidance does not allow expanded UEI exceptions for
foreign organizations beyond those that appeared in the text of the
proposed guidance in October 2023. OMB did not finalize either of the
expanded exceptions described in the preamble to the proposed guidance
because OMB has not found a way for the exceptions to be implemented
consistently with the Transparency Act. The Federal award threshold in
paragraph (a)(2)(ii) remains $25,000 and OMB does not expand the
``exigent circumstances'' exception to provide recipients additional
time beyond 30 days. The ``exigent circumstances'' exception was
paragraph (a)(2)(iii) in the proposed guidance and is now paragraph
(a)(2)(iv) in the final guidance.
OMB also did not provide a complete exception from obtaining a UEI
for all foreign organizations or foreign public entities applying for
or receiving a subaward below the Transparency Act threshold of $25,000
for a project or program performed outside the U.S. OMB maintains the
existing level of transparency for this class of Federal awards and
disagrees with the commenter's suggestion. Federal agencies are
provided flexibility in this section to provide UEI exceptions for
these organizations in specifically defined circumstances.
For <a href="http://SAM.gov">SAM.gov</a> registration only, which is not specifically required
by the Transparency Act, OMB provided an expanded exception applicable
to foreign organizations and foreign public entities in the final
guidance at paragraph (a)(2)(iii). This new exception provides that,
for applicants or recipients, the Federal agency may exempt foreign
organizations or foreign public entities from completing full
registration in <a href="http://SAM.gov">SAM.gov</a> for a Federal award less than $500,000 that
will be performed outside the U.S. Similar to the exception at
paragraph (a)(2)(ii), this exception may be used when the Federal
agency deems it impractical for the entity to comply with the
requirement for completing full registration in <a href="http://SAM.gov">SAM.gov</a>. Foreign
organizations or foreign public entities exempted from registering in
<a href="http://SAM.gov">SAM.gov</a> under this provision must still obtain a UEI. In addition,
Federal agencies remain responsible for reporting under the
Transparency Act in connection with the award. The Federal agency must
determine this exemption on a case-by-case basis while utilizing a
risk-based approach. Only OMB has authority to provide class exceptions
under part 25. See 2 CFR 25.110(b) (as revised). To help ensure
continued alignment with the Clean Contracting Act of 2008 (codified at
41 U.S.C. 2313),
[[Page 30052]]
OMB uses a threshold of $500,000 for this exception. This exception
narrows the exception proposed by OMB in the October 2023 preamble to
only include <a href="http://SAM.gov">SAM.gov</a> registration, but increases the maximum threshold
from $250,000 as initially proposed.
Regarding comments requesting that OMB allow UEI exceptions granted
under part 25 to apply to subaward reporting requirements under part
170: the fact that a subrecipient is not required to obtain a UEI under
part 25, does not necessarily affect reporting requirements under part
170, except that section 25.110 may allow use of a generic identifier
for that reporting in certain circumstances. The ability to report
using a generic identifier does not mean that reporting is not
required. Specifically, section 25.110(a)(i) explains that if a Federal
agency grants an exception, the Federal agency must use a generic
entity identifier in the data it reports to USAspending.gov if
reporting is required by the Transparency Act. The same principle would
apply to required subaward reporting in circumstances in which an
exception is granted to a subrecipient. Granting an exception under
part 25 does not impact responsibility for reporting under the
Transparency Act, except that a generic entity identifier may be used
in the circumstances described.
The Transparency Act, at section 7 (Classified and Protected
Information), provides that the Act does not ``require the disclosure
to the public'' of information that would be exempt from disclosure
under the Freedom of Information Act (codified at 5 U.S.C. 552) or
protected under the Privacy Act (codified at 5 U.S.C. 552a) or section
6103 of the Internal Revenue Code of 1986 (codified at 26 U.S.C. 6103).
See 31 U.S.C. 6101, statutory note. In cases of direct conflict between
OMB's guidance and section 7 of the Transparency Act, the statutory
text in the Transparency Act would prevail. See, for example, 2 CFR
25.105(a) and 170.105(a).
OMB did not find it necessary to explicitly state in part 25 that
contractors with a procurement relationship with a recipient are not
required to obtain UEI. The applicability section at 25.105 explains
what entities must obtain a UEI. See also 2 CFR 25.200(b) and 25.300.
OMB accepted the suggestion to renumber paragraph (a)(2)(ii)(A)(5)
as paragraph (a)(2)(ii)(A)(4). OMB made minor clarifying edits in
paragraph (a)(1)(i). OMB did not find it necessary to specify which act
amended the Transparency Act, which has been amended multiple times.
Lastly, OMB renumbered paragraphs in this section based on the addition
of a new exception at paragraph (a)(2)(iii) as discussed above. Except
as noted, OMB otherwise included revisions in this section as proposed.
Subpart B--Policy
Section 25.200--Requirements for Notice of Funding Opportunities,
Regulations, and Application Instructions
OMB did not propose significant updates to section 25.200. OMB
rearranged some language to provide clarity and made plain language
revisions. OMB received a comment requesting clarification on whether
the requirement that a recipient be registered in <a href="http://SAM.gov">SAM.gov</a> prior to
application is passed through to sub-recipients. This commenter also
stated that sub-recipients need to register in <a href="http://SAM.gov">SAM.gov</a> to allow States
and territories to complete reporting for Transparency Act purposes.
Another commenter asked OMB to provide guidance that low-risk auditees
only need to update their <a href="http://SAM.gov">SAM.gov</a> registrations once every three years,
instead of annually, unless there is a material change that causes the
auditee's <a href="http://SAM.gov">SAM.gov</a> registration to become outdated or otherwise
inaccurate.
OMB also received comments requesting other minor clarifying edits
in paragraph (c), which caused confusion for some commenters as
initially proposed by OMB. For example, OMB received a recommendation
to delete the first sentence of paragraph (c) and strike certain
language from the second sentence.
OMB Response: Regarding comments requesting clarification on
applicability to subrecipients, OMB finds that revisions are not needed
in the guidance text. As a subrecipient does not directly apply to a
Federal agency for an award, it is sufficiently clear that this
provision is not addressing subrecipients. A subrecipient must only
provide a UEI to the recipient in accordance with subpart C. Next, OMB
does not agree with the comment stating that updating <a href="http://SAM.gov">SAM.gov</a>
registration on an annual basis presents excessive burden and made no
change to this policy. Finally, OMB agrees with commenters that
paragraph (c) should be clarified. OMB made minor edits in the guidance
text to clarify intent.
Section 25.205--Effect of Noncompliance With a Requirement To Obtain a
UEI or Register in <a href="http://SAM.gov">SAM.gov</a>
OMB made plain language revisions and minor clarifications to this
section in the proposed guidance. Specifically, OMB explained that the
requirement to have an active UEI does not apply to amendments to
terminate or close a Federal award. OMB received a comment requesting
clarification on whether the annual <a href="http://SAM.gov">SAM.gov</a> registration requirement is
through project closeout or the record retention period.
OMB Response: OMB finds that additional clarification is not needed
in the guidance text. Section 25.200 explains that the registration
requirement applies while a Federal award is ``active'' or ``an
application [is] under consideration by a Federal agency.'' OMB added
clarifying language unrelated to the comment received, but otherwise
made revisions in the final guidance as proposed.
Section 25.215--Requirements for Agency Information Systems
OMB made plain language revisions to this section and updated
citations to other 2 CFR sections. OMB received a comment recommending
that OMB and Federal agencies ensure that the UEI required by part 25
can be linked with global registries for PIDs.
OMB Response: OMB did not link UEIs with PIDs at this time. To do
so would go beyond the scope of the changes proposed and is not
necessary for this update.
Subpart C--Recipient Requirements of Subrecipients
Section 25.300--Requirement for Recipients To Ensure Subrecipients Have
a Unique Entity Identifier
OMB made plain language revisions to this section in the proposed
guidance. OMB received several comments on section 25.300. First, a
commenter requested OMB define ``full registration'' in paragraph (a),
stating that there is confusion over levels of registration. Next, OMB
received multiple comments on the notification requirement in paragraph
(b) and Appendix A. For example, one commenter stated that the
requirement that recipients must notify any potential subrecipients
that the recipient cannot make a subaward unless the subrecipient
obtains and provides a UEI to the recipient, is unnecessary given the
requirements of paragraph (a). The commenter stated this requirement
imposed an unnecessary administrative burden on recipients. OMB also
received a comment stating that paragraph (b) is unclear regarding
whether this notification requirement applies during both the pre-award
and post-award phases and to whom the
[[Page 30053]]
notification should be provided in each case.
OMB Response: On the comment regarding defining ``full
registration'' in paragraph (a), OMB did not find it necessary to
further define this term in this update. With the exception of minor
plain language revisions, this section remains similar to guidance as
it existed before this update and OMB finds the meaning is sufficiently
clear. The paragraph explains that subrecipients must obtain a UEI
prior to receiving a subaward, but are not required to register in
<a href="http://SAM.gov">SAM.gov</a>. Similarly, on the comments regarding the notification
requirement in paragraph (b), this section remains similar to guidance
as it existed before this update. OMB did not find it unclear or overly
burdensome.
Subpart D--Definitions
Section 25.400--Definitions
In the proposed October 2023 revisions, OMB combined definitions
from multiple sections within a single section at 25.400. OMB provided
a definition for entity, updated and removed several other definitions,
and made additional clarifying and plain language edits. Many of the
revisions to this section aimed to more closely follow statutory
language in the Transparency Act. OMB received comments requesting
clarification on the definitions of ``entity'' and ``Federal financial
assistance.'' For the definition of entity, commenters specifically
raised questions about the applicability of the definition to tribes,
consortium organizations, and individual recipients of Federal
financial assistance. Another commenter asked OMB to add a definition
for ``internal recipient'' for situations where a government recipient,
such as a State, passes funds to another agency within the government
recipient. OMB also received questions asking about this section's
applicability to fixed award amounts and OTA instruments. Finally, a
commenter suggested that OMB consider combining the definition sections
for parts 25 and part 200.
OMB Response: OMB made minor revisions to the definition of the
term ``entity'' to more closely align with the statutory definition in
the Transparency Act. Specifically, at paragraph (1)(x), OMB added
``any subcontractor or subgrantee that is not excluded by paragraph
(2).'' Section 2 of the Transparency Act provides that this element of
the definition applies on and after January 1, 2009. Other guidance in
part 25 provides more specific information on which entities must
obtain UEIs or register in <a href="http://SAM.gov">SAM.gov</a> in the context of this part,
including the provisions at sections 25.105, 25.200(b), and 25.300. OMB
also made minor technical edits to the definition of the term
``entity'' in the final guidance.
OMB did not add a definition for the term ``internal recipient.''
This is beyond the scope of OMB's proposed changes for this version of
the guidance, but Federal agencies may be able to provide further
guidance on this question in the context of specific awards if
appropriate. On the question about applicability to fixed amounts
awards: a fixed amount award is a form of Federal financial assistance
and subject to this part.
OMB did not combine the definitions from section 25.400 and section
200.1. Some of the definitions in section 25.400 are specifically
tailored to align with the Transparency Act, while some definitions in
part 200 have a broader range of applications. Regarding the definition
of Federal financial assistance, OMB did not find it necessary to
explicitly address whether section 25.400 applies to OTA instruments.
As discussed above, Federal agencies using such authority are in the
best position to answer questions and provide guidance on what specific
requirements apply to OTA instruments used by that agency--including to
address whether part 25 applies to them. OTA instruments, and the
authorities for such instruments, provide for unique flexibilities that
might not be the same across all Federal agencies.
Appendix A to Part 25--Award Term
OMB proposed plain language revisions and minor clarifying edits to
Appendix A to Part 25. Multiple commenters questioned OMB's usage of
second-person pronouns (``you'') and second-person possessive
adjectives (``your'') in the Appendix.
OMB Response: OMB agrees with the commenters that further
clarifying edits should be made to Appendix A. Because ``you'' and
``your'' generally referred to the award recipient in the proposed
Appendix, OMB now uses the term ``recipient'' in place of both. OMB
also made other conforming edits as necessary in the final guidance.
OMB is also correcting a citation for the definition of entity.
Part 170--Reporting Subaward and Executive Compensation Information
In the proposed revisions, OMB proposed to revise the guidance in
this part to ensure it properly aligns with authorizing statutes
including the Transparency Act and the DATA Act of 2014. OMB proposed
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 proposed to revise certain sections to
clarify their intended meaning. For example, OMB proposed to move
certain requirements currently contained in section 170.110 to section
170.105, which OMB proposed to rename ``Applicability.''
Part 170--General Comments
OMB received multiple comments on this part that did not focus on a
particular section. First, OMB received comments stating that reporting
requirements should be clarified to distinguish between reporting the
amount obligated by a single award, which was referred to as an
``action'' in Appendix A, and the new total obligated amount. Second,
another commenter noted certain difficulties encountered with the FFATA
Subaward Reporting System (FSRS).
OMB Response: Regarding the first comment, OMB added language in
Appendix A to clarify that the total subaward amount under a Federal
award must be reported for all reported subawards. Regarding the second
comment, OMB can only update policy on reporting requirements in this
part. OMB did not propose changes to FSRS through this update. This
guidance is not the appropriate vehicle to address system challenges
with FSRS or make changes to that system.
Subpart A--General
Section 170.100--Purpose of This Part
OMB proposed plain language revisions and minor technical edits to
this section. OMB did not receive any significant comments. In the
final guidance, OMB made a minor technical edit, but otherwise updated
the guidance as proposed.
Section 170.105--Applicability
OMB proposed to move certain requirements contained in section
170.110 to section 170.105, which OMB proposed to rename
``Applicability.'' OMB also proposed plain language revisions and other
clarifying edits. OMB further updated citations to other sections
within the 2 CFR guidance.
OMB received multiple comments requesting that the guidance
explicitly allow exceptions to the UEI requirement granted under 2 CFR
part 25 to apply to first-tier subaward reporting requirements under 2
CFR part 170. The commenters stated that any exception to the
requirement for a subrecipient to
[[Page 30054]]
obtain a UEI under part 25 should equate to an exception to report
under part 170. Similarly, OMB received a comment requesting the
addition of an exception in 2 CFR part 25 for awards and subawards less
than $30,000, which would align with the threshold for first-tier
subaward reporting under 2 CFR part 170.
OMB Response: Regarding comments requesting OMB to allow UEI
exceptions granted under part 25 to apply to subaward reporting
requirements under part 170: OMB's response is provided in the section
of the preamble on part 25 above. In general, the fact that a recipient
or subrecipient is not required to obtain a UEI under part 25 does not
necessarily affect reporting requirements under part 170, except that
generic identifiers may be used in defined circumstances. Certain
disclosure exceptions may also be available under the statutory text of
the Transparency Act, which are discussed above. See 31 U.S.C. 6101,
statutory note. In cases of direct conflict between OMB's guidance and
section 7 of the Transparency Act, the statutory text would prevail.
Paragraph (a) of section 170.105 recognizes that such statutory
exemptions for subaward reporting may be available in some
circumstances. For example, when information is formally classified
under criteria established by an Executive Order, 5 U.S.C. 552(b)(1),
the statutory authority in section 7 of the Transparency Act would
warrant withholding publication of information under part 170.
Regarding comments requesting that OMB create an exception in part
25 for awards and subawards less than $30,000, see discussion in this
preamble above. OMB did not identify statutory authority that would
allow increasing the threshold above $25,000 in part 25 in the final
guidance.
Subpart B--Policy
Section 170.200--Federal Agency Reporting Requirements
OMB proposed plain language revisions to this section and other
clarifying edits. OMB did not receive any comments on this section. In
the final guidance, OMB updated the prior reference to the DATA Act
Information Model Schema (DAIMS). The revised reference is to the
Government-wide Spending Data Model (GSDM).
Section 170.210--Requirements for Notices of Funding Opportunities,
Regulations, and Application Instructions
OMB proposed plain language revisions to this section and added a
definition for ``notice of funding opportunity.'' OMB did not receive
any comments on this section and revised the guidance as proposed.
Section 170.220--Use of Award Term
OMB proposed plain language revisions to this section and added
certain clarifying language. A commenter suggested that it would be
helpful to insert an example to illustrate the revised language in this
subsection.
OMB Response: OMB made changes to clarify that the total subaward
amount must be reported. OMB otherwise revised the guidance as
proposed.
Subpart C--Definitions
Section 170.300--Definitions
In the proposed October 2023 revisions, OMB combined definitions
from multiple sections within a single section at 170.300. OMB also
proposed plain language revisions within this section, added the
definition of entity, and updated or removed other definitions from the
prior version of the guidance. OMB received a comment that the CFR
citation in the definition for ``Total Compensation'' was incorrect.
OMB Response: OMB corrected the citation in the definition for
``Total Compensation.'' OMB otherwise revised the guidance in this
section as proposed.
Appendix A to Part 170--Award Term
In Appendix A to Part 170, OMB proposed changes including
reordering text, revising for plain language, removing definitions or
citing to relevant 2 CFR sections, and adding the definition of entity.
OMB received multiple comments on the Appendix. One commenter requested
that OMB provide clear guidance on certain inconsistencies the
commenter perceived between the FSRS system and USAspending.gov.
Another commenter suggested that rather than subrecipients reporting
executive compensation to and through the pass-through entity, when
applicable, the subrecipient report this data directly into FSRS.
Another commenter noted this Appendix requires reporting executive
total compensation of first-tier subrecipients unless the subrecipient
is exempt as provided in Section I, paragraph (d). The commenter stated
that this exemption--using a threshold of $300,000 in gross income--is
not necessary because a higher threshold is established elsewhere in
the Appendix. Specifically, the commenter pointed to Section I,
paragraph (c)(1)(ii)(B), which uses a threshold of $25,000,000 or more
in annual gross revenues in the subrecipient's preceding fiscal year.
The commenter further noted Section I, paragraph (d), addresses the
reader directly as ``you,'' which is inconsistent with paragraphs (b)
and (c) being applicable to both recipients and subrecipients. Lastly,
this commenter suggested that in Section I, paragraph (d), if OMB
continues to apply the exemption to subrecipients, it should modify the
language to clarify that it applies to both recipients and first-tier
subrecipients.
Next, another commenter suggested adding an example to the Appendix
for clarity. A commenter also requested clarification on what specific
action triggers the requirement for Transparency Act subaward
reporting, which requires the recipient to report a subaward action.
OMB received another comment requesting a clearer definition of
subaward to recognize different reporting timeframes. An additional
commenter suggested that there is a lack of clarity about the amount of
time recipients have to report a subrecipient's compensation
information to FSRS and stated that this may lead to recipients issuing
unsigned subawards.
One commenter requested further clarification in Section I,
paragraph (d), noting that the proposed language appeared to indicate
that the prime recipient and the first-tier subrecipient are exempt
from reporting executive compensation if their gross income from all
sources is under $300,000. However, the commenter noted that paragraph
(d) is referring to the reporting of subawards and executive
compensation.
OMB also received a question on the significance of the changes
regarding reporting subawards. The commenter noted that the current
version of the Award Term required reporting ``each obligating action''
or ``obligation'' that equals or exceeds $30,000, while the proposed
Award Term deleted those words and substituted ``subaward'' in their
place.
OMB Response: Throughout Appendix A, in the final guidance OMB
replaces ``you'' and ``your'' with references to the ``recipient'' to
which the award term is addressed. OMB also made other conforming edits
as necessary throughout Appendix A.
OMB also made certain clarifying edits in Section I, paragraph (d)
of Appendix A in response to comments. Consistent with the rest of the
Appendix, OMB clarifies that ``you'' refers to the recipient.
Consistent with the Transparency Act, OMB also clarified that the
relevant period for gross income is ``the previous tax year.''
[[Page 30055]]
OMB did not add an example to this paragraph and finds the revised text
is now sufficiently clear.
In response to commenters: first, regarding the question about FSRS
and USAspending.gov, instructions on using FSRS are provided on
<a href="http://FSRS.gov">FSRS.gov</a>. Next, the comment about subrecipients reporting executive
compensation directly to FSRS is beyond the scope of changes proposed
by OMB. OMB did not make this change in the final guidance.
Regarding the comment maintaining that there is a discrepancy
between the thresholds in Section I, paragraph (c)(1)(ii)(B) and
paragraph (d) for reporting subaward information: the threshold in
paragraph (c)(1)(ii)(B) refers to certain annual gross revenues in the
subrecipient's preceding fiscal year, while the threshold in paragraph
(d) refers to the recipient's gross income in the previous tax year.
Because each threshold has a different subject, neither is superfluous.
Both thresholds are provided by the Transparency Act.
On the question regarding the trigger for subaward reporting under
the Transparency Act, OMB did not make additional changes. OMB finds
the clarifying edits made throughout Appendix A sufficient to explain
its intent.
On comments regarding specific Federal financial assistance
programs, OMB did not make changes in part 170. OMB is unable to
accommodate all requests for individual programs. The Federal agencies
implementing these programs are in the best position to address
program-specific questions and concerns.
Regarding the comment requesting further clarity on the timeframe
recipients have to report a subrecipient's compensation information to
FSRS, OMB did not make revisions to the guidance text. OMB understands
that some variation may exist in the actions by which recipients
obligate subawards, and that delays may occur in some circumstances.
However, the Transparency Act requires reporting within 30 days of a
Federal award. As a result, part 170 sets the expectation on when this
information must be submitted. The recipient must determine when an
action constituting a legal obligation of the subaward has occurred,
which begins the reporting clock.
Finally, in response to questions about the significance of the
changes in terminology regarding the reporting of subawards under the
Award Term, OMB finds that the references to ``subawards'' are
sufficiently clear when read in the context of this part and other
clarifying edits in the Appendix. As noted in the preceding paragraph,
recipients must still use some discretion and reasonable judgement to
determine when an action constituting a legal obligation of the
subaward has occurred. OMB did not find it necessary to specifically
address this topic in part 170.
Part 175--Award Term for Trafficking in Persons
OMB proposed 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 Trafficking Victims Protection Act
(TVPA) of 2000, as codified at 22 U.S.C. 7101 to 7115. OMB proposed to
update the policy and Award Term to ensure alignment with the current
statute and to further align with the format of the guidance. For
example, at section 175.105, OMB proposed adding provisions related to
a compliance plan and requiring notification to Inspectors Generals
under certain circumstances to further align with the TVPA.
Several commenters questioned the inclusion of the compliance plan
and annual certification requirements. One commenter noted that the
certification threshold is inconsistent with the threshold in the
Federal Acquisition Regulation (FAR).
OMB Response: OMB appreciates the comments received on this part.
The compliance plan and annual certification requirements are required
by law. OMB does not have the same authority in the context of Federal
financial assistance as exists under the FAR, in the context of Federal
procurement, to increase statutory thresholds. See 41 U.S.C. 1908. OMB
retained the certification threshold at $500,000, which is set by
statute.
In the final guidance, OMB revised the compliance plan and
certification requirements in section 175.105(b) to clarify, consistent
with law, that the requirements apply to subrecipients, contractors,
and subcontractors. 22 U.S.C. 7104a. OMB also made conforming changes
to the notification requirement at section 175.105(b). Next, OMB also
revised section 175.105(c)(1) to clarify that a recipient must
immediately inform the Federal agency, in addition to the Inspector
General of the Federal agency, of any information it receives from any
source that alleges credible information that the recipient, or any
subrecipient, contractor, or subcontractor of the recipient, has
engaged in conduct that is prohibited in this part.
OMB revised section 175.200(b) to clarify that a Federal agency may
include the compliance plan and certification requirements in the award
term when applicable--or other information consistent with statutory
requirements. Finally, OMB also added a reference to the compliance
plan and certification requirements in the award term. Federal agencies
may decide to expand or relocate this information in the award term in
appendix A to part 175 consistent with the guidance in 175.200(b).
Part 180--OMB Guidelines to Agencies on Government-Wide Debarment and
Suspension (Nonprocurement)
OMB proposed 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 did not propose extensive plain language
revisions in part 180. Sections in part 180 that OMB proposed to revise
included sections 180.635 and 180.640 to clarify available
administrative actions in lieu of debarment. OMB proposed 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 proposed 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 proposed to add
text onto ``whether your business, technical, or professional
license(s) has been suspended, terminated, or revoked.'' OMB proposed
changes to this part generally in response to an ISDC recommendation to
provide additional clarifications to 2 CFR to reflect current practice.
OMB did not propose to establish new policy in part 180 that would
negatively impact the ability of Federal agencies or recipients to
adhere to this guidance.
OMB received a variety of comments and suggestions on part 180. For
example, a commenter requested revisions on what individuals may be
eligible to serve as ``the suspending official or designee'' and ``the
debarring official or designee.'' OMB also received requests to modify
notice requirements, revise definitions, increase thresholds, expand
the list of enumerated causes for debarment, fix references, make
grammatical changes, and include other changes in this part.
OMB Response: OMB appreciates the comments it received on this
part, but generally considers them beyond the limited scope of the
clarifying changes
[[Page 30056]]
that OMB proposed for this update. More substantive changes will
require additional engagement with the ISDC in accordance with section
180.40 to develop appropriate language. At this time, OMB finds that
the changes requested by commenters are not necessary to understand the
policy under part 180. Except for a minor grammatical change, OMB made
revisions in this section as proposed. OMB will consider whether
additional changes to Part 180 are warranted in the future, and may
consider the comments received in response to the proposed guidance.
Part 182--Government-Wide Requirements for Drug-Free Workplace
(Financial Assistance)
OMB proposed limited plain language and technical revisions to this
part. A commenter pointed out a minor typographical error, which OMB
fixed in the final guidance. Another commenter suggested changes to how
workplaces are identified in section 182.230, which OMB did not find it
necessary to incorporate at this time. Other than the typographical
error, OMB incorporated the proposed revisions in the final guidance.
Part 183--Never Contract With the Enemy
OMB proposed limited plain language and technical revisions to this
part. OMB did not receive significant comments regarding the proposed
changes. OMB revised its guidance in this part as proposed.
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 did not propose changes to part 184 through the proposed
guidance. However, in the final guidance, OMB made minor technical
edits to align Part 184 with the definitions in Part 200 as revised.
Specifically, OMB replaced the term ``Federal awarding agency'' with
``Federal agency.''
OMB received several comments relating to the applicability of the
Build America, Buy America Act (BABA), including questions on its
application to for-profit recipients. Commenters also raised concerns
about the equitable application of Part 184 to different types of
entities. As explained in the preamble to OMB's proposed revisions, OMB
did not propose any substantive changes to BABA applicability or part
184 through this guidance-making process, and OMB did not make any
substantive changes through this update on those topics.
For reasons unrelated to part 184, OMB replaced ``non-Federal
entity'' with ``recipients or subrecipients'' in the revised definition
of Federal financial assistance in section 200.1 discussed below.
Section 70912(4) of BABA incorporates the definition of Federal
financial assistance from the Uniform Guidance at 2 CFR 200.1 or
successor regulations. In cases in which Federal agencies apply
subparts A through E of part 200 to for-profit organizations, this
revision may provide further clarity on the applicability of BABA to
Federal awards made to for-profit organizations. OMB did not materially
change the sentence in the applicability section of the Uniform
Guidance at 200.101(a)(2) providing Federal agencies with discretion on
whether to apply the guidance in part 200 to for-profit organizations.
Thus, OMB did not substantively change the status quo on applicability
of BABA to for-profit recipients as described in the preamble for the
part 184 guidance at 88 FR 57774 and in OMB Memorandum M-24-02,
Implementation Guidance on Application of Buy America Preference in
Federal Financial Assistance Programs for Infrastructure (Oct. 25,
2023). As explained in Memorandum M-24-02, Federal agencies may
consider applying BABA requirements to for-profit entities consistent
with their legal authorities, but are not required by OMB to do so. For
additional information on BABA and OMB's guidance in 2 CFR part 184,
see also 88 FR 55750 (Aug. 23, 2023).
Subpart A--Acronyms and Definitions
Section 200.0--Acronyms
OMB proposed to update section 200.0 to remove acronyms that either
appeared only once or were used infrequently in the guidance. At the
same time, OMB proposed to add several acronyms that were used more
frequently, but have been omitted from this section in past updates,
such as UEI. OMB received a few comments that suggested incorporating
acronyms excluded from this section in the proposed guidance.
OMB Response: OMB did not find it necessary to expand on the list
of acronyms. OMB only included in this section if used in multiple
sections throughout the guidance. However, if multiple uses of an
acronym were confined to a single section of the guidance, OMB did not
find it necessary to include the acronym in this section. With the
exception of simplifying the citation for FFATA (the Transparency Act),
OMB included acronyms in this section in the final guidance as
proposed.
Section 200.1--Definitions
In section 200.1, OMB proposed to remove several definitions that
were used only once or on a limited basis and instead moved such
definitions to the appropriate section of the guidance where they
appear. OMB also proposed deleting the definition of Federal awarding
agency, which OMB incorporated within the definition of Federal agency.
OMB also proposed adding several new definitions of commonly used terms
including continuation funding, for-profit organization, key personnel,
participant, and prior approval. OMB also proposed 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 supplies to $10,000, and the definition of modified total
direct costs, under which OMB proposed to exclude subaward costs above
$50,000, as compared to $25,000 in the prior version of the guidance.
OMB also proposed to revise several definitions for other reasons,
including cost sharing, Federal agency, Federal award date, Federal
financial assistance, financial obligations, improper payment, Indian
Tribe, intangible property, participant support costs, period of
performance, prior approval, questioned costs, real property,
recipient, special purpose equipment, subaward, and termination.
OMB received many comments on the definitions in this section,
including some suggestions for new definitions and other potential
changes for future updates. OMB also received a few comments
recommending the deletion of definitions and moving them to applicable
sections of the guidance. Comments received on specific definitions and
OMB's responses are provided below. OMB attempted to incorporate public
comments where appropriate.
Advance Payment: OMB received one comment suggesting that this
definition exclude the reference to subrecipients as a disburser of
funds. OMB disagrees with the commenter. Like recipients, subrecipients
also disburse funds for program purposes. For example, subrecipients
disburse cash for property and services. Accordingly, OMB finds this
change is unwarranted and revised the definition as proposed.
Advisory Council: OMB received a suggestion to include a definition
for advisory council in this section, which is only defined in section
200.422. OMB
[[Page 30057]]
did not add a definition for this term. OMB is limiting the definitions
to those terms used consistently throughout the guidance.
Bad Debt: OMB received a suggestion to include a definition for bad
debt in this section, which is only defined in section 200.426. OMB did
not add a definition for this term. OMB is limiting the definitions to
those terms used consistently throughout the guidance.
Beneficiary: OMB received several comments suggesting that OMB
define the term beneficiary. OMB did not propose to define the term,
the meaning of which can vary widely between Federal agencies as well
as within agencies between assistance programs. OMB defers to Federal
agencies to determine who is or is not a beneficiary under their
respective programs consistent with law. The definition of participant
and participant support costs in this guidance is not intended to
include beneficiaries. For the reasons summarized here, OMB defers to
Federal agencies on the use and meaning of this term consistent with
law for their programs.
Cognizant Agency for Audit: One commenter asked OMB to clarify
whether there is a list of cognizant agencies for audit. The commenter
noted that this information is not available on the Federal Audit
Clearinghouse (FAC) website. OMB revised the definition to clarify that
the FAC website provides a list of Federal agency Single Audit contacts
and not a list of cognizant agencies for audit.
Conditional Title: A commenter asked OMB to include the definition
of conditional title in section 200.1, which is currently defined in
section 200.313. OMB did not add a definition for this term. OMB is
limiting the definitions to those terms used consistently throughout
the guidance.
Conference: Another commenter asked OMB to define the term
conference in section 200.1 because it is only defined in section
200.313. OMB did not add a definition for this term. OMB is limiting
the definitions to those terms used consistently throughout the
guidance.
Construction: OMB received two comments requesting a definition of
the term construction. OMB did not add a definition for this term. OMB
is limiting the definitions to those terms used consistently throughout
the guidance. OMB also did not define this term in part 200 because OMB
did not want to inadvertently impact the implementation of Buy America
requirements under part 184, which incorporate definitions from part
200, but which are not the focus of this update.
Contingency Provisions: One commenter asked OMB to include the
definition of contingency provisions or costs in section 200.1. OMB did
not add a definition for this term. OMB is limiting the definitions to
those terms used consistently throughout the guidance.
Continuation Funding: One comment expressed concern that the
proposed definition of continuation funding did not adequately capture
the distinction between an agency's exercise of its discretion when
making an award and subsequent determinations by the agency, pursuant
to terms and conditions of the award, to provide funding for additional
budget periods for that same award. In the final guidance, OMB revised
the definition of continuation funding to simply mean ``the second or
subsequent budget period within an identified period of performance.''
The proposed reference to a ``discretionary decision by a Federal
agency'' is no longer included in the definition. Depending on the
assistance program and the terms and conditions of the Federal award,
agency discretion may be involved or legally available on whether to
provide continuation funding. However, considering the potential for
variation among Federal agencies and programs, OMB did not find it
necessary to address this topic directly in the final definition of
continuation funding.
Contract: OMB made a minor revision to this term to clarify that
contracts are utilized for conducting ``procurement transactions'' in
general and are not limited to only purchasing ``property and
services.''
Conviction: A commenter asked OMB to harmonize the definition of
conviction across the guidance. The commenter noted that the definition
of this term varies in different sections. For example, different
definitions are used in sections 200.435(a)(1), 180.920, and 182.615.
OMB did not add a definition for this term in part 200. OMB is limiting
the definitions in section 200.1 to those terms used consistently
throughout the part 200 guidance. For the purposes of this update, OMB
did not find it necessary to provide a single definition of this term
applicable across all parts of the OMB guidance in 2 CFR.
Cooperative Agreement: OMB received several comments requesting
clarification on the relationship between parties under both grants and
cooperative agreements. OMB agrees with commenters that additional
clarity is warranted and made minor clarifying revisions in the final
guidance.
Cooperative audit resolution: As proposed, OMB moved this
definition to section 200.513(c), which outlines Federal agency
responsibilities for audits. Considering its limited use in the
guidance, OMB found it easier for the reader in this case if the
definition is included in the same section where the responsibilities
are outlined.
Cost of Idle Facilities: One commenter asked OMB to insert a
definition of cost of idle facilities in section 200.1 because a
definition is provided in section 200.466(a)(4). OMB did not add a
definition for this term. OMB is limiting the definitions to those
terms used consistently throughout the guidance.
Cost objective: OMB made a minor revision to this term by removing
``((Facilities and Administration (F&A))'' after ``indirect'' cost. The
more general term ``indirect costs'' is not necessarily limited in all
cases to the more specific F&A category. The definition of indirect
cost now explains that the term facilities and administrative (F&A)
cost is often used to refer to indirect costs by Institutions of Higher
Education.
Cost sharing: In the proposed guidance, OMB proposed minor
revisions to this term, including clarifying that cost sharing includes
matching. OMB made changes to the definition as proposed.
Credible Evidence: At least one commenter asked OMB to provide a
definition of credible evidence. OMB did not find it necessary to
define the term in section 200.1. OMB intends to generally align the
meaning of credible evidence under the Uniform Guidance in part 200
with the existing meaning under the FAR. See 73 FR 67064 (Nov. 12,
2008) (explaining reasons for selecting the term ``credible evidence''
including discussion of alternatives considered). This topic is
discussed further in the context of section 200.113 below.
Data Management and Sharing Costs: One commenter asked OMB to add a
definition of data management and sharing costs, which appears in
section 200.455. OMB did not add a definition for this term. OMB is
limiting the definitions to those terms used consistently throughout
the guidance.
Depreciation: One commenter asked OMB to add a definition of
depreciation, which is used in section 200.436(a). OMB did not add a
definition for this term. OMB is limiting the definitions to those
terms used consistently throughout the guidance.
Disallowed Cost: Six commenters asked OMB to restore the version of
disallowed cost under the prior version of the guidance, which is
limited to costs determined to be unallowable in
[[Page 30058]]
accordance with applicable Federal statutes, regulations, or the terms
and conditions of the Federal award. OMB agrees with commenters and
restored that language in the final guidance.
Encumbrance: Several commenters asked OMB to add a definition of
encumbrance in section 200.1 in place of the proposed definitions in
sections 200.311, 200.313, and 200.315. OMB discusses this topic
further in those sections. Other commenters noted certain deficiencies
with OMB's proposed definition included in sections 200.311, 200.313,
and 200.315. For example, a commenter asked OMB to address the
difference between encumbrances and ``pre-existing encumbrances.''
OMB did not add a definition of encumbrance in section 200.1. OMB
also removed its proposed definition from the later sections of the
preamble. Like the prior version of the guidance, the term
``encumbrance'' is not formally defined in the final guidance text.
OMB's decision was based in part on comments expressing concern that
the proposed definition may not fit equally well in all contexts under
part 200 in which it could be applied. For the present, OMB did not
attempt to revise its definition to effectively address all scenarios
and potential concerns.
For future updates, OMB will again consider exploring this topic
and providing a definition. OMB may consider providing a single
definition of this term or providing separate definitions in the
specific sections in which it is used. OMB cautions, however, that its
decision not to provide a definition of this term should not be
interpreted to indicate any particular policy intent in the sections in
which the terms ``encumber'' or ``encumbrance'' are used. For example,
OMB's decision to remove the proposed definition is not based on any
single comment received in response to the proposed guidance. Removing
the definition also does not indicate that OMB now disagrees with its
proposed definition, which may be reasonable to use in many contexts.
OMB will continue to evaluate what definition, if any, should be
provided in future updates to the Uniform Guidance.
Equipment: OMB received three comments requesting that the
threshold for equipment be raised above $10,000. OMB proposed to raise
the threshold to $10,000 in the proposed guidance. OMB finds that an
additional increase is not warranted at this time and revised the
guidance as proposed.
Expenditures: OMB proposed to revise this definition. One commenter
asked OMB to restore a definition closer to the original, including
restoring the reference to a ``project or program'' under a Federal
award. OMB agrees with the comment and restored the use of ``project or
program'' to the definition.
Facilities: A commenter asked OMB to include a definition of
facilities, which is used in section 200.446(a)(1). OMB did not add a
definition for this term. OMB is limiting the definitions to those
terms used consistently throughout the guidance.
Federal Agency: OMB received two comments indicating that the new
definition of Federal Agency was unclear. OMB agrees with commenters
that the structure of the proposed definition could cause confusion. To
simplify, OMB now defines the term to mean an ``agency'' as defined at
5 U.S.C. 551(1) and further clarified by 5 U.S.C. 552(f). The
definition further explains that the term generally refers to the
agency that provides a Federal award directly to a recipient unless the
context indicates otherwise. OMB incorporated these revisions in the
final guidance. Based on this change, OMB eliminated the term ``Federal
awarding agency,'' which no longer appears in the guidance text.
Federal Award: One commenter suggested revising paragraphs (1)(i)
and (1)(ii) using both the terms recipient and subrecipient, rather
than just recipient in (1)(i) and non[hyphen]Federal entity in (1)(ii).
The commenter stated that this would more clearly identify the types of
entities covered as well as provide flexibility should an agency wish
to make subparts A through E applicable to other types of entities. OMB
disagrees with the commenter that further clarification is needed for
paragraph (1)(i) at this time. OMB retained the language from the
proposed and prior versions of the guidance, which is widely known and
understood in the Federal financial assistance community. OMB also did
not further revise paragraph (1)(ii) from the proposed or prior version
of the guidance, which refers to a cost-reimbursement contract under
the FAR. In this case, OMB retained the original term non-Federal
entity.
Another commenter asked OMB to clarify the distinction between a
grant and contract based on ambiguity presented in paragraphs (1) and
(3). Paragraph (3) of the definition of Federal award refers to
contracts that a ``Federal agency uses to buy goods or services,''
which generally would be governed by the FAR. However, paragraph
(1)(ii) of the definition helps to clarify that a cost-reimbursement
contract awarded under the FAR to a non-Federal entity may be subject
to certain specified provisions under part 200. This is more
specifically described in section 200.101, which is referenced in
paragraph (1)(ii). This is a long-standing feature of the definition of
Federal award and section 200.101, which is not newly proposed by OMB
in this update. OMB did not propose changes to this element of the
definition and does not make any further changes in the final guidance.
Another commenter recommended that the definitions of Federal
award, Federal financial assistance, Federal program, and grant
agreement all be revised to specifically exclude funds and activities
associated with self-determination compacts between Indian Tribes and
the Federal government. The existing definitions do not provide the
requested exclusion, nor did OMB propose to add the exclusion in the
proposed guidance. OMB may consider this comment for future updates,
but made no change in the final guidance. Section 200.101(d) provides
that statutes or Federal agency regulations may govern in circumstances
where they conflict with the provisions of part 200. This existing
provision of the guidance recognizes that the provisions of the Indian
Self-Determination and Education and Assistance Act (ISDEAA), as
amended (see 25 U.S.C. 5301-5423) may govern in some circumstances.
Federal awarding agency: See discussion of the term Federal agency.
Federal award date: OMB proposed minor revisions to this term,
which it mostly included in the final guidance. In the final version,
OMB deleted ``binding agreement'' following the word alternative in
recognition that 31 U.S.C. 1501 does not require this in all cases. The
relevant alternatives are listed in 31 U.S.C. 1501.
Federal financial assistance: OMB proposed a minor change to the
definition of the term ``Federal financial assistance.'' As with other
provisions in subparts A through E, OMB proposed 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 prior version of the guidance. OMB included this change in the
final guidance.
Another commenter recommended that the definitions of Federal
award, Federal financial assistance, Federal program, and grant
agreement all be revised to specifically exclude funds and activities
associated with self-determination compacts between Indian Tribes and
the Federal government. See
[[Page 30059]]
OMB's response above under Federal award.
Federal program: One commenter recommended that the definitions of
Federal award, Federal financial assistance, Federal program, and grant
agreement all be revised to specifically exclude funds and activities
associated with self-determination compacts between Indian Tribes and
the Federal government. See OMB's response above under Federal award.
Financial obligations: A commenter asked OMB further clarify the
definition of financial obligations by adding a table. OMB did not find
this necessary or critical to understand the meaning of this term. In
the final guidance, before the word ``result,'' OMB added the word
``will.'' This change simply recognizes that expenditures are not
always contemporaneous with the financial obligation. Rather, an
obligation will often require a future--but not immediate--expenditure
or outlay of funds.
Fixed amount award: A commenter asked OMB to incorporate policy
requirements for fixed amount awards into the definition. OMB disagrees
that this is necessary in the definition section and did not make a
change. Specific requirements for fixed amount awards are addressed
later in the guidance.
For-profit organization: OMB proposed to add a definition of this
term in the proposed guidance. That definition is included in the final
guidance.
Fraud: A commenter asked OMB to include the definition of fraud in
section 200.1 based on use of that term in 200.435. OMB did not add a
definition for this term. OMB is limiting the definitions to those
terms used consistently throughout the guidance.
General Support Services: A commenter asked OMB to add a definition
for general support services. OMB did not add a definition for this
term. OMB is limiting the definitions to those terms used consistently
throughout the guidance.
Grant agreement: OMB received a couple of comments requesting
further clarity on the relationship between parties under the
definitions of grants and cooperative agreements. OMB agrees with the
commenters and made minor clarifying revisions in the final guidance.
Another commenter recommended that the definitions of Federal
award, Federal financial assistance, Federal program, and grant
agreement all be revised to specifically exclude funds and activities
associated with self-determination compacts between Indian Tribes and
the Federal government. See OMB's response above under Federal award.
Idle Capacity: A commenter suggested including a definition for
idle capacity based on its use in 200.446. OMB did not add a definition
for this term in section 200.1. OMB is limiting the definitions to
those terms used consistently throughout the guidance.
Idle Facilities: A commenter suggested including a definition for
idle facilities based on its use in 200.446(a)(2). OMB did not add a
definition for this term in section 200.1. OMB is limiting the
definitions to those terms used consistently throughout the guidance.
Improper Influence: A commenter suggested including a definition
for improper influence based on its use in section 200.450(b). OMB did
not add a definition for this term in section 200.1. OMB is limiting
the definitions to those terms used consistently throughout the
guidance.
Improper payment: A few commenters asked OMB to reinstate the
previous definition of improper payment. OMB disagrees. As stated in
the preamble for the proposed guidance, OMB proposed to shorten the
definition of ``improper payment'' to ensure better alignment with in
Appendix C to OMB Circular A-123, Requirements for Payment Integrity
Improvement. OMB made changes to the definition as proposed. See also
the definition of questioned costs, in which OMB clarifies that
questioned costs are not considered improper until they are confirmed
to be improper under A-123.
Indian Tribe: OMB proposed minor revisions to this term. It
includes the revised definition in the final guidance.
Indirect cost: In the final guidance, OMB revised the definition of
indirect cost to no longer include reference to facilities and
administrative (F&A) cost directly in the name of the term itself.
OMB's revision to the defined term has no substantive impact on how the
term is applied under the final guidance relative to how it was applied
under the prior version of the guidance. The term ``indirect cost''
continues to align with ``F&A costs.'' OMB explains within the
definition that F&A costs and indirect costs are often used
interchangeably at Institutions of Higher Education (IHE). OMB received
multiple comments requesting this revision. OMB also received one
comment that recommended amending the definition of indirect cost to
note that the duplication of costs is unallowable. OMB did not find the
latter change necessary in the context of this definition. Allowability
is addressed later in the guidance.
Indirect cost rate proposal: OMB received three comments that
recommended adding ``or subrecipient'' to the definition of indirect
cost rate proposal because indirect costs apply to both recipients and
subrecipients. OMB acknowledges that one can be both a recipient and
subrecipient and have a Federally negotiated rate. However, only
recipients prepare proposals in accordance with the appendices. An
organization that is exclusively a subrecipient would not negotiate a
rate with a Federal agency under the appendices to this part.
Information technology systems: One commenter requested inclusion
of cybersecurity in the definition of information technology systems.
Cybersecurity may already be included in the definition if provided
through listed items such as software or firmware or a related
procedure or service. OMB did not find it necessary to specifically
list cybersecurity in this definition.
Initial equity contribution: A commenter asked for a definition of
initial equity contribution to be included in section 200.1 based on
its use in 200.449(c)(7). OMB did not add a definition for this term in
section 200.1. OMB is limiting the definitions to those terms used
consistently throughout the guidance.
Intangible property: A commenter expressed concern that the
proposed inclusion of data under the definition of intangible property
would make data subject to the requirements of section 200.315. OMB
responds that data is included as an example under the definition of
intangible property. Even under the prior definition, certain data
could already have been considered intangible property and subject to
section 200.315 if it met the criteria under the guidance. For example,
section 200.315 refers to intangible property developed, or for which
ownership was acquired, under a Federal award. With the exception of
minor edits, OMB revised the definition as proposed.
Key personnel: OMB proposed to add a definition for this term in
the proposed guidance. OMB received several comments suggesting that
the new definition caused confusion or was unclear. In the final
guidance, OMB removes its proposed definition of this term in response
to those comments. In section 200.308(f)(2), OMB clarified that, at
least in the context of that provision, key personnel includes
employees and contractors.
[[Page 30060]]
Less-than-arm's-length: One commenter suggested including a
definition of less-than-arm's-length in section 200.1 based on its use
in 200.465(c). OMB did not add a definition for this term in section
200.1. OMB is limiting the definitions to those terms used consistently
throughout the guidance.
Loan: In the final guidance, OMB added ``or subrecipient''
following recipient to recognize that subrecipients may also receive or
administer loans.
Local Partner: One commenter suggested including a definition of
local partner. OMB did not add a definition for this term in section
200.1. OMB is limiting the definitions to those terms used consistently
throughout the guidance.
Micro-purchase: A commenter asked OMB to revise the definition of a
micro-purchase to aggregate the purchase of supplies needed over the
life of a Federal award. Another commenter asked OMB to remove the
language referring to an individual procurement transaction. OMB found
that neither of these changes are necessary and revised the definition
as proposed.
Micro-purchase threshold: In the final guidance, OMB revised the
definition of this term by revising language on the ceiling for the
micro-purchase threshold. OMB received several comments noting that the
definition of the micro-purchase threshold failed to recognize
different ways of establishing higher rates under section 200.320. OMB
agrees with commenters and revised the definition accordingly.
Modified total direct costs (MTDC): A commenter suggested revising
the definition to not require exclusion of the portion of each subaward
above the threshold. Two commenters asked whether subcontracts would be
included in the modified total direct costs definition based on earlier
versions of the guidance. Several commenters sought clarification on
the intended application of rental costs and patient care costs in the
modified total direct cost definition and suggested that OMB define
these terms. Another commenter suggested that OMB revise the definition
of modified total direct cost to include the threshold amount for each
year during the period of performance that the subaward is in effect.
Several commenters also asked OMB to increase the threshold for each
subaward to above $50,000.
In the final guidance, OMB revised the definition as proposed. Many
of the suggestions are beyond the scope of OMB's proposed revision to
this definition, which was limited to increasing the threshold for the
portion of each subaward that may be included from $25,000 to $50,000.
As proposed, OMB retained the exclusion of the portion of each subaward
above the threshold. OMB does not include subcontracts in the revised
definition, which were removed in earlier versions of the guidance. OMB
leaves this policy unchanged.
Under the revised definition, only the first $50,000 of each
subaward may be included--regardless of the period of performance of
that subaward. OMB disagrees that recipients should be able to apply
this threshold on an annual basis for subawards with longer periods of
performance. OMB also disagrees with the proposal to further increase
the threshold for each subaward. OMB finds that doubling the threshold,
as proposed, is an appropriate increase for this update.
Notice of Funding Opportunity: A commenter asked for clarity on
what a pass-through entity should call a notice of funding opportunity
(NOFO) as the definition does not include pass-through entities.
Another commenter stated that the reference to subrecipient in the
definition should be removed because Federal agencies do not select
subrecipients.
Regarding the first comment: a pass-through entity is not required
to call a solicitation of subaward proposals by a specific name. On the
second comment, although OMB agrees that Federal agencies do not
directly select subrecipients under a NOFO, some NOFOs do provide
guidance or information on how recipients should select subrecipients
for a particular assistance program. For this reason, OMB retained the
reference to subrecipient in the definition. OMB made changes to the
definition as proposed.
Participant: OMB proposed to add a definition of participant in the
proposed guidance. OMB made a few revisions to the final definition to
provide further clarification of its intent. For example, OMB
restructured the definition to begin with an affirmative definition of
a participant generally, before providing a negative definition of what
a participant is not. The order was reversed in the proposed guidance.
Other revisions are addressed below.
Initially, the definition of participant cannot account for all
variations on how participants are treated or defined by different
Federal agencies or under specific assistance programs. For this
reason, section 200.456 of the guidance specifies that the recipient
must document its policies and procedures for making participant
determinations. That section also provides that participant support
costs must be treated consistently across all Federal awards. See also
participant support costs below.
One commenter suggested changing the reference to ``exchange
students'' in the definition to just ``students.'' The commenter stated
this would be simpler and, in most cases, more appropriate for Federal
programs. The reference to exchange students was just one potential
example of a participant, but OMB made this change in the final
guidance.
Another commenter stated the definition was unclear and overly
broad. One commenter specifically pointed to the phrase ``playing a
role in the overall program activities'' as overly broad and confusing.
In addition to restructuring the definition, as explained above, OMB
attempted to provide further clarity in the final definition. For
example, OMB now begins the definition by stating that a participant is
an individual participating in or attending program activities--but not
an individual responsible for implementing those activities under the
Federal award.
Next, a commenter stated the definition should specify that
individuals who attend trainings and conferences may be treated as
participants. OMB agrees and included such individuals as examples of
participants.
Another commenter stated that the definition should exclude project
personnel and those who commit effort on the implementation of the
Federal award. OMB agrees and revised the definition. Another commenter
asked OMB to replace ``staff member'' in the proposed definition with
``employee.'' OMB did not find this change was necessary.
One commenter stated the definition should provide that
beneficiaries are also participants. OMB disagrees that this would
always be true and does not consider the two terms to be equivalent or
synonymous. Identification of beneficiaries is at the discretion of the
Federal agency making the award to the extent consistent with
authorizing law. See also discussion under the term ``beneficiary''
above, which is discussed in this preamble but not defined in section
200.1.
A commenter also asked OMB to clarify that the examples are
provided for illustrative purposes only and that the classification is
at the discretion of the recipient. Partially in response to this
comment, OMB revised and restructured the definition to better identify
where it is providing definitional elements of a participant and where
it is just providing examples
[[Page 30061]]
that may fit those elements. OMB also revised some of the examples
provided.
Other commenters asked OMB to provide additional examples of
participants within the definition. OMB finds that an exhaustive list
of examples is not necessary. For example, although examples such as
teachers, scholars, or scientists may be participants in some cases,
they could also be employees, consultants, or beneficiaries in others.
OMB sought an appropriate balance in the final definition by providing
a few illustrative examples but not providing--or attempting to
provide--an exhaustive list.
Participant Support Costs: One commenter asked OMB to revert to the
prior definition of participant support costs. Another commenter sought
clarification on whether the inclusion of stipends as an example in the
definition indicates that stipends are considered participant support
costs. Another comment asked OMB to provide examples of types of
participants, associated with typical participant support costs.
Another commenter asked for clarification on the inclusion of temporary
dependent care in the participant definition. Specifically, the
commenter questioned whether the use in this definition was intended to
be synonymous with the use of the same term in section 200.475(c)(1).
OMB finds the proposed text for this definition was sufficiently
clear and did not make significant changes. Only stipends paid to
participants are considered participant support costs. OMB found that
it was not necessary to specifically mention training and conferences
in the definition as the costs may also be incurred in other contexts
when allowed under the guidance. Participant support costs are any
costs that are paid directly to or on behalf of a participant. OMB
clarified the reference to ``temporary'' dependent care. Section
200.475 applies to dependent care for employees, not participants.
Pass-through entity: OMB received several comments indicating that
the definitions of recipient, subrecipient, and pass-through entity
were unclear. OMB proposed only minor revisions to the definition of
pass-through entity and disagrees with commenters that the term is
unclear. While traditionally pass-through entity specifically referred
to a non-Federal entities under earlier versions of the guidance, other
entities may also be considered pass-through entities based on how a
Federal agency implements the guidance for its programs.
In the final guidance, to address potential confusion on how the
term will be applied, OMB added language to clarify that the authority
of the pass-through entity under part 200 flows through the subaward
agreement between the pass-through entity and subrecipient. OMB added
this language to ensure that a pass-through entity will not erroneously
apply the authorities available to the Federal agency under part 200.
For example, if a provision in part 200 allows ``the Federal agency or
pass-through entity'' to provide an approval or authorization for a
``recipient or subrecipient,'' the pass-through entity only has
authority to provide the approval or authorization to its subrecipient.
In this situation, the pass-through entity cannot provide the approval
or authorization to itself, but rather would need to obtain approval or
authorization from the Federal agency. For a more specific example,
under section 200.343, the pass-through entity is not permitted to
authorize its own costs for its own primary Federal award. The pass-
through entity may expressly authorize these costs for subawards only.
Performance Based Payment: One commenter asked OMB to include a
definition of performance based payment. OMB did not add a definition
for this term in section 200.1. OMB is limiting the definitions to
those terms used consistently throughout the guidance.
Period of performance: OMB proposed revisions to this term, but now
provides a simplified definition in the final guidance. The final
definition reinstates some familiar language from the definition in the
prior version of the guidance, which OMB had proposed to remove. As now
revised, period of performance means the time interval between the
start and end date of a Federal award, which may include one or more
budget periods. The final definition also recognizes that
identification of the period of performance in the Federal award
consistent with section 200.211(b)(5) does not commit the Federal
agency to fund the award beyond the currently approved budget period.
The period of performance is also sometimes referred to by Federal
agencies as the performance period.
Personally Identifiable Information (PII): Within the definition of
Personally Identifiable Information (PII), in the final guidance OMB
deleted the text defining Public PII. The term ``Public PII'' is never
used in the guidance text. OMB seeks to avoid confusion by defining a
term in section 200.1 that is never used in the body of the guidance--
which could potentially prompt questions on whether Public PII should
be treated differently than normal PII. The deletion of this text on
Public PII does not represent a substantive change to the policy in the
guidance. The remaining text in the definition continues to explain
that some PII can be available in public sources.
Post-retirement health plan: One commenter asked OMB to include a
definition of post-retirement health plan in section 200.1 based on its
use in 200.431(h). OMB did not add a definition for this term in
section 200.1. OMB is limiting the definitions to those terms used
consistently throughout the guidance.
Prior approval: Several commenters asked OMB to clarify the
definition of prior approval by adding the words ``obtained in
advance.'' Some commenters also asked OMB to clarify and specify when
ratification (after the fact approval) would be permissible. One
comment requested that OMB specify that approval of the project
narrative or budget constitutes prior written approval. A different
comment requested that the guidance limit Federal agency or pass-
through entity review of requests for budget or program revisions to 15
days. Several comments questioned whether the definition may cause
misunderstanding for pass-through entities and subrecipients on who can
approve which action.
OMB added the words ``obtained in advance'' to the definition to
clarify that, generally, obtaining approval in advance is a
definitional element of prior approval, which is required where stated
in the guidance. However, this change is not intended to prohibit
Federal agencies from using appropriate procedures to retroactively
provide prior approval, if necessary, under a Federal award in specific
cases. OMB does not directly address this topic in the definition of
the term, but Federal agencies may exercise reasonable discretion in
providing ``after the fact'' prior approval when warranted on a case-
by-case basis under Federal awards and otherwise consistent with law.
Guidance provided in section 200.308 is already responsive to the
comment regarding circumstances in which approval of the project
narrative or budget may constitute prior written approval. In response
to another commenter, OMB is not establishing a specific timeframe in
which an agency should provide prior approval, but may consider the
recommendation of a 15-day period in future updates. Regarding
commenters expressing confusion on when pass-through entities may
provide prior approval, in many instances the guidance text
specifically states whether
[[Page 30062]]
the Federal agency or pass-through entity may provide the approval. In
circumstances in which pass-through entities may provide prior
approval, they have the same responsibility for monitoring and
oversight as a Federal agency does. In some circumstances a change
under a subaward will be significant enough to also require a change to
the recipient's Federal award, which would also require prior approval
by the Federal agency.
Program Evaluation: Two commenters asked OMB to define the term
program evaluation to align with OMB Circular A-11. OMB did not add a
definition for this term directly in section 200.1. OMB is limiting the
definitions to those terms used consistently throughout the guidance.
Program Income: A commenter observed that usage of the phrase
``under a Federal award'' in the illustrative examples of program
income was confusing and needed clarification. The phrase was used for
some examples but not others. In response to the comment: the key
definitional elements of program income are provided in the first
sentence of the definition, including explaining its connection to a
Federal award. But the repetition of ``Federal award'' in certain
examples helps to provide context. For example, in relation to certain
items, the examples identify program income ``acquired'' under Federal
awards, ``fabricated'' under a Federal award, and ``made with'' Federal
award funds. Deleting this language would make the examples less clear.
Thus, OMB retains reference to ``Federal award'' in the case of some
example, but not all, when it helps to provide context and explain what
OMB means by the example.
Protected Personally Identifiable Information (Protected PII): In
the final guidance, OMB made minor revisions to the definition of
Protected Personally Identifiable Information (Protected PII) to more
accurately reflect the meaning of this term.
Questioned Cost: Multiple commenters objected to the deletion of
the statement that questioned costs are not improper payments until
reviewed and confirmed to be improper payments. No policy change was
intended by the deletion. OMB restored the original statement within
the definition of questioned cost at paragraph (6).
Two comments expressed concern about situations in which an auditor
identifies questioned costs, the auditee locates additional
documentation, and the auditor reports the questioned costs without
considering the documentation. This comment recommended stating more
specifically when adequacy of documentation should be assessed. OMB
finds that it is not necessary to specifically address in the guidance
the point in time at which this would occur.
Several commenters expressed concern that introducing the concept
of ``likely questioned costs'' could put auditees at risk from
speculative or unsubstantiated audit findings. OMB responds that the
concept of likely questioned costs is not new. The definition now
appearing at section 200.1 is from section 200.516 in prior versions of
OMB's guidance. It is also based on AU-C 935.11 in the auditing
standards of the American Institute of Certified Public Accountants
(AICPA). The requirements associated with this concept are not new,
including the requirement for auditors to consider the likely
questioned costs in formulating their opinion on compliance. OMB merely
moved the existing language from section 200.516 to section 200.1.
Speculative or unsubstantiated audit findings would not align with the
AICPA's auditing standards.
Several commenters recommended that ``known questioned cost,''
rather than ``questioned cost,'' should be the defined term and used as
a basis for defining the related term, ``likely questioned cost.'' OMB
is not adopting this recommendation at this time. OMB did not find
reason to restructure the definition in this way through this update,
but may consider the suggestion in the future.
Several commenters suggested categorizing the compliance
requirements in the compliance supplement (see definition in section
200.1) as monetary or non-monetary to facilitate consistent reporting
of questioned costs. In paragraph (3)(ii) of the definition, OMB
clarified that there is no questioned cost solely because of
noncompliance with the ``reporting type of compliance requirement'' (as
described in the compliance supplement) if this noncompliance does not
affect the amount expended or received from the Federal award.
Several commenters also suggested clarifying that there is no
questioned cost solely because of a misclassification of costs. OMB
agrees that in some cases this may be consistent with the intent of
paragraph (3)(ii), as revised, but also observes that misclassified
costs may sometimes affect the amount expended and thus be considered
questioned costs. This may occur, for example, if the misclassification
resulted in noncompliance with matching requirements.
Real Property: OMB received a comment on proposed revisions to the
definition of real property. The commenter questioned the proposed
addition of ``legal interests in land.'' The commenter stated these
would only be considered intangible rights or intangible property, but
not real property. In response to the comment, many Federal agency
regulations recognize that ``real property'' may include legal
interests in land.\2\ Black's Law Dictionary also recognizes that real
property ``can be either corporeal (soil and buildings) or incorporeal
(easements).'' (11th ed. 2019). In the final guidance, OMB decided to
retain the reference to ``legal interests in land'' followed by a short
list of examples. Relative to the proposed guidance, OMB only made
minor technical edits. As applied to other sections of the guidance,
the revised definition clarifies, for example, that if an easement is
acquired under a Federal award, the recipient must not dispose of the
easement while it is being used for the originally-authorized purpose
except as provided by the Federal agency--or as otherwise allowed under
relevant sections of the guidance. See 2 CFR 200.311(b). It is possible
that not all provisions in the Uniform Guidance that apply to real
property will equally apply to all legal interests in land. For
example, section 200.310 on insurance coverage may have limited
applicability in certain cases if insurance coverage would not
ordinarily apply to a particular legal interest in land. Federal
agencies may exercise discretion in appropriate application of the
revised definition consistent with law.
---------------------------------------------------------------------------
\2\ See, e.g., the General Services Administration (GSA)
regulation applicable to GSA's real property policies at 41 CFR 102-
71.20 (Real property means ``[a]ny interest in land, together with
the improvements, structures, and fixtures located thereon . . . and
appurtenances thereto . . .''). See also, e.g., 43 CFR 423.2 (``Real
property means any legal interest in land . . .''); 23 CFR 710.105
(``Real property . . . means any interest in land and any
improvements thereto . . .''); 10 CFR 770.4 (``Real Property means
all interest in land . . .''); 25 CFR 900.6 (``Real property means
any interest in land together with the improvements, structures, and
fixtures and appurtenances thereto''); 25 CFR 170.5 (``Real property
means any interest in land together with the improvements,
structures, fixtures and appurtenances''); 26 CFR 1.856-10
(identifying ``intangible assets that are real property or interests
in real property'').
---------------------------------------------------------------------------
Recipient: Some commenters asked OMB to amend the proposed
definition of recipient (and subrecipient) to explain specifically
which entities are recipients (or subrecipients). OMB also received
requests to further define the word entity in this and other
definitions. These changes are not necessary. Applicability of the
guidance is addressed separately in section 200.101. Subparts A through
F always
[[Page 30063]]
apply to Federal agencies that make Federal awards to non-Federal
entities. Federal agencies may also apply subparts A through E to
certain other entities as provided in section 200.101. Because the
applicability will not always be the same for all Federal agencies and
programs, OMB is not specifically listing which entities are recipients
(or subrecipients) within the definition section. More detailed
discussion on section 200.101--and the meaning of applying the guidance
to certain entities--is provided in this preamble below. OMB disagrees
that further definition of the word ``entity'' is needed to understand
the meaning of the terms recipient and subrecipient under part 200.
Section 200.101, on applicability, is the appropriate place to find
information on the entities to which part 200 may be applied by Federal
agencies.
Renewal award: OMB proposed minor revisions to the definition of
this term. In the final guidance, OMB revised the definition to remove
language specifying that a renewal award is made ``after the expiration
of'' a Federal award. In practice, renewal awards can be executed prior
to the actual expiration of the award that they follow. The revised
definition explains that the start date for a renewal award is
contiguous with, or closely follows, the end of the expiring Federal
award. The start date of a renewal award begins a new and distinct
period of performance.
Simplified acquisition threshold: A commenter requested clarity on
whether the capitalization of this term in sections outside of section
200.1 was intentional and indicated a different meaning. OMB did not
intend for capitalization to indicate different meanings for this term
within part 200. OMB removed the inconsistent capitalization in other
sections of the guidance.
Special Purpose Equipment: OMB received a comment suggesting that
the use of ``other technical activities'' is overly broad and could be
interpreted to be overly inclusive of items that would otherwise be
considered general purpose equipment. OMB changed the text to read
``other similar technical activities.'' OMB considered referring to
``other unique and specific activities'' but decided that language
could be too narrow because it would not necessarily apply to the
listed examples of special purpose equipment, including microscopes.
OMB finds the general definition and listed examples provide the
information needed to exercise appropriate discretion on distinguishing
between items that constitute ``special purpose'' and ``general
purpose'' equipment.
Strategic Sourcing: A commenter suggested including a definition of
strategic sourcing in section 200.1 because it appears in section
200.318. OMB did not add a definition for this term in section 200.1.
OMB is limiting the definitions to those terms used consistently
throughout the guidance.
Subaward: A commenter expressed confusion regarding the statement
that a subaward ``may be provided through any legal agreement,
including an agreement the pass-through entity considers a contract.''
In the final definition, OMB further clarifies its intent. OMB explains
that criteria for distinguishing between subawards and contracts is
provided at section 200.331. Some of this language just restored
language from the prior version of the guidance.
OMB also received several comments recommending the definition of
subaward clarify if payments to beneficiaries that are not individuals
are also excluded. OMB agrees the language was potentially misleading
and clarified that subawards do ``not include payments to a contractor,
beneficiary, or participant.''
Subcontract and Subcontractor: Two commenters asked OMB to add
definitions for subcontract and subcontractor. OMB did not add a
definition for these terms in section 200.1. OMB finds that the terms
are clear from the context in which they are used in the guidance and
extend logically from the definition of ``contract'' and
``contractor.'' Thus, additional definitions are not needed at this
time.
Subrecipient: OMB received a request to clarify if only individual
beneficiaries are excluded in the term subrecipient. OMB agrees this
feature of the definition was potentially confusing and amended the
final language to simply explain that the term ``does not include a
beneficiary or participant.'' Consistent with the definition of
recipient, OMB did not add further information on the meaning of the
word entity. On this topic, see further discussion in this preamble
above on the meaning of recipient.
Supply: OMB proposed revisions to this term, including an increased
threshold of $10,000. OMB included the revised definition in the final
guidance.
Telecommunications cost: A commenter requested OMB to clarify if
telecommunications cost includes the cost of using other types of
devices including satellites, radio, TV, telegraphs, and others. OMB
responds that the examples provided in the guidance are illustrative
and not exhaustive. OMB is not adding other examples to the definition,
but recognizes that other communication technologies may also fit under
the definition.
Temporary dependent care cost: A commenter asked OMB to defined
temporary dependent care cost in section 200.1 because it is defined in
section 200.475(c)(1). OMB did not add a definition for this term in
section 200.1. OMB is limiting the definitions to those terms used
consistently throughout the guidance.
Termination: A few commenters asked OMB to further clarify the
meaning of ``discontinue'' and ``discontinuing'' in the proposed
definition of ``termination,'' which they stated OMB had used in
different and conflicting ways. OMB simplified the definition in the
final guidance. As now revised, termination means the action a Federal
agency or pass-through entity takes to discontinue a Federal award, in
whole or in part, at any time before the planned end date of the period
of performance. The final guidance also explains that termination does
not include discontinuing a Federal award due to a lack of available
funds. See also discussion in this preamble below on changes OMB made
to the termination provision at section 200.340 in the final guidance.
Third-party in-kind contribution: One commenter asked OMB to revise
paragraph (1) of the definition by either removing ``Federal award''
from the sentence or adding ``that is funded by a'' before Federal
award. Another commenter asked OMB to revise paragraph (1) to state:
``Benefit a federally-assisted project or program or Federal award.''
OMB revised the definition based on consideration of these comments to
clarify its intent.
Total cost: A commenter asked OMB to include a definition of total
cost in section 200.1 because it is defined in section 200.402. OMB did
not add a definition for this term in section 200.1. OMB is limiting
the definitions to those terms used consistently throughout the
guidance.
Unliquidated financial obligation: A commenter stated that this
definition should be further clarified. OMB agrees and clarified the
final sentence addressing reports prepared on an accrual basis. For
reports prepared on an accrual basis, the final guidance now clarifies
that these are financial obligations incurred by the recipient or
subrecipient but for which expenditures have not been recorded.
[[Page 30064]]
Subpart B--General Provisions
Section 200.100--Purpose
OMB proposed multiple clarifying and plain language revisions in
this section. OMB received multiple comments requesting reinstatement
of the word ``inconsistent'' in paragraph (a) and the ``fair share''
language in paragraph (c).
OMB Response: OMB does not find the changes requested by these
commenters to be necessary in this section. OMB disagrees that the word
``inconsistent'' is needed to understand its intended policy in
paragraph (a)(1). Additional requirements are only allowed as described
in this paragraph. The fair share language in paragraph (c) of the
prior version of the guidance recognized a general background principle
used in the design of the cost principles in subpart E. This language,
on its own, did not require agencies to actually take specific actions.
By removing this language, OMB did not intend to indicate that Federal
awards no longer need to bear their fair share of cost. Rather, OMB
decided to simplify the guidance text in this section and allow the
more specific and substantive cost principles in subpart E to speak for
themselves on this topic. This general principle used in the design of
the cost principles does not need to be stated explicitly in subpart B.
In paragraph (d) of section 200.100, OMB made a minor edit to change
``administering'' to ``expending.''
Section 200.101--Applicability
In section 200.101, OMB proposed to clarify the applicability of
the guidance. In OMB's proposal, all subparts of part 200 continued to
apply to Federal agencies that make Federal awards to ``non-Federal
entities.'' Federal agencies also retained discretion under OMB's
proposal 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 proposed 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.
Additionally, OMB proposed to convert the applicability table in
paragraph (b) of section 200.101 into narrative form.
OMB received several comments that expressed support for proposed
changes in this section and a few provided suggestions for future
updates. Other commenters provided a variety of suggestions for further
revisions to OMB's current update of this section. Two commenters asked
whether OMB will list every program considered exempt from the 2 CFR
guidance. Additionally, OMB received a comment asking if paragraph
(a)(2)--calling for Federal agencies to apply the requirements to all
recipients in a consistent and equitable manner--should be revised to
also include subrecipients. OMB also received some questions on the
application of subparts A through E by an awarding Federal agency to
other Federal agencies.
One commenter sought clarification regarding whether subpart E or
FAR 31.2 is the primary guide of cost principles for for-profit
entities. Another commenter recommended that subpart F should not apply
to fixed amount awards based on the commenter's interpretation that
subparts C, D, and E do not apply to these awards. OMB received one
comment suggesting that some sections should not be applied to foreign
public entities or foreign organizations considering that some
exemptions from the guidance are necessary for these entities. OMB
received a few comments suggesting restoration of an applicability
table instead of presenting this information in narrative form.
OMB also received a comment inquiring about FAR contracts and how
they would be included within the scope of a single audit under the
current guidance. The commenter asked if this point could be clarified
in section 200.101. OMB received one comment that requested the
movement of the statement, ``rules flow down to recipients and
subrecipients'' to General Applicability instead of Types of Awards.
OMB received several questions inquiring as to when agencies should
determine exceptions to the guidance and the date for which adoption of
the guidance is enforced. OMB received a recommendation to remove the
language ``and procurement contracts under the FAR and subcontracts
under those contracts'' in paragraph (b), which the commenter stated
could imply that procurement contracts are a type of Federal financial
assistance. Another commenter recommended that the 2 CFR guidance be
expanded to cover loans and benefits and that the title of references
be changed from ``Grants and Agreements'' to ``Federal Financial
Assistance.'' OMB received one comment inquiring if the guidance is
applicable to inter-agency agreements.
OMB Response: In the final guidance, paragraph (a) of section
200.101 generally indicates how the guidance applies to Federal
agencies making awards, and paragraph (a)(2) generally indicates which
entities those Federal agencies may apply the guidance to. OMB first
revised paragraph (a)(1) of section 200.101 to add a sentence
clarifying the applicability of the final guidance to Federal agencies
making awards. In paragraph (a)(2), OMB added a sentence to clarify the
broad applicability of the guidance to non-Federal entities receiving
awards. The remainder of paragraph (a)(2), which explains other
entities that Federal agencies may apply the guidance to, was mostly
included in the final guidance as proposed. OMB did strike one sentence
on automatic application of the cost principles under the FAR to for-
profit organizations if the Federal agency does not apply the cost
principles in subpart E to that entity. This change does not imply that
Federal agencies making awards to for-profit organizations do not need
to apply cost principles to those awards--or that for-profit
organizations are not subject to cost principles in this scenario.
Rather, instead of relying on the FAR to apply automatically in this
case, the Federal agency will specify which cost principles apply in
the terms and conditions of the award.
OMB disagrees that further changes are needed to paragraph (a)(2).
A commenter questioned whether the final sentence of that paragraph on
consistent and equitable application of the guidance to all recipients
should also reference subrecipients. OMB responds that the reference to
recipients is sufficient for the purposes of the policy in this
paragraph. In general, Federal agencies do not apply requirements in
part 200 directly to subrecipients. Although OMB acknowledges Federal
agencies apply the guidance indirectly to subrecipients--for example,
through information contained in NOFOs, agency regulations or guidance,
and the terms and conditions of Federal awards, which flow down to
subrecipients--OMB did not find it necessary to include reference to
subrecipients in this provision. See 2 CFR 200.101(b)(1) (as revised).
The requested change could create confusion about the nature of the
relationship between Federal agencies and subrecipients.
OMB also received questions on the statement in paragraph (a)(2)
that Federal agencies may apply subparts A through E to other Federal
agencies. This is an existing feature of the prior version of the
guidance, which was added by OMB in 2020. See 85 FR 49506 (Aug. 13,
2020), at 49520. OMB's current plain language revisions throughout
subparts A through E of part 200--replacing the term ``non-Federal
[[Page 30065]]
entity'' with ``recipient,'' ``subrecipient,'' or both--may present
additional questions on how specific provisions apply or may apply to
Federal agencies.
In response to questions on this topic, OMB first reiterates, as
explained above, that the revisions related to the use of the terms
``non-Federal entity,'' ``recipient,'' and ``subrecipient'' do not
directly change the existing scope or applicability of the guidance.
Section 200.101 continues to provide Federal agencies discretion on
whether to apply subparts A through E of part 200 to other Federal
agencies. Next, OMB's 2020 preamble did not affirmatively require
application of part 200 to Federal agencies; rather, it clarified that
the Federal agencies ``may apply the requirements of . . . part 200 to
other Federal agencies . . . to the extent permitted by law'' and ``as
appropriate.'' 85 FR 49506 (Aug. 13, 2020), at 49520 (emphasis added).
To the extent that applying part 200 as a whole, or a particular
provision of part 200, to a Federal agency would conflict with
applicable Federal law, those provisions should not be applied to the
Federal agency. For example, applying both part 200 and provisions of
the FAR would present certain conflicts.
OMB also clarifies that its plain language revisions replacing
``non-Federal entity'' with ``recipient,'' ``subrecipient,'' or both,
are not intended to indicate that a Federal agency is a recipient of
Federal financial assistance in any formal sense under Federal law when
provisions of part 200 are applied to it.\3\ Just as a Federal agency
did not become a ``non-Federal entity'' when the prior version of the
guidance was applied to it, a Federal agency does not actually become a
recipient of Federal financial assistance when the revised version of
the guidance is applied. Unlike other entities--such as non-Federal
entities and for-profit organizations--Federal agencies carrying out
Federal program activities with Federal funds cannot fairly be
described as ``recipients'' of Federal assistance.\4\
---------------------------------------------------------------------------
\3\ See United States DOT v. Paralyzed Veterans of Am., 477 U.S.
597, 612 (1986) (finding that program ``owned and operated'' by the
United States ``is not `federal financial assistance' at all.'').
See also Jacobson v. Delta Airlines, 742 F.2d 1202, 1213 (9th Cir.
1984) (air traffic control and national weather service programs are
owned and operated by the Federal government and therefore they are
not recipients of federal financial assistance).
\4\ Paralyzed Veterans, 477 U.S. at 612.
---------------------------------------------------------------------------
OMB understands commenters' desire to seek additional guidance on
the applicability of various section to foreign public entities and
foreign organizations. However, the application of the guidance to such
entities is at the discretion of Federal agencies.
OMB also added a new paragraph (a)(4) in the final guidance. This
new paragraph explains that throughout subparts A through E, when the
word ``or'' is used between the terms ``recipient'' and
``subrecipient,'' any requirements or recommendations in the relevant
provisions of this part apply to the recipient, the subrecipient, or
both, as applicable. The use of ``or'' between recipient and
subrecipient does not mean that applicable requirements or
recommendations only apply to one of these entities unless the context
clearly indicates otherwise. OMB determined that this change was
warranted to clarify its more extensive usage of these terms in part
200 in this update. In final guidance, OMB relocated the proposed
paragraph (b)(1) on use of ``must,'' ``should,'' and ``may,'' to a new
location as paragraph (a)(3).
Regarding the applicability table in the prior version of the
guidance at paragraph (b), OMB disagrees that the table provided
greater clarity. OMB made some technical edits to the narrative
description of applicability under this section, but did not restore
the table from the prior version of the guidance in the final version.
In the final guidance, paragraphs (b) and (c) are now structured to
address the applicability of part 200 to Federal financial assistance
under paragraph (b) and contracts awarded under the FAR in paragraph
(c). In both paragraphs, OMB generally sought to maintain alignment
with the content of the prior version of the guidance, but did make
some changes to clarify the prior guidance in some cases. The removal
of the applicability table from the prior version of the guidance
resulted in this restructuring. Paragraph (b) also continues to include
language on requirements flowing down to recipients and subrecipients.
In response to some commenters, OMB did not find the need to move this
language to a different paragraph.
OMB agreed with commenters on making changes to paragraph (b) to
eliminate references to procurement contracts under the FAR, which were
referenced in the applicability table in the prior version of the
guidance. Except on the topic of audits, OMB struck language in
paragraph (b) related to procurement contracts under the FAR and
relocated this guidance to paragraph (c). Paragraph (c) in the prior
version of the guidance already contained cost-reimbursement contracts
under the FAR, but OMB now also incorporates the guidance from the
applicability table on fixed-price contracts under the FAR in slightly
modified form. OMB also clarified and streamlined some of the guidance
in this paragraph. The guidance provides that in cases of conflict
between the requirements of applicable portions of part 200 and the
terms and conditions of the contract, the terms and conditions of the
contract and the FAR prevail.
In paragraph (b), OMB added guidance on applicability of the cost
principles to fixed amount awards. Section 200.101(b)(4)(ii) now
explains that only sections 200.400(g), 200.402 through 200.405, and
200.407(d) from subpart E apply to fixed amount awards. This topic is
discussed in more detail below. In response to the comment that subpart
F should not apply to fixed amount awards based on applicability of
other subparts to these awards, OMB disagrees. The audit requirement
under subpart F continue to apply. The commenter's interpretation that
subparts C, D, and E do not apply to fixed amount awards is also
incorrect--although subpart E only has limited applicability to these
awards as explained in the guidance text. Fixed amount awards must
comply with applicable Federal statutes (including the Single Audit
Act), regulations, and applicable provisions of part 200, as well as
with the terms and conditions of the Federal award.
Regarding comments seeking clarification of the applicability of
part 200 to specific Federal assistance programs, OMB cannot list every
program that may have a statutory exception to the guidance. Federal
agencies can provide information to applicants and recipients on this
topic.
Section 200.102--Exceptions
In section 200.102, OMB proposed multiple clarifying revisions to
improve agency and recipient understanding of the availability and use
of exceptions to, or deviations from, OMB's Uniform Guidance in part
200. A few commenters expressed support for the proposed changes.
OMB received a request to explicitly create an exception to the
competition requirements and Federal clause requirements for adhesion
contracts. Additionally, two commenters noted concern about explicit
authority for deviations where there is no statutory prohibition. They
suggested that this could make the Federal award process more
challenging.
One commenter expressed concern over the removal of the requirement
of maximum uniformity. Also, another commenter suggested that OMB
clarify that the exception provision does not
[[Page 30066]]
apply to Project Labor Agreement (PLA) utilization, local hire
preferences, scoring methods, organizing efforts, and employee
misclassification.
One commenter suggested OMB restore the text for this section from
the prior version of the guidance. Another commenter suggested
enhancing OMB's authority as the primary oversight entity.
OMB Response: In the proposed guidance, OMB did not intend to
change the policy in section 200.102 in a significant way. In the final
version of the guidance OMB restored some language from the prior
version of the guidance, but did not make a significant change on the
policy for exceptions. The final version of the guidance in this
section is structured in three paragraphs: OMB class exceptions are
addressed in paragraph (a), statutory and regulatory exceptions are
addressed in paragraph (b), and Federal agency exceptions are addressed
in paragraph (c).
OMB removed references to ``deviations'' in this section from the
final version of the guidance. In the proposed guidance, OMB explained
that a deviation would mean applying more or less restrictive
requirements to Federal awards, recipients, or subrecipients. In
circumstances in which OMB or a Federal agency have authority under
this section to allow an exception, they also generally have authority
to allow a deviation if otherwise permitted by law. In other words, an
exception allowed under section 200.102 can take the form of deviation
as OMB used that term--which has no official definition or meaning in
the final guidance.
Section 200.103--Authorities
OMB proposed minor changes to this section to clarify authorities
for the guidance. OMB revised this section in the final guidance as
proposed.
Section 200.104--Supersession
In section 200.104, OMB proposed 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 did not find it 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. A commenter noted that a
reference to chapter I should be changed to chapter II. Another
commenter requested clarity on the meaning of the revised supersession
provision.
OMB Response: In the final guidance, OMB corrected the mistake on
the chapter number. OMB also revised the language in this section to
clarify that part 200 superseded prior OMB guidance previously found in
2 CFR and OMB Circulars in the past. OMB is not again superseding the
already-superseded guidance through this specific update. The
supersession occurred through OMB's earlier updates. For example, OMB
previously provided guidance in parts 215, 220, 225, and 230 of this
title, which were superseded by part 200. See also discussion in
section 1.215 in this preamble above.
Section 200.105--Effect on Other Issuances
OMB did not propose significant changes to this section. A
commenter asked OMB to prohibit the incorporation of handbooks,
manuals, and similar documents that are required to go through the
rulemaking process. Another commenter suggested establishing a Research
Policy Board at OMB to address implementation challenges of the
guidance in 2 CFR and provide the research community with consistent
and efficient policies. One commenter requested a change to the
phrasing of the paragraph (a) on superseding inconsistent requirements.
In particular, the commenter thought use of the words ``those
subparts'' was unclear.
OMB Response: OMB did not significantly change the policy in this
section based on the comments. OMB made a minor correction to the
language in paragraph (a) to replace ``those subparts'' with ``this
part.''
Section 200.106--Agency Implementation
OMB did not propose significant changes to this section. One
commenter recommended OMB further emphasize the need for Federal
agencies to update their regulations to align with the Uniform
Guidance. OMB provided further discussion of agency implementation
elsewhere in this preamble, such as under section 1.220 above.
Section 200.107--OMB Responsibilities
OMB did not propose significant changes to this section. OMB
received one comment requesting that the role of stakeholder engagement
and inclusion be dedicated to either the Research Policy Board or the
Council on Federal Financial Assistance. Another commenter suggested
establishing a Research Policy Board at OMB to address implementation
challenges and provide the research community with consistent and
efficient policies. Two commenters recommended OMB include language
providing that it would act as a neutral arbitrator to resolve disputes
and provide oversight for the research administrative system. Lastly,
another commenter suggested that section 200.107 address scenarios when
recipients have concerns with agency implementation.
OMB Response: OMB did not make changes to the policy in this
section. OMB considered the comments, but found they went beyond the
scope of its policy aims for the current update. OMB revised this
section as proposed. OMB provided further discussion of agency
implementation elsewhere in this preamble, such as under section 1.220
above.
Section 200.108--Inquiries
OMB did not propose significant changes to this section. OMB
received two comments regarding challenges for subrecipients in
addressing the relevant Federal agency when a dispute arises between a
subrecipient and pass-through entity. The comments suggested that OMB
could play a more formal role in resolving conflicts between
subrecipients and pass-through entities; or between recipients and
Federal agencies.
OMB Response: OMB appreciates the concern raised by the commenters.
However, OMB finds that establishing a formal role for itself as an
arbiter of these types of disputes is not warranted at this time.
Federal agencies are better suited to address the concerns raised by
the commenters.
Section 200.109--Review Date
OMB did not propose significant changes to this section. OMB
received several comments seeking clarification regarding the removal
of language indicating that OMB would review the guidance every five
years.
OMB Response: OMB's intent is to review and update 2 CFR when
changes are warranted, which could be more frequently than every five
years depending on the circumstances. OMB finds that inclusion of a
specific number of years is not necessary.
Section 200.110--Effective Date
OMB did not propose significant changes to this section. OMB
received several comments that generally addressed agency adoption of 2
CFR overall or included specific implementation questions. For example,
one commenter proposed that all
[[Page 30067]]
Federal agencies commit to one date for adoption. Another commenter
proposed that agencies be required to develop and make transparent any
differences between a Federal agency's and OMB's published guidance.
OMB Response: OMB recognizes challenges potentially impacting
Federal financial assistance recipients, including their concerns about
the timeliness of implementation of the 2 CFR guidance by Federal
agencies and potential variations in their approaches. OMB finds that
issuing implementation guidance within this section is not warranted at
this time. OMB provided further discussion of agency implementation
elsewhere in this preamble, such as under section 1.220 above.
Section 200.111--English Language
In the proposed guidance, OMB proposed to permit Federal agencies
to allow a language other than English, when it is appropriate for a
specific program or Federal award, for example in program reports,
proposals, or official communication. The intent of this policy change
was to allow for more flexibility when working in international
environments or in communities where English is the not the primary
language. OMB received over 30 comments in support of these proposed
changes. OMB also received several comments requesting that the
guidance not only allow for languages other than English, but rather
that agencies be required to translate materials. Another commenter
questioned whether translation costs in support of proposals be allowed
under a Federal award.
OMB Response: OMB appreciates the numerous comments of support and
also understands potential benefits of advancing the policy even
further. However, OMB finds that requiring translation more broadly
would place an administrative burden on Federal agencies and programs.
At this time, allowing Federal agencies discretion is more appropriate.
The range of Federal programs, recipient types, and program activities
is diverse and not all Federal programs would warrant or benefit from
such mandatory translation requirements. Regarding translation costs,
OMB did not find it necessary to address these costs in the guidance.
Translation costs may be allowable if they are allocable to the Federal
award and are reasonable for the effective administration of the award;
however, the allowability of such costs may depend upon the program.
Section 200.112--Conflict of Interest
OMB did not propose significant changes to this section. OMB
received several comments requesting that the policy be moved to
subpart D of part 200. Other commenters noted that the elements of the
conflict of interest policy align with those established in the
procurement standards.
OMB Response: OMB finds that the conflict of interest section is
appropriately located in subpart B. OMB revised this section as
proposed.
Section 200.113--Mandatory Disclosures
In the proposed guidance, based on feedback from the oversight
community, OMB proposed to revise the section on mandatory disclosure
to clarify that recipients and subrecipients must promptly disclose
credible evidence of a violation of Federal criminal law potentially
affecting the Federal award or a violation of the civil False Claims
Act (FCA) (31 U.S.C. 3729-3733). OMB also proposed to revise this
section to require recipients and subrecipients to provide written
disclosure to the agency's Office of Inspector General. In the proposed
guidance, OMB found the proposed ``credible evidence'' standard more
appropriate because it would not require recipients, subrecipients, and
applicants to make a firm legal determination that a criminal law had
been violated before they were 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.
OMB received many comments in response to the proposed policy
changes. For example, one commenter suggested that no changes should be
made and noted that the policy would result in an increased number of
frivolous claims. Some commenters suggested that the policy should
continue to refer to only a ``violation'' of law, rather than of
``credible evidence of violation.'' Other commenters questioned
misalignment of the disclosure requirement in this section of part 200
with the parallel disclosure requirement in the FAR applicable to
Federal procurement. OMB also received several comments seeking
clarification on the responsibility of subrecipients to report such
information. For example, a commenter questioned whether a subrecipient
has to report to all three entities (Federal agency, pass-through
entity, and Office of the Inspector General) or just to the pass-
through entity. OMB also received a few comments suggesting the
addition of a definition of credible evidence along with examples.
Finally, several commenters asked OMB to revert to language from the
prior version of the guidance requiring disclosure ``in a timely
manner,'' rather than ``promptly.''
OMB Response: In the final guidance, OMB revised this requirement
to better align with the disclosure requirement under the FAR. See 48
CFR 3.1003 and 52.203-13. Requiring timely disclosure of ``credible
evidence'' of relevant violations is important to provide assurance of
the integrity of applicants for, and recipients and subrecipients of,
Federal financial assistance, and to protect the Federal government
from fraud, waste, and abuse.
In the final guidance, the revised provision requires an applicant,
recipient, or subrecipient of a Federal award to promptly disclose
whenever, in connection with the Federal award (including any
activities or subawards thereunder), it has credible evidence of the
commission of a violation of Federal criminal law involving fraud,
conflict of interest, bribery, or gratuity violations found in Title 18
of the United States Code or a violation of the civil False Claims Act
(31 U.S.C. 3729-3733). The disclosure must be made in writing to the
Federal agency, the agency's Office of Inspector General, and pass-
through entity (if applicable).
Based on the existing use of the term ``credible evidence'' in the
FAR, OMB did not find it necessary to provide a definition of this term
in part 200. Black's Law Dictionary defines this term to mean evidence
``that is worthy of belief; trustworthy evidence.'' (11th ed. 2019).
When the term was added to the FAR, the FAR Council explained that the
``term indicates a higher standard [than reasonable grounds to
believe], implying that the contractor will have the opportunity to
take some time for preliminary examination of the evidence to determine
its credibility before deciding to disclose to the Government.'' 73 FR
67064, 67073 (Nov. 12, 2008). OMB intends the meaning of the term in
the Uniform Guidance in part 200 to generally align with its meaning in
the FAR.
Relatedly, the FAR preamble also provides some additional insight
on the timing of disclosure requirements. Applied to the Uniform
Guidance, the standard of ``credible evidence'' implies that the
applicant, recipient, or subrecipient ``will have the opportunity to
take some time for preliminary examination of the evidence to determine
its credibility before deciding to disclose to the Government.'' Id. at
67074. This does not impose ``an
[[Page 30068]]
obligation to carry out a complex investigation, but only to take
reasonable steps that the [applicant, recipient, or subrecipient]
considers sufficient to determine that the evidence is credible.'' Id.
The use of the word ``promptly'' in the Uniform Guidance indicates that
any such preliminary investigation should not be open-ended or extend
over a longer period of time than is necessary to make a preliminary
assessment of credibility. However, the use of the word ``promptly''
was not intended to otherwise affect this general principle on timing
discussed in the FAR preamble.
Finally, a couple of commenters questioned other ways that OMB's
proposed disclosure requirement misaligned with the parallel disclosure
requirement in the FAR, such as failing to refer to the ``commission''
of a crime or specify what OMB intended by a violation ``potentially
affecting'' the Federal award. In the final guidance, in response to
such comments, OMB made two additional revisions to better align the
disclosure requirement with the disclosure requirement at FAR 52.203-
13.
First, OMB added the phrase ``the commission of'' before ``a
violation.'' Similar to the FAR, on receipt of such evidence, the
preliminary examination by an applicant, recipient, or subrecipient
will involve a diligent (and reasonably prompt) internal effort to
determine whether a violation has, in fact, occurred.
In addition, OMB replaced ``potentially affecting the Federal
award'' with ``in connection with the Federal award (including any
activities or subawards thereunder).'' Like the FAR, the disclosure
requirement is broad, but there must be some nexus to the Federal
award. The proposed text did not necessarily require disclosure of all
criminal laws, as suggested by one commenter, but ``violation of a
Federal criminal law potentially affecting the Federal award.'' The
final guidance, in alignment with the FAR, now refers to violations
that have a ``connection with'' a Federal award. In many cases this
will encompass relevant violations ``potentially affecting the Federal
award,'' but does not necessarily encompass all such violations with
only a tenuous potential effect or connection. The term ``activities''
in the parenthetical includes, but is not necessarily limited to,
activities described throughout OMB's guidance in part 200.
Establishing a specific mechanism for anonymous reporting is beyond
the scope of the proposed changes in section 200.113, which places the
responsibility on the ``applicant, recipient, or subrecipient of a
Federal award'' to promptly make the disclosure. Anonymous reporting
may also be available, but this type of reporting would not necessarily
satisfy the mandatory disclosure requirement under this section if the
applicant, recipient, or subrecipient could not verify that it made the
required disclosure. In the new provision at section 200.217, OMB
endeavored to better recognize certain legal protections for
whistleblowers.
Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards
Section 200.200--Purpose
One commenter noted that the sections referenced in the proposed
guidance did not include the new section 200.217 on whistleblower
protections.
OMB Response: OMB modified the final guidance to include reference
to the new section 200.117.
Section 200.201--Use of Grants, Cooperative Agreements, Fixed Amount
Awards, and Contracts
In the proposed guidance, OMB revised this section to clarify
certain requirements for fixed amount awards. For example, OMB
clarified 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. OMB also
clarified record retention and post award certification requirements.
In addition--although no specific language was proposed--OMB sought
comments on requiring additional pre-award certifications for fixed
amount awards to address the potential increased risk of fraud under
fixed amount awards. OMB also invited comments on appropriate pre-award
certifications for fixed amount awards and noted that it may include a
requirement for such certifications in the final guidance document. OMB
also proposed to more specifically identify certain prior approval
requirements that specifically relate to fixed amount awards.
OMB received many comments on proposed revisions related to fixed
amount awards. Several comments expressed appreciation for the many
clarifications OMB proposed in the draft revisions, including the
clarification that program income could be generated under a fixed
amount award, but would not be subject to the requirements on use of
program income specified in section 200.307. Commenters also approved
of the clarification that recipients of fixed amount awards are
entitled to any unexpended funds if the required activities were
completed in accordance with the terms and conditions of the award.
OMB received comments requesting clarification on how budgets for
fixed amount awards are negotiated with recipients. A commenter asked
for clarification that no review of actual costs incurred by the
recipient would be required. The commenter also sought clarification on
whether fixed cost awards are subject to audit. Other comments
requested clarification of the recordkeeping requirements for fixed
amount awards. One commenter questioned the necessity of reporting
activities that were not completed at the end of the award.
OMB also received several comments requesting clarification on
which subparts and sections of the guidance apply to fixed amount
awards. For example, several commenters requested removal of the
reference to section 200.403 (on factors affecting allowability of
costs) under the certification requirement. Some of these commenters
observed that the section 200.101 on applicability stated that subpart
E does not apply to fixed amount awards. Commenters stated this
requirement in section 200.201 could substantially hinder the use of
fixed amount awards and subawards by requiring reimbursement of
specific items of cost.
Next, OMB also received several comments requesting clarification
on when fixed amount awards may not be used. Specifically, the
commenters asked for clarity on the meaning of the statement that
``fixed amount awards may not be used for programs with mandatory cost
sharing requirements.'' OMB also received several comments regarding
the applicability of the guidance to OTA instruments.
Other commenters provided a variety of additional suggestions. Some
commenters suggested OMB require a tiered risk assessment; that OMB
encourage the use of fixed amount awards; that OMB remove the prior
approval requirement for fixed amount subawards; and that OMB allow for
fixed amount awards when the recipient will make performance-based
payments. Clarification of the prior approval requirements was
requested by some commenters. Some commenters also requested the
guidance maintain the language of on ``the level of effort . . .
expended'' in the final certification requirement.
OMB also received several suggestions for future revisions in
[[Page 30069]]
response to the preamble of the proposed guidance. Regarding the
possibility of requiring additional pre-award certifications for fixed
amount awards, one commenter cautioned that risk mitigation measures
should be designed not to pose an insurmountable burden on smaller
organizations and impede timely award processing. Another commenter
noted that pre-award certifications are already completed as part of
the UEI registration process and that due diligence is already
conducted for a responsibility determination. Rather than another set
of certifications, one commenter suggested that OMB should consider
explicitly expanding section 200.205, on Federal agency review of risk
posed by applicants, to fixed amount awards.
OMB Response: OMB made several changes in the final version of
section 200.201. Relative to the proposed guidance, OMB revised
paragraph (b)(1) to replace the word ``adequate'' with ``accurate''
with respect to cost, historical, or unit pricing data for determining
budgets for fixed amount awards. This change was made to provide more
specificity as to the quality of information informing the final
amounts of fixed amount awards.
Paragraph (b)(1) was also revised in the final guidance to clarify
that budgets for fixed amount awards are negotiated with the recipient.
The final guidance also clarifies that the total amount of Federal
funding is determined using information from the recipient's proposal,
pricing data, and subpart E. This new language supplements the first
sentence of this paragraph, which had only referenced pricing
information and cost principles.
OMB further revised paragraph (b)(1) in the final guidance to
clarify that ``routine monitoring'' of the actual costs incurred is not
expected--rather than ``no review'' as proposed. No ``review'' may have
suggested that fixed amount awards are not subject to audit, which is
not accurate.
OMB also revised the final guidance to clarify that recipients and
subrecipients of fixed amount awards are subject to record keeping
requirements. Paragraph (b)(1) was revised to include additional
language emphasizing that records should be maintained and made
available for audits. This change clarifies that fixed amount awards do
not absolve the recipient of the responsibilities of making records
available for review during an audit. Lastly in paragraph (b)(1), OMB
added cross references to sections 200.101(b)(4)(ii) and
200.101(b)(5)(i) for clarity on how other subparts in part 200 apply to
fixed amount awards, including the cost principles.
Regarding limitations on using fixed amount awards in programs that
have mandatory cost sharing, OMB clarified the intent of this statement
by removing the word ``mandatory'' before cost sharing in paragraph
(b)(2). The final guidance simply states that fixed amount awards must
not be used in programs that require cost sharing. To the extent cost
sharing is required, this implies that the Federal agency or pass-
through entity would be responsible for monitoring the recipient's or
subrecipient's contributions of cost share for the purposes of
verification. Therefore, financial reporting would be required, which
would conflict with the provisions applicable to fixed amount awards.
OMB revised paragraph (b)(4) to require, upon conclusion of a fixed
amount award, the identification of activities that were not completed.
This is necessary to reduce the appropriate amount of award funding if
the original scope of the project was not completed. Although the
recipient is entitled to any remaining funds at the end of the award
that were not used to carry out a completed program, if a recipient did
not complete certain program activities, the recipient must inform the
Federal agency of this. Any funds associated with costs of activities
that were not completed must be returned.
OMB revised paragraph (b)(6) to apply additional prior approval
requirements for revisions to fixed amount awards with regards to
subaward activities and cost sharing. This change was made to more
accurately capture the list of prior approvals that should be required
for fixed amount awards. OMB also added additional prior approval
requirements for fixed amount awards enumerated in section 200.308(f)
in response to a comment seeking clarification on this topic.
The prior version of the guidance specified that budgets for fixed
amount awards should be negotiated ``using the cost principles . . . as
a guide.'' 2 CFR 200.201(b)(1) (prior version). The final guidance
retains the reference to negotiating fixed amount awards using the cost
principles in paragraph (b)(1), but also now clarifies in the
applicability section that fixed amount awards and expenses under a
fixed amount award are subject to certain cost principles in sections
200.400(g), 200.402 through 200.405, and 200.407(d). See 2 CFR
200.101(b)(4)(ii) (as revised). Considering that fixed amount awards
are negotiated using the cost principles, unallowable costs should not
be included in fixed amount award budgets. In addition, audit
requirements in subpart F have always applied to fixed amount awards.
See 2 CFR 200.101(b)(5)(i) (as revised; included in ``Table 1 to
paragraph (b)'' in the prior version). The lack of reference to
maintaining records in section 200.201 created the false impression for
some that the recipient and subrecipient would not be required to
maintain records or to make them available during an audit. The final
guidance now clarifies that this impression is incorrect in paragraph
(b)(1) of section 200.201.
OMB finds that application of some of the basic considerations of
the cost principles at sections 200.402 through 200.405--particularly
during the budget negotiation process--remains consistent with the use
and general meaning of fixed amount awards. For example, one reason the
cost principles have not historically applied to fixed amount awards is
that various prior approval requirements are contained in the general
provisions for selected items of cost. Requiring prior approval for
selected items of cost throughout the performance period would
interfere with the efficiencies provided by this type of award. OMB did
not add such prior approval requirements in the final guidance. Section
200.400(g) of the final guidance also now expressly recognizes that
when the required program activities are completed in accordance with
the terms and conditions of the fixed amount award, the unexpended
funds retained by the recipient or subrecipient are not considered
profit. Thus, the final guidance continues to recognize that
accountability for fixed amount awards is based primarily on
performance and results--as stated directly in the definition of the
term.
Many commenters asked OMB to clarify which provisions of part 200
apply--and do not apply--to fixed amount awards. Fixed amount awards,
per the definition of that term in section 200.1, are a type of grant
or cooperative agreement with a fixed budget. These awards are not
subject to all of the same requirements as other grants, such as
certain reporting and prior approval requirements, but do not relieve
recipients and subrecipients of all compliance requirements. As
explained in 200.101, as a type of grant or cooperative agreement,
fixed amount awards are subject to multiple subparts of 2 CFR part 200,
including subparts A through D. Fixed amount awards are also subject to
certain cost principles in subpart E and the audit requirements in
subpart F. Section 200.101(b) (as revised) now provides more specific
detail. Under section 200.102, Federal
[[Page 30070]]
agencies also retain flexibility to apply less restrictive requirements
when issuing fixed amount awards, except for those requirements imposed
by statute or in subpart F related to audit. Thus, certain questions
posed by commenters on what requirements apply to fixed amount awards
may depend on the implementation of specific Federal financial
assistance programs by Federal agencies and the discretion exercised by
Federal agencies under section 200.102.
In response to a question from one commenter, procurements
standards in subpart D generally apply to fixed amount awards unless a
Federal agency applies less restrictive requirements under section
200.102. In response to a question from another commenter: although
less restrictive requirements may apply to fixed amount awards, they
should not be used for unallowable activities. However, under section
200.400(g) in the final guidance, unexpended funds may be retained
after satisfactory completion of the fixed amount award. In addition,
under section 200.405(b), unallowable activities may receive an
appropriate allocation of indirect costs in some circumstances.
Federal agencies are responsible for determining when a fixed
amount award is or is not appropriate, and are also responsible for
agency risk assessment procedures. Federal agencies should also
exercise proper oversight of pass-through entities. For these reasons,
OMB also finds that prior approval of fixed amount subawards remains
appropriate. See 2 CFR 200.333 (as revised). In the final guidance, OMB
did not completely remove a threshold for fixed amount subawards, but
raised the threshold to $500,000. Id. (as revised). See also discussion
of fixed amount subawards in section 200.333 below. OMB's policies on
UEI and subaward reporting requirements are addressed separately in
parts 25 and 170.
Finally, even if performance-based payments are elected, a fixed
amount award must only be used if there are measurable goals and
objectives and enough data is available to determine costs up front.
With regards to amending the certification language to include
reference to ``level of effort . . . expended,'' OMB disagrees that it
is necessary to amend the certification in this way relative to the
proposed guidance. In the final guidance, the recipient is required to
certify, among other things, that it carried out the program activities
in accordance with the terms of the award without reference to a
specific level of effort.
Section 200.202--Program Planning and Design
In the proposed guidance, OMB expanded section 200.202 on program
planning and design. For example, OMB added language encouraging
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 underscored that Federal agencies should consider
all available data, evidence, and evaluation results from past programs
and coordinate with other agencies during program planning and design.
The majority of comments that OMB received requested revisions to
section 200.202 that could be more appropriate for Federal agencies to
implement and cannot be broadly required or implemented through OMB
guidance under this update. For example, these comments requested that
OMB further strengthen the policy to address program sustainability,
invest in capacity building, promote partnerships, reduce requirements
for nonprofits, and support ``continuous improvement.'' One comment
encouraged ``participatory grant-making,'' which would allow community
members to be involved in funding decisions.
OMB also received one comment requesting OMB to require
recipients--as opposed to the Federal agency--to engage members of the
community that would benefit from a program. OMB received several
comments recommending that OMB streamline the grants process for
organizations receiving Congressional earmarks. OMB received several
additional comments noting that the RESTORE Act already sets forth a
program design. One commenter requested that OMB encourage Federal
agencies to publish results and performance frameworks and, wherever
applicable, pay recipients for achievement of results against them.
OMB Response: The purpose of section 200.202 is to establish key
requirements and communicate the principles or best practices
associated with proper program design. However, agencies are ultimately
responsible for the design, innovation, and long-term development and
sustainability of these programs. The final guidance encourages
community engagement, but OMB finds it unnecessary to specify one
method over another for all Federal agencies and Federal financial
assistance programs.
With regard to Congressional earmarks, even though funding is
directed by Congress, Federal agencies still have the responsibility to
ensure there is proper oversight of taxpayer dollars. Thus, a different
approach specific to earmarks is not appropriate. In addition, the
intent of part 200 is to provide more uniform requirements. However,
OMB acknowledges that specific programs often have specific, statutory
requirements. Paragraph (a)(1) recognizes that program design must be
``consistent with the Federal authorizing legislation of the program.''
OMB disagrees with the suggestion to require Federal agencies to
publish performance results at this time. This proposed agency
requirement would require greater coordination across the Federal
government prior to OMB implementing a policy change. OMB disagrees
with the suggestion to pay recipients specifically for results
achieved, as payments under grants and cooperative agreements should
only support actual costs incurred and not serve as a reward for
achieving results, which would constitute a profit.
OMB revised section 200.202(a)(5) to specify that ``applicants,''
and not ``recipients,'' should engage with members of the community
when practicable during the design phase to encourage community
engagement.
Relative to the proposed guidance, section 202.202(b) was also
revised to add that Federal agencies should consider ``evidence,'' in
addition to available data and evaluation results. This change was made
to align with the Evidence Act and capture more accurately the relevant
considerations during the program design phase.
Section 200.203--Requirement To Provide Public Notice of Federal
Financial Assistance Programs
In the proposed guidance, OMB revised section 200.203 on Assistance
Listings to reinforce the importance of communicating in plain language
and highlighting any program-related customer service initiatives.
OMB received several comments emphasizing the importance of data
standards and suggesting the inclusions of data standards in this
section in general. OMB also received several comments requesting that
OMB require agencies to break out the program description into elements
of Project Goals, Project Objectives, and Project Performance
Measurements. Another commenter questioned whether ``customer service
initiatives'' differs from ``customer service experience initiatives''
used elsewhere in Federal programs.
OMB Response: OMB continues to work in concert with Federal
agencies on the development of data standards.
[[Page 30071]]
The guidance in part 200, however, is not an appropriate vehicle for
mandating agency adoption of data standards at this time, which is an
ongoing and iterative process that requires continued interagency
coordination. In addition, section 200.203 provides information that is
essential for Assistance Listings, but agencies have the authority to
break out the information into more distinct categories if there is a
need or benefit in doing so. OMB also revised ``customer service
initiatives'' to ``customer service experience initiatives'' to align
with standard Federal terminology on this topic.
Section 200.204--Notices of Funding Opportunities
In the proposed guidance, OMB revised section 200.204 on NOFOs 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 proposed to include an
Executive Summary requirement and to encourage agencies to use plain
language when publishing opportunities. OMB also stipulated that
Federal agencies should communicate program requirements specifically
and clearly, as well as limit the length of program announcements. This
is particularly important in consideration of applicants with less
experience applying for Federal financial assistance, such as
applicants from underserved communities.
OMB also revised this section in the proposed guidance by
encouraging 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 the
proposed guidance, OMB sought to make NOFOs more consistent and
transparent. OMB aimed to ensure that applicants are not
unintentionally excluded from funding opportunities. Additionally, OMB
proposed 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.
OMB received one comment requesting that agencies assess
opportunities to further remove barriers for partnership with tribal
entities. For example, OMB received several comments recommending
requiring NOFOs to state the anticipated award date and agencies to
adhere to the anticipated timeline. OMB also received several comments
requesting that OMB break out the program description into elements of
Project Goals, Project Objectives, and Project Performance
Measurements. Some commenters emphasized the importance and inclusion
of data standards in NOFOs as well.
OMB also received several comments regarding the Federal financial
assistance application process. For example, several commenters
requested that opportunities be available for 90 days rather than 60
days. Some commenters recommended that opportunities that are available
for less than 30 days be approved by an agency head or delegate and
that NOFOs posted for fewer than 60 days be accompanied by supporting
documentation justifying the reason for the abbreviated period. Several
commenters recommended that agencies offer technical assistance for the
grant application process.
OMB Response: OMB did not revise the guidance substantially in
response to comments received. As noted, many comments and suggestions
were not entirely applicable to all Federal programs. For example,
adding a required ``anticipated award date'' would not be feasible in
all cases. Its feasibility may depend on the funding status and other
factors. Federal agencies can break out the information, such as
Project Goals and Objectives, if it is necessary for the program, but
OMB disagrees that this should be required in all NOFOs at this time.
Beyond establishing the elements of a NOFO, this guidance also does
not require any specific application process. While OMB strives to
encourage more uniformity and consistency in grants processes, Federal
agencies may also identify opportunities to simplify their own agency
process.
OMB disagrees that revisions are necessary regarding the time for
posting NOFOs and finds that the recommendation of at least 60 days is
sufficient. Ultimately, it is the responsibility of the Federal agency
to determine its process for approving opportunities that will be
available for less than 30 days based on exigent circumstances.
OMB continues to support the removal of barriers for all
organizations. The final guidance provides that Federal agencies may
offer pre-application technical assistance or provide clarifying
information for funding opportunities. Federal agencies must also
ensure these resources are made accessible and widely available to all
potential applicants. For example, agencies may post answers to
questions and requests on <a href="http://Grants.gov">Grants.gov</a>.
Relative to the proposed guidance, paragraph (b) of section 202.204
was revised to state that the Federal agency may ``modify'' the
availability period--as opposed to ``extend.'' This change was made to
capture scenarios in which it may be necessary to shorten the
availability period of a NOFO.
OMB also revised section 202.204 to add ``tribal organizations'' as
an additional example of potentially eligible applicants. This change
is relevant to removing barriers for tribal organizations. See, for
example, E.O. 14112, Reforming Federal Funding and Support for Tribal
Nations To Better Embrace Our Trust Responsibilities and Promote the
Next Era of Tribal Self-Determination. With this change, the final
guidance provides that the Federal agency should make every effort to
identify in the NOFO all eligible applicants including tribal
organizations.
Section 200.205--Federal Agency Review of Merit of Proposals
In section 200.205 of the proposed guidance, OMB clarified that a
Federal agency should consider diversity when developing policies and
procedures for merit review panels. OMB received several comments on
the composition of merit review panels. One comment requested that the
requirements of a NOFO and merit review be extended to recipients and
not just for Federal peer review panelists. Commenters also suggested
that the guidance require agencies to utilize external reviewers when
the award involves technology development or acquisition. One commenter
requested Federal agencies provide sufficient funding to support
equitable merit review processes that truly compensate review panelists
for their time and expertise. Finally, OMB received one comment
suggesting that OMB require agencies to consider diversity when
developing policies and procedures for merit review panels.
OMB Response: Section 200.205 was revised to apply standards more
uniformly to merit review panels in general, and not simply to those
panels that employ ``external peer reviewers.'' Therefore, the language
limiting some of the guidance in this section to external peer
reviewers was removed. Mandating external peer reviewers, as requested
by some commenters, would be overly burdensome and not necessarily
applicable to all Federal financial assistance programs. Federal agency
discretion, consistent with law, will determine when it is appropriate
to utilize external reviewers. On requiring compensation for review
panelists, OMB disagreed with making this proposed change. The
circumstances under which compensation could be
[[Page 30072]]
provided for this purpose would need to be evaluated by Federal
agencies for individual assistance programs. Thus, this decision may
vary between Federal agencies and programs. OMB disagrees that this
should be a universal requirement.
Section 200.206--Federal Agency Review of Risk Posed by Applicants
In the proposed guidance, in section 200.206 OMB revised 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 clarified 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 clarified that an agency may modify
its risk assessment at any time during the lifecycle of an award.
One commenter suggested a modification to paragraph (d) that
referenced the exclusion of parties from ``receiving Federal awards
[and] participating in Federal awards.'' OMB also received several
comments on risk assessment factors in paragraph (b) and whether fraud
risks are to be considered. These comments suggested that risk
assessments should be limited to determining whether the recipient can
adequately manage the award and not include criteria such as impacts on
local jobs and communities or history of performance. Other commenters
suggested that Federal agencies should be required to consider
diversity when developing policies and procedures for conducting risk
assessment.
OMB Response: Paragraph (b) of section 202.206 was revised to add
``fraud risks'' to the list of examples of elements of a risk
assessment to expand on the examples provided. OMB also agrees with the
suggestion to clarify language in paragraph (d). OMB added a missing
``or'' to the final sentence, which now states ``receiving Federal
awards or participating in Federal awards.''
OMB disagrees that section 202.206 should be revised to require
agencies to consider diversity when developing policies and procedures
for risk assessment. Criteria provided in section 200.206 on job
impacts and history of performance are only suggestions of what may be
considered and not a comprehensive list of requirements.
Section 200.207--Standard Application Requirements
OMB received several comments that were not relevant to proposed
changes in section 200.207. The comments stated that applications often
request information that is required on other forms or systems and is
therefore redundant. Commenters requested that OMB simplify the
application process and make it more inclusive, as well as establish a
single online grant application system.
OMB Response: OMB recognizes that there may be need for improvement
in the application process for some assistance programs. Generally,
this section of the 2 CFR guidance does not specify a particular
application process, but only provides information on high-level
standard application requirements. OMB added examples of standard
forms, such as the SF-424 or the recently approved Biographical Sketch
Common Form.
This update to the guidance is not the appropriate place for
establishing a unified application system, which would go beyond the
scope of OMB's proposed revisions in October 2023, and may not be
feasible to implement through this section of part 200. <a href="http://Grants.gov">Grants.gov</a> is
the primary Federal system to seek funding opportunities, but many
Federal agencies, at this point in time, also have unique systems
through which applicants may apply.
Section 200.208--Specific Conditions
OMB received several comments inquiring whether the guidance in
section 200.208 on determinations that a recipient does not have
adequate financial resources only applies if an award has a cost
sharing requirement. Some commenters questioned whether financial
resources as a condition is too limiting.
OMB Response: A Federal agency may make such a determination and
apply specific conditions regardless of whether there is a cost sharing
requirement. For example, specific conditions may be necessary to
safeguard Federal funds if a recipient does not have sufficient funds
to cover unforeseen expenses that are not related to the Federal
program. OMB also changed ``a determination that a recipient or
subrecipient has adequate financial resources'' to ``a d
[…truncated; see source link]Indexed from Federal Register on April 22, 2024.
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