[Code of Federal Regulations]
[Title 32, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR37.560]

[Page 213]
 
                       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 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.