[Federal Register Volume 70, Number 219 (Tuesday, November 15, 2005)]
[Rules and Regulations]
[Pages 69250-69272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22475]
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DEPARTMENT OF ENERGY
10 CFR Parts 600 and 603
RIN 1991-AB72
Assistance Regulations
AGENCY: Department of Energy.
ACTION: Interim final rule.
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SUMMARY: The Department of Energy (DOE) is adding a new part to the DOE
assistance regulations to establish policies and procedures to
implement the ``other transaction authority'' granted to the Secretary
of Energy by section 1007 of the Energy Policy Act of 2005. DOE has
decided to implement other transaction authority through the award and
administration of technology investment agreements (TIAs). TIAs are a
new class of assistance instrument for DOE, but they have been used by
the Department of Defense (DoD) for many years to support or stimulate
defense research projects involving for-profit firms, especially
commercial firms that do business primarily in the commercial
marketplace. The new part 603 is similar to the DoD regulation; both
provide contracting officers greater flexibility to negotiate award
provisions in areas that can present barriers to those commercial firms
(e.g., intellectual property, audits, and cost principles). DOE also is
revising 10 CFR part 600, subpart A, to conform it with the new part.
DATES: Effective Date: This interim final rule is effective on March
15, 2006. Comment Date: Written comments must be received by December
15, 2005.
ADDRESSES: You may submit comments, identified by RIN Number 1991-AB72,
by any of the following methods:
1. E-mail to [email protected]. Include RIN 1991-AB72 and
``TIA'' in the subject line of the e-mail. Please include the full body
of your comments in the text of the message or as an attachment.
2. Federal eRulemaking Portal: http://www.regulations.gov. Follow
the instructions for submitting comments.
3. Mail: Address the comments to Trudy Wood, U.S. Department of
Energy, Office of Procurement and Assistance Policy (ME-61), 1000
Independence Avenue, SW., Washington, DC 20585. Due to potential delays
in DOE's receipt and processing of mail sent through the U.S. Postal
Service, we encourage respondents to submit comments electronically to
ensure timely receipt.
FOR FURTHER INFORMATION CONTACT: Ms. Trudy Wood, Office of Procurement
and Assistance Policy, Department of Energy, at 202-827-1336.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Rule Provisions
III. Discussion on Conforming Changes to 10 CFR Part 600
IV. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under the Treasury and General Government
Appropriations Act, 2001
J. Review Under Executive Order 13211
K. Review Under the Small Business Regulatory Enforcement
Fairness Act
V. Approval of the Office of the Secretary of Energy
I. Background
Section 1007 of the Energy Policy Act of 2005 (Pub. L. 109-58)
amends section 646 of the Department of Energy (DOE) Organization Act
by adding a subsection (g) which authorizes the Secretary of Energy to
enter into transactions (other than contracts, cooperative agreements,
and grants) subject to the same terms and conditions as the Secretary
of Defense under section 2371 of title 10, United States Code. Pursuant
to 10 U.S.C. 2371, the Department of Defense (DoD) has developed types
of cooperative agreements and other transactions to support research
with potential for both commercial and defense applications. In 1997,
DoD issued interim guidance that merged various cooperative agreements
and other transactions that were similar to
[[Page 69251]]
each other into a single class of assistance instruments called
technology investment agreements (TIAs). DoD published a regulation in
2003 (68 FR 47150, August 7, 2003) establishing policies and procedures
for the award and administration of TIAs.
Today DOE is publishing interim final regulations as a new part 603
to the DOE assistance regulations to establish policies and procedures
to implement the Department's ``other transaction authority.'' These
regulations were developed on an expedited basis in order to comply
with the statutory requirement to issue guidance within 90 days of
enactment of the Energy Policy Act of 2005. DOE will continue to review
and evaluate transactions authorized and carried out by other Federal
agencies under similar authority. This evaluation, which will be
considered in formulating the final rule as well as internal guidance,
includes an assessment of training and experience requirements for
contracting officers, the use of independent audits, cost sharing,
tracking of transactions, and knowledge management. The Department is
seeking public comment on these interim final regulations in accordance
with subsection 646(g)(6)(B) of the DOE Organization Act. Consistent
with subsection 646(g)(6)(C) of the same Act, DOE will not carry out
any transactions under section 646 until DOE considers comments
received in response to this notice and makes the guidelines final.
DOE used the DoD TIA regulation as the basis for developing the new
part 603, but tailored the regulation to fit DOE requirements and
procedures. Today's rule permits DOE to enter into a TIA, a special
type of assistance instrument, with a for-profit firm or a consortium
that includes a for-profit firm after a determination is made that a
contract, grant, or cooperative agreement is not feasible or
appropriate. A TIA can be either a type of cooperative agreement with
more flexible provisions tailored to accommodate the financial
management, property management, and purchasing systems of commercial
firms, but with standard intellectual property provisions, or a
transaction ``other than'' a grant or cooperative agreement if the
intellectual property requirements vary from the Bayh-Dole statute
(Chapter 18 of Title 35, U.S.C.) and the DOE patent statutes (42 U.S.C.
5908 and 42 U.S.C 2182). The two types of TIAs have similar
requirements except for the intellectual property requirements.
DOE is also amending the existing 10 CFR part 600, subpart A, which
establishes general requirements for financial assistance awards. The
revision extends the application of subpart A to TIAs.
II. Discussion of Rule Provisions
Part 603 is similar to the DoD Grant and Agreements Regulations, 32
CFR part 37, Technology Investment Agreements. Like the DoD regulation,
the new part 603 provides guidance to DOE contracting officers who
award or administer TIAs, rather than to the TIA recipient. However,
potential TIA recipients may have an interest in part 603 because it
tells the contracting officer how to craft award terms and conditions
that legally bind the recipient. The following paragraphs describe the
subparts of part 603 and highlight some of the major requirements.
Subpart A contains general information about TIAs. It explains the
purpose, form and uses of a TIA and identifies other DOE assistance
regulations that apply to the award and administration of a TIA.
Subpart B describes when the contracting officer may use a TIA.
Section 603.210 limits the use of a TIA to instances when a for-
profit firm is the recipient, a member of a consortium, or is involved
in the commercial application of the results of the project. The
section states that a TIA is particularly useful for an award to a
consortium because such collaborations build new relationships among
performers in the technology base, which can improve the overall
quality of the research, development, and demonstration (RD&D), and
provide a self-governance mechanism. The more flexible terms and
conditions of a TIA often make it easier to accommodate the needs of
commercial firms that do not traditionally do business with the
government.
Section 603.215 states that recipients are to provide, to the
maximum extent practicable, at least half of the costs of the RD&D
project. The purpose of cost sharing is to ensure that recipients have
a vested interest in the project's success.
Section 603.230 states that contracting officers may not use a TIA
if a recipient is to receive fee or profit. The basis for the policy is
that fee or profit, while appropriate for a procurement contract used
in a buyer-seller relationship, is not appropriate for an assistance
instrument used to accomplish a public purpose of support or
stimulation in a project of mutual interest to the recipient and the
Government.
Subpart C addresses expenditure-based and fixed-support TIAs. An
expenditure-based TIA is somewhat analogous to a cost-type procurement
contract or grant. A fixed-support TIA is somewhat analogous to a
fixed-price procurement contract. Section 603.315 describes the
advantages of a fixed-support TIA, which include reducing or
eliminating post-award requirements that may be a disincentive for a
commercial firm to participate in the RD&D.
Subpart D states the policy to use competitive procedures to award
TIAs. It also discusses the format and content of the program
announcement or announcement.
Subpart E addresses contracting officer's responsibilities, prior
to awarding TIAs, for determining that potential recipients are
qualified and evaluating business aspects of the proposed transaction.
The contracting officer must analyze funding, cost sharing and the
ability of the recipient to successfully complete the project. In
addition, if the recipient is a consortium that is not formally
incorporated, the contracting officer must examine the collaboration
agreement to ensure that the management plan is sound and that there is
an effective working relationship among the members.
Subparts F and G specify administrative requirements for TIAs.
Subpart F addresses organization-wide system requirements for financial
management, property management, and purchasing. To reduce
administrative burden, the general policy is to have each type of
organization that participates in a TIA continue to use its present
administrative systems. Subpart G addresses award-specific
administrative requirements, such as payment methods, revision of
budget and program plans, intellectual property, reporting, and
termination and enforcement.
Overall, subparts F and G give contracting officers considerable
latitude to negotiate award provisions in areas that sometimes are
sources of concern for commercial firms.
Two portions of subpart F may be of particular interest to
potential recipients. Sections 603.640 through 603.675 address audit
requirements for expenditure-based TIAs. Under Sec. 603.650,
contracting officers may authorize use of Independent Public
Accountants (IPAs) for audits of for-profit firms under certain
conditions. When IPAs are used, Sec. 603.660 requires the audits to be
performed in accordance with the Generally Accepted Government Auditing
Standards (GAGAS) issued by the Government Accountability Office (GAO).
Much of the GAGAS parallel the Generally
[[Page 69252]]
Accepted Auditing Standards used by the private sector.
Section 603.680 of subpart F establishes the general policy for
capital assets, including equipment that for-profit firms may need to
perform the RD&D under TIAs. The policy calls for allowing a firm to
charge to an expenditure-based TIA only depreciation or use charges for
real property and equipment used on a TIA, except in certain
circumstances. The contracting officer may grant an exception and
permit a firm to charge the full acquisition cost of a capital asset to
the RD&D project. However, if the full acquisition cost of the capital
asset is charged to the award, Sec. 603.680 provides that although the
recipient takes title to the property, the property is subject to the
disposition process in 10 CFR 600.321(f).
A portion of subpart G may be of particular interest to potential
recipients. Sections 603.840 through Sec. 603.875 address data and
patent rights and provide contracting officers guidelines for
negotiating provisions appropriate to a wide variety of circumstances
that may arise.
Subpart H details contracting officer's responsibilities at the
time of award. The section that may be of most interest to potential
TIA recipients is Sec. 603.1010, which lists substantive issues that
must be addressed in the award document.
Subpart I addresses internal agency procedures for post-award
administration.
Subpart J includes definitions used in this part. The definitions
in 10 CFR 600.3 also apply to TIAs.
III. Discussion of Conforming Changes to 10 CFR Part 600
Today's rule makes the following conforming changes to 10 CFR part
600, subpart A.
1. Under the authority paragraph, the rule adds the authority that
allows DOE to enter into transactions that are other than contracts,
cooperative agreements or grants.
2. In Sec. 600.1, the rule amends the last sentence to make
subpart A apply to technology investment agreements as well as grants
and cooperative agreements and states that the guidance for technology
investment agreements is contained in part 603.
3. In Sec. 600.6(c), the rule amends the paragraph to make the
noncompetitive financial assistance requirements applicable to TIAs as
well as grants and cooperative agreements.
4. In Sec. 600.8(a), the rule amends the paragraph to make the
program announcement requirements applicable to TIAs as well as grants
and cooperative agreements.
5. In Sec. 600.16(b), the rule amends the paragraph to make the
provision applicable to TIAs as well as grants and cooperative
agreements and adds the appropriate cites for awards made under subpart
D and part 603.
6. In Sec. 600.17, the rule amends the paragraph to clarify that
the Notice of Financial Assistance Award form (DOE F 4600.1) is
required only for grants and cooperative agreements awarded under part
600.
7. In Sec. 600.23, the rule corrects the cite for the debarment
and suspension procedures. The debarment and suspension procedures also
apply to TIAs and are referenced in part 603.
8. In Sec. 600.26(a), the rule amends the paragraph to state that
the project period must be specified in the award since the Notice of
Financial Assistance Award (DOE Form 4600.1) is not appropriate for
TIAs.
IV. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be ``a
significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993).
Accordingly, this action is not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs (OIRA) of the
Office of Management and Budget (OMB).
B. Review Under Regulatory Flexibility Act of 1980
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking'' (67 FR 53461, August 16, 2002), DOE published
procedures and policies to ensure that the potential impacts of its
draft rules on small entities are properly considered during the
rulemaking process (68 FR 7990, February 19, 2003), and has made them
available on the Office of General Counsel's Web site: http://www.gc.doe.gov. DOE has reviewed today's interim final rule under the
provisions of the Regulatory Flexibility Act and the procedures and
policies published on February 19, 2003. This regulatory action will
not have a significant adverse impact on a substantial number of small
entities because under part 603, small entities are subject either to
requirements that parallel government-wide requirements that OMB
Circular A-110 establishes for other assistance awards, or to less
burdensome requirements that enable firms from the commercial
marketplace to participate in DOE research, development, and
demonstration. On the basis of the foregoing, DOE certifies that the
interim final rule does not have a significant economic impact on a
substantial number of small entities. DOE did not prepare a regulatory
flexibility analysis for this rulemaking.
C. Review Under the Paperwork Reduction Act of 1995
This regulatory action will not impose any additional reporting or
recordkeeping requirements subject to approval under the Paperwork
Reduction Act. Participant reporting and recordkeeping requirements in
part 603 either are parallel to, or less burdensome than, government-
wide requirements already established in OMB Circular A-110.
D. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions that would not individually or cumulatively have a
significant impact on the human environment, as determined by DOE's
regulations implementing the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.). Specifically, this rule establishes
guidelines and procedures for application and review, administration,
audit and closeout of assistance instruments, and, therefore, is
covered under the Categorical Exclusion in paragraph A6 to subpart D,
10 CFR part 1021. Accordingly, neither an environmental assessment nor
an environmental impact statement is required.
E. Review Under Executive Order 13132
Executive Order 13132, 64 FR 43255 (August 4, 1999), imposes
certain requirements on agencies formulating and implementing policies
or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. The Executive Order also requires agencies
to have an accountable process to ensure meaningful and timely input by
State and local officials in the development of
[[Page 69253]]
regulatory policies that have federalism implications. On March 14,
2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations (65 FR 13735). DOE has examined today's
proposed rule and has determined that it does not preempt State law and
does not have a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. No further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Federal agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. Section 3(b) of Executive
Order 12988 specifically requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) Clearly specifies
the preemptive effect, if any; (2) clearly specifies any effect on
existing Federal law or regulation; (3) provides a clear legal standard
for affected conduct while promoting simplification and burden
reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, this rule meets the relevant standards of Executive
Order 12988.
G. Review Under the Unfunded Mandates Act of 1995
This regulatory action does not contain a Federal mandate that will
result in the expenditure by State, local, and tribal governments, in
aggregate, or by the private sector of $100 million or more in any one
year.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any proposed rule or policy that may affect
family well-being. Today's rule will not have any impact on the
autonomy or integrity of the family as an institution. Accordingly, DOE
has concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under the Treasury and General Government Appropriations Act,
2001
The Treasury and General Government Appropriations Act, 2001, 44
U.S.C. 3516 note, provides for agencies to review most disseminations
of information to the public under implementing guidelines established
by each agency pursuant to general guidelines issued by OMB. OMB's
guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's
guidelines were published at 67 FR 62446 (October 7, 2002). DOE has
reviewed today's interim final rule under the OMB and DOE guidelines
and has concluded that it is consistent with applicable policies in
those guidelines.
J. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use, 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order and (2) is likely to have
a significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use. Today's regulatory
action is not a significant energy action. Accordingly, DOE has not
prepared a Statement of Energy Effects.
K. Review Under the Small Business Regulatory Enforcement Fairness Act
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of today's rule prior to its effective date. The report
will state that it has been determined that the rule is not a ``major
rule'' as defined by 5 U.S.C. 801(2).
V. Approval of the Office of the Secretary of Energy
The Office of the Secretary has approved the issuance of this rule.
List of Subjects
10 CFR Part 600
Administrative practice and procedure, Assistance programs.
10 CFR Part 603
Accounting, administrative practice and procedure, Financial
assistance programs, Grant programs, Reporting and recordkeeping
requirements, Technology investments.
Issued in Washington, DC on November 7, 2005.
Richard H. Hopf,
Director, Office of Procurement and Assistance Management, Office of
Management, Department of Energy.
Robert C. Braden,
Director, Office of Acquisition and Supply Management, National Nuclear
Security Administration.
0
For the reasons stated in the preamble, part 600 of chapter II, title
10 of the Code of Federal Regulations, is amended as follows:
PART 600--FINANCIAL ASSISTANCE RULES
0
1. The authority citation for part 600 continues to read as follows:
Authority: 42 U.S.C. 7101 et seq.; 31 U.S.C. 6301-6308; 50
U.S.C. 2401 et seq., unless otherwise noted.
Sec. 600.1 [Amended]
0
2. Section 600.1, the last sentence is revised to read as follows:
Sec. 600.1 Purpose.
* * * This subpart (Subpart A) sets forth the general policies and
procedures applicable to the award and administration of grants,
cooperative agreements, and technology investment agreements. The
specific guidance for technology investment agreements is contained in
part 603.
Sec. 600.6 [Amended]
0
3. In Sec. 600.6(c), the first sentence is amended by removing ``grant
or cooperative agreement'' and adding ``grant, cooperative agreement,
or
[[Page 69254]]
technology investment agreement'' in lieu thereof.
Sec. 600.8 [Amended]
0
4. In Sec. 600.8(a), the first sentence is amended by removing ``grant
or cooperative agreement'' and adding ``grant, cooperative agreement,
or technology investment agreement'' in lieu thereof.
Sec. 600.16 [Amended]
0
5. Section 600.16(b) is amended as follows:
0
a. The first sentence is amended by removing ``grant or cooperative
agreement'' and adding ``grant, cooperative agreement, or technology
investment agreement'' in lieu thereof.
0
b. The first sentence is amended by removing ``Sec. Sec. 600.125(e) or
600.230 of this part'' and adding ``Sec. Sec. 600.125(e), 600.230,
600.317(b), or 603.830'' in lieu thereof.
Sec. 601.17 [Amended]
0
6. Section 600.17 is amended by removing ``Each financial assistance
award'' and adding ``Each grant and cooperative agreement awarded under
this part'' in lieu thereof.
Sec. 601.23 [Amended]
0
7. Section 600.23 is amended by removing ``10 CFR part 1036'' and
adding ``10 CFR part 606'' in lieu thereof.
Sec. 600.26 [Amended]
0
8. Section 600.26(a) is amended by removing ``on the Notice of
Financial Assistance Award (DOE Form 4600.1)'' and adding ``in the
award document'' in lieu thereof.
0
9. Part 603 is added to read as follows:
PART 603--TECHNOLOGY INVESTMENT AGREEMENTS
Subpart A--General
Sec.
603.100 Purpose.
603.105 Description.
603.110 Use of TIAs.
603.115 Approval requirements.
603.120 Contracting officer warrant requirements.
603.125 Applicability of other parts of the DOE Assistance
Regulations.
Subpart B--Appropriate Use of Technology Investment Agreements
603.200 Contracting officer responsibilities.
603.205 Nature of the project.
603.210 Recipients.
603.215 Recipient's commitment and cost sharing.
603.220 Government participation.
603.225 Benefits of using a TIA.
603.230 Fee or profit.
Subpart C--Requirements for Expenditure-Based and Fixed-Support
Technology Investment Agreements
603.300 Difference between an expenditure-based and a fixed-support
TIA.
603.305 Use of a fixed-support TIA.
603.310 Use of an expenditure-based TIA.
603.315 Advantages of a fixed-support TIA.
Subpart D--Competition Phase
603.400 Competitive procedures.
603.405 Announcement format.
603.410 Announcement content.
603.415 Cost sharing.
603.420 Disclosure of information.
Subpart E--Pre-Award Business Evaluation
603.500 Pre-award business evaluation.
603.505 Program resources.
Recipient Qualification
603.510 Recipient qualifications.
603.515 Qualification of a consortium.
Total Funding
603.520 Reasonableness of total project funding.
Cost Sharing
603.525 Value and reasonableness of the recipient's cost sharing
contribution.
603.530 Acceptable cost sharing.
603.535 Value of proposed real property or equipment.
603.540 Acceptability of fully depreciated real property or
equipment.
603.545 Acceptability of costs of prior RD&D.
603.550 Acceptability of intellectual property.
603.555 Value of other contributions.
Fixed-Support or Expenditure-Based Approach
603.560 Estimate of project expenditures.
603.565 Use of a hybrid instrument.
Accounting, Payments, and Recovery of Funds
603.570 Determining milestone payment amounts.
603.575 Repayment of Federal cost share.
Subpart F--Award Terms Affecting Participants' Financial, Property, and
Purchasing Systems
603.600 Administrative matters.
603.605 General policy.
603.610 Flow down requirements.
Financial Matters
603.615 Financial management standards for for-profit firms.
603.620 Financial management standards for nonprofit participants.
603.625 Cost principles or standards applicable to for-profit
participants.
603.630 Use of Federally-approved indirect cost rates for for-profit
firms.
603.635 Cost principles for nonprofit participants.
603.640 Audits of for-profit participants.
603.645 Periodic audits and award-specific audits of for-profit
participants.
603.650 Designation of auditor for for-profit participants.
603.655 Frequency of periodic audits of for-profit participants.
603.660 Other audit requirements.
603.665 Periodic audits of nonprofit participants.
603.670 Flow down audit requirements to subrecipients.
603.675 Reporting use of IPA for subawards.
Property
603.680 Purchase of real property and equipment by for-profit firms.
603.685 Management of real property and equipment by nonprofit
participants.
603.690 Requirements for Federally-owned property.
603.695 Requirements for supplies.
Purchasing
603.700 Standards for purchasing systems of for-profit firms.
603.705 Standards for purchasing systems of nonprofit organizations.
Subpart G--Award Terms Related to Other Administrative Matters
603.800 Scope.
Payments
603.805 Payment methods.
603.810 Method and frequency of payment requests.
603.815 Withholding payments.
603.820 Interest on advance payments.
Revision of Budget and Program Plans
603.825 Government approval of changes in plans.
603.830 Pre-award costs.
Program Income
603.835 Program income requirements.
Intellectual Property
603.840 Negotiating data and patent rights.
603.845 Data rights requirements.
603.850 Marking of data.
603.855 Protected data.
603.860 Rights to inventions.
603.865 March-in rights.
603.870 Marking of documents related to inventions.
603.875 Foreign access to technology and U.S. Competitiveness
provisions.
Financial and Programmatic Reporting
603.880 Reporting requirements.
603.885 Updated program plans and budgets.
603.890 Final performance report.
603.895 Protection of information in programmatic reports.
603.900 Receipt of final performance report.
Records Retention and Access Requirements
603.905 Record retention requirements.
603.910 Access to a for-profit participant's records.
603.915 Access to a nonprofit participant's records.
Termination and Enforcement
603.920 Termination and enforcement requirements.
[[Page 69255]]
Subpart H--Executing the Award
603.1000 Contracting officer's responsibilities at time of award.
The Award Document
603.1005 General responsibilities.
603.1010 Substantive issues.
603.1015 Execution.
Reporting Information About the Award
603.1020 File documents.
Subpart I--Post-Award Administration
603.1100 Contracting officer's post-award responsibilities.
603.1105 Advance payments or payable milestones.
603.1110 Other payment responsibilities.
603.1115 Single audits.
603.1120 Award-specific audits.
Subpart J--Definitions of Terms Used in this Part
603.1205 Advance.
603.1210 Articles of collaboration.
603.1215 Assistance.
603.1220 Award-specific audit.
603.1225 Cash contributions.
603.1230 Commercial firm.
603.1235 Consortium.
603.1240 Cooperative agreement.
603.1245 Cost sharing.
603.1250 Data.
603.1255 Equipment.
603.1260 Expenditure-based award.
603.1265 Expenditures or outlays.
603.1270 Grant.
603.1275 In-kind contributions.
603.1280 Institution of higher education.
603.1285 Intellectual property.
603.1290 Participant.
603.1295 Periodic audit.
603.1300 Procurement contract.
603.1305 Program income.
603.1310 Program official.
603.1315 Property.
603.1320 Real property.
603.1325 Recipient.
603.1330 Supplies.
603.1335 Termination.
603.1340 Technology investment agreement.
Appendix A to Part 603--Applicable Federal Statutes, Executive
Orders, and Government-wide Regulations
Appendix B to Part 603--Flow Down Requirements for Purchases of
Goods and Services
Authority: 42 U.S.C. 7101 et seq.; 31 U.S.C. 6301-6308; 50
U.S.C. 2401 et seq., unless otherwise noted.
Subpart A--General
Sec. 603.100 Purpose.
This part establishes uniform policies and procedures for the
implementation of DOE's ``other transaction'' authority and for award
and administration of a technology investment agreement (TIA).
Sec. 603.105 Description.
(a) A TIA is a special type of assistance instrument used to
increase involvement of commercial firms in the Department of Energy's
(DOE) research, development and demonstration (RD&D) programs. A TIA,
like a cooperative agreement, requires substantial Federal involvement
in the technical or management aspects of the project. A TIA may be
either a type of cooperative agreement or a type of assistance
transaction other than a cooperative agreement, depending on the
intellectual property provisions. A TIA is either:
(1) A type of cooperative agreement with more flexible provisions
tailored for commercial firms (as distinct from a cooperative agreement
subject to all of the requirements in 10 CFR 600), but with
intellectual property provisions in full compliance with the DOE
intellectual property statutes (i.e., Bayh-Dole statute and 42 U.S.C.
2182 and 5908, as implemented in 10 CFR 600.325). The authority to
award this type of TIA is 42 U.S.C. 7256(a), as well as any program-
specific statute that provides authority to award cooperative
agreements; or
(2) An assistance transaction other than a cooperative agreement,
if its intellectual property provisions vary from the Bayh-Dole statute
and 42 U.S.C. 2182 and 5908, which require the Government to retain
certain intellectual property rights and require differing treatment
between large businesses and nonprofit organizations or small
businesses. The authority to award this type of TIA is 42 U.S.C.
7256(g), as well as any program-specific statute that provides
authority to award assistance agreements.
(b) The two types of TIAs have similar requirements, except for the
intellectual property requirements. If the contracting officer
determines there is a unique, exceptional need to vary from the
standard intellectual property requirements in 10 CFR 600.325, the TIA
becomes an assistance transaction other than a cooperative agreement.
Sec. 603.110 Use of TIAs.
The ultimate goal for using a TIA is to broaden the technology base
available to meet DOE mission requirements and foster within the
technology base new relationships and practices to advance the national
economic and energy security of the United States, to promote
scientific and technological innovation in support of that mission, and
to ensure the environmental cleanup of the national nuclear weapons
complex. A TIA therefore is designed to:
(a) Reduce barriers to participation in RD&D programs by commercial
firms that deal primarily in the commercial marketplace. A TIA allows
contracting officers to tailor Government requirements and lower or
remove barriers if it can be done with proper stewardship of Federal
funds.
(b) Promote new relationships among performers in the technology
base. Collaborations among commercial firms that deal primarily in the
commercial marketplace, firms that regularly perform on the DOE RD&D
programs and nonprofit organizations can enhance overall quality and
productivity.
(c) Stimulate performers to develop and use new business practices
and disseminate best practices throughout the technology base.
Sec. 603.115 Approval requirements.
An officer of the Department who has been appointed by the
President by and with the advice and consent of the Senate and who has
been delegated the authority from the Secretary must approve the award
of a TIA and may perform other functions of the Secretary as set forth
in 42 U.S.C. 7256(g). This authority may not be re-delegated. The DOE
or National Nuclear Security Administration (NNSA) Senior Procurement
Executive also must concur in the award of a TIA.
Sec. 603.120 Contracting officer warrant requirements.
A contracting officer may award or administer a TIA only if the
contracting officer's warrant authorizes the award or administration of
a TIA.
Sec. 603.125 Applicability of other parts of the DOE Assistance
Regulations.
(a) TIAs are explicitly covered in this part and 10 CFR part 600,
subpart A--General. 10 CFR part 600, subpart A, addresses general
matters that relate to assistance instruments.
(b) Three additional parts of the DOE Assistance Regulations apply
to TIAs, although they do not mention a TIA explicitly. They are:
(1) 10 CFR part 601--lobbying restrictions apply by law (31 U.S.C.
1352) to a TIA that is a cooperative agreement and as a matter of DOE
policy to a TIA that is an assistance transaction other than a
cooperative agreement.
(2) 10 CFR part 606--debarment and suspension requirements apply
because they cover nonprocurement instruments in general; and
(3) 10 CFR part 607--drug-free work-place (financial assistance)
requirements apply because they cover all assistance instruments.
(c) Other portions of 10 CFR part 600 apply to a TIA as referenced
in part 603.
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Subpart B--Appropriate Use of Technology Investment Agreements
Sec. 603.200 Contracting officer responsibilities.
Contracting officers may use a TIA only in appropriate situations.
To do so, the use of a TIA must be justified based on:
(a) The nature of the project, as discussed in Sec. 603.205;
(b) The type of recipient, addressed in Sec. 603.210;
(c) The recipient's commitment and cost sharing, as described in
Sec. 603.215;
(d) The degree of involvement of the Government program official,
as discussed in Sec. 603.220; and
(e) The contracting officer's judgment that the use of a TIA could
benefit the RD&D objectives in ways that likely would not happen if
another type of instrument were used (i.e., a contract, grant or
cooperative agreement is not feasible or appropriate). Answers to the
four questions in Sec. 603.225 form the basis for the contracting
officer's judgment.
Sec. 603.205 Nature of the project.
Judgments relating to the nature of the project include:
(a) The principal purpose of the project is to carry out a public
purpose of support or stimulation of RD&D (i.e., assistance), rather
than acquiring goods or services for the benefit of the Government
(i.e., acquisition);
(b) To the maximum extent practicable, the TIA does not support
RD&D that duplicates other RD&D being conducted under existing programs
carried out by the DOE; and
(c) The use of a standard contract, grant or cooperative agreement
for the project is not feasible or appropriate (see questions in Sec.
603.225).
Sec. 603.210 Recipients.
(a) A TIA requires one or more for-profit firms to be involved
either in the:
(1) Performance of the RD&D project; or
(2) The commercial application of the results.
(i) In those cases where there is only a non-profit performer or a
consortium of non-profit performers or non-profit performs and FFRDC
contractors, if and as authorized, the performers must have at least a
tentative agreement with a specific for-profit partner or partners who
plan on being involved in the commercial application of the results.
(ii) In consultation with legal counsel, the contracting officer
should review the agreement between the performers and their for-profit
partner to ensure that the for-profit partner is committed to being
involved in the commercial application of the results.
(b) A TIA may be particularly useful for awards to consortia (a
consortium may include one or more for-profit firms, as well as State
or local government agencies, institutions of higher education, other
nonprofit organizations, or FFRDC contractors, if and as authorized)
because:
(1) If multiple performers are participating as a consortium, they
may be more equal partners in the performance of the project than
usually is the case with a prime recipient and subawards. All of
performers are more likely to be directly involved in developing and
revising plans for the RD&D effort, reviewing technical progress, and
overseeing financial and other business matters. That feature makes
consortia well suited to building new relationships among performers in
the technology base, a principal objective for the use of a TIA.
(2) In addition, interactions among the participants within a
consortium potentially provide a self-governance mechanism. The
potential for additional self-governance is particularly good when a
consortium includes multiple for-profit participants that normally are
competitors within an industry.
(c) A TIA may be used for carrying out RD&D performed by single
firms or multiple performers (e.g., a teaming arrangement) in prime
award-subaward relationships. In awarding a TIA in those cases,
however, consideration should be given to providing for greater
involvement of the program official or a way to increase self-
governance (e.g., a prime award with multiple subawards arranged so as
to give the subrecipients more insight into and authority and
responsibility for the programmatic and business aspects of the overall
project than they usually have).
Sec. 603.215 Recipient's commitment and cost sharing.
(a) The contracting officer should evaluate whether the recipient
has a strong commitment to and self-interest in the success of the
project and incorporating the technology into products and processes
for the commercial marketplace. Evidence of that commitment and
interest should be found in the proposal, in the recipient's management
plan, or through other means.
(b) The contracting officer must seek cost sharing. The purpose of
cost share is to ensure that the recipient incurs real risk that gives
it a vested interest in the project's success; the willingness to
commit to meaningful cost sharing is a good indicator of a recipient's
self-interest. The requirements are that:
(1) To the maximum extent practicable, the non-Federal parties
carrying out a RD&D project under a TIA are to provide at least half of
the costs of the project; and
(2) The parties must provide the cost sharing from non-Federal
resources unless otherwise provided by law.
(c) The contracting officer may consider whether cost sharing is
impracticable in a given case, unless there is a statutory requirement
for cost sharing that applies to the particular program under which the
award is to be made. Before deciding that cost sharing is
impracticable, the contracting officer should carefully consider if
there are other factors that demonstrate the recipient's self-interest
in the success of the current project.
Sec. 603.220 Government participation.
A TIA is used to carry out cooperative relationships between the
Federal Government and the recipient(s) which require substantial
involvement of the Government in the execution of the RD&D. For
example, program officials will participate in recipients' periodic
reviews of progress and may be substantially involved with the
recipients in the resulting revisions of plans for future effort.
Sec. 603.225 Benefits of using a TIA.
Before deciding that a TIA is appropriate, the contracting officer
also must judge that using a TIA could benefit the RD&D objectives in
ways that likely would not happen if another type of assistance
instrument were used (e.g., a cooperative agreement subject to all of
the requirements of 10 CFR part 600). The contracting officer, in
conjunction with Government program officials, must consider the
questions in paragraphs (a) through (d) of this section, to help
identify the benefits that may justify using a TIA and reducing some of
the usual requirements. The contracting officer must report the answers
to these questions to help the DOE measure the benefits of using a TIA.
Note full concise answers are required only to questions that relate to
the benefits perceived for using the TIA, rather than another type of
funding instrument, for the particular project. A simple ``no'' or
``not applicable'' is a sufficient response for other questions. The
questions are:
(a) Will the use of a TIA permit the involvement of any commercial
firms or business units of firms that would not otherwise participate
in the project? If so:
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(1) What are the expected benefits of those firms' or divisions'
participation (e.g., is there a specific technology that could be
better, more readily available, or less expensive)?
(2) Why would they not participate if an instrument other than a
TIA were used? The contracting officer should identify specific
provisions of the TIA or features of the TIA award process that enable
their participation. For example, if the RD&D effort is based
substantially on a for-profit firm's privately developed technology and
the Government may be a major user of any commercial product developed
as a result of the award, a for-profit firm may not participate unless
the Government's intellectual property rights in the technology are
modified.
(b) Will the use of a TIA allow the creation of new relationships
among participants in a consortium, at the prime or subtier levels,
among business units of the same firm, or between non-Federal
participants and the Federal Government that will foster better
technology? If so:
(1) Why do these new relationships have the potential for fostering
technology that is better, more affordable, or more readily available?
(2) Are there provisions of the TIA or features of the TIA award
process that enable these relationships to form? If so, the contracting
officer should be able to identify specifically what they are. If not,
the contracting officer should be able to explain specifically why the
relationships could not be created if another type of assistance
instrument were used. For example, a large business firm may not be
willing to participate in a consortium or teaming arrangement with
small business firms and nonprofit firms under a standard cooperative
agreement because those entities have invention rights under the Bayh-
Dole statute that are not available to large businesses. A large
business firm may be willing to participate in a consortium or teaming
arrangement only if all partners are substantially equal with regard to
the allocation of intellectual property rights.
(c) Will the use of a TIA allow firms or business units of firms
that traditionally accept Government awards to use new business
practices in the execution of the RD&D project that will foster better
technology, new technology more quickly or less expensively, or
facilitate partnering with commercial firms? If so:
(1) What specific benefits result from the use of these new
practices? The contracting officer should be able to explain
specifically the potential for those benefits.
(2) Are there provisions of the TIA or features of the TIA award
process that enable the use of the new practices? If so, the
contracting officer should be able to identify those provisions or
features and explain why the practices could not be used if the award
were made using another type of assistance instrument.
(d) Are there any other benefits of the use of a TIA that could
help DOE meet its objectives in carrying out the project? If so, the
contracting officer should be able to identify specifically what they
are, how they can help meet the objectives, what features of the TIA or
award process enable DOE to realize them, and why the benefits likely
would not be realized if an assistance instrument other than a TIA were
used.
Sec. 603.230 Fee or profit.
The contracting officer may not use a TIA if any participant is to
receive fee or profit. Note that this policy extends to all performers
of the project, including any subawards for substantive program
performance, but it does not preclude participants' or subrecipients'
payment of reasonable fee or profit when making purchases from
suppliers of goods (e.g., supplies and equipment) or services needed to
carry out the RD&D.
Subpart C--Requirements for Expenditure-Based and Fixed-Support
Technology Investment Agreements
Sec. 603.300 Difference between an expenditure-based and a fixed-
support TIA.
The contracting officer may negotiate expenditure-based or fixed-
support award terms for either types of TIA subject to the requirements
in this subpart. The fundamental difference between an expenditure-
based and a fixed-support TIA is:
(a) For an expenditure-based TIA, the amounts of interim payments
or the total amount ultimately paid to the recipient are based on the
amounts the recipient expends on project costs. If a recipient
completes the project specified at the time of award before it expends
all of the agreed-upon Federal funding and recipient cost sharing, the
Federal Government may recover its share of the unexpended balance of
funds or, by mutual agreement with the recipient, amend the agreement
to expand the scope of the RD&D project. An expenditure-based TIA,
therefore, is analogous to a cost-type procurement contract or grant.
(b) For a fixed-support TIA, the amount of assistance is
established at the time of award and is not meant to be adjusted later.
In that sense, a fixed-support TIA is somewhat analogous to a fixed-
price procurement contract.
Sec. 603.305 Use a fixed-support TIA.
The contracting officer may use a fixed-support TIA if:
(a) The agreement is to support or stimulate RD&D with outcomes
that are well defined, observable, and verifiable;
(b) The resources required to achieve the outcomes can be estimated
well enough to ensure the desired level of cost sharing (see example in
Sec. 603.560(b)); and
(c) The agreement does not require a specific amount or percentage
of recipient cost sharing. In cases where the agreement does require a
specific amount or percentage of cost sharing, a fixed-support TIA is
not practicable because the agreement has to specify cost principles or
standards for costs that may be charged to the project; require the
recipient to track the costs of the project; and provide access for
audit to allow verification of the recipient's compliance with the
mandatory cost sharing. A fixed-support TIA may not be used if there
is:
(1) A requirement (e.g., in statute or policy determination) for a
specific amount or percentage of recipient cost sharing; or
(2) The contracting officer, in consultation with the program
official, otherwise elects to include in the TIA a requirement for a
specific amount or percentage of cost sharing.
Sec. 603.310 Use of an expenditure-based TIA.
In general, the contracting officer must use an expenditure-based
TIA under conditions other than those described in Sec. 603.305.
Reasons for any exceptions to this general rule must be documented in
the award file and must be consistent with the policy in Sec. 603.230
that precludes payment of fee or profit to participants.
Sec. 603.315 Advantages of a fixed-support TIA.
In situations where the use of a fixed-support TIA is permissible
(see Sec. Sec. 603.305 and 603.310), its use may encourage some
commercial firms' participation in the RD&D. With a fixed-support TIA,
the contracting officer can eliminate or reduce some post-award
requirements that sometimes are cited as disincentives for those firms
to participate. For example, a fixed-support TIA need not:
(a) Specify minimum standards for the recipient's financial
management system;
(b) Specify cost principles or standards stating the types of costs
the recipient may charge to the project;
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(c) Provide for financial audits by Federal auditors or independent
public accountants of the recipient's books and records;
(d) Set minimum standards for the recipient's purchasing system; or
(e) Require the recipient to prepare financial reports for
submission to the Federal Government.
Subpart D--Competition Phase
Sec. 603.400 Competitive procedures.
DOE policy is to award a TIA using competitive procedures and a
merit-based selection process, as described in 10 CFR 600.6 and 600.13,
respectively:
(a) In every case where required by statute; and
(b) To the maximum extent feasible, in all other cases. If it is
not feasible to use competitive procedures, the contracting officer
must comply with the requirements in 10 CFR 600.6(c).
Sec. 603.405 Announcement format.
The announcement must use the government-wide standard format for
program announcements of funding opportunities (see 10 CFR 600.8). If
the contracting officer, in consultation with the program official,
decides that a TIA is among the types of instruments that may be
awarded under an announcement, the additional elements described in
Sec. Sec. 603.410 through 603.420 should be included in the
announcement.
Sec. 603.410 Announcement content.
Once the contracting officer, in consultation with the program
official, considers the factors described in Subpart B of this part and
decides that a TIA is among the types of instruments that may be
awarded pursuant to a program announcement, it is important to state
that fact in the announcement. The announcement also should state that
a TIA is more flexible than a traditional financial assistance
agreement and that requirements are negotiable in areas such as audits
and intellectual property rights that may cause concern for commercial
firms. Doing so should increase the likelihood that commercial firms
will be willing to submit proposals.
Sec. 603.415 Cost sharing.
To help ensure a competitive process that is fair and equitable to
all potential proposers, the announcement should state clearly:
(a) That, to the maximum extent practicable, the non-Federal
parties carrying out a RD&D project under a TIA are to provide at least
half of the costs of the project (see Sec. 603.215(b));
(b) The types of cost sharing that are acceptable;
(c) How any in-kind contributions will be valued, in accordance
with Sec. Sec. 603.530 through 603.555; and
(d) Whether any consideration will be given to alternative
approaches a proposer may offer to demonstrate its strong commitment to
and self-interest in the project's success, in accordance with Sec.
603.215.
Sec. 603.420 Disclosure of information.
The announcement should tell potential proposers that:
(a) For all TIAs, information described in paragraph (b) of this
section is exempt from disclosure requirements of the Freedom of
Information Act (FOIA)(codified at 5 U.S.C. 552) for a period of five
years after the date on which the DOE receives the information from
them; and
(b) As provided in 42 U.S.C. 7256(g) incorporating certain
provisions of 10 U.S.C. 2371, disclosure is not required, and may not
be compelled, under FOIA during that period if:
(1) A proposer submits the information in a competitive or
noncompetitive process that could result in the award of a TIA; and
(2) The type of information is among the following types that are
exempt:
(i) Proposals, proposal abstracts, and supporting documents; and
(ii) Business plans and technical information submitted on a
confidential basis.
(c) If proposers desire to protect business plans and technical
information for five years from FOIA disclosure requirements, they must
mark them with a legend identifying them as documents submitted on a
confidential basis. After the five-year period, information may be
protected for longer periods if it meets any of the criteria in 5
U.S.C. 552(b) (as implemented by the DOE in 10 CFR part 1004) for
exemption from FOIA disclosure requirements.
Subpart E--Pre-Award Business Evaluation
Sec. 603.500 Pre-award business evaluation.
(a) The contracting officer must determine the qualification of the
recipient, as described in Sec. Sec. 603.510 and 603.515.
(b) As the business expert working with the program official, the
contracting officer also must address the financial aspects of the
proposed agreement. The contracting officer must:
(1) Determine that the total amount of funding for the proposed
effort is reasonable, as addressed in Sec. 603.520.
(2) Assess the value and determine the reasonableness of the
recipient's proposed cost sharing contribution, as discussed in
Sec. Sec. 603.525 through 603.555.
(3) If contemplating the use of a fixed-support rather than
expenditure-based TIA, ensure that its use is justified, as explained
in Sec. Sec. 603.560 and 603.565.
(4) Determine amounts for milestone payments, if used, as discussed
in Sec. 603.570.
Sec. 603.505 Program resources.
Program officials can be a source of information for determining
the reasonableness of proposed funding (e.g., on labor rates, as
discussed in Sec. 603.520) or establishing observable and verifiable
technical milestones for payments (see Sec. 603.570).
Recipient Qualification
Sec. 603.510 Recipient qualifications.
Prior to award of a TIA, the contracting officer's responsibilities
for determining that the recipient is qualified are the same as those
for awarding a grant or cooperative agreement. If the recipient is a
consortium that is not formally incorporated, the contracting officer
has the additional responsibility described in Sec. 603.515.
Sec. 603.515 Qualification of a consortium.
(a) When the prospective recipient of a TIA is a consortium that is
not formally incorporated, the contracting officer must also, in
consultation with legal counsel, review the management plan in the
consortium's collaboration agreement to ensure that the management plan
is sound and that it adequately addresses the elements necessary for an
effective working relationship among the consortium members. An
effective working relationship is essential to increase the project's
chances of success.
(b) The collaboration agreement, commonly referred to as the
articles of collaboration, is the document that sets out the rights and
responsibilities of each consortium member. It binds the individual
consortium members together. The document should discuss, among other
things, the consortium's
(1) Management structure;
(2) Method of making payments to consortium members;
(3) Means of ensuring and overseeing members' efforts on the
project;
(4) Provisions for members' cost sharing contributions; and
(5) Provisions for ownership and rights in intellectual property
developed previously or under the agreement.
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Total Funding
Sec. 603.520 Reasonableness of total project funding.
In cooperation with the program official, the contracting officer
must assess the reasonableness of the total estimated budget to perform
the RD&D that will be supported by the agreement.
(a) Labor. Much of the budget likely will involve direct labor and
associated indirect costs, which may be represented together as a
``loaded'' labor rate. The program official is an essential advisor on
reasonableness of the overall level of effort and its composition by
labor category. The contracting officer also may rely on experience
with other awards as the basis for determining reasonableness.
(b) Real property and equipment. In almost all cases, the project
costs should normally include only depreciation or use charges for real
property and equipment of for-profit participants, in accordance with
Sec. 603.680. Remember that the budget for an expenditure-based TIA
may not include depreciation of a participant's property as a direct
cost of the project if that participant's practice is to charge the
depreciation of that type of property as an indirect cost, as many
organizations do.
Cost Sharing
Sec. 603.525 Value and reasonableness of the recipient's cost sharing
contribution.
The contracting officer must:
(a) Determine that the recipient's cost sharing contributions meet
the criteria for cost sharing and determine values for them, in
accordance with Sec. Sec. 603.530 through 603.555. In doing so, the
contracting officer must:
(1) Ensure that there are affirmative statements from any third
parties identified as sources of cash contributions, and
(2) Include in the award file an evaluation that documents how the
values of the recipient's contributions to the funding of the project
were determined.
(b) Judge that the recipient's cost sharing contribution, as a
percentage of the total budget, is reasonable. To the maximum extent
practicable, the recipient must provide at least half of the costs of
the project, in accordance with Sec. 603.215.
Sec. 603.530 Acceptable cost sharing.
The contracting officer may accept any cash or in-kind
contributions that meet all of the following criteria.
(a) In the contracting officer's judgment, they represent
meaningful cost sharing that demonstrates the recipient's commitment to
the success of the RD&D project. Cash contributions clearly demonstrate
commitment and they are strongly preferred over in-kind contributions.
(b) They are necessary and reasonable for accomplishment of the
RD&D project's objectives.
(c) They are costs that may be charged to the project under Sec.
603.625 and Sec. 603.635, as applicable to the participant making the
contribution.
(d) They are verifiable from the recipient's records.
(e) They are not included as cost sharing contributions for any
other Federal award.
(f) They are not paid by the Federal Government under another
award, unless otherwise provided by law.
Sec. 603.535 Value of proposed real property or equipment.
The contracting officer rarely should accept values for cost
sharing contributions of real property or equipment that are in excess
of depreciation or reasonable use charges, as discussed in Sec.
603.680 for for-profit participants. The contracting officer may accept
the full value of a donated capital asset if the real property or
equipment is to be dedicated to the project and the contracting officer
expects that it will have a fair market value that is less than $5,000
at the project's end. In those cases, the contracting officer should
value the donation at the lesser of:
(a) The value of the property as shown in the recipient's
accounting records (i.e., purchase price less accumulated
depreciation); and
(b) The current fair market value. The contracting officer may
accept the use of any reasonable basis for determining the fair market
value of the property. If there is a justification to do so, the
contracting officer may accept the current fair market value even if it
exceeds the value in the recipient's records.
Sec. 603.540 Acceptability of fully depreciated real property or
equipment.
The contracting officer should limit the value of any contribution
of a fully depreciated asset to a reasonable use charge. In determining
what is reasonable, the contracting officer must consider:
(a) The original cost of the asset;
(b) Its estimated remaining useful life at the time of the
negotiations;
(c) The effect of any increased maintenance charges or decreased
performance due to age; and
(d) The amount of depreciation that the participant previously
charged to Federal awards.
Sec. 603.545 Acceptability of costs of prior RD&D.
The contracting officer may not count any participant's costs of
prior RD&D as a cost sharing contribution. Only the additional
resources that the recipient will provide to carry out the current
project (which may include pre-award costs for the current project, as
described in Sec. 603.830) are to be counted.
Sec. 603.550 Acceptability of intellectual property.
(a) In most instances, the contracting officer should not count
costs of patents and other intellectual property (e.g., copyrighted
material, including software) as cost sharing because:
(1) It is difficult to assign values to these intangible
contributions;
(2) Their value usually is a manifestation of prior research costs,
which are not allowed as cost share under Sec. 603.545; and
(3) Contributions of intellectual property rights generally do not
represent the same cost of lost opportunity to a recipient as
contributions of cash or tangible assets. The purpose of cost share is
to ensure that the recipient incurs real risk that gives it a vested
interest in the project's success.
(b) The contracting officer may include costs associated with
intellectual property if the costs are based on sound estimates of
market value of the contribution. For example, a for-profit firm may
offer the use of commercially available software for which there is an
established license fee for use of the product. The costs of the
development of the software would not be a reasonable basis for valuing
its use.
Sec. 603.555 Value of other contributions.
For types of participant contributions other than those addressed
in Sec. Sec. 603.535 through 603.550, the general rule is that the
contracting officer is to value each contribution consistently with the
cost principles or standards in Sec. 603.625 and Sec. 603.635 that
apply to the participant making the contribution. When valuing services
and property donated by parties other than the participants, the
contracting officer may use as guidance the provisions of 10 CFR
600.313(b)(2) through (b)(5).
Fixed-Support or Expenditure-Based Approach
Sec. 603.560 Estimate of project expenditures.
(a) To use a fixed-support TIA, rather than an expenditure-based
TIA, the contracting officer must have confidence in the estimate of
the
[[Page 69260]]
expenditures required to achieve well-defined outcomes. Therefore, the
contracting officer must work carefully with program officials to
select outcomes that, when the recipient achieves them, are reliable
indicators of the amount of effort the recipient expended. However, the
estimate of the required expenditures need not be a precise dollar
amount, as illustrated by the example in paragraph (b) of this section,
if:
(1) The recipient is contributing a substantial share of the costs
of achieving the outcomes, which must meet the criteria in Sec.
603.305(a); and
(2) The contracting officer is confident that the costs of
achieving the outcomes will be at least a minimum amount that can be
specified and the recipient is willing to accept the possibility that
its cost sharing percentage ultimately will be higher if the costs
exceed that minimum amount.
(b) To illustrate the approach, consider a project for which the
contracting officer is confident that the recipient will have to expend
at least $800,000 to achieve the specified outcomes. The contracting
officer must determine, in conjunction with program officials, the
minimum level of recipient cost sharing required to demonstrate the
recipient's commitment to the success of the project. For purposes of
this illustration, let that minimum recipient cost sharing be 60% of
the total project costs. In that case, the Federal share should be no
more than 40% and the contracting officer could set a fixed level of
Federal support at $320,000 (40% of $800,000). With that fixed level of
Federal support, the recipient would be responsible for the balance of
the costs needed to complete the project.
(c) Note, however, that the level of recipient cost sharing
negotiated should be based solely on the level needed to demonstrate
the recipient's commitment. The contracting officer may not use a
shortage of Federal Government funding for the program as a reason to
try to persuade a recipient to accept a fixed-support TIA, rather than
an expenditure-based instrument, or to accept responsibility for a
greater share of the total project costs than it otherwise is willing
to offer. If there is insufficient funding to provide an appropriate
Federal Government share for the entire project, the contracting
officer should re-scope the effort covered by the agreement to match
the available funding.
Sec. 603.565 Use of a hybrid instrument.
For a RD&D project that is to be carried out by a number of
participants, the contracting officer may award a TIA that provides for
some participants to perform under fixed-support arrangements and
others to perform under expenditure-based arrangements. This approach
may be useful, for example, if a commercial firm that is a participant
will not accept an agreement with all of the post-award requirements of
an expenditure-based award. Before using a fixed-support arrangement
for that firm's portion of the project, the agreement must meet the
criteria in Sec. 603.305.
Accounting, Payments, and Recovery of Funds
Sec. 603.570 Determining milestone payment amounts.
(a) If the contracting officer selects the milestone payment method
(see Sec. 603.805), the contracting officer must assess the
reasonableness of the estimated amount for reaching each milestone.
This assessment enables the contracting officer to set the amount of
each milestone payment to approximate the Federal share of the
anticipated resource needs for carrying out that phase of the RD&D
effort.
(b) The Federal share at each milestone need not be the same as the
Federal share of the total project. For example, the contracting
officer might deliberately set payment amounts with a larger Federal
share for early milestones if a project involves a start-up company
with limited resources.
(c) For an expenditure-based TIA, if the contracting officer
establishes minimum cost sharing percentages for each milestone, those
percentages should be indicated in the agreement.
(d) For a fixed-support TIA, the milestone payments should be
associated with the well-defined, observable, and verifiable technical
outcomes (e.g., demonstrations, tests, or data analysis) that are
established for the project in accordance with Sec. Sec. 603.305(a)
and 603.560(a).
Sec. 603.575 Repayment of Federal cost share.
In accordance with the Energy Policy Act of 2005 (Pub. L. 109-58),
section 988(e), the contracting officer may not require repayment of
the Federal share of a cost-shared TIA as a condition of making an
award, unless otherwise authorized by statute.
Subpart F--Award Terms Affecting Participants' Financial, Property,
and Purchasing Systems
Sec. 603.600 Administrative matters.
This subpart addresses ``systemic'' administrative matters that
place requirements on the operation of a participant's financial
management, property management, or purchasing system. Each
participant's systems are organization-wide and do not vary with each
agreement. Therefore, a TIA should address systemic requirements in a
uniform way for each type of participant organization.
Sec. 603.605 General policy.
The general policy for an expenditure-based TIA is to avoid
requirements that would force participants to use different financial
management, property management, and purchasing systems than they
currently use for:
(a) Expenditure-based Federal procurement contracts and assistance
awards in general, if they receive them; or
(b) Commercial business, if they have no expenditure-based Federal
procurement contracts and assistance awards.
Sec. 603.610 Flow down requirements.
If it is an expenditure-based award, the TIA must require
participants to provide the same financial management, property
management, and purchasing systems requirements to a subrecipient that
would apply if the subrecipient were a participant. For example, a for-
profit participant would require a university subrecipient to comply
with the requirements that apply to a university participant. Note that
this policy applies to subawards for substantive performance of
portions of the RD&D project supported by the TIA and not to
participants' purchases of goods or services needed to carry out the
RD&D.
Financial Matters
Sec. 603.615 Financial management standards for-profit firms.
(a) To avoid causing needless changes in participants' financial
management systems, an expenditure-based TIA will make for-profit
participants that currently perform under other expenditure-based
Federal procurement contracts or assistance awards subject to the same
standards for financial management systems that apply to those other
awards. Therefore, if a for-profit participant has expenditure-based
DOE assistance awards other than a TIA, the TIA must apply the
standards in 10 CFR 600.311. The contracting officer may grant an
exception and allow a for-profit participant that has other
expenditure-based Federal Government awards to use an alternative set
of standards that meets the minimum criteria in paragraph (b) of this
section, if there is a compelling programmatic or business reason to do
so. For each case in which
[[Page 69261]]
an exception is granted, the contracting officer must document the
reason in the award file.
(b) For an expenditure-based TIA, the contracting officer is to
allow and encourage each for-profit participant that does not currently
perform under expenditure-based Federal procurement contracts or
assistance awards (other than a TIA) to use its existing financial
management system as long as the system, as a minimum:
(1) Complies with Generally Accepted Accounting Principles.
(2) Effectively controls all project funds, including Federal funds
and any required cost share. The system must have complete, accurate,
and current records that document the sources of funds and the purposes
for which they are disbursed. It also must have procedures for ensuring
that project funds are used only for purposes permitted by the
agreement (see Sec. 603.625).
(3) Includes, if advance payments are authorized under Sec.
603.805, procedures to minimize the time elapsing between the payment
of funds by the Government and the firm's disbursement of the funds for
program purposes.
Sec. 603.620 Financial management standards for nonprofit
participants.
So as not to force system changes for any State, local government,
institution of higher education, or other nonprofit organization,
expenditure-based TIA requirements for the financial management system
of any nonprofit participant are to be the same as those that apply to
the participant's other Federal assistance awards. Specifically, the
requirements are those in:
(a) 10 CFR 600.220 for State and local governments; and
(b) 10 CFR 600.121(b) for other nonprofit organizations, with the
exception of nonprofit Government-owned, contractor-operated (GOCO)
facilities and Federally Funded Research and Development Centers
(FFRDCs) that are excepted from the definition of ``recipient'' in 10
CFR 600.101. If a GOCO or FFRDC is a participant, the contracting
officer must specify appropriate standards that conform as much as
practicable with requirements in their procurement contract.
Sec. 603.625 Cost principles or standards applicable to for-profit
participants.
(a) So as not to require any firm to needlessly change its cost
accounting system, an expenditure-based TIA is to apply the Government
cost principles in 48 CFR part 31 to for-profit participants that
currently perform under expenditure-based Federal procurement contracts
or assistance awards (other than a TIA) and therefore have existing
systems for identifying allowable costs under those principles. If
there are programmatic or business reasons to do otherwise, the
contracting officer may grant an exception from this requirement and
use alternative standards as long as the alternative satisfies the
conditions described in paragraph (b) of this section; if an exception
is granted the reasons must be documented in the award file.
(b) For other for-profit participants, the contracting officer may
establish alternative standards in the agreement as long as that
alternative provides, as a minimum, that Federal funds and funds
counted as recipients' cost sharing will be used only for costs that:
(1) A reasonable and prudent person would incur in carrying out the
RD&D project contemplated by the agreement. Generally, elements of cost
that appropriately are charged are those identified with RD&D
activities under the Generally Accepted Accounting Principles (see
Statement of Financial Accounting Standards Number 2, ``Accounting for
Research and Development Costs,'' October 1974). Moreover, costs must
be allocated to DOE and other projects in accordance with the relative
benefits the projects receive. Costs charged to DOE projects must be
given consistent treatment with costs allocated to the participants'
other RD&D activities (e.g., activities supported by the participants
themselves or by non-Federal sponsors).
(2) Are consistent with the purposes stated in the governing
Congressional authorizations and appropriations. The contracting
officer is responsible for ensuring that provisions in the award
document address any requirements that result from authorizations and
appropriations.
Sec. 603.630 Use Federally approved indirect cost rates for for-
profit firms.
In accordance with the general policy in Sec. 603.605, the
contracting officer must require a for-profit participant that has
Federally approved indirect cost rates for its Federal procurement
contracts to use those rates to accumulate and report costs under an
expenditure-based TIA. This includes both provisional and final rates
that are approved up until the time that the TIA is closed out.
Sec. 603.635 Cost principles for nonprofit participants.
So as not to force financial system changes for any nonprofit
participant, an expenditure-based TIA will provide that costs to be
charged to the RD&D project by any nonprofit participant must be
determined to be allowable in accordance with:
(a) OMB Circular A-87, if the participant is a State or local
governmental organization;
(b) OMB Circular A-21, if the participant is an institution of
higher education;
(c) 45 CFR part 74, Appendix E, if the participant is a hospital;
or
(d) OMB Circular A-122, if the participant is any other type of
nonprofit organization (the cost principles in 48 CFR parts 31 and 231
are to be used by any nonprofit organization that is identified in
Circular A-122 as being subject to those cost principles).
Sec. 603.640 Audits of for-profit participants.
If the TIA is an expenditure-based award, the contracting officer
must include in it an audit provision that addresses, for each for-
profit participant:
(a) Whether the for-profit participant must have periodic audits,
in addition to any award-specific audits, as described in Sec.
603.645;
(b) Whether the Defense Contract Audit Agency (DCAA) or an
independent public accountant (IPA) will perform required audits, as
discussed in Sec. 603.650;
(c) How frequently any periodic audits are to be performed,
addressed in Sec. 603.655; and
(d) Other matters described in Sec. 603.660, such as audit
coverage, allowability of audit costs, auditing standards, and remedies
for noncompliance.
Sec. 603.645 Periodic audits and award-specific audits of for-profit
participants.
The contracting officer needs to consider requirements for both
periodic audits and award-specific audits (as defined in Sec. 603.1295
and Sec. 603.1220, respectively). The way that an expenditure-based
TIA addresses the two types of audits will vary, depending upon the
type of for-profit participant.
(a) For for-profit participants that are audited by the DCAA or
other Federal auditors, as described in Sec. Sec. 603.650(b) and
603.655, specific requirements for periodic audits need not be added
because the Federal audits should be sufficient to address whatever may
be needed. The inclusion in the TIA of the standard access-to-records
provision for those for-profit participants, as discussed in Sec.
603.910(a), gives the necessary access in the event that the
contracting officer later needs to request
[[Page 69262]]
audits to address award-specific issues that arise.
(b) For each other for-profit participant, the contracting officer:
(1) Should require that the participant have an independent auditor
(i.e., the DCAA or an independent public accountant (IPA)) conduct
periodic audits of its systems if it expends $500,000 or more per year
in TIAs and other Federal assistance awards. A prime reason for
including this requirement is that the Federal Government, for an
expenditure-based award, necessarily relies on amounts reported by the
participant's systems when it sets payment amounts or adjusts
performance outcomes. The periodic audit provides some assurance that
the reported amounts are reliable.
(2) Must ensure that the award provides an independent auditor the
access needed for award-specific audits, to be performed at the request
of the contracting officer if issues arise that require audit support.
However, consistent with the government-wide policies on single audits
that apply to nonprofit participants (see Sec. 603.665), the
contracting officer should rely on periodic audits to the maximum
extent possible to resolve any award-specific issues.
Sec. 603.650 Designation of auditor for for-profit participants.
The auditor identified in an expenditure-based TIA to perform
periodic and award-specific audits of a for-profit participant depends
on the circumstances, as follows:
(a) DCAA or an IPA will be the auditor for a for-profit participant
that does not meet the criteria in paragraph (b) of this section. Note
that the allocable portion of the costs of the IPA's audit may be
reimbursable under the TIA, as described in Sec. 603.660(b). The IPA
should be the one that the participant uses to perform other audits
(e.g., of its financial statement), to minimize added burdens and
costs.
(b) Except as provided in paragraph (c) of this section, the
Federal cognizant agency (e.g., DCAA) must be identified as the auditor
for any for-profit participant that is subject to Federal audits
because it is currently performing under a Federal award that is
subject to the:
(1) Cost principles in 48 CFR part 31 of the Federal Acquisition
Regulation (FAR); or
(2) Cost Accounting Standards in 48 CFR Chapter 99.
(c) If there are programmatic or business reasons that justify the
use of an auditor other than the Federal cognizant agency for a for-
profit participant that meets the criteria in paragraph (b) of this
section, the contracting officer may provide that an IPA will be the
auditor for that participant in which case the reasons for this
decision must be documented in the award file.
Sec. 603.655 Frequency of periodic audits of for-profit participants.
If an expenditure-based TIA provides for periodic audits of a for-
profit participant by an IPA, the contracting officer must specify the
frequency for those audits. The contracting officer should consider
having an audit performed during the first year of the award, when the
participant has its IPA do its next financial statement audit, unless
the participant already had a systems audit due to other Federal awards
within the past two years. The frequency thereafter may vary depending
upon the dollars the participant is expending annually under the award,
but it is not unreasonable to require an updated audit every two to
three years to verify that the participant's systems continue to be
reliable (the audit then would cover the two or three-year period
between audits).
Sec. 603.660 Other audit requirements.
If an expenditure-based TIA provides for audits of a for-profit
participant by an IPA, the contracting officer also must specify:
(a) What periodic audits are to cover. It is important to specify
audit coverage that is only as broad as needed to provide reasonable
assurance of the participant's compliance with award terms that have a
direct and material effect on the RD&D project.
(b) Who will pay for periodic and award-specific audits. The
allocable portion of the costs of any audits by IPAs may be
reimbursable under the TIA. The costs may be direct charges or
allocated indirect costs, consistent with the participant's accounting
system and practices.
(c) The auditing standards that the IPA will use. The contracting
officer must provide that the IPA will perform the audits in accordance
with the Generally Accepted Government Auditing Standards.
(d) The available remedies for noncompliance. The agreement must
provide that the participant may not charge costs to the award for any
audit that the contracting officer determines was not performed in
accordance with the Generally Accepted Government Auditing Standards or
other terms of the agreement. It also must provide that the Government
has the right to require the participant to have the IPA take
corrective action and, if corrective action is not taken, that the
agreements officer has recourse to any of the remedies for
noncompliance identified in 10 CFR 600.352(a).
(e) Where the IPA is to send audit reports. The agreement must
provide that the IPA is to submit audit reports to the contracting
officer. It also must require that the IPA report instances of fraud
directly to the Office of Inspector General (OIG), DOE.
(f) The retention period for the IPA's working papers. The
contracting officer must specify that the IPA is to retain working
papers for a period of at least three years after the final payment,
unless the working papers relate to an audit whose findings are not
fully resolved within that period or to an unresolved claim or dispute
(in which case, the IPA must keep the working papers until the matter
is resolved and final action taken).
(g) Who will have access to the IPA's working papers. The agreement
must provide for Government access to working papers.
Sec. 603.665 Periodic audits of nonprofit participants.
An expenditure-based TIA is an assistance instrument subject to the
Single Audit Act (31 U.S.C. 7501-7507), so nonprofit participants are
subject to the requirements under that Act and OMB Circular A-133.
Specifically, the requirements are those in:
(a) 10 CFR 600.226 for State and local governments; and
(b) 10 CFR 600.126 for other nonprofit organizations.
Sec. 603.670 Flow down audit requirements to subrecipients.
(a) In accordance with Sec. 603.610, an expenditure-based TIA must
require participants to flow down the same audit requirements to a
subrecipient that would apply if the subrecipient were a participant.
(b) For example, a for-profit participant that is audited by the
DCAA:
(1) Would flow down to a university subrecipient the Single Audit
Act requirements that apply to a university participant;
(2) Could enter into a subaward allowing a for-profit participant,
under the circumstances described in Sec. 603.650(a), to use an IPA to
do its audits.
(c) This policy applies to subawards for substantive performance of
portions of the RD&D project supported by the TIA, and not to
participants' purchases of goods or services needed to carry out the
RD&D.
[[Page 69263]]
Sec. 603.675 Reporting use of IPA for subawards.
An expenditure-based TIA should require participants to report to
the contracting officer when they enter into any subaward allowing a
for-profit subawardee to use an IPA, as described in Sec.
603.670(b)(2).
Property
Sec. 603.680 Purchase of real property and equipment by for-profit
firms.
(a) With the two exceptions described in paragraph (b) of this
section, the contracting officer must require a for-profit firm to
purchase real property or equipment with its own funds that are
separate from the RD&D project. The contracting officer should allow
the firm to charge to an expenditure-based TIA only depreciation or use
charges for real property or equipment (and the cost estimate for a
fixed-support TIA only would include those costs). Note that the firm
must charge depreciation consistently with its usual accounting
practice. Many firms treat depreciation as an indirect cost. Any firm
that usually charges depreciation indirectly for a particular type of
property must not charge depreciation for that property as a direct
cost to the TIA.
(b) In two situations, the contracting officer may grant an
exception and allow a for-profit firm to use project funds, which
includes both the Federal Government and recipient shares, to purchase
real property or equipment (i.e., to charge to the project the full
acquisition cost of the property). The two circumstances, which should
be infrequent for equipment and extremely rare for real property, are
those in which either:
(1) The real property or equipment will be dedicated to the project
and has a current fair market value that is less than $5,000 by the
time the project ends; or
(2) The contracting officer gives prior approval for the firm to
include the full acquisition cost of the real property or equipment as
part of the cost of the project (see Sec. 603.535).
(c) If the contracting officer grants an exception in either of the
circumstances described in paragraphs (b)(1) and (2) of this section,
the real property or equipment must be subject to the property
management standards in 10 CFR 600.321(b) through (e). As provided in
those standards, the title to the real property or equipment will vest
conditionally in the for-profit firm upon acquisition. A TIA, whether
it is a fixed-support or expenditure-based award, must specify that any
item of equipment that has a fair market value of $5,000 or more at the
conclusion of the project also will be subject to the disposition
process in 10 CFR 600.321(f), whereby the Federal Government will
recover its interest in the property at that time.
Sec. 603.685 Management of real property and equipment by nonprofit
participants.
For nonprofit participants, a TIA's requirements for vesting of
title, use, management, and disposition of real property or equipment
acquired under the award are the same as those that apply to the
participant's other Federal assistance awards. Specifically, the
requirements are those in:
(a) 10 CFR 600.231 and 600.232, for participants that are States
and local governmental organizations; and
(b) 10 CFR 600.132 and 600.134, for other nonprofit participants,
with the exception of nonprofit GOCOs and FFRDCs that are exempted from
the definition of ``recipient'' in 10 CFR 600.101. If a GOCO or FFRDC
is a participant, the contracting officer must specify appropriate
standards that conform as much as practicable with the requirements in
its procurement contract. Note also that:
(1) If the TIA is a cooperative agreement, 31 U.S.C. 6306 provides
authority to vest title to tangible personal property in a nonprofit
institution of higher education or in a nonprofit organization whose
primary purpose is conducting scientific research, without further
obligation to the Federal Government; and
(2) A TIA therefore must specify any conditions on the vesting of
title to real property or equipment acquired by any such nonprofit
participant.
Sec. 603.690 Requirements for Federally-owned property.
If DOE provides Federally-owned property to any participant for the
performance of RD&D under a TIA, the contracting officer must require
that participant to account for, use, and dispose of the property in
accordance with:
(a) 10 CFR 600.322, if the participant is a for-profit firm.
(b) 10 CFR 600.232(f), if the participant is a State or local
governmental organization. Note that 10 CFR 600.232(f) contains
additional requirements for managing the property.
(c) 10 CFR 600.133(a) and 600.134(f), if the participant is a
nonprofit organization other than a GOCO or FFRDC (requirements for
GOCOs and FFRDCs should conform with the property standards in their
procurement contracts).
Sec. 603.695 Requirements for supplies.
An expenditure-based TIA's provisions should permit participants to
use their existing procedures to account for and manage supplies. A
fixed-support TIA should not include requirements to account for or
manage supplies.
Purchasing
Sec. 603.700 Standards for purchasing systems of for-profit firms.
(a) If the TIA is an expenditure-based award, it should require
for-profit participants that currently perform under DOE assistance
instruments subject to the purchasing standards in 10 CFR 600.331 to
use the same requirements for the TIA, unless there are programmatic or
business reasons to do otherwise (in which case the reasons must be
documented in the award file).
(b) Other for-profit participants under an expenditure-based TIA
should be allowed to use their existing purchasing systems, as long as
they flow down the applicable requirements in Federal statutes,
Executive Orders or Government-wide regulations (see Appendices A and B
to this part for a list of those requirements).
Sec. 603.705 Standards for purchasing systems of nonprofit
organizations.
So as not to force system changes for any nonprofit participant, an
expenditure-based TIA should provide that each nonprofit participant's
purchasing system comply with:
(a) 10 CFR 600.236, if the participant is a State or local
governmental organization.
(b) 10 CFR 600.140 through 10 CFR 600.149, if the participant is a
nonprofit organization other than a GOCO or FFRDC that is excepted from
the definition of ``recipient'' in 10 CFR 600.101. If a GOCO or FFRDC
is a participant, the TIA must specify appropriate standards that
conform as much as practicable with requirements in its procurement
contract.
Subpart G--Award Terms Related to Other Administrative Matters
Sec. 603.800 Scope.
This subpart addresses administrative matters that do not impose
organization-wide requirements on a participant's financial management,
property management, or purchasing system. Because an organization does
not have to redesign its systems to accommodate award-to-award
variations in these requirements, TIAs may differ in the requirements
that they specify for a given participant, based on the circumstances
of the particular RD&D
[[Page 69264]]
project. To eliminate needless administrative complexity, the
contracting officer should handle some requirements, such as the
payment method, in a uniform way for the agreement as a whole.
Payments
Sec. 603.805 Payment methods.
A TIA may provide for:
(a) Reimbursement, as described in 10 CFR 600.312(a)(1), if it is
an expenditure-based award.
(b) Advance payments, as described in 10 CFR 600.312(a)(2), subject
to the conditions in 10 CFR 600.312(b)(2)(i) through (iii).
(c) Payments based on payable milestones. These are payments made
according to a schedule that is based on predetermined measures of
technical progress or other payable milestones. This approach relies
upon the fact that, as the RD&D progresses throughout the term of the
agreement, observable activity will be taking place. The recipient is
paid upon the accomplishment of a predetermined measure of progress. A
fixed-support TIA must use this payment method (this does not preclude
use of an initial advance payment, if there is no alternative to
meeting immediate cash needs). Payments based on payable milestones is
the preferred method of payment for an expenditure-based TIA if well-
defined outcomes can be identified.
Sec. 603.810 Method and frequency of payment requests.
The procedure and frequency for payment requests depend upon the
payment method, as follows:
(a) For either reimbursements or advance payments, the TIA must
allow recipients to submit requests for payment at least monthly. The
contracting officer may authorize the recipients to use the forms or
formats described in 10 CFR 600.312(d).
(b) If the payments are based on payable milestones, the recipient
will submit a report or other evidence of accomplishment to the program
official at the completion of each predetermined activity. If the award
is an expenditure-based TIA that includes minimum cost sharing
percentages for milestones (see 10 CFR 603.570(c), the recipient must
certify in the report that the minimum cost sharing requirement has
been met. The contracting officer may approve payment to the recipient
after receiving validation from the program manager that the milestone
was successfully reached.
Sec. 603.815 Withholding payments.
A TIA must provide that the contracting officer may withhold
payments in the circumstances described in 10 CFR 600.312(g), but not
otherwise.
Sec. 603.820 Interest on advance payments.
If an expenditure-based TIA provides for either advance payments or
payable milestones, the agreement must require the recipient to:
(a) Maintain in an interest-bearing account any advance payments or
milestone payment amounts received in advance of needs to disburse the
funds for program purposes unless:
(1) The recipient receives less than $120,000 in Federal grants,
cooperative agreements, and TIAs per year;
(2) The best reasonably available interest-bearing account would
not be expected to earn interest in excess of $1,000 per year on the
advance or milestone payments; or
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources for the project.
(b) Remit annually the interest earned to the contracting officer.
Revision of Budget and Program Plans
Sec. 603.825 Government approval of changes in plans.
If it is an expenditure-based award, a TIA must require the
recipient to obtain the contracting officer's prior approval if there
is to be a change in plans that may result in a need for additional
Federal funding (this is unnecessary for a fixed-support TIA because
the recipient is responsible for additional costs of achieving the
outcomes). Other than that, the program official's substantial
involvement in the project should ensure that the Government has
advance notice of changes in plans.
Sec. 603.830 Pre-award costs.
Pre-award costs, as long as they are otherwise allowable costs of
the project, may be charged to an expenditure-based TIA only with the
specific approval of the contracting officer. All pre-award costs are
incurred at the recipient's risk (e.g. , DOE is not obligated to
reimburse the costs if, for any reason, the recipient does not receive
an award, or if the award is less than anticipated and inadequate to
cover the costs).
Program Income
Sec. 603.835 Program income requirements.
A TIA must apply the standards of 10 CFR 600.314 for program income
that may be generated. The TIA must also specify if the recipient is to
have any obligation to the Federal Government with respect to program
income generated after the end of the project period (.e., the period,
as established in the award document, during which Federal support is
provided).
Intellectual Property
Sec. 603.840 Negotiating data and patent rights.
(a) The contracting officer must confer with program officials and
assigned intellectual property counsel to develop an overall strategy
for intellectual property that takes into account inventions and data
that may result from the project and future needs the Government may
have for rights in them. The strategy should take into account program
mission requirements and any special circumstances that would support
modification of standard patent and data terms, and should include
considerations such as the extent of the recipient's contribution to
the development of the technology; expected Government or commercial
use of the technology; the need to provide equitable treatment among
consortium or team members; and the need for the DOE to engage non-
traditional Government contractors with unique capabilities.
(b) Because a TIA entails substantial cost sharing by recipients,
the contracting officer must use discretion in negotiating Government
rights to data and patentable inventions resulting from the RD&D under
the agreements. The considerations in Sec. Sec. 603.845 through
603.875 are intended to serve as guidelines, within which there is
considerable latitude to negotiate provisions appropriate to a wide
variety of circumstances that may arise.
Sec. 603.845 Data rights requirements.
(a) If the TIA is a cooperative agreement, the requirements at 10
CFR 600.325(d), Rights in data-general rule, apply. The ``Rights in
Data--General'' provision in Appendix A to Subpart D of 10 CFR 600
normally applies. This provision provides the Government with unlimited
rights in data first produced in the performance of the agreement,
except as provided in paragraph (c) Copyright. However, in certain
circumstances, the ``Rights in Data--Programs Covered Under Special
Protected Data Statutes'' provision in Appendix A may apply.
(b) If the TIA is an assistance transaction other than a
cooperative agreement, the requirements at 10 CFR 600.325(e), Rights in
data--programs covered under special protected data statutes, normally
apply. The ``Rights in
[[Page 69265]]
Data--Programs Covered Under Special Data Statutes'' provision in
Appendix A to Subpart D of 10 CFR 600 may be modified to accommodate
particular circumstances (e.g., access to or expanded use rights in
protected data among consortium or team members), or to list data or
categories of data that the recipient must make available to the
public. In unique cases, the contracting officer may negotiate special
data rights requirements that vary from those in 10 CFR 600.325.
Modifications to the standard data provisions must be approved by
intellectual property counsel.
Sec. 603.850 Marking of data.
To protect the recipient's interests in data, the TIA should
require the recipient to mark any particular data that it wishes to
protect from disclosure with a specific legend specified in the
agreement identifying the data as data subject to use, release, or
disclosure restrictions.
Sec. 603.855 Protected data.
In accordance with law and regulation, the contracting officer must
not release or disclose data marked with a restrictive legend (as
specified in Sec. 603.850) to third parties, unless they are parties
authorized by the award agreement or the terms of the legend to receive
the data and are subject to a written obligation to treat the data in
accordance with the marking.
Sec. 603.860 Rights to inventions.
(a) The contracting officer should negotiate rights in inventions
that represent an appropriate balance between the Government's
interests and the recipient's interests.
(1) The contracting officer has the flexibility to negotiate patent
rights requirements that vary from that which the Bayh-Dole statute
(Chapter 18 of Title 35, U.S.C.) and 42 U.S.C. 2182 and 5908 require. A
TIA becomes an assistance transaction other than a cooperative
agreement if its patent rights requirements vary from those required by
these statutes.
(2) If the TIA is a cooperative agreement, the patent rights
provision of 10 CFR 600.325(b) or (c) or 10 CFR 600.136 applies,
depending on the type of recipient. Unless a class waiver has been
issued, it will be necessary for a large, for-profit business to
request a patent waiver to obtain title to subject inventions.
(b) The contracting officer may negotiate Government rights that
vary from the statutorily-required patent rights requirements described
in paragraph (a)(2) of this section when necessary to accomplish
program objectives and foster the Government's interests. Doing so
would make the TIA an assistance transaction other than a cooperative
agreement. The contracting officer must decide, with the help of the
program manager and assigned intellectual property counsel, what best
represents a reasonable arrangement considering the circumstances,
including past investments of the recipient to development of the
technology, contributions under the current TIA, and potential
commercial and Government markets. Any change to the standard patent
rights provisions must be approved by assigned intellectual property
counsel.
(c) Taking past investments as an example, the contracting officer
should consider whether the Government or the recipient has contributed
more substantially to the prior RD&D that provides the foundation for
the planned effort. If the predominant past contributor to the
particular technology has been:
(1) The Government, then the TIA's patent rights provision should
be the standard provision as set forth in 10 CFR 600.325(b) or (c), or
10 CFR 600.136, as applicable.
(2) The recipient, then less restrictive patent requirements may be
appropriate, which would make the TIA an assistance transaction other
than a cooperative agreement. The contracting officer normally would,
with the concurrence of intellectual property counsel, allow the
recipient to retain title to subject inventions without going through
the process of obtaining a patent waiver as required by 10 CFR 784. For
example, with the concurrence of intellectual property counsel, the
contracting officer also could eliminate or modify the nonexclusive
paid-up license for practice by or on behalf of the Government to allow
the recipient to benefit more directly from its investments.
Sec. 603.865 March-in rights.
A TIA's patent rights provision should include the Bayh-Dole march-
in rights set out in paragraph (j) of the Patent Rights (Small Business
Firms and Nonprofit Organization) provision in Appendix A to subpart D
of 10 CFR 600, or an equivalent clause, concerning actions that the
Government may take to obtain the right to use subject inventions, if
the recipient fails to take effective steps to achieve practical
application of the subject inventions within a reasonable time. The
march-in provision may be modified to best meet the needs of the
program. However, only infrequently should the march-in provision be
entirely removed (e.g., if a recipient is providing most of the funding
for a RD&D project, with the Government providing a much smaller
share).
Sec. 603.870 Marking of documents related to inventions.
To protect the recipient's interest in inventions, the TIA should
require the recipient to mark documents disclosing inventions it
desires to protect by obtaining a patent. The recipient should mark the
documents with a legend identifying them as intellectual property
subject to public release or public disclosure restrictions, as
provided in 35 U.S.C. 205.
Sec. 603.875 Foreign access to technology and U.S. competitiveness
provisions.
(a) Consistent with the objective of enhancing national security
and United States competitiveness by increasing the public's reliance
on the United States commercial technology, the contracting officer
must include provisions in a TIA that addresses foreign access to
technology developed under the TIA.
(b) A provision must provide, as a minimum, that any transfer of
the technology must be consistent with the U.S. export laws,
regulations and the Department of Commerce Export Regulation at Chapter
VII, Subchapter C, Title 15 of the CFR (15 CFR parts 730 through 774),
as applicable.
(c) A provision should also provide that any products embodying, or
produced through the use of, any created intellectual property, will be
manufactured substantially in the United States, and that any transfer
of the right to use or sell the products must, unless the Government
grants a waiver, require that the products will be manufactured
substantially in the United States. In individual cases, the
contracting officer, with the approval of the program official and
intellectual property counsel, may waive or modify the requirement of
substantial manufacture in the United States at the time of award, or
subsequent thereto, upon a showing by the recipient that:
(1) Alternative benefits are being secured for the United States
taxpayer (e.g., increased domestic jobs notwithstanding foreign
manufacture);
(2) Reasonable but unsuccessful efforts have been made to transfer
the technology under similar terms to those likely to manufacture
substantially in the United States; or
(3) Under the circumstances domestic manufacture is not
commercially feasible.
[[Page 69266]]
Financial and Programmatic Reporting
Sec. 603.880 Reports requirements.
A TIA must include requirements that, as a minimum, provide for
periodic reports addressing program performance and, if it is an
expenditure-based award, business/financial status. The contracting
officer must require submission of the reports at least annually, and
may require submission as frequently as quarterly (this does not
preclude a recipient from electing to submit more frequently than
quarterly the financial information that is required to process payment
requests if the award is an expenditure-based TIA that uses
reimbursement or advance payments under Sec. 603.810(a)). The
requirements for the content of the reports are as follows:
(1) The program portions of the reports must address progress
toward achieving performance goals and milestones, including current
issues, problems, or developments.
(2) The business/financial portions of the reports, applicable only
to expenditure-based awards, must provide summarized details on the
status of resources (federal funds and non-federal cost sharing),
including an accounting of expenditures for the period covered by the
report. The report should compare the resource status with any payment
and expenditure schedules or plans provided in the original award;
explain any major deviations from those schedules; and discuss actions
that will be taken to address the deviations. The contracting officer
may require a recipient to separately identify in these reports the
expenditures for each participant in a consortium and for each
programmatic milestone or task, if the contracting officer, after
consulting with the program official, judges that those additional
details are needed for good stewardship.
Sec. 603.885 Updated program plans and budgets.
In addition to reports on progress to date, a TIA may include a
provision requiring the recipient to annually prepare an updated
technical plan for future conduct of the research effort and a revised
budget if there is a significant change from the initial budget.
Sec. 603.890 Final performance report.
A TIA must require a final performance report that addresses all
major accomplishments under the TIA.
Sec. 603.895 Protection of information in programmatic reports.
If a TIA is awarded under the authority of 42 U.S.C. 7256(g) (i.e.,
it is a type of assistance transaction ``other than'' a contract, grant
or a cooperative agreement), the contracting officer may inform a
participant that the award is covered by a special protected data
statute, which provides for the protection from public disclosure, for
a period of up to 5 years after the date on which the information is
developed, any information developed pursuant to this transaction that
would be trade secret, or commercial or financial information that is
privileged or confidential, if the information had been obtained from a
non-Federal party.
Sec. 603.900 Receipt of final performance report.
If a final report is required, the TIA should make receipt of the
report a condition for final payment. If the payments are based on
payable milestones, the submission and acceptance of the final report
by the Government representative will be incorporated as an event that
is a prerequisite for one of the payable milestones.
Records Retention and Access Requirements
Sec. 603.905 Record retention requirements.
A TIA must require participants to keep records related to the TIA
(for which the agreement provides Government access under Sec.
603.910) for a period of three years after submission of the final
financial status report for an expenditure-based TIA or final program
performance report for a fixed-support TIA, with the following
exceptions:
(a) The participant must keep records longer than three years after
submission of the final financial status report if the records relate
to an audit, claim, or dispute that begins but does not reach its
conclusion within the 3-year period. In that case, the participant must
keep the records until the matter is resolved and final action taken.
(b) Records for any real property or equipment acquired with
project funds under the TIA must be kept for three years after final
disposition.
Sec. 603.910 Access to a for-profit participant's records.
(a) If a for-profit participant currently grants access to its
records to the DCAA or other Federal Government auditors, the TIA must
include for that participant the standard access-to-records
requirements at 10 CFR 600.342(e). If the agreement is a fixed-support
TIA, the language in 10 CFR 600.342(e) may be modified to provide
access to records concerning the recipient's technical performance,
without requiring access to the recipient's financial or other records.
Note that any need to address access to technical records in this way
is in addition to, not in lieu of, the need to address rights in data
(see Sec. 603.845).
(b) For other for-profit participants that do not currently give
the Federal Government direct access to their records and are not
willing to grant full access to records pertinent to the award, the
contracting officer may negotiate limited access to the recipient's
financial records. For example, if the audit provision of an
expenditure-based TIA gives an IPA access to the recipient's financial
records for audit purposes, the Federal Government must have access to
the IPA's reports and working papers and the contracting officer need
not include a provision requiring direct Government access to the
recipient's financial records. For both fixed-support and expenditure-
based TIAs, the TIA must include the access-to-records requirements at
10 CFR 600.342(e) for records relating to technical performance.
Sec. 603.915 Access to a nonprofit participant's records.
A TIA must include for any nonprofit participant the standard
access-to-records requirement at:
(a) 10 CFR 600.242(e), for a participant that is a State or local
governmental organization;
(b) 10 CFR 600.153(e), for a participant that is a nonprofit
organization. The same requirement applies to any GOCO or FFRDC, even
though nonprofit GOCOs and FFRDCs are exempted from the definition of
``recipient'' in 10 CFR 600.101.
Termination and Enforcement
Sec. 603.920 Termination and enforcement requirements.
(a) Termination. A TIA must include the following conditions for
termination:
(1) An award may be terminated in whole or in part by the
contracting officer, if a recipient materially fails to comply with the
terms and conditions of the award.
(2) Subject to a reasonable determination by either party that the
project will not produce beneficial results commensurate with the
expenditure of resources, that party may terminate in whole or in part
the agreement by providing at least 30 days advance written notice to
the other party, provided such notice is preceded by consultation
between the parties. The two parties will negotiate the termination
conditions, including the effective date and, in the case of partial
termination, the portion to be terminated. If either party determines
in
[[Page 69267]]
the case of partial termination that the reduced or modified portion of
the award will not accomplish the purpose for which the award was made,
the award may be terminated in its entirety.
(3) Unless otherwise negotiated, for terminations of an expenditure
based TIA, DOE's maximum liability is the lesser of:
(i) DOE's share of allowable costs incurred up to the date of
termination, or
(ii) The amount of DOE funds obligated to the TIA.
(4) Unless otherwise negotiated, for terminations of a fixed-
support based TIA, DOE shall pay the recipient a proportionate share of
DOE's financial commitment to the project based on the percent of
project completion as of the date of termination.
(5) Notwithstanding paragraphs (3) and (4) of this section, if the
award includes milestone payments, the Government has no obligation to
pay the recipient beyond the last completed and paid milestone if the
recipient decides to terminate.
(b) Enforcement. The standards of 10 CFR 600.352 (for enforcement)
and the procedures in 10 CFR 600.22 (for disputes and appeals) apply.
Subpart H--Executing the Award
Sec. 603.1000 Contracting officer's responsibilities at time of
award.
At the time of the award, the contracting officer must:
(a) Ensure that the award document contains the appropriate terms
and conditions and is signed by the appropriate parties, in accordance
with Sec. Sec. 603.1005 through 603.1015.
(b) Document the analysis of the agreement in the award file, as
discussed in Sec. 603.1020.
(c) Provide information about the award to the office responsible
for reporting on TIAs.
The Award Document
Sec. 603.1005 General responsibilities.
The contracting officer is responsible for ensuring that the award
document is complete and accurate. The document should:
(a) Address all issues;
(b) State requirements directly. It is not helpful to readers to
incorporate statutes or rules by reference, without sufficient
explanation of the requirements. The contracting officer generally
should not incorporate clauses from the Federal Acquisition Regulation
(48 CFR parts 1-53) or Department of Energy Acquisition Regulation (48
CFR parts 901-970) because those provisions are designed for
procurement contracts that are used to acquire goods and services,
rather than for a TIA or other assistance instruments.
(c) Be written in clear and concise language, to minimize potential
ambiguity.
Sec. 603.1010 Substantive issues.
Each TIA is designed and negotiated individually to meet the
specific requirements of the particular project, so the list of
substantive issues that will be addressed in the award document may
vary. Every award document must address:
(a) Project scope. The scope is an overall vision statement for the
project, including a discussion of the project's purpose, objectives,
and detailed commercial goals. It is a critical provision because it
provides a context for resolving issues that may arise during post-
award administration. In a fixed-support TIA, the well-defined outcomes
that reliably indicate the amount of effort expended and serve as the
basis for the level of the fixed support must be clearly specified (see
Sec. Sec. 603.305 and 603.560(a)).
(b) Project management. The TIA should describe the nature of the
relationship between the Federal Government and the recipient; the
relationship among the participants, if the recipient is an
unincorporated consortium; and the overall technical and administrative
management of the project. A TIA is used to carry out collaborative
relationships between the Federal Government and the recipient.
Consequently, there must be substantial involvement of the DOE program
official (see Sec. 603.220) and usually the contracting officer. The
program official provides technical insight, which differs from the
usual technical oversight of a project. The management provision also
should discuss how modifications to the TIA are made.
(c) Termination, enforcement, and disputes. A TIA must provide for
termination, enforcement remedies, and disputes and appeals procedures,
in accordance with Sec. 603.920.
(d) Funding. The TIA must:
(1) Show the total amount of the agreement and the total period of
performance.
(2) If the TIA is an expenditure-based award, state the
Government's and recipient's agreed-upon cost shares for the project
period and for each budget period. The award document should identify
values for any in-kind contributions, determined in accordance with
Sec. Sec. 603.530 through 603.555, to preclude later disagreements
about them.
(3) Specify the amount of Federal funds obligated and the
performance period for those obligated funds.
(4) State, if the agreement is to be incrementally funded, that the
Government's obligation for additional funding is contingent upon the
availability of funds and that no legal obligation on the part of the
Government exists until additional funds are made available and the
agreement is amended. The TIA also must include a prior approval
requirement for changes in plans requiring additional Government
funding, in accordance with Sec. 603.825.
(e) Payment. The TIA must identify the payment method and tell the
recipient how, when, and where to submit payment requests, as discussed
in Sec. Sec. 603.805 through 603.815. The payment method must take
into account sound cash management practices by avoiding unwarranted
cash advances. For an expenditure-based TIA, the payment provision must
require the return of interest should excess cash balances occur, in
accordance with Sec. 603.820. For any TIA using the milestone payment
method described in Sec. 603.805(c), the TIA must include language
notifying the recipient that the contracting officer may adjust amounts
of future milestone payments if a project's expenditures fall too far
below the projections that were the basis for setting the amounts (see
Sec. 603.575(c) and Sec. 603.1105(c)).
(f) Records retention and access to records. The TIA must include
the records retention requirement at Sec. 603.910. The TIA also must
provide for access to for-profit and nonprofit participants' records,
in accordance with Sec. 603.915 and Sec. 603.920.
(g) Patents and data rights. In designing the patents and data
rights provision, the TIA must set forth the minimum required Federal
Government rights in intellectual property generated under the award
and address related matters, as provided in Sec. Sec. 603.840 through
603.875. It is important to define all essential terms in the patent
rights provision.
(h) Foreign access to technology and U.S. competitiveness. The TIA
must include provisions, in accordance with Sec. 603.875, concerning
foreign access and domestic manufacture of products using technology
generated under the award.
(i) Title to, management of, and disposition of tangible property.
The property provisions for for-profit and nonprofit participants must
be in accordance with Sec. Sec. 603.685 through 603.700.
(j) Financial management systems. For an expenditure-based award,
the
[[Page 69268]]
TIA must specify the minimum standards for financial management systems
of both for-profit and nonprofit participants, in accordance with
Sec. Sec. 603.615 and 603.620.
(k) Allowable costs. If the TIA is an expenditure-based award, it
must specify the standards that both for-profit and nonprofit
participants are to use to determine which costs may be charged to the
project, in accordance with Sec. Sec. 603.625 through 603.635, as well
as Sec. 603.830.
(l) Audits. If a TIA is an expenditure-based award, it must include
an audit provision for both for-profit and nonprofit participants and
subrecipients, in accordance with Sec. Sec. 603.640 through 603.670
and Sec. 603.675.
(m) Purchasing system standards. The TIA should include a provision
specifying the standards in Sec. Sec. 603.700 and 603.705 for
purchasing systems of for-profit and nonprofit participants,
respectively.
(n) Program income. The TIA should specify requirements for program
income, in accordance with Sec. 603.835.
(o) Financial and programmatic reporting. The TIA must specify the
reports that the recipient is required to submit and tell the recipient
when and where to submit them, in accordance with Sec. Sec. 603.880
through 603.900.
(p) Assurances for applicable national policy requirements. The TIA
must incorporate assurances of compliance with applicable requirements
in Federal statutes, Executive Orders, or regulations (except for
national policies that require certifications). Appendix A to this part
contains a list of commonly applicable requirements that should be
augmented with any specific requirements that apply to a particular TIA
(e.g., general provisions in the appropriations act for the specific
funds that are being obligating).
(q) Other matters. The agreement should address any other issues
that need clarification, including the name of the contracting officer
who will be responsible for post-award administration and the statutory
authority or authorities for entering into the TIA. In addition, the
agreement must specify that it takes precedence over any inconsistent
terms and conditions in collateral documents such as attachments to the
TIA or the recipient's articles of collaboration.
Sec. 603.1015 Execution.
(a) If the recipient is a consortium that is not formally
incorporated and the consortium members prefer to have the agreement
signed by all of them individually, the agreement may be executed in
that manner.
(b) If they wish to designate one consortium member to sign the
agreement on behalf of the consortium as a whole, the determination
whether to execute the agreement in that way should not be made until
the contracting officer reviews the consortium's articles of
collaboration with legal counsel.
(1) The purposes of the review are to:
(i) Determine whether the articles properly authorize one
participant to sign on behalf of the other participants and are binding
on all consortium members with respect to the RD&D project; and
(ii) Assess the risk that otherwise could exist when entering into
an agreement signed by a single member on behalf of a consortium that
is not a legal entity. For example, the contracting officer should
assess whether the articles of collaboration adequately address
consortium members' future liabilities related to the RD&D project
(e.g., whether they will have joint and severable liability).
(2) After the review, in consultation with legal counsel, the
contracting officer should determine whether it is better to have all
of the consortium members sign the agreement individually or to allow
them to designate one member to sign on all members' behalf.
Reporting Information About the Award
Sec. 603.1020 File documents.
The award file should include an analysis which:
(a) Briefly describes the program and details the specific
commercial benefits that should result from the project supported by
the TIA. If the recipient is a consortium that is not formally
incorporated, a copy of the signed articles of collaboration should be
attached.
(b) Describes the process that led to the award of the TIA,
including how DOE solicited and evaluated proposals and selected the
one supported through the TIA.
(c) Explains the basis for the decision that a TIA was the most
appropriate instrument, in accordance with the factors in Subpart B of
this part. The explanation must include the answers to the relevant
questions in Sec. 603.225(a) through (d).
(d) Explains how the recipient's cost sharing contributions was
valued in accordance with Sec. Sec. 603.530 through 603.555. For a
fixed-support TIA, the file must document the analysis required (see
Sec. 603.560) to set the fixed level of Federal support; the
documentation must explain how the recipient's minimum cost share was
determined and how the expenditures required to achieve the project
outcomes were estimated.
(e) Documents the results of the negotiation, addressing all
significant issues in the TIA's provisions.
Subpart I--Post-Award Administration
Sec. 603.1100 Contracting officer's post-award responsibilities.
Generally, the contracting officer's post-award responsibilities
are the same responsibilities as those for any cooperative agreement.
Responsibilities for a TIA include:
(a) Participating as the business partner to the DOE program
official to ensure the Government's substantial involvement in the RD&D
project. This may involve attendance with program officials at kickoff
meetings or post-award conferences with recipients. It also may involve
attendance at the consortium management's periodic meetings to review
technical progress, financial status, and future program plans.
(b) Tracking and processing of reports required by the award terms
and conditions, including periodic business status reports,
programmatic progress reports, and patent reports.
(c) Handling payment requests and related matters. For a TIA using
advance payments, that includes reviews of progress to verify that
there is continued justification for advancing funds, as discussed in
Sec. 603.1105(b). For a TIA using milestone payments, it includes
making any needed adjustments in future milestone payment amounts, as
discussed in Sec. 603.1105(c).
(d) Making continuation awards for subsequent budget periods, if
the agreement includes separate budget periods. See 10 CFR 600.26(b).
Any continuation award is contingent on availability of funds,
satisfactory progress towards meeting the performance goals and
milestones, submittal of required reports, and compliance with the
terms and conditions of the award.
(e) Coordinating audit requests and reviewing audit reports for
both single audits of participants' systems and any award-specific
audits that may be needed, as discussed in Sec. Sec. 603.1115 and
603.1120.
(f) Responding, after coordination with program officials and
intellectual property counsel, to recipient requests for permission to
assign or license intellectual property to entities that do
[[Page 69269]]
not agree to manufacture substantially in the United States, as
described in Sec. 603.875(b). Before granting approval for any
technology, the contracting officer must secure assurance that any such
assignment is consistent with license rights for Government use of the
technology, and that other conditions for any such transfer are met.
Sec. 603.1105 Advance payments or payable milestones.
The contracting officer must:
(a) For any expenditure-based TIA with advance payments or payable
milestones, forward to the responsible payment office any interest that
the recipient remits in accordance with Sec. 603.820(b). The payment
office will return the amounts to the Department of the Treasury's
miscellaneous receipts account.
(b) For any expenditure-based TIA with advance payments, consult
with the program official and consider whether program progress
reported in periodic reports, in relation to reported expenditures, is
sufficient to justify the continued authorization of advance payments
under Sec. 603.805(b).
(c) For any expenditure-based TIA using milestone payments, work
with the program official at the completion of each payable milestone
or upon receipt of the next business status report to:
(1) Compare the total amount of project expenditures, as recorded
in the payable milestone report or business status report, with the
projected budget for completing the milestone; and
(2) Adjust future payable milestones, as needed, if expenditures
lag substantially behind what was originally projected and the
contracting officer judges that the recipient is receiving Federal
funds sooner than necessary for program purposes. Before making
adjustments, the contracting officer should consider how large a
deviation is acceptable at the time of the milestone. For example,
suppose that the first milestone payment for a TIA is $50,000, and that
the awarding official set the amount based on a projection that the
recipient would have to expend $100,000 to reach the milestone (i.e.,
the original plan was for the recipient's share at that milestone to be
50% of project expenditures). If the milestone payment report shows
$90,000 in expenditures, the recipient's share at this point is 44%
($40,000 out of the total $90,000 expended, with the balance provided
by the $50,000 milestone payment of Federal funds). For this example,
the contracting officer should adjust future milestones if a 6%
difference in the recipient's share at the first milestone is judged to
be too large, but not otherwise. Remember that milestone payment
amounts are not meant to track expenditures precisely at each milestone
and that a recipient's share will increase as it continues to perform
RD&D and expend funds, until it completes another milestone to trigger
the next Federal payment.
Sec. 603.1110 Other payment responsibilities.
Regardless of the payment method, the contracting officer should
ensure that:
(a) The request complies with the award terms;
(b) Available funds are adequate to pay the request;
(c) The recipient will not have excess cash on hand, based on
expenditure patterns; and
(d) Payments are not withheld, except in one of the circumstances
described in 10 CFR 600.312(g).
Sec. 603.1115 Single audits.
For audits of for-profit participant's systems, under Sec. Sec.
603.640 through 603.660, the contracting officer is the focal point for
ensuring that participants submit audit reports and for resolving any
findings in those reports. The contracting officer's responsibilities
regarding single audits of nonprofit participant's systems are
identified in the DOE ``Guide to Financial Assistance.''
Sec. 603.1120 Award-specific audits.
Guidance on when and how the contracting officer should request
additional audits for an expenditure-based TIA is identical to the
guidance in 10 CFR 600.316(d). If the contracting officer requires an
award-specific examination or audit of a for-profit participant's
records related to a TIA, the contracting officer must use the auditor
specified in the award terms and conditions, which should be the same
auditor who performs periodic audits of the participant.
Subpart J--Definitions of Terms Used in This Part
The terms defined in 10 CFR 600.3 apply to all DOE financial
assistance, including a TIA. In addition to those terms, the following
terms are used in this part.
Sec. 603.1205 Advance.
A payment made to a recipient before the recipient disburses the
funds for program purposes. Advance payments may be based upon a
recipient's request or a predetermined payment schedule.
Sec. 603.1210 Articles of collaboration.
An agreement among the participants in a consortium that is not
formally incorporated as a legal entity, by which they establish their
relative rights and responsibilities (see Sec. 603.515).
Sec. 603.1215 Assistance.
The transfer of a thing of value to a recipient to carry out a
public purpose of support or stimulation authorized by a law of the
United States (see 31 U.S.C. 6101(3)). Grants, cooperative agreements,
and technology investment agreements are examples of legal instruments
used to provide assistance.
Sec. 603.1220 Award-specific audit.
An audit of a single TIA, usually done at the cognizant contracting
officer's request, to help resolve issues that arise during or after
the performance of the RD&D project. An award-specific audit of an
individual award differs from a periodic audit of a participant (as
defined in Sec. 603.1295).
Sec. 603.1225 Cash contributions.
A recipient's cash expenditures made as contributions toward cost
sharing, including expenditures of money that third parties contributed
to the recipient.
Sec. 603.1230 Commercial firm.
A for-profit firm or segment of a for-profit firm (e.g., a division
or other business unit) that does a substantial portion of its business
in the commercial marketplace.
Sec. 603.1235 Consortium.
A group of RD&D-performing organizations that either is formally
incorporated or that otherwise agrees to jointly carry out a RD&D
project (see definition of ``articles of collaboration,'' in Sec.
603.1210).
Sec. 603.1240 Cooperative agreement.
A legal instrument which, consistent with 31 U.S.C. 6305, is used
to enter into the same kind of relationship as a grant (see definition
of ``grant,'' in Sec. 603.1270), except that substantial involvement
is expected between the DOE and the recipient when carrying out the
activity contemplated by the cooperative agreement. The term does not
include ``cooperative research and development agreements'' as defined
in 15 U.S.C. 3710a.
Sec. 603.1245 Cost sharing.
A portion of project costs from non-Federal sources that are borne
by the recipient or non-Federal third parties on behalf of the
recipient, rather than by the Federal Government.
Sec. 603.1250 Data.
Recorded information, regardless of form or the media on which it
may be
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recorded. The term includes technical data and computer software. It
does not include information incidental to administration, such as
financial, administrative, cost or pricing, or other management
information related to the administration of a TIA.
Sec. 603.1255 Equipment.
Tangible property, other than real property, that has a useful life
of more than one year and an acquisition cost of $5,000 or more per
unit.
Sec. 603.1260 Expenditure-based award.
A Federal Government assistance award for which the amounts of
interim payments or the total amount ultimately paid (i.e., the sum of
interim payments and final payment) are subject to redetermination or
adjustment, based on the amounts expended by the recipient in carrying
out the purposes for which the award was made, as long as the
redetermination or adjustment does not exceed the total Government
funds obligated to the award. Most Federal Government grants and
cooperative agreements are expenditure-based awards.
Sec. 603.1265 Expenditures or outlays.
Charges made to the project or program. They may be reported either
on a cash or accrual basis, as shown in the following table:
------------------------------------------------------------------------
Expenditures are the sum of . .
If reports are prepared on a . . . .
------------------------------------------------------------------------
(a) Cash basis......................... (1) Cash disbursements for
direct charges for goods and
services;
(2) The amount of indirect
expense charged;
(3) The value of third party in-
kind contributions applied;
and
(4) The amount of cash advances
and payments made to any other
organizations for the
performance of a part of the
RD&D effort.
(b) Accrual basis...................... (1) Cash disbursements for
direct charges for goods and
services;
(2) The amount of indirect
expense incurred;
(3) The value of in-kind
contributions applied; and
(4) The net increase (or
decrease) in the amounts owed
by the recipient for goods and
other property received, for
services performed by
employees, contractors, and
other payees and other amounts
becoming owed under programs
for which no current services
or performance are required.
------------------------------------------------------------------------
Sec. 603.1270 Grant.
A legal instrument which, consistent with 31 U.S.C. 6304, is used
to enter into a relationship:
(a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or
stimulation authorized by a law of the United States, rather than to
acquire property or services for the Department of Energy's direct
benefit or use.
(b) In which substantial involvement is not expected between the
DOE and the recipient when carrying out the activity contemplated by
the grant.
Sec. 603.1275 In-kind contributions.
The value of non-cash contributions made by a recipient or non-
Federal third parties toward cost sharing.
Sec. 603.1280 Institution of higher education.
An educational institution that:
(a) Meets the criteria in section 101 of the Higher Education Act
of 1965 (20 U.S.C. 1001); and
(b) Is subject to the provisions of OMB Circular A-110,
``Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations,'' as implemented by the Department of Energy at 10 CFR
600, Subpart B.
Sec. 603.1285 Intellectual property.
Patents, trademarks, copyrights, mask works, protected data, and
other forms of comparable property protected by Federal law and foreign
counterparts.
Sec. 603.1290 Participant.
A consortium member or, in the case of an agreement with a single
for-profit entity, the recipient. Note that a for-profit participant
may be a firm or a segment of a firm (e.g., a division or other
business unit).
Sec. 603.1295 Periodic audit.
An audit of a participant, performed at an agreed-upon time
(usually a regular time interval), to determine whether the participant
as a whole is managing its Federal awards in compliance with the terms
of those awards. Appendix A to this part describes what such an audit
may cover. A periodic audit of a participant differs from an award-
specific audit of an individual award (as defined in Sec. 603.1220).
Sec. 603.1300 Procurement contract.
A federal government procurement contract. It is a legal instrument
which, consistent with 31 U.S.C. 6303, reflects a relationship between
the Federal Government and a State, a local government, or other non-
government entity when the principal purpose of the instrument is to
acquire property or services for the direct benefit or use of the
Federal Government. See the more detailed definition of the term
``contract'' at 48 CFR 2.101.
Sec. 603.1305 Program income.
Gross income earned by the recipient or a participant that is
generated by a supported activity or earned as a direct result of a
TIA. Program income includes but is not limited to: income from fees
for performing services; the use or rental of real property, equipment,
or supplies acquired under a TIA; the sale of commodities or items
fabricated under a TIA; and license fees and royalties on patents and
copyrights. Interest earned on advances of Federal funds is not program
income.
Sec. 603.1310 Program official.
A federal government program manager, project officer, scientific
officer, or other individual who is responsible for managing the
technical program being carried out through the use of a TIA.
Sec. 603.1315 Property.
Real property, equipment, supplies, and intellectual property,
unless stated otherwise.
Sec. 603.1320 Real property.
Land, including land improvements, structures and appurtenances
thereto, but excluding movable machinery and equipment.
Sec. 603.1325 Recipient.
An organization or other entity that receives a TIA from DOE. Note
that a for-profit recipient may be a firm or a segment of a firm (e.g.,
a division or other business unit).
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Sec. 603.1330 Supplies.
Tangible property other than real property and equipment. Supplies
have a useful life of less than one year or an acquisition cost of less
than $5,000 per unit.
Sec. 603.1335 Termination.
The cancellation of a TIA, in whole or in part, at any time prior
to either:
(a) The date on which all work under the TIA is completed; or
(b) The date on which Federal sponsorship ends, as given in the
award document or any supplement or amendment thereto.
Sec. 603.1340 Technology investment agreement.
A TIA is a special type of assistance instrument used to increase
involvement of commercial firms in the DOE research, development and
demonstration (RD&D) programs. A TIA, like a cooperative agreement,
requires substantial Federal involvement in the technical or management
aspects of the project. A TIA may be either a type of cooperative
agreement or a type of assistance transaction other than a cooperative
agreement, depending on the intellectual property provisions. A TIA is
either:
(a) A type of cooperative agreement with more flexible provisions
tailored for involving commercial firms (as distinct from a cooperative
agreement subject to all of the requirements in 10 CFR part 600), but
with intellectual property provisions in full compliance with the DOE
intellectual property statutes (i.e., Bayh-Dole statute and 42 U.S.C.
sections 2182 and 5908, as implemented in 10 CFR 600.325); or
(b) An assistance transaction other than a cooperative agreement,
if its intellectual property provisions vary from the Bayh-Dole statute
and 42 U.S.C. sections 2182 and 5908, which require the Government to
retain certain intellectual property rights, and require differing
treatment between large businesses and nonprofit organizations or small
businesses.
Appendix A to Part 603--Applicable Federal Statutes, Executive Orders,
and Government-Wide Regulations
Whether the TIA is a cooperative agreement or a type of
assistance transaction other than a cooperative agreement, the terms
and conditions of the agreement must provide for recipients'
compliance with applicable Federal statutes, Executive Orders and
Government-wide regulations. This appendix lists some of the more
common requirements to aid in identifying ones that apply to a
specific TIA. The list is not intended to be all-inclusive, however;
the contracting officer may need to consult legal counsel to verify
whether there are others that apply (e.g., due to a provision in the
appropriations act for the specific funds in use or due to a statute
or rule that applies to a particular program or type of activity).
A. Certifications
All financial assistance applicants, including applicants
requesting a TIA must comply with the prohibitions concerning
lobbying in a Government-wide common rule that the DOE has codified
at 10 CFR part 601. The ``List of Certifications and Assurances for
SF 424(R&R)'' on the DOE Applicant and Recipient page at http://grants.pr.doe.gov includes the Government-wide certification that
must be provided with a proposal for a financial assistance award,
including a TIA.
B. Assurances That Apply to a TIA
Currently the DOE approach to communicating Federal statutes,
Executive Orders and Government-wide regulations is to provide
potential applicants a list of ``National Policies Assurances to be
Incorporated as Award Terms'' in the program announcement (This list
is available on the Applicant and Recipient Page at http://grants.pr.doe.gov under Award Terms). The contracting officer should
follow this approach for announcements that allow for the award of a
TIA. The contracting officer should normally incorporate by
reference or attach the list of national policy assurances to a TIA
award. Of these requirements, the following four assurances apply to
all TIA:
1. Prohibitions on discrimination on the basis of race, color,
or national origin in Title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d, et seq.) as implemented by DOE regulations at 10 CFR
part 1040. These apply to all financial assistance. They require
recipients to flow down the prohibitions to any subrecipients
performing a part of the substantive RD&D program (as opposed to
suppliers from whom recipients purchase goods or services).
2. Prohibitions on discrimination on the basis of age, in the
Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) as
implemented by DOE regulations at 10 CFR part 1040. They apply to
all financial assistance and require flow down to subrecipients.
3. Prohibitions on discrimination on the basis of handicap, in
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) as
implemented by DOE regulations at 10 CFR part 1041. They apply to
all financial assistance and require flow down to subrecipients.
4. Preferences for use of U.S.-flag air carriers in the
International Air Transportation Fair Competitive Practices Act of
1974 (49 U.S.C. 40118), which apply to uses of U.S. Government
funds.
C. Other Assurances
Additional assurance requirements may apply in certain
circumstances, as follows:
1. If construction work is to be done under a TIA or its
subawards, it is subject to the prohibitions in Executive Order
11246 on discrimination on the basis of race, color, religion, sex,
or national origin.
2. If the RD&D involves human subjects or animals, it is subject
to the requirements codified by the Department of Health and Human
Services at 45 CFR part 46 and implemented by DOE at 10 CFR part 745
and rules on animal acquisition, transport, care, handling and use
in 9 CFR parts 1 through 4, Department of Agriculture rules and
rules of the Department of Interior at 50 CFR parts 10 through 24
and Commerce at 50 CFR parts 217 through 277, respectively. See item
a. or b., respectively, under the heading ``Live organisms''
included on the DOE ``National Policy Assurances to Be Incorporated
As Award Terms'' on the Applicant and Recipient Page.
3. If the RD&D involves actions that may affect the environment,
it is subject to the National Environmental Policy Act, and may also
be to subject to nation policy requirements for flood-prone areas,
coastal zones, coastal barriers, wild and scenic rivers, and
underground sources of drinking water.
4. If the project may impact a historic property, it is subject
to the National Historic Preservation Act of 1966 (16 U.S.C. 470, et
seq.).
Appendix B to Part 603--Flow Down Requirements for Purchases of Goods
and Services
A. As discussed in Sec. 603.705, the contracting officer must
inform recipients of any requirements that flow down to their
purchases of goods or services (e.g., supplies or equipment) under
their TIA. Note that purchases of goods or services differ from
subawards, which are for substantive RD&D program performance.
B. Appendix A to 10 CFR part 600, subpart D lists eight
requirements that commonly apply to firms' purchases under grants or
cooperative agreements. Of those eight, two that apply to all
recipients' purchases under a TIA are:
1. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). A contractor
submitting a bid to the recipient for a contract award of $100,000
or more must file a certification with the recipient that it has not
and will not use Federal appropriations for certain lobbying
purposes. The contractor also must disclose any lobbying with non-
Federal funds that takes place in connection with obtaining any
Federal award. For further details, see 10 CFR part 601, the DOE's
codification of the Government-wide common rule implementing this
amendment.
2. Debarment and suspension. Recipients may not make contract
awards that exceed the simplified acquisition threshold (currently
$100,000) and certain other contract awards may not be made to
parties listed on the General Services Administration (GSA) ``List
of Parties Excluded from Federal Procurement and Nonprocurement
Programs. The GSA list contains the names of parties debarred,
suspended, or otherwise excluded by agencies, and parties declared
ineligible under statutory or regulatory authority other than
Executive Orders 12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR,
1989 Comp., p. 235). For further details, see subparts A through E
of 10 CFR part 606, which is the DOE's codification of the
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Government-wide common rule implementing Executive Orders 12549 and
12689.
C. One other requirement applies only in cases where
construction work is to be performed under the TIA with Federal
funds or recipient funds counted toward required cost sharing:
1. Equal Employment Opportunity. If the TIA includes
construction work, the contracting officer should inform the
recipient that Department of Labor regulations at 41 CFR 60-1.4(b)
prescribe a clause that must be incorporated into construction
awards and subawards. Further details are provided in Appendix B to
10 CFR part 600 subpart D, item 1.
[FR Doc. 05-22475 Filed 11-14-05; 8:45 am]
BILLING CODE 6450-01-P