Tailoring the Application of the Uniform Guidance to the BEAD Program; Request for Comments, 42918-42925 [2023-14114]
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undersized red grouper that are
harvested seaward of a line
approximating the 35-fathom (64-meter)
contour on 3 federally permitted
commercial vessels with eastern Gulf
reef fish bottom longline endorsement
(project vessels). The EFP would allow
the applicant to study an optimized
retention management strategy that
would require retention of all
undersized red grouper harvested by
bottom longline gear in Gulf Federal
waters deeper than 35 fathoms (64
meters). The project would also examine
the effectiveness of incentivizing bottom
longline fisherman to target fishing
areas where undersized red grouper
discards are historically low.
Over 6 years of electronic monitoring
(EM) data collected by the applicant
indicates that in the primary red
grouper commercial fishing areas of the
eastern Gulf, 46.7 percent of red grouper
harvested in waters less than 35 fathoms
(64 meters) are undersized and
discarded. Of those discarded
undersized red grouper, an estimated 25
percent of those discarded red grouper
die after release. For red grouper
commercially harvested in water deeper
than 35 fathoms (64 meters), 18.7
percent of the fish are undersized and
discarded, of which 42.7 percent
estimated to die. These derived discard
mortality estimates are a minimum
value for bottom longline gear given the
increased biological stresses on
discarded fish that can occur when
using this gear type. In 2018, the
Southeast Data Assessment and Review
61, used a discard mortality rate of 44.1
percent for red grouper harvested with
bottom longline gear.
The optimized retention management
strategy tested under the EFP would
require retention of all undersized red
grouper harvested deeper than 35
fathoms on the three project vessels
during their normal fishing operations.
The applicant chose the 35 fathom (64
meter) depth contour based on the EM
discard data, which indicates that
approximately 3,000 lb (1,361 kg),
gutted weight, of undersized red
grouper would be subjected to high
post-release mortality (and thus lost to
both the fishery and the population) and
could be sustainably retained.
Therefore, the undersized fish retention
limit is expected to eliminate red
grouper discards in water deeper than
35 fathoms (64 meters). The 35 fathom
(64 meter) depth contour is also
consistent with the Gulf reef fish bottom
longline seasonal prohibition in 50 CFR
622.35(b)(1).
The EFP would be effective from
January 1, 2024, through December 31,
2024, or until the project vessels have
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retained a combined 3,000 lb (1,361 kg),
gutted weight, of undersized red
grouper. The three project vessels would
be equipped with EM systems, which
use multiple cameras and sensors to
record fishing activity, and would be
required to have the EM systems on
during all commercial fishing activities.
In Gulf Federal waters, all commercial
grouper harvest occurs within the
individual fishing quota (IFQ) system
where each participating commercial
vessel may harvest up to their respective
allocation, in pounds, of an IFQ species.
The three project vessels are part of the
IFQ system and will possess the
necessary red grouper allocation to
harvest the amount of fish requested
under the EFP. The three vessels will
not be changing their normal fishing
activities or normal fishing locations for
the project, and except for the limited
retention of undersized red grouper,
would comply with all other applicable
Federal regulations.
Undersized red grouper that are
harvested in waters seaward of the line
approximating the 35 fathom (64 meter)
depth contour will be fitted with unique
tags supplied to each vessel for this
project. The tag will facilitate dockside
sorting where these tagged undersized
red grouper will be weighed separately
to ensure that the poundage from
undersized red grouper counted towards
the total allowable amount under the
EFP. Undersized red grouper will be
weighed and processed through the IFQ
system and assigned their own separate
category on the weigh-out ticket, to note
any pricing differences from the rest of
the IFQ catch. The tagged fish will be
further utilized by Florida Fish and
Wildlife Conservation Commission
(FWC) dockside samplers who will
obtain biological data (e.g., length
measurements, otoliths). The FWC will
provide the otoliths with corresponding
individual fish information to the NMFS
laboratory in Panama City, Florida for
aging analysis. Lastly, after the needed
sampling, these fish will be sold by IFQ
dealers and marketability of undersized
red grouper would be assessed.
All trips made by the 3 project vessels
will include 100 percent video review
using established and approved
protocols to verify fishing and project
activity. The fish tags will serve to link
each fish to a specific location of
capture, documented through the EM
systems and vessel monitoring system.
Fish catch locations will be linked with
associated metadata (e.g., depth, bottom
type), available in a database of
environmental, bathymetric, and
physical data.
NMFS finds the application warrants
further consideration based on a
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preliminary review. Possible conditions
the agency may impose on the EFP, if
granted, include but are not limited to,
a prohibition on fishing within marine
protected areas, marine sanctuaries, or
special management zones without
additional authorization.
A final decision on issuance of the
EFP will depend on NMFS’ review of
public comments received on the
application, consultations with the
appropriate fishery management
agencies of the affected states, the Gulf
of Mexico Fishery Management Council,
and the U.S. Coast Guard, and a
determination that the activities to be
taken under the EFP are consistent with
all other applicable laws.
Authority: 16 U.S.C. 1801 et seq.
Dated: June 29, 2023.
Kelly Denit,
Director, Office of Sustainable Fisheries,
National Marine Fisheries Service.
[FR Doc. 2023–14186 Filed 7–3–23; 8:45 am]
BILLING CODE 3510–22–P
DEPARTMENT OF COMMERCE
National Telecommunications and
Information Administration
[Docket No.: 230622–0154]
Tailoring the Application of the
Uniform Guidance to the BEAD
Program; Request for Comments
National Telecommunications
and Information Administration, U.S.
Department of Commerce.
ACTION: Notice; request for comment.
AGENCY:
The Broadband Equity,
Access and Deployment (BEAD)
Program was established in November
2021 through the Infrastructure
Investment and Jobs Act, also known
(and referred to subsequently herein) as
the Bipartisan Infrastructure Law. Under
the BEAD Program, the National
Telecommunications and Information
Administration (NTIA) is responsible
for administering $42.45 billion in
grants to the States, Territories, and the
District of Columbia (Eligible Entities)
with the principal focus of ensuring that
every American has access to affordable,
reliable high-speed internet service.
Various stakeholders have requested
NTIA to consider exemptions of certain
provisions of OMB’s Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards (Uniform Guidance)
from application to grants and subgrants
awarded under the BEAD Program. In
this Notice, NTIA seeks public comment
on the issues raised by stakeholders and
other questions relating to the
SUMMARY:
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relationship between the Uniform
Guidance and the BEAD Program.
DATES: Submit written comments on or
before 5 p.m. Eastern Standard Time on
August 4, 2023.
ADDRESSES: You may submit public
comments on this action, identified by
Regulations.gov docket number NTIA–
2023–0007, by any of the following
means:
1. Using the Federal e-Rulemaking
Portal at https://www.regulations.gov
(our preferred method). The docket
established for this opportunity to
comment can be found at
www.Regulations.gov, NTIA–2023–
0007. Click the ‘‘Comment Now!’’ icon,
complete the required fields, and enter
or attach your comments.
2. Mailing a printed submission to
National Telecommunications and
Information Administration, U.S.
Department of Commerce, 1401
Constitution Avenue NW, Room 4878,
Washington, DC 20230, Attention:
BEAD Uniform Guidance RFC.
Please submit your comments in only
one of these ways to minimize the
receipt of duplicate submissions.
FOR FURTHER INFORMATION CONTACT:
Please direct questions regarding this
Notice to Sean Conway at sconway@
ntia.gov, indicating ‘‘BEAD Uniform
Guidance Request for Comment’’ in the
subject line, or if by mail, addressed to
Sean Conway, National
Telecommunications and Information
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; or by
telephone: (202) 482–1816. Please direct
media inquiries to NTIA’s Office of
Public Affairs, press@ntia.gov or (202)
482–7002.
SUPPLEMENTARY INFORMATION:
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I. Background
The Office of Management and Budget
(OMB) released the Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards (2 CFR part 200)
(Uniform Guidance) on December 26,
2013, which consolidated eight existing
Federal circulars into a single guidance
document. The Uniform Guidance
streamlined and eased administrative
burdens across the Federal Government
in the administration of Federal
financial assistance programs, thus
increasing the efficiency and
effectiveness of Federal awards, while
also strengthening oversight over
Federal funds to prevent waste, fraud,
and abuse. OMB may allow exceptions
from the requirements of the Uniform
Guidance, pursuant to 2 CFR 200.102.
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The Uniform Guidance generally sets
out requirements for Federal awards to
‘‘non-federal entities.’’ 1 While
commercial entities do not fall within
the definition of non-Federal entities,
the Uniform Guidance provides that
‘‘[f]ederal awarding agencies may apply
subparts A through E’’ of these rules to
other types of entities, including ‘‘forprofit entities.’’ 2 Federal agencies
administering Federal financial
assistance programs may, and often
have, adopted standard terms and
conditions (ST&Cs) to implement the
Uniform Guidance and provide
additional guidance to subagencies and
relevant stakeholders (e.g., applicants).
Federal agencies can, for example,
expand application of the Uniform
Guidance to include commercial entities
through (a) the operation of an agency’s
Federal financial assistance ST&Cs and/
or (b) the ‘‘pass through’’ provisions of
the Uniform Guidance when a nonFederal entity issues a subaward to a
commercial entity.3
The Department of Commerce (DOC)
adopted the Uniform Guidance and gave
it regulatory effect in December 2014.4
The DOC has extended its application of
the Uniform Guidance to commercial
entities in its Financial Assistance
Standard Terms and Conditions (DOC
ST&Cs), which governs implementation
of DOC financial assistance awards.5
Thus, absent modification of the ST&Cs,
the DOC ST&Cs require that DOC’s
Federal financial assistance programs
apply the Uniform Guidance to both
non-Federal entities and commercial
entities.
In accordance with the DOC ST&Cs,
NTIA has routinely applied the relevant
subparts of the Uniform Guidance to
non-Federal entities and commercial
entities in its grant programs that fund
last mile and middle mile broadband
deployment, such as the Broadband
Technologies Opportunities Program
(BTOP), the Broadband Infrastructure
1 2 CFR 200.102(a)(1); see also 2 CFR 200.1
(defining ‘‘Non-Federal entity’’ to mean ‘‘a state,
local government, Indian tribe, institution of higher
education (IHE), or nonprofit organization that
carries out a Federal award as a recipient or
subrecipient.’’).
2 2 CFR 200.101(a)(2).
3 2 CFR 200.331.
4 See 2 CFR 1327.101; Federal Awarding Agency
Regulatory Implementation of Office of
Management and Budget’s Uniform Administrative
Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 79 FR 75867.
5 Department of Commerce, Financial Assistance
ST&Cs, Preface (11/12/20) (‘‘[U]nless otherwise
provided by the terms and conditions of this DOC
financial assistance award, subparts A through E of
2 CFR part 200 and the Standard Terms are
applicable to for-profit entities, foreign public
entities and to foreign organizations that carry out
a DOC financial assistance award.’’).
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Program, the Tribal Broadband
Connectivity Program, and the Middle
Mile Grants Program established by the
Bipartisan Infrastructure Law. Such
application of the Uniform Guidance
occurred without significant opposition,
or even significant discussion, from
applicants or program participants or
apparent material impact on the
programs or the projects funded
thereunder.
Consistent with this approach, the
Notice of Funding Opportunity (NOFO)
for the BEAD Program provides that the
Uniform Guidance and DOC ST&Cs will
apply to the BEAD Program.6
II. Request for Comment
Following publication of the NOFO,
various stakeholders requested that
NTIA clarify the extent to which the
Uniform Guidance applies to grants and
subgrants awarded under the BEAD
Program, if at all, and identified
provisions of the Uniform Guidance that
they argue will deter the participation of
internet service providers (ISPs) in the
BEAD Program and/or increase the costs
that subgrantees will incur—and the
award amounts they will require—to
participate in the program without
concomitant benefit. These stakeholders
also requested that NTIA address their
concerns by waiving or otherwise
modifying the application of the
Uniform Guidance to the BEAD
Program.
This Request for Comment affords all
interested persons an opportunity to
provide input on any exemptions from
the Uniform Guidance that might help
facilitate the implementation of the
BEAD Program. Given the
unprecedented amount of funding
Congress made available through the
BEAD Program and the scale, scope, and
character of the deployment challenge
the Program is designed to resolve, it is
critically important that NTIA operate
this program as effectively and
efficiently as possible, while also
ensuring a high level of accountability
to prevent waste, fraud, and abuse. This
approach will further the goal of
ensuring all Americans have access to
affordable, reliable, high-speed internet
service.
The BEAD Program differs from prior
Federal broadband funding programs
administered by NTIA, the Federal
Communications Commission (FCC),
the United States Department of
Agriculture, and other Federal entities
in important ways. First, the BEAD
6 NTIA, Notice of Funding Opportunity,
Broadband Equity, Access, and Deployment
Program (hereinafter ‘‘NOFO’’) at 86, section
VII.D.1–2 (2022).
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Program is the first broadband funding
program to require that awardees ensure
the delivery of qualifying broadband
service to all unserved locations, and (to
the extent funds are available) all
underserved locations within their
jurisdiction. Prior programs have
targeted areas with specific
demographic characteristics (e.g., rural
areas) or particular classes of network
operators (e.g., rate of return incumbent
local exchange carriers), resulting in
significant, but incomplete,
improvements in availability. But
Congress mandated that the BEAD
Program ensure universal availability of
high-speed internet access, including to
those locations that have not been
addressed by prior programs because
they have proven to be the most difficult
and expensive to serve. This
unprecedented effort will require that
each Eligible Entity maximize
incentives for provider participation.
To meet this challenge, the BEAD
Program will provide a historic level of
grant funding, providing significant
resources to every State, Territory, and
the District of Columbia. Each of these
Eligible Entities will be required to
conduct a ‘‘subgrantee selection
process’’ to identify subgrantees 7 that
will build and operate networks to
deliver qualifying broadband service to
every unserved and underserved
location in its jurisdiction. Subgrantees
that receive awards from Eligible
Entities to build broadband networks in
many cases likely will retain ownership
of those networks in perpetuity, subject
to award conditions mandating that, for
a designated period of time, the
applicable program requirements are
met and the public continues to benefit
from this Federal investment.
The relevant provisions of the
Bipartisan Infrastructure Law use the
terms ‘‘subgrantee’’ and ‘‘subgrant’’—
rather than ‘‘subrecipient’’ or
‘‘subaward’’ as used in the Uniform
Guidance.8 Faithfully implementing
these statutory provisions, the NOFO
uses this same terminology and explains
that ‘‘[a]s used herein, the terms
‘subgrantee’ and ‘subgrant’ herein are
meant to have the same meaning,
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7 Subgrantees
may be traditional commercial
broadband ISPs or ‘‘non-traditional broadband
providers,’’ meaning ‘‘an electric cooperative,
nonprofit organization, public-private partnership,
public or private utility, public utility district,
Tribal entity, or local government (including any
unit, subdivision, authority, or consortium of local
governments) that provides or will provide
broadband services.’’ BEAD NOFO at 14, section
I.C.(p).
8 Infrastructure Investment and Jobs Act of 2021,
Division F, Title I, Section 60104, Public Law 117–
58, 135 Stat. (Nov. 15, 2021) (otherwise known as
the Bipartisan Infrastructure Law).
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respectively, as the terms ‘subrecipient’
and ‘subaward’.’’ 9 While some have
argued that Eligible Entities should be
permitted to structure BEAD Program
subgrants as ‘‘contracts,’’ NTIA
continues to adhere to the interpretation
that awards are made as ‘‘subgrants’’ to
‘‘subgrantees,’’ and that ‘‘subgrantees’’
are not performing BEAD Program
projects as contractors to the Eligible
Entity. They are, instead, subrecipients
‘‘carrying out a portion of a Federal
award.’’ 10 This key statutory difference
notwithstanding, NTIA below requests
comment on proposals to modify the
application of certain provisions of the
Uniform Guidance consistent with the
U.S. Department of the Treasury’s
(Treasury Department) Coronavirus
State and Local Fiscal Recovery Funds
and Capital Projects Fund
Supplementary Broadband Guidance.11
NTIA Seeks Public Comment on the
Following Areas Relating to the
Relationship Between the Uniform
Guidance and the BEAD Program
(Inclusive of 15 Questions)
A. Program Income and ‘‘Profit’’
The Uniform Guidance defines
program income as earned income ‘‘that
is directly generated by a supported
activity or earned as a result of the
Federal award during the period of
performance.’’ 12 The Uniform
Guidance, together with the DOC
ST&Cs, does not permit recipients and
subrecipients to retain program income
without restriction, but instead
prescribes three permissible uses during
the period of performance: (1) to offset
total allowable costs (i.e., the deduction
method), (2) to satisfy cost sharing or
match requirements (i.e., the cost
sharing method), and (3) to add to the
total allowable costs for a project (i.e.,
9 ‘‘[A]pplicable regulations governing federal
financial assistance generally use the term
subrecipient’ to refer to what the Infrastructure Act
calls ‘subgrantees’ and the term ‘subaward’ to refer
to what the Infrastructure Act calls ‘subgrants’,’’
and concluded that ‘‘the terms subgrantee’ and
‘subgrant’ herein are meant to have the same
meaning, respectively, as the terms ‘subrecipient’
and ‘subaward’ in those regulations and other
governing authorities.’’ BEAD NOFO at n 15.
10 2 CFR 200.331(a).
11 See SLFRF and CPF Supplementary Broadband
Guidance, U.S. Department of the Treasury, May 17,
2023, https://home.treasury.gov/system/files/136/
SLFRF-and-CPF-Supplementary-BroadbandGuidance.pdf. NTIA and the Treasury Department
closely coordinated their respective approaches on
this topic. While the proposals in this Notice are
directionally aligned with the Treasury
Department’s final guidance, certain statutory and
programmatic differences will likely warrant some
variations in the application of the Uniform
Guidance to the BEAD program, on the one hand,
and the relevant Treasury Department programs, on
the other hand.
12 See 2 CFR 200.1.
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the addition method).13 Relatedly, the
Uniform Guidance states that recipients
and subrecipients ‘‘may not earn or keep
any profit resulting from Federal
financial assistance unless explicitly
authorized by the terms and conditions
of the award.’’ 14
In the context of broadband projects
in the Capital Projects Fund (CPF) and
State and Local Fiscal Relief Fund
(SLFRF) programs, the Treasury
Department is allowing CPF and SLFRF
subrecipients to retain program income
for use without restriction, including
keeping it as profit.
NTIA tentatively agrees with the
Treasury Department’s approach to
program income. In creating the BEAD
Program, Congress established
competitive subrecipient selection
processes as the principle means for
disbursing BEAD subawards.15 The
NOFO includes a number of provisions
aimed at implementing this statutory
directive, and it recognizes that robust
competition holds ‘‘the potential to offer
consumers more affordable, high-quality
options for broadband service.’’ 16
Further, the Biden-Harris
Administration has made competition a
priority across the economy, recognizing
in the Executive Order on Promoting
Competition in the American Economy
that competition means ‘‘better
service[,] and lower prices’’ for
consumers.17
As discussed above, maximizing
provider participation in the BEAD
Program is a key to ensuring its success.
Broad participation facilitates
competition, and the opportunity for
providers to retain program income to
support their business case and to avoid
the transaction costs of tracking income
generated on Program-funded network
assets separate from other operating
income will help stimulate
participation.
Internet service is provided by a
multitude of types of entities, including
cooperatives, nonprofit organizations,
public-private partnerships, utilities,
public utility districts, local
governments, and, most commonly,
private companies. While some of these
13 See 2 CFR 200.307(e); DOC ST&Cs at section
B.05. The ‘‘deduction’’ method is the default rule
when ‘‘the Federal awarding agency does not
specify in its regulations or the terms and
conditions of the Federal award, or give prior
approval for how program income is to be used.’’
2 CFR 200.307(e).
14 2 CFR 200.400(g).
15 47 U.S.C. 1702(e)(3)(A)(i)(IV).
16 NOFO at 50, section IV.C.1.a.
17 Executive Order on Promoting Competition in
the American Economy, July 9, 2021, https://
www.whitehouse.gov/briefing-room/presidentialactions/2021/07/09/executive-order-on-promotingcompetition-in-the-american-economy/.
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provider types may not need to earn
profit to justify infrastructure
investment, a profit opportunity will
improve the business case for all
providers, and thereby create incentives
for others to participate.
Moreover, as discussed above,
incentives for broad participation are
needed to address the unique challenges
for which the BEAD Program was
created to solve. Unserved and
underserved areas present significant
barriers for service, as evidenced by the
lack of existing high-speed internet
infrastructure even after decades of the
Federal efforts to expand broadband
deployment in these areas. Indeed, the
lack of a sustainable business case—
namely a business case that generates a
reasonable return on investment—is a
core problem the BEAD Program is
designed to address. The program
income rules will in many cases prevent
providers from earning a reasonable
return on investment during the period
of performance, and would not address
the economic conditions that have
stunted investment in these areas.
The increased incentive for providers
to participate in the BEAD Program and
compete for grant funding may also help
extend the benefits of the BEAD
Program to more Americans.
Competition for a given set of locations
will reduce the level of grant funding
required on a per location basis.
Efficient funding levels will in turn
create opportunities for Eligible Entities
to ensure that broadband network
facilities are deployed to all unserved
and underserved locations within their
jurisdiction, and potentially pursue
eligible access-, adoption-, and equityrelated uses.18
For these reasons, the program
income provisions of the Uniform
Guidance and DOC ST&Cs may be
counterproductive in this specific
context.
Question 1: The Uniform Guidance
allows Federal awarding agencies to
adjust requirements to a class of awards
when approved by OMB.19 Pursuant to
this authority, NTIA proposes to seek
from OMB an exemption from the
Uniform Guidance’s requirements for
recipients and subrecipients to retain
program income without restriction,
including retaining program income for
profit.20 NTIA would also seek
conforming changes to the award terms
in light of Section B.05 of the DOC
ST&Cs. NTIA seeks comment on this
proposal.
18 See
NOFO at 7, section I.B.1.
2 CFR 200.102(c).
20 2 CFR 200.307(e); 2 CFR 200.400(g).
19 See
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In responding to Question 1,
commenters should take into account
NTIA’s interpretation of Section
V.H.2.b. of the NOFO.21 Section
V.H.2.b. states that a profit, fee, or other
incremental charge above the actual cost
incurred by a subrecipient is not an
allowable cost.22 This provision
prohibits subrecipients from charging
profit as an allowable cost under its
grant. In other words, the subrecipient
should not expect that the Federal
Government will pay the subrecipient a
profit from the grant amount for the
subrecipient’s performance. This NOFO
language does not prohibit program
income derived from the servicing and
use of supported networks and
connections (e.g., wholesale revenues,
end-user subscription revenues, etc.) for
such subgrants. Program income is
ordinarily encouraged in financial
assistance awards, and the only
difference presented by the proposal in
Question 1 would be expanding the
permissible use of program income.
NTIA plans to otherwise apply the
program income provisions of 2 CFR
200.307 and Section B.05 of the DOC
ST&Cs.
B. Fixed Amount Subawards and Cost
Principles
The Uniform Guidance defines fixed
amount subawards as those in which a
‘‘pass-through entity provides a specific
level of support without regard to actual
costs incurred under the [subaward].’’ 23
This type of subaward reduces some of
the administrative burden and recordkeeping requirements for both
subrecipients and the pass-through
entities.24 Section 200.201 of the
Uniform Guidance permits pass-through
entities to use fixed amount awards only
if the project scope has measurable goals
and objectives, and if adequate cost,
historical, or unit pricing data is
available to establish a fixed amount
award based on a reasonable estimate of
actual cost.25 The Uniform Guidance
prohibits the use of fixed amount
subawards in programs requiring
mandatory cost sharing or match,26 and
generally limits pass-through entities
from providing fixed amount subawards
exceeding the Simplified Acquisition
Threshold, which is $250,000.27
The Federal Government’s cost
principle rules do not apply as
compliance requirements to fixed
NOFO at 82, section V.H.2.b.
id.
23 2 CFR 200.1.
24 See id.
25 2 CFR 200.201(b).
26 2 CFR 200.201(b)(2).
27 See 2 CFR 200.333; see also 48 CFR part 2,
subpart 2.1.
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22 See
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amount subawards. Instead, the cost
principles are used as a guide when
budgeting for the work that will be
performed. The Treasury Department is
allowing CPF and SLFRF pass-through
entities to structure broadband
infrastructure subawards as fixed
amount subawards. The cost principle
rules thus will not apply as compliance
requirements to subrecipients of those
subawards.
NTIA tentatively agrees with the
Treasury Department’s approach in this
area. Competitive subrecipient selection
processes, as directed by Congress in the
Bipartisan Infrastructure Law, are likely
to result in fixed amount broadband
infrastructure subawards that have
measurable goals and objectives.28
Moreover, the NOFO’s implementing
provisions requiring that such selection
processes are fair and open will help
deliver adequate cost data necessary to
establish fixed amount subawards that
are based on a reasonable estimate of
actual costs.29
In addition, under the BEAD NOFO,
the total amount of grant funding
requested is among the criteria that
Eligible Entities must give the greatest
weight in deciding among competitive
projects covering the same location or
locations, which gives potential
subgrantees significant financial
incentive to estimate their costs
conservatively.30 We also note that
NTIA is developing in coordination
with the FCC a broadband deployment
cost model to determine high-cost areas,
a model that will provide agency staff
an additional tool for evaluating
whether a potential subgrantee’s cost
estimates are reasonable estimates of
actual costs.
For the reasons above, we believe the
structure of the BEAD program and
certain program features justify treating
BEAD subgrants as fixed amount
subawards. We expect this classification
will result in fewer administrative
burdens on Eligible Entities and
subgrantees which should result in the
more efficient administration of the
BEAD program and more efficient use of
program funding.
At the same time, it is important to
minimize the risk of waste, fraud, and
abuse. We therefore propose requiring
Eligible Entities as a condition of their
BEAD grants to monitor the costs of
their subrecipients using reasonable and
appropriate accounting methodologies.
An Eligible Entity, for example, could
require subgrantees to periodically
report their expenses for grant-funded
28 See
47 U.S.C. 1702(f).
NOFO at 35, section IV.B.7.
30 See id. at 43, section IV.B.7.b.2.i.
29 See
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projects using the recipient’s existing
accounting methodology so long as it
meets Generally Accepted Accounting
Principles or other standard accounting
practices.31 By imposing measures to
validate that fixed amount awards
reasonably approximate the actual cost
of broadband infrastructure deployment
or other BEAD Program projects, we will
minimize the risk of misuse of taxpayer
resources.
Question 2: As further addressed
below, NTIA proposes to seek from
OMB the necessary exceptions to the
Uniform Guidance rules to allow
Eligible Entities to issue fixed amount
BEAD Program subawards of any
amount for broadband infrastructure
projects. Is it reasonable to assume that
the subgrantee selection process, as
specified in the Bipartisan Infrastructure
Law and BEAD NOFO, will ensure that
each project has ‘‘measurable goals and
objectives’’ and provide ‘‘a reasonable
estimate of actual cost’’? 32
Question 3: The Uniform Guidance
prohibits the use of fixed amount
awards or subawards in programs
requiring mandatory cost sharing or
match, as is the case in the BEAD
Program.33 NTIA thus proposes to seek
from OMB an exemption for the class of
subawards identified in sections
60102(f)(1), (2), and (4) of the Bipartisan
Infrastructure Law from the prohibition
on the use of fixed amount awards in
programs requiring mandatory cost
sharing or match.34 As previously
addressed, the Uniform Guidance
allows Federal awarding agencies to
adjust requirements to a class of awards
when approved by OMB.35 NTIA seeks
comment on this proposal.
Question 4: The Uniform Guidance
generally limits pass-through entities
from providing fixed amount subawards
exceeding the Simplified Acquisition
Threshold, which is $250,000.36 Many
BEAD subgrants related to broadband
deployment and connections will
exceed $250,000. NTIA thus proposes to
seek from OMB an exemption of the
class of subawards identified in
§ 60102(f)(1), (2), and (4) of the
31 See Accounting Standards Codification,
Financial Accounting Standards Board, FASB.org.
32 See 2 CFR 200.201(b)(1).
33 2 CFR 200.201(b)(2).
34 The class of subawards identified in sections
60102(f)(1), (2), and (4) of the Bipartisan
Infrastructure Law is that which would be used for
internet infrastructure projects. Consistent with the
Treasury Department’s approach to provide
exceptions from the Uniform Guidance to internet
infrastructure projects, NTIA is proposing to
provide this exception to the class of subawards
that would support internet infrastructure projects.
35 See 2 CFR 200.102(c).
36 See 2 CFR 200.333; see also 48 CFR part 2,
subpart 2.1.
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Bipartisan Infrastructure Law from the
rule limiting pass-through entities from
providing subawards on fixed amounts
exceeding the Simplified Acquisition
Threshold.37 NTIA seeks comment on
this proposal.
Question 5: In the case of fixed
amount subawards, the Uniform
Guidance provides that payments are
based on meeting specific requirements
of the subaward. It further offers some
ways in which the subaward may be
paid.38 Options include, but are not
limited to, (1) in several partial
payments, the amount of each agreed
upon in advance, and the ‘‘milestone’’
or event triggering the payment also
agreed upon in advance, and set forth in
the award; (2) on a unit price basis, for
a defined unit or units, at a defined
price or prices, agreed to in advance of
performance of the Federal award and
set forth in the Federal award; and (3)
in one payment at award completion.
NTIA seeks comment on whether to
specify through guidance or a special
award condition the form in which
fixed amount subawards by Eligible
Entities should be paid.
Question 6: While the Federal
Government’s cost principle rules do
not apply as compliance requirements
to fixed amount subawards, the Uniform
Guidance requires fixed subaward
amounts to be negotiated using the cost
principles (or other pricing information)
as a guide.39 As discussed above, the
BEAD Program’s competitive subaward
selection process must, by statute, be
fair and open and will help deliver
adequate cost data necessary to establish
fixed amount subawards that are based
on a reasonable estimate of actual costs.
Is the information that Eligible Entities
will obtain from the subgrantee
selection process sufficient ‘‘other
pricing information?’’ Are there
circumstances under which NTIA
should issue a special award condition
instructing subrecipients of fixed
amount subawards to use as a guide the
cost principles that would otherwise
apply, such as the Eligible Entity’s
extremely high cost per location
threshold? 40
Question 7: NTIA seeks comment on
the nature and scope of any related
adjustments to the requirements of the
Uniform Guidance that may be required
if broadband infrastructure subgrants
CFR 200.333.
CFR 200.201(b)(1).
39 See 2 CFR 200.201(b).
40 See NOFO at 13, section I.C.(k) (defining
‘‘extremely high cost per location threshold’’); id. at
81, section V.H.1 (applying the cost principles in
2 CFR part 200, including subpart E, to States and
non-profit organizations, and the cost principles in
48 CFR part 31 to commercial organizations).
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38 2
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are treated as fixed amount awards. For
example, what additional steps, if any,
should NTIA take to ensure that BEAD
Program funds are used solely for the
purposes intended? What additional
steps, if any, should NTIA take to
ensure that Eligible Entities are issuing
awards at levels reasonably related to
provider costs? What additional steps, if
any, should NTIA take to ensure that
other programmatic requirements (e.g.,
that a subgrantee provide matching
funds of not less than 25 percent of
project costs) are met by Eligible Entities
and subgrantees?
NTIA plans to otherwise apply the
fixed amount award provisions of 2 CFR
200.201(b) and the cost principle
provisions of 2 CFR part 200, subpart E
to State, Territorial, local or federallyrecognized Indian Tribal Governments
and 48 CFR part 31 to commercial
organizations.
C. Procurement
The Uniform Guidance generally
imposes procurement rules on
recipients and subrecipients that use
federal assistance funds to obtain
property or services.41 The underlying
objective of these rules is to ensure that
procurement processes sufficiently
guard against waste, fraud, and abuse.
The Treasury Department is allowing
pass-through entities in the CPF and
SLFRF programs to waive the
procurement rules for subrecipients of
fixed amount broadband infrastructure
subawards. An awarding agency may
provide less restrictive requirements
when making fixed amount awards.42 In
determining whether the procurement
rules of the Uniform Guidance should
apply to BEAD Program subgrants, it is
worth noting that many broadband
providers already utilize competitive
procurement processes that align with
the spirit, if not the specific provisions,
of the Uniform Guidance’s procurement
rules. The risk of waste, fraud, and
abuse is further diminished by the
congressional directive that Eligible
Entities ‘‘competitively award’’ such
subgrants.43
Question 8: If NTIA chooses to seek
the exceptions necessary to allow
Eligible Entities to issue fixed amount
BEAD Program subawards, NTIA further
proposes to issue a special award
condition authorizing Eligible Entities
to provide subrecipients an exception
from the procurement requirements
codified in 2 CFR 200.318–320 and
200.324–326 when using fixed amount
subawards. The special award condition
41 See
2 CFR 200.318–327.
2 CFR 200.102(c).
43 See 47 U.S.C. 1702(f).
42 See
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excepting procurement requirements
also would require the Eligible Entity to
obtain certifications from subrecipients
that the subrecipient used competitive
procurement processes in executing the
project. NTIA seeks comment on this
proposal.
NTIA plans to otherwise apply the
procurement provisions of 2 CFR
200.318–327.
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D. Property Standards
The Uniform Guidance’s property
standards, in conjunction with the DOC
ST&Cs, provide NTIA with a framework
for holding subrecipients accountable
and ensuring that BEAD investments
deliver for the American people.44 This
framework provides standards and
procedures for ownership, title, use,
management, and disposition of
property acquired with DOC financial
assistance. In applying this framework
to BEAD-funded networks, NTIA’s
overarching goals are to ensure that
BEAD subawards are used for their
intended purposes; to prevent the unjust
enrichment of subrecipients; and to
minimize administrative burdens that
could materially impact the incentives
of traditional and non-traditional
broadband providers to participate in
the program.
1. Useful Life of BEAD-Funded
Equipment
The Uniform Guidance requires real
property and equipment acquired or
improved with a subgrant to be held in
trust for the beneficiaries of the BEAD
Program.45 The DOC ST&Cs further
provide that this trust relationship
exists throughout the duration of the
property’s estimated useful life (the
Federal Interest Period).46 Subrecipients
must comply with all ownership, title,
use, management, and disposition
requirements as set forth in 2 CFR
200.310 through 200.316, as applicable,
and in the terms and conditions of the
Federal award throughout the Federal
Interest Period.47 The duration of
Federal Interest Period is determined by
the grants officer in consultation with
the program office.48
Question 9: The Treasury Department
is assigning one uniform period of time
for all funded broadband infrastructure
property in its SLFRF and CPF. NTIA
proposes to take a similar approach in
the BEAD program. Specifically, NTIA
proposes a Federal Interest Period of 20
years, which is consistent with the
44 See 2 CFR 200.310–316; DOC ST&Cs at section
C.02.
45 See 2 CFR 200.316.
46 See DOC ST&Cs at section C.02.
47 Id.
48 Id.
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expected useful life of fiber optic
cable.49 NTIA seeks comment on this
proposal. Alternatively, NTIA seeks
comment on whether to issue a
schedule defining the Federal Interest
Period as the useful life for different
categories of BEAD-funded personal
property. If commenters favor the
development of such a schedule, what
are the relevant categories, types, and
estimated useful life of BEAD-funded
equipment and property?
2. Use of Real Property and Equipment
The Uniform Guidance establishes
use requirements on real property and
equipment acquired under a Federal
award or subaward during the Federal
Interest Period. One such requirement is
that the real property and equipment
must be used in the program or project
for which it was acquired as long as
needed, whether or not the project or
program continues to be supported by
the Federal award.50 Another such
requirement is for the recipient or
subrecipient to make equipment
available for use on other projects or
programs currently or previously
supported by the Federal Government,
provided that such use will not interfere
with the work on the projects or
program which it was originally
acquired.51 The Uniform Guidance also
provides that equipment may be used in
other activities supported by the Federal
awarding agency.52 The Treasury
Department is applying a modified
version of these use requirements to
broadband infrastructure fixed amount
subawards in its CPF and SLFRF
programs.
Question 10: The Uniform Guidance
allows Federal awarding agencies to
apply less restrictive requirements when
making fixed amount subawards.53
Should NTIA employ this authority
with respect to any of the previously
described use requirements? If so,
explain why.
NTIA plans to otherwise apply the
real property and equipment use
provisions of 2 CFR 200.311(b) and 2
CFR 200.313(c)(1)–(2).
49 ‘‘Planning and Flexibility Are Key to
Effectively Deploying Broadband Conduit through
Federal Highway Projects,’’ Government
Accountability Office, at 4, June 27, 2012, https://
www.gao.gov/assets/gao-12-687r.pdf (‘‘Industry
documentation estimates that the expected useful
life of fiber cables is between 20 and 25 years and
that the expected useful life of underground
conduit is between 25 and 50 years.’’).
50 2 CFR 200.311(b); 2 CFR 200.313(c)(1).
51 2 CFR 200.313(c)(2).
52 2 CFR 200.313(c)(1).
53 See 2 CFR 200.102(c).
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42923
3. Equipment Management
Requirements
The Uniform Guidance provides
specific procedures for managing
equipment (including replacement
equipment) acquired in whole or in part
under a Federal award or subaward.54
The Treasury Department guidance
requires broadband infrastructure
subrecipients in the SLFRF and CPF
programs to comply with the
requirements in section 200.313(d) of
the Uniform Guidance, which may be
satisfied by applying the ISP’s
commercial practices for meeting such
requirements in the normal course of
business (e.g., commercial inventory
controls, loss prevention procedures,
etc.), provided that such inventory
controls indicate the applicable Federal
interest.
Question 11: Do existing commercial
practices for managing equipment
deployed as part of a broadband
network contemplate the same or
similar activities as those identified in
section 200.313(d) of the Uniform
Guidance (e.g., maintenance of property
records, regular physical inventories,
commercial inventory controls,
maintenance procedures, and resale
procedures)? NTIA recognizes that
inventory controls indicating the
applicable Federal interest are critical
tools for guarding against waste, fraud,
and abuse. Inventory Controls are also
particularly important for tracking and,
to the extent necessary, enforcing the
Federal Government’s reversionary
interest in BEAD equipment. Would
commercial inventory controls indicate
the Federal interest in equipment?
Commenters should provide detailed
analyses comparing existing commercial
practices to the requirements identified
in section 200.313(d). If such
commercial practices do contemplate
the same or similar activities, should
NTIA provide an exception to the
equipment management requirements in
section 200.313(d) for those broadband
infrastructure subrecipients that certify
that they use commercial practices for
managing equipment deployed as part
of a broadband network? Should any
such exception be conditioned on the
subrecipient’s obligation to make the
records available pursuant to those
commercial practices available to the
Eligible Entity and to NTIA for review
on request?
NTIA plans to otherwise apply the
equipment management provisions of 2
CFR 200.313(d).
54 See
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2 CFR 200.313(d).
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4. Equipment Upgrades and Network
Evolution
The Uniform Guidance and DOC
ST&Cs contain specific provisions
regarding the replacement of equipment
and the disposition of equipment no
longer needed for the original project or
program.55 With respect to acquiring
replacement equipment, the Uniform
Guidance provides that subrecipients
may use the equipment to be replaced
as a trade-in or sell the property and use
the proceeds to offset the cost of the
replacement property.56 When
equipment acquired under a Federal
subaward is no longer needed for the
original project, subrecipients must
request disposition instructions from
the Federal awarding agency.57 The
Treasury Department is allowing
broadband infrastructure subrecipients
in its SLFRF and CPF programs to
dispose of equipment in the ordinary
course of business when no longer
needed to operate the network, subject
to the conditions that the subrecipient
provide notice to the Treasury
Department, the same level of service
provided by the network is maintained,
there is no material interruption to
service, and the upgraded property is
subject to the same property
requirements are the original property.
The equipment replacement and
disposition requirements play an
important role in safeguarding the
Federal interest in real property
acquired or improved under a Federal
award. At the same time, requiring
subrecipients of internet infrastructure
subawards to sell older equipment in
every instance of equipment upgrades,
or obtain instructions for every instance
of equipment disposition, may prove
impractical given the scale and duration
of the BEAD Program. Moreover, it may
unintentionally chill efforts by BEAD
subrecipients to upgrade and evolve
networks during the Federal Interest
Period.
Question 12. NTIA proposes to issue
a special award condition providing
subrecipients clarity as to the
flexibilities that BEAD subrecipients
have under the Uniform Guidance to
upgrade and evolve BEAD-funded
networks. Specifically, this special
award condition would clarify that for
purposes of the BEAD Program:
‘‘Subrecipients acquiring replacement
equipment under 2 CFR 200.313(c)(4)
may treat the equipment to be replaced
as ‘trade-in’ even if the subrecipient
elects to retain full ownership and use
over equipment. As with trade-ins that
55 See
2 CFR 200.313(c)(4), 200.313(e).
CFR 200.313(c)(4).
57 2 CFR 200.313(e).
involve a third party, the subrecipient
will have to record the fair market value
of the equipment being replaced in its
Tangible Personal Property Status
Reports to the Department of Commerce
to ensure adequate tracking of the
Federal percentage of participation in
the cost of the project. The subrecipient
also is responsible for tracking the value
of the replacement equipment,
including both the Federal and nonFederal share.’’ NTIA seeks comment on
this proposal.
NTIA plans to otherwise apply the
equipment replacement and disposition
provision of 2 CFR 200.313(c)(4) and
200.313(e).
5. Lien Requirements
The Uniform Guidance defers to the
Federal awarding agency regarding
whether to require the recording of liens
or other notices of record on real
property and equipment acquired or
approved under a Federal subaward.58
In turn, the DOC ST&Cs permit—but do
not require—the imposition of a lien or
other notice of record requirement on
subrecipients. Notwithstanding the
recording of a lien or other notice of
record on property, the Federal
Government retains beneficial title to
the grant-funded equipment or property
to ensure it is used for the intended
public purposes.
The Treasury Department is requiring
subrecipients to record liens only in
those instances in which the
subrecipient encumbers the project
property. These liens must reflect the
Treasury Department’s shared first lien
position in the project property such
that, if the project property were
foreclosed upon and liquidated,
Treasury would receive the portion of
the fair market value of the property that
is equal to Treasury’s percentage
contribution to the project costs.
Question 13. NTIA proposes the same
approach as the Treasury Department is
requiring. Specifically, NTIA would
require subrecipients to record such
liens for any encumbered equipment
and real property acquired or improved
using the class of subgrants defined in
section 60102(f)(1), (2), and (4) of the
Bipartisan Infrastructure Law. NTIA
would not otherwise require liens for
equipment and real property acquired or
improved using this same class of
subgrants. NTIA seeks comment on this
proposal.
E. Audits
While the NOFO establishes default
audit requirements, it affords NTIA
authority to prescribe different
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F. Revision of Budget
The Uniform Guidance requires
recipients to report, and request prior
approvals from Federal awarding
agencies for, budget and program plan
revisions.60 While such a requirement
may help to reduce the risk of waste,
fraud, and abuse in certain award
constructs, it may not be as critical in
the context of fixed-amount BEAD
subawards.
Question 15. Assuming that NTIA
permits Eligible Entities to proceed with
fixed amount subaward frameworks,
what flexibility, if any, should NTIA
allow an Eligible Entity to provide to
subrecipients of fixed-amount
subawards with respect to budget
revision? If NTIA does allow an Eligible
Entity to provide flexibility with respect
to budget revisions, how can NTIA and
Eligible Entity ensure that subrecipients
provide sufficient notice and seek
approval where there is a significant
change in project scope/objective or
inability to complete project without
additional Federal funds?
59 See
56 2
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requirements for commercial entities via
the terms and conditions of awards.59
Rather than apply any specific audit
requirements to subrecipients in its
SLFRF and CPF programs, the Treasury
Department is allowing pass-through
entities to determine the form and
frequency of commercial subrecipient
audits, so long as such audits can be
used by pass-through entities to satisfy
the terms and conditions of their award.
This approach is consistent with the
construct of the BEAD Program, which
vests significant decision-making
authority in Eligible Entities.
Question 14. NTIA thus proposes to
issue a special award condition vesting
authority in Eligible Entities to
determine the form and frequency of
audits from commercial subrecipients.
Under such an approach, each Eligible
Entity can prescribe and enforce any
such audit requirement it deems
sufficient for its own compliance
requirements as recipients of BEAD
awards. NTIA seeks comment on this
proposal.
NTIA plans to otherwise apply the
audit requirements specified in section
VII.G of the NOFO and 2 CFR part 200,
subpart F.
58 2
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NOFO at 93, section VII.G.
2 CFR 200.308(b).
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NTIA plans to otherwise apply the
budget revision provisions of 2 CFR
200.308(b).
Sean Conway,
Acting Deputy Chief Counsel, National
Telecommunications and Information
Administration.
[FR Doc. 2023–14114 Filed 7–3–23; 8:45 am]
BILLING CODE 3510–60–P
DEPARTMENT OF COMMERCE
National Telecommunications and
Information Administration
Commerce Spectrum Management
Advisory Committee Meeting
National Telecommunications
and Information Administration, U.S.
Department of Commerce.
ACTION: Notice of open meeting.
AGENCY:
This notice announces a
public meeting of the Commerce
Spectrum Management Advisory
Committee (Committee). The Committee
provides advice to the Assistant
Secretary of Commerce for
Communications and Information and
the National Telecommunications and
Information Administration (NTIA) on
spectrum management policy matters.
DATES: The meeting will be held July 18,
2023, from 3:00 p.m. to 5:00 p.m.,
Eastern Daylight Time (EDT).
ADDRESSES: The meeting will be held at
Wilkinson Barker Knauer, LLP, 1800 M
St. NW, Suite 800N, Washington, DC
20036. The public may also access the
meeting via audio teleconference (866–
880–0098, participant code 48261650).
Public comments may be emailed to
arichardson@ntia.gov or mailed to
Commerce Spectrum Management
Advisory Committee, National
Telecommunications and Information
Administration, 1401 Constitution
Avenue NW, Room 4600, Washington,
DC 20230.
FOR FURTHER INFORMATION CONTACT:
Antonio Richardson, Designated Federal
Officer, at (202) 482–4156 or
arichardson@ntia.gov; and/or visit
NTIA’s website at https://www.ntia.gov/
category/csmac.
SUPPLEMENTARY INFORMATION:
Background: The Committee provides
advice to the Assistant Secretary of
Commerce for Communications and
Information on needed reforms to
domestic spectrum policies and
management in order to: license radio
frequencies in a way that maximizes
public benefits; keep wireless networks
as open to innovation as possible; and
make wireless services available to all
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SUMMARY:
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17:11 Jul 03, 2023
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Americans. See Charter at https://
www.ntia.doc.gov/files/ntia/
publications/csmac-charter-2021.pdf.
This Committee is subject to the
Federal Advisory Committee Act
(FACA), 5 U.S.C. app. 2, and is
consistent with the National
Telecommunications and Information
Administration Act, 47 U.S.C. 904(b).
The Committee functions solely as an
advisory body in compliance with the
FACA. For more information about the
Committee visit: https://www.ntia.gov/
category/csmac.
Matters to Be Considered: The
planned meeting for Tuesday, July 18,
2023, will include updates on the
progress CSMAC subcommittees are
making in addressing topics they are
addressing, specifically the Citizens
Broadband Radio Service, 6G wireless
systems, and Electromagnetic
Compatibility (EMC) improvements.
NTIA will post a detailed agenda on its
website, https://www.ntia.gov/category/
csmac, prior to the meeting. To the
extent that the meeting time and agenda
permit, any member of the public may
address the Committee regarding the
agenda items. See Open Meeting and
Public Participation Policy, available at
https://www.ntia.gov/category/csmac.
Time and Date: The meeting will be
held on July 18, 2023, from 3:00 p.m. to
5:00 p.m., Eastern Daylight Time (EDT).
The meeting time and the agenda topics
are subject to change. Please refer to
NTIA’s website, https://www.ntia.gov/
category/csmac, for the most up-to-date
meeting agenda and access information.
Place: The meeting will be held at
Wilkinson Barker Knauer, LLP, 1800 M
St. NW, Suite 800N, Washington, DC
20036. The public may also access the
meeting via audio teleconference (866–
880–0098, participant code 48261650).
Individuals requiring accommodations
are asked to notify Mr. Richardson at
(202) 482–4156 or arichardson@ntia.gov
at least ten (10) business days before the
meeting.
Status: Interested parties are invited
to join the teleconference and to submit
written comments to the Committee at
any time before or after the meeting.
Parties wishing to submit written
comments for consideration by the
Committee in advance of the meeting
are strongly encouraged to submit their
comments in Microsoft Word and/or
PDF format via electronic mail to
arichardson@ntia.gov. Comments may
also be sent via postal mail to
Commerce Spectrum Management
Advisory Committee, National
Telecommunications and Information
Administration, 1401 Constitution
Avenue NW, Room 4600, Washington,
DC 20230. It would be helpful if paper
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42925
submissions also include a compact disc
(CD) that contains the comments in one
or both of the file formats specified
above. CDs should be labeled with the
name and organizational affiliation of
the filer. Comments must be received
five (5) business days before the
scheduled meeting date in order to
provide sufficient time for review.
Comments received after this date will
be distributed to the Committee but may
not be reviewed prior to the meeting.
Additionally, please note that there may
be a delay in the distribution of
comments submitted via postal mail to
Committee members.
Records: NTIA maintains records of
all Committee proceedings. Committee
records are available for public
inspection at NTIA’s Washington, DC
office at the address above. Documents
including the Committee’s charter,
member list, agendas, minutes, and
reports are available on NTIA’s website
at https://www.ntia.gov/category/csmac.
Sean Conway,
Acting Deputy Chief Counsel, National
Telecommunications and Information
Administration.
[FR Doc. 2023–14118 Filed 7–3–23; 8:45 am]
BILLING CODE 3510–60–P
DEPARTMENT OF EDUCATION
[Docket No.: ED–2023–SCC–0068]
Agency Information Collection
Activities; Submission to the Office of
Management and Budget for Review
and Approval; Comment Request;
Vocational Rehabilitation Financial
Report (RSA–17)
Office of Special Education and
Rehabilitative Services (OSERS),
Department of Education (ED).
ACTION: Notice.
AGENCY:
In accordance with the
Paperwork Reduction Act (PRA) of
1995, the Department is proposing a
revision of a currently approved
information collection request (ICR).
DATES: Interested persons are invited to
submit comments on or before August 4,
2023.
ADDRESSES: Written comments and
recommendations for proposed
information collection requests should
be submitted within 30 days of
publication of this notice. Click on this
link www.reginfo.gov/public/do/
PRAMain to access the site. Find this
information collection request (ICR) by
selecting ‘‘Department of Education’’
under ‘‘Currently Under Review,’’ then
check the ‘‘Only Show ICR for Public
Comment’’ checkbox. Reginfo.gov
SUMMARY:
E:\FR\FM\05JYN1.SGM
05JYN1
]]>Agencies
[Federal Register Volume 88, Number 127 (Wednesday, July 5, 2023)]
[Notices]
[Pages 42918-42925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14114]
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DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
[Docket No.: 230622-0154]
Tailoring the Application of the Uniform Guidance to the BEAD
Program; Request for Comments
AGENCY: National Telecommunications and Information Administration,
U.S. Department of Commerce.
ACTION: Notice; request for comment.
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SUMMARY: The Broadband Equity, Access and Deployment (BEAD) Program was
established in November 2021 through the Infrastructure Investment and
Jobs Act, also known (and referred to subsequently herein) as the
Bipartisan Infrastructure Law. Under the BEAD Program, the National
Telecommunications and Information Administration (NTIA) is responsible
for administering $42.45 billion in grants to the States, Territories,
and the District of Columbia (Eligible Entities) with the principal
focus of ensuring that every American has access to affordable,
reliable high-speed internet service. Various stakeholders have
requested NTIA to consider exemptions of certain provisions of OMB's
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance) from application to
grants and subgrants awarded under the BEAD Program. In this Notice,
NTIA seeks public comment on the issues raised by stakeholders and
other questions relating to the
[[Page 42919]]
relationship between the Uniform Guidance and the BEAD Program.
DATES: Submit written comments on or before 5 p.m. Eastern Standard
Time on August 4, 2023.
ADDRESSES: You may submit public comments on this action, identified by
Regulations.gov docket number NTIA-2023-0007, by any of the following
means:
1. Using the Federal e-Rulemaking Portal at https://www.regulations.gov (our preferred method). The docket established for
this opportunity to comment can be found at www.Regulations.gov, NTIA-
2023-0007. Click the ``Comment Now!'' icon, complete the required
fields, and enter or attach your comments.
2. Mailing a printed submission to National Telecommunications and
Information Administration, U.S. Department of Commerce, 1401
Constitution Avenue NW, Room 4878, Washington, DC 20230, Attention:
BEAD Uniform Guidance RFC.
Please submit your comments in only one of these ways to minimize
the receipt of duplicate submissions.
FOR FURTHER INFORMATION CONTACT: Please direct questions regarding this
Notice to Sean Conway at [email protected], indicating ``BEAD Uniform
Guidance Request for Comment'' in the subject line, or if by mail,
addressed to Sean Conway, National Telecommunications and Information
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; or by telephone: (202) 482-1816. Please
direct media inquiries to NTIA's Office of Public Affairs,
[email protected] or (202) 482-7002.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Management and Budget (OMB) released the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (2 CFR part 200) (Uniform Guidance) on December 26,
2013, which consolidated eight existing Federal circulars into a single
guidance document. The Uniform Guidance streamlined and eased
administrative burdens across the Federal Government in the
administration of Federal financial assistance programs, thus
increasing the efficiency and effectiveness of Federal awards, while
also strengthening oversight over Federal funds to prevent waste,
fraud, and abuse. OMB may allow exceptions from the requirements of the
Uniform Guidance, pursuant to 2 CFR 200.102.
The Uniform Guidance generally sets out requirements for Federal
awards to ``non-federal entities.'' \1\ While commercial entities do
not fall within the definition of non-Federal entities, the Uniform
Guidance provides that ``[f]ederal awarding agencies may apply subparts
A through E'' of these rules to other types of entities, including
``for-profit entities.'' \2\ Federal agencies administering Federal
financial assistance programs may, and often have, adopted standard
terms and conditions (ST&Cs) to implement the Uniform Guidance and
provide additional guidance to subagencies and relevant stakeholders
(e.g., applicants). Federal agencies can, for example, expand
application of the Uniform Guidance to include commercial entities
through (a) the operation of an agency's Federal financial assistance
ST&Cs and/or (b) the ``pass through'' provisions of the Uniform
Guidance when a non-Federal entity issues a subaward to a commercial
entity.\3\
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\1\ 2 CFR 200.102(a)(1); see also 2 CFR 200.1 (defining ``Non-
Federal entity'' to mean ``a state, local government, Indian tribe,
institution of higher education (IHE), or nonprofit organization
that carries out a Federal award as a recipient or subrecipient.'').
\2\ 2 CFR 200.101(a)(2).
\3\ 2 CFR 200.331.
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The Department of Commerce (DOC) adopted the Uniform Guidance and
gave it regulatory effect in December 2014.\4\ The DOC has extended its
application of the Uniform Guidance to commercial entities in its
Financial Assistance Standard Terms and Conditions (DOC ST&Cs), which
governs implementation of DOC financial assistance awards.\5\ Thus,
absent modification of the ST&Cs, the DOC ST&Cs require that DOC's
Federal financial assistance programs apply the Uniform Guidance to
both non-Federal entities and commercial entities.
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\4\ See 2 CFR 1327.101; Federal Awarding Agency Regulatory
Implementation of Office of Management and Budget's Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, 79 FR 75867.
\5\ Department of Commerce, Financial Assistance ST&Cs, Preface
(11/12/20) (``[U]nless otherwise provided by the terms and
conditions of this DOC financial assistance award, subparts A
through E of 2 CFR part 200 and the Standard Terms are applicable to
for-profit entities, foreign public entities and to foreign
organizations that carry out a DOC financial assistance award.'').
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In accordance with the DOC ST&Cs, NTIA has routinely applied the
relevant subparts of the Uniform Guidance to non-Federal entities and
commercial entities in its grant programs that fund last mile and
middle mile broadband deployment, such as the Broadband Technologies
Opportunities Program (BTOP), the Broadband Infrastructure Program, the
Tribal Broadband Connectivity Program, and the Middle Mile Grants
Program established by the Bipartisan Infrastructure Law. Such
application of the Uniform Guidance occurred without significant
opposition, or even significant discussion, from applicants or program
participants or apparent material impact on the programs or the
projects funded thereunder.
Consistent with this approach, the Notice of Funding Opportunity
(NOFO) for the BEAD Program provides that the Uniform Guidance and DOC
ST&Cs will apply to the BEAD Program.\6\
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\6\ NTIA, Notice of Funding Opportunity, Broadband Equity,
Access, and Deployment Program (hereinafter ``NOFO'') at 86, section
VII.D.1-2 (2022).
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II. Request for Comment
Following publication of the NOFO, various stakeholders requested
that NTIA clarify the extent to which the Uniform Guidance applies to
grants and subgrants awarded under the BEAD Program, if at all, and
identified provisions of the Uniform Guidance that they argue will
deter the participation of internet service providers (ISPs) in the
BEAD Program and/or increase the costs that subgrantees will incur--and
the award amounts they will require--to participate in the program
without concomitant benefit. These stakeholders also requested that
NTIA address their concerns by waiving or otherwise modifying the
application of the Uniform Guidance to the BEAD Program.
This Request for Comment affords all interested persons an
opportunity to provide input on any exemptions from the Uniform
Guidance that might help facilitate the implementation of the BEAD
Program. Given the unprecedented amount of funding Congress made
available through the BEAD Program and the scale, scope, and character
of the deployment challenge the Program is designed to resolve, it is
critically important that NTIA operate this program as effectively and
efficiently as possible, while also ensuring a high level of
accountability to prevent waste, fraud, and abuse. This approach will
further the goal of ensuring all Americans have access to affordable,
reliable, high-speed internet service.
The BEAD Program differs from prior Federal broadband funding
programs administered by NTIA, the Federal Communications Commission
(FCC), the United States Department of Agriculture, and other Federal
entities in important ways. First, the BEAD
[[Page 42920]]
Program is the first broadband funding program to require that awardees
ensure the delivery of qualifying broadband service to all unserved
locations, and (to the extent funds are available) all underserved
locations within their jurisdiction. Prior programs have targeted areas
with specific demographic characteristics (e.g., rural areas) or
particular classes of network operators (e.g., rate of return incumbent
local exchange carriers), resulting in significant, but incomplete,
improvements in availability. But Congress mandated that the BEAD
Program ensure universal availability of high-speed internet access,
including to those locations that have not been addressed by prior
programs because they have proven to be the most difficult and
expensive to serve. This unprecedented effort will require that each
Eligible Entity maximize incentives for provider participation.
To meet this challenge, the BEAD Program will provide a historic
level of grant funding, providing significant resources to every State,
Territory, and the District of Columbia. Each of these Eligible
Entities will be required to conduct a ``subgrantee selection process''
to identify subgrantees \7\ that will build and operate networks to
deliver qualifying broadband service to every unserved and underserved
location in its jurisdiction. Subgrantees that receive awards from
Eligible Entities to build broadband networks in many cases likely will
retain ownership of those networks in perpetuity, subject to award
conditions mandating that, for a designated period of time, the
applicable program requirements are met and the public continues to
benefit from this Federal investment.
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\7\ Subgrantees may be traditional commercial broadband ISPs or
``non-traditional broadband providers,'' meaning ``an electric
cooperative, nonprofit organization, public-private partnership,
public or private utility, public utility district, Tribal entity,
or local government (including any unit, subdivision, authority, or
consortium of local governments) that provides or will provide
broadband services.'' BEAD NOFO at 14, section I.C.(p).
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The relevant provisions of the Bipartisan Infrastructure Law use
the terms ``subgrantee'' and ``subgrant''--rather than ``subrecipient''
or ``subaward'' as used in the Uniform Guidance.\8\ Faithfully
implementing these statutory provisions, the NOFO uses this same
terminology and explains that ``[a]s used herein, the terms
`subgrantee' and `subgrant' herein are meant to have the same meaning,
respectively, as the terms `subrecipient' and `subaward'.'' \9\ While
some have argued that Eligible Entities should be permitted to
structure BEAD Program subgrants as ``contracts,'' NTIA continues to
adhere to the interpretation that awards are made as ``subgrants'' to
``subgrantees,'' and that ``subgrantees'' are not performing BEAD
Program projects as contractors to the Eligible Entity. They are,
instead, subrecipients ``carrying out a portion of a Federal award.''
\10\ This key statutory difference notwithstanding, NTIA below requests
comment on proposals to modify the application of certain provisions of
the Uniform Guidance consistent with the U.S. Department of the
Treasury's (Treasury Department) Coronavirus State and Local Fiscal
Recovery Funds and Capital Projects Fund Supplementary Broadband
Guidance.\11\
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\8\ Infrastructure Investment and Jobs Act of 2021, Division F,
Title I, Section 60104, Public Law 117-58, 135 Stat. (Nov. 15, 2021)
(otherwise known as the Bipartisan Infrastructure Law).
\9\ ``[A]pplicable regulations governing federal financial
assistance generally use the term subrecipient' to refer to what the
Infrastructure Act calls `subgrantees' and the term `subaward' to
refer to what the Infrastructure Act calls `subgrants','' and
concluded that ``the terms subgrantee' and `subgrant' herein are
meant to have the same meaning, respectively, as the terms
`subrecipient' and `subaward' in those regulations and other
governing authorities.'' BEAD NOFO at n 15.
\10\ 2 CFR 200.331(a).
\11\ See SLFRF and CPF Supplementary Broadband Guidance, U.S.
Department of the Treasury, May 17, 2023, https://home.treasury.gov/system/files/136/SLFRF-and-CPF-Supplementary-Broadband-Guidance.pdf.
NTIA and the Treasury Department closely coordinated their
respective approaches on this topic. While the proposals in this
Notice are directionally aligned with the Treasury Department's
final guidance, certain statutory and programmatic differences will
likely warrant some variations in the application of the Uniform
Guidance to the BEAD program, on the one hand, and the relevant
Treasury Department programs, on the other hand.
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NTIA Seeks Public Comment on the Following Areas Relating to the
Relationship Between the Uniform Guidance and the BEAD Program
(Inclusive of 15 Questions)
A. Program Income and ``Profit''
The Uniform Guidance defines program income as earned income ``that
is directly generated by a supported activity or earned as a result of
the Federal award during the period of performance.'' \12\ The Uniform
Guidance, together with the DOC ST&Cs, does not permit recipients and
subrecipients to retain program income without restriction, but instead
prescribes three permissible uses during the period of performance: (1)
to offset total allowable costs (i.e., the deduction method), (2) to
satisfy cost sharing or match requirements (i.e., the cost sharing
method), and (3) to add to the total allowable costs for a project
(i.e., the addition method).\13\ Relatedly, the Uniform Guidance states
that recipients and subrecipients ``may not earn or keep any profit
resulting from Federal financial assistance unless explicitly
authorized by the terms and conditions of the award.'' \14\
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\12\ See 2 CFR 200.1.
\13\ See 2 CFR 200.307(e); DOC ST&Cs at section B.05. The
``deduction'' method is the default rule when ``the Federal awarding
agency does not specify in its regulations or the terms and
conditions of the Federal award, or give prior approval for how
program income is to be used.'' 2 CFR 200.307(e).
\14\ 2 CFR 200.400(g).
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In the context of broadband projects in the Capital Projects Fund
(CPF) and State and Local Fiscal Relief Fund (SLFRF) programs, the
Treasury Department is allowing CPF and SLFRF subrecipients to retain
program income for use without restriction, including keeping it as
profit.
NTIA tentatively agrees with the Treasury Department's approach to
program income. In creating the BEAD Program, Congress established
competitive subrecipient selection processes as the principle means for
disbursing BEAD subawards.\15\ The NOFO includes a number of provisions
aimed at implementing this statutory directive, and it recognizes that
robust competition holds ``the potential to offer consumers more
affordable, high-quality options for broadband service.'' \16\ Further,
the Biden-Harris Administration has made competition a priority across
the economy, recognizing in the Executive Order on Promoting
Competition in the American Economy that competition means ``better
service[,] and lower prices'' for consumers.\17\
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\15\ 47 U.S.C. 1702(e)(3)(A)(i)(IV).
\16\ NOFO at 50, section IV.C.1.a.
\17\ Executive Order on Promoting Competition in the American
Economy, July 9, 2021, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.
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As discussed above, maximizing provider participation in the BEAD
Program is a key to ensuring its success. Broad participation
facilitates competition, and the opportunity for providers to retain
program income to support their business case and to avoid the
transaction costs of tracking income generated on Program-funded
network assets separate from other operating income will help stimulate
participation.
Internet service is provided by a multitude of types of entities,
including cooperatives, nonprofit organizations, public-private
partnerships, utilities, public utility districts, local governments,
and, most commonly, private companies. While some of these
[[Page 42921]]
provider types may not need to earn profit to justify infrastructure
investment, a profit opportunity will improve the business case for all
providers, and thereby create incentives for others to participate.
Moreover, as discussed above, incentives for broad participation
are needed to address the unique challenges for which the BEAD Program
was created to solve. Unserved and underserved areas present
significant barriers for service, as evidenced by the lack of existing
high-speed internet infrastructure even after decades of the Federal
efforts to expand broadband deployment in these areas. Indeed, the lack
of a sustainable business case--namely a business case that generates a
reasonable return on investment--is a core problem the BEAD Program is
designed to address. The program income rules will in many cases
prevent providers from earning a reasonable return on investment during
the period of performance, and would not address the economic
conditions that have stunted investment in these areas.
The increased incentive for providers to participate in the BEAD
Program and compete for grant funding may also help extend the benefits
of the BEAD Program to more Americans. Competition for a given set of
locations will reduce the level of grant funding required on a per
location basis. Efficient funding levels will in turn create
opportunities for Eligible Entities to ensure that broadband network
facilities are deployed to all unserved and underserved locations
within their jurisdiction, and potentially pursue eligible access-,
adoption-, and equity-related uses.\18\
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\18\ See NOFO at 7, section I.B.1.
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For these reasons, the program income provisions of the Uniform
Guidance and DOC ST&Cs may be counterproductive in this specific
context.
Question 1: The Uniform Guidance allows Federal awarding agencies
to adjust requirements to a class of awards when approved by OMB.\19\
Pursuant to this authority, NTIA proposes to seek from OMB an exemption
from the Uniform Guidance's requirements for recipients and
subrecipients to retain program income without restriction, including
retaining program income for profit.\20\ NTIA would also seek
conforming changes to the award terms in light of Section B.05 of the
DOC ST&Cs. NTIA seeks comment on this proposal.
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\19\ See 2 CFR 200.102(c).
\20\ 2 CFR 200.307(e); 2 CFR 200.400(g).
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In responding to Question 1, commenters should take into account
NTIA's interpretation of Section V.H.2.b. of the NOFO.\21\ Section
V.H.2.b. states that a profit, fee, or other incremental charge above
the actual cost incurred by a subrecipient is not an allowable
cost.\22\ This provision prohibits subrecipients from charging profit
as an allowable cost under its grant. In other words, the subrecipient
should not expect that the Federal Government will pay the subrecipient
a profit from the grant amount for the subrecipient's performance. This
NOFO language does not prohibit program income derived from the
servicing and use of supported networks and connections (e.g.,
wholesale revenues, end-user subscription revenues, etc.) for such
subgrants. Program income is ordinarily encouraged in financial
assistance awards, and the only difference presented by the proposal in
Question 1 would be expanding the permissible use of program income.
NTIA plans to otherwise apply the program income provisions of 2 CFR
200.307 and Section B.05 of the DOC ST&Cs.
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\21\ See NOFO at 82, section V.H.2.b.
\22\ See id.
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B. Fixed Amount Subawards and Cost Principles
The Uniform Guidance defines fixed amount subawards as those in
which a ``pass-through entity provides a specific level of support
without regard to actual costs incurred under the [subaward].'' \23\
This type of subaward reduces some of the administrative burden and
record-keeping requirements for both subrecipients and the pass-through
entities.\24\ Section 200.201 of the Uniform Guidance permits pass-
through entities to use fixed amount awards only if the project scope
has measurable goals and objectives, and if adequate cost, historical,
or unit pricing data is available to establish a fixed amount award
based on a reasonable estimate of actual cost.\25\ The Uniform Guidance
prohibits the use of fixed amount subawards in programs requiring
mandatory cost sharing or match,\26\ and generally limits pass-through
entities from providing fixed amount subawards exceeding the Simplified
Acquisition Threshold, which is $250,000.\27\
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\23\ 2 CFR 200.1.
\24\ See id.
\25\ 2 CFR 200.201(b).
\26\ 2 CFR 200.201(b)(2).
\27\ See 2 CFR 200.333; see also 48 CFR part 2, subpart 2.1.
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The Federal Government's cost principle rules do not apply as
compliance requirements to fixed amount subawards. Instead, the cost
principles are used as a guide when budgeting for the work that will be
performed. The Treasury Department is allowing CPF and SLFRF pass-
through entities to structure broadband infrastructure subawards as
fixed amount subawards. The cost principle rules thus will not apply as
compliance requirements to subrecipients of those subawards.
NTIA tentatively agrees with the Treasury Department's approach in
this area. Competitive subrecipient selection processes, as directed by
Congress in the Bipartisan Infrastructure Law, are likely to result in
fixed amount broadband infrastructure subawards that have measurable
goals and objectives.\28\ Moreover, the NOFO's implementing provisions
requiring that such selection processes are fair and open will help
deliver adequate cost data necessary to establish fixed amount
subawards that are based on a reasonable estimate of actual costs.\29\
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\28\ See 47 U.S.C. 1702(f).
\29\ See NOFO at 35, section IV.B.7.
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In addition, under the BEAD NOFO, the total amount of grant funding
requested is among the criteria that Eligible Entities must give the
greatest weight in deciding among competitive projects covering the
same location or locations, which gives potential subgrantees
significant financial incentive to estimate their costs
conservatively.\30\ We also note that NTIA is developing in
coordination with the FCC a broadband deployment cost model to
determine high-cost areas, a model that will provide agency staff an
additional tool for evaluating whether a potential subgrantee's cost
estimates are reasonable estimates of actual costs.
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\30\ See id. at 43, section IV.B.7.b.2.i.
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For the reasons above, we believe the structure of the BEAD program
and certain program features justify treating BEAD subgrants as fixed
amount subawards. We expect this classification will result in fewer
administrative burdens on Eligible Entities and subgrantees which
should result in the more efficient administration of the BEAD program
and more efficient use of program funding.
At the same time, it is important to minimize the risk of waste,
fraud, and abuse. We therefore propose requiring Eligible Entities as a
condition of their BEAD grants to monitor the costs of their
subrecipients using reasonable and appropriate accounting
methodologies. An Eligible Entity, for example, could require
subgrantees to periodically report their expenses for grant-funded
[[Page 42922]]
projects using the recipient's existing accounting methodology so long
as it meets Generally Accepted Accounting Principles or other standard
accounting practices.\31\ By imposing measures to validate that fixed
amount awards reasonably approximate the actual cost of broadband
infrastructure deployment or other BEAD Program projects, we will
minimize the risk of misuse of taxpayer resources.
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\31\ See Accounting Standards Codification, Financial Accounting
Standards Board, FASB.org.
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Question 2: As further addressed below, NTIA proposes to seek from
OMB the necessary exceptions to the Uniform Guidance rules to allow
Eligible Entities to issue fixed amount BEAD Program subawards of any
amount for broadband infrastructure projects. Is it reasonable to
assume that the subgrantee selection process, as specified in the
Bipartisan Infrastructure Law and BEAD NOFO, will ensure that each
project has ``measurable goals and objectives'' and provide ``a
reasonable estimate of actual cost''? \32\
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\32\ See 2 CFR 200.201(b)(1).
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Question 3: The Uniform Guidance prohibits the use of fixed amount
awards or subawards in programs requiring mandatory cost sharing or
match, as is the case in the BEAD Program.\33\ NTIA thus proposes to
seek from OMB an exemption for the class of subawards identified in
sections 60102(f)(1), (2), and (4) of the Bipartisan Infrastructure Law
from the prohibition on the use of fixed amount awards in programs
requiring mandatory cost sharing or match.\34\ As previously addressed,
the Uniform Guidance allows Federal awarding agencies to adjust
requirements to a class of awards when approved by OMB.\35\ NTIA seeks
comment on this proposal.
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\33\ 2 CFR 200.201(b)(2).
\34\ The class of subawards identified in sections 60102(f)(1),
(2), and (4) of the Bipartisan Infrastructure Law is that which
would be used for internet infrastructure projects. Consistent with
the Treasury Department's approach to provide exceptions from the
Uniform Guidance to internet infrastructure projects, NTIA is
proposing to provide this exception to the class of subawards that
would support internet infrastructure projects.
\35\ See 2 CFR 200.102(c).
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Question 4: The Uniform Guidance generally limits pass-through
entities from providing fixed amount subawards exceeding the Simplified
Acquisition Threshold, which is $250,000.\36\ Many BEAD subgrants
related to broadband deployment and connections will exceed $250,000.
NTIA thus proposes to seek from OMB an exemption of the class of
subawards identified in Sec. 60102(f)(1), (2), and (4) of the
Bipartisan Infrastructure Law from the rule limiting pass-through
entities from providing subawards on fixed amounts exceeding the
Simplified Acquisition Threshold.\37\ NTIA seeks comment on this
proposal.
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\36\ See 2 CFR 200.333; see also 48 CFR part 2, subpart 2.1.
\37\ 2 CFR 200.333.
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Question 5: In the case of fixed amount subawards, the Uniform
Guidance provides that payments are based on meeting specific
requirements of the subaward. It further offers some ways in which the
subaward may be paid.\38\ Options include, but are not limited to, (1)
in several partial payments, the amount of each agreed upon in advance,
and the ``milestone'' or event triggering the payment also agreed upon
in advance, and set forth in the award; (2) on a unit price basis, for
a defined unit or units, at a defined price or prices, agreed to in
advance of performance of the Federal award and set forth in the
Federal award; and (3) in one payment at award completion. NTIA seeks
comment on whether to specify through guidance or a special award
condition the form in which fixed amount subawards by Eligible Entities
should be paid.
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\38\ 2 CFR 200.201(b)(1).
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Question 6: While the Federal Government's cost principle rules do
not apply as compliance requirements to fixed amount subawards, the
Uniform Guidance requires fixed subaward amounts to be negotiated using
the cost principles (or other pricing information) as a guide.\39\ As
discussed above, the BEAD Program's competitive subaward selection
process must, by statute, be fair and open and will help deliver
adequate cost data necessary to establish fixed amount subawards that
are based on a reasonable estimate of actual costs. Is the information
that Eligible Entities will obtain from the subgrantee selection
process sufficient ``other pricing information?'' Are there
circumstances under which NTIA should issue a special award condition
instructing subrecipients of fixed amount subawards to use as a guide
the cost principles that would otherwise apply, such as the Eligible
Entity's extremely high cost per location threshold? \40\
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\39\ See 2 CFR 200.201(b).
\40\ See NOFO at 13, section I.C.(k) (defining ``extremely high
cost per location threshold''); id. at 81, section V.H.1 (applying
the cost principles in 2 CFR part 200, including subpart E, to
States and non-profit organizations, and the cost principles in 48
CFR part 31 to commercial organizations).
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Question 7: NTIA seeks comment on the nature and scope of any
related adjustments to the requirements of the Uniform Guidance that
may be required if broadband infrastructure subgrants are treated as
fixed amount awards. For example, what additional steps, if any, should
NTIA take to ensure that BEAD Program funds are used solely for the
purposes intended? What additional steps, if any, should NTIA take to
ensure that Eligible Entities are issuing awards at levels reasonably
related to provider costs? What additional steps, if any, should NTIA
take to ensure that other programmatic requirements (e.g., that a
subgrantee provide matching funds of not less than 25 percent of
project costs) are met by Eligible Entities and subgrantees?
NTIA plans to otherwise apply the fixed amount award provisions of
2 CFR 200.201(b) and the cost principle provisions of 2 CFR part 200,
subpart E to State, Territorial, local or federally-recognized Indian
Tribal Governments and 48 CFR part 31 to commercial organizations.
C. Procurement
The Uniform Guidance generally imposes procurement rules on
recipients and subrecipients that use federal assistance funds to
obtain property or services.\41\ The underlying objective of these
rules is to ensure that procurement processes sufficiently guard
against waste, fraud, and abuse.
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\41\ See 2 CFR 200.318-327.
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The Treasury Department is allowing pass-through entities in the
CPF and SLFRF programs to waive the procurement rules for subrecipients
of fixed amount broadband infrastructure subawards. An awarding agency
may provide less restrictive requirements when making fixed amount
awards.\42\ In determining whether the procurement rules of the Uniform
Guidance should apply to BEAD Program subgrants, it is worth noting
that many broadband providers already utilize competitive procurement
processes that align with the spirit, if not the specific provisions,
of the Uniform Guidance's procurement rules. The risk of waste, fraud,
and abuse is further diminished by the congressional directive that
Eligible Entities ``competitively award'' such subgrants.\43\
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\42\ See 2 CFR 200.102(c).
\43\ See 47 U.S.C. 1702(f).
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Question 8: If NTIA chooses to seek the exceptions necessary to
allow Eligible Entities to issue fixed amount BEAD Program subawards,
NTIA further proposes to issue a special award condition authorizing
Eligible Entities to provide subrecipients an exception from the
procurement requirements codified in 2 CFR 200.318-320 and 200.324-326
when using fixed amount subawards. The special award condition
[[Page 42923]]
excepting procurement requirements also would require the Eligible
Entity to obtain certifications from subrecipients that the
subrecipient used competitive procurement processes in executing the
project. NTIA seeks comment on this proposal.
NTIA plans to otherwise apply the procurement provisions of 2 CFR
200.318-327.
D. Property Standards
The Uniform Guidance's property standards, in conjunction with the
DOC ST&Cs, provide NTIA with a framework for holding subrecipients
accountable and ensuring that BEAD investments deliver for the American
people.\44\ This framework provides standards and procedures for
ownership, title, use, management, and disposition of property acquired
with DOC financial assistance. In applying this framework to BEAD-
funded networks, NTIA's overarching goals are to ensure that BEAD
subawards are used for their intended purposes; to prevent the unjust
enrichment of subrecipients; and to minimize administrative burdens
that could materially impact the incentives of traditional and non-
traditional broadband providers to participate in the program.
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\44\ See 2 CFR 200.310-316; DOC ST&Cs at section C.02.
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1. Useful Life of BEAD-Funded Equipment
The Uniform Guidance requires real property and equipment acquired
or improved with a subgrant to be held in trust for the beneficiaries
of the BEAD Program.\45\ The DOC ST&Cs further provide that this trust
relationship exists throughout the duration of the property's estimated
useful life (the Federal Interest Period).\46\ Subrecipients must
comply with all ownership, title, use, management, and disposition
requirements as set forth in 2 CFR 200.310 through 200.316, as
applicable, and in the terms and conditions of the Federal award
throughout the Federal Interest Period.\47\ The duration of Federal
Interest Period is determined by the grants officer in consultation
with the program office.\48\
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\45\ See 2 CFR 200.316.
\46\ See DOC ST&Cs at section C.02.
\47\ Id.
\48\ Id.
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Question 9: The Treasury Department is assigning one uniform period
of time for all funded broadband infrastructure property in its SLFRF
and CPF. NTIA proposes to take a similar approach in the BEAD program.
Specifically, NTIA proposes a Federal Interest Period of 20 years,
which is consistent with the expected useful life of fiber optic
cable.\49\ NTIA seeks comment on this proposal. Alternatively, NTIA
seeks comment on whether to issue a schedule defining the Federal
Interest Period as the useful life for different categories of BEAD-
funded personal property. If commenters favor the development of such a
schedule, what are the relevant categories, types, and estimated useful
life of BEAD-funded equipment and property?
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\49\ ``Planning and Flexibility Are Key to Effectively Deploying
Broadband Conduit through Federal Highway Projects,'' Government
Accountability Office, at 4, June 27, 2012, https://www.gao.gov/assets/gao-12-687r.pdf (``Industry documentation estimates that the
expected useful life of fiber cables is between 20 and 25 years and
that the expected useful life of underground conduit is between 25
and 50 years.'').
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2. Use of Real Property and Equipment
The Uniform Guidance establishes use requirements on real property
and equipment acquired under a Federal award or subaward during the
Federal Interest Period. One such requirement is that the real property
and equipment must be used in the program or project for which it was
acquired as long as needed, whether or not the project or program
continues to be supported by the Federal award.\50\ Another such
requirement is for the recipient or subrecipient to make equipment
available for use on other projects or programs currently or previously
supported by the Federal Government, provided that such use will not
interfere with the work on the projects or program which it was
originally acquired.\51\ The Uniform Guidance also provides that
equipment may be used in other activities supported by the Federal
awarding agency.\52\ The Treasury Department is applying a modified
version of these use requirements to broadband infrastructure fixed
amount subawards in its CPF and SLFRF programs.
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\50\ 2 CFR 200.311(b); 2 CFR 200.313(c)(1).
\51\ 2 CFR 200.313(c)(2).
\52\ 2 CFR 200.313(c)(1).
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Question 10: The Uniform Guidance allows Federal awarding agencies
to apply less restrictive requirements when making fixed amount
subawards.\53\ Should NTIA employ this authority with respect to any of
the previously described use requirements? If so, explain why.
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\53\ See 2 CFR 200.102(c).
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NTIA plans to otherwise apply the real property and equipment use
provisions of 2 CFR 200.311(b) and 2 CFR 200.313(c)(1)-(2).
3. Equipment Management Requirements
The Uniform Guidance provides specific procedures for managing
equipment (including replacement equipment) acquired in whole or in
part under a Federal award or subaward.\54\ The Treasury Department
guidance requires broadband infrastructure subrecipients in the SLFRF
and CPF programs to comply with the requirements in section 200.313(d)
of the Uniform Guidance, which may be satisfied by applying the ISP's
commercial practices for meeting such requirements in the normal course
of business (e.g., commercial inventory controls, loss prevention
procedures, etc.), provided that such inventory controls indicate the
applicable Federal interest.
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\54\ See 2 CFR 200.313(d).
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Question 11: Do existing commercial practices for managing
equipment deployed as part of a broadband network contemplate the same
or similar activities as those identified in section 200.313(d) of the
Uniform Guidance (e.g., maintenance of property records, regular
physical inventories, commercial inventory controls, maintenance
procedures, and resale procedures)? NTIA recognizes that inventory
controls indicating the applicable Federal interest are critical tools
for guarding against waste, fraud, and abuse. Inventory Controls are
also particularly important for tracking and, to the extent necessary,
enforcing the Federal Government's reversionary interest in BEAD
equipment. Would commercial inventory controls indicate the Federal
interest in equipment? Commenters should provide detailed analyses
comparing existing commercial practices to the requirements identified
in section 200.313(d). If such commercial practices do contemplate the
same or similar activities, should NTIA provide an exception to the
equipment management requirements in section 200.313(d) for those
broadband infrastructure subrecipients that certify that they use
commercial practices for managing equipment deployed as part of a
broadband network? Should any such exception be conditioned on the
subrecipient's obligation to make the records available pursuant to
those commercial practices available to the Eligible Entity and to NTIA
for review on request?
NTIA plans to otherwise apply the equipment management provisions
of 2 CFR 200.313(d).
[[Page 42924]]
4. Equipment Upgrades and Network Evolution
The Uniform Guidance and DOC ST&Cs contain specific provisions
regarding the replacement of equipment and the disposition of equipment
no longer needed for the original project or program.\55\ With respect
to acquiring replacement equipment, the Uniform Guidance provides that
subrecipients may use the equipment to be replaced as a trade-in or
sell the property and use the proceeds to offset the cost of the
replacement property.\56\ When equipment acquired under a Federal
subaward is no longer needed for the original project, subrecipients
must request disposition instructions from the Federal awarding
agency.\57\ The Treasury Department is allowing broadband
infrastructure subrecipients in its SLFRF and CPF programs to dispose
of equipment in the ordinary course of business when no longer needed
to operate the network, subject to the conditions that the subrecipient
provide notice to the Treasury Department, the same level of service
provided by the network is maintained, there is no material
interruption to service, and the upgraded property is subject to the
same property requirements are the original property.
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\55\ See 2 CFR 200.313(c)(4), 200.313(e).
\56\ 2 CFR 200.313(c)(4).
\57\ 2 CFR 200.313(e).
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The equipment replacement and disposition requirements play an
important role in safeguarding the Federal interest in real property
acquired or improved under a Federal award. At the same time, requiring
subrecipients of internet infrastructure subawards to sell older
equipment in every instance of equipment upgrades, or obtain
instructions for every instance of equipment disposition, may prove
impractical given the scale and duration of the BEAD Program. Moreover,
it may unintentionally chill efforts by BEAD subrecipients to upgrade
and evolve networks during the Federal Interest Period.
Question 12. NTIA proposes to issue a special award condition
providing subrecipients clarity as to the flexibilities that BEAD
subrecipients have under the Uniform Guidance to upgrade and evolve
BEAD-funded networks. Specifically, this special award condition would
clarify that for purposes of the BEAD Program: ``Subrecipients
acquiring replacement equipment under 2 CFR 200.313(c)(4) may treat the
equipment to be replaced as `trade-in' even if the subrecipient elects
to retain full ownership and use over equipment. As with trade-ins that
involve a third party, the subrecipient will have to record the fair
market value of the equipment being replaced in its Tangible Personal
Property Status Reports to the Department of Commerce to ensure
adequate tracking of the Federal percentage of participation in the
cost of the project. The subrecipient also is responsible for tracking
the value of the replacement equipment, including both the Federal and
non-Federal share.'' NTIA seeks comment on this proposal.
NTIA plans to otherwise apply the equipment replacement and
disposition provision of 2 CFR 200.313(c)(4) and 200.313(e).
5. Lien Requirements
The Uniform Guidance defers to the Federal awarding agency
regarding whether to require the recording of liens or other notices of
record on real property and equipment acquired or approved under a
Federal subaward.\58\ In turn, the DOC ST&Cs permit--but do not
require--the imposition of a lien or other notice of record requirement
on subrecipients. Notwithstanding the recording of a lien or other
notice of record on property, the Federal Government retains beneficial
title to the grant-funded equipment or property to ensure it is used
for the intended public purposes.
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\58\ 2 CFR 200.316.
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The Treasury Department is requiring subrecipients to record liens
only in those instances in which the subrecipient encumbers the project
property. These liens must reflect the Treasury Department's shared
first lien position in the project property such that, if the project
property were foreclosed upon and liquidated, Treasury would receive
the portion of the fair market value of the property that is equal to
Treasury's percentage contribution to the project costs.
Question 13. NTIA proposes the same approach as the Treasury
Department is requiring. Specifically, NTIA would require subrecipients
to record such liens for any encumbered equipment and real property
acquired or improved using the class of subgrants defined in section
60102(f)(1), (2), and (4) of the Bipartisan Infrastructure Law. NTIA
would not otherwise require liens for equipment and real property
acquired or improved using this same class of subgrants. NTIA seeks
comment on this proposal.
E. Audits
While the NOFO establishes default audit requirements, it affords
NTIA authority to prescribe different requirements for commercial
entities via the terms and conditions of awards.\59\ Rather than apply
any specific audit requirements to subrecipients in its SLFRF and CPF
programs, the Treasury Department is allowing pass-through entities to
determine the form and frequency of commercial subrecipient audits, so
long as such audits can be used by pass-through entities to satisfy the
terms and conditions of their award. This approach is consistent with
the construct of the BEAD Program, which vests significant decision-
making authority in Eligible Entities.
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\59\ See NOFO at 93, section VII.G.
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Question 14. NTIA thus proposes to issue a special award condition
vesting authority in Eligible Entities to determine the form and
frequency of audits from commercial subrecipients. Under such an
approach, each Eligible Entity can prescribe and enforce any such audit
requirement it deems sufficient for its own compliance requirements as
recipients of BEAD awards. NTIA seeks comment on this proposal.
NTIA plans to otherwise apply the audit requirements specified in
section VII.G of the NOFO and 2 CFR part 200, subpart F.
F. Revision of Budget
The Uniform Guidance requires recipients to report, and request
prior approvals from Federal awarding agencies for, budget and program
plan revisions.\60\ While such a requirement may help to reduce the
risk of waste, fraud, and abuse in certain award constructs, it may not
be as critical in the context of fixed-amount BEAD subawards.
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\60\ See 2 CFR 200.308(b).
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Question 15. Assuming that NTIA permits Eligible Entities to
proceed with fixed amount subaward frameworks, what flexibility, if
any, should NTIA allow an Eligible Entity to provide to subrecipients
of fixed-amount subawards with respect to budget revision? If NTIA does
allow an Eligible Entity to provide flexibility with respect to budget
revisions, how can NTIA and Eligible Entity ensure that subrecipients
provide sufficient notice and seek approval where there is a
significant change in project scope/objective or inability to complete
project without additional Federal funds?
[[Page 42925]]
NTIA plans to otherwise apply the budget revision provisions of 2
CFR 200.308(b).
Sean Conway,
Acting Deputy Chief Counsel, National Telecommunications and
Information Administration.
[FR Doc. 2023-14114 Filed 7-3-23; 8:45 am]
BILLING CODE 3510-60-P
