[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 32CFR37.560]



[Page 235-236]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents

 

                 Subpart E_Pre-Award Business Evaluation

 

Sec.  37.560  Must I be able to estimate project expenditures precisely 

in order to justify use of a fixed-support TIA?



    (a) To use a fixed-support TIA, rather than an expenditure-based 

TIA, you must have confidence in your estimate of the expenditures 

required to achieve well-defined outcomes. Therefore, you must work 

carefully with program officials to select outcomes that, when the 

recipient achieves them, are reliable indicators of the amount of effort 

the recipient expended. However, your estimate of the required 

expenditures need not be a precise dollar amount, as illustrated by the 

example in paragraph (b) of this section, if:

    (1) The recipient is contributing a substantial share of the costs 

of achieving the outcomes, which must meet the criteria in Sec.  

37.305(a); and

    (2) You are confident that the costs of achieving the outcomes will 

be at



[[Page 236]]



least a minimum amount that you can specify and the recipient is willing 

to accept the possibility that its cost sharing percentage ultimately 

will be higher if the costs exceed that minimum amount.

    (b) To illustrate the approach, consider a project for which you are 

confident that the recipient will have to expend at least $800,000 to 

achieve the specified outcomes. You must determine, in conjunction with 

program officials, the minimum level of recipient cost sharing that you 

want to negotiate, based on the circumstances, to demonstrate the 

recipient's commitment to the success of the project. For purposes of 

this illustration, let that minimum recipient cost sharing be 40% of the 

total project costs. In that case, the Federal share should be no more 

than 60% and you could set a fixed level of Federal support at $480,000 

(60% of $800,000). With that fixed level of Federal support, the 

recipient would be responsible for the balance of the costs needed to 

complete the project.

    (c) Note, however, that the level of recipient cost sharing you 

negotiate is to be based solely on the level needed to demonstrate the 

recipient's commitment. You may not use a shortage of Federal Government 

funding for the program as a reason to try to persuade a recipient to 

accept a fixed-support TIA, rather than an expenditure-based instrument, 

or to accept responsibility for a greater share of the total project 

costs than it otherwise is willing to offer. If you lack sufficient 

funding to provide an appropriate Federal Government share for the 

entire project, you instead should rescope the effort covered by the 

agreement to match the available funding.