Guidance for Reporting and Use of Information Concerning Recipient Integrity and Performance, 43301-43311 [2015-17753]

Agencies

• Management and Budget Office

[Federal Register Volume 80, Number 140 (Wednesday, July 22, 2015)]
[Rules and Regulations]
[Pages 43301-43311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17753]



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Federal Register / Vol. 80, No. 140 / Wednesday, July 22, 2015 / 
Rules and Regulations

[[Page 43301]]



OFFICE OF MANAGEMENT AND BUDGET

2 CFR Parts 180 and 200


Guidance for Reporting and Use of Information Concerning 
Recipient Integrity and Performance

AGENCY: Executive Office of the President, Office of Management and 
Budget.

ACTION: Final guidance.

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SUMMARY: The Office of Management and Budget (OMB) is issuing final 
guidance to Federal agencies to implement Section 872 of the Duncan 
Hunter National Defense Authorization Act for Fiscal Year 2009 
(hereafter referred to as ``section 872''), as that statute applies to 
grants. As section 872 required, OMB and the General Services 
Administration (GSA) have established an integrity and performance 
system that includes governmentwide data with specified information 
related to the integrity and performance of entities awarded Federal 
grants and contracts. This system, currently designated as the Federal 
Awardee Performance and Integrity Information System (FAPIIS), 
integrates various sources of information on the eligibility of 
organizations for Government awards and is currently available at 
https://www.fapiis.gov.
    This final guidance implements section 872's requirements for 
recipients and Federal awarding agencies to report information that 
will appear in the OMB-designated integrity and performance system and 
for Federal awarding agencies to consider information the system 
contains about a non-Federal entity before awarding a grant to that 
non-Federal entity. The final guidance for grants, which also applies 
to cooperative agreements, also addresses how the designated integrity 
and performance system and other information may be used in assessing 
recipient integrity.

DATES: This guidance is effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Rhea Hubbard, Office of Federal 
Financial Management, Office of Management and Budget, 
rhubbard@omb.eop.gov, telephone (202) 395-2743.

SUPPLEMENTARY INFORMATION:

I. Background

    A. This final guidance to Federal agencies implement Sections 872 
of the Duncan Hunter National Defense Authorization Act for Fiscal Year 
2009 (Pub. L. 110-417, codified as amended at 41 U.S.C. 2313).
    On February 18, 2010 (75 FR 7316), the Office of Management and 
Budget (OMB) proposed a number of changes to Title 2 of the Code of 
Federal Regulations (2 CFR). Since publication of the February 2010 
Federal Register notice, OMB finalized the portion of the guidance at 2 
CFR part 25, which includes requirements for obtaining a Universal 
Identifier and registering in the System for Award Management (SAM) 
formerly called the Central Contractor Registration system (CCR) in the 
Federal Register on September 14, 2010 [75 FR 55671]. Part 25 was 
expedited and finalized separately from the guidance being issued today 
because it was needed to support reporting of subawards made on or 
after October 1, 2010, as the next step in implementation of the 
Federal Funding Accountability and Transparency Act (``Transparency 
Act,'' Pub. L. 109-282, as amended). The preamble of the Federal 
Register notice that finalized 2 CFR part 25 included responses to the 
public comments that we received on the proposed requirements related 
to DUNS numbers and CCR (which subsequently became SAM and is 
accessible at https://www.sam.gov). The remainder of this notice 
therefore does not address that portion of the February 2010 Federal 
Register notice.
    Also since publication of the February 2010 Federal Register 
notice, OMB published final guidance at 2 CFR part 200 titled Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards on December 26, 2013 [78 FR 78589]. This final 
guidance streamlined the Federal government's guidance on 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal awards and provided a governmentwide framework for grants 
management. Part 200 incorporated portions of the proposed guidance at 
part 27 regarding notices of funding opportunities, see 2 CFR 200.203. 
Therefore this notice does not address certain portions of part 27 that 
were proposed in the February 2010 Federal Register notice. Further, 
OMB is no longer issuing parts 27, 35, and 77 separately. The final 
guidance incorporates the proposed guidance at parts 27, 35, and 77 
into part 200. This approach is consistent with the intent for part 200 
to serve as a governmentwide framework for grants management.
    The February 2010 Federal Register notice proposed changes to 
governmentwide guidance for nonprocurement debarment and suspension 
remain reflected in the final guidance at 2 CFR part 180.
    B. The major elements of the proposed guidance, which are addressed 
in this notice, are requirements for:
     Federal awarding agencies to report information to the 
designated integrity and performance system about any termination of an 
award due to a material failure to comply with the award terms and 
conditions; any administrative agreement with a non-Federal entity to 
resolve a suspension or debarment proceeding; and any finding that a 
non-Federal entity is not qualified to receive a given award, if the 
finding is based on criteria related to the non-Federal entity's 
integrity or prior performance under Federal awards.
     Recipients that have Federal contract, grant, and 
cooperative agreement awards with a cumulative total value greater than 
$10,000,000 to provide information to the designated integrity and 
performance system about certain civil, criminal, and administrative 
proceedings that reached final disposition within the most recent five 
year period and that were connected with the award or performance of a 
Federal award.
     Recipients that have Federal contract, grant, and 
cooperative agreement awards with a cumulative total value greater than 
$10,000,000 are required to disclose semiannually the information about 
the criminal, civil,

[[Page 43302]]

and administrative proceedings that section 872(c) describes.
     Federal awarding agencies, prior to making an award to a 
non-Federal entity, to determine whether that non-Federal entity is 
qualified to receive that particular award. In making the 
determination, the Federal awarding agency must take into consideration 
any information about the entity that is in the designated integrity 
and performance system.
     Notice of funding opportunities and Federal award terms 
and conditions to inform a non-Federal entity that it may submit 
comments to the designated integrity and performance system about any 
information that the Federal awarding agency had reported to the system 
about the non-Federal entity, for consideration by the Federal awarding 
agency in making future Federal awards to the non-Federal entity.
    We received comments on these elements of the proposed guidance 
from four State agencies, seven Federal agencies or agency components, 
and three associations representing community health centers, academic 
institutions, and industrial firms, respectively. We considered all 
comments received and made some of the recommended improvements in 
developing the final guidance. Some of the more significant changes are 
to:
     Make the guidance for grants and cooperative agreements as 
consistent where practicable with the FAPIIS guidance in the Federal 
Acquisition Regulation (FAR) that applies to procurement contracts (48 
CFR 9.104), thereby simplifying implementation for non-Federal entities 
that receive both Federal assistance and procurement awards;
     provide information on the legislative amendment to 
section 872, which was enacted after issuance of the proposed guidance, 
that requires making certain information in the designated integrity 
and performance system available to the public;
     provide information that must be included in a notice of 
funding opportunity regarding implementation of integrity and 
performance reporting;
     clarify the process that a Federal awarding agency follows 
when making a determination that a non-Federal entity is qualified to 
receive an award based on a review of information in the designated 
integrity and performance system and other sources;
     add wording to help ensure that all non-Federal entities, 
including applicants under programs that do not have program 
announcements, are fully aware of the potential effects of information 
about them in the designated integrity and performance system and their 
right to submit comments about the information; and
     add a requirement that Federal awarding agencies wait 14 
calendar days after posting information to the non-public segment of 
the designated integrity and performance system before making the 
information available through the public segment of the system to be 
consistent with the acquisitions community's requirements.
    Additional changes were made for clarity or completeness. For 
example, the simplified acquisition threshold set by the Federal 
Acquisition Regulation (FAR) at 48 CFR Subpart 2.1 (Definitions) is 
periodically adjusted for inflation in accordance with 41 U.S.C. 1908 
and is now set at $150,000. Consequently, we updated the threshold 
citation throughout the guidance by including a reference to the 
definition available at 2 CFR 200.88. Also, several of the systems 
referred to in the guidance, namely the Central Contractor Registration 
(CCR) and the Excluded Parties List System (EPLS), have been migrated 
into SAM and no longer exist as stand-alone systems. Further, the 
General Services Administration (GSA) plans to migrate the currently 
designated integrity and performance system, FAPIIS, to SAM and the 
language describing the system in the final guidance is designed to 
accommodate future system changes. Additional system migrations to SAM 
and other central portals will make it easier for agencies and 
recipients to input and receive information through a central Web site.
    C. The designated integrity and performance system integrates 
various sources of information regarding non-Federal entities to help 
Federal awarding agencies ensure that a thorough review of available 
databases with relevant information on to determine whether a recipient 
is qualified occurs before the issuance of Federal awards. In addition 
to the designated integrity and performance system, Federal awarding 
agencies are able to conduct matching to help determine qualification 
for Federal awards and payments through complementary efforts, such as 
the Do Not Pay working system maintained by the Department of the 
Treasury. While Treasury conducts matching against the Do Not Pay 
working system for all appropriate Federal payments, in accordance with 
the Improper Payments Elimination and Recovery Improvement Act of 2012, 
Federal awarding agencies are responsible for determining which of the 
Do Not Pay databases are appropriate to review for pre-award purposes. 
As required by 2 CFR part 180, Federal awarding agencies are required 
to check SAM Exclusions prior to the issuance of Federal awards, which 
is available directly through SAM or the Do Not Pay working system. 
Federal awarding agencies are not required to check the other databases 
that are part of the Do Not Pay working system for pre-award purposes 
where the Federal awarding agency has determined that the designated 
integrity and performance system (currently FAPIIS) and SAM provide 
more relevant information to making decisions on recipient 
qualification. As governmentwide systems continue to mature, there may 
be opportunities for further integration between the various systems.
    D. Section 872 applies without distinguishing between for-profit 
and other recipients. Thus, notwithstanding 2 CFR 200.101(c) general 
permissive application of subparts A through E to for-profits, agencies 
must apply to for-profit recipients (in agencies' regulations, 
policies, or directly through the terms and conditions of Federal 
awards) the requirements reflected in this final guidance. OMB is 
considering governmentwide guidance to apply consistent treatment 
towards for-profit grant and cooperative agreement recipients, 
including the requirements of Section 872.
    E. Since publishing the proposed guidance, Section 852 of the 
National Defense Authorization Act for Fiscal Year 2013 set forth 
additional requirements for the designated integrity and performance 
system to include, to the extent practicable, additional information on 
any parent, subsidiary, or successor entities to corporations included 
in the system. In order to address these additional requirements, OMB 
is considering publishing proposed guidance to implement Section 852 of 
the National Defense Authorization Act for Fiscal Year 2013.

II. Comments and Responses

    Sections II. A through II. F of this preamble summarize the major 
comments and our responses. General comments that address more than one 
portion of the guidance are summarized in section II.A. Each of the 
other sections addresses comments pertaining to a specific portion of 
the proposed guidance.

A. General Comments

    Comment: One State agency asked when GSA will establish the 
specifics of the FAPIIS data system and whether the specifics will be 
posted for comment.

[[Page 43303]]

    Response: GSA continues to make improvements to enable the 
designated integrity and performance system to collect other 
information for use by Federal awarding agencies that must make 
determinations concerning recipient qualifications. The public 
opportunity to comment on specific information to be collected from 
contractors and recipients of assistance awards is through the 
Paperwork Reduction Act (PRA) clearance process. The PRA clearance for 
procurement contracts was addressed in the Federal Register documents 
with the FAR changes and approved under OMB Clearance Number 9000-0174. 
The PRA clearance for grants and cooperative agreements was addressed 
in the Federal Register documents issued October 1, 2010 [75 FR 60756], 
February 11, 2011 [76 FR 7851], and July 3, 2014 [79 FR 38028].
    Comment: One industry association and one university association 
asked that we implement section 872 for grants in a manner that 
conforms with the implementation for procurement contracts, except 
where justified by the substantive differences between assistance and 
procurement. Noting that their constituents receive contracts, as well 
as grants, they recommended use of identical wording of any required 
questions or assurances, as well as electronic entry of data through 
the same system.
    Response: We agree that conformity to the maximum extent 
practicable is important for requirements that are common to both 
recipients of grants and contractors. The award term and condition for 
grants and cooperative agreements therefore requires recipients to 
enter certain information through SAM, the same system that contractors 
use for that purpose. A recipient and contractor must answer identical 
questions in SAM and, if applicable, must provide the same information 
about the types of proceedings identified in section 872.
    Comment: The industry and university associations and one Federal 
awarding agency responded to the invitation in the February 2010 
Federal Register notice to comment on a possible expansion of the scope 
of the designated integrity and performance system to ``include 
recipient information from authoritative data sources not described in 
this guidance.'' One association recommended we not expand the scope to 
information not related to the performance of a Federal or State 
contract or grant. The other strongly suggested limiting it to 
information related to performance under Federal awards only. The 
Federal awarding agency recommended building the system to allow for 
future expansion to include data on integrity and performance 
information beyond what was delineated in the proposed guidance.
    Response: OMB may expand the scope of the system to include 
information related to integrity and performance information beyond 
what was delineated in the proposed guidance.
    Comment: A university association suggested that we reaffirm that 
the term ``recipient'' throughout the 2 CFR guidance proposed in the 
February 2010 Federal Register notice means the organization receiving 
an award, as it usually does in the assistance community, and does not 
also include associated individuals. They stated that the reaffirmation 
was especially important as it relates to recipient qualification 
matters addressed in subpart A of the proposed 2 CFR part 35.
    Response: As defined at 2 CFR 200.86, the term ``recipient'' means 
``a non-Federal entity that receives a Federal award directly from a 
Federal awarding agency to carry out an activity under a Federal 
program.'' Thus, the term does not include individuals such as the 
organization's employees or other individuals who may only be involved 
in performance of the project or program under the award because those 
individuals did not receive the Federal award directly from a Federal 
awarding agency.
    Comment: The university association also recommended that we state 
in the guidance that information in the designated integrity and 
performance system is not subject to disclosure in response to Freedom 
of Information Act (FOIA) requests. They noted that the Federal 
Register notice for the final FAR rule on section 872 stated that the 
question of access to the data under FOIA would be determined on a 
case-by-case basis.
    Response: After publication of the proposed guidance, section 872 
was amended to require public disclosure of information in designated 
integrity and performance system other than past performance reviews. 
Actions posted in system on or after April 15, 2011, will be available 
to the public, as required by section 3010 of Public Law 111-212. 
Agencies' disclosure of information should be consistent with all 
applicable statutes that limit such disclosures. For example, 
heightened attention should be given to whether documentation includes 
information that involves privacy, security, proprietary business 
interests, and law enforcement investigations. Only information posted 
after April 15, 2011 will be subject to the disclosure requirements in 
section 3010 of Public Law 111-212.

B. Comments on Requirements in the Proposed 2 CFR Part 27 for 
Announcements of Funding Opportunities

    Comment: Two Federal awarding agencies recommended we revise the 
guidance in the proposed Sec.  27.210 that the form and content of 
agency program announcements must adhere to those of the standard 
announcement format contained in the appendix to part 27. They 
recommended that we instead require agencies' announcements to comply 
with a ``substantial conformance'' standard that would provide greater 
flexibility. The agencies were particularly concerned about the wording 
in Section II of Subdivision 1 of the announcement format stating that 
agencies' announcements should conform to the numbering convention in 
the standard format. They noted that wording could require them to 
modify information systems currently used in conjunction with program 
announcements and associated agency guidance documents.
    Response: We removed the information on format because OMB reissued 
final guidance on notice of funding opportunities available at 2 CFR 
200.203 and Appendix I to part 200. Further, the remaining portions of 
the proposed guidance at part 27 are incorporated into part 200.
    Comment: One Federal awarding agency noted that we should narrow 
the scope of the proposed guidance for paragraph E.3 of the 
announcement format in the appendix to part 27. The proposed guidance 
for that paragraph required an agency to inform potential applicants 
that awarding officials would consider information in designated 
integrity and performance system prior to making awards. The commenter 
noted that the guidance should exempt announcements under which a 
Federal awarding agency anticipated no Federal awards with Federal 
funding in excess of the simplified acquisition threshold above which 
section 872 requires Federal awarding agencies to consider information 
in the system.
    Response: We agree and Appendix I to Part 200 reflects that 
information regarding the designated integrity and performance system 
is included in notices of funding opportunities when the Federal 
awarding agency anticipates that any Federal award under a notice of 
funding opportunity may include, over the period of performance, a 
total

[[Page 43304]]

Federal share greater than the simplified acquisition threshold.

C. Comments on the Dollar Thresholds Related to Integrity and 
Performance Reporting

    Comment: One State agency and two Federal awarding agencies sought 
further explanation of the differences between the three dollar 
thresholds related to the designated integrity and performance system--
at the simplified acquisition threshold (currently $150,000); at 
$500,000; and at $10,000,000. One of the Federal awarding agencies 
suggested that implementation would be simpler if the three thresholds 
were the same.
    Response: The three thresholds are consistent with the statutory 
requirements of section 872:
     $500,000--Subsection (b) of section 872 is the source of 
the $500,000 threshold. It essentially requires that the designated 
integrity and performance system contain information about each non-
Federal entity: (1) That receives a Federal award of more than 
$500,000; and (2) about which there is a proceeding that must be 
reported as described in section 872. Therefore, the final guidance 
following this preamble states that Federal awarding agencies must 
include the award term and condition requiring the recipient to 
maintain its information in designated integrity and performance system 
for each Federal award where it is anticipated that the total Federal 
share will exceed $500,000 over the period of performance. Note that 
the award term and condition requires the non-Federal entity to provide 
the required information through the SAM (formerly CCR) and to provide 
the information specified in SAM.
     $10,000,000--The source of the $10,000,000 threshold is 
subsection (f) of section 872. Under that subsection (f) of section 
872, a non-Federal entity receiving Federal awards with a total value 
more than $10,000,000 must submit any information about criminal, 
civil, and administrative proceedings that section 872 requires and 
update the information semiannually. Based on feedback or as necessary, 
OMB may revise the $10,000,000 threshold. Based on feedback, OMB may 
consider revising this affirmative disclosure threshold for grants and 
cooperative agreements to the extent legally permissible/consistent 
with the statute.
     $150,000--The third threshold relates to two requirements 
for the Federal awarding agency. The source of that threshold, which is 
at the simplified acquisition threshold set by the FAR at 48 CFR 
Subpart 2.1 and adjusted periodically to track inflation (currently 
$150,000), is subparagraph (e)(2)(A) of section 872, which requires the 
Federal awarding agency to consider information in the designated 
integrity and performance system before making a Federal award for more 
than that threshold amount. In addition to implementing that 
requirement, the final guidance requires the Federal awarding agency to 
report to the designated integrity and performance system any instance 
in which the Federal awarding agency does not award a grant or 
cooperative agreement above that threshold amount to a non-Federal 
entity based on a determination that the non-Federal entity is not 
qualified due to its prior record of integrity or performance under 
Federal awards. The latter requirement is analogous to the requirement 
for procurement contracts in paragraph (c)(5) of section 872.
    Comment: An industry association and two Federal awarding agencies 
recommended clarifications of the term ``total value'' as used in 
relation to the integrity and performance requirements. The association 
recommended we adopt the FAR wording to specify that total value 
includes priced contract options, even if not yet executed. One Federal 
awarding agency suggested we clarify whether future funding obligations 
under a multi-year grant are included. The other Federal awarding 
agency noted that it was unclear whether the dollar thresholds in part 
35 and the award term and condition in the appendix to part 35 were 
based on the Federal share of the funding or also included any 
recipient cost share or match.
    Response: We agree with the comments and the final guidance located 
at part 200 is revised to provide the recommended clarifications. The 
final guidance clarifies that these thresholds are based on the Federal 
share of Federal awards and includes the value of all expected funding 
over the period of performance of the Federal award.
    Comment: An industry association recommended that we amend the 
proposed section 35.275 and require Federal awarding agencies to 
include the award term and condition for integrity and performance 
reporting only in a grant or cooperative agreement with a total value 
expected to be greater than $500,000. The commenter noted that would be 
consistent with the FAR requirement for procurement contracts.
    Response: We agree. The final guidance located at 2 CFR 200.210 is 
revised, as recommended.

D. Comments Related to Types of Information To Be Reported to the 
Designated Integrity and Performance System

    Comment: One State agency asked who would determine what type of 
information about a recipient would be reported by the recipient, 
rather than the Federal awarding agency. The agency also asked when and 
how the recipient would be notified about its self-reporting 
requirements.
    Response: The award term and condition in Appendix XII to 2 CFR 
part 200 includes the notification to the recipient that it must report 
certain information in order to comply with the integrity and 
performance reporting requirement. The details about the specific 
information that a recipient must provide are addressed in the guidance 
regarding the Entity Management area of SAM.
    Comment: Four State agencies recommended clarifying the specific 
types of proceedings about which the proposed guidance required 
recipients to report to the designated integrity and performance 
system. Two agencies said that the proposed requirement for recipients 
to report on criminal, civil, and administrative proceedings was overly 
broad and some noted that State agencies can be parties to legal 
proceedings as part of their performance of grants that fund regulatory 
enforcement programs. One agency asked why the information was to be 
collected and what outcomes might result from a reported proceeding. 
Other questions were: Does the requirement apply to local governments 
or just to a recipient in the performance of its duties under an award; 
does a State agency have to report a fine assessed against it by 
another State agency; and what type of documentation must be submitted?
    Response: No change was made. The governing statute, section 872, 
specifies the breadth of the reporting requirement. As for the purpose 
of collecting the information, the designated integrity and performance 
system gives a Federal awarding agency more information than is 
presently available about a potential recipient's record of performance 
under prior Federal awards and occurrences that may shed light on its 
integrity and business ethics. The information supports compliance with 
long-standing policy that the Federal Government protects the public 
interest and ensures the integrity of Federal programs by conducting 
business only with responsible persons.

[[Page 43305]]

    Potential outcomes due to reported information depend on the nature 
of the information. A Federal awarding agency considers the information 
in the designated integrity and performance system about a non-Federal 
entity when determining that the non-Federal entity is qualified with 
respect to a particular Federal award. Information that the non-Federal 
entity is currently debarred or suspended precludes the making of the 
Federal award to the non-Federal entity in almost all cases, while 
other information may or may not lead the Federal awarding agency to 
determine that the non-Federal entity is not qualified for the Federal 
award. The Federal awarding agency also may notify other Federal 
awarding agencies about information in the designated integrity and 
performance system--e.g., he or she would refer to a debarring official 
information about a matter that may be a cause for debarment.
    With respect to the commenters' other questions:
     A local government must report if it has a Federal award 
with an award term and condition making it subject to the reporting 
requirement. It would not be required to report solely by virtue of 
being a subrecipient under a Federal award to a State agency.
     The requirement is broader than proceedings related to a 
recipient's performance under an award. A recipient also must report 
about proceedings related to the making of a Federal award (e.g., a 
conviction for misuse of Federal appropriations to lobby for an award).
     A State agency must report a proceeding that results in a 
fine levied against it by another State agency if the violation or 
activity for which it is fined is in connection with the making of, or 
performance under, a Federal award.
     The recipient must provide the information about a 
proceeding that is required in SAM. No other documentation is required.
    Comment: Two commenters made recommendations related to the 
proposed requirement for a recipient to report information to the 
designated integrity and performance system about proceedings related 
to State awards. One commenter recommended that the requirement be made 
parallel with the one for contractors in the FAR clause 52.209-7(c)(1), 
by requiring reporting only on proceedings related to Federal awards 
and not also those associated with State awards. The second commenter 
recommended we clarify that State funds appropriated to a State's 
institutions of higher education would not be a ``State award'' for 
this purpose.
    Response: Due to the challenges associated with collecting State 
government information, the final guidance does not include the 
proposed requirement to collect information related to State award 
proceedings. Collection of information related State award proceedings 
may be considered in a subsequent phases of implementation. This 
approach is consistent with the FAR implementation of section 872 (75 
FR 14059).
    Comment: An industry association recommended conforming the 
definition of ``administrative proceeding'' with the definition of that 
term in the FAR implementation of section 872.
    Response: We agree. The definition is revised to be consistent with 
the FAR definition in section 52.209-7 of 48 CFR part 52.
    Comment: A Federal awarding agency suggested two changes related to 
the types of proceedings for which reporting is required. It suggested 
defining ``conviction'' analogously to 2 CFR part 180, to include any 
deferred prosecution agreement that included a statement of guilt on 
the part of the defendant. The agency also suggested eliminating 
vagueness from paragraph B.3.d(i) of the award term and condition in 
the appendix to part 35, by dropping the words ``it is practical to 
judge'' from the requirement for a recipient to report on ``any other 
criminal, civil, or administrative proceeding if it is practical for 
[the recipient] to judge that it could have led to'' a criminal 
conviction or finding of fault and liability that the recipient would 
have been required to report.
    Response: We agree in part. We conformed the definition of 
``conviction'' to the FAR definition, to parallel the implementation of 
section 872 for procurement contracts, rather than conforming it to the 
definition in 2 CFR part 180 that the commenter suggested. We removed 
the words ``it is practical to judge'' from the award term and 
condition, as recommended.

E. Other Comments on Requirements in 2 CFR Part 35 Concerning the 
Designated Integrity and Performance System and Recipient Qualification

    Comment: One Federal awarding agency suggested amending the 
proposed section 35.10 to exclude open-ended entitlements and programs 
under which funding is allocated in accordance with mandatory formulas 
from coverage under part 35. The Federal awarding agency questioned 
whether recipient qualification was an appropriate consideration under 
those programs, generally known as ``mandatory programs,'' and noted 
that they were excluded from coverage under the nonprocurement 
suspension and debarment guidance in 2 CFR part 180.
    Response: We understand that the nature of mandatory programs could 
make it more difficult than it would be under other programs to make a 
Federal award to an alternative recipient if the Federal awarding 
agency determined that a recipient was not qualified, as the program 
still must serve the intended beneficiaries. However, section 872 does 
not provide for an exclusion of those programs. Moreover, it would be 
important to protect both the investment of Federal funding and the 
interests of the beneficiaries in the event that a recipient was found 
not to be qualified.
    Comment: One Federal awarding agency expressed concern that the 
association in the proposed section 35.110 between an awarding 
official's signature of an award document and his or her determination 
concerning the recipient's qualification could be misinterpreted as a 
requirement for a certification that the recipient is qualified. The 
agency noted that a certification would require the awarding official 
to have more information than one could reasonably expect to be 
available to him or her.
    Response: The final guidance in part 200 no longer states that an 
awarding official's signature represents a determination that a 
recipient is qualified to receive a Federal award; however, Federal 
awarding agencies remain responsible for reviewing a potential 
recipient's records to determine whether the recipient meets the 
minimum standards as reflected in 2 CFR 200.205.
    Comment: One Federal agency questioned whether the use of the terms 
``qualified'' and ``disqualified'' in this part was consistent with the 
use of the term ``disqualified'' in 2 CFR part 180. The agency 
suggested defining at least one of the terms to avoid unnecessary 
confusion.
    Response: We agree in part and made revisions of two types. First, 
we revised the wording in a number of places within part 200 to clarify 
that, under this guidance, each determination by Federal awarding 
agency of a non-Federal entity's qualification or disqualification 
pertains to the specific Federal award being contemplated at that time. 
It is possible for a Federal awarding agency to determine that a non-
Federal entity is not qualified for one award and, depending on the 
reasons for that first determination, qualified for another award. For 
example, a Federal awarding agency

[[Page 43306]]

may determine that a non-Federal entity is: (1) Not qualified for a 
Federal award for a large and complex program, due to information in 
the designated integrity and performance system indicating an 
unsatisfactory record for performing under Federal awards for programs 
of that level of complexity; and (2) qualified for a second Federal 
award to carry out a simpler program. Further, Federal awarding 
agencies may make a Federal award to a recipient who does not fully 
meet these standards, if there are specific conditions that can 
appropriately mitigate the effects of the non-Federal entity's risk in 
accordance with Sec.  200.207.
    The other revisions were to replace the term ``disqualified'' in 
part 200 with ``not qualified,'' to remove any potential for confusion 
with that term as it is used and defined in 2 CFR part 180.
    Comment: Two Federal awarding agencies and an association of health 
care centers raised questions and concerns about due process. The 
association expressed concern that: (1) A Federal awarding agency that 
determines that a non-Federal entity was not qualified for an award was 
not required to tell the non-Federal entity why it was not qualified; 
and (2) the identification of the non-Federal entity in designated 
integrity and performance system as a result of that determination 
could prevent it from receiving any Federal funding for five years. One 
Federal awarding agency asked if there was a process by which a non-
Federal entity could appeal a Federal awarding agency's determination 
that it was not qualified for a Federal award, and the association and 
other Federal awarding agency recommended there be one.
    Response: We agree in part. With respect to the first concern, we 
added a requirement in 2 CFR 200.212 for a Federal awarding agency to 
provide an explanation in the notification to a non-Federal entity 
about the determination that the non-Federal entity is not qualified 
for a Federal award.
    With respect to the second concern that information in the 
designated integrity and performance system about a non-Federal entity 
could prevent it from receiving any Federal funding, we note that a 
Federal awarding agency's determination that a non-Federal entity is 
not qualified is related to a specific award that is being 
contemplated. As explained more fully in the response to the previous 
comment, that determination does not preclude the making of a different 
Federal award to the non-Federal entity. We revised the wording in 
multiple places in part 200 to clarify that connection with a specific 
Federal award.
    On the matter of appeals of a Federal awarding agency's 
determination that a non-Federal entity is not qualified for a Federal 
award, we did not revise the guidance to require delay of individual 
Federal awards, to allow an opportunity for appeal after the Federal 
awarding agency makes the determination. A govermentwide requirement is 
impractical in light of the constraints under which many Federal 
programs operate, with firm schedules for program execution that are 
impelled by statute or needs for timely obligation of appropriated 
funds. Individual Federal awarding agencies may, if timing constraints 
for their programs permit, offer an opportunity for appeal or 
additional input to the Federal awarding agency prior to award. Also 
note that the commenters' concern should be addressed by the 
opportunities provided for the non-Federal entity's input. Sections 
200.212 and 200.340 require Federal awarding agencies to notify non-
Federal entities when information that may be used when Federal 
awarding agencies are making future funding decisions is entered into 
the designated performance and integrity system. Non-Federal entities 
whose information is entered will have the opportunity to comment on 
information included in the system.
    We anticipate that Federal agencies' and recipients' current 
apprehension about the use of the designated integrity and performance 
system will abate over time, as they gain practical experience with the 
system and associated requirements. If lessons learned from the use of 
the designated integrity and performance system warrant further 
improvements to the system or clarifications to the guidance, we will 
carefully evaluate the existing guidance and revise the guidance, as 
appropriate.
    Comment: Two Federal awarding agencies commented on the 
requirements in the proposed section 35.120 for a Federal awarding 
official to check SAM (formerly EPLS) and the designated integrity and 
performance system. One agency stated that it was important that 
Federal awarding agencies be required to check SAM (formerly EPLS) 
separately, as the designated integrity and performance system would 
not provide all of the information they required concerning non-Federal 
entities that were debarred, suspended, or otherwise excluded or 
disqualified from participation in covered Federal transactions. The 
other Federal awarding agency recommended including a table to make 
clear the different dollar thresholds for use of the two systems--SAM 
(formerly EPLS) must be checked before making any Federal covered 
transaction, regardless of award amount, while the requirement to check 
the designated integrity and performance system applies to a Federal 
award with a total value expected to exceed the simplified acquisition 
threshold.
    Response: We agree in part and plan to provide further 
clarification to Federal awarding agencies regarding the relationship 
between various governmentwide systems. As discussed earlier in the 
preamble, GSA plans to integrate the designated integrity and 
performance system (currently FAPIIS) into SAM, so including a detailed 
chart in the final guidance outlining when a Federal awarding agency is 
required to check specific systems is not appropriate as the chart may 
become obsolete. Although a Federal awarding agency searching the 
current designated integrity and performance system about a potential 
recipient entity may receive information in response to the search, as 
well as information from other data systems accessed through the 
system, the current design does not ensure that the awarding official 
receives all the SAM information that he or she needs. For instance, 
FAPIIS does not reflect whether a non-Federal entity has an active SAM 
registration as required by 2 CFR part 25. As the commenters note, the 
awarding official also must check SAM Exclusions as required by 2 CFR 
part 180 prior to making a Federal award for an amount below the dollar 
threshold at which he or she is required to check the designated 
integrity and performance system. Therefore, it is imperative that a 
Federal awarding agency separately checks SAM prior to making an award 
at this time.
    Comment: A Federal awarding agency noted the requirement in the 
proposed paragraph 35.120(a)(3)(ii) for a Federal awarding agency to 
check the SAM Exclusions (formerly EPLS) for potential subaward 
recipients if Federal approval of those subrecipients was required 
under the terms and conditions of the Federal award. It asked if a 
prime recipient was required to check the designated integrity and 
performance system for information about a non-Federal entity to which 
it intended to make a subaward.
    Response: If the terms and conditions of the Federal award require 
the recipient to obtain Federal awarding agency approval of 
subawardees, the Federal awarding agency must check SAM Exclusions to 
verify whether a proposed subrecipient is debarred, suspended, or 
otherwise disqualified from the subaward. In addition, a recipient is 
always required under existing policy (2 CFR 180.300) to verify

[[Page 43307]]

that a non-Federal entity to which it intends to make a subaward is not 
excluded or disqualified from the transaction, whether or not Federal 
awarding agency approval of the subrecipient is required. Unlike a 
Federal awarding agency, however, 2 CFR 180.300 allows recipients 
multiple ways in which it can do the verification, checking SAM 
Exclusions being just one of those ways. While only Federal awarding 
agencies are required to consider information available through the 
designated integrity and performance system for awards expected to 
exceed the simplified acquisition threshold, a recipient and the 
general public are also able to check the system for information in 
doing checks of subrecipients.
    Comment: A State agency, noting the same requirement in the 
proposed paragraph 35.120(a)(3)(ii) to check SAM (formerly EPLS), asked 
how the process works if a recipient does not know the identity of all 
subrecipients at the time it receives a Federal award. It asked if the 
Federal award includes a term requiring verification of subrecipients 
and whether that delays the making of subawards.
    Response: The requirement stated in the proposed guidance is not 
reflected in the final guidance at 2 CFR part 200; however, this 
requirement is not new. The existing policy located at 2 CFR 180.425, 
states that a Federal awarding agency must check SAM Exclusions for 
potential subrecipients if its approval of the subrecipients is 
required. When that approval is required, the Federal awarding agency 
can check SAM Exclusions after the prime award is made if the 
subrecipients' identities are not known until then.

F. Comments on Proposed Amendments to the Nonprocurement Suspension and 
Debarment Guidance in 2 CFR Part 180

    Comment: One Federal awarding agency recommended revising 2 CFR 
180.520 to require suspending and debarring officials to enter 
information into SAM Exclusions (formerly EPLS) within three working 
days of taking a suspension or debarment action, a reduction from the 
current five days. The Federal awarding agency noted that this change 
was made in the FAR, in 48 CFR 9.404, as part of the implementation of 
the FAPIIS requirements for procurement contracts.
    Response: We agree. We made the recommended change and similarly 
revised 2 CFR 180.655, to establish a three-day time period for 
suspending and debarring officials to report information about 
administrative agreements to the designated integrity and performance 
system.
    Comment: Two Federal agencies suggested revising the requirement in 
the proposed section 2 CFR 180.655 for a Federal suspending or 
debarring official to report information to the designated integrity 
and performance system about each administrative agreement into which 
the Federal Government enters with a non-Federal entity in lieu of a 
suspension or debarment. One Federal awarding agency recommended 
delaying the effective date of the requirement until a planned update 
to the designated integrity and performance system added the capability 
to accept information about administrative agreements. The other 
Federal awarding agency suggested adding a requirement for reporting 
any modifications of administrative agreements to the designated 
integrity and performance system.
    Response: We agree and have made changes in sections 2 CFR 180.655 
and 180.660 that are responsive to the recommendations. In October 
2010, the designated integrity and performance system gained the 
capability to accept information about administrative agreements. The 
system specifies the information that must be reported.
    Comment: A Federal awarding agency recommended deleting the 
requirement in the proposed section 2 CFR 180.660 for a Federal 
suspending or debarring official to include information about the 
designated integrity and performance system in each administrative 
agreement into which he or she enters with a non-Federal entity in lieu 
of a suspension or debarment action. The Federal awarding agency stated 
that the express purpose of an administrative agreement is to preserve 
the non-Federal entity's eligibility to receive a Federal award. It 
added that the notice of funding opportunities under which Federal 
awards are made are the appropriate places to inform the non-Federal 
entity about Federal awarding agency's consideration of information 
that they receive through the designated integrity and performance 
system, including information about administrative agreements.
    Response: We agree. We removed the proposed section 180.660 from 
the final guidance. Due to the removal of section 180.660, section 
180.665 of the guidance proposed in the February 2010 Federal Register 
notice has been designated as section 180.660 in the final guidance.
    Comment: The same Federal awarding agency recommended deleting the 
requirements in the proposed paragraphs 2 CFR 180.715(h) and 
180.870(b)(2)(v) for a Federal suspending or debarring official to 
include information about the designated integrity and performance 
system in each notice of a suspension or debarment action. The Federal 
awarding agency noted that each notice already informs the suspended or 
debarred entity that the action results in its being listed in SAM 
Exclusions (formerly EPLS), with the mandatory effect of excluding it 
from covered transactions. The Federal awarding agency further noted 
that the availability of the information to a Federal awarding agency 
through the designated integrity and performance system, in addition to 
SAM, does not alter that mandatory effect. It suggested that adding 
information about designated integrity and performance system to the 
notice of suspension or debarment therefore could only confuse the 
matter.
    Response: We agree. We removed the proposed amendments to sections 
180.715 and 180.870 from the final guidance.

III. Next Steps

    This final guidance is effective for Federal awards issued on or 
after January 1, 2016 that meet the thresholds as described in the 
preamble and to existing awards that are terminated on or after January 
1, 2016 due to material failure to comply with the Federal award terms 
and conditions. Federal awarding agencies that have formally adopted 2 
CFR parts 180 and 200 in their entirety in 2 CFR will begin 
implementing this final guidance on January 1, 2016. Federal awarding 
agencies who adopted 2 CFR parts 180 and 200 through another means must 
work with OMB to ensure their regulations or policies are updated 
effective January 1, 2016. OMB will collaborate with GSA to ensure that 
the user guides and other guidance materials regarding the designated 
integrity and performance system are updated to reflect use by the 
Federal assistance community. Applicants and recipients will see the 
agencies' implementation reflected in requirements identified in notice 
of funding opportunities or other agency releases with application 
instructions, as well as in the new award term and condition in 
Appendix XII to 2 CFR part 200.

List of Subjects

2 CFR Part 180

    Administrative practice and procedure, Debarment and suspension, 
Grant programs, Loan programs,

[[Page 43308]]

Reporting and recordkeeping requirements.

2 CFR Part 200

    Accounting, Auditing, Colleges and universities, State and local 
governments, Grant programs, Grants administration, Hospitals, Indians, 
Nonprofit organizations, Reporting and recordkeeping requirements.

David Mader,
Controller.

    For the reasons stated in the preamble and under the authority of 
the Chief Financial Officer Act of 1990 (31 U.S.C. 503), the Office of 
Management and Budget amends 2 CFR parts 180 and 200 as set forth 
below:

TITLE 2--GRANTS AND AGREEMENTS

Chapter I--Office of Management and Budget Governmentwide Guidance for 
Grants and Agreements

PART 180--OMB GUIDELINES TO AGENCIES ON GOVERNMENTWIDE DEBARMENT 
AND SUSPENSION (NONPROCUREMENT)

0
1. The authority citation for part 180 continues to read as follows:

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 
235.


Sec.  180.520  [Amended]

0
2. Amend Sec.  180.520(c) introductory text by removing the words 
``generally within five working days,'' and adding in their place 
``within three business days,''.
0
3. Add Sec.  180.650 to subpart F to read as follows:


Sec.  180.650  May an administrative agreement be the result of a 
settlement?

    Yes, a Federal agency may enter into an administrative agreement 
with you as part of the settlement of a debarment or suspension action.

0
4. Add Sec.  180.655 to subpart F to read as follows:


Sec.  180.655  How will other Federal awarding agencies know about an 
administrative agreement that is the result of a settlement?

    The suspending or debarring official who enters into an 
administrative agreement with you must report information about the 
agreement to the designated integrity and performance system within 
three business days after entering into the agreement. This information 
is required by section 872 of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (41 U.S.C. 2313).

0
5. Add Sec.  180.660 to subpart F to read as follows:


Sec.  180.660  Will administrative agreement information about me in 
the designated integrity and performance system accessible through SAM 
be corrected or updated?

    Yes, the suspending or debarring official who entered information 
into the designated integrity and performance system about an 
administrative agreement with you:
    (a) Must correct the information within three business days if he 
or she subsequently learns that any of the information is erroneous.
    (b) Must correct in the designated integrity and performance 
system, within three business days, the ending date of the period 
during which the agreement is in effect, if the agreement is amended to 
extend that period.
    (c) Must report to the designated integrity and performance system, 
within three business days, any other modification to the 
administrative agreement.
    (d) Is strongly encouraged to amend the information in the 
designated integrity and performance system in a timely way to 
incorporate any update that he or she obtains that could be helpful to 
Federal awarding agencies who must use the system.

Chapter II--Office of Management and Budget Guidance

PART 200--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

0
6. The authority citation for part 200 continues to read as follows:

    Authority: 31 U.S.C. 503.


Sec.  200.0  [Amended]

0
7. Amend Sec.  200.0 by adding ``(accessible at https://www.sam.gov)'' 
after ``System for Award Management''.
0
8. Revise Sec.  200.113 to read as follows:


Sec.  200.113  Mandatory disclosures.

    The non-Federal entity or applicant for a Federal award must 
disclose, in a timely manner, in writing to the Federal awarding agency 
or pass-through entity all violations of Federal criminal law involving 
fraud, bribery, or gratuity violations potentially affecting the 
Federal award. Non-Federal entities that have received a Federal award 
including the term and condition outlined in Appendix XII--Award Term 
and Condition for Recipient Integrity and Performance Matters are 
required to report certain civil, criminal, or administrative 
proceedings to SAM. Failure to make required disclosures can result in 
any of the remedies described in Sec.  200.338 Remedies for 
noncompliance, including suspension or debarment. (See also 2 CFR part 
180, 31 U.S.C. 3321, and 41 U.S.C. 2313.)


Sec.  200.203  [Amended]

0
9. Amend Sec.  200.203 paragraph (c)(5) by removing ``See also 2 CFR 
part 27 (forthcoming at time of publication).''
0
10. Revise Sec.  200.205 paragraph (a) to read as follows:


Sec.  200.205  Federal awarding agency review of risk posed by 
applicants.

    (a) Review of OMB-designated repositories of govermentwide data. 
(1) Prior to making a Federal award, the Federal awarding agency is 
required by 31 U.S.C. 3321 and 41 U.S.C. 2313 note to review 
information available through any OMB-designated repositories of 
governmentwide eligibility qualification or financial integrity 
information as appropriate. See also suspension and debarment 
requirements at 2 CFR part 180 as well as individual Federal agency 
suspension and debarment regulations in title 2 of the Code of Federal 
Regulations.
    (2) In accordance 41 U.S.C. 2313, the Federal awarding agency is 
required to review the publicly available information in the OMB-
designated integrity and performance system accessible through SAM 
(currently the Federal Awardee Performance and Integrity Information 
System (FAPIIS)) prior to making a Federal award where the Federal 
share is expected to exceed the simplified acquisition threshold, 
defined in 41 U.S.C. 134, over the period of performance. At a minimum, 
the information in the system for a prior Federal award recipient must 
demonstrate a satisfactory record of executing programs or activities 
under Federal grants, cooperative agreements, or procurement awards; 
and integrity and business ethics. The Federal awarding agency may make 
a Federal award to a recipient who does not fully meet these standards, 
if it is determined that the information is not relevant to the current 
Federal award under consideration or there are specific conditions that 
can appropriately mitigate the effects of the non-Federal entity's risk 
in accordance with Sec.  200.207 Specific conditions.
* * * * *

0
11. In Sec.  200.210, add paragraph (b)(1)(iii) to read as follows:


Sec.  200.210  Information contained in a Federal award.

* * * * *

[[Page 43309]]

    (b) * * *
    (1) * * *
    (iii) Recipient integrity and performance matters. If the total 
Federal share of the Federal award may include more than $500,000 over 
the period of performance, the Federal awarding agency must include the 
term and condition available in Appendix XII--Award Term and Condition 
for Recipient Integrity and Performance Matters. See also Sec.  200.113 
Mandatory disclosures.
* * * * *

0
12. In Sec.  200.211, revise paragraph (b) and add paragraph (c) to 
read as follows:


Sec.  200.211  Public access to Federal award information.

* * * * *
    (b) All information posted in the designated integrity and 
performance system accessible through SAM (currently FAPIIS) on or 
after April 15, 2011 will be publicly available after a waiting period 
of 14 calendar days, except for:
    (1) Past performance reviews required by Federal Government 
contractors in accordance with the Federal Acquisition Regulation (FAR) 
42.15;
    (2) Information that was entered prior to April 15, 2011; or
    (3) Information that is withdrawn during the 14-calendar day 
waiting period by the Federal Government official.
    (c) Nothing in this section may be construed as requiring the 
publication of information otherwise exempt under the Freedom of 
Information Act (5 U.S.C 552), or controlled unclassified information 
pursuant to Executive Order 13556.

0
13. Revise Sec.  200.212 to read as follows:


Sec.  200.212  Reporting a determination that a non-Federal entity is 
not qualified for a Federal award.

    (a) If a Federal awarding agency does not make a Federal award to a 
non-Federal entity because the official determines that the non-Federal 
entity does not meet either or both of the minimum qualification 
standards as described in Sec.  200.205, Federal awarding agency review 
of risk posed by applicants, paragraph (a)(2), the Federal awarding 
agency must report that determination to the designated integrity and 
performance system accessible through SAM (currently FAPIIS), only if 
all of the following apply:
    (1) The only basis for the determination described in paragraph (a) 
of this section is the non-Federal entity's prior record of executing 
programs or activities under Federal awards or its record of integrity 
and business ethics, as described in Sec.  200.205 Federal awarding 
agency review of risk posed by applicants, paragraph (a)(2) (i.e., the 
entity was determined to be qualified based on all factors other than 
those two standards), and
    (2) The total Federal share of the Federal award that otherwise 
would be made to the non-Federal entity is expected to exceed the 
simplified acquisition threshold over the period of performance.
    (b) The Federal awarding agency is not required to report a 
determination that a non-Federal entity is not qualified for a Federal 
award if they make the Federal award to the non-Federal entity and 
includes specific award terms and conditions, as described in Sec.  
200.207 Specific conditions.
    (c) If a Federal awarding agency reports a determination that a 
non-Federal entity is not qualified for a Federal award, as described 
in paragraph (a) of this section, the Federal awarding agency also must 
notify the non-Federal entity that--
    (1) The determination was made and reported to the designated 
integrity and performance system accessible through SAM, and include 
with the notification an explanation of the basis for the 
determination;
    (2) The information will be kept in the system for a period of five 
years from the date of the determination, as required by section 872 of 
Public Law 110-417, as amended (41 U.S.C. 2313), then archived;
    (3) Each Federal awarding agency that considers making a Federal 
award to the non-Federal entity during that five year period must 
consider that information in judging whether the non-Federal entity is 
qualified to receive the Federal award when the total Federal share of 
the Federal award is expected to include an amount of Federal funding 
in excess of the simplified acquisition threshold over the period of 
performance;
    (4) The non-Federal entity may go to the awardee integrity and 
performance portal accessible through SAM (currently the Contractor 
Performance Assessment Reporting System (CPARS)) and comment on any 
information the system contains about the non-Federal entity itself; 
and
    (5) Federal awarding agencies will consider that non-Federal 
entity's comments in determining whether the non-Federal entity is 
qualified for a future Federal award.
    (d) If a Federal awarding agency enters information into the 
designated integrity and performance system accessible through SAM 
about a determination that a non-Federal entity is not qualified for a 
Federal award and subsequently:
    (1) Learns that any of that information is erroneous, the Federal 
awarding agency must correct the information in the system within three 
business days;
    (2) Obtains an update to that information that could be helpful to 
other Federal awarding agencies, the Federal awarding agency is 
strongly encouraged to amend the information in the system to 
incorporate the update in a timely way.
    (e) Federal awarding agencies shall not post any information that 
will be made publicly available in the non-public segment of designated 
integrity and performance system that is covered by a disclosure 
exemption under the Freedom of Information Act. If the recipient 
asserts within seven calendar days to the Federal awarding agency that 
posted the information that some or all of the information made 
publicly available is covered by a disclosure exemption under the 
Freedom of Information Act, the Federal awarding agency that posted the 
information must remove the posting within seven calendar days of 
receiving the assertion. Prior to reposting the releasable information, 
the Federal awarding agency must resolve the issue in accordance with 
the agency's Freedom of Information Act procedures.

0
14. Add Sec.  200.213 to subpart C to read as follows:


Sec.  200.213  Suspension and debarment.

    Non-federal entities are subject to the non-procurement debarment 
and suspension regulations implementing Executive Orders 12549 and 
12689, 2 CFR part 180. These regulations restrict awards, subawards, 
and contracts with certain parties that are debarred, suspended, or 
otherwise excluded from or ineligible for participation in Federal 
assistance programs or activities.


Sec.  200.300  [Amended]

0
15. Amend Sec.  200.300 paragraph (b) by removing ``Central Contractor 
Registration'' and adding in its place ``System for Award Management''.


Sec.  200.318  [Amended]

0
16. Amend Sec.  200.318 paragraph (h) by removing ``Sec.  200.212'' and 
adding in its place ``Sec.  200.213''.
0
17. In Sec.  200.339, revise paragraph (b) and add paragraph (c) to 
read as follows:


Sec.  200.339  Termination.

* * * * *
    (b) When a Federal awarding agency terminates a Federal award prior 
to the

[[Page 43310]]

end of the period of performance due to the non-Federal entity's 
material failure to comply with the Federal award terms and conditions, 
the Federal awarding agency must report the termination to the OMB-
designated integrity and performance system accessible through SAM 
(currently FAPIIS).
    (1) The information required under paragraph (b) of this section is 
not to be reported to designated integrity and performance system until 
the non-Federal entity either--
    (i) Has exhausted its opportunities to object or challenge the 
decision, see Sec.  200.341 Opportunities to object, hearings and 
appeals; or
    (ii) Has not, within 30 calendar days after being notified of the 
termination, informed the Federal awarding agency that it intends to 
appeal the Federal awarding agency's decision to terminate.
    (2) If a Federal awarding agency, after entering information into 
the designated integrity and performance system about a termination, 
subsequently:
    (i) Learns that any of that information is erroneous, the Federal 
awarding agency must correct the information in the system within three 
business days;
    (ii) Obtains an update to that information that could be helpful to 
other Federal awarding agencies, the Federal awarding agency is 
strongly encouraged to amend the information in the system to 
incorporate the update in a timely way.
    (3) Federal awarding agencies, shall not post any information that 
will be made publicly available in the non-public segment of designated 
integrity and performance system that is covered by a disclosure 
exemption under the Freedom of Information Act. If the non-Federal 
entity asserts within seven calendar days to the Federal awarding 
agency who posted the information, that some of the information made 
publicly available is covered by a disclosure exemption under the 
Freedom of Information Act, the Federal awarding agency who posted the 
information must remove the posting within seven calendar days of 
receiving the assertion. Prior to reposting the releasable information, 
the Federal agency must resolve the issue in accordance with the 
agency's Freedom of Information Act procedures.
    (c) When a Federal award is terminated or partially terminated, 
both the Federal awarding agency or pass-through entity and the non-
Federal entity remain responsible for compliance with the requirements 
in Sec. Sec.  200.343 Closeout and 200.344 Post-closeout adjustments 
and continuing responsibilities.

0
18. Revise Sec.  200.340, paragraph (b) to read as follows:


Sec.  200.340  Notification of termination requirement.

* * * * *
    (b) If the Federal award is terminated for the non-Federal entity's 
material failure to comply with the Federal statutes, regulations, or 
terms and conditions of the Federal award, the notification must state 
that--
    (1) The termination decision will be reported to the OMB-designated 
integrity and performance system accessible through SAM (currently 
FAPIIS);
    (2) The information will be available in the OMB-designated 
integrity and performance system for a period of five years from the 
date of the termination, then archived;
    (3) Federal awarding agencies that consider making a Federal award 
to the non-Federal entity during that five year period must consider 
that information in judging whether the non-Federal entity is qualified 
to receive the Federal award, when the Federal share of the Federal 
award is expected to exceed the simplified acquisition threshold over 
the period of performance;
    (4) The non-Federal entity may comment on any information the OMB-
designated integrity and performance system contains about the non-
Federal entity for future consideration by Federal awarding agencies. 
The non-Federal entity may submit comments to the awardee integrity and 
performance portal accessible through SAM (currently (CPARS).
    (5) Federal awarding agencies will consider non-Federal entity 
comments when determining whether the non-Federal entity is qualified 
for a future Federal award.
* * * * *

0
19. In Appendix I to Part 200, revise paragraph E.3., add paragraph 
E.4., and revise paragraph F.3. to read as follows:

Appendix I to Part 200--Full Text of Notice of Funding Opportunity

* * * * *
    E. * * *
    3. For any Federal award under a notice of funding opportunity, 
if the Federal awarding agency anticipates that the total Federal 
share will be greater than the simplified acquisition threshold on 
any Federal award under a notice of funding opportunity may include, 
over the period of performance (see Sec.  200.88 Simplified 
Acquisition Threshold), this section must also inform applicants:
    i. That the Federal awarding agency, prior to making a Federal 
award with a total amount of Federal share greater than the 
simplified acquisition threshold, is required to review and consider 
any information about the applicant that is in the designated 
integrity and performance system accessible through SAM (currently 
FAPIIS) (see 41 U.S.C. 2313);
    ii. That an applicant, at its option, may review information in 
the designated integrity and performance systems accessible through 
SAM and comment on any information about itself that a Federal 
awarding agency previously entered and is currently in the 
designated integrity and performance system accessible through SAM;
    iii. That the Federal awarding agency will consider any comments 
by the applicant, in addition to the other information in the 
designated integrity and performance system, in making a judgment 
about the applicant's integrity, business ethics, and record of 
performance under Federal awards when completing the review of risk 
posed by applicants as described in Sec.  200.205 Federal awarding 
agency review of risk posed by applicants.
    4. Anticipated Announcement and Federal Award Dates--Optional. 
This section is intended to provide applicants with information they 
can use for planning purposes. If there is a single application 
deadline followed by the simultaneous review of all applications, 
the Federal awarding agency can include in this section information 
about the anticipated dates for announcing or notifying successful 
and unsuccessful applicants and for having Federal awards in place. 
If applications are received and evaluated on a ``rolling'' basis at 
different times during an extended period, it may be appropriate to 
give applicants an estimate of the time needed to process an 
application and notify the applicant of the Federal awarding 
agency's decision.
    F. * * *
    3. Reporting--Required. This section must include general 
information about the type (e.g., financial or performance), 
frequency, and means of submission (paper or electronic) of post-
Federal award reporting requirements. Highlight any special 
reporting requirements for Federal awards under this funding 
opportunity that differ (e.g., by report type, frequency, form/
format, or circumstances for use) from what the Federal awarding 
agency's Federal awards usually require. Federal awarding agencies 
must also describe in this section all relevant requirements such as 
those at 2 CFR 180.335 and 2 CFR 180.350.
    If the Federal share of any Federal award may include more than 
$500,000 over the period of performance, this section must inform 
potential applicants about the post award reporting requirements 
reflected in Appendix XII--Award Term and Condition for Recipient 
Integrity and Performance Matters.
* * * * *

0
20. Add Appendix XII to Part 200 to read as follows:

[[Page 43311]]

Appendix XII to Part 200--Award Term and Condition for Recipient 
Integrity and Performance Matters

A. Reporting of Matters Related to Recipient Integrity and Performance

1. General Reporting Requirement

    If the total value of your currently active grants, cooperative 
agreements, and procurement contracts from all Federal awarding 
agencies exceeds $10,000,000 for any period of time during the 
period of performance of this Federal award, then you as the 
recipient during that period of time must maintain the currency of 
information reported to the System for Award Management (SAM) that 
is made available in the designated integrity and performance system 
(currently the Federal Awardee Performance and Integrity Information 
System (FAPIIS)) about civil, criminal, or administrative 
proceedings described in paragraph 2 of this award term and 
condition. This is a statutory requirement under section 872 of 
Public Law 110-417, as amended (41 U.S.C. 2313). As required by 
section 3010 of Public Law 111-212, all information posted in the 
designated integrity and performance system on or after April 15, 
2011, except past performance reviews required for Federal 
procurement contracts, will be publicly available.

2. Proceedings About Which You Must Report

    Submit the information required about each proceeding that:
    a. Is in connection with the award or performance of a grant, 
cooperative agreement, or procurement contract from the Federal 
Government;
    b. Reached its final disposition during the most recent five 
year period; and
    c. Is one of the following:
    (1) A criminal proceeding that resulted in a conviction, as 
defined in paragraph 5 of this award term and condition;
    (2) A civil proceeding that resulted in a finding of fault and 
liability and payment of a monetary fine, penalty, reimbursement, 
restitution, or damages of $5,000 or more;
    (3) An administrative proceeding, as defined in paragraph 5. of 
this award term and condition, that resulted in a finding of fault 
and liability and your payment of either a monetary fine or penalty 
of $5,000 or more or reimbursement, restitution, or damages in 
excess of $100,000; or
    (4) Any other criminal, civil, or administrative proceeding if:
    (i) It could have led to an outcome described in paragraph 
2.c.(1), (2), or (3) of this award term and condition;
    (ii) It had a different disposition arrived at by consent or 
compromise with an acknowledgment of fault on your part; and
    (iii) The requirement in this award term and condition to 
disclose information about the proceeding does not conflict with 
applicable laws and regulations.

3. Reporting Procedures

    Enter in the SAM Entity Management area the information that SAM 
requires about each proceeding described in paragraph 2 of this 
award term and condition. You do not need to submit the information 
a second time under assistance awards that you received if you 
already provided the information through SAM because you were 
required to do so under Federal procurement contracts that you were 
awarded.

4. Reporting Frequency

    During any period of time when you are subject to the 
requirement in paragraph 1 of this award term and condition, you 
must report proceedings information through SAM for the most recent 
five year period, either to report new information about any 
proceeding(s) that you have not reported previously or affirm that 
there is no new information to report. Recipients that have Federal 
contract, grant, and cooperative agreement awards with a cumulative 
total value greater than $10,000,000 must disclose semiannually any 
information about the criminal, civil, and administrative 
proceedings.

5. Definitions

    For purposes of this award term and condition:
    a. Administrative proceeding means a non-judicial process that 
is adjudicatory in nature in order to make a determination of fault 
or liability (e.g., Securities and Exchange Commission 
Administrative proceedings, Civilian Board of Contract Appeals 
proceedings, and Armed Services Board of Contract Appeals 
proceedings). This includes proceedings at the Federal and State 
level but only in connection with performance of a Federal contract 
or grant. It does not include audits, site visits, corrective plans, 
or inspection of deliverables.
    b. Conviction, for purposes of this award term and condition, 
means a judgment or conviction of a criminal offense by any court of 
competent jurisdiction, whether entered upon a verdict or a plea, 
and includes a conviction entered upon a plea of nolo contendere.
    c. Total value of currently active grants, cooperative 
agreements, and procurement contracts includes--
    (1) Only the Federal share of the funding under any Federal 
award with a recipient cost share or match; and
    (2) The value of all expected funding increments under a Federal 
award and options, even if not yet exercised.
    B. [Reserved]

[FR Doc. 2015-17753 Filed 7-21-15; 8:45 am]
BILLING CODE P