Award Format for DoD Grants and Cooperative Agreements, 51161-51167 [2020-16421]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Unknown Section]
[Pages 51161-51167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16421]


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DEPARTMENT of DEFENSE

Office of the Secretary

2 CFR Part 1120

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


Award Format for DoD Grants and Cooperative Agreements

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

ACTION: Final rule.

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SUMMARY: This final rule is the second of a sequence of six final rules 
in this issue of the Federal Register that collectively establish for 
DoD grants and cooperative agreements an updated interim implementation 
of Government wide 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 rule adds a new DoDGARs part to establish a standard format for 
organizing the content of DoD Components' awards of grants and 
cooperative agreements and modifications to them.

DATES: This rule is effective October 19, 2020.

FOR FURTHER INFORMATION CONTACT: Barbara Orlando, Basic Research 
Office, telephone 571-372-6413.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose of the Final Rule

    As explained in the SUPPLEMENTARY INFORMATION section of the final 
rulemaking immediately preceding this one in this issue of the Federal 
Register, this is one of six rules that collectively make needed 
updates to the Department of Defense Grant and Agreement Regulations 
(DoDGARs). These rules were published as Notices of Proposed Rulemaking 
(NPRM) on November 7, 2016 (81 FR 78356).
    One purpose of the overall 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).
    This final rule does that by implementing provisions of the OMB 
guidance on the minimum content that Federal agencies' awards must 
include. Another purpose of this rule is to provide greater uniformity 
in the content and organization of DoD grants and cooperative 
agreements. It does so by:
     Establishing requirements for uniform content, beyond the 
minimum identified in the OMB guidance; and
     Specifying a standard format for organizing the content of 
DoD Component grants and cooperative agreements to all types of 
entities, including entities other than those addressed in the OMB 
guidance.

B. Revisions Implemented by This Rule

    This final rule implements provisions of the OMB guidance on the 
minimum content that Federal agencies' awards must include on the 
notice of award. This rule revises current practices by:
     Establishing requirements for uniform content, beyond the 
minimum identified in the OMB guidance; and
     Specifying a standard format for organizing the content of 
DoD Component grants and cooperative agreements to all types of 
entities, including entities other than those addressed in the OMB 
guidance.

C. Legal Authorities for the Regulatory Action

    There are two statutory authorities for this final rulemaking:
     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.

II. Regulatory History

    In December 2014 (79 FR 76047), DoD established an interim 
implementation of the final guidance, ``Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards,'' published by the Office of Management and Budget (OMB) on 
December 26, 2013, in 2 CFR part 200 (Uniform Guidance--available at 78 
FR 78589). DoD then published a Notice of Proposed Rulemaking (November 
7, 2016 (81 FR 78369)) that proposed to add 2 CFR part 1120 to 
establish a standard format for organizing the content of DoD

[[Page 51162]]

Components' grant and cooperative agreement awards and modifications to 
them.

III. Comments and Responses

    DoD received no public comments on the proposed addition of 2 CFR 
part 1120, including the several areas cited in the NPRM as variations 
from the OMB guidance, i.e., providing more detailed explanations of 
some of the information elements listed in the OMB guidance in 2 CFR 
200.210(a); clarifying 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; and translation of awards into a language other than English.
    DoD made several changes in this final rule for accuracy and 
consistency with other parts of the DoDGARs being made final today as 
follows:
     In 2 CFR 1120.105(a)(10)(iii), we added language to 
clarify that DoD Components are required to make known to recipients 
(1) where portions of the award (as specified in 2 CFR 
1120.105(a)(10)(ii)) are located, and, (2) when incorporating any 
portion of the award by reference, what is being incorporated and where 
to find the full text.
     To make the wording of part 1120 consistent with the scope 
of Subchapter D of the DoDGARs (parts 1126 through 1138), we added the 
phase ``cost-type'' to modify ``awards'' in 2 CFR 1120.510(a) and 
1120.515(a).
    In addition, we made several minor editorial changes for clarity 
and to conform to current terminology, e.g., substituting ``funding 
opportunity announcement'' for ``program announcement.''

IV. Regulatory Analyses

    We developed this rule after considering numerous statutes and 
Executive Orders (E.O.s) related to rulemaking. Below we summarize our 
analyses based on these statutes or E.O.s.

A. Regulatory Planning and Review

    Executive Orders 12866 (Regulatory Planning and Review) and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated as a ``not significant'' 
regulatory action, and not economically significant, under section 3(f) 
of Executive Order 12866. Accordingly, the rule has not been reviewed 
by the Office of Management and Budget (OMB) under the requirements of 
these Executive Orders.
    Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs) directs agencies to reduce regulation and control 
regulatory costs and provides that ``for every one new regulation 
issued, at least two prior regulations be identified for elimination, 
and that the cost of planned regulations be prudently managed and 
controlled through a budgeting process.'' This is not subject to the 
requirements of this Executive Order because it is not significant 
under Executive Order 12866.
Costs
    DoD has found that this rule will not impose costs on the public, 
as there are not any costs associated with standardizing the DoD award 
forms.
Benefits
    The benefits of this regulatory action result from:
     Standardization across DoD of the location of basic 
information about the award and requirements contained in award terms 
and conditions across awards made by about 100 DoD Component awarding 
offices; and
     DoD Components incorporating DoD-wide standard wording for 
administrative and national policy requirements into their general 
terms and conditions by reference, making it easier to identify how 
each awarding office's general terms and conditions vary from the DoD 
standard wording.
    For the first time, there is a uniform implementation for DoD of 
OMB guidance, national policy requirements, and DoD policy through 
general terms and conditions. In addition, the standard format should 
enable recipients to more easily and quickly find requirements in 
different offices' awards, as each requirement should appear in a 
standard location across awards.
    Standard wording and use of plain language should reduce the time 
that otherwise would be spent reading and interpreting differently 
worded terms and conditions for the same requirements. Based on 
comments DoD has received from recipients since it established the 
DoDGARs in the 1990s, we expect that the standard award format and use 
of standard wording and plain language in general terms and conditions 
will reduce administrative burdens for recipients while improving 
transparency and ease of compliance. The primary benefit will be to 
those recipients that receive awards from multiple DoD Components, but 
all recipients should benefit from the use of such a format.
Alternatives
    1. No action--If no action was taken, DoD would not be compliant 
with OMB requirements to move all financial assistance regulations to 2 
CFR.
    2. Next Best alternative--The next best alternative would be to 
implement requirements beyond the mandatory minimum content that 
Federal agencies' awards must include. By creating additional 
requirements, the public will experience an additional regulatory 
burden without, necessarily, gaining an additional benefit. Therefore, 
this alternative was not chosen as the preferred alternative.

B. Congressional Review Act (5 U.S.C. 801, et seq.)

    Under the Congressional Review Act, a major rule may not take 
effect until at least 60 days after submission to Congress of a report 
regarding the rule. A major rule is one that would have an annual 
effect on the economy of $100 million or more or have certain other 
impacts. This rule is not a major rule under the Congressional Review 
Act.

C. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as 
amended, requires Federal agencies to consider the potential impact of 
regulations on small entities during rulemaking. The term ``small 
entities'' comprises small businesses, not-for-profit organizations 
that are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations of less than 
50,000. This rule will not impose any impacts on any entities. This 
means that there will be no economic impacts on any entities. 
Therefore, the Department of Defense under 5 U.S.C. 601 et seq. 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities.

D. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996, Public Law 104-121, we want to assist small 
entities in understanding this rule so that they can better evaluate 
its effects on them and participate in the rulemaking. If the rule 
would affect your small business, organization, or governmental

[[Page 51163]]

jurisdiction and you have questions concerning its provisions or 
options for compliance, please contact the person in the FOR FURTHER 
INFORMATION CONTACT section of this rule.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector of $100,000,000 (adjusted for 
inflation) or more in any 1 year. Although this rule will not result in 
such an expenditure, we do discuss the effects of this rule elsewhere 
in this preamble.

F. Collection of Information

    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520) applies to 
collections of information using identical questions posed to, or 
reporting or recordkeeping requirements imposed on, ten or more members 
of the public. This rule does not call for a new collection of 
information under the PRA.

G. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This proposed rule does not have federalism implications 
that warrant the preparation of a federalism assessment in accordance 
with Executive Order 13132.

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 amended by adding part 
1120 to read as follows:

PART 1120--AWARD FORMAT FOR DOD GRANTS AND COOPERATIVE AGREEMENTS

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 award format for DoD Components' grants and 
cooperative agreements. 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.

[[Page 51164]]

That subelement is designated as 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 Table 
1:

                        Table 1 to Paragraph (b)
------------------------------------------------------------------------
    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 terms  Subpart B.
 and conditions, if any.
(3) Division III--General terms and         Subpart C.
 conditions, comprised of four
 subelements:.
(i) Subdivision A--The preamble to the      Subpart D.
 general terms and conditions.
(ii) Subdivision B--General terms and       Subpart E.
 conditions for administrative
 requirements.
(iii) Subdivision C of the--General terms   Subpart F.
 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 of a grant or cooperative agreement 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 grant or cooperative 
agreement 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 (Federal Award Identification Number or FAIN) 
and, if the action is a modification, the modification number.
    (3) The type of award--i.e., 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 even if that 
share is ``zero.''
    (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):

[[Page 51165]]

    (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:
    (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 portions of the award listed in paragraph 
(a)(10)(ii) of this section are located, which content the DoD 
Component generally should incorporate into the award by reference. 
When incorporating that content into the award by reference, the DoD 
Component must both:
    (A) Indicate in the award cover pages that the award incorporates 
those items into the award by reference, thereby making them an 
integral part of the award; and
    (B) 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 PDs 
or co-PIs, 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

[[Page 51166]]

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 funding opportunity announcement 
under which 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 funding opportunity 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 funding 
opportunity 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 funding opportunity 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 cost-type 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 cost-type awards to institutions of higher education,

[[Page 51167]]

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 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 to be included in a 
grant or cooperative agreement 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 placed on those personnel to 
protect sensitive information about recipients or the projects or 
programs supported by their awards.

    Dated: July 24, 2020.
Aaron T. Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2020-16421 Filed 8-18-20; 8:45 am]
BILLING CODE 5001-06-P