Format for DoD Grant and Cooperative Agreement Awards, 78369-78376 [2016-25699]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 81, Number 215 (Monday, November 7, 2016)]
[Proposed Rules]
[Pages 78369-78376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25699]


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DEPARTMENT OF DEFENSE

Office of the Secretary

2 CFR Part 1120

[DOD-2016-OS-0052]
RIN 0790-AJ47


Format for DoD Grant and Cooperative Agreement Awards

AGENCY: Office of the Secretary, Department of Defense (DoD).

ACTION: Proposed rule.

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SUMMARY: This notice of proposed rulemaking (NPRM) is the second of a 
sequence of six NPRM documents in this issue of the Federal Register 
that collectively establish for DoD grants and cooperative agreements 
an updated interim implementation of Governmentwide guidance on 
administrative requirements, cost principles, and audit requirements 
for Federal awards and make other needed updates to the DoD Grant and 
Agreement Regulations (DoDGARs). This NPRM adds a new DoDGARs part to 
establish a standard format for organizing the content of DoD 
Components' grant and cooperative agreement awards and modifications to 
them.

DATES: To ensure that they can be considered in developing the final 
rule, comments must be received at either the Web site or mailing 
address indicated below by February 6, 2017.

ADDRESSES: You may submit comments identified by docket number, or by 
Regulatory Information Number (RIN) and title, by either of the 
following methods:
    The Web site: https://www.regulations.gov. Follow the instructions 
at that site for submitting comments.
    Mail: Department of Defense, Deputy Chief Management Officer, 
Directorate for Oversight and Compliance, 4800 Mark Center Drive, ATTN: 
Box 24, Alexandria, VA 22350-1700.
    Instructions: All submissions must include the agency name and 
docket number or RIN for this Federal Register document. The general 
policy for comments and other submissions from the public is to make 
the submissions available for public viewing on the

[[Page 78370]]

Internet at https://www.regulations.gov without change (i.e., as they 
are received, including any personal identifiers or contact 
information).

FOR FURTHER INFORMATION CONTACT: Wade Wargo, Basic Research Office, 
telephone 571-372-2941.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of the Regulatory Action

1. The Need for the Regulatory Action and How the Action Meets That 
Need
    As explained in the SUPPLEMENTARY INFORMATION section of the NPRM 
immediately preceding this one in this issue of the Federal Register, 
this is one of six NPRMS that collectively make needed updates to the 
Department of Defense Grant and Agreement Regulations (DoDGARs). One 
purpose of the updating is to implement Office of Management and Budget 
(OMB) guidance to Federal agencies on administrative requirements, cost 
principles, and audit requirements applicable to Federal grants, 
cooperative agreements, and other assistance instruments (2 CFR part 
200). Another purpose is to provide greater uniformity in the content 
and organization of DoD grants and cooperative agreements made by 
approximately 100 offices located throughout the nation and abroad.
    The regulatory action in this NPRM contributes to the first of 
those purposes by implementing provisions of the OMB guidance on the 
minimum content that Federal agencies' awards must include. It also 
contributes to the second of those purposes by:
     Establishing additional requirements for uniform content, 
beyond the minimum identified in the guidance; and
     Specifying a standard format for organizing the content of 
DoD Component awards to all types of entities, including entities other 
than those addressed in the OMB guidance.
2. Legal Authorities for the Regulatory Action
    There are two statutory authorities for this NPRM:
     10 U.S.C. 113, which establishes the Secretary of Defense 
as the head of the Department of Defense; and
     5 U.S.C. 301, which authorizes the head of an Executive 
department to prescribe regulations for the governance of that 
department and the performance of its business.

B. Summary of the Major Provisions of the Regulatory Action

    The proposed part 1120 is organized into seven subparts, each of 
which addresses a major element or subelement of the standard award 
format that the part establishes. Those elements and subelements of the 
standard award format are the:
     Award cover pages (addressed in subpart A of the proposed 
part).
     Award-specific terms and conditions (addressed in subpart 
B).
     General terms and conditions (addressed in subpart C), the 
four subelements of which (addressed in subparts D through G) are the: 
(i) Preamble; (ii) administrative requirements; (iii) national policy 
requirements; and (iv) programmatic requirements.
    Sections I.B.1 through I.B.7 of this Supplementary Information 
section describe these elements and subelements of the standard award 
format. Sections I.B.1 and I.B.2 describe the award cover pages and 
award-specific terms and conditions, respectively. Section I.B.3 
describes the general terms and conditions as a whole and sections 
I.B.4 through 7 separately describe its four subelements.
1. Award Cover Pages (Division I of the Award)
    Subpart A of the proposed part 1120 addresses the content of the 
award cover pages and their location in Division I of the award. The 
cover pages will contain basic information about the award or 
modification to the award, such as the name of the DoD awarding office 
and recipient, the award number, and amount. The cover pages list what 
else the award includes--such as the scope of work, any award-specific 
terms and conditions, and the general terms and conditions--and state 
where those other portions of the award are located. The cover pages 
will be signed by the DoD grants officer and, for a bilaterally 
executed award or modification, an official the recipient entity 
authorizes to sign on its behalf.
    For grants and cooperative agreements to institutions of higher 
education, nonprofit organizations, States, local governments, and 
Indian tribes, Subpart A thereby implements OMB guidance in 2 CFR 
200.210(a) on the general information contained in awards. The proposed 
Subpart A is broader than the OMB guidance in that it: (1) Specifies 
use of the format for awards to for-profit and other entities not 
addressed in the guidance; and (2) requires DoD Components' to include 
more information elements than the guidance specifies. The proposed 
Subpart A varies in three instances from the guidance by:
     Providing more detailed explanations of some of the 
information elements listed in Sec.  200.210(a) of the OMB guidance, to 
help clarify exactly what information a DoD Component is to include--
e.g., in the case of each funding amount, whether it is the federal 
share, the non-federal share, or the sum of the two.
     Providing clarification related to the guidance in 2 CFR 
200.210(a)(15) on the inclusion in each award of the recipient's 
indirect cost rate for the award. The proposed subpart A requires a DoD 
Component to include only the indirect cost rate that is in effect at 
the time of the initial award. The reason is to avoid unnecessary 
burdens and costs of having to update information on cover pages 
throughout the life of a multi-year award to a for-profit or other 
entity that has post-determined final indirect cost rates and rates 
that vary from one fiscal year to the next (note that a post-determined 
final rate for a recipient's fiscal year is set after the end of that 
fiscal year, based on actual costs).
     Excepting a DoD Component from the requirement to include 
the indirect cost rate on an award if the recipient of the award 
affirms that it treats its rate as proprietary information, as many 
for-profit and nonprofit entities do.
    The proposed subpart A also provides for later development of a 
standard DoD form for the cover pages, by mandating use of the form 
when there is one. A standard form will make it easier for both 
recipients and DoD post-award administrators to locate basic 
information they need in different DoD awarding offices' awards.
2. Award-Specific Terms and Conditions (Division II of the Award)
    Subpart B of the proposed 2 CFR part 1120 provides for DoD 
Components' inclusion of award-specific terms and conditions in 
Division II of their awards. Depending upon specific conditions 
pertinent to a particular award, an awarding office may need award-
specific terms and conditions to supplement or supersede some of the 
general terms and conditions. The proposed Subpart B does not prescribe 
how to organize the content of the award-specific terms and conditions, 
nor does it specify standard wording for any of them. For grants and 
cooperative agreements to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes, the 
proposed Subpart B implements, without variation, OMB guidance in 2 CFR 
200.210(c) as it applies to award-specific terms and conditions.

[[Page 78371]]

3. General Terms and Conditions (Division III of the Award)
    Subpart C of the proposed part 1120 addresses the general terms and 
conditions as a whole and their location in Division III of the award. 
The subpart also provides for publicly posting the general terms and 
conditions, rather than providing them to each recipient with its 
award. Publicly posting them should make it easy for a potential 
proposer to review the requirements with which it would have to comply 
if its proposal was successful. For grants and cooperative agreements 
to institutions of higher education, nonprofit organizations, States, 
local governments, and Indian tribes, the subpart implements OMB 
guidance in 2 CFR 200.210(b), without variation.
4. Preamble to the General Terms and Conditions (Subdivision A of 
Division III of the Award)
    Subpart D of the proposed part 1120 requires a DoD Component to 
include a preamble for each set of general terms and conditions that it 
maintains and specify its location as Subdivision A of the general 
terms and conditions in Division III of the award. The subpart requires 
the preamble to a set of general terms and conditions to contain 
important information about that set, such as the types of awards and 
recipient entities to which it applies. The only portion of the OMB 
guidance that relates to the proposed subpart D is the guidance in 2 
CFR 200.111(b) on the need for a recipient, if a significant portion of 
its employees who are working under a Federal agency's award are not 
fluent in English, to provide a translation of the award into the 
language or languages with which its employees are familiar. The 
proposed subpart D clarifies that guidance by stating that a recipient 
must translate award content only to the extent that its compliance 
with award requirements depends on employees who are not fluent in 
English being able to read and comprehend that content.
5. Administrative Requirements Portion of the General Terms and 
Conditions (Subdivision B of Division III of the Award)
    The proposed subpart E of part 1120 specifies what the 
administrative requirements portion of the general terms and conditions 
covers, where it is located within the award, and which DoDGARs part or 
parts governs the administrative requirements for awards to different 
types of recipients. It also encourages a DoD Component that is 
constructing general terms and conditions for awards to institutions of 
higher education, nonprofit organizations, States, local governments, 
and Indian tribes to incorporate the administrative requirements by 
reference to the portions of the DoDGARs that provide standard wording 
for that portion of the terms and conditions. For awards to those types 
of recipients, subpart E also implements OMB guidance in 2 CFR 
200.210(b)(1)(i), without variation.
6. National Policy Requirements Portion of the General Terms and 
Conditions (Subdivision C of Division III of the Award)
    The proposed content of subpart F of part 1120 provides direction 
to DoD Components concerning the scope, source, and location within the 
award format of national policy requirements. As the proposed subpart E 
does for administrative requirements, subpart F encourages a DoD 
Component to incorporate the standard wording that the DoDGARs provides 
for commonly applicable national policy requirements into general terms 
and conditions by reference. For awards to institutions of higher 
education, nonprofit organizations, States, local governments, and 
Indian tribes, subpart F implements OMB guidance in 2 CFR 
200.210(b)(1)(ii), without variation.
7. Programmatic Requirements Portion of the General Terms and 
Conditions (Subdivision D of Division III of the Award)
    The proposed subpart G of part 1120: (1) Clarifies what the 
programmatic requirements segment of the general terms and conditions 
includes, in relation to the content of the administrative and national 
policy requirements; (2) provides some specific examples of 
programmatic requirements; and (3) specifies the location of those 
requirements as Subdivision D of the general terms and conditions in 
Division III of the award. For awards to institutions of higher 
education, nonprofit organizations, States, local governments, and 
Indian tribes, subpart G implements, without variation, OMB guidance in 
2 CFR 200.210(c) as it applies to program-specific requirements 
included in general terms and conditions.

C. Costs and Benefits

    The primary benefit of the regulatory action proposed in this NPRM 
results from its standardization of the location of basic information 
about the award and requirements for recipients contained in award 
terms and conditions across awards made by about 100 DoD Component 
awarding offices. With that standardization, recipients, auditors, DoD 
post-award administrators, and others who use the content of DoD awards 
should be able to find what they need more quickly and easily within 
the 15,000 award actions per year that the awarding offices issue.
    Another benefit of the proposed regulatory action is the 
encouragement for DoD Components to incorporate DoD-wide standard 
wording for administrative and national policy requirements into their 
general terms and conditions by reference. This approach makes it 
easier for recipients and others who use the terms and conditions to 
much more quickly identify how each awarding office's general terms and 
conditions vary from the DoD standard wording.
    The administrative burdens and associated costs to recipients due 
to the regulatory action proposed in this NPRM are primarily those 
resulting from the Governmentwide guidance to agencies that OMB issued 
in 2 CFR part 200. The few variations from the guidance noted in 
sections I.B.1 and I.B.4 of this SUPPLEMENTARY INFORMATION section are 
minor, and any slight effect they will have on burdens and associated 
costs should be to reduce them.

II. Regulatory Analysis

Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Order 12866, as supplemented by Executive Order 13563, 
directs each Federal agency to: Propose regulations only after 
determining that benefits justify costs; tailor regulations to minimize 
burdens on society, consistent with achieving regulatory objectives; 
maximize net benefits when selecting among regulatory approaches; to 
the extent feasible, specify performance objectives rather than the 
behavior or manner of compliance; and seek the views of those likely to 
be affected before issuing a notice of proposed rulemaking, where 
feasible and appropriate. The Department of Defense has determined that 
a regulatory implementation that includes a standard format for 
organizing the content of DoD Components' grant and cooperative 
agreement awards will maximize long-term benefits in relation to costs 
and burdens for recipients of those awards. This rule has been 
designated a ``significant regulatory action'' under section 3(f) of 
Executive Order 12866,

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although not an economically significant one. Accordingly, the rule has 
been reviewed by OMB.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) (2 U.S.C. 1532) requires that a Federal agency prepare a 
budgetary impact statement before issuing a rule that includes any 
Federal mandate that may result in the expenditure in any one year by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in 1995 dollars, updated 
annually for inflation. In 2015, that inflation-adjusted amount in 
current dollars is approximately $146 million. The Department of 
Defense has determined that this proposed regulatory action will not 
result in expenditures by State, local, and tribal governments, or by 
the private sector, of that amount or more in any one year.

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires an agency that is proposing 
a rule to provide a regulatory flexibility analysis or to certify that 
the rule will not have a significant economic impact on a substantial 
number of small entities. The Department of Defense certifies that this 
proposed regulatory action will not have a significant economic impact 
on substantial number of small entities beyond any impact due to 
provisions of it that implement OMB guidance at 2 CFR part 200.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35; 5 CFR part 1320, appendix A.1) (PRA), the Department of 
Defense has determined that there are no new collections of information 
contained in this proposed regulatory action.

Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it proposes a regulation that has Federalism 
implications. This proposed regulatory action does not have any 
Federalism implications.

List of Subjects in 2 CFR Part 1120

    Business and Industry, Colleges and universities, Cooperative 
agreements, Grants administration, Hospitals, Indians, Nonprofit 
organizations, Small business, State and local governments.


0
Accordingly, 2 CFR chapter XI, subchapter C is proposed to be amended 
by adding part 1120 to read as follows:

PART 1120--FORMAT FOR DOD GRANT AND COOPERATIVE AGREEMENT AWARDS

Sec.
1120.1 Purpose of this part.
1120.2 Applicability of this part.
1120.3 DoD Component implementation.
1120.4 Elements and subelements of the standard award format in 
relation to the organization of this part.
Subpart A--Award Cover Pages
1120.100 Purpose of the award cover pages.
1120.105 Content of the award cover pages.
1120.110 Use of alternative to DoD form.
Subpart B--Award-specific Terms and Conditions
1120.200 Purpose and inclusion of award-specific terms and 
conditions.
1120.205 Organization and wording of award-specific terms and 
conditions.
Subpart C--General Terms and Conditions
1120.300 Purpose of general terms and conditions.
1120.305 Requirement for general terms and conditions.
1120.310 Use of plain language.
1120.315 Availability of general terms and conditions.
Subpart D--Preamble to the General Terms and Conditions
1120.400 Requirement to include a preamble.
1120.405 Content of the preamble.
Subpart E--Administrative Requirements Portion of the General Terms and 
Conditions
1120.500 Scope of administrative requirements.
1120.505 Location of administrative requirements in the standard 
award format.
1120.510 Sources of administrative requirements.
1120.515 Incorporation of administrative requirements into general 
terms and conditions by reference.
Subpart F--National Policy Requirements Portion of the General Terms 
and Conditions
1120.600 Scope of national policy requirements.
1120.605 Location of national policy requirements in the standard 
award format.
1120.610 Source of national policy requirements.
1120.615 Incorporation of national policy requirements into general 
terms and conditions by reference.
Subpart G--Programmatic Requirements Portion of the General Terms and 
Conditions
1120.700 Scope of programmatic requirements.
1120.705 Location of programmatic requirements in the standard award 
format.
1120.710 Examples of programmatic requirements.

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


Sec.  1120.1  Purpose of this part.

    This part of the DoD Grant and Agreement Regulations (DoDGARs) 
establishes a standard format for DoD Components' grant and cooperative 
agreement awards. It thereby makes the content easier for a recipient 
to locate in different DoD Components' awards.


Sec.  1120.2  Applicability of this part.

    (a) To whom it applies. This part:
    (1) Sets forth requirements for DoD Components that award grants 
and cooperative agreements.
    (2) Does not impose requirements on recipients of DoD Components' 
awards.
    (b) To what awards it applies. This part applies to grants and 
cooperative agreements, other than Technology Investment Agreements 
(TIAs), awarded to any type of recipient entity.


Sec.  1120.3  DoD Component implementation.

    Each DoD Component that awards grants or cooperative agreements 
must:
    (a) Conform the format of its awards to the standard format 
established by this part no later than [18 months after the effective 
date of the final rule].
    (b) Update electronic systems it maintains for generating awards 
within 18 months of the issuance of a new or updated DoD form for the 
award cover pages, in order to implement that form in those systems, 
unless it has an approved deviation in accordance with Sec.  1120.110.


Sec.  1120.4   Elements and subelements of the standard award format in 
relation to the organization of this part.

    (a) The standard award format has three major elements that are 
designated as Divisions I through III of the award.
    (1) The first major element of the standard award format is 
comprised of the award cover pages. It is designated as Division I of 
the award.
    (2) The second major element is comprised of any award-specific 
terms and conditions. That element is designated as Division II of the 
award.
    (3) The last of the three major elements of the standard award 
format is comprised of the general terms and conditions. That element 
is designated as Division III of the award. It has four subelements 
that are designated as Subdivisions A through D of the general terms 
and conditions.
    (i) The first subelement of the general terms and conditions is the 
preamble, which is designated as Subdivision A.
    (ii) The second subelement of the general terms and conditions is 
comprised of terms and conditions addressing administrative 
requirements. That subelement is designated as

[[Page 78373]]

Subdivision B of the general terms and conditions.
    (iii) The third subelement of the general terms and conditions is 
comprised of terms and conditions addressing national policy 
requirements. That subelement is designated as Subdivision C of the 
general terms and conditions.
    (iv) The last of the four subelements of the general terms and 
conditions is comprised of any programmatic requirements that apply to 
awards using those general terms and conditions. That subelement is 
designated as Subdivision D of the general terms and conditions.
    (b) This part has seven subparts. Each subpart addresses one major 
element or subelement of the standard award format, as shown in the 
following table:

------------------------------------------------------------------------
  Major element or subelement of the
        standard award format                 Subpart of this part
------------------------------------------------------------------------
(1) Division I--Award cover pages....  Subpart A.
(2) Division II--Award[dash]specific   Subpart B.
 terms and conditions, if any.
(3) Division III--General terms and    Subpart C.
 conditions, comprised of four
 subelements.
(i) Subdivision A--The preamble to     Subpart D.
 the general terms and conditions.
(ii) Subdivision B--General terms and  Subpart E.
 conditions for administrative
 requirements.
(iii) Subdivision C of the--General    Subpart F.
 terms and conditions for national
 policy requirements.
(iv) Subdivision D--General terms and  Subpart G.
 conditions for programmatic
 requirements, if any.
------------------------------------------------------------------------

Subpart A--Award Cover Pages


Sec.  1120.100   Purpose of the award cover pages.

    The award cover pages comprise the portion of each DoD Component 
award or modification to an award that the DoD Component transmits to 
the recipient when it makes the award or modification. It:
    (a) Contains basic information about the award or modification and 
the recipient, as described in Sec.  1120.105;
    (b) Is signed by a DoD grants officer; and
    (c) Also is signed by the recipient's authorized organizational 
representative if the award or modification is a bilateral action that 
is to be signed on behalf of both the DoD Component and recipient.


Sec.  1120.105   Content of the award cover pages.

    The award cover pages of each DoD Component award or modification:
    (a) Must include, as a minimum, the following information about the 
award or modification:
    (1) The name of the DoD Component awarding office that made the 
award or modification.
    (2) The award number and, if the action is a modification, the 
modification number.
    (3) The type of award--e.g., grant or cooperative agreement.
    (4) The type of award action--e.g., new award, funding 
modification, or administrative (non-funding) modification. For an 
administrative modification, the award cover pages should include a 
brief description of the purpose of the modification (e.g., a no-cost 
extension of the end date of the period of performance).
    (5) For a new award or funding modification:
    (i) A brief description of the project or program supported by the 
award.
    (ii) The amount of the obligation or deobligation of Federal funds 
due to the current action and any accompanying change in the total 
amount of cost sharing or matching required under the award.
    (iii) The cumulative amounts of Federal funds and any corresponding 
non-Federal share obligated to date (i.e., the sums of the amounts of 
the current action and the cumulative amounts of prior obligations and 
deobligations).
    (iv) The total amount of the project costs in the currently 
approved budget through the end of the period of performance, the 
Federal share of that amount, and the non-Federal share.
    (v) The total value of the award; the Federal share of that total 
value (which includes Federal funding obligated to date; future 
incremental funding actions; and options for which amounts have been 
predetermined, whether or not they have been exercised yet); and the 
non-Federal share of that total value (i.e., total cost sharing or 
matching required under the award).
    (vi) A table such as the following may be helpful in clearly 
presenting the information described in paragraphs (a)(5)(ii) through 
(vi) of this section:

----------------------------------------------------------------------------------------------------------------
                                                                                Corresponding
                                                              Federal funds      non-Federal      Total amount
                                                                                    share
----------------------------------------------------------------------------------------------------------------
(A) Obligated or deobligated this action..................
(B) Cumulative obligations to date, including this and
 previous actions.........................................
(C) Planned project costs in the currently approved budget
 through the end of the period of performance, to include
 any future incremental funding obligations...............
(D) Total value, which includes any unexercised options
 for which amounts were established in the award..........
----------------------------------------------------------------------------------------------------------------

    (6) The obligation date (i.e., the date of the grants officer's 
signature) and, if different, the effective date.
    (7) The start date and current end date of the period of 
performance.
    (8) The statutory authority or authorities under which the award or 
modification was made.
    (9) The number and title of the program listed in the Catalog of 
Federal Domestic Assistance under which the award or modification was 
made.
    (10) For a new award (or, as needed, in a modification that amends 
any of the following information):
    (i) Whether the project or program under the award is research and 
development (R&D). This information is needed by auditors performing 
single audits of recipients because the OMB guidance to the auditors 
treats all Federal agencies' R&D programs as a single group (or 
``cluster'') of programs for audit sampling purposes (see the Single 
Audit Act requirements implemented in subpart E of 2 CFR part 1128 and 
FMS Article V in appendix E to part 1128).
    (ii) What the award includes in addition to the cover pages--i.e., 
the:

[[Page 78374]]

    (A) Scope of work or other appropriate content to specify the goals 
and objectives of the project or program supported by the award;
    (B) Approved budget; and
    (C) General, and any award-specific, terms and conditions of the 
award.
    (iii) Where the other portions of the award listed in paragraph 
(a)(10)(ii) of this section are located. A DoD Component generally 
should indicate in the award cover pages that the award includes the 
general terms and conditions by reference and specify their location 
(see Sec.  1120.315), rather than transmit them in their entirety with 
each award.
    (iv) The order of precedence in the event of conflict among the 
general and any award-specific terms and conditions and other potential 
sources of requirements (e.g., Federal statutes).
    (v) The name of, and contact information for, the individual or 
office in the DoD responsible for post-award administration of the 
award. If there are multiple individuals and offices for different 
post-award functions (e.g., payments and property administration), the 
award cover pages should provide information about each.
    (vi) The name of, and contact information for, the DoD Component's 
program manager or other point of contact for programmatic matters.
    (b) Must include, as a minimum, the following information about the 
recipient entity:
    (1) The recipient's unique entity identifier required for its 
registration in the System for Award Management (SAM). Currently, that 
is the Dun and Bradstreet Data Universal Numbering System (DUNS) 
number.
    (2) The recipient's business name and address, which must be the 
legal business or ``doing business as'' name and physical address in 
SAM at the time of award corresponding to the recipient's unique entity 
identifier.
    (3) The name and title of the recipient's authorized 
representative, either the individual who signed the application or 
proposal on behalf of the recipient entity or another individual 
designated by that entity.
    (4) The name of the recipient's Project or Program Director (PD) or 
Principal Investigator (PI) and his or her organization, if different 
from the name of the recipient organization. If there are multiple PD's 
or PI's, the name and organization of each should be included.
    (5) The indirect cost rate in effect at the start of the 
performance period for the award, which generally is a Governmentwide 
rate negotiated by the recipient's cognizant agency for indirect costs. 
However, this requirement does not apply--i.e., the award cover pages 
need not include the recipient's indirect cost rate--if the recipient 
entity affirms that it treats its indirect cost rate as proprietary 
information.
    (c) May also include, as applicable, elements such as:
    (1) A statement that the award can be amended only by a grants 
officer. The statement might also explain how amendments are issued.
    (2) Information about any planned, future incremental funding or 
options for which amounts were pre-determined.


Sec.  1120.110  Use of alternative to DoD form.

    (a) A DoD Component may use something other than a DoD form as its 
award cover pages only if:
    (1) There is not currently any DoD form for the award cover pages; 
or
    (2) The DoD Component obtains approval for a deviation from the 
requirement to use a DoD form from the Office of the Assistant 
Secretary of Defense for Research and Engineering, in accordance with 
the procedures specified in 32 CFR 21.340.
    (b) If a DoD Component does not use a DoD form for its award cover 
pages, as described in paragraph (a) of this section, its award cover 
pages must include all information specified in Sec.  1120.105.

Subpart B--Award-specific Terms and Conditions


Sec.  1120.200  Purpose and inclusion of award-specific terms and 
conditions.

    A DoD Component must include with each award, for transmission to 
the recipient, any terms and conditions needed to communicate 
requirements specific to the individual award as distinct from the more 
broadly applicable requirements in the general terms and conditions. 
For a modification to an award, only changes to previously transmitted 
terms and conditions must be included.


Sec.  1120.205  Organization and wording of award-specific terms and 
conditions.

    DoD Components should organize and word award-specific terms and 
conditions to make them as clear and easy to understand as possible for 
the benefit of recipients, award administrators, auditors, and others 
who may need to use them. The DoDGARs specify neither a standard 
organization nor standard wording for award-specific terms and 
conditions.

Subpart C--General Terms and Conditions


Sec.  1120.300  Purpose of general terms and conditions.

    The general terms and conditions comprise the portion of the award 
with requirements that apply to a class of awards (e.g., awards under a 
particular program or type of program activity, such as research or 
education, or for a class of recipients, such as for-profit entities).


Sec.  1120.305  Requirement for general terms and conditions.

    Each DoD Component must establish at least one set of general terms 
and conditions. A DoD Component may have more than one set, as it deems 
appropriate to reflect differences in its award terms and conditions 
across different programs, classes of recipients, or types of activity.


Sec.  1120.310  Use of plain language.

    (a) DoD Components must use plain language in:
    (1) General terms and conditions of grants and cooperative 
agreements to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes. Those 
awards are subject to the DoDGARs provisions in:
    (i) 2 CFR parts 1128 through 1138, the appendices to which provide 
standard wording for general terms and conditions addressing 
administrative requirements. That standard wording uses personal 
pronouns.
    (ii) 2 CFR part 1122, the appendices to which provide standard 
wording for general terms and conditions addressing commonly applicable 
national policy requirements. That standard wording also uses personal 
pronouns.
    (2) The national policy requirements in Subdivision B of general 
terms and conditions of grants and cooperative agreements to for-profit 
entities, which also are subject to 2 CFR part 1122.
    (b) Although the DoDGARs currently do not provide standard wording 
for terms and conditions addressing administrative requirements for use 
in awards to for-profit entities, DoD Components are strongly 
encouraged to use plain language and personal pronouns in their terms 
and conditions of those other awards. The DoDGARs provisions that 
specify the administrative requirements to incorporate into those terms 
and conditions are listed in Sec.  1120.510(b).


Sec.  1120.315  Availability of general terms and conditions.

    (a) A DoD Component that issues a program announcement under which

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grants or cooperative agreements may be awarded must maintain on the 
Internet the general terms and conditions for those awards if:
    (1) The distribution of the program announcement is unlimited; and
    (2) The DoD Component anticipates making 10 or more awards per year 
using those general terms and conditions.
    (b) Each DoD Component that maintains a set of general terms and 
conditions on the Internet must also maintain an archive of previous 
versions of that set at the same Internet location, for use by 
recipients, post-award administrators, auditors, and others. Each 
version must be labeled with its effective dates.
    (c) If a DoD Component has a set of general terms and conditions 
that is not subject to the requirement in paragraph (a) of this section 
and the DoD Component chooses not to maintain that set on the Internet:
    (1) It must tell potential applicants or proposers in the program 
announcement, if there is one, how they may view or obtain a copy of 
the general terms and conditions; or
    (2) If there is no program announcement (e.g., if it is a 
noncompetitive program for which all recipients are known in advance), 
the DoD Component must provide the general terms and conditions to each 
recipient no later than the time of award.

Subpart D--Preamble to the General Terms and Conditions


Sec.  1120.400  Requirement to include a preamble.

    Each DoD Component must include a preamble as Subdivision A of each 
set of general terms and conditions it maintains, to provide 
information to help recipients understand how to use those terms and 
conditions.


Sec.  1120.405  Content of the preamble.

    The preamble for each set of general terms and conditions must 
include at least the following information elements, organized in the 
order shown:
    (a) Table of contents. This should show the articles within each 
other subdivision of the general terms and conditions (Subdivisions B 
and C for administrative and national policy requirements and, if 
needed, Subdivision D for programmatic requirements).
    (b) Scope. This element identifies the programs, types of awards, 
and types of recipient entities that are subject to the set of general 
terms and conditions.
    (c) Effective date. This is the date on which the particular 
version of the set of general terms and conditions became effective, 
which enables a recipient to easily distinguish it from any earlier or 
subsequent versions. The version date of each article within the 
general terms and conditions must be indicated in parentheses following 
the title of the article, to help a recipient identify the articles 
that changed from previous versions of the general terms and 
conditions.
    (d) English language. The purpose of this element of the preamble 
is to implement OMB guidance in 2 CFR 200.111(b) by informing each 
recipient that:
    (1) It must translate any of the award content (including 
attachments to it and any material incorporated into the award by 
reference) into another language to the extent that the recipient's 
compliance with the award's terms and conditions depends upon a 
significant number of its employees who are not fluent in English being 
able to read and comprehend that content.
    (2) If it does translate any award content into another language, 
either as required by paragraph (d)(1) of this section or at its own 
initiative, the original award content in the English language will 
take precedence in the event of an inconsistency between the award 
requirements in the English and translated versions.
    (e) Plain language. This section of the preamble is required when 
the general terms and conditions use personal pronouns, in accordance 
with Sec.  1120.310. Its purpose is to inform recipients about the 
meanings of those personal pronouns.
    (f) Definitions. Providing the definitions of words and phrases 
that are used in the general terms and conditions and defined in the 
DoDGARs is more helpful to recipients than referring them to the 
DoDGARs to find the definitions.

Subpart E--Administrative Requirements Portion of the General Terms 
and Conditions


Sec.  1120.500  Scope of administrative requirements.

    The administrative requirements in an award are post-award and 
after-the-award requirements for recipients in the following subject 
matter areas:
    (a) Financial and program management, to include financial 
management system standards, payment, allowable costs, program and 
budget revisions, audits, cost sharing or matching, and program income.
    (b) Property administration, to include title vesting, property 
management system standards, and use and disposition of tangible and 
intangible property.
    (c) Recipient procurement procedures.
    (d) Financial, programmatic, property, and other reporting.
    (e) Records retention and access, remedies, claims and disputes, 
and closeout.


Sec.  1120.505  Location of administrative requirements in the standard 
award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes administrative requirements as Subdivision B of the general 
terms and conditions.


Sec.  1120.510  Sources of administrative requirements.

    The source of administrative requirements is:
    (a) Subchapter D of this chapter for grant and cooperative 
agreement awards to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes. Subchapter 
D provides a standard set of articles into which a DoD Component 
organizes the administrative requirements. It also provides standard 
wording for the general terms and conditions in those articles, as 
explained in the overview of subchapter D in 2 CFR part 1126.
    (b) 32 CFR part 34 for grant and cooperative agreement awards to 
for-profit entities. That part of the DoDGARs specifies the 
administrative requirements for awards to those entities but does not 
provide standard articles or terms and conditions.


Sec.  1120.515  Incorporation of administrative requirements into 
general terms and conditions by reference.

    (a) For awards to institutions of higher education, nonprofit 
organizations, States, local governments, and Indian tribes, DoD 
Components are strongly encouraged to construct the portion of their 
general terms and conditions addressing administrative requirements by:
    (1) Incorporating the standard wording of each article of 
administrative requirements provided in subchapter D of this chapter 
(the standard wording of the articles is in the appendices to 2 CFR 
parts 1128 through 1138) into those general terms and conditions by 
reference; and
    (2) Stating any variations from that standard wording (e.g., any 
sections or paragraphs that the DoD Component adds, revises, or omits, 
consistent with the DoDGARs prescription for use of the standard 
wording).
    (b) Incorporating that standard wording into general terms and 
conditions by reference, rather than

[[Page 78376]]

including the full text of each article of the general terms and 
conditions, will make it easier for those who must use terms and 
conditions of multiple DoD Components' awards (e.g., recipients, DoD 
Components' post-award administrators, and auditors) to quickly 
identify how each Component's general terms and conditions differ from 
the DoD standard wording.

Subpart F--National Policy Requirements Portion of the General 
Terms and Conditions


Sec.  1120.600  Scope of national policy requirements.

    National policy requirements, as defined in 2 CFR 1122.2, are 
requirements:
    (a) That are prescribed by a statute, Executive order, policy 
guidance issued by the Executive Office of the President, or regulation 
that specifically refer to grants, cooperative agreements, or financial 
assistance in general;
    (b) With which a recipient of a grant or cooperative agreement must 
comply during the period of performance; and
    (c) That are outside subject matter areas covered by administrative 
requirements, as described in Sec.  1120.500.


Sec.  1120.605  Location of national policy requirements in the 
standard award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes national policy requirements as Subdivision C of the general 
terms and conditions.


Sec.  1120.610  Source of national policy requirements.

    The source of national policy requirements is 2 CFR part 1122.


Sec.  1120.615  Incorporation of national policy requirements into 
general terms and conditions by reference.

    For the same reason given in Sec.  1120.515(b), DoD Components are 
strongly encouraged to construct the portion of their general terms and 
conditions addressing national policy requirements for awards to all 
types of recipient entities, including for-profit entities, by:
    (a) Incorporating the standard wording of each article of national 
policy requirements provided in the appendices to 2 CFR part 1122 into 
those general terms and conditions by reference; and
    (b) Stating any variations from that standard wording (e.g., any 
added, omitted, or revised paragraphs, based on which national policy 
requirements apply to programs and recipients for which the general 
terms and conditions are used).

Subpart G--Programmatic Requirements Portion of the General Terms 
and Conditions


Sec.  1120.700  Scope of programmatic requirements.

    A requirement is most appropriately included in the programmatic 
requirements portion of the general terms and conditions if it:
    (a) Is not in one of the subject matter areas covered by the 
administrative requirements in Subdivision B of the general terms and 
conditions, as described in Sec.  1120.500.
    (b) Does not meet the criteria in Sec.  1120.600 for a national 
policy requirement.
    (c) Broadly applies to awards using the general terms and 
conditions. Requirements that apply to relatively few of those awards 
are more appropriately included in the award-specific terms and 
conditions of the individual awards to which they apply.
    (d) Is expected to be in effect for the foreseeable future, rather 
than for a limited period of time. For example, a requirement in an 
annual appropriations act that applies specifically to funding made 
available by that act is better addressed through the award-specific 
terms and conditions of awards or modifications to which it applies.


Sec.  1120.705  Location of programmatic requirements in the standard 
award format.

    As shown in the table in Sec.  1120.4(b), the standard award format 
includes programmatic requirements as Subdivision D of the general 
terms and conditions.


Sec.  1120.710  Examples of programmatic requirements.

    Examples of provisions appropriately included as programmatic 
requirements in Subdivision D of the general terms and conditions 
include:
    (a) Requirements for recipients to acknowledge the DoD Component's 
support in publications of results of the projects or programs 
performed under awards.
    (b) Requirements for recipients to promptly alert the DoD Component 
if they develop any information in the course of performing the 
projects or programs under their awards that, in their judgment, might 
adversely affect national security if disclosed.
    (c) Reservation of the Government's right to use non-Federal 
personnel in any aspect of post-award administration of awards, with 
appropriate nondisclosure requirements on those personnel to protect 
sensitive information about recipients or the projects or programs 
supported by their awards.

    Dated: October 19, 2016.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-25699 Filed 11-4-16; 8:45 am]
BILLING CODE 5001-06-P