[Federal Register: September 19, 2008 (Volume 73, Number 183)]
[Rules and Regulations]
[Page 54291-54305]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19se08-1]
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Rules and Regulations
Federal Register
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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DEPARTMENT OF AGRICULTURE
Agricultural Research Service
7 CFR Part 550
RIN-0518-AA03
General Administrative Policy for Non-Assistance Cooperative
Agreements
AGENCY: Agricultural Research Service, REE, USDA.
ACTION: Final rule.
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SUMMARY: This Part establishes uniform guidelines within the Research,
Education, and Economics (REE) mission area on the use, award, and
administration of cooperative agreements awarded under the authority of
7 U.S.C. 3318(b).
DATES: Effective Date: October 1, 2008.
FOR FURTHER INFORMATION CONTACT: Kim Hicks, (301) 504-1141.
SUPPLEMENTARY INFORMATION:
Background
Section 1424 of the Food Security Act of 1985, Public Law No. 99-
198, amended Section 1472(b) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3318(b)) to
authorize the Secretary to use a cooperative agreement as a legal
instrument reflecting a relationship between the Secretary and a State
cooperative institution, State department of agriculture, college,
university, other research or educational institution or organization,
Federal or private agency or organization, individual, or any other
party, if the Secretary determines (a) the objectives of the agreement
will serve a mutual interest of the parties to the agreement in
agricultural research, extension, and teaching activities, including
statistical reporting; and (b) all parties will contribute resources to
the accomplishment of those objectives.
The cooperative agreements authorized by 7 U.S.C. 3318(b) have been
determined to be neither procurement nor assistance in nature and,
therefore, not subject to the provisions of Federal Grant and
Cooperative Agreement Act of 1977. These cooperative agreements are
exempt from Department of Agriculture (USDA) rules and regulations
promulgated at 7 CFR 3015, 3016, and 3019. The agreements covered by
this rule are characterized by mutual interest and benefit to both
parties, and reflect the unique cooperative relationship that exists
between the REE agencies and the various public and private
organizations engaged in the conduct of agricultural research,
extension, and teaching activities.
Although the nonassistance cooperative agreements described in this
rule are substantively different than the Federal assistance-type
cooperative agreements used by most Federal awarding agencies and are
not subject to the grants management Common Rule found at 2 CFR 215,
``Uniform Administrative Requirements for Grants and Agreements With
Institutions of Higher Education, Hospitals and Other Non-profit
Organizations,'' REE has decided to apply many of the provisions of the
Common Rule as a matter of good business practice. Many of the
standards and provisions of the Common Rule have been adopted in whole
or in part in the proposed rule because they embody principles of good
management and sound financial stewardship important to all Federal
assistance and nonassistance awards. Additionally, we have included by
reference specific provisions of other Federal assistance-type or
procurement guidance documents such as 7 CFR 3052, 42 U.S.C. 6962, and
the Cash Management Improvement Act, codified at 31 CFR part 205, for
the same reasons.
Comments
On September 21, 2006, the Office of Management and Budget (OMB)
reviewed the workplan on the proposed rule and determined the docket to
be not significant. The proposed rule was published in the Federal
Register on July 26, 2007, and the comment period ended on September
24, 2007.
We received two comments; one comment that was irrelevant to the
proposed rule and one comment from the University of California,
Oakland, California.
The University of California welcomed the proposed rule and
commended the Agency for its efforts, especially with regard to
explicit adoption of some of the prior approval authorities consistent
with OMB Circular A-21. The University expressed concerns with regard
to resource contributions and payment frequency. These concerns are
duly noted. However, ARS implemented the same guidelines for resource
contributions and payment frequency as part of the general provisions
governing all ARS ``Non-assistance Cooperative Agreements'' on
September 1, 2004. The same requirements are stated verbatim in the
proposed rule. ARS and the University have cooperated successfully
under these guidelines for nearly four years with minimal disruption to
routine business operations. Therefore, ARS is making no changes to the
final rule.
Executive Order 12866 and Regulatory Flexibility Act
This rule has been reviewed under Executive Order 12866. The rule
has been determined to be not significant for the purposes of Executive
Order 12866.
Executive Order 12372
The programs covered by this rule are listed in the Catalog of
Federal Domestic Assistance (CFDA) under the following CFDA numbers:
The Agricultural Research Service found at 10.001; the Economics
Research Service found at 10.250; and the National Agricultural
Statistics Service found at 10.950.
Because this rule does not authorize any programs or program
expenditures, this notice is not subject to Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. (See 7 CFR part 3015, subpart V.)
Executive Order 12988--Civil Justice Reform
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under this rule, (1) State and local laws and
regulations will not be preempted; (2) no retroactive effect will be
given to this rule; and (3) administrative proceedings will not be
required before parties may file suit in court challenging this rule.
[[Page 54292]]
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the information collection or
recordkeeping requirements included in this rule will be submitted for
approval to OMB.
List of Subjects in Part 550
Agricultural research, Non-assistance, Procedural rules, Research,
Science and technology.
0
For the reasons stated in the preamble, the Department of Agriculture,
Agriculture Research Service, amends 7 CFR chapter V by adding part 550
as set forth below.
PART 550--GENERAL ADMINISTRATIVE POLICY FOR NON-ASSISTANCE
COOPERATIVE AGREEMENTS
Subpart A--General
Sec.
550.1 Purpose and scope.
550.2 Definitions.
550.3 Applicability.
550.4 Eligibility.
550.5 Competition.
550.6 Duration.
550.7 Exceptions.
550.8 Conflicting policies and deviations.
550.9 Other applicable regulations.
550.10 Special Award Conditions.
Subpart B--Formation of Agreements
550.11 Purpose.
550.12 Statutory authorization required (REE Agency).
550.13 Mutuality of interest.
550.14 Indirect costs/tuition remission.
550.15 Resource contribution.
550.16 Project development.
550.17 Peer review.
550.18 Assurances/certifications.
Subpart C--Management of Agreements
Financial Management
550.19 Purpose.
550.20 Standards for financial management systems.
550.21 Funding availability.
550.22 Payment.
550.23 Program income.
550.24 Non-Federal audits.
550.25 Allowable costs.
Program Management
550.26 Monitoring program performance.
550.27 Prior approvals.
550.28 Publications and acknowledgement of support.
550.29 Press releases.
550.30 Advertising.
550.31 Questionnaires and survey plans.
550.32 Project supervision and responsibilities.
550.33 Administrative supervision.
550.34 Research misconduct.
550.35 Rules of the workplace.
Equipment/Property Standards
550.36 Purpose of equipment/property standards.
550.37 Title to equipment.
550.38 Equipment.
550.39 Equipment replacement insurance
550.40 Supplies and other expendable property.
550.41 Federally owned property.
550.42 Intangible property.
Procurement Standards
550.43 Purpose of procurement standards.
550.44 Cooperator responsibilities.
550.45 Standards of conduct.
550.46 Competition.
550.47 Cost and price analysis.
550.48 Procurement records.
550.49 Contract administration.
550.50 Contract provisions.
Reports and Records
550.51 Purpose of reports and records.
550.52 Reporting program performance.
550.53 Financial reporting.
550.54 Invention disclosure and utilization reporting.
550.55 Retention and access requirements for records.
Suspension, Termination and Enforcement
550.56 Purpose of suspension, termination, and enforcement.
550.57 Suspension and termination.
550.58 Enforcement.
Subpart D--Close Out
550.59 Purpose.
550.60 Closeout procedures.
550.61 Subsequent adjustments and continuing responsibilities.
550.62 Collection of amounts due.
Authority: Section 1472(b) of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977, as amended (7
U.S.C. 3318(b)).
Subpart A--General
Sec. 550.1 Purpose and scope.
This Part establishes REE-wide standards of USDA's award and
administration of non-assistance cooperative agreements executed under
the authority of Section 1472(b) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C.
3318(b)). These agreements are neither procurement nor assistance in
nature, and therefore, are not subject to the Federal Grant and
Cooperative Agreements Act of 1977. Accordingly, proper use of these
cooperative agreements will promote and facilitate partnerships between
the REE Agency and the Cooperator in support of research, extension and
education projects of mutual benefit to each party.
Sec. 550.2 Definitions.
Accrued expenditures means the charges incurred by the Cooperator
during a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients,
and other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
Acquisition cost of equipment means the net invoice price of the
equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such
as the cost of installation, transportation, taxes, duty or protective
in-transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the Cooperator's regular accounting
practices.
Advance means a payment made to a Cooperator upon its request
either before outlays are made by the Cooperator or through the use of
predetermined payment schedules.
Authorized Departmental Officer (ADO) means the REE Agency's
official delegated authority to negotiate, award, administer, suspend,
and terminate non-assistance cooperative agreements.
Authorized Departmental Officer's Designated Representative (ADODR)
means the REE Agency's technical representative, acting within the
scope of delegated authority, who is responsible for participating with
the Cooperator in the accomplishment of a cooperative agreement's
objectives and monitoring and evaluating the Cooperator's performance.
Award means a non-assistance cooperative agreement which provides
money or in-kind services or property in lieu of money, to an eligible
Cooperator. The term does not include: Financial assistance awards in
the form of grants, cooperative agreements, loans, loan guarantees,
interest subsidies, or insurance; direct payments of any kind to
individuals; and contracts which are required to be entered into and
administered under procurement laws and regulations.
CFR means the Code of Federal Regulations.
Closeout means the process by which a REE Agency determines that
all applicable administrative actions and all required work under the
agreement has been completed by the Cooperator and REE Agency.
Contract means a procurement contract entered into by the
cooperator or a subcontractor of the cooperator pursuant to the
cooperative agreement.
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Cooperator means any State agricultural experiment station, State
cooperative extension service, all colleges and universities, other
research or education institutions and organizations, Federal and
private agencies and organizations, individuals, and any other party,
either foreign or domestic, receiving an award from a REE Agency.
Disallowed costs means those charges incurred under the cooperative
agreement that REE determines to be unallowable, in accordance with the
applicable Federal cost principles or other terms and conditions
contained in the cooperative agreement.
Electronic Funds Transfer (EFT) means electronic payment methods
used to transfer funds to a Cooperator's bank account (including HHS/
PMS).
Equipment means tangible nonexpendable personal property
contributed or acquired by either an REE Agency or by the Cooperator,
having a useful life of more than one year and an acquisition cost of
$5000 or more per unit. However, consistent with Cooperator policy,
lower limits may be established.
Funding period means the period of time when Federal funding is
available for obligation by the Cooperator.
HHS-PMS means the Department of Health and Human Services/Payment
Management System (also see EFT).
i-Edison (Interagency Edison) is a database, which provides Federal
grantee/Cooperator organizations and participating Federal agencies
with the technology to electronically manage extramural invention
portfolios in compliance with Federal reporting requirements.
Intangible property means, trademarks, copyrights, patents and
patent applications.
Obligations means the amounts of orders placed, contracts and
grants awarded, services received and similar transactions during a
given period that require payment by the Cooperator during the same or
a future period.
OMB means the Office of Management and Budget.
Outlays or expenditures means charges made to the project or
program. Outlays and expenditures also include cash disbursements for
direct charges for goods and services, the amount of indirect expense
incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the Cooperator for goods
and other property received, for services performed by employees,
contractors, subrecipients, and other payees and other amounts becoming
owed under programs for which no current services or performance are
required.
Peer Review is a process utilized by REE Agencies to:
(1) Determine if agency sponsored research projects have scientific
merit and program relevance;
(2) Provide peer input and make improvements to project design and
technical approaches;
(3) Provide insight on how to conduct the highest quality research
in support of Agency missions and programs.
Personal property means property of any kind except real property.
It may be tangible, having physical existence, or intangible, having no
physical existence, such as copyrights, patents, or securities.
Principle Investigator (PI) means the individual, designated by the
Cooperator, responsible for directing and monitoring the performance,
the day-to-day activities, and the scientific and technical aspects of
the Cooperator's portion of a REE funded project. The PI works jointly
with the ADODR in the development of project objectives and all other
technical and performance related aspects of the program or project.
See additional responsibilities of PI in Sec. 550.32.
Prior approval means written approval by an ADO evidencing prior
consent.
Program income means gross income earned by the Cooperator that is
directly generated by a supported activity or earned as a result of the
award. Program income includes, but is not limited to, income from fees
for services performed, the use or rental of real or personal property
acquired under federally funded projects, the sale of commodities or
items fabricated under an award, and license fees and royalties on
patents and copyrights. Program income does not include the receipt of
principal on loans, rebates, credits, discounts, etc., or interest
earned on any of them, or interest earned on advances of Federal funds.
Project costs means all allowable costs, incurred by the Cooperator
and the REE Agency toward the completion of the project.
Project period means the period established in the cooperative
agreement during which Federal contributions begin and end.
Property means, unless otherwise stated, personal property,
equipment, intangible property.
Publications mean all types of paper based media including
electronic and audio media.
Real property means land, including land improvements, structures
and appurtenances thereto, but excludes movable machinery and
equipment.
REE Agency means the USDA Agency that enters into a cooperative
agreement with the cooperator.
State Cooperative Institutions are defined in statute as
institutions designated or receiving funds pursuant to:
(1) The First Morrill Act--The Land Grant Institutions.
(2) The Second Morrill Act--The 1890 Institutions.
(3) The Hatch Act of 1887--The State Agricultural Experiment
Stations.
(4) The Smith-Lever Act--The State Extension Services.
(5) The McIntire-Stennis Act of 1962--The Cooperating Forestry
Schools.
(6) Public Law 95-113, Section 1430--A college or university having
an accredited college of veterinary medicine or a department of
veterinary science or animal pathology or similar unit conducting
animal health and disease research in a State Agricultural Experiment
Station.
(7) Public Law 97-98, Section 1475b--Colleges, universities, and
Federal laboratories having a demonstrated capacity in aquaculture
research.
(8) Public Law 97-98, Section 1480--Colleges, universities, and
Federal laboratories having a demonstrated capacity of rangeland
research.
(9) Equity in Educational Land--Grant Status Act of 1994 (7 U.S.C.
301 note) 1994 Institutions.
Subaward means an award in the form of money or in-kind services or
property in lieu of money, made under an award by a Cooperator to an
eligible subrecipient or by a subrecipient to a lower tier
subrecipient.
Subrecipient means the legal entity to which a subaward is made and
which is accountable to the Cooperator for the use of the funds
provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the REE
Agency.
Supplies means all personal property excluding equipment,
intangible property, as defined in this section, and inventions of a
contractor conceived or first actually reduced to practice in the
performance of work under a funding agreement (``subject inventions''),
as defined in 37 CFR part 401, ``Rights to Inventions Made by Nonprofit
Organizations and Small Business Firms Under Government Grants,
Contracts, and Cooperative Agreements.''
Suspension means an action by a REE Agency that temporarily
withdraws Federal sponsorship under an award,
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pending corrective action by the Cooperator or pending a decision to
terminate the award by the REE Agency. Suspension of an award is a
separate action from suspension under Federal Agency regulations
implementing Executive Orders 12549 and 12689, ``Debarment and
Suspension.''
Termination means the cancellation of Federal sponsorship, in whole
or in part, under an agreement at any time prior to the date of
completion.
Unliquidated obligations are the amount of obligations incurred by
the Cooperator for which an outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by
the REE Agency that has not been obligated by the Cooperator and is
determined by deducting the cumulative obligations from the cumulative
funds authorized.
Unrecovered indirect cost means the difference between the amount
awarded and the amount, which could have been awarded under the
Cooperator's approved negotiated indirect cost rate.
U.S.C. means the United States Code.
USDA means the United States Department of Agriculture.
Sec. 550.3 Applicability.
This Part applies to all REE non-assistance cooperative agreements
awarded under the authority of 7 U.S.C. 3318(b).
Sec. 550.4 Eligibility.
REE agencies may enter into non-assistance cooperative agreements
with State agricultural experiment stations, State cooperative
extension services, all colleges and universities, other research or
education institutions and organizations, Federal and private agencies
and organizations, individuals, and any other party, either foreign or
domestic, to further research, extension, or teaching programs in the
food and agricultural sciences. (7 U.S.C. 3318(b)(1)).
Sec. 550.5 Competition.
REE agencies may enter into non-assistance cooperative agreements,
as authorized by this Part, without regard to any requirements for
competition. (7 U.S.C. 3318(e)).
Sec. 550.6 Duration.
REE may enter into non-assistance cooperative agreements for a
period not to exceed five years.
Sec. 550.7 Exceptions.
This Part does not apply to:
(a) USDA Federal Financial Assistance agreements subject to 7 CFR
3015, 3016, or 3019.
(b) Procurement contracts or other agreements subject to the
Federal Acquisition Regulation (FAR) or the Agriculture Acquisition
Regulation (AgAR); on Agreements providing loans or insurance directly
to an individual.
Sec. 550.8 Conflicting policies and deviations.
This Part supersedes and takes precedence over any individual REE
regulations and directives dealing with the award and administration of
non-assistance cooperative agreements entered into under the delegated
authority of 7 U.S.C. 3318(b). This Part may only be superseded, in
whole or in part, by either a specifically worded statutory provision
or a waiver authorized by the USDA-REE-Administrative and Financial
Management (AFM)-Extramural Agreements Division (EAD) or any successor
organization. Responsibility for developing, interpreting, and updating
this Part is assigned to the USDA-REE-AFM-EAD or any successor
organization.
Sec. 550.9 Other applicable regulations.
Related issuances are in other Parts of the CFR and the U.S.C. as
follows:
(a) 7 CFR Part 3017 ``Governmentwide Debarment and Suspension'';
(b) 7 CFR Part 3018 ``New Restrictions on Lobbying'';
(c) 7 CFR Part 3052 ``Audits of States, Local Governments, and
Nonprofit Organizations'';
(d) 7 CFR 3015.175 (b) ``Copyrights'';
(e) 37 CFR 401.14 ``Standard Patent Rights Clause'';
(f) 15 U.S.C. 205a et seq.--``The Metric Conversion Act, as amended
by the Omnibus Trade and Competitiveness Act'';
(g) 42 U.S.C. 6962 ``Resource Conservation and Recovery Act
(RCRA)''.
Sec. 550.10 Special Award Conditions.
(a) REE Agencies may impose special conditions and/or additional
requirements to a non-assistance agreement if a Cooperator:
(1) Has a history of poor performance,
(2) Is not financially stable,
(3) Has a management system that does not meet the standards
prescribed in this Part,
(4) Has not conformed to the terms and conditions of a previous
award, or
(5) Is not otherwise responsible.
(b) Special conditions and/or additional requirements may be added
to an award provided that the Cooperator is notified in writing as to:
the nature of the additional requirements, the reason why the
additional requirements are being imposed, the nature of the corrective
action needed, the time allowed for completing the corrective actions,
and the method for requesting reconsideration of the additional
requirements imposed. Any special conditions shall be promptly removed
once the conditions that prompted them have been corrected.
Subpart B--Formation of Agreements
Sec. 550.11 Purpose.
Sections 550.12 through 550.18 prescribe instructions and other
pre-award matters to be used in establishing a non-assistance
cooperative agreement.
Sec. 550.12 Statutory authorization required (REE Agency).
REE Agencies must have programmatic statutory authority for the
proposed project prior to entering into any non-assistance cooperative
agreement.
Sec. 550.13 Mutuality of interest.
The REE Agency shall document both parties interest in the project.
Mutual interest exists when both parties benefit in the same
qualitative way from the objectives of the agreement. If one party to
the agreement would independently have an interest in the project,
which is shared by the other party, and both parties pool resources to
obtain the end result of the project, mutual interest exists.
Sec. 550.14 Indirect cost/tuition remission.
(a) Indirect Cost. (1) State Cooperative Institutions: Payment of
indirect costs to State Cooperative Institutions in connection with
non-assistance cooperative agreements awarded under the authority of 7
U.S.C. 3318(b) is prohibited. This prohibition does not apply to funds
for international agricultural programs conducted by a State
cooperative institution and administered by the Secretary or to funds
provided by a Federal agency for such cooperative program or project
through a fund transfer, advance or reimbursement. (7 U.S.C. 3319.)
(2) Non-Profit Organizations: Payment of indirect costs to non-
profit institutions in connection with USDA cooperative agreement,
under the authority of 7 U.S.C. 3318(b), is limited to 10 percent of
the total direct cost of the project. (Annual Appropriations Bill for
Agriculture and Related agencies, General Provisions.)
(3) All other cooperating organizations: With the exception of
paragraphs (a)(1) and (2) of this section, payment of indirect costs is
allowable in connection with REE non-assistance cooperative agreements.
Reimbursement
[[Page 54295]]
of indirect costs is limited to the percentage(s) established in the
Cooperator's negotiated indirect cost rate schedule.
(4) In any case, the REE Agency shall not reimburse indirect costs
prior to receipt of the Cooperator's negotiated indirect cost rate
schedule.
(b) Tuition Remission. (1) State Cooperative Institutions:
Reimbursement of tuition expenses to State Cooperative Institutions in
connection with REE non-assistance cooperative agreements is
prohibited. (7 U.S.C. 3319)
(2) All other cooperating organizations: Except for paragraph
(b)(1) of this section, tuition remission is an allowable expense as
determined in accordance with the cost principles applicable to the
Cooperator. REE agencies shall negotiate and approve such payments as
related to the scope and objectives of the non-assistance agreement.
Sec. 550.15 Resource contribution.
Each party must contribute resources towards the successful
completion of the project. Required resource contributions must be
substantial enough to substantiate a true stake in the project as
determined by the ADO.
(a) REE Agency's Contribution. The REE Agency's contribution must
consist of the total in-house costs to the REE Agency and the total
amount to be reimbursed by the REE Agency to the Cooperator for all
allowable costs agreed to in advance as reflected in the cooperative
agreement.
(b) Cooperator's Contribution. (1) The Cooperator's contribution
must be no less than 20 percent of the total of the resource
contributions under the cooperative agreement. Resource contributions
of the Cooperator must consist of a sufficient amount of itemized
direct costs to substantiate a true stake in the project as determined
by the ADO. The Cooperator's contribution must be maintained at 20
percent of Federal funding throughout the life of the cooperative
agreement.
(2) Cooperators share of contributions may consist of ``in-kind''
contributions and may also include unrecoverable indirect costs. Such
costs may be accepted as part of the Cooperator's resource contribution
when all of the following criteria are met:
(i) Costs are verifiable from the Cooperator's records.
(ii) Costs are not included as contributions for any other
federally assisted project or program.
(iii) Costs are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(iv) Costs are allowable under the applicable cost principles.
(v) Costs are not paid by the Federal Government under another
award, except where authorized by Federal statute to be used for cost
sharing or matching.
(vi) Costs conform to other provisions of this Part, as applicable.
(3) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as resource contributions if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services shall be consistent with those paid for similar work in the
Cooperator's organization. In those instances in which the required
skills are not found in the Cooperator organization, rates shall be
consistent with those paid for similar work in the labor market in
which the Cooperator competes for the kind of services involved. In
either case, paid fringe benefits that are reasonable, allowable, and
allocable may be included in the valuation.
(4) When an employer other than the Cooperator furnishes the
services of an employee, these services shall be valued at the
employee's regular rate of pay (plus an amount of fringe benefits that
are reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in the same skill for which the
employee is normally paid.
(5) Donated supplies may include such items as expendable
equipment, office supplies, laboratory supplies or workshop and
classroom supplies. Value assessed to donated supplies included in the
cost sharing or matching share shall be reasonable and shall not exceed
the fair market value of the property at the time of the donation.
(6) The value of donated property shall be determined in accordance
with the usual accounting policies of the Cooperator, with the
following qualifications.
(i) The value of donated land and buildings shall not exceed its
fair market value at the time of donation to the Cooperator as
established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and
certified by a responsible official of the Cooperator.
(ii) The value of donated equipment shall not exceed the fair
market value of equipment of the same age and condition at the time of
donation.
(iii) The value of donated space shall not exceed the fair rental
value of comparable space as established by an independent appraisal of
comparable space and facilities in a privately owned building in the
same locality.
(iv) The value of loaned equipment shall not exceed its fair rental
value.
(v) The following requirements pertain to the Cooperator's
supporting records for in-kind contributions from third parties.
(A) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the Cooperator for its
own employees.
(B) The basis for determining the valuation for personal service,
material, equipment, buildings, and land shall be documented.
Sec. 550.16 Project development.
REE provides partial funding to Cooperators to support research
projects that contribute to REE program objectives and help carry out
the REE mission. The Cooperator's PI and the REE Agency's ADODR shall
jointly develop the following documentation:
(a) Project Plan--A plan that shall be jointly developed by the REE
ADODR and the Cooperator that is compliant with an REE program
requirement. The project plan will utilize the REE provided format for
external peer review.
(b) Statement of Work--A detailed statement of work shall be
jointly planned, developed and prepared by the Cooperator's PI and the
awarding Agency's ADODR consisting of the following:
(1) Objective
(2) Approach
(3) Statement of Mutual Interest
(4) Performance Responsibilities
(5) Mutual Agreements
(c) Budget--A plan that shall be jointly developed by the REE ADODR
and the Cooperator PI outlining the following resource contributions:
(1) Total amount to be reimbursed by the REE Agency to the
Cooperator. (Direct and Indirect Costs as applicable)
(2) Total in-house costs to the REE Agency. (Direct and indirect
costs)
(3) Total in-house costs to the Cooperator. (Direct and indirect
costs)
Sec. 550.17 Peer review.
Upon request of the REE Agency, cooperators may be requested to
provide documentation in support of peer review activities and
cooperator personnel may be requested to participate in peer review
forums to assist the REE Agency in their reviews.
[[Page 54296]]
Sec. 550.18 Assurances/certifications.
(a) Governmentwide Debarment and Suspension (Non procurement)--7
CFR 3017;
(b) Governmentwide requirements for Drug-Free Workplace--7 CFR
3021;
(c) Non-discrimination. The Cooperator assures compliance with the
following requirement: No person in the United States shall, on the
grounds of race, color, national origin, sex, age, religion, political
beliefs, or disability, be excluded from participation in, be denied
the benefits of, or be otherwise subjected to discrimination under any
project or activity under a non-assistance cooperative agreement.
(d) Protection of Human Subjects Requirements: The Cooperator
assures compliance with the following provisions regarding the rights
and welfare of human subjects:
(1) The Cooperator is responsible for safeguarding the rights and
welfare of any human subjects involved in research, development, and
related activities supported by this Agreement. The Cooperator may
conduct research involving human subjects only as prescribed in the
statement of work and as approved by the Cooperator's Cognizant
Institutional Review Board. Prior to conducting such research, the
Cooperator shall obtain and document a legally sufficient informed
consent from each human subject involved. No such informed consent
shall include any exculpatory language through which the subject is
made to waive, or to appear to waive, any of his or her legal rights,
including any release of the Cooperator or its agents from liability
for negligence.
(2) The Cooperator agrees to comply with U.S. Department of Health
and Human Services' regulations regarding human subjects, appearing in
45 CFR part 46 (as amended).
(3) It will comply with REE policy, which is to assure that the
risks do not outweigh either potential benefits to the subjects or the
expected value of the knowledge sought.
(4) Selection of subject or groups of subjects shall be made
without regard to sex, race, color, religion, or national origin unless
these characteristics are factors to be studied.
(e) Animal Welfare Act Requirements: The Cooperator assures
compliance with the Animal Welfare Act, as amended, 7 U.S.C. 2131, et
seq., and the regulations promulgated thereunder by the Secretary of
Agriculture (9 CFR, Subchapter A) pertaining to the care, handling, and
treatment of warm-blooded animals held or used for research, teaching,
or other activities supported by Federal funds. The Cooperator may
request registration of facilities and a current listing of licensed
dealers from the Regional Office of the Animal and Plant Health
Inspection Service (APHIS), USDA, for the Region in which their
facility is located. The location of the appropriate APHIS Regional
Office, as well as information concerning this requirement, may be
obtained by contacting the Senior Staff Officer, Animal Care Staff,
USDA/APHIS, 4700 River Road, Riverdale, Maryland 20737.
(f) Recombinant DNA Research Requirements: The Cooperator assures
that it will assume primary responsibility for implementing proper
conduct on recombinant DNA research and it will comply with the
National Institute of Health Guidelines for Recombinant DNA Research,
as revised.
(1) If the Cooperator wishes to send or receive registered
recombinant DNA material which is subject to quarantine laws, permits
to transfer this material into the U.S. or across state lines may be
obtained by contacting USDA/APHIS/PPQ, Scientific Services--
Biotechnology Permits, 4700 River Road, Unit 133, Riverdale, Maryland
20737. In the event that the Cooperator has not established the
necessary biosafety committee, a request for guidance or assistance may
be made to the USDA Recombinant DNA Research Officer.
(2) [Reserved]
(g) Agriculture Bioterrorism Protection Act Requirements: The
Cooperator assures compliance with the Agriculture Bioterrorism
Protection Act of 2002, as implemented at 7 CFR part 331 and 9 CFR part
121, by agreeing that it will not possess, use, or transfer any select
agent or toxin without a certificate of registration issued by the
Agency.
Subpart C--Management of Agreements
Financial Management
Sec. 550.19 Purpose.
Sections 550.20 through 550.25 of this subpart prescribe standards
for financial management systems and program management requirements.
Sec. 550.20 Standards for financial management systems.
(a) REE agencies shall require Cooperators to relate financial data
to performance data.
(b) Cooperators' financial management systems shall provide for the
following:
(1) Accurate, current, and complete disclosure of the financial
results of each REE sponsored project or program in accordance with the
reporting requirements set forth in Sec. 550.53 of this part. REE
requires financial reporting on an accrual basis; however, the
Cooperator shall not be required to establish an accrual accounting
system. These Cooperators shall develop such accrual data through best
estimate for their reports on the basis of an analysis of the
documentation on hand.
(2) Records that identify the source and application of funds for
federally sponsored activities. These records shall contain information
pertaining to Federal awards, authorizations, obligations, unobligated
balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds,
property and other assets. Cooperators shall adequately safeguard all
such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the Cooperator from the U.S. Treasury and the
issuance or redemption of a check, warrant or payment by other means
for program purposes by the Cooperator. To the extent that the
provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-
453) govern, payment methods of State agencies, instrumentalities, and
fiscal agents shall be consistent with CMIA Treasury-State Agreements
or the CMIA default procedures codified at 31 CFR part 205, ``Rules and
procedures for efficient Federal State funds transfer.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the terms and
conditions of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Where bonds are required in the situations described above, the
bonds shall be obtained from companies holding certificates of
authority as acceptable sureties, as prescribed in 31 CFR part 223,
``Surety Companies Doing Business with the United States.''
Sec. 550.21 Funding availability.
The funding period will begin on the date of final signature,
unless otherwise stated on the agreement, and continue for the project
period specified on the cover page of the cooperative agreement.
[[Page 54297]]
Sec. 550.22 Payment.
(a) Payment methods shall minimize the time elapsing between the
transfer of funds from the U.S. Treasury and the issuance or redemption
of a check, warrant, or payment by other means by the Cooperators.
Payment methods of State agencies or instrumentalities shall be
consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Reimbursement is the preferred method of payment. All payments
to the Cooperator shall be made via EFT.
(1) When the reimbursement method is used, the REE Agency shall
make payment within 30 days after receipt of the billing, unless the
billing is improper.
(2) Cooperators shall be authorized to submit requests for payment
not more than quarterly and not less frequently than annually.
(3) Content of Invoice.
At a minimum, the Cooperator's invoice shall state the following:
(i) The name and address of the Cooperator;
(ii) The name and address of the PI;
(iii) The name and address of the financial officer to whom
payments shall be sent;
(iv) A reference to the cooperative agreement number;
(v) The invoice date;
(vi) The time period covered by the invoice; and
(vii) Total dollar amount itemized by budget categories (labor,
direct costs, and indirect costs, etc.).
(4) To facilitate the EFT process, the Cooperator shall provide the
following information:
(i) The name, addresses, and telephone number of the financial
institution receiving payment;
(ii) The routing transit number of the financial institution
receiving payment;
(iii) The account to which funds are to be deposited; and
(iv) The type of depositor account (checking or savings).
(c) If the REE Agency has determined that reimbursement is not
feasible because the Cooperator lacks sufficient working capital, the
REE Agency may provide cash on an advance basis provided the Cooperator
maintains or demonstrates the willingness to maintain: Written
procedures that minimize the time elapsing between the transfer of
funds and disbursement by the Cooperator, and financial management
systems that meet the standards for fund control and accountability as
established in Sec. 550.20. Under this procedure, the REE Agency shall
advance cash to the Cooperator to cover its estimated disbursement
needs for an initial period. The timing and amount of cash advances
shall be as close as is administratively feasible to the actual
disbursements by the Cooperator organization for direct program or
project costs and the proportionate share of any allowable indirect
costs.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to the requirements of
31 CFR part 205.
(3) Requests for advance payment shall be submitted on SF-270,
``Request for Advance or Reimbursement.'' This form is not to be used
when advance payments are made to the Cooperator automatically through
the use of a predetermined payment schedule or if precluded by special
REE Agency instructions for electronic funds transfer.
(4) Cooperators shall maintain advances of Federal funds in
interest bearing accounts, unless Sec. 550.22(c)(4)(i), (ii), or (iii)
applies.
(i) The Cooperator receives less than $120,000 in Federal awards
per year.
(ii) The best reasonably available interest bearing account would
not be expected to earn interest in excess of $250 per year on Federal
cash balances.
(iii) 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.
(5) For those entities where CMIA and its implementing regulations
do not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, Rockville, MD 20852. The
Cooperator for administrative expense may retain interest amounts up to
$250 per year. State universities and hospitals shall comply with CMIA,
as it pertains to interest. If an entity subject to CMIA uses its own
funds to pay pre-award costs for discretionary awards without prior
written approval from the REE Agency, it waives its right to recover
the interest under CMIA. Thereafter, the REE Agency shall reimburse the
Cooperator for its actual cash disbursements.
(6) Whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the REE Agency to the
Cooperator. The working capital advance method of payment shall not be
used for Cooperators unwilling or unable to provide timely advances to
their subrecipient to meet the subrecipient's actual cash
disbursements.
(d) To the extent available, Cooperators shall disburse funds
available from repayments to and interest earned on program income,
rebates, refunds, contract settlements, audit recoveries and interest
earned on such funds before requesting additional cash payments.
(e) Unless otherwise required by statute, REE Agencies shall not
withhold payments for proper charges made by Cooperators at any time
during the project period unless the conditions of paragraphs (e)(1) or
(2) of this section apply.
(1) A Cooperator has failed to comply with the project objectives,
the terms and conditions of the award, or REE reporting requirements.
(2) The Cooperator owes a debt to the United States which is
subject to offset pursuant to 7 CFR part 3 and Federal Clause
Collection Standard; 31 CFR parts 901 through 904.
(f) Standards governing the use of banks and other institutions as
depositories of funds advanced or reimbursed under awards are as
follows:
(1) Except for situations described in Sec. 550.22(f)(2), REE
Agencies shall not require separate depository accounts for funds
provided to a Cooperator or establish any eligibility requirements for
depositories for funds provided to a Cooperator. However, Cooperators
must be able to account for the receipt, obligation and expenditure of
funds.
(2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.
Sec. 550.23 Program income.
(a) REE Agencies shall apply the standards set forth in this
section in requiring Cooperator organizations to account for program
income related to projects financed in whole or in part with Federal
funds.
(b) Except as provided in Sec. 550.23(f), program income earned
during the project period shall be retained by the Cooperator and shall
be added to funds committed to the project by the REE Agency and
Cooperator and used to further eligible project or program objectives.
(c) Cooperators shall have no obligation to the Federal Government
regarding program income earned after the end of the project period.
(d) Costs incident to the generation of program income may be
deducted from gross income to determine program income, provided these
costs have not been charged to the award.
(e) Proceeds from the sale of property shall be handled in
accordance with the
[[Page 54298]]
requirements of the Property Standards (See Sec. Sec. 550.36 through
550.42).
(f) Cooperators shall have no obligation to the Federal Government
with respect to program income earned from license fees and royalties
for copyrighted material, patents, patent applications, trademarks, and
inventions produced under an award. However, Patent and Trademark
Amendments (35 U.S.C. Chapter 25) apply to inventions made under an
experimental, developmental, or research award.
Sec. 550.24 Non-Federal audits.
(a) Cooperators and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-
133, ``Audits of States, Local Governments, and Non-Profit
Organizations.''
(b) State and local governments shall be subject to the audit
requirements contained in the Single Audit Act Amendments of 1996 (31
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States,
Local Governments, and Non-Profit Organizations.''
(c) For-profit hospitals not covered by the audit provisions of
revised OMB Circular A-133 shall be subject to the audit requirements
of the REE agencies.
(d) Commercial organizations shall be subject to the audit
requirements of the REE Agency or the prime recipient as incorporated
into the award document.
Sec. 550.25 Allowable costs.
For each kind of Cooperator, there is a set of Federal principles
for determining allowable costs. Allowability of costs shall be
determined in accordance with the cost principles applicable to the
entity incurring the costs. Thus, allowability of costs incurred by
State, local or federally recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87,
``Cost Principles for State, Local, and Indian Tribal Governments''
codified at 2 CFR part 225. The allowability of costs incurred by non-
profit organizations is determined in accordance with the provisions of
OMB Circular A-122, ``Cost Principles for Non-Profit Organizations''
codified at 2 CFR part 230. The allowability of costs incurred by
institutions of higher education is determined in accordance with the
provisions of OMB Circular A-21, ``Cost Principles for Educational
Institutions'' codified at 2 CFR 220. The allowability of costs
incurred by hospitals is determined in accordance with the provisions
of Subpart E of 45 CFR part 74. The allowability of costs incurred by
commercial organizations and those non-profit organizations listed in
Appendix C to Circular A-122 (2 CFR part 230) is determined in
accordance with the contract cost principles and procedures of the
Federal Acquisition Regulation (FAR) at 48 CFR part 31.
Program Management
Sec. 550.26 Monitoring program performance.
(a) Cooperators are responsible for managing the day-to-day
operations of REE nonassistance awards using their established controls
and policies, as long as they are consistent with REE requirements.
However, in order to fulfill their role in regard to the stewardship of
Federal funds, REE Agencies monitor their agreements to identify
potential problems and areas where technical assistance might be
necessary. This active monitoring is accomplished through review of
reports and correspondence from the cooperator, audit reports, site
visits, and other information available to the REE Agency. It is the
responsibility of the Cooperator to ensure that the project is being
performed in compliance with the terms and conditions of the award.
(b) Monitoring of a project or activity will continue for as long
as the REE Agency retains a financial interest in the project or
activity. REE agencies reserve the right to monitor a project after it
has been administratively closed out and no longer providing active
support in order to resolve issues of accountability and other
administrative requirements. Additional requirements regarding
reporting and program performance can be found in Sec. Sec. 550.51
through 550.55 of this part.
(c) The REE Agency reserves the right to perform site visits at
Cooperator locations. Access to project or program records shall be
provided in accordance with the provisions of Sec. 550.55.
Sec. 550.27 Prior approvals.
(a) The budget is the financial expression of the project or
program as approved during the award process. REE agencies require that
all Federal costs be itemized on the approved budget. The budget shall
be related to performance for program evaluation purposes.
(b) Cooperators are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions.
(c) Cooperators shall request prior approvals from REE Agencies for
one or more of the following program or budget related reasons.
(1) Incur pre-award costs up to 90 days prior to award date. All
pre-award costs are incurred at the Cooperator's risk (i.e., the REE
Agency is under no obligation to reimburse such costs if for any reason
the Cooperator does not receive an award or if the award is less than
anticipated and inadequate to cover such costs).
(2) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
(3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(4) Extensions of time, within statutory limitations, to complete
project objectives. This extension may not be requested merely for the
purpose of using unobligated balances. The Cooperator shall request the
extension in writing with supporting reasons.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa.
(6) The inclusion of costs that require prior approval in
accordance with OMB Circular A-21, ``Cost Principles for Educational
Institutions,'' (2 CFR part 220), OMB Circular A-122, ``Cost Principles
for Non-Profit Organizations'' (2 CFR part 230) or 45 CFR part 74
Appendix E, or 48 CFR part 31, ``Contract Cost Principles and
Procedures,'' as applicable.
(7) Unless described in the agreement and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies,
material, equipment or general support services.
(d) When requesting approval for budget revisions, Cooperators
shall use the budget form used in the cooperative agreement.
(e) Within 30 calendar days from the date of receipt of the request
for budget revisions, the ADO shall review the request and notify the
Cooperator whether the budget revisions have been approved.
Sec. 550.28 Publications and acknowledgment of support.
(a) Publications. REE Agencies and the Federal Government shall
enjoy a royalty-free, nonexclusive, and irrevocable right to reproduce,
publish or otherwise use, and to authorize others to use, any materials
developed in conjunction with a nonassistance cooperative agreement or
contract under such an agreement.
(b)(1) Cooperators shall acknowledge ARS, Economics Research
Service
[[Page 54299]]
(ERS), National Agricultural Statistics Service (NASS), and the
Cooperative State Research, Education, and Extension Service (CSREES)
support, whether cash or in-kind, in any publications written or
published with Federal support and, if feasible, on any publication
reporting the results of, or describing, a Federally supported activity
as follows:
``This material is based upon work supported by the U.S. Department
of Agriculture, ---- (insert Agency name) ---- under Agreement No.
(Cooperator should enter the applicable agreement number here).''
(2) All such material must also contain the following disclaimer
unless the publication is formally cleared by the awarding agency:
``Any opinions, findings, conclusion, or recommendations expressed
in this publication are those of the author(s) and do not necessarily
reflect the view of the U.S. Department of Agriculture.''
(3) Any public or technical information related to work carried out
under a non assistance cooperative agreement shall be submitted by the
developing party to the other for advice and comment. Information
released to the public shall describe the contributions of both parties
to the work effort. In the event of a dispute, a separate publication
may be made with effective statements of acknowledgment and disclaimer.
(c) Media. Cooperators shall acknowledge awarding Agency support,
as indicated in Sec. 550.28(b) above, in any form of media (print,
DVD, audio production, etc.) produced with Federal support that has a
direct production cost to the Cooperator of over $5,000. Unless the
terms of the Federal award provide otherwise, this requirement does not
apply to:
(1) Media produced under mandatory or formula grants or under sub
awards.
(2) Media produced as research instruments or for documenting
experimentation or findings and intended for presentation or
distribution to a USDA/REE audience.
Sec. 550.29 Press releases.
Press releases or other forms of public notification will be
submitted to the REE agency for review prior to release to the public.
The REE Agency will be given the opportunity to review, in advance, all
written press releases and any other written information to be released
to the public by the Cooperator, and require changes as deemed
necessary, if the material mentions by name the REE Agency or the USDA,
or any USDA employee or research unit or location.
Sec. 550.30 Advertising.
The Cooperator will not refer in any manner to the USDA or agencies
thereof in connection with the use of the results of the project
without prior specific written authorization by the awarding Agency.
Information obtained as a result of the project will be made available
to the public in printed or other forms by the awarding Agency at its
discretion. The Cooperator will be given due credit for its cooperation
in the project. Prior approval is required.
Sec. 550.31 Questionnaires and survey plans.
The Cooperator is required to submit to the REE Agency copies of
questionnaires and other forms for clearance in accordance with the
Paperwork Reduction Act of 1980 and 5 CFR part 1320.
Sec. 550.32 Project supervision and responsibilities.
(a) The Cooperator is responsible and accountable for the
performance and conduct of all Cooperator employees assigned to the
project. The REE Agency does not have authority to supervise Cooperator
employees or engage in the employer employee relationship.
(b) The PI shall:
(1) Work jointly with the ADODR in the development of the project
statement of work;
(2) Work jointly with the ADODR in the development of the project
budget;
(3) Report, and obtain approval for, any change in the project
budget;
(4) Report, and obtain approval for, any change in the scope or
objectives of the project;
(5) Assure that technical project performance and financial status
reports are submitted on a timely basis in accordance with the terms
and conditions of the award;
(6) Advise the ADODR of any issues that may affect the timely
completion of the project;
(7) Assure that the Cooperator meets its commitments under the
terms and conditions of the non-assistance agreement;
(8) Assure that appropriate acknowledgements of support are
included in all publications, in accordance with Sec. 550.28 of this
Part.
(9) Assure that inventions are appropriately reported in accordance
with Sec. 550.54 of this Part; and
(10) Upon request, provide the REE Agency with a project plan for
use for external peer review.
Sec. 550.33 Administrative supervision.
REE employees are prohibited from engaging in matters related to
cooperator employer/employee relations such as personnel, performance
and time management issues. The cooperator is solely responsible for
the administrative supervision of its employees.
Sec. 550.34 Research misconduct.
(a) The Cooperator bears the primary responsibility for prevention
and detection of research misconduct and for the inquiry, investigation
and adjudication of research misconduct alleged to have occurred in
association with their own institution.
(b) The Cooperator shall:
(1) maintain procedures for responding to allegations or instances
of research misconduct that has the following components:
(i) Objectivity;
(ii) Due process;
(iii) Whistle blower protection;
(iv) Confidentiality;
(v) Timely resolution;
(2) Promptly conduct an inquiry into any allegation of research
misconduct;
(3) Conduct an investigation if an inquiry determines that the
allegation or apparent instance of research misconduct has substance;
(4) Provide appropriate separation of responsibilities between
those responsible for inquiry and investigation, and those responsible
for adjudication;
(5) Advise REE Agency of outcome at end of inquiries and
investigations into allegations or instances of research misconduct;
and
(6) Upon request, provide the REE Agency, upon request, hard copy
(or website address) of their policies and procedures related to
research misconduct.
(c) Research misconduct or allegations of research misconduct shall
be reported to the USDA Research Integrity Officer (RIO) and/or to the
USDA, Office of Inspector General (OIG) Hotline.
(1) The USDA RIO can be reached at: USDA Research Integrity
Officer, 214-W Whitten Building, Washington, DC 20250, Telephone: 202-
720-5923, Email: researchintegrity@usda.gov.
(2) The USDA OIG Hotline can be reached on: 1-800-424-9121.
Sec. 550.35 Rules of the workplace.
Cooperator employees, while engaged in work at the REE Agency's
facilities, will abide by the Agency's standard operating procedures
regarding the maintenance of laboratory notebooks, dissemination of
information, equipment operation standards, hours of work, conduct, and
other incidental matters stated in the rules and regulations of the
Agency.
[[Page 54300]]
Equipment/Property Standards
Sec. 550.36 Purpose of equipment/property standards.
Sections 550.37 through 550.42 of this part set forth uniform
standards governing management and disposition of property furnished by
the Federal Government or acquired by the Cooperator with funds
provided by the Federal Government. The Cooperator may use its own
property management standards and procedures provided it observes other
applicable provisions of this Part.
Sec. 550.37 Title to equipment.
(a) As authorized by 7 U.S.C. 3318(d), title to expendable and
nonexpendable equipment, supplies, and other tangible personal property
purchased with Federal funding in connection with a non assistance
cooperative agreement shall vest in the Cooperator from date of
acquisition unless otherwise stated in the cooperative agreement.
(b) Notwithstanding any other provision of this rule the REE Agency
may, at its discretion, retain title to equipment described in
paragraph (a) of this section that is or may be purchased with Federal
funds when the REE agency determines that it is in the best interest of
the Federal Government.
Sec. 550.38 Equipment.
(a) The Cooperator shall not use equipment acquired with Federal
funds to provide services to non-Federal outside organizations for a
fee that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute, for as long as the
Federal Government retains an interest in the equipment.
(b) The Cooperator shall use the equipment in the project or
program for which it was acquired as long as needed, whether or not the
project or program continues to be supported by Federal funds and shall
not encumber the property without approval of the REE Agency. When no
longer needed for the original project or program, the Cooperator shall
use the equipment in connection with its other federally-sponsored
activities, in the following order of priority:
(1) Activities sponsored by the REE Agency which funded the
original project, then
(2) Activities sponsored by other Federal awarding agencies.
(c) During the time that equipment is used on the project or
program for which it was acquired, the Cooperator shall make it
available for use on other projects or programs if such other use will
not interfere with the work on the project or program for which the
equipment was originally acquired as may be determined by the REE
Agency. First preference for such other use shall be given to other
projects or programs sponsored by the REE Agency that financed the
equipment; second preference shall be given to projects or programs
sponsored by other Federal awarding agencies. If equipment is owned by
the Federal Government, use on other activities not sponsored by the
Federal Government shall be permissible if authorized by the REE
Agency. User charges shall be treated as program income.
(d) When acquiring replacement equipment, unless otherwise directed
by the REE Agency, the Cooperator shall use the equipment to be
replaced as trade-in or sell the equipment and use the proceeds to
offset the costs of the replacement equipment subject to the approval
of the REE Agency.
(e) The Cooperator's property management standards for equipment
acquired with Federal funds and federally owned equipment shall include
all of the following.
(1) Equipment records shall be maintained accurately and shall
include the following information:
(i) A description of the equipment;
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number;
(iii) Source of the equipment, including the award number;
(iv) Whether title vests in the Cooperator or the Federal
Government;
(v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost;
(vi) Information from which one can calculate the percentage of
Federal participation in the cost of the equipment (not applicable to
equipment furnished by the Federal Government);
(vii) Location and condition of the equipment and the date the
information was reported;
(viii) Unit acquisition cost; and
(ix) Ultimate disposition data, including date of disposal and
sales price or the method used to determine current fair market value
where a Cooperator compensates the REE Agency for its share.
(2) Equipment owned by the Federal Government shall be identified
to indicate Federal ownership.
(3) A physical inventory of equipment shall be taken and the
results reconciled with the equipment records at least once every two
years and a copy provided to the ADO responsible for the agreement. Any
differences between quantities determined by the physical inspection
and those shown in the accounting records shall be investigated to
determine the causes of the difference. The Cooperator shall, in
connection with the inventory, verify the existence, current
utilization, and continued need for the equipment.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment. Any
loss, damage, or theft of equipment shall be investigated and fully
documented. If the Federal Government owns the equipment, the
Cooperator shall promptly notify the REE Agency.
(5) Adequate maintenance procedures shall be implemented to keep
the equipment in good condition.
(6) Where the Cooperator is authorized or required to sell the
equipment, proper sales procedures shall be established which provide
for competition to the extent practicable and result in the highest
possible return.
(f) When the Cooperator no longer needs the equipment, the
equipment shall be used for other activities in accordance with the
following standards. For equipment with a current per unit fair market
value of $5,000 or more, the Cooperator may retain the equipment for
other uses provided that compensation is made to the original REE
Agency or its successor. The amount of compensation shall be computed
by applying the percentage of Federal participation in the cost of the
original project or program to the current fair market value of the
equipment. If the Cooperator has no need for the equipment, the
Cooperator shall request disposition instructions from the REE Agency.
The REE Agency shall determine whether the equipment can be used to
meet the Agency's requirements. If no requirement exists within that
Agency, the availability of the equipment shall be reported to the
General Services Administration (GSA) by the REE Agency to determine
whether a requirement for the equipment exists in other Federal
agencies. The REE Agency shall issue instructions to the Cooperator no
later than 120 calendar days after the Cooperator's request and the
following procedures shall govern.
(1) If so instructed or if disposition instructions are not issued
within 120 calendar days after the Cooperator's request, the Cooperator
shall sell the equipment and reimburse the REE Agency an amount
computed by applying to the sales proceeds the percentage of Federal
participation in the cost of the original project or program. However,
the Cooperator shall be permitted to deduct and retain from the Federal
share $500 or ten percent of
[[Page 54301]]
the proceeds, whichever is less, for the Cooperator's selling and
handling expenses.
(2) If the Cooperator is instructed to ship the equipment
elsewhere, the Cooperator shall be reimbursed by the Federal Government
by an amount which is computed by applying the percentage of the
Cooperator's participation in the cost of the original project or
program to the current fair market value of the equipment, plus any
reasonable shipping or interim storage costs incurred.
(3) If the Cooperator is instructed to otherwise dispose of the
equipment, the Cooperator shall be reimbursed by the REE Agency for
such costs incurred in its disposition.
(4) The REE Agency may reserve the right to transfer the title to
the Federal Government or to a third party named by the Federal
Government when such third party is otherwise eligible under existing
statutes. Such transfer shall be subject to the following standards.
(i) The equipment shall be appropriately identified in the award or
otherwise made known to the Cooperator in writing.
(ii) The REE Agency shall issue disposition instructions within 120
calendar days after receipt of a final inventory. The final inventory
shall list all equipment acquired with federal funds and federally
owned equipment. If the REE Agency fails to issue disposition
instructions within the 120 calendar days, the Cooperator shall apply
the standards of this section, as appropriate.
(iii) When the REE Agency exercises its right to take title, the
equipment shall be subject to the provisions for federally owned
equipment.
Sec. 550.39 Equipment replacement insurance.
If required by the terms and conditions of the award, the
Cooperator shall provide adequate insurance coverage for replacement of
equipment acquired with Federal funds in the event of loss or damage to
such equipment.
Sec. 550.40 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest in
the Cooperator upon acquisition. If there is a residual inventory of
unused supplies exceeding $5,000 in total aggregate value upon
termination or completion of the project or program and the supplies
are not needed for any other federally-sponsored project or program,
the Cooperator shall retain the supplies for use on non-Federal
sponsored activities or sell them, but shall, in either case,
compensate the Federal Government for its share. The amount of
compensation shall be computed in the same manner as for equipment.
(b) The Cooperator shall not use supplies acquired with Federal
funds to provide services to non-Federal outside organizations for a
fee that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute as long as the
Federal Government retains an interest in the supplies.
Sec. 550.41 Federally-owned property.
(a) Title to federally-owned property remains vested in the Federal
Government. Cooperators shall submit annually an inventory listing of
federally-owned property in their custody to the REE Agency. Upon
completion of the award or when the property is no longer needed, the
Cooperator shall report the property to the REE Agency for further
Federal Agency utilization.
(b) If the REE Agency has no further need for the property, it
shall be declared excess and reported to the GSA, unless the REE Agency
has statutory authority to dispose of the property by alternative
methods (e.g., the authority provided by the Federal Technology
Transfer Act (15 U.S.C. 3710 (i)) to donate research equipment to
educational and non-profit organizations in accordance with Executive
Order 12999, ``Education technology: ensuring Opportunity for all
children in the next century.'' Appropriate instructions shall be
issued to the Cooperator by the REE Agency.
Sec. 550.42 Intangible property.
(a) The Cooperator may copyright any work that is subject to
copyright and was developed, by the Cooperator, or jointly by the
Federal Government and the Cooperator, or for which ownership was
purchased, under a cooperative agreement. REE Agencies reserve a
royalty-free, nonexclusive and irrevocable right to reproduce, publish,
or otherwise use the work for Federal purposes, and to authorize others
to do so for Federal purposes.
(b) Cooperators are subject to applicable regulations governing
patents and inventions, including government-wide regulations issued by
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts and Cooperative Agreements.''
(c) The REE Agency has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under a cooperative agreement; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research
findings produced under a cooperative agreement that were used by the
Federal Government in developing an Agency action that has the force
and effect of law, the REE Agency shall request, and the Cooperator
shall provide, within a reasonable time, the research data so that they
can be made available to the public through the procedures established
under the FOIA. If the REE Agency obtains the research data solely in
response to a FOIA request, the Agency may charge the requester a
reasonable fee equaling the full incremental cost of obtaining the
research data. This fee should reflect costs incurred by the Agency,
the Cooperator, and applicable subrecipients. This fee is in addition
to any fees the Agency may assess under the FOIA (5 U.S.C.
552(a)(4)(A)).
(2) The following definitions apply for purposes of paragraph (d)
of this section:
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews,
or communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
(A) Trade secrets, commercial information, materials necessary to
be held confidential by a researcher until they are published, or
similar information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific
or technical journal;
(B) A Federal Agency publicly and officially cites the research
findings in support of an Agency action that has the force and effect
of law; or
[[Page 54302]]
(C) Used by the Federal Government in developing an Agency action
that has the force and effect of law is defined as when an Agency
publicly and officially cites the research findings in support of an
Agency action that has the force and effect of law.
(e) All rights, title, and interest in any Subject Invention made
solely by employee(s) of the REE Agency shall be owned by the REE
Agency. All rights, title, and interest in any Subject Invention made
solely by at least one (1) employee of the REE Agency and at least one
(1) employee of the Cooperator shall be jointly owned by the Agency and
the Cooperator, subject to the provisions of 37 CFR part 401.
(f) REE Agencies shall have a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced for or on
behalf of the United States the subject invention throughout the world.
Procurement Standards
Sec. 550.43 Purpose of procurement standards.
Sections 44 through 50 set forth standards for use by Cooperators
in establishing procedures for the procurement of supplies and other
expendable property, equipment and other services with Federal funds.
These standards are furnished to ensure that such materials and
services are obtained in an effective manner and in compliance with the
provisions of applicable Federal statutes and executive orders. No
additional procurement standards or requirements shall be imposed by
the Federal awarding agencies upon Cooperators, unless specifically
required by Federal statute or executive order or approved by OMB.
Sec. 550.44 Cooperator responsibilities.
The standards contained in this section do not relieve the
Cooperator of the contractual responsibilities arising under its
contract(s). The Cooperator is the responsible authority, without
recourse to the REE Agency, regarding the settlement and satisfaction
of all contractual and administrative issues arising out of
procurements entered into in support of a nonassistance agreement. This
includes disputes, claims, award protests, source evaluation or other
matters of a contractual nature. Matters concerning violation of
statute are to be referred to such Federal, State or local authority,
as may have proper jurisdiction.
Sec. 550.45 Standards of conduct.
The Cooperator shall maintain written standards of conduct
governing the performance of its employees engaged in the award and
administration of contracts. No employee, officer, or agent shall
participate in the selection, award, or administration of a contract
supported by Federal funds if a real or apparent conflict of interest
would be involved. Such a conflict would arise when the employee,
officer, or agent, any member of his or her immediate family, his or
her partner, or an organization which employs or is about to employ any
of the parties indicated herein, has a financial or other interest in
the firm selected for an award. The officers, employees, and agents of
the Cooperator shall neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors, or parties to
subagreements. However, Cooperators may set standards for situations in
which the financial interest is not substantial or the gift is an
unsolicited item of nominal value. The standards of conduct shall
provide for disciplinary actions to be applied for violations of such
standards by officers, employees, or agents of the Cooperator.
Sec. 550.46 Competition.
(a) All procurement transactions shall be conducted in a manner to
provide, to the maximum extent practical, open and free competition.
The Cooperator shall be alert to organizational conflicts of interest
as well as noncompetitive practices among contractors that may restrict
or eliminate competition or otherwise restrain trade. In order to
ensure objective contractor performance and eliminate unfair
competitive advantage, contractors that develop or draft
specifications, requirements, statements of work, invitations for bids
and/or requests for proposals shall be excluded from competing for such
procurements. Awards shall be made to the bidder or offeror whose bid
or offer is responsive to the solicitation and is most advantageous to
the Cooperator, price, quality and other factors considered.
Solicitations shall clearly set forth all requirements that the bidder
or offer shall fulfill in order for the bid or offer to be evaluated by
the Cooperator. Any and all bids or offers may be rejected when it is
in the Cooperator's interest to do so.
(b) Contracts shall be made only with responsible contractors who
possess the potential ability to perform successfully under the terms
and conditions of the proposed procurement. Consideration shall be
given to such matters as contractor integrity, record of past
performance, financial and technical resources or accessibility to
other necessary resources. In certain circumstances, contracts with
certain parties are restricted by agencies' implementation of Executive
Orders 12549 and 12689, ``Debarment and Suspension.''
(c) Recipients shall, on request, make available for the REE
Agency, pre-award review and procurement documents, such as request for
proposals or invitations for bids, independent cost estimates, etc.
Sec. 550.47 Cost and price analysis.
Some form of cost or price analysis shall be made and documented in
the procurement files in connection with every procurement action.
Price analysis may be accomplished in various ways, including the
comparison of price quotations submitted, market prices and similar
indicia, together with discounts. Cost analysis is the review and
evaluation of each element of cost to determine reasonableness,
allocability and allowability.
Sec. 550.48 Procurement records.
Procurement records and files for purchases in excess of the small
purchase threshold shall include the following at a minimum:
(a) Basis for contractor selection;
(b) Justification for lack of competition when competitive bids or
offers are not obtained; and
(c) Basis for award cost or price.
Sec. 550.49 Contract administration.
A system for contract administration shall be maintained to ensure
contractor conformance with the terms, conditions and specifications of
the contract and to ensure adequate and timely followup of all
purchases. Recipients shall evaluate contractor performance and
document, as appropriate, whether contractors have met the terms,
conditions and specifications of the contract.
Sec. 550.50 Contract provisions.
The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all
contracts. The following provisions shall also be applied to
subcontracts.
(a) Contracts in excess of the simplified acquisition threshold
shall contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in which a
contractor violates or breaches the contract terms, and provide for
such remedial actions as may be appropriate.
(b) All contracts in excess of the simplified acquisition threshold
shall contain suitable provisions for termination by the cooperator,
including the manner by which termination shall
[[Page 54303]]
be effected and the basis for settlement. In addition, such contracts
shall describe conditions under which the contract may be terminated
for default as well as conditions where the contract may be terminated
because of circumstances beyond the control of the contractor.
(c) All negotiated contracts (except those for less than the
simplified acquisition threshold) awarded by recipients shall include a
provision to the effect that the recipient, the REE Agency, the
Comptroller General of the United States, or any of their duly
authorized representatives, shall have access to any books, documents,
papers and records of the contractor which are directly pertinent to a
specific program for the purpose of making audits, examinations,
excerpts and transcriptions.
(d) All contracts, including small purchases, awarded by recipients
and their contractors shall contain the procurement provisions of
Appendix A, 2 CFR part 215, as applicable.
Reports and Records
Sec. 550.51 Purpose of reports and records.
Sections 550.52 through 550.55 set forth the procedures for
monitoring and reporting on the Cooperator's financial and program
performance and the necessary reporting format. They also set forth
record retention requirements, and property and equipment inventory
reporting requirements.
Sec. 550.52 Reporting program performance.
(a) The REE Agency shall prescribe the frequency with which
performance reports shall be submitted. Performance reports shall not
be required more frequently than quarterly or, less frequently than
annually. Annual reports shall be due 90 calendar days after the grant
year; quarterly or semi-annual reports shall be due 30 days after the
reporting period. The REE Agency may require annual reports before the
anniversary dates of multiple year agreements in lieu of these
requirements. The final performance reports are due 90 calendar days
after the expiration or termination of the period of agreement.
(b) When required, performance reports shall contain, for each
award, detailed information on each of the following.
(1) A comparison of actual accomplishments with the goals and
objectives established for the period and the findings of the
investigator. Whenever appropriate and the output of programs or
projects can be readily quantified, such quantitative data should be
related to cost data for computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(c) Cooperators shall not be required to submit more than the
original and two copies of performance reports.
(d) Cooperators shall immediately notify the REE Agency of
developments that have a significant impact on the award-supported
activities. Also, notification shall be given in the case of problems,
delays, or adverse conditions which materially impair the ability to
meet the objectives of the award. This notification shall include a
statement of the action taken or contemplated, and any assistance
needed to resolve the situation.
Sec. 550.53 Financial reporting.
Financial Status Report.
(a) Each REE Agency shall require Cooperators to report the status
of funds as approved in the budget for the cooperative agreement. A
financial status report shall consist of the following information:
(1) The name and address of the Cooperator.
(2) The name and address of the PI.
(3) The name, address, and signature of the financial officer
submitting the report.
(4) A reference to the cooperative agreement.
(5) Period covered by the report.
(6) An itemization of actual dollar amounts expended on the project
during the reporting period (in line with the approved budget) and
cumulative totals expended for each budget category from the starting
date of the cooperative agreement.
(b) The REE Agency shall determine the frequency of the Financial
Status Report for each project or program, considering the size and
complexity of the particular project or program. However, the report
shall not be required more frequently than quarterly or less frequently
than annually. A final report shall be required at the completion of
the agreement.
(c) The REE Agency shall require Cooperators to submit the
financial status report (an original and no more than two copies) no
later than 30 days after the end of each specified reporting period for
quarterly and semi-annual reports, and 90 calendar days for annual and
final reports. Extensions of reporting due dates may be approved by the
REE Agency upon request of the Cooperator.
Sec. 550.54 Invention disclosure and utilization reporting.
(a) The Cooperator shall report Invention Disclosures and
Utilization information electronically via i-Edison Web Interface at:
www.iedison.gov.
(b) If access to InterAgency Edison is unavailable, the invention
disclosure should be sent directly to: Division of Extramural
Intentions and Technology Resources, 6705 Rockledge Drive, (RKL 1),
Suite 310, MSC 7980, Bethesda, Maryland 20892-7750.
Sec. 550.55 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and
access to records for awards to Cooperators. REE agencies shall not
impose any other record retention or access requirements upon
Cooperators, excepting as set out in Sec. 550.42(d).
(b) Financial records, supporting documents, statistical records,
and all other records pertinent to an award shall be retained for a
period of 3 years from the date of submission of the final expenditure
report or, for awards that are renewed quarterly or annually, from the
date of the submission of the quarterly or annual financial report, as
authorized by the REE Agency. The only exceptions are the following:
(1) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained until
all litigation, claims or audit findings involving the records have
been resolved and final action taken;
(2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition;
(3) When records are transferred to or maintained by the REE
Agency, the 3-year retention requirement is not applicable to the
Cooperator;
(4) Indirect cost rate proposals, cost allocations plans, etc., as
specified in paragraph (f) of this section.
(c) Copies of original records may be substituted for the original
records if authorized by the REE Agency.
(d) The REE Agency shall request transfer of certain records to its
custody from Cooperators when it determines that the records possess
long-term retention value. However, in order to avoid duplicate record
keeping, a REE Agency may make arrangements for Cooperators to retain
any records that are continuously needed for joint use.
(e) The REE Agency, the Inspector General, Comptroller General of
the United States, or any of their duly authorized representatives,
have the right of timely and unrestricted access
[[Page 54304]]
to any books, documents, papers, or other records of Cooperators that
are pertinent to the awards, in order to make audits, examinations,
excerpts, transcripts and copies of such documents. This right also
includes timely and reasonable access to a Cooperator's personnel for
the purpose of interview and discussion related to such documents. The
rights of access in this paragraph are not limited to the required
retention period, but shall last as long as records are retained.
(f) No Cooperator shall disclose its records that are pertinent to
an award until the Cooperator provides notice of the intended
disclosure with copies of the relevant records to the REE Agency.
(g) Indirect cost rate proposals, cost allocations plans, etc.
Paragraphs (g)(1) and (g)(2) of this section apply to the following
types of documents, and their supporting records: Indirect cost rate
computations or proposals, cost allocation plans, and any similar
accounting computations of the rate at which a particular group of
costs is chargeable (such as computer usage charge back rates or
composite fringe benefit rates).
(1) If submitted for negotiation. If the Cooperator submits to the
REE Agency or the subrecipient submits to the Cooperator the proposal,
plan, or other computation to form the basis for negotiation of the
rate, then the 3-year retention period for its supporting records
starts on the date of such submission.
(2) If not submitted for negotiation. If the Cooperator is not
required to submit to the REE Agency or the subrecipient is not
required to submit to the Cooperator the proposal, plan, or other
computation for negotiation purposes, then the 3-year retention period
for the proposal, plan, or other computation and its supporting records
starts at the end of the fiscal year (or other accounting period)
covered by the proposal, plan, or other computation.
Suspension, Termination, and Enforcement
Sec. 550.56 Purpose of suspension, termination, and enforcement.
Sections Sec. 550.57 and Sec. 550.58 of this part set forth
uniform suspension, termination, and enforcement procedures.
Sec. 550.57 Suspension and termination.
Awards may be suspended or terminated in whole or in part if
paragraphs (a), (b), or (c) of this section apply.
(a) The REE Agency may terminate the award, if a Cooperator
materially fails to comply with the provisions of this rule or the
terms and conditions of an award.
(b) The REE Agency with the consent of the Cooperator, in which
case the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial termination,
the portion to be terminated.
(c) If costs are allowed under an award, the responsibilities of
the Cooperator referred to in Sec. 550.32, including those for
property management as applicable, shall be considered in the
termination of the award, and provision shall be made for continuing
responsibilities of the Cooperator after termination, as appropriate.
Sec. 550.58 Enforcement.
(a) Remedies for noncompliance. If a Cooperator materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of
award, the REE Agency may, in addition to imposing any of the special
conditions outlined in Sec. 550.10, take one or more of the following
actions.
(1) Temporarily withhold cash payments pending correction of the
deficiency by the Cooperator or more severe enforcement action by the
REE Agency.
(2) Disallow all or part of the cost of the activity or action not
in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Effects of suspension and termination. Costs of a Cooperator
resulting from obligations incurred by the Cooperator during a
suspension or after termination of an award are not allowable unless
the REE Agency expressly authorizes them in the notice of suspension or
termination or thereafter. Other Cooperator costs during suspension or
after termination which are necessary and not reasonably avoidable are
allowable if paragraphs (b)(1) and (2) of this section apply.
(1) The costs result from obligations which were properly incurred
by the Cooperator before the effective date of suspension or
termination, are not in anticipation of it, and in the case of a
termination, are non-cancellable.
(2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(3) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude a Cooperator from being subject to
debarment and suspension under Executive Orders 12549 and 12689 and
USDA implementing regulations (7 CFR part 3017).
Subpart D--Close Out
Sec. 550.59 Purpose.
Sections 550.60 through 550.62 of this part contain closeout
procedures and other procedures for subsequent disallowances and
adjustments.
Sec. 550.60 Closeout procedures.
(a) Cooperators shall submit, within 90 calendar days after the
date of completion of the award, all financial, performance, and other
reports as required by the terms and conditions of the award. The REE
Agency may approve extensions to the reporting period when requested by
the Cooperator.
(b) Unless the REE Agency authorizes an extension, a Cooperator
shall liquidate all obligations incurred under the award not later than
90 calendar days after the funding period or the date of completion as
specified in the terms and conditions of the award or in Agency
implementing instructions.
(c) The REE Agency shall make prompt payments to a Cooperator for
allowable reimbursable costs under the award being closed out.
(d) The Cooperator shall promptly refund any balance of unobligated
cash advanced or paid by the REE Agency that it is not authorized to
retain for use in other projects. OMB Circular A-129 governs unreturned
amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, the
REE Agency shall make a settlement for any upward or downward
adjustments to the Federal share of costs after closeout reports are
received.
(f) The Cooperator shall account for any personal property acquired
with Federal funds or received from the Federal Government in
accordance with Sec. Sec. 550.36 through 550.42.
(g) In the event a final audit has not been performed prior to the
closeout of an award, the REE Agency shall retain the right to recover
an appropriate amount after fully considering the recommendations on
disallowed costs resulting from the final audit.
Sec. 550.61 Subsequent adjustments and continuing responsibilities.
The closeout of an award does not affect any of the following:
[[Page 54305]]
(a) The right of the REE Agency to disallow costs and recover funds
on the basis of a later audit or other review.
(b) The obligation of the Cooperator to return any funds due as a
result of later refunds, corrections, or other transactions.
(c) Audit requirements in Sec. 550.24.
(d) Property management requirements in Sec. Sec. 550.36 through
550.42.
(e) Records retention as required in Sec. 550.56.
Sec. 550.62 Collection of amounts due.
(a) Any funds paid to a Cooperator in excess of the amount to which
the Cooperator is finally determined to be entitled under the terms and
conditions of the award constitute a debt to the Federal Government. If
not paid within a reasonable period after the demand for payment, the
REE Agency may in accordance with 7 CFR part 3, reduce the debt by--
(1) Making an administrative offset against other requests for
reimbursements, or
(2) Withholding advance payments otherwise due to the Cooperator,
or
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, the REE Agency shall
charge interest on an overdue debt in accordance with 31 CFR part 900,
``Federal Claims Collection Standards.''
Gale A. Buchanan,
Chief Scientist, USDA, Under Secretary, Research, Education, and
Economics.
[FR Doc. E8-21941 Filed 9-18-08; 8:45 am]
BILLING CODE 3410-03-P