Guidance for Grants and Agreements, 69390-69500 [2023-21078]

Agencies

• Management and Budget Office

[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Proposed Rules]
[Pages 69390-69500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21078]



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Vol. 88

Thursday,

No. 192

October 5, 2023

Part III





 Office of Management and Budget





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2 CFR Parts 1, 25, 175, et al.





Guidance for Grants and Agreements; Proposed Rule

Federal Register / Vol. 88, No. 192 / Thursday, October 5, 2023 / 
Proposed Rules

[[Page 69390]]


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OFFICE OF MANAGEMENT AND BUDGET

2 CFR Parts 1, 25, 175, 180, 182, 183, 184, 200


Guidance for Grants and Agreements

AGENCY: Office of Federal Financial Management, Office of Management 
and Budget.

ACTION: Proposed rule; notification of proposed guidance.

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SUMMARY: The Office of Management and Budget (OMB) is proposing to 
revise sections of OMB Guidance for Grants and Agreements. This 
proposed revision reflects comments received from Federal agencies and 
those received in response to the OMB Notice of Request for Information 
published in the Federal Register in February 2023. In response to 
Federal agency and public input, OMB is proposing revisions intended in 
many cases to reduce agency and recipient burden. OMB proposes both 
policy changes and clarifications to existing guidance including plain 
language revisions. OMB also proposes to update the guidance to reflect 
recent OMB priorities related to Federal financial assistance. Finally, 
OMB is proposing revisions to improve Federal financial assistance 
management, transparency, and oversight through more accessible and 
readily comprehensible guidance.

DATES: OMB invites interested persons and organizations to submit 
comments on or before December 4, 2023.

ADDRESSES: Comments on this proposal must be submitted electronically 
before the comment closing date to www.regulations.gov. In submitting 
comments, please search for recent submissions by OMB to find docket 
OMB-2023-0017, which includes the full text of the proposed revisions 
and submit comments there. Please provide clarity as to the section of 
the guidance that each comment is referencing by beginning each comment 
with the section number in brackets. For example; if the comment is on 
2 CFR 200.1 include the following before the comment [200.1]. The 
public comments received by OMB will be posted at https://www.regulations.gov and be a matter of public record. Accordingly, 
please do not include in your comments any confidential business 
information or information of a personal-privacy nature. In general, 
responses to the comments will be summarized and included in the 
preamble of the final guidance.

FOR FURTHER INFORMATION CONTACT: Andrew Reisig or Steven Mackey at the 
OMB Office of Federal Financial Management via email at 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Summary

    The Office of Management and Budget (OMB) proposes to revise 
several parts of the OMB Guidance for Grants and Agreements located in 
title 2 of the Code of Federal Regulations (CFR) to further clarify and 
update guidance to Federal agencies on the consistent and efficient use 
of Federal financial assistance. This document includes proposed 
revisions to Part 1 (About Title 2 of the Code of Federal Regulations 
and Subtitle A); Part 25 (Universal Identifier and System for Award 
Management); Part 170 (Reporting Subaward and Executive Compensation 
Information), Part 175 (Award Term for Trafficking in Persons); Part 
180 (OMB Guidelines to Agencies on Governmentwide Debarment and 
Suspension (Non-procurement)); Part 182 (Governmentwide Requirements 
for Drug-Free Workplace (Financial Assistance)); Part 183 (Never 
Contract with the Enemy); and Part 200 (Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards).
    As explained in further detail below, OMB proposes revising 2 CFR 
for reasons including: (1) incorporating statutory requirements and 
administration priorities; (2) reducing agency and recipient burden; 
(3) clarifying sections that recipients or agencies have interpreted in 
different ways; and (4) rewriting applicable sections in plain 
language, improving flow, and addressing inconsistent use of terms. 
Consistent with these objectives, OMB proposes both policy changes and 
clarifications to existing guidance including plain language revisions. 
OMB also proposes to update the guidance to reflect recent OMB 
priorities related to Federal financial assistance. Finally, OMB's 
proposed revisions are also intended to improve Federal financial 
assistance management, transparency, and oversight through more 
accessible and readily comprehensible guidance.
    OMB summarizes its proposals for policy changes in this document 
below. OMB also explains its general methodology for plain language 
revisions. OMB sought to maintain the existing structure of the 2 CFR 
guidance, which remains generally intact and mostly consistent with 
earlier iterations of the guidance--for example, in terms of the 
structure of parts, structure of subparts, and section numbering. 
Except in cases where OMB proposes policy changes or other edits for 
consistency with statutory requirements, OMB also generally sought to 
maintain the existing content of the 2 CFR guidance. In many cases 
throughout the guidance, however, OMB proposes plain language revisions 
to simplify the guidance text, avoid or reduce technical jargon where 
feasible, provide greater consistency, and make the text more succinct.
    The proposed revisions align with OMB's authority to: (i) issue 
guidance promoting consistent and efficient use of Federal financial 
assistance instruments; and (ii) provide overall direction and 
leadership to Federal agencies on policies and requirements related to 
Federal financial assistance. See 31 U.S.C. 6307 and 31 U.S.C. 
503(a)(2). Additional authorities for the proposed revisions are set 
forth below. Many of the proposed revisions reflect comments received 
from Federal agencies and those received from the public in response to 
the OMB Notice of Request for Information published in the Federal 
Register in February 2023. See 88 FR 8480 (Feb. 9, 2023).

Background

    Between 2012 and 2013, OMB worked with Federal agencies to revise 
and streamline existing guidance to develop the Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards (Uniform Guidance) located in part 200 of 2 CFR. 79 FR 78589 
(Dec. 26, 2013). This effort was intended to assist programs in 
delivering better outcomes on behalf of the American people while 
simultaneously reducing administrative burden and the risk of fraud, 
waste, and abuse. The Uniform Guidance in part 200, which OMB 
established in 2013, consolidated, streamlined, and superseded 
requirements from several earlier OMB Circulars and guidance documents 
related to grants management and implementation of the Single Audit 
Act. OMB explained in 2013 that its guidance intended to improve both 
the clarity and accessibility of these requirements across the Federal 
government. Federal award-making agencies implemented the Uniform 
Guidance through an interim final rule, which became effective on 
December 26, 2014. 79 FR 75867 (Dec. 19, 2014).
    OMB generally reviews the Uniform Guidance every five years in 
accordance with 2 CFR 200.109. OMB made further revisions to the 
Uniform Guidance in 2020. 85 FR 49506 (Aug. 13, 2020). The 2020 
revisions addressed topics including program development and design, as 
well as measuring recipient

[[Page 69391]]

performance to assist Federal awarding agencies and non-Federal 
entities to improve program goals and objectives, share lessons 
learned, and adopt of promising performance practices.
    Based on feedback and ongoing engagement with Federal agencies and 
the broader Federal financial assistance community, OMB believes that 
additional revisions are now warranted to the Uniform Guidance in part 
200 to further streamline, clarify, and update the guidance, including 
raising certain thresholds, where permissible under law, in recognition 
of inflation over time. Further information on OMB's objectives for the 
proposed revisions is provided below.
    In addition to proposed revisions in part 200, OMB also proposes 
revisions to other parts in subtitle A of 2 CFR for similar reasons, 
including parts 1, 25, 170, 175, 180, 182, and 183. OMB established 
these parts at different times in the last 20 years. See, for example, 
69 FR 26276 (May, 11, 2004) (establishing 2 CFR for guidance on grants 
and other financial assistance and nonprocurement agreements); 70 FR 
51863 (Aug. 31, 2005) (establishing part 180); 75 FR 55671 (Sep. 14, 
2010) (establishing part 25); and 75 FR 55663 (Sep. 14, 2010) 
(establishing part 170).

OMB Objectives

    OMB's objectives for the current proposed revisions to several 
parts of subtitle A of 2 CFR include: (1) incorporating statutory 
requirements and administration priorities; (2) reducing agency and 
recipient burden; (3) clarifying sections that recipients or agencies 
have interpreted in different ways; and (4) rewriting applicable 
sections in plain language, improving flow, and addressing inconsistent 
use of terms.
    The proposed revisions to the Uniform Guidance in part 200 and 
other parts of 2 CFR generally support these four objectives. In 
support of objective (1), OMB proposes to implement changes throughout 
the Uniform Guidance and other parts to ensure consistency with 
statutory authorities. For example, OMB proposes to revise Parts 25, 
170, and 175 to ensure its guidance properly aligns with underlying 
statutes, as amended. These potential revisions would reduce 
inconsistencies between OMB's guidance and authorizing statutes to 
ensure proper implementation. OMB has also made several structural 
changes to individual parts within Chapter I to provide further 
structural consistency throughout OMB's guidance in 2 CFR.
    In support of objective (2), OMB proposes to increase several 
monetary thresholds that have not been updated for many years. For 
example, OMB proposes increasing the single audit threshold from 
$750,000 to $1,000,000 and increasing the threshold from $5,000 to 
$10,000 for determining items that are considered to be equipment. OMB 
reviewed previous increases to the thresholds and considered current 
economic data when making its determinations. In further support of 
reducing burden, OMB is proposing a complete revision to the template 
text for a Notice of Funding Opportunity (NOFO) located in Appendix I 
of the Uniform Guidance in part 200. With this revision, OMB intends to 
reduce administrative burden and unnecessary obstacles for applying to 
Federal financial assistance.
    In support of objective (3), OMB proposes revisions to 2 CFR to 
clarify areas of misinterpretation. Many of these clarifications do not 
represent a change in policy but serve to explain the intent of 
specific sections of the Uniform Guidance in part 200, and other parts 
in 2 CFR, with greater precision and clarity. OMB received feedback 
from Federal agencies and the public stating that Federal agencies and 
the recipient community interpret many sections differently. As one 
example, OMB clarifies that Federal agencies approve costs requiring 
prior approval when the Federal award is issued if the costs were 
included in the recipient's proposal, and do not require subsequent 
approval prior to expenditure.
    In support of objective (4), OMB proposes to revise the guidance to 
follow plain language principles. Plain language principles OMB focused 
on included using simple words and phrases, avoiding jargon, using 
terms consistently, and being concise.
    Related to OMB's plain language revisions, throughout subparts A to 
E of part 200, OMB proposes to use the terms ``recipient,'' 
``subrecipient,'' or both in place of ``non-Federal entity.'' OMB 
believes that the existing usage of ``non-Federal entity'' in subparts 
A through E of the existing CFR text in part 200 presents challenges to 
readers and makes it difficult to quickly understand what entity is 
being addressed, especially in situations in which Federal agencies 
apply part 200 to Federal agencies, for-profit organizations, foreign 
public entities, or foreign organizations under 2 CFR 200.101. In the 
revisions to part 200, OMB uses the term ``non-Federal entity,'' as 
defined in section 200.1, only when that entity is specifically 
intended, such as in subpart F implementing the Single Audit Act. In 
many cases in part 200 OMB proposes to replace ``non-Federal entity'' 
with either ``recipient and subrecipient'' or ``recipient or 
subrecipient.'' In cases where the guidance in part 200 relates 
specifically to only either ``recipients'' or ``subrecipients,'' but 
not both, OMB refers specifically to the applicable entity. OMB invites 
comments on this proposal and any effects it may have on specific 
sections or paragraphs of the guidance in part 200.
    OMB notes that these revisions related to the use of the terms 
``non-Federal entity,'' ``recipient,'' and ``subrecipient'' do not 
directly change the existing scope of applicability of the guidance. 
The applicability provision for part 200 at section 200.101, continues 
to provide Federal agencies with discretion on whether to apply 
subparts A through E of part 200 to Federal agencies, for-profit 
entities, foreign public entities, or foreign organizations. In the 
same section, OMB proposes to encourage Federal agencies to apply the 
requirements in subparts A to E of part 200 to all recipients in a 
consistent and equitable manner, but does not require them to do so. In 
cases in which Federal agencies apply part 200 to such entities, OMB's 
proposal further clarifies how the guidance applies to those entities 
as either recipients or subrecipients.
    As another example of plain language revisions, OMB proposes to 
replace the use of the general term ``OMB designated governmentwide 
systems'' with more specific terms to reduce ambiguity for those 
unfamiliar with the Uniform Guidance. In this proposed revisions OMB 
specifically mentions the appropriate system, such as SAM.gov, 
USASpending.gov, the Contractor Performance Assessment Reporting System 
(CPARS), or Grants.gov.
    The overall goal of OMB's plain language revision effort is to make 
the Uniform Guidance more accessible to the general public and ensure 
more equitable access to Federal funding opportunities by making the 
guidance on that topic easier to understand. OMB does not directly 
address the proposed plain language revisions in this preamble unless a 
revision represents a material change to the Uniform Guidance. However, 
OMB invites comment on whether any of its plain language revisions in 
part 200, or other parts, may have unintended consequences. OMB also 
invites comments on whether further modifications or additional 
precision is needed in any specific instance, such as in the case of 
OMB's proposed use of the terms ``recipient,'' ``subrecipient,'' or 
both in particular sections of the guidance.

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Statutory Authority for OMB Guidance for Grants and Agreements

    The Director of OMB is authorized under 31 U.S.C. 6307 to ``issue 
supplementary interpretative guidelines to promote consistent and 
efficient use of . . . grant agreements . . . and cooperative 
agreements.'' The Deputy Director for Management of OMB is authorized 
under 31 U.S.C. 503 to, among other things, provide ``overall direction 
and leadership to the executive branch on financial management matters 
by establishing financial management policies and requirements.'' 31 
U.S.C. 503(a)(2).
    OMB also relies on authorities including the Single Audit Act 
Amendments of 1996 (Pub. L. 104-156, as amended, codified at 31 U.S.C. 
7501-7507); the Federal Funding Accountability and Transparency Act of 
2006 (FFATA or the Transparency Act) (Pub. L. 109-282), as amended; the 
Digital Accountability and Transparency Act of 2014 (DATA Act of 2014) 
(Pub. L. 113-101), as amended; the Federal Program Information Act 
(Pub. L. 95-220 and Pub. L. 98-169, as amended, codified at 31 U.S.C. 
6101-6106); the Federal Grant and Cooperative Agreement Act of 1977 
(Pub. L. 95-224, as amended, codified at 31 U.S.C. 6301-6309); the 
Office of Federal Procurement Policy Act (codified at 41 U.S.C. 1101-
1131); the Budget and Accounting Procedures Act of 1950, as amended 
(codified at 31 U.S.C. 1101-1126); the Chief Financial Officers Act of 
1990 (codified at 31 U.S.C. 503-504); the Trafficking Victims 
Protection Act of 2000 (TVPA), as amended (codified at 22 U.S.C. 7101-
7115); and Executive Order 11541, ``Prescribing the Duties of the 
Office of Management and Budget and the Domestic Policy Council in the 
Executive Office of the President.''

Request for Information Issued by OMB in February 2023

    On February 9, 2023, OMB published a Notice of Request for 
Information (RFI) in the Federal Register. 88 FR 8480 (Feb. 9, 2023). 
OMB received approximately 1,250 individual comments from all sources, 
including 113 submissions from the public containing multiple comments 
in each. In response to Federal agency and public input, OMB is 
proposing the revisions discussed below.

Part-by-Part Discussion of the Proposed Revisions

    OMB invites comments on the proposed revisions throughout subtitle 
A of 2 CFR. OMB identifies areas below where comments may be 
particularly useful.

Part 1--About Title 2 of the Code of Federal Regulations and Subtitle A

    OMB proposes to revise the headings of title of 2 CFR and Subtitle 
A and Chapter I to replace ``Grants and Agreements'' with ``Federal 
Financial Assistance.'' This revision will help to ensure that the 
Uniform Guidance is understood to be applicable beyond just grants and 
cooperative agreements, unless noted differently in the applicability 
provision for the Uniform Guidance at section 200.101 or relevant 
provisions in others parts in chapter I.
    OMB proposes to revise section 1.200 to remove paragraphs (b) and 
(c), which are no longer accurate. When OMB first established part 1 in 
2004, see 69 FR 26276 (May 11, 2004), it implemented the Federal 
Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-
107). That legislation ceased to be effective on November 20, 2007 
based on a sunset date included in the law. In addition, chapter II of 
subtitle A in 2 CFR, which now contains part 200, was initially 
intended to contain OMB guidance in its ``initial form'' before it was 
``finalized.'' That statement no longer accurately reflects the 
structure of subtitle A of 2 CFR nor status of the OMB guidance in part 
200.
    OMB proposes to provide a more succinct statement in section 1.215 
explaining that some of the guidance was organized differently within 
previous OMB circulars or other guidance documents before establishment 
of title 2 of the CFR. Because 2 CFR has now existed for almost 20 
years in its current format and location, OMB does not believe it is 
necessary to continue to include the table showing earlier sources of 
certain elements of the OMB guidance in 2 CFR. The Federal Register 
notice establishing 2 CFR in 2004, see 69 FR 26276 (May, 11, 2004), and 
other subsequent Federal Register notices establishing and revising 
particular parts and provisions of subtitle A in 2 CFR, include that 
information.
    OMB also proposes to revise section 1.305 to further clarify 
Federal agency responsibilities, such as coordinating with the Council 
on Federal Financial Assistance (see OMB Memorandum M-23-19), the 
Grants Quality Service Management Office (QSMO), and other governance 
committees.
    OMB also proposes to add section 1.231 to clarify its intent that 
if any provision of this guidance, as finalized, were held to be 
invalid or unenforceable, such provision, or combination of provisions, 
are severable from the remaining provisions of the guidance, as 
finalized.

Part 25--Unique Entity Identifier and System for Award Management

    OMB proposes to revise the guidance in this part to ensure it 
properly aligns with the authorizing statutes, as amended, including 
the Transparency Act and the DATA Act of 2014. OMB first revises the 
title of Part 25 to replace ``universal identifier'' with ``unique 
entity identifier.'' In section 25.105, which is renamed 
``Applicability,'' OMB proposes to clarify that the requirement to 
obtain a Unique Entity Identifier (UEI) and register in SAM.gov does 
not apply to second-tier subrecipients or contractors. In support of 
Federal agency requests, OMB proposes to clarify that recipients of 
loan guarantees must obtain a UEI and register in SAM.gov, while a 
Federal agency may use discretion when determining to apply the 
requirements to beneficiary borrowers.
    In section 25.110, OMB proposes to clarify that, even if an 
exception is granted, a Federal agency remains responsible for 
reporting data to comply with the Transparency Act, as amended, except 
that it may use a generic entity identifier in the circumstances 
described.
    Although not included in the proposed guidance in this document, 
OMB is also considering other ways of reducing the administrative 
burden associated with obtaining a UEI and registering in SAM.gov for 
foreign organizations or foreign public entity receiving Federal awards 
between $25,000 (the Transparency Act threshold for a ``Federal 
award'') and $250,000 (the simplified acquisition threshold). Federal 
agencies have explained to OMB that the process for obtaining a UEI and 
registering in SAM.gov can present significant challenges for some of 
their applicants for, and recipients of, awards in this limited 
category. Based on this feedback, OMB is considering establishing a new 
exception in section 25.110 that would allow an agency to grant a one-
time exception from the requirement to obtain a UEI, register in 
SAM.gov, or both for foreign organizations or foreign public entities 
applying for or receiving an award between $25,000 and $250,000 for a 
project or program performed outside the U.S. OMB will work with 
Federal agency partners to determine if this proposal can be 
implemented in a way that is consistent with Transparency Act reporting 
requirements. If included in the final revisions to the guidance, OMB 
will also consider incorporating further

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limits or safeguards in this exception to mitigate risk, such as not 
allowing its application to awards that will include subawards above 
$30,000--the threshold for subaward reporting established based on the 
pilot program in section 5(b) of the Transparency Act, as amended by 
the Data Act of 2014. Public Law 113-101; 85 FR 49506 (Aug. 13, 2020); 
2 CFR 170.220. This proposed change would provide more flexibility--as 
needed--to agencies operating in overseas environments where SAM.gov 
registration presents particular challenges. If finalized, the 
exception would only be available on a case-by-case basis in situations 
in which the agency has conducted a risk-based analysis and deemed it 
impractical for the entity to comply with the requirements(s). This 
proposed change would only be finalized in a way that would allow 
agencies to continue following Transparency Act reporting requirements 
for this limited category of awards.
    Related to the above analysis, OMB is also considering expanding 
the exigent circumstances exception in section 25.110 to provide 
recipients with additional time to obtain a UEI and complete SAM.gov 
registration if exigent circumstances persist beyond 30 days. This 
proposal is not included in the proposed guidance in this document, but 
OMB is considering ways to provide this additional flexibility in the 
final guidance. When exigent circumstances exist, the current guidance 
at section 25.110 allows agencies to provide recipients up to 30 days 
after the Federal award date to obtain a UEI and complete SAM.gov 
registration. In recognition of the issues that sometimes arise when 
organizations attempt to register in SAM.gov, particularly for new or 
inexperienced applicants, OMB's proposal would provide Federal agencies 
with the option to provide recipients an additional 90 days if exigent 
circumstances persist. OMB will work with Federal agency partners to 
determine if this proposal can be implemented in a way that is 
consistent with Transparency Act reporting requirements. If included in 
the final revisions to the guidance, OMB proposes to further clarify 
that Federal agencies should not issue payments to a recipient that is 
unable to obtain a UEI or complete registration in SAM.gov. OMB also 
proposes to clarify that Federal agencies should include an award term 
expressly providing that the recipient's eligibility to receive any 
future payments under the award (such as outlays of cash) would be 
contingent on the recipient receiving a UEI and completing 
registration. Again, this proposed change would only be finalized in a 
way that would allow agencies to continue following Transparency Act 
reporting requirements for this limited category of awards.
    OMB also proposes several clarifications in the part, such as a 
proposed revision in section 25.205 explaining that the requirement to 
have an active UEI does not apply to amendments to terminate or close a 
Federal award.

Part 170--Reporting Subaward and Executive Compensation Information

    OMB proposes to revise the guidance in this part to ensure it 
properly aligns with the authorizing statutes, as amended, including 
the Transparency Act and the DATA Act of 2014. OMB proposes to clarify 
the specific Federal agency reporting requirements and to revise the 
award term to resolve issues related to which entities the award term 
applies to. OMB also proposes to revise certain sections to clarify 
their intended meaning. For example, OMB proposes to move certain 
requirements currently contained in section 170.110 to section 170.105, 
which OMB proposes to rename ``Applicability.''

Part 175--Award Term for Trafficking in Persons

    OMB proposes to revise the guidance in part 175 to ensure it 
properly aligns with the authorizing statutes that have been amended 
since it was published. See the TVPA of 2000, as codified at 22 U.S.C. 
7101 to 7115. OMB proposes to update the policy and Award Term to 
ensure alignment with the current statute and to further align with the 
format of the CFR. For example, at section 175.105, OMB proposes adding 
provisions related to a compliance plan and requiring notification to 
Inspectors Generals under certain circumstances to further align with 
statute.

Part 180--OMB Guidelines to Agencies on Government-Wide Debarment and 
Suspension (Nonprocurement)

    OMB proposes minimal revisions to this part based on feedback 
received from the Interagency Suspension and Debarment Committee (ISDC) 
in accordance with section 180.40. Considering the role of the ISDC in 
recommending changes, OMB does not propose extensive plain language 
revisions through this document in part 180. Sections in part 180 that 
OMB proposes to revise include sections 180.635 and 180.640 to clarify 
available administrative actions in lieu of debarment. OMB proposes 
amending section 180.705 to include ``other indicators of adequate 
evidence that may include, but are not limited to, warrants and their 
accompanying affidavits'' for officials to consider before initiating a 
suspension. OMB proposes additional clarifying edits to sections 
180.710, 180.815, and 180.860, including adding text to section 180.860 
to address factors influencing a debarment decision; this revision 
proposes to add text on ``whether your business, technical, or 
professional license(s) has been suspended, terminated, or revoked.'' 
OMB proposes changes to this part generally in response to an ISDC 
recommendation to provide additional clarifications to 2 CFR to reflect 
current practice. OMB is not proposing to establish new policy in part 
180 that would negatively impact the ability of Federal agencies or 
recipients to adhere to this guidance.

Part 182--Government-Wide Requirements for Drug-Free Workplace 
(Financial Assistance)

    OMB proposes limited plain language revisions to this part.

Part 183--Never Contract With The Enemy

    OMB proposes limited plain language revisions to this part.

Part 184--Buy America Preferences for Infrastructure Projects

    OMB established this part on Buy America preferences for 
infrastructure projects through a separate process. 88 FR 57750 (Aug. 
23, 2023). OMB does not propose changes to part 184 through this 
document. OMB notes, however, that it may potentially make minor, non-
substantive changes to part 184 through its final guidance if necessary 
to ensure consistency with any changes to the definitions in section 
200.1. OMB notes that part 184, at section 184.3, states that acronyms 
and terms not defined in part 184 have the same meaning as provided in 
section 200.1. Certain terms used in part 184, such as ``Federal 
awarding agency,'' may be affected by OMB's proposed changes under this 
notice. Thus, it may be necessary to make minor conforming changes to 
part 184 to ensure consistent use of terms.

Part 200--Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards

    In the paragraphs below, OMB discusses proposed changes to each 
subpart of the Uniform Guidance in 2 CFR part 200.

[[Page 69394]]

Subpart A--Acronyms and Definitions

    OMB proposes to update section 200.0 to remove acronyms that either 
appear only once or are used infrequently in the Uniform Guidance. At 
the same time, OMB proposes to add several acronyms that are used more 
frequently, but have been omitted from this section in past updates, 
such as Unique Entity Identifier (UEI).
    In section 200.1, OMB proposes to remove several definitions that 
were used only once or on a limited basis and instead move such 
definitions to the appropriate section of the Uniform Guidance where 
they appear. OMB proposes this change to ease the experience of the 
reader and avoid the need to review Subpart A for an understanding of a 
single section or small set of sections. For example, OMB proposes 
moving the definition of ``Cooperative audit resolution'' to the text 
of Subpart F. OMB also proposes deleting the definition of ``Federal 
awarding agency,'' which OMB now proposes to incorporate within the 
definition of ``Federal agency.''
    OMB also proposes adding several new definitions of commonly used 
terms based on feedback from agencies and the RFI. Proposed new 
definitions include ``continuation funding,'' ``for-profit 
organization,'' ``key personnel,'' ``participant,'' and ``prior 
approval.''
    OMB proposes to revise several definitions to incorporate threshold 
increases referenced in other sections, such as the threshold increase 
for ``equipment'' to $10,000, the threshold for ``supply'' to $10,000, 
and the definition of ``Modified Total Direct Costs,'' which now 
proposes to exclude subaward costs above $50,000, as compared to 
$25,000 in the existing guidance.
    OMB also proposes to revise several definitions for other reasons. 
For example, OMB proposes to shorten the definition of ``improper 
payment'' to ensure that the definition references the appropriate 
source in Appendix C to OMB Circular A-123, Requirements for Payment 
Integrity Improvement. OMB proposes to update the definition of 
``intangible property'' to include more information related to date and 
licenses. OMB also proposes to clarify ``participant support costs'' 
with additional explanatory information and expand the definition of 
``questioned costs'' to provide greater understanding of the terms 
throughout the Uniform Guidance. In addition, other definitions that 
OMB proposes altering include ``cost sharing'' (discussed below under 
section 200.306), ``Federal agency,'' ``Federal award date,'' 
``financial obligations,'' ``Indian tribe,'' ``period of performance,'' 
``prior approval,'' ``real property'', ``recipient,'' ``special purpose 
equipment,'' ``subaward,'' and ``termination.''
    OMB also proposes a minor change to the definition of the term 
``Federal financial assistance.'' OMB proposes the term to include 
assistance received or administered by ``recipients or 
subrecipients''--as compared to assistance received or administered by 
``non-Federal entities'' in the existing guidance. In cases in which 
Federal agencies apply subparts A through E of part 200 to for-profit 
organizations, use of the terms ``recipients or subrecipients'' in this 
definition may provide further clarity on the applicability of the 
Build America, Buy America Act (BABA) (Pub. L. 117-58, 135 Stat. 429, 
70901-70927, Nov. 15, 2021) to Federal awards made by that agency to 
for-profit organizations. Section 70912(4) of BABA incorporates the 
definition of Federal financial assistance from 2 CFR 200.1 or 
successor regulations. For additional information on BABA and OMB's 
guidance in 2 CFR part 184, see 88 FR 55750 (Aug. 23, 2023). OMB does 
not, however, propose to materially change the sentence in the 
applicability section at 200.101(a)(2) providing Federal agencies with 
discretion on whether to apply the guidance to for-profit 
organizations.

Subpart B--General Provisions

    OMB proposes to revise this subpart, in section 200.101, to clarify 
the applicability of the Uniform Guidance. In OMB's proposal, all 
subparts of part 200 continue to apply to Federal agencies that make 
Federal awards to ``non-Federal entities.'' Federal agencies also 
retain discretion on whether to apply subparts A through E of part 200 
to Federal agencies, for-profit entities, foreign public entities, or 
foreign organizations--which are not included in the definition of the 
term ``non-Federal entity.'' OMB proposes to add language encouraging 
agencies to apply the requirements in subparts A through E of part 200 
to all recipients in a consistent and equitable manner to the extent 
permitted within applicable statutes, regulations, and policies.
    In support of plain language principles, OMB proposes to convert 
the applicability table in paragraph (b) of section 200.101 into 
paragraph form.
    OMB proposes multiple clarifying revisions in section 200.102 to 
improve agency and recipient understanding of the availability and use 
of exceptions to, or deviations from, OMB's Uniform Guidance in part 
200.
    In section 200.104, OMB proposes to provide a more succinct 
statement that part 200 supersedes previous OMB guidance issued in 2 
CFR on topics including cost principles and audits for Federal 
financial assistance. Because part 200 has now existed for 10 years in 
its current format and location, OMB does not believe it is necessary 
to continue to include the detailed list identifying elements of the 
Uniform Guidance in part 200 previously contained in OMB Circulars or 
other parts of 2 CFR, subtitle A, chapter II.
    In section 200.111 OMB proposes new guidance to permit Federal 
agencies to request, receive, and distribute Federal award information 
in a language other than English when it is appropriate for a specific 
program or Federal award. This proposal would allow for more 
flexibility when working in international environments or in 
communities where English is the not the primary language.
    Finally, based on feedback from the oversight community, OMB 
proposes to revise the section on mandatory disclosure to clarify that 
recipients and subrecipients must promptly disclose any credible 
evidence of a violation of Federal criminal law potentially affecting 
the Federal award. OMB also proposes to revise this section to require 
recipients and subrecipients to provide written disclosure to the 
agency's Office of Inspector General. OMB believes the proposed 
``credible evidence'' standard is more appropriate because it would not 
require recipients, subrecipients, and applicants to make a legal 
determination that a criminal law has been violated before they are 
required to make a disclosure of ``credible evidence'' of such a 
violation to the Federal agency, pass-through entity (if applicable), 
and the agency's Office of Inspector General.

Subpart C--Pre-Federal Award Requirements and Contents of Federal 
Awards

    OMB proposes to revise this subpart to clarify certain requirements 
for fixed amount awards. For example, OMB proposes to clarify in 
section 200.201 that recipients are entitled to any unexpended funds 
under a fixed amount award if the required activities were completed in 
accordance with the terms and conditions of the award. In the same 
section, OMB also proposes to clarify record retention and post award 
certification requirements. In addition--although no specific language 
is proposed in this document--OMB is considering requiring additional 
pre-award certifications for fixed amount awards to address the 
potential

[[Page 69395]]

increased risk of fraud under fixed amount awards. OMB invites comments 
on appropriate pre-award certifications for fixed amount awards and 
notes that it may include a requirement for such certifications in the 
final guidance document. OMB also proposes to more specifically 
identify certain prior approval requirements that specifically relate 
to fixed amount awards.
    OMB also proposes to expand section 200.202 on program planning and 
design to encourage agencies to encourage recipients to engage members 
of the community that will benefit from or be impacted by a Federal 
financial assistance program. OMB also proposes to encourage Federal 
agencies to develop programs in consultation with the communities that 
will benefit from or be impacted by a program. In section 200.202, OMB 
also proposes to underscore that Federal agencies should consider all 
available data and evaluation results from past programs and coordinate 
with other agencies during program planning and design.
    OMB proposes to revise section 200.203 on Assistance Listings to 
reinforce the importance of communicating in plain language and 
highlighting any program-related customer service initiatives.
    OMB proposes to revise section 200.204 on notices of funding 
opportunities in a number of ways to encourage Federal agencies to 
focus more on communicating requirements to the public in an accessible 
and comprehensible manner. For example, OMB proposes to include an 
Executive Summary requirement and to encourage agencies to use plain 
language when publishing opportunities. OMB also proposes that agencies 
should communicate program requirements specifically and clearly, as 
well as limit the length of program announcements. As noted in the 
proposed changes to the guidance, this is particularly important in 
consideration of applicants with less experience applying for Federal 
financial assistance, such as applicants from underserved communities. 
OMB also proposes to encourage Federal agencies to identify all 
eligible applicants in the funding opportunity--for example, by 
providing greater specificity on different types of nonprofit 
organizations such as labor unions. In proposing these revisions, OMB 
aims to make notices of funding opportunities more consistent and 
transparent. OMB also aims to ensure that applicants are not 
unintentionally excluded from funding opportunities.
    OMB also proposes additional changes in section 200.204, such as 
encouraging agencies to provide an anticipated award date and providing 
additional clarifying guidance on the availability period for funding 
opportunities.
    In section 200.205 OMB proposes to clarify that a Federal agency 
should consider diversity when developing policies and procedures for 
merit review panels.
    In section 200.206 OMB proposes to revise the section regarding 
risk evaluation by using the term risk assessment as a standard term 
and clarifying agency requirements to appropriately review eligibility 
qualifications and financial integrity information. OMB also proposes 
to clarify that agency processes may consider any risk criteria 
pertinent to a program, such as cybersecurity risk or impacts on local 
jobs and the community. OMB further proposes to clarify that an agency 
may modify its risk assessment at any time during the lifecycle of an 
award.
    OMB also proposes to clarify in section 200.209 that those entities 
who are exempt from the requirements of 2 CFR part 25 must still 
complete the certifications and representations by submitting the 
appropriate assurance form.
    OMB also proposes to include several additions to section 200.216 
on the prohibition of certain telecommunications and video surveillance 
services or equipment to expand the guidance by incorporating 
additional information from OMB's Frequently Asked Questions document.
    Lastly, OMB proposes to include a new section 200.217 to expand on 
the whistleblower protections and requirements for recipients of 
Federal financial assistance, which had previously been referenced in 
section 200.300.

Subpart D--Post Federal Award Requirements

    OMB proposes to retain the guidance in section 200.300 on statutory 
and national policy requirements, which explains the need to administer 
Federal awards in full accordance with the U.S. Constitution, 
applicable Federal statutes and regulations, and requirements of part 
200. OMB proposes to streamline section 200.300 and to reinforce 
existing nondiscrimination requirements under the Constitution and 
other applicable law, consistent with Executive Order 13988 of January 
20, 2021 (``Preventing and Combating Discrimination on the Basis of 
Gender Identity or Sexual Orientation''), and Executive Order 14075 of 
June 15, 2022 (``Advancing Equality for Lesbian, Gay, Bisexual, 
Transgender, Queer, and Intersex Individuals'').
    In section 200.305 on Federal payment, OMB proposes to provide 
additional flexibilities for recipients when interest bearing accounts 
are not accessible in a foreign country; and to provide a specific link 
for returning funds to the Payment Management System, rather than 
including the more extensive instructions in the guidance itself.
    OMB proposes to revise section 200.306 on cost sharing, as well as 
the definition of cost sharing itself, to clarify that ``matching'' is 
one category of cost sharing overall--thus eliminating the need to 
repeat the term ``matching'' throughout. In the same section, OMB also 
proposes to provide additional guidance on voluntary uncommitted cost 
sharing for institutes of higher education.
    OMB proposes to revise section 200.307 on program income by 
providing clarifications in paragraph (a) regarding use and expenditure 
of program income, including allowing program income for certain 
closeout costs. OMB also proposes to revise and provide further 
clarifying guidance in paragraph (b) for each of the three methods for 
use of program income.
    OMB proposes changes to section 200.308 on revision of budget and 
program plans by combining the requirements for construction and non-
construction awards to provide greater uniformity in the requirements 
for all award types. OMB proposes to clarify that recipients do not 
need approval of individual subrecipients under all circumstances, but 
only when making subawards of programmatic activities not proposed by 
the recipient in the application for an award. A Federal agency may 
also require prior approval of subrecipients through the terms and 
conditions of a Federal award. OMB proposes to further clarify that 
agencies should not require approval of a change in a proposed 
subrecipient unless the initial inclusion of a subrecipient was a 
determining factor in the agency's merit review process. This change is 
proposed to reinforce the role of the recipient as responsible for the 
efficient and effective administration of the Federal award including 
the selection of a qualified and capable subrecipient. OMB also 
proposes to identify other items requiring prior approval, including 
requesting additional funds, transferring funds, and no-cost 
extensions. OMB proposes to clarify that no-cost extensions are 
different from one-time extensions, which an agency is permitted to 
authorize a recipient to do without prior approval.

[[Page 69396]]

    In section 200.309 on modification to the period of performance, 
OMB proposes to provide additional clarification that when an agency 
decides not to continue an award with multiple budget periods, the 
period of performance should be amended to end at the completion of the 
currently authorized budget period. OMB also proposes to incorporate 
the definition of ``renewal award'' in this section.
    In section 200.311, addressing real property, OMB proposes to 
include a new paragraph on appraisals to introduce additional guidance 
on standards for conducting independent appraisals consistent with the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended, (42 U.S.C. 4601-4655) except as provided in 
the implementing regulations at 49 CFR part 24, ``Uniform Relocation 
Assistance And Real Property Acquisition For Federal And Federally-
Assisted Programs.'' OMB also proposes to include a definition of the 
term ``encumbrance'' in sections 200.311, 200.313, and 200.315.
    In section 200.313, relating to equipment, OMB proposes to increase 
the threshold value for equipment from $5,000 to $10,000 and to provide 
additional guidance on the meaning of a ``conditional title.'' 
Consistent with proposals in sections 200.311 and 200.315, OMB also 
proposes a definition of the term ``encumbrance.'' Consistent with the 
existing requirements for States, OMB also proposes to allow Indian 
Tribe to dispose of equipment in accordance with tribal law. OMB also 
proposes to clarify that agencies may permit the recipient to retain 
equipment with no further obligation to the Federal government when it 
is not prohibited by Federal statue or regulation. OMB also proposes to 
reinforce the responsibility of recipients to maintain updated records 
regarding equipment.
    OMB proposes to revise section 200.314 on supplies to raise the 
threshold from $5,000 to $10,000. OMB also proposes to clarify that the 
requirements for unused supplies apply to the aggregate value of all 
supply types, and not just like-item supplies. OMB also proposes to 
include a definition of ``unused supplies'' in section 200.314.
    In section 200.315 on intangible property, OMB proposes to 
reinforce the potential requirement for recipients and subrecipients to 
make intangible property publicly available on agency-designated 
websites. Consistent with proposals in sections 200.311 and 200.313, 
OMB also proposes a definition of the term ``encumbrance.''
    OMB proposes several revisions to the procurement standards in the 
Uniform Guidance. In recognition of Tribal sovereignty, and consistent 
with the existing requirements for States, in section 200.317 OMB 
proposes to allow Indian tribes to follow their own policies and 
procedures.
    OMB also proposes to revise the procurement standards in section 
200.318. These proposed revisions include providing additional guidance 
that contractors appropriately classify employees consistent with the 
Fair Labor Standards Act. See the Fair Labor Standards Act at 29 U.S.C. 
chapter 8.
    OMB also proposes adding a new paragraph (l) in section 200.318 to 
clarify that that the procurement standards in part 200 do not prohibit 
recipients or subrecipients from using Project Labor Agreements or 
similar forms of pre-hire collective bargaining agreements; requiring 
commitments or goals to hire people residing in high-poverty areas, 
disadvantaged communities as defined by the Justice40 Initiative OMB 
Memorandum M-21-28, or high-unemployment census tracts within a region 
no smaller than the county where a federally funded construction 
project is located, consistent with the policies and procedures of the 
recipient or subrecipient, provided that a recipient or subrecipient 
may not prohibit interstate hiring; requiring commitments or goals to 
individuals with barriers to employment (as defined in section 3 of the 
Workforce Innovation and Opportunity Act (29 U.S.C. 3102(24)), 
including women and people from underserved communities as defined by 
Executive Order 13985; using agreements intended to ensure 
uninterrupted delivery of services; using agreements intended to ensure 
community benefits; or offering employees of a predecessor contractor 
rights of first refusal under a new contract. The proposed paragraph 
explains that Federal agencies may consider allowing recipients or 
subrecipients to use such practices if consistent with the U.S. 
Constitution, applicable Federal statutes and regulations, the 
objectives and purposes of the Federal financial assistance program, 
and other requirements of part 200. For example, any hiring preference 
for a class or groups of persons would be permissible only to the 
extent that it is consistent with the equal protection requirement of 
the U.S. Constitution.
    In section 200.319, OMB proposes to remove the prohibition in the 
Uniform Guidance on using geographic preference requirements. In the 
same section, OMB also proposes to state that subpart D does not 
prohibit recipients and subrecipients from incorporating a scoring 
mechanism that rewards bidders committing to specific numbers and types 
of U.S. jobs, as well as certain compensation and benefits. OMB 
cautions, however, that any geographic preferences or scoring 
mechanisms must be consistent with the U.S. Constitution, applicable 
Federal statutes and regulations, and the terms and conditions of the 
Federal award. OMB also proposes to clarify that any such scoring 
mechanism must be consistent with established practices and legal 
requirements applicable to the recipient or subrecipient.
    In section 200.320 on procurement methods, OMB proposes to change 
``small purchases'' to ``simplified acquisitions'' to further align 
with standard terminology. In paragraph (a), OMB proposes to clarify 
that ``micro-purchases'' and ``simplified acquisitions'' are types of 
``informal procurement methods for small purchases.'' OMB also proposes 
to remove the requirements that local and tribal governments must open 
sealed bids in public; this requirement may be inconsistent with State 
or tribal policies and procedures.
    In section 200.321, OMB proposes to add ``veteran-owned business'' 
to the types of businesses that recipients and subrecipients are 
encouraged to consider for procurement contracts under a Federal award.
    OMB proposes to add a new paragraph (b) in section 200.323. 
Executive Order 14057 of December 8, 2021 (``Catalyzing Clean Energy 
Industries and Jobs Through Federal Sustainability'') establishes that 
it is the policy of this Administration to lead by example and pursue a 
whole-of-government approach on sustainability and expanding American 
technologies, industries, and jobs that support sustainability and 
climate resilience. The Executive Order tasks the Federal government 
with pursuing new strategies to improve the Nation's preparedness and 
resilience to the effects of a changing climate, including financial 
management strategies. In support of this policy, OMB proposes to add a 
new paragraph (b) in section 200.323 encouraging Federal award 
recipients, to the extent permitted by law, to purchase, acquire, or 
use products and services that can be reused, refurbished, or recycled; 
contain recycled content, are biobased, or are energy and water 
efficient; and are sustainable.
    OMB proposes to add additional language to section 200.324 on 
contract cost and price to establish that the

[[Page 69397]]

recipient or subrecipient may consider potential workforce impacts in 
their procurement analysis if the procurement transaction will 
potentially displace public sector employees. OMB also seeks comment on 
its proposal to delete the existing paragraph (b) in 2 CFR 200.324, 
requiring the recipient to negotiate profit as a separate element of 
the price for each contract in which there is no price competition.
    In section 200.328, OMB proposes to provide additional clarity on 
required deadlines for financial reporting to align with progress 
reporting requirements.
    In section 200.329, OMB proposes to revise the reporting of program 
performance section to remind agencies of the importance of not 
requiring information in programmatic reports that is not necessary for 
the effective monitoring of the award. OMB also proposes additional 
language that emphasizes the importance of measuring customer 
experience as well as considering evaluation plans when outlining 
reporting requirements. OMB further proposes to clarify that 
programmatic reporting may not be required more frequently than 
quarterly unless specific conditions have been applied to the award in 
accordance with section 200.208.
    In section 200.331 on subrecipient and contractor determinations, 
OMB proposes additional language to emphasize that Federal agencies do 
not have a direct legal relationship with subrecipients and contractors 
of pass-through entities. OMB also proposes to clarify that the 
characteristics indicative of a subrecipient or contractor 
determination are not limited to the sample characteristics currently 
provided in the guidance.
    Based on feedback from the Federal financial assistance community, 
OMB proposes to include in section 200.332 the requirement for pass-
through entities to confirm that potential subrecipients are not 
suspended, debarred, or otherwise excluded from receiving Federal 
funds.
    In section 200.333, OMB proposes removing the current Simplified 
Acquisition Threshold limit for fixed amount subawards to provide 
agencies and recipients with increased flexibility in making 
programmatic and budgetary decisions, while still allowing recipients 
to establish their own award-specific thresholds with the prior written 
approval of the Federal agency. Under the proposed revision, a 
recipient's use of fixed amount subawards remains subject to the prior 
written approval of the Federal agency.
    OMB also proposes to revise and clarify the guidance pertaining to 
termination and closeout requirements in sections 200.340 through 
200.344. On termination, in section 200.340 OMB proposes to remove 
language that allows a Federal agency or pass-through entity to 
terminate an award ``if an award no longer effectuates the program 
goals or agency priorities.'' This revision is proposed only for the 
purpose of clarifying the guidance; the proposed guidance still allows 
agencies to terminate a Federal award according to the terms and 
condition of the award. OMB also proposes to clarify that a termination 
does not include a Federal agency's decision to not provide 
continuation funding. In section 200.341, OMB also proposes to clarify 
requirements that must be included in a notice of termination.
    In section 200.344 on closeout, OMB proposes to revise closeout 
guidance to clarify that recipients must still submit a final financial 
report even when the recipient does not have a final indirect cost 
rate; and proposes to clarify that an additional final report must be 
submitted when the indirect cost rate is finalized. In the same 
section, OMB also proposes to provide additional flexibilities for 
agencies and recipients to closeout Federal awards in a timely manner. 
OMB proposes to allow an agency and recipient to mutually agree upon a 
final indirect cost rate for an individual award. This proposed 
revision is not intended to grant agencies additional authorities to 
negotiate rates over cognizant agencies for indirect rates; rather, it 
simply proposes to affirm the Federal agency's right to negotiate with 
the recipient or subrecipient on a case-by-case basis with the goal of 
closing out specific awards in a timely manner.

Subpart E--Cost Principles

    In section 200.401 on applicability, OMB proposes to clarify that 
the cost principles in subpart E do not apply to grants and cooperative 
agreements for food commodities.
    In section 200.403, OMB proposes to add language clarifying when 
allowable administrative closeout costs may be incurred in paragraph 
(h).
    In section 200.407, OMB has removed ten items from the prior 
written approval requirements to reduce Federal agency and recipient 
burden. These proposed revisions include no longer requiring prior 
written approval for such items as, real property, equipment, direct 
costs, entertainment costs, exchange rates, memberships, participant 
support costs, selling and marketing costs, and taxes. In this section, 
OMB also proposes to remove the reference to requiring prior written 
approval for use of grants agreements, cooperative agreements, and 
contracts, but other requirements throughout the Uniform Guidance in 
part 200 would continue to apply to use of these instruments.
    In section 200.414, OMB proposes to revise several aspects of the 
guidance pertaining to indirect costs. OMB proposes to clarify that 
recipients and subrecipients may notify OMB of any disputes with 
regards to a Federal agency's application or acceptance of a federally 
negotiated indirect cost rates. OMB also proposes to revise the 
guidance to clarify that pass-through entities must accept all 
federally negotiated indirect cost rates for subrecipients.
    In the same section, in response to feedback from the Federal 
financial assistance community, OMB proposes to raise the de minimis 
rate from 10 percent to 15 percent. This change would allow for a more 
reasonable and realistic recovery of indirect costs, particularly for 
new or inexperienced organizations that may not have the capacity to 
undergo a formal rate negotiation, but still deserve to be fully 
compensated for their overhead costs. The proposed changes still allow 
recipients and subrecipients to apply a rate lower than 15 percent at 
their own discretion. At the same time, the proposed guidance clarifies 
that Federal agencies may not compel recipients and subrecipients to 
use an indirect rate lower than the proposed 15 percent rate, unless 
required by statute. OMB also proposes to clarify that the de minimis 
rate may not be applied to cost reimbursement contracts and recipients 
and subrecipients are not required to use the de minimis rate.
    Finally, OMB also proposes to remove the existing requirement in 
paragraph (h) of section 200.414 for all indirect cost rates to be 
publicly available on a government-wide website--but this may be 
revisited when applicable systems are updated to allow for the posting 
of indirect cost rates. OMB seeks comments that include analysis on the 
advantages and disadvantages of raising the de minimis rate in the way 
proposed.
    Based on feedback from the oversight community, in section 200.415 
OMB proposes to require subrecipients to certify to pass-through 
entities that financial information submitted to the pass-through 
entity is complete and accurate.
    Based on feedback from both Institutions of Higher Education (IHE) 
and Federal agencies, OMB also proposes to remove the requirement in 
section 200.419 for an IHE that receives

[[Page 69398]]

an aggregate total $50 million or more in Federal awards and 
instruments subject to subpart E to submit a disclosure statement form 
(DS-2) containing information on cost accounting standards. This 
proposed change, if finalized, would likely reduce Federal agency and 
recipient burden. OMB received a comment indicating that the DS-2 is 
outdated, not needed for ensuring compliance with statutory authorities 
related to Federal financial assistance, and not universally 
implemented across the IHE community. The commenter also indicated that 
the DS-2 is not used as regular tool by the audit or oversight 
community to enhance compliance or oversight. This commenter also 
stated that information contained in the DS-2 is readily available in 
numerous policy portals at research universities and creates 
unnecessary administrative and cost burden to research universities and 
Federal agencies.
    If finalized, this proposed change would not impact the requirement 
for IHEs receiving Federal awards above the threshold to comply with 
the Cost Accounting Standards Board's cost accounting standards. It 
would only no longer require use of the DS-2 form. This proposed change 
also is not intended to impact any FAR-based requirements related to 
disclosure of cost accounting practices.
    OMB seeks comments on the potential impact of this proposed change 
to section 200.419, including analysis on the advantages and 
disadvantages of removing the requirement for use of the DS-2 form. For 
example, are there any advantages in retaining consistency and 
uniformity in accounting practices followed by educational institutions 
for both contracts under the FAR and Federal financial assistance under 
part 200, which are achieved through use of the DS-2? For additional 
background, see, for example, 58 FR 39996, at 39997 (Jul. 26, 1993) 
(explaining OMB's initial plans to expand the Cost Accounting Standards 
Board's regulations and standards for educational institutions to 
Federal grants). Does the requirement to use the DS-2 at section 
200.419 help ensure that each IHE's practices used in estimating costs 
for a proposal are consistent with cost accounting practices used by 
the institution in accumulating and reporting costs or serve other 
functions? See 48 CFR 9905.501-20. How, if at all, could removing the 
requirement to use the DS-2 from section 200.419 impact compliance by 
research universities with the requirements of 41 U.S.C. 1502 or the 
implementing regulations at FAR, Chapter 99 for government contracts? 
To what extent would removing the requirement to use the DS-2 at 
section 200.419 reduce burden if the statutory and FAR-based 
requirements remain in effect?
    OMB proposes to require several revisions to the general provisions 
for items of costs. Specifically, in section 200.420, OMB proposes to 
add further clarifying text explaining that the listed items of cost 
are not intended to provide a comprehensive list and that failure to 
mention an item, even as an example, is not intended to imply that is 
allowable or unallowable. OMB proposes this clarification to address 
numerous questions about allowability of costs that arise in the 
Federal financial assistance community.
    In section 200.422, OMB proposes to incorporate the definition of 
an ``advisory council or committee.''
    At section 200.431, OMB proposes to revise the section on fringe 
benefits to require recipients and subrecipients to allocate payments 
for unused leave as general administrative expenses or include them in 
a fringe benefit rate with cognizant agency approval. Based on feedback 
from the oversight community, OMB also proposes in section 200.431 to 
clarify that recipients and subrecipients may not charge unfunded 
pension and post-retirement health benefits to an award in a manner 
that is inconsistent with the allocation principles of Subpart E. Also 
in section 200.431, OMB proposes additional clarifying guidance on 
pension plan costs and post-retirement health plans.
    OMB proposes to clarify the description of conferences in section 
200.432 to remove any limitations provided by the specific types of 
events listed in the guidance currently. OMB also proposes to allow for 
dependent-care costs associated with participants' attending or 
partaking in program-related conferences.
    OMB proposes to revise section 200.438 entertainment costs to 
include prizes, which currently reside in Subpart B, despite the fact 
that prizes are an item of cost.
    In section 200.440, OMB removed the requirement for prior approval 
of fluctuations of exchange rates. While a recipient or subrecipient 
needs prior approval for additional Federal funding, no approval is 
required because an exchange rate has fluctuated and resulted in a 
necessary charge to available funding.
    In section 200.454, OMB proposes to remove prior approval 
requirements for the cost of membership in any civic or community 
organization.
    In section 200.455 on organization costs, OMB proposes to clarify 
that any costs associated with either persuading or dissuading 
employees from collective bargaining and related activities are not 
allowable under Federal awards. OMB also proposes to add clarifying 
language that certain costs related to data, evaluation, and other 
related organization costs are allowable.
    In section 200.456, OMB proposes to remove the prior approval 
requirement of participant support costs. OMB proposes to clarify, 
however, that the treatment of participant costs is ultimately the 
responsibility of the recipient or subrecipient to determine, document, 
and treat consistently across all Federal awards (and when negotiating 
indirect rates).
    In section 200.461, OMB proposes additional clarifying guidance on 
publication and printing costs by adding reference to ``article 
processing charges'' or ``similar open access fees.''
    In section 200.467, OMB also proposes to remove the prior approval 
option for selling and marketing costs, clarifying selling and 
marketing costs are unallowable unless they meet the requirements in 
section 200.421 and are required to meet the requirements of the award.
    Finally, OMB proposes to revise the section on termination costs at 
section 200.472 to also include closeout costs. Specifically, OMB 
proposes to include guidance for recipients and subrecipients to charge 
administrative costs specifically associated with the closeout of a 
Federal award. OMB received feedback from the Federal financial 
assistance community that the exclusion of closeout costs in the 
Uniform Guidance has been problematic as recipients and subrecipients 
have been unable to charge actual costs associated with closeout 
actions, such as certain administrative or staff costs not covered 
through indirect cost recoveries.

Subpart F--Audit Requirements

    In this subpart, OMB proposes to raise the audit threshold from 
$750,000 to $1,000,000 in section 200.501. OMB reviewed audit 
submission data as well as economic data when determining the increase 
to this threshold. Every two years, the Director of OMB is authorized 
to adjust the dollar amount of this threshold consistent with the 
purposes of the Single Audit Act, provided the Director does not make 
such adjustments below $300,000. 31 U.S.C. 7502.
    In section 200.502 OMB also proposes to clarify that, in 
determining Federal awards expended, loan and loan guarantees retain 
their Federal character through the end of the Federal award

[[Page 69399]]

period of performance unless otherwise specified in statute or Federal 
agency regulations. In response to feedback from Federal agencies, OMB 
proposes to revise the guidance to require that the schedule of 
expenditures of Federal awards for comprehensive annual financial 
reports identify the State, municipal, or local entity recipient or 
subrecipient of a Federal award. This change is necessary to provide 
greater transparency and understanding of the information provided in 
the schedule.
    In section 200.510, at paragraph (b), OMB proposes additional 
guidance explaining that, for audits covering multiple recipients (such 
as departments, agencies, IHEs, and other organizational units), the 
schedule of expenditures must identify the recipient of the Federal 
award.
    In section 200.513, OMB proposes to revise the responsibilities of 
Federal agencies. Specifically, OMB proposes to encourage Federal 
agencies to engage with external audit stakeholders and the Federal 
agency's Office of Inspector General National Single Audit Coordinator 
(NSAC) prior to submitting compliance supplement drafts to OMB. In the 
same section OMB also proposes to clarify that a Federal agency's key 
management single audit liaison must also coordinate with the agency's 
Office of Inspector General NSAC when appropriate.
    In section 200.514, on scope of audit, OMB proposes to revise 
compliance requirements to specify that compliance testing must include 
a test of transactions and other auditing procedures necessary to 
provide the auditor with sufficient evidence to support an opinion on 
compliance.
    In section 200.516, based on feedback OMB received from the Federal 
financial assistance community, OMB proposes to revise in the 
definitions of known questioned costs and likely questioned costs and 
provide further clarity on how they are identified in an audit report.

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

    OMB proposes to revise this appendix in its entirety in support of 
the goal of simplifying and clarifying the grant solicitation and 
application process, which is a key objective under Executive Order 
14058 on Transforming Federal Customer Experience and Service Delivery 
to Rebuild Trust in Government. The proposed changes to the notice of 
funding opportunity in Appendix I are intended to improve the quality 
and accessibility of funding opportunities. Specifically, the proposed 
revisions to Appendix I intend to: (1) follow plain language 
principles; (2) group similar items together to streamline content; (3) 
align sections more closely to the application process; (4) include 
basic information at the top of a funding opportunity so that 
applicants can more easily make decisions about whether or not to 
apply; (5) clearly define what must be included in a section of the 
funding opportunity versus what is at an agency's discretion; and (6) 
provide flexibility to agencies while also giving applicants a common 
way to find information in every funding opportunity.

Appendix III to Part 200--Indirect (F&A) Costs Identification and 
Assignment, and Rate Determination for Institutions of Higher Education 
(IHEs)

    OMB proposes to update this appendix to adjust the exclusion 
threshold of subawards from $25,000 to $50,000 for modified total 
direct costs.

Appendix IV to Part 200--Indirect (F&A) Costs Identification and 
Assignment, and Rate Determination for Nonprofit Organizations

    OMB proposes to update this appendix to adjust the exclusion 
threshold of subawards from $25,000 to $50,000 for modified total 
direct costs. OMB also proposes to clarify that under the direct cost 
allocation method, joint costs include costs for information 
technology.

Appendix VII to Part 200--States and Local Government and Indian Tribe 
Indirect Cost Proposals

    OMB proposes to update this appendix to adjust the exclusion 
threshold of subawards from $25,000 to $50,000 under modified total 
direct costs (MTDC). OMB also proposes to clarify the meaning of 
``department or agency'' for State and local governments.
    OMB also proposes a revision to underscore that Federal agencies 
must accept indirect cost proposals developed by State or local 
departments or agencies receiving less than $35 million in their fiscal 
year. The proposed revision to this appendix also provides that Federal 
agencies cannot compel these State or local governmental departments or 
agencies to accept the de minimis rate, or any other rate established 
by the Federal agency, in place of their indirect cost proposals. OMB 
emphasizes, however, that any such indirect cost proposals must be 
developed in accordance with the requirements of part 200 and 
maintained for audit--along with related supporting documentation.

Appendix X to Part 200--Data Collection Form (Form SF-SAC)

    OMB proposes to revise this appendix to clarify where audit 
submission instructions are located.

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

    OMB proposes to revise this award term to be consistent with the 
statutory obligation and to reflect the appropriate location 
(responsibility and qualification records) in SAM.gov for reporting 
integrity and performance matters. OMB proposes to renumber the award 
term to align to the requirements of the standard organization of the 
Code of Federal Regulations.

Other Revisions Under Consideration for Future Updates

    OMB may consider additional revisions for potential future updates. 
Specifically, OMB welcomes additional comments from the public on the 
following topics for consideration in possible additional revisions in 
the future:
     Establishing specific audit requirements for for-profit 
entities, which are not subject to the requirements of Subpart F;
     Incorporating the requirements of National Security 
Presidential Management (NSPM)-33 on research security requirements;
     Providing additional guidance in 2 CFR concerning the 
relationship of specific aspects of the guidance to loans and loan 
guarantees;
     Establishing mechanisms to automatically adjust certain 
thresholds due to inflation or other triggering events (where permitted 
by law).
     Removing additional prior approval requirements.
     Challenges related to negotiating indirect costs, working 
with cognizant agencies, or any other topics related to indirect costs 
that could be addressed in future updates; and
     Expanding the guidance in Subpart F to include more 
specific requirements on the scope of an audit (``proper perspective'') 
so that agencies have additional contextual information to guide them 
in resolving audit findings.

Request for Comments

    OMB requests comments on all aspects of the propose guidance in 
this document, including on any reliance interests that commenters may 
have based on the existing text of 2 CFR, subtitle A that OMB's 
proposal may affect, and that OMB should consider in deciding whether 
or how to finalize this guidance.

[[Page 69400]]

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), and Executive Order 
14094 (Modernizing Regulatory Review)

    Executive Orders (E.O.s) 12866, 13563, and 14094 direct agencies to 
assess all costs and benefits of available regulatory alternatives, 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
The OMB Guidance for Grants and Agreements published in subtitle A of 2 
CFR is guidance to Federal agencies and not regulation. 2 CFR 1.100(b). 
OMB has thus determined that the revision of 2 CFR is not a significant 
regulatory action under E.O. 12866, as amended.

Regulatory Flexibility Act

    This proposed guidance is exempt from the notice and comment 
requirements of the Administrative Procedure Act (APA) because it is 
guidance to Federal agencies and not regulation. See 5 U.S.C. 553(b). 
Moreover, even if this proposed guidance were otherwise subject to 5 
U.S.C. 553, it would be exempt from the notice and comment requirement 
as a matter related to grants. See 5 U.S.C. 553(a)(2). OMB nonetheless 
provides the following information for the information of the public. 
For a rule subject to the notice-and-comment provisions of the APA, the 
Regulatory Flexibility Act 5 U.S.C. 601, et seq., requires that an 
agency provide a final regulatory flexibility analysis or to certify 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Based on the nature of the 
revisions proposed in this notice, OMB does not expect this guidance to 
have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act. There 
are some proposed revisions that may impose a non-significant burden; 
however, there are more proposed revisions that reduce burden to small 
entities. When reviewing all proposed revisions, the burden that will 
be reduced for recipients is much greater than the burden imposed.

Unfunded Mandates Reform Act of 1995

    The proposed guidance would not impose unfunded mandates as defined 
by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 
48). The proposed guidance would not result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $168 million or more in any one year (2 U.S.C. 
1532).

Executive Order 13132 (Federalism Assessment)

    This proposed guidance has been analyzed in accordance with the 
principles and criteria contained in E.O. 13132, ``Federalism,'' 64 FR 
43255 (Aug. 10, 1999). OMB has determined that this proposed guidance 
would not have sufficient federalism implications to warrant the 
preparation of a federalism assessment. The guidance in 2 CFR is 
inherently national in scope and significance. Regardless, in 
accordance with section 4(d) of E.O. 13132, OMB consulted with 
appropriate State and local officials that may be affected by Federal 
agencies' implementation of OMB's revised guidance by means of posting 
the RFI prior to proposing revisions. OMB weighed carefully the 
interests of those who submitted comments in response to the RFI in 
proposing revisions to the guidance, which balance the State interests 
with the need to provide Federal agencies with consistent, uniform, 
efficient, and transparent guidance, which is consistent with 
authorizing law.

Paperwork Reduction Act

    This guidance does not contain a new requirement for information 
collection. Rather, it streamlines requirements in specific sections. 
Thus, the Paperwork Reduction Act does not apply.

Executive Order 13175 (Tribal Consultation)

    OMB has analyzed this revised guidance in accordance with the 
principles and criteria contained in E.O. 13175, ``Consultation and 
Coordination with Indian Tribal Governments'' 65 FR 67249 (Nov. 9, 
2000). On March 7, 2023, OMB held a two-hour Tribal consultation to 
solicit feedback from Tribal representatives. OMB also proposes 
providing greater flexibility to Tribal governments in the proposed 
guidance centered on procurement standards and disposition of 
equipment. OMB also proposes to clarify the definition of Indian 
Tribes.

List of Subjects

2 CFR Part 1

    Administration of Federal financial assistance, Administrative 
practice and procedure, Federal financial assistance programs.

2 CFR Part 25

    Administrative practice and procedure; Grant programs; Grants 
administration; Loan programs.

2 CFR Part 170

    Colleges and universities; Grant programs; Hospitals; International 
organizations; Loan programs; Reporting and recordkeeping requirements.

2 CFR Part 175

    Administrative practice and procedures; Grant programs; Indians--
tribal government; Nonprofit organizations; State and local 
governments.

2 CFR Part 180

    Administrative practice and procedure; Grant programs; Loan 
programs; Reporting and recordkeeping requirements.

2 CFR Part 182

    Administrative practice and procedure; Drug abuse; Grant programs; 
Reporting and recordkeeping requirements.

2 CFR Part 183

    Foreign aid; Grants administration; Grant programs; International 
organizations; Reporting and recordkeeping requirements.

2 CFR Part 200

    Administration of Federal financial assistance, Administrative 
practice and procedure, Federal financial assistance programs.

    For the reasons stated in the preamble, the Office of Management 
and Budget proposes to amend title 2, subtitle A, chapters I and II of 
the Code of Federal Regulations as follows:

0
1. Revise the heading of title 2 to read as follows:

Title 2--Federal Financial Assistance

0
2. Revise the heading of subtitle A of title 2 to read as follows:

Subtitle A--Office of Management and Budget Guidance for Federal 
Financial Assistance

0
3. Revise part 1, consisting of Sec. Sec.  1.100 through 1.305, to read 
as follows:

PART 1--ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND 
SUBTITLE A

Sec.
Subpart A--Introduction to Title 2 of the CFR
1.100 Content of this title.
1.105 Organization and subtitle content.
1.110 Issuing authorities.

[[Page 69401]]

Subpart B--Introduction to Subtitle A
1.200 Purpose of chapters I and II.
1.205 Applicability to Federal financial assistance.
1.210 Applicability to Federal agencies and others.
1.215 Relationship to previous issuances.
1.220 Federal agency implementation of this subtitle.
1.230 Maintenance of this subtitle.
1.231 Severability.
Subpart C--Responsibilities of OMB and Federal Agencies
1.300 OMB responsibilities.
1.305 Federal agency responsibilities.

    Authority:  31 U.S.C. 503; 31 U.S.C. 1111; 31 U.S.C. 6307; 41 
U.S.C. 1121; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 
10737.

Subpart A--Introduction to Title 2 of the CFR


Sec.  1.100  Content of this title.

    This title contains:
    (a) Office of Management and Budget (OMB) guidance to Federal 
agencies on governmentwide policies for the award and administration of 
Federal financial assistance; and
    (b) Federal agency regulations implementing that OMB guidance.


Sec.  1.105  Organization and subtitle content.

    (a) This title is organized into two subtitles.
    (b) The OMB guidance described in Sec.  1.100(a) is published in 
subtitle A. Publication of the OMB guidance in the CFR does not change 
its nature--it is guidance, not regulation.
    (c) Each Federal agency that awards Federal financial assistance 
has a chapter in subtitle B in which it issues those regulations. The 
Federal agency regulations in subtitle B differ in nature from the OMB 
guidance in subtitle A because the OMB guidance is not regulatory. 
Federal agency regulations in subtitle B may give regulatory effect to 
the OMB guidance, to the extent that the agency regulations require 
compliance with all or portions of the OMB guidance. See also Sec.  
1.220.


Sec.  1.110   Issuing authorities.

    OMB issues this subtitle. Each Federal agency that has a chapter in 
subtitle B of this title issues that chapter.

Subpart B--Introduction to Subtitle A


Sec.  1.200   Purpose of chapters I and II.

    Chapters I and II of subtitle A provide OMB guidance to Federal 
agencies that helps ensure consistent and uniform governmentwide 
policies and procedures for the management of the agencies' Federal 
financial assistance.


Sec.  1.205   Applicability to Federal financial assistance.

    The types of instruments that are subject to the guidance in this 
subtitle vary from one portion of the guidance to another. All portions 
of the guidance apply to grants and cooperative agreements, and some 
portions also apply to other types of Federal financial assistance. For 
example, the:
    (a) Guidance on debarment and suspension in part 180 of this 
subtitle applies broadly to all Federal financial assistance, and not 
just to grants and cooperative agreements.
    (b) Cost principles in subpart E of part 200 of this subtitle apply 
to procurement contracts issued under a Federal award, as well as to 
Federal financial assistance. Cost principles are implemented for 
Federal agencies' direct procurement contracts through the Federal 
Acquisition Regulation in title 48 of the CFR, rather than through 
Federal agency regulations on Federal financial assistance in this 
title.


Sec.  1.210  Applicability to Federal agencies and others.

    (a) This subtitle contains guidance that directly applies only to 
Federal agencies.
    (b) The guidance in this subtitle may affect other entities through 
each Federal agency's implementation of the guidance, portions of which 
may apply to:
    (1) The agency's awarding or administering officials;
    (2) Recipients and subrecipients that receive or apply for the 
agency's Federal financial assistance or receive subawards under grants 
or cooperative agreements; or
    (3) Any other entities involved in agency transactions subject to 
the guidance in this chapter.


Sec.  1.215  Relationship to previous issuances.

    Although some of the guidance was organized differently within OMB 
circulars or other documents, much of the guidance in this subtitle 
existed prior to the establishment of title 2 of the CFR.


Sec.  1.220  Federal agency implementation of this subtitle.

    A Federal agency that awards Federal financial assistance subject 
to the OMB guidance in this subtitle implements the guidance in agency 
regulations in subtitle B of this title and in guidance documents, 
policy documents, and procedural issuances, such as internal 
instructions to the agency's awarding and administering officials. An 
applicant, recipient, or subrecipient would see the effect of that 
implementation in the organization and content of the agency's 
announcements of funding opportunities and in its award terms and 
conditions.


Sec.  1.230  Maintenance of this subtitle.

    OMB issues guidance in this subtitle after publication in the 
Federal Register. Any portion of the guidance that has a potential 
impact on the public is published with an opportunity for public 
comment.


Sec.  1.231  Severability.

    The provisions of this subtitle are separate and severable from one 
another. If any provision of this subtitle is held invalid or 
unenforceable as applied to a particular person or circumstance, the 
provision should be construed so as to continue to give the maximum 
effect permitted by law as applied to other persons not similarly 
situated or to dissimilar circumstances. If any provision is determined 
to be wholly invalid and unenforceable, it should be severed from the 
remaining provisions of this part, which should remain in effect.

Subpart C--Responsibilities of OMB and Federal Agencies


Sec.  1.300  OMB responsibilities.

    OMB is responsible for:
    (a) Issuing and maintaining the guidance in this subtitle, as 
described in Sec.  1.230;
    (b) Interpreting the policy requirements in this subtitle;
    (c) Reviewing Federal agency regulations implementing the 
requirements of this subtitle, as required by Executive Order 12866;
    (d) Conducting broad oversight of governmentwide compliance with 
the guidance in this subtitle; and
    (e) Performing other OMB functions specified in this subtitle.


Sec.  1.305  Federal agency responsibilities.

    The head of each Federal agency that awards and administers Federal 
financial assistance subject to the guidance in this subtitle is 
responsible for:
    (a) Implementing the guidance in this subtitle;
    (b) Ensuring that the Federal agency complies with their 
implementation of the guidance;
    (c) Coordinating with the Council on Federal Financial Assistance, 
the Grants Quality Service Management Office, and other governance 
committees as appropriate; and
    (d) Performing other functions specified in this subtitle.

[[Page 69402]]

0
4. Revise part 25, consisting of Sec.  25.100 through appendix A to 
part 25, to read as follows:

PART 25--UNIQUE ENTITY IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT

Sec.
Subpart A--General
25.100 Purpose of this part.
25.105 Applicability.
25.110 Exceptions to this part.
Subpart B--Policy
25.200 Requirements for notice of funding opportunities, 
regulations, and application instructions.
25.205 Effect of noncompliance with a requirement to obtain a UEI or 
register in SAM.gov.
25.210 Authority to modify agency application forms or formats.
25.215 Requirements for agency information systems.
25.220 Use of award term.
Subpart C--Recipient Requirements of Subrecipients
25.300 Requirement for recipients to ensure subrecipients have a 
unique entity identifier.
Subpart D--Definitions
25.400 Definitions.

Appendix A to Part 25

Award Term

    Authority: 31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub. 
L. 109-282; Pub. L. 110-252, Pub. L. 113-101, Pub. L. 117-40.

Subpart A--General


Sec.  25.100  Purpose of this part.

    This part provides guidance to Federal agencies that:
    (a) The unique entity identifier (UEI) is the universal identifier 
for Federal financial assistance applicants, as well as recipients and 
their direct subrecipients, and;
    (b) The System for Award Management (SAM.gov) is the repository for 
standard information about applicants and recipients.


Sec.  25.105  Applicability.

    (a) This part applies to a Federal agency's Federal financial 
assistance as defined in Sec.  25.400. This part applies to all 
applicants for and recipients of Federal financial assistance unless 
exempted by Federal statute or Sec.  25.110.
    (b) Subrecipients are required to obtain a UEI in accordance with 
subpart C. This part does not apply to subrecipients of subrecipients 
(second-tier subrecipients) or contractors under Federal awards.
    (c) This part does not apply to an individual who applies for or 
receives Federal financial assistance as a natural person (unrelated to 
any business or nonprofit organization an individual owns or operates).
    (d) Because this part applies to loan guarantees and other 
guaranteed programs, recipients of the guarantee from the Federal 
agency (for example, lenders of guaranteed loans) are required to 
complete entity validations and acquire a UEI. Additionally, at the 
Federal agency's discretion, non-individual beneficiary borrowers (for 
example, small businesses or corporations) may be required by the 
Federal agency to obtain a UEI or register in SAM.gov.


Sec.  25.110  Exceptions to this part.

    (a) General exceptions. (1) Under a condition identified in 
paragraph (a)(2) of this section, a Federal agency may exempt an 
applicant or recipient of Federal financial assistance from the 
requirement to obtain a UEI, register in SAM.gov, or both.
    (i) If a Federal agency grants an exception under paragraph (a)(2) 
of this section, it must use a generic entity identifier in the data it 
reports to USAspending.gov if reporting for a prime award of Federal 
financial assistance to the recipient is required by the Federal 
Funding Accountability and Transparency Act (Pub. L. 109-282, as 
amended, hereafter cited as ``Transparency Act''). Granting an 
exception under paragraph (a)(2) of this section does not impact a 
Federal agency's responsibility for reporting under the Transparency 
Act, except that it may use a generic entity identifier in the 
circumstances described.
    (ii) Federal agencies should use generic entity identifiers rarely 
as it prevents recipients from fulfilling reporting requirements such 
as subaward or executive compensation reporting required by the 
Transparency Act.
    (2) A Federal agency may exempt either an applicant or recipient 
when:
    (i) The Federal agency determines that it must protect information 
about the entity from disclosure in the national security or foreign 
policy interests of the United States or to avoid jeopardizing the 
personal safety of the entity's staff, partners, beneficiaries, and 
participants;
    (ii) (A) All of the following conditions are met:
    (1) the entity is a foreign organization or foreign public entity;
    (2) the Federal award or subaward will be performed outside the 
United States;
    (3) the Federal award or subaward will be less than $25,000; and
    (5) the Federal agency deems it to be impractical for the entity to 
comply with the requirements of this part.
    (B) The Federal agency must determine this exemption on a case-by-
case basis while utilizing a risk-based approach; or
    (iii) For applicants, the Federal agency determines that there are 
exigent circumstances that prohibit the applicant from receiving a UEI 
and registering in SAM.gov before receiving a Federal award. In these 
instances, Federal agencies must require the recipient to obtain a UEI 
and complete registration in SAM.gov within 30 days of the Federal 
award date.
    (b) Class exceptions. OMB may approve additional exceptions for 
classes of Federal awards, applicants, or recipients subject to the 
requirements of this part when exceptions are not prohibited by 
statute.

Subpart B--Policy


Sec.  25.200  Requirements for notice of funding opportunities, 
regulations, and application instructions.

    (a) A Federal agency that issues Federal financial assistance (see 
Sec.  25.400) must include the requirements of paragraph (b) of this 
section in each notice of funding opportunity, regulation, or other 
issuance containing instructions for applicants that is issued on or 
after the effective date of this guidance. A notice of funding 
opportunity is any paper or electronic issuance that a Federal agency 
uses to announce a funding opportunity, whether it is called a 
``program announcement,'' ``notice of funding availability,'' ``broad 
agency announcement,'' ``research announcement,'' ``solicitation,'' or 
any other term.
    (b) The notice of funding opportunity, regulation, or other 
issuance must require each applicant that does not have an exemption 
under Sec.  25.110 to:
    (1) Be registered in SAM.gov before submitting an application;
    (2) Maintain a current and active registration in SAM.gov at all 
times during which it has an active Federal award or an application 
under consideration by a Federal agency. The applicant must review and 
update its information in SAM.gov annually from the date of initial 
registration or subsequent updates to ensure it is current, accurate, 
and complete. If applicable, this includes identifying the applicant's 
immediate and highest-level owner and subsidiaries, as well as 
providing information on all predecessors that have received a

[[Page 69403]]

Federal award or contract within the last three years; and
    (3) Include its UEI in each application it submits to the Federal 
agency.
    (c) For the purposes of this policy: the applicant meets the 
Federal agency's eligibility criteria and has the legal authority to 
apply and receive the Federal award. For example, if a consortium 
applies for a Federal award to be made to the consortium as the 
recipient, the consortium must have a UEI. If a consortium is eligible 
to receive funding under a Federal agency program, but the agency's 
policy is to make the Federal award to a lead entity for the 
consortium, the UEI of the lead applicant must be used.


Sec.  25.205  Effect of noncompliance with a requirement to obtain a 
UEI or register in SAM.gov.

    (a) Unless an entity is exempt under Sec.  25.110, a Federal agency 
may not issue a Federal award or amend an existing Federal award if the 
entity is not in compliance with the requirements of this part. This 
does not apply to amendments to terminate or close out a Federal award.
    (b) At the time a Federal agency is ready to make a Federal award, 
if the intended recipient has not complied with the requirements to 
obtain a UEI and maintain an active registration in SAM.gov with 
current information, the Federal agency may make a Federal award to 
another applicant.


Sec.  25.210  Authority to modify agency application forms or formats.

    To implement the policies in Sec. Sec.  25.200 and 25.205, a 
Federal agency may add a UEI field to information collections 
previously approved by OMB, with no further approval required.


Sec.  25.215  Requirements for agency information systems.

    Each Federal agency that awards Federal financial assistance (see 
Sec.  25.400) must ensure that its information systems are able to both 
accept and transmit the UEI as the universal identifier for Federal 
financial assistance applicants and recipients.


Sec.  25.220  Use of award term.

    (a) A Federal agency must include the award term in Appendix A in 
all Federal financial assistance agreements (see Sec.  25.400) to 
accomplish the purpose of Sec.  25.100.
    (b) A Federal agency may use different letters and numbers than 
those in Appendix A to designate the paragraphs of the award term.

Subpart C--Recipient Requirements of Subrecipients


Sec.  25.300  Requirement for recipients to ensure subrecipients have a 
unique entity identifier.

    (a) A recipient may not make a subaward to a subrecipient that has 
not obtained a UEI and provided it to the recipient. Subrecipients are 
not required to complete full registration in SAM.gov to obtain a UEI.
    (b) A recipient must notify any potential subrecipients that the 
recipient cannot make a subaward unless the subrecipient obtains and 
provides a UEI to the recipient.

Subpart D--Definitions


Sec.  25.400  Definitions.

    Terms not defined in this part shall have the same meaning as 
provided in 2 CFR part 200, subpart A. As used in this part:
    Applicant means any entity that applies for a Federal award 
directly to a Federal agency.
    Entity includes:
    (1) Whether for profit or nonprofit:
    (i) A corporation;
    (ii) An association;
    (iii) A partnership;
    (iv) A limited liability company;
    (v) A limited liability partnership;
    (vi) A sole proprietorship;
    (vii) Any other legal business entity;
    (viii) Another grantee or contractor that is not excluded by 
subparagraph (b); and
    (ix) Any State or locality;
    (2) Does not include:
    (i) An individual recipient of Federal financial assistance; or
    (ii) A Federal employee.
    Federal Award means an award of Federal financial assistance that 
an entity receives from a Federal agency.
    Federal financial assistance:
    (1) Means assistance that entities receive or administer in the 
form of a:
    (i) Grant;
    (ii) Cooperative agreement (which does not include a cooperative 
research and development agreement pursuant to the Federal Technology 
Transfer Act of 1986, as amended (15 U.S.C. 3710a);
    (iii) Loan;
    (iv) Loan guarantee;
    (v) Subsidy;
    (vi) Insurance;
    (vii) Food commodity;
    (viii) Direct appropriation;
    (ix) Assessed or voluntary contribution; or
    (x) Any other financial assistance transaction that authorizes the 
entity's expenditure of Federal funds.
    (2) For the purposes of this part, the term ``Federal financial 
assistance'' does not include:
    (i) Technical assistance that provides services in lieu of money; 
and
    (ii) A transfer of title to federally-owned property provided in 
lieu of money, even if the award is called a grant.
    Recipient means an entity that receives or administers a Federal 
Award directly from a Federal agency.
    System for Award Management (SAM.gov) means the Federal repository 
into which an entity must provide the information required for the 
conduct of business as a recipient.
    Unique entity identifier means the universal identifier assigned by 
SAM.gov to uniquely identify an entity.

Appendix A to Part 25--Award Term

I. System for Award Management (SAM.gov) and Universal Identifier 
Requirements

    (a) Requirement for System for Award Management.
    (1) Unless exempt from this requirement under 2 CFR 25.110, you 
must maintain a current and active registration in SAM.gov. Your 
registration must always be current and active until you submit all 
final reports required under this Federal award or receive the final 
payment, whichever is later. You must review and update your 
information in SAM.gov at least annually from the date of your 
initial registration or any subsequent updates to ensure it is 
current, accurate, and complete. If applicable, this includes 
identifying your immediate and highest-level owner and subsidiaries 
and providing information about your predecessors that have received 
a Federal award or contract within the last three years.
    (b) Requirement for Unique Entity Identifier (UEI). (1) If you 
are authorized to make subawards under this Federal award, you:
    (i) Must notify potential subrecipients that no entity may 
receive a subaward from you until the entity has provided its UEI to 
you.
    (ii) May not make a subaward to an entity unless the entity has 
provided its UEI to you. Subrecipients are not required to complete 
full registration in SAM.gov to obtain a UEI.
    (c) Definitions. For the purposes of this award term:
    System for Award Management (SAM.gov) means the Federal 
repository into which a recipient must provide the information 
required for the conduct of business as a recipient. Additional 
information about registration procedures may be found in SAM.gov 
(currently at https://www.sam.gov).
    Unique entity identifier means the universal identifier assigned 
by SAM.gov to uniquely identify an entity.
    Entity is defined at 25 CFR 400 and includes all of the 
following types as defined in 2 CFR 200.1:
    (1) Non-Federal entity;
    (2) Foreign organization;
    (3) Foreign public entity;
    (4) Domestic for-profit organization; and
    (5) Federal agency.
    Subaward has the meaning given in 2 CFR 200.1.
    Subrecipient has the meaning given in 2 CFR 200.1.

[[Page 69404]]

0
5. Revise part 170 to read as follows:

PART 170--REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION

Sec.
Subpart A--General
170.100 Purpose of this part.
170.105 Applicability.
Subpart B--Policy
170.200 Federal agency reporting requirements.
170.210 Requirements for notices of funding opportunities, 
regulations, and application instructions.
170.220 Use of award term.
Subpart C--Definitions
170.300 Definitions.

Appendix A to Part 170

Award term

    Authority:  31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub. 
L. 109-282; Pub. L. 110-252, Pub. L. 113-101, Pub. L. 117-40.

Subpart A--General


Sec.  170.100  Purpose of this part.

    This part provides guidance to Federal agencies on establishing 
requirements for recipients of Federal awards to report information on 
subawards and executive total compensation, as required by the Federal 
Funding Accountability and Transparency Act of 2006 (Public Law 109-
282), as amended by the Digital Accountability and Transparency Act of 
2014 (Public Law 113-101), hereafter referred to as the ``Transparency 
Act.''


Sec.  170.105  Applicability.

    (a) This part applies to a Federal agency's Federal financial 
assistance as defined in Sec.  170.300. This part applies to all 
recipients and subrecipients of Federal awards who meet the reporting 
requirements of paragraph (c) of this section, unless exempt under 
Federal statute or by paragraph (d) of this section.
    (b) This part does not apply to an individual who applies for or 
receives Federal financial assistance as a natural person (that is, 
unrelated to any business or nonprofit organization an individual owns 
or operates).
    (c) Reporting Requirements. (1) The names and total compensation of 
an entity's five most highly compensated executives must be reported 
if:
    (i) In the entity's preceding fiscal year, it received:
    (A) 80 percent or more of its annual gross revenue in Federal 
procurement contracts (and subcontracts) and Federal awards (and 
subawards) subject to the Transparency Act, as defined at Sec.  
170.300; and
    (B) $25,000,000 or more in annual gross revenue from Federal 
procurement contracts (and subcontracts) and Federal awards (and 
subawards) subject to the Transparency Act, as defined at Sec.  
170.300; and
    (ii) The public does not have access to information about the 
compensation of senior executives of the entity through periodic 
reports filed under section 13(a) or 15(d) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal 
Revenue Code of 1986.
    (d) Class exceptions. OMB may approve additional exceptions for 
classes of Federal awards or recipients when not prohibited by Federal 
statute.

Subpart B--Policy


Sec.  170.200  Federal agency reporting requirements.

    (a) Federal agencies must publicly report Federal awards that equal 
or exceed the micro-purchase threshold (see 2 CFR 200.1). Federal 
agencies must publish the required Federal award information on 
USAspending.gov in accordance with the guidance provided by OMB and the 
U.S. Department of the Treasury's DATA Act Information Model Schema 
(DAIMS).
    (b) Federal agencies should ensure that their agency-specific 
requirements do not require recipients to submit data that is the same 
as or similar to data required by the Transparency Act during a given 
reporting period.


Sec.  170.210  Requirements for notices of funding opportunities, 
regulations, and application instructions.

    (a) A Federal agency that makes Federal awards subject to the 
Transparency Act must include the requirements of paragraph (b) of this 
section in each notice of funding opportunity, regulation, or other 
issuance containing instructions for applicants under which Federal 
awards may be made that are subject to Transparency Act reporting 
requirements. A notice of funding opportunity is any paper or 
electronic issuance that a Federal agency uses to announce a funding 
opportunity, whether it is called a ``program announcement,'' ``notice 
of funding availability,'' ``broad agency announcement,'' ``research 
announcement,'' ``solicitation,'' or any other term.
    (b) The notice of funding opportunity, regulation, or other 
issuance must require each applicant, to which this part applies, to 
have the necessary processes and systems in place to comply with this 
part if they receive a Federal award.


Sec.  170.220  Use of award term.

    (a) A Federal agency must include the award term in Appendix A to 
this part in each Federal award to a recipient under which the total 
funding is anticipated to equal or exceed $30,000 in Federal funding.
    (b) Consistent with paragraph (a) of this section, a Federal agency 
is not required to include the award term in Appendix A of this part if 
the total amount of Federal funding under the Federal award will not 
equal or exceed $30,000. However, the Federal agency must subsequently 
add the award term if increases to the Federal funding result in the 
award equaling or exceeding $30,000.
    (c) A Federal agency may use different letters and numbers than 
those in Appendix A to designate the paragraphs of the award term.

Subpart C--Definitions


Sec.  170.300  Definitions

    Terms not defined in this part shall have the same meaning as 
provided in 2 CFR part 200, subpart A. As used in this part:
    Applicant means any entity that applies for a Federal award 
directly from a Federal agency.
    Entity includes:
    (1) Whether for profit or nonprofit:
    (i) A corporation;
    (ii) An association;
    (iii) A partnership;
    (iv) A limited liability company;
    (v) A limited liability partnership;
    (vi) A sole proprietorship;
    (vii) Any other legal business entity;
    (viii) Another grantee or contractor that is not excluded by 
subparagraph (2) or (3); and
    (ix) Any State or locality;
    (2) Does not include:
    (i) An individual recipient of Federal financial assistance; or
    (ii) A Federal employee.
    Federal Award means an award of Federal financial assistance that 
an entity receives from a Federal agency.
    Executive means an officer, managing partner, or any other employee 
holding a management position.
    Federal financial assistance:
    (1) Means assistance that entities receive or administer in the 
form of a:
    (i) Grant;
    (ii) Cooperative agreement (which does not include a cooperative 
research and development agreement pursuant to the Federal Technology 
Transfer Act of 1986, as amended (15 U.S.C. 3710a);
    (iii) Loan;

[[Page 69405]]

    (iv) Loan guarantee;
    (v) Subsidy;
    (vi) Insurance;
    (vii) Food commodity;
    (viii) Direct appropriation;
    (ix) Assessed or voluntary contribution; or
    (x) Any other financial assistance transaction that authorizes the 
entity's expenditure of Federal funds.
    (2) For the purposes of this part, the term ``Federal financial 
assistance'' does not include:
    (i) Technical assistance that provides services in lieu of money;
    (ii) A transfer of title to federally-owned property provided in 
lieu of money, even if the award is called a grant;
    (iii) Any classified Federal award; or
    (iv) Any award funded in whole or in part with Recovery funds, as 
defined in section 1512 of the American Recovery and Reinvestment Act 
of 2009 (Pub. L. 111-5).
    Recipient means an entity that receives or administers a Federal 
Award directly from a Federal agency.
    Total Compensation means the cash and noncash dollar value an 
executive earns during an entity's preceding fiscal year. This includes 
all items of compensation as prescribed in 17 CFR 29.402(c)(2).

Appendix A to Part 170--Award Term

I. Reporting Subawards and Executive Compensation

    (a) Reporting of first-tier subawards--(1) Applicability. Unless 
you are exempt as provided in paragraph (d) of this award term, you 
must report each action that equals or exceeds $30,000 in Federal 
funds for a subaward to an entity or Federal agency. You must 
subsequently report an action if increases to the Federal funding 
results in the subaward equaling or exceeding $30,000.
    (2) Reporting Requirements. (i) The entity or Federal agency 
must report each subaward described in paragraph (a)(1) of this 
award term to the Federal Funding Accountability and Transparency 
Act Subaward Reporting System (FSRS) at https://www.fsrs.gov.
    (ii) For subaward information, report no later than the end of 
the month following the month in which the subaward was made. (For 
example, if the subaward was made on November 7, 2025, the subaward 
must be reported by no later than December 31, 2025).
    (b) Reporting total compensation of recipient executives for 
entities--(1) Applicability. You must report the total compensation 
for each of your five most highly compensated executives for the 
preceding completed fiscal year if:
    (i) The total Federal funding authorized to date under this 
Federal award equals or exceeds $30,000;
    (ii) in the preceding fiscal year, you received:
    (A) 80 percent or more of your annual gross revenues from 
Federal procurement contracts (and subcontracts) and Federal awards 
(and subawards) subject to the Transparency Act; and
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal awards (and 
subawards) subject to the Transparency Act; and,
    (iii) The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code 
of 1986 after receiving this subaward. (To determine if the public 
has access to the compensation information, see the U.S. Security 
and Exchange Commission total compensation filings at https://www.sec.gov/answers/execomp.htm.)
    (2) Reporting Requirements. You must report executive total 
compensation described in paragraph (b)(1) of this appendix:
    (i) As part of your registration profile at https://www.sam.gov.
    (ii) No later than the month following the month in which this 
Federal award is made, and annually after that. (For example, if 
this Federal award was made on November 7, 2025, the executive total 
compensation must be reported by no later than December 31, 2025.)
    (c) Reporting of total compensation of subrecipient executives--
(1) Applicability. Unless a first-tier subrecipient is exempt as 
provided in paragraph (d) of this appendix, you must report the 
executive total compensation of each of the subrecipient's five most 
highly compensated executives for the subrecipient's preceding 
completed fiscal year, if:
    (i) The total Federal funding authorized to date under the 
subaward equals or exceeds $30,000;
    (ii) In the subrecipient's preceding fiscal year, the 
subrecipient received:
    (A) 80 percent or more of its annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal awards (and 
subawards) subject to the Transparency Act; and,
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts), and Federal awards (and 
subawards) subject to the Transparency Act; and
    (iii) The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code 
of 1986 after receiving this subaward. (To determine if the public 
has access to the compensation information, see the U.S. Security 
and Exchange Commission total compensation filings at https://www.sec.gov/answers/execomp.htm.)
    (2) Reporting Requirements. Subrecipients must report to you, 
the recipient, their executive total compensation described in 
paragraph (c)(1) of this appendix. You are required to submit this 
information to the Federal Funding Accountability and Transparency 
Act Subaward Reporting System (FSRS) at https://www.fsrs.gov no later 
than the end of the month following the month in which the subaward 
was made. (For example, if the subaward was made on November 7, 
2025, the subaward must be reported by no later than December 31, 
2025).
    (d) Exemptions. (1) If in the previous tax year you had gross 
income under $300,000, you are exempt from the requirements to 
report:
    (i) Subawards, and
    (ii) The total compensation of the five most highly compensated 
executives of any subrecipient.
    (e) Definitions.
    For purposes of this award term:
    Entity includes:
    (1) Whether for profit or nonprofit:
    (i) A corporation;
    (ii) An association;
    (iii) A partnership;
    (iv) A limited liability company;
    (v) A limited liability partnership;
    (vi) A sole proprietorship;
    (vii) Any other legal business entity;
    (viii) Another grantee or contractor that is not excluded by 
subparagraph (2); and
    (ix) Any State or locality;
    (2) Does not include:
    (i) An individual recipient of Federal financial assistance; or
    (ii) A Federal employee.
    Executive means an officer, managing partner, or any other 
employee holding a management position.
    Subaward has the meaning given in 2 CFR 200.1.
    Subrecipient has the meaning given in 2 CFR 200.1.
    Total Compensation means the cash and noncash dollar value an 
executive earns during an entity's preceding fiscal year. This 
includes all items of compensation as prescribed in 17 CFR 
229.402(c)(2).
0
6. Revise part 175 to read as follows:

PART 175--AWARD TERM FOR TRAFFICKING IN PERSONS

Sec.
Subpart A--General
175.100 Purpose of this part.
175.105 Statutory requirement.
Subpart B--Guidance
175.200 Use of award term.
175.205 Referral.
Subpart C--Definitions
175.300 Definitions.

Appendix A to Part 175

Award term

    Authority:  22 U.S.C. 7104(g); 22 U.S.C. 7104a; 22 U.S.C. 7104b; 
22 U.S.C. 7104c; 31 U.S.C. 503; 31 U.S.C. 6307; 31 U.S.C. 1111; 41 
U.S.C. 1121; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 
10737.

Subpart A--General


Sec.  175.100  Purpose of this part.

    This part establishes a Federal award term for grants and 
cooperative

[[Page 69406]]

agreements to implement the requirements in 22 U.S.C. 7104(g).


Sec.  175.105  Statutory requirement.

    (a) Federal agencies are required to include in each Federal grant 
or cooperative agreement a condition that authorizes the Federal agency 
to terminate the award, without penalty, if a private entity receiving 
funds under the award as a recipient or subrecipient engages in:
    (1) Severe forms of trafficking in persons;
    (2) The procurement of a commercial sex act during the period of 
time that the grant or cooperative agreement is in effect;
    (3) The use of forced labor in the performance of the grant or 
cooperative agreement; or
    (4) Acts that directly support or advance trafficking in persons, 
including the following acts:
    (i) Destroying, concealing, removing, confiscating, or otherwise 
denying an employee access to that employee's identity or immigration 
documents;
    (ii) Failing to provide return transportation or pay for return 
transportation costs to an employee from a country outside the United 
States to the country from which the employee was recruited upon the 
end of employment if requested by the employee, unless:
    (A) exempted from the requirement to provide or pay for such return 
transportation by the Federal department or agency providing or 
entering into the grant or cooperative agreement; or
    (B) the employee is a victim of human trafficking seeking victim 
services or legal redress in the country of employment or a witness in 
a human trafficking enforcement action;
    (iii) Soliciting a person for the purpose of employment, or 
offering employment, by means of materially false or fraudulent 
pretenses, representations, or promises regarding that employment;
    (iv) Charging recruited employees a placement or recruitment fee; 
or
    (v) Providing or arranging housing that fails to meet the host 
country's housing and safety standards.
    (b) Compliance plan and certification requirement.
    (1) Certification. Prior to receiving a grant or cooperative 
agreement, if the estimated value of services required to be performed 
under the grant or cooperative agreement outside the United States 
exceeds $500,000, a recipient must certify that:
    (i) The recipient has implemented a plan to prevent the activities 
described in paragraph (a) of this section, and is in compliance with 
this plan;
    (ii) The recipient has implemented procedures to prevent any 
activities described in paragraph (a) of this section and to monitor, 
detect, and terminate any subcontractor, subgrantee, or employee of the 
recipient engaging in any activities described in paragraph (a) of this 
section; and
    (iii) To the best of the recipient's knowledge, neither the 
recipient, nor any subcontractor or subgrantee of the recipient or any 
agent of the recipient or of such a subcontractor or subgrantee, is 
engaged in any of the activities described in paragraph (a) of this 
section.
    (2) Annual certification. If the recipient receives the award, it 
must submit an annual certification consistent with paragraph (b)(1) of 
this section for each year the award is in effect.
    (3) Compliance plan. Any plan or procedures implemented pursuant to 
paragraph (b) must be appropriate to the size and complexity of the 
grant or cooperative agreement and to the nature and scope of its 
activities, including the number of non-United States citizens expected 
to be employed.
    (4) Copies of the compliance plan. The recipient must provide a 
copy of the plan to the grant officer upon request, and as appropriate, 
must post the useful and relevant contents of the plan or related 
materials on its website and at the workplace.
    (5) Minimum requirements of the compliance plan. The compliance 
plan must include, at a minimum, the following:
    (i) An awareness program to inform recipient employees about the 
Government's policy prohibiting trafficking-related activities 
described in paragraph (a) of this section, the activities prohibited, 
and the actions that will be taken against the employee for violations. 
Additional information about Trafficking in Persons and examples of 
awareness programs can be found at the website for the Department of 
State's Office to Monitor and Combat Trafficking in Persons at https://www.state.gov/j/tip/.
    (ii) A process for employees to report, without fear of 
retaliation, activity inconsistent with the policy prohibiting 
trafficking in persons.
    (iii) A recruitment and wage plan that only permits the use of 
recruitment companies with trained employees, prohibits charging 
recruitment fees to the employees or potential employees and ensures 
that wages meet applicable host-country legal requirements or explains 
any variance.
    (iv) A housing plan, if the recipient, subrecipient, contractor, or 
subcontractor intends to provide or arrange housing, that ensures that 
the housing meets host-country housing and safety standards.
    (v) Procedures to prevent agents, subrecipients, contractors, or 
subcontractors at any tier and at any dollar value from engaging in 
trafficking in persons, including activities in paragraph (a) of this 
section, and to monitor, detect, and terminate any agents, subgrants, 
or subrecipient, contractor, or subcontractor employees that have 
engaged in such activities.
    (c) Notification to Inspectors General and cooperation with 
government. The head of a Federal agency making or awarding a grant or 
cooperative agreement must require that the recipient of the grant or 
cooperative agreement:
    (1) Immediately inform the Inspector General of the Federal agency 
of any information it receives from any source that alleges credible 
information that the recipient, any subcontractor or subgrantee of the 
recipient, or any agent of the recipient or of such a subcontractor or 
subgrantee, has engaged in conduct described in paragraph (a) of this 
section; and
    (2) Fully cooperate with any Federal agencies responsible for 
audits, investigations, or corrective actions relating to trafficking 
in persons.

Subpart B--Guidance


Sec.  175.200  Use of award term.

    (a) To implement the requirements of 22 U.S.C. 7104(g) a Federal 
agency must include the award term in Appendix A of this part for the 
following Federal awards:
    (1) A grant or cooperative agreement to a private entity, as 
defined in Sec.  175.300; and
    (2) A grant or cooperative agreement to a State, local government, 
Indian Tribe, foreign public entity, or any other recipient if funding 
under the award could be provided to a subrecipient that is a private 
entity.
    (b) A Federal agency may use different letters and numbers than 
those in Appendix A to designate the paragraphs of the award term.


Sec.  175.205  Referral.

    A Federal agency official should inform the agency's suspension and 
debarment official if an award is terminated based on a violation of a 
prohibition in the award term under Appendix A.

[[Page 69407]]

Subpart C--Definitions


Sec.  175.300  Definitions.

    Terms not defined in this part shall have the same meaning as 
provided in 2 CFR part 200, subpart A. As used in this part:
    Abuse or threatened abuse of law or legal process means the use or 
threatened use of a law or legal process, whether administrative, 
civil, or criminal, in any manner or for any purpose for which the law 
was not designed, in order to exert pressure on another person to cause 
that person to take some action or refrain from taking some action.
    Coercion means:
    (1) Threats of serious harm to or physical restraint against any 
person;
    (2) Any scheme, plan, or pattern intended to cause a person to 
believe that failure to perform an act would result in serious harm to 
or physical restraint against any person; or
    (3) The abuse or threatened abuse of the legal process.
    Commercial sex act means any sex act on account of which anything 
of value is given to or received by any person.
    Debt bondage means the status or condition of a debtor arising from 
a pledge by the debtor of his or her personal services or of those of a 
person under his or her control as a security for debt, if the value of 
those services as reasonably assessed is not applied toward the 
liquidation of the debt or the length and nature of those services are 
not respectively limited and defined.
    Involuntary servitude includes a condition of servitude induced by 
means of:
    (1) Any scheme, plan, or pattern intended to cause a person to 
believe that, if the person did not enter into or continue in such 
condition, that person or another person would suffer serious harm or 
physical restraint; or
    (2) The abuse or threatened abuse of the legal process.
    Private Entity means any entity, including for-profit 
organizations, nonprofit organizations, institutes of higher education, 
and hospitals. The term does not include foreign public entities, 
Indian Tribes, local governments, or states as defined in 2 CFR 200.1.
    Recruitment Fee means fees of any type, including charges, costs, 
assessments, or other financial obligations, that are associated with 
the recruiting process, regardless of the time, manner, or location of 
imposition or collection of the fee.
    (1) Recruitment fees include, but are not limited to, the following 
fees (when they are associated with the recruiting process) for:
    (i) Advertising;
    (ii) Obtaining permanent or temporary labor certification, 
including any associated fees;
    (iii) Processing applications and petitions;
    (iv) Acquiring visas, including any associated fees;
    (v) Acquiring photographs and identity or immigration documents, 
such as passports, including any associated fees;
    (vi) Accessing the job opportunity, including required medical 
examinations and immunizations; background, reference, and security 
clearance checks and examinations; and additional certifications;
    (vii) An employer's recruiters, agents or attorneys, or other 
notary or legal fees;
    (viii) Language interpretation or translation, arranging for or 
accompanying on travel, or providing other advice to employees or 
potential employees;
    (ix) Government-mandated fees, such as border crossing fees, 
levies, or worker welfare fund;
    (x) Transportation and subsistence costs:
    (A) While in transit, including, but not limited to, airfare or 
costs of other modes of transportation, terminal fees, and travel taxes 
associated with travel from the country of origin to the country of 
performance and the return journey upon the end of employment; and
    (B) From the airport or disembarkation point to the worksite;
    (xi) Security deposits, bonds, and insurance; and
    (xii) Equipment charges.
    (2) A recruitment fee, as described in the introductory text of 
this definition, is a recruitment fee, regardless of whether the 
payment is:
    (i) Paid in property or money;
    (ii) Deducted from wages;
    (iii) Paid back in wage or benefit concessions;
    (iv) Paid back as a kickback, bribe, in-kind payment, free labor, 
tip, or tribute; or
    (v) Collected by an employer or a third party, whether licensed or 
unlicensed, including, but not limited to:
    (A) Agents;
    (B) Labor brokers;
    (C) Recruiters;
    (D) Staffing firms (including private employment and placement 
firms);
    (E) Subsidiaries/affiliates of the employer;
    (F) Any agent or employee of such entities; and
    (G) Subcontractors at all tiers.
    Severe forms of trafficking in persons means:
    (1) Sex trafficking in which a commercial sex act is induced by 
force, fraud, or coercion or in which the person induced to perform 
such act has not attained 18 years of age; or
    (2) The recruitment, harboring, transportation, provision, or 
obtaining of a person for labor or services, through the use of force, 
fraud, or coercion for the purpose of subjection to involuntary 
servitude, peonage, debt bondage or slavery.
    Sex trafficking means the recruitment, harboring, transportation, 
provision, obtaining, patronizing, or soliciting of a person for the 
purpose of a commercial sex act.

Appendix A to Part 175--Award Term

    I. Trafficking in persons.
    (a) Provisions applicable to a recipient that is a private 
entity. (1) Under this award, you as the recipient, your employees, 
subrecipients under this award, and subrecipient's employees may not 
engage in:
    (i) Severe forms of trafficking in persons;
    (ii) The procurement of a commercial sex act during the period 
of time that this award or any subaward is in effect;
    (iii) The use of forced labor in the performance of this award 
or any subaward; or
    (iv) Acts that directly support or advance trafficking in 
persons, including the following acts:
    (A) Destroying, concealing, removing, confiscating, or otherwise 
denying an employee access to that employee's identity or 
immigration documents;
    (B) Failing to provide return transportation or pay for return 
transportation costs to an employee from a country outside the 
United States to the country from which the employee was recruited 
upon the end of employment if requested by the employee, unless:
    (1) Exempted from the requirement to provide or pay for such 
return transportation by the Federal department or agency providing 
or entering into the grant or cooperative agreement; or
    (2) The employee is a victim of human trafficking seeking victim 
services or legal redress in the country of employment or a witness 
in a human trafficking enforcement action;
    (C) Soliciting a person for the purpose of employment, or 
offering employment, by means of materially false or fraudulent 
pretenses, representations, or promises regarding that employment;
    (D) Charging recruited employees a placement or recruitment fee; 
or
    (E) Providing or arranging housing that fails to meet the host 
country's housing and safety standards.
    (2) We as the awarding Federal agency may unilaterally terminate 
this award, without penalty, if any private entity under this award:

[[Page 69408]]

    (i) Is determined to have violated a prohibition in paragraph 
(a)(1) of this appendix; or
    (ii) Has an employee that is determined to have violated a 
prohibition in paragraph (a)(1) of this this appendix through 
conduct that is either:
    (A) Associated with the performance under this award; or
    (B) Imputed to you or the subrecipient using the standards and 
due process for imputing the conduct of an individual to an 
organization that are provided in 2 CFR part 180, ``OMB Guidelines 
to Agencies on Government-wide Debarment and Suspension 
(Nonprocurement),'' as implemented by our agency at [agency must 
insert reference here to its regulatory implementation of the OMB 
guidelines in 2 CFR part 180 (for example, ``2 CFR part XX'')].
    (b) Provision applicable to a recipient other than a private 
entity. (1) We as the awarding Federal agency may unilaterally 
terminate this award, without penalty, if a subrecipient that is a 
private entity under this award:
    (i) Is determined to have violated a prohibition in paragraph 
(a)(1) of this appendix; or
    (ii) Has an employee that is determined to have violated a 
prohibition in paragraph (a)(1) of this appendix through conduct 
that is either:
    (A) Associated with the performance under this award; or
    (B) Imputed to the subrecipient using the standards and due 
process for imputing the conduct of an individual to an organization 
that are provided in 2 CFR part 180, ``OMB Guidelines to Agencies on 
Government-wide Debarment and Suspension (Nonprocurement),'' as 
implemented by our agency at [agency must insert reference here to 
its regulatory implementation of the OMB guidelines in 2 CFR part 
180 (for example, ``2 CFR part XX'')].
    (c) Provisions applicable to any recipient. (1) You must inform 
us immediately of any information you receive from any source 
alleging a violation of a prohibition in paragraph (a)(1) of this 
appendix.
    (2) Our right to unilaterally terminate this award as described 
in paragraphs (a)(2) or (b)(1) of this appendix:
    (i) Implements the requirements of 22 U.S.C. 78, and
    (ii) Is in addition to all other remedies for noncompliance that 
are available to us under this award.
    (3) You must include the requirements of paragraph (a)(1) of 
this award term in any subaward you make to a private entity.
    (d) Definitions. For purposes of this award term:
    Employee means either:
    (1) An individual employed by you or a subrecipient who is 
engaged in the performance of the project or program under this 
award; or
    (2) Another person engaged in the performance of the project or 
program under this award and not compensated by you including, but 
not limited to, a volunteer or individual whose services are 
contributed by a third party as an in-kind contribution toward cost 
sharing requirements.
    Private Entity means any entity, including for-profit 
organizations, nonprofit organizations, institutions of higher 
education, and hospitals. The term does not include foreign public 
entities, Indian Tribes, local governments, or states as defined in 
2 CFR 200.1.
    The terms ``severe forms of trafficking in persons,'' 
``commercial sex act,'' ``sex trafficking,'' ``Abuse or threatened 
abuse of law or legal process,'' ``coercion,'' ``debt bondage,'' and 
``involuntary servitude'' have the meanings given at section 103 of 
the TVPA, as amended (22 U.S.C. 7102).

0
7. Revise part 180 to read as follows:

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

Sec.
180.5 What does this part do?
180.10 How is this part organized?
180.15 To whom does the guidance apply?
180.20 What must a Federal agency do to implement these guidelines?
180.25 What must a Federal agency address in its implementation of 
the guidance?
180.30 Where does a Federal agency implement these guidelines?
180.40 How are these guidelines maintained?
180.45 Do these guidelines cover persons who are disqualified, as 
well as those who are excluded from nonprocurement transactions?
Subpart A--General
180.100 How are subparts A through I organized?
180.105 How is this part written?
180.110 Do terms in this part have special meanings?
180.115 What do subparts A through I of this part do?
180.120 Do subparts A through I of this part apply to me?
180.125 What is the purpose of the nonprocurement debarment and 
suspension system?
180.130 How does an exclusion restrict a person's involvement in 
covered transactions?
180.135 May a Federal agency grant an exception to let an excluded 
person participate in a covered transaction?
180.140 Does an exclusion under the nonprocurement system affect a 
person's eligibility for Federal procurement contracts?
180.145 Does an exclusion under the Federal procurement system 
affect a person's eligibility to participate in nonprocurement 
transactions?
180.150 Against whom may a Federal agency take an exclusion action?
180.155 How do I know if a person is excluded?
Subpart B--Covered Transactions
180.200 What is a covered transaction?
180.205 Why is it important if a particular transaction is a covered 
transaction?
180.210 Which nonprocurement transactions are covered transactions?
180.215 Which nonprocurement transactions are not covered 
transactions?
180.220 Are any procurement contracts included as covered 
transactions?
180.225 How do I know if a transaction in which I may participate is 
a covered transaction?
Subpart C--Responsibilities of Participants Regarding Transactions 
Doing Business With Other Persons
180.300 What must I do before I enter into a covered transaction 
with another person at the next lower tier?
180.305 May I enter into a covered transaction with an excluded or 
disqualified person?
180.310 What must I do if a Federal agency excludes a person with 
whom I am already doing business in a covered transaction?
180.315 May I use the services of an excluded person as a principal 
under a covered transaction?
180.320 Must I verify that principals of my covered transactions are 
eligible to participate?
180.325 What happens if I do business with an excluded person in a 
covered transaction?
180.330 What requirements must I pass down to persons at lower tiers 
with whom I intend to do business?

Disclosing Information--Primary Tier Participants

180.335 What information must I provide before entering into a 
covered transaction with a Federal agency?
180.340 If I disclose unfavorable information required under Sec.  
180.335, will I be prevented from participating in the transaction?
180.345 What happens if I fail to disclose information required 
under Sec.  180.335?
180.350 What must I do if I learn of information required under 
Sec.  180.335 after entering into a covered transaction with a 
Federal agency?

Disclosing Information--Lower Tier Participants

180.355 What information must I provide to a higher tier participant 
before entering into a covered transaction with that participant?
180.360 What happens if I fail to disclose information required 
under Sec.  180.355?
180.365 What must I do if I learn of information required under 
Sec.  180.355 after entering into a covered transaction with a 
higher tier participant?
Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions
180.400 May I enter into a transaction with an excluded or 
disqualified person?
180.405 May I enter into a covered transaction with a participant if 
a principal of the transaction is excluded?
180.410 May I approve a participant's use of the services of an 
excluded person?
180.415 What must I do if a Federal agency excludes the participant 
or a principal after I enter into a covered transaction?

[[Page 69409]]

180.420 May I approve a transaction with an excluded or disqualified 
person at a lower tier?
180.425 When do I check to see if a person is excluded or 
disqualified?
180.430 How do I check to see if a person is excluded or 
disqualified?
180.435 What must I require of a primary tier participant?
180.440 What action may I take if a primary tier participant 
knowingly does business with an excluded or disqualified person?
180.445 What action may I take if a primary tier participant fails 
to disclose the information required under Sec.  180.335?
180.450 What action may I take if a lower tier participant fails to 
disclose the information required under Sec.  180.355 to the next 
higher tier?
Subpart E--System for Award Management (SAM.gov) Exclusions
180.500 What is the purpose of the System for Award Management 
(SAM.gov) Exclusions?
180.505 Who uses SAM.gov Exclusions?
180.510 Who maintains SAM.gov Exclusions?
180.515 What specific information is in SAM.gov Exclusions?
180.520 Who places the information into SAM.gov Exclusions?
180.525 Whom do I ask if I have questions about a person in SAM.gov 
Exclusions?
180.530 Where can I find SAM.gov Exclusions?
Subpart F--General Principles Relating to Suspension and Debarment 
Actions
180.600 How do suspension and debarment actions start?
180.605 How does suspension differ from debarment?
180.610 What procedures does a Federal agency use in suspension and 
debarment actions?
180.615 How does a Federal agency notify a person of a suspension or 
debarment action?
180.620 Do Federal agencies coordinate suspension and debarment 
actions?
180.625 What is the scope of a suspension or debarment?
180.630 May a Federal agency impute the conduct of one person to 
another?
180.635 May a Federal agency resolve an administrative action in 
lieu of debarment or suspension?
180.640 May a settlement include a voluntary exclusion?
180.645 Do other Federal agencies know if an agency agrees to a 
voluntary exclusion?
180.650 May an administrative agreement be the result of a 
settlement?
180.655 How will other Federal awarding agencies know about an 
administrative agreement that is the result of a settlement?
180.660 Will administrative agreement information about me in 
SAM.gov be corrected or updated?
Subpart G--Suspension
180.700 When may the suspending official issue a suspension?
180.705 What does the suspending official consider in issuing a 
suspension?
180.710 When does a suspension take effect?
180.715 What notice does the suspending official give me if I am 
suspended?
180.720 How may I contest a suspension?
180.725 How much time do I have to contest a suspension?
180.730 What information must I provide to the suspending official 
if I contest the suspension?
180.735 Under what conditions do I get an additional opportunity to 
challenge the facts on which the suspension is based?
180.740 Are suspension proceedings formal?
180.745 How is fact-finding conducted?
180.750 What does the suspending official consider in deciding 
whether to continue or terminate my suspension?
180.755 When will I know whether the suspension is continued or 
terminated?
180.760 How long may my suspension last?
Subpart H--Debarment
180.800 What are the causes for debarment?
180.805 What notice does the debarring official give me if I am 
proposed for debarment?
180.810 When does a debarment take effect?
180.815 How may I contest a proposed debarment?
180.820 How much time do I have to contest a proposed debarment?
180.825 What information must I provide to the debarring official if 
I contest the proposed debarment?
180.830 Under what conditions do I get an additional opportunity to 
challenge the facts on which the proposed debarment is based?
180.835 Are debarment proceedings formal?
180.840 How is fact-finding conducted?
180.845 What does the debarring official consider in deciding 
whether to debar me?
180.850 What is the standard of proof in a debarment action?
180.855 Who has the burden of proof in a debarment action?
180.860 What factors may influence the debarring official's 
decision?
180.865 How long may my debarment last?
180.870 When do I know if the debarring official debars me?
180.875 May I ask the debarring official to reconsider a decision to 
debar me?
180.880 What factors may influence the debarring official during 
reconsideration?
180.885 May the debarring official extend a debarment?
Subpart I--Definitions
180.900 Adequate evidence.
180.905 Affiliate.
180.910 Agent or representative.
180.915 Civil judgment.
180.920 Conviction.
180.925 Debarment.
180.930 Debarring official.
180.935 Disqualified.
180.940 Excluded or exclusion.
180.945 System for Award Management Exclusions (SAM.gov) Exclusions.
180.950 Federal agency.
180.955 Indictment.
180.960 Ineligible or ineligibility.
180.965 Legal proceedings.
180.970 Nonprocurement transaction.
180.975 Notice.
180.980 Participant.
180.985 Person.
180.990 Preponderance of the evidence.
180.995 Principal.
180.1000 Respondent.
180.1005 State.
180.1010 Suspending official.
180.1015 Suspension.
180.1020 Voluntary exclusion or voluntarily excluded.

Appendix A to Part 180

Covered Transactions

    Authority:  31 U.S.C. 503; 31 U.S.C. 6102; 31 U.S.C. 6307; Pub. 
L. 103-355; Pub. L. 109-282; Pub. L. 110-252; Pub. L. 111-84; Pub. 
L. 113-101; Pub. L. 115-232; Pub. L. 117-40; E.O. 12549; E.O. 12689.


Sec.  180.5  What does this part do?

    This part provides guidance for Federal agencies on how to 
implement the government-wide debarment and suspension system for 
nonprocurement programs and activities.


Sec.  180.10  How is this part organized?

    This part is organized into two segments.
    (a) Sections 180.5 through 180.45 contain general policy direction 
for Federal agencies' use of the standards in subparts A through I.
    (b) Subparts A through I contain uniform government-wide standards 
that Federal agencies are to use to specify:
    (1) The types of transactions that are covered by the 
nonprocurement debarment and suspension system;
    (2) The effects of an exclusion under that nonprocurement system, 
including reciprocal effects with the government-wide debarment and 
suspension system for procurement;
    (3) The criteria and minimum due process to be used in 
nonprocurement debarment and suspension actions; and
    (4) Related policies and procedures to ensure the effectiveness of 
those actions.


Sec.  180.15   To whom does the guidance apply?

    This part provides guidance to Federal agencies. Publication of 
this guidance in the Code of Federal Regulations (CFR) does not change 
its nature--it is guidance and not regulation. Federal agencies' 
implementation of this guidance governs the rights and responsibilities 
of other persons affected by the nonprocurement debarment and 
suspension system.

[[Page 69410]]

Sec.  180.20   What must a Federal agency do to implement these 
guidelines?

    As Section 3 of Executive Order 12549 requires, each Federal agency 
with nonprocurement programs and activities covered by subparts A 
through I of the guidance must issue regulations consistent with those 
subparts.


Sec.  180.25  What must a Federal agency address in its implementation 
of the guidance?

    Each Federal agency's implementing regulation:
    (a) Must establish policies and procedures for that Federal 
agency's nonprocurement debarment and suspension programs and 
activities consistent with this guidance. When adopted by a Federal 
agency, the provisions of the guidance have a regulatory effect on that 
Federal agency's programs and activities.
    (b) Must address some matters for which these guidelines give each 
Federal agency some discretion. Specifically, the regulation must:
    (1) Identify either the Federal agency head or the title of the 
designated official who is authorized to grant exceptions under Sec.  
180.135 to let an excluded person participate in a covered transaction.
    (2) State whether the Federal agency includes as covered 
transactions an additional tier of contracts awarded under covered 
nonprocurement transactions, as permitted under Sec.  180.220(c).
    (3) Identify the method(s) a Federal agency official may use when 
entering into a covered transaction with a primary tier participant to 
communicate to the participant the requirements described in Sec.  
180.435. Examples of methods are an award term that requires compliance 
as a condition of the award, an assurance of compliance obtained at the 
time of application, or a certification.
    (4) State whether the Federal agency specifies a particular method 
that participants must use to communicate compliance requirements to 
lower tier participants, as described in Sec.  180.330(a). If there is 
a specified method, the regulation must require Federal agency 
officials to communicate that requirement when entering into covered 
transactions with primary tier participants.
    (c) May also, at the Federal agency's option:
    (1) Identify any specific types of transactions the Federal agency 
includes as ``nonprocurement transactions'' in addition to the examples 
provided in Sec.  180.970.
    (2) Identify any types of nonprocurement transactions that the 
Federal agency exempts from coverage under these guidelines, as 
authorized under Sec.  180.215(g)(2).
    (3) Identify specific examples of types of individuals who would be 
``principals'' under the Federal agency's nonprocurement programs and 
transactions, in addition to the types of individuals described in 
Sec.  180.995.
    (4) Specify the Federal agency's procedures, if any, by which a 
respondent may appeal a suspension or debarment decision.
    (5) Identify by title the officials designated by the Federal 
agency head as debarring officials under Sec.  180.930 or suspending 
officials under Sec.  180.1010.
    (6) Include a subpart covering disqualifications, as authorized in 
Sec.  180.45.
    (7) Include any provisions authorized by OMB.


Sec.  180.30  Where does a Federal agency implement these guidelines?

    Each Federal agency that participates in the government-wide 
nonprocurement debarment and suspension system must issue a regulation 
implementing these guidelines within its chapter in subtitle B of this 
title.


Sec.  180.40   How are these guidelines maintained?

    The Interagency Committee on Debarment and Suspension, established 
by section 4 of Executive Order 12549, recommends to the OMB any needed 
revisions to the guidelines in this part. The OMB publishes proposed 
changes to the guidelines in the Federal Register for public comment, 
considers comments with the help of the Interagency Committee on 
Debarment and Suspension, and issues the final guidelines.


Sec.  180.45  Do these guidelines cover persons who are disqualified, 
as well as those who are excluded from nonprocurement transactions?

    A Federal agency may add a subpart covering disqualifications to 
its regulation implementing these guidelines, but the guidelines in 
subparts A through I:
    (a) Address disqualified persons only to:
    (1) Provide for their inclusion in the System for Award Management 
(SAM.gov) Exclusions; and
    (2) State the responsibilities of Federal agencies and participants 
to check for disqualified persons before entering into covered 
transactions.
    (b) Do not specify the:
    (1) Transactions for which a disqualified person is ineligible. 
Those transactions vary on a case-by-case basis because they depend on 
the language of the specific statute, Executive order, or regulation 
that caused the disqualification;
    (2) Entities to which a disqualification applies; or
    (3) Process that a Federal agency uses to disqualify a person. 
Unlike exclusion under subparts A through I of this part, 
disqualification is frequently not a discretionary action that a 
Federal agency takes and may include special procedures.

Subpart A--General


Sec.  180.100   How are subparts A through I organized?

    (a) Each subpart contains information related to a broad topic or 
specific audience with special responsibilities, as shown in table 1:

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
      In subpart . . .         You will find provisions related to . . .
------------------------------------------------------------------------
A...........................  general information about Subparts A
                               through I.
B...........................  the types of transactions that are covered
                               by the government-wide nonprocurement
                               suspension and debarment system.
C...........................  the responsibilities of persons who
                               participate in covered transactions.
D...........................  the responsibilities of Federal agency
                               officials who are authorized to enter
                               into covered transactions.
E...........................  the responsibilities of Federal agencies
                               for entering information into SAM.gov
                               Exclusions.
F...........................  the general principles governing
                               suspension, debarment, voluntary
                               exclusion and settlement.
G...........................  suspension actions.
H...........................  debarment actions.
I...........................  definitions of terms used in this part.
------------------------------------------------------------------------


[[Page 69411]]

    (b) Table 2 shows which subparts may be of special interest to you, 
depending on who you are:

                        Table 2 to Paragraph (b)
------------------------------------------------------------------------
            If you are . . .                   See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a       A, B, C and I.
 nonprocurement transaction.
(2) a respondent in a suspension action.  A, B, F, G and I.
(3) a respondent in a debarment action..  A, B, F, H and I.
(4) a suspending official...............  A, B, E, F, G and I.
(5) a debarring official................  A, B, D, F, H and I.
(6) a Federal agency official authorized  A, B, D, E and I.
 to enter into a covered transaction.
------------------------------------------------------------------------

Sec.  180.105  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier 
for the general public and business community. The section headings and 
text must be read together, as they are often in the form of questions 
and answers.
    (b) Pronouns used within this part, such as ``I'' and ``you,'' 
change from subpart to subpart depending on the audience being 
addressed.
    (c) The ``Covered Transactions'' diagram in the appendix to this 
part shows the levels or ``tiers'' at which a Federal agency may 
enforce an exclusion.


Sec.  180.110  Do terms in this part have special meanings?

    This part uses terms throughout the text that have special 
meanings. Those terms are defined in subpart I. For example, three 
important terms are:
    (a) Exclusion or excluded, which refers only to discretionary 
actions taken by a suspending or debarring official under Executive 
Order 12549 and Executive Order 12689 or under the Federal Acquisition 
Regulations (48 CFR part 9, subpart 9.4);
    (b) Disqualification or disqualified, which refers to prohibitions 
under specific statutes, executive orders (other than Executive Order 
12549 and Executive Order 12689), or other authorities. 
Disqualifications frequently are not subject to the discretion of a 
Federal agency official, may have a different scope than exclusions, or 
have special conditions that apply to the disqualification; and
    (c) Ineligibility or ineligible, which generally refers to a person 
who is either excluded or disqualified.


Sec.  180.115  What do subparts A through I of this part do?

    Subparts A through I provide for the reciprocal exclusion of 
persons who have been excluded under the Federal Acquisition 
Regulations and provide for the consolidated listing of all persons who 
are excluded, or disqualified by statute, executive order or other 
legal authority.


Sec.  180.120  Do subparts A through I of this part apply to me?

    Portions of subparts A through I (see table at Sec.  180.100(b)) 
apply to you if you are a:
    (a) Person who has been, is, or may reasonably be expected to be, a 
participant or principal in a covered transaction;
    (b) Respondent (a person against whom a Federal agency has 
initiated a debarment for suspension action);
    (c) Federal agency debarring or suspending official; or
    (d) Federal agency official who is authorized to enter into covered 
transactions with non-Federal parties.


Sec.  180.125  What is the purpose of the nonprocurement debarment and 
suspension system?

    (a) To protect the public interest, the Federal Government ensures 
the integrity of Federal programs by conducting business only with 
responsible persons.
    (b) A Federal agency uses the nonprocurement debarment and 
suspension system to exclude persons who are not presently responsible 
from Federal programs.
    (c) An exclusion is a serious action that a Federal agency may take 
only to protect the public interest. A Federal agency may not exclude a 
person or commodity for the purposes of punishment.


Sec.  180.130  How does an exclusion restrict a person's involvement in 
covered transactions?

    With the exceptions stated in Sec. Sec.  180.135, 315, and 420, a 
person who is excluded by any Federal agency may not:
    (a) Be a participant in a Federal agency transaction that is a 
covered transaction; or
    (b) Act as a principal of a person participating in one of those 
covered transactions.


Sec.  180.135  May a Federal agency grant an exception to let an 
excluded person participate in a covered transaction?

    (a) A Federal agency head or designee may grant an exception 
permitting an excluded person to participate in a particular covered 
transaction. If the Federal agency head or designee grants an 
exception, the exception must be in writing and state the reason(s) for 
deviating from the government-wide policy in Executive Order 12549.
    (b) An exception granted by one Federal agency for an excluded 
person does not extend to the covered transactions of another Federal 
agency.


Sec.  180.140  Does an exclusion under the nonprocurement system affect 
a person's eligibility for Federal procurement contracts?

    When a Federal agency excludes a person under Executive Order 12549 
or Executive Order 12689 on or after August 25, 1995, the excluded 
person is also ineligible for Federal procurement transactions under 
the Federal Acquisition Regulations. Therefore, an exclusion under this 
part has a reciprocal effect on Federal procurement transactions.


Sec.  180.145   Does an exclusion under the Federal procurement system 
affect a person's eligibility to participate in nonprocurement 
transactions?

    When a Federal agency excludes a person under the Federal 
Acquisition Regulations (FAR) on or after August 25, 1995, the excluded 
person is also ineligible to participate in Federal agencies' 
nonprocurement covered transactions. Therefore, an exclusion under the 
FAR has a reciprocal effect on Federal nonprocurement transactions.


Sec.  180.150  Against whom may a Federal agency take an exclusion 
action?

    Given a cause that justifies an exclusion under this part, a 
Federal agency may exclude any person who has been, is, or may 
reasonably be expected to be a participant or principal in a covered 
transaction.

[[Page 69412]]

Sec.  180.155   How do I know if a person is excluded?

    Check the System for Award Management (SAM.gov) Exclusions to 
determine whether a person is excluded. The General Services 
Administration (GSA) maintains SAM.gov Exclusions and makes it 
available, as detailed in subpart E. When a Federal agency takes action 
to exclude a person under the nonprocurement or procurement debarment 
and suspension system, the agency enters the information about the 
excluded person into SAM.gov Exclusions.

Subpart B--Covered Transactions


Sec.  180.200   What is a covered transaction?

    A covered transaction is a nonprocurement or procurement 
transaction subject to this part's prohibitions. It may be a 
transaction at:
    (a) The primary tier, between a Federal agency and a person (see 
Appendix to this part); or
    (b) A lower tier between a participant in a covered transaction and 
another person.


Sec.  180.205  Why is it important if a particular transaction is a 
covered transaction?

    The importance of whether a transaction is a covered transaction 
depends upon who you are.
    (a) As a participant in the transaction, you have the 
responsibilities laid out in subpart C of this part. Those include 
responsibilities to the person or Federal agency at the next higher 
tier from whom you received the transaction, if any. They also include 
responsibilities if you subsequently enter into other covered 
transactions with persons at the next lower tier.
    (b) As a Federal official who enters into a primary tier 
transaction, you have the responsibilities laid out in subpart D of 
this part.
    (c) As an excluded person, you may not be a participant or 
principal in the transaction unless:
    (1) The person who entered into the transaction with you allows you 
to continue your involvement in a transaction that predates your 
exclusion, as permitted under Sec.  180.310 or Sec.  180.415; or
    (2) A Federal agency official obtains an exception from the agency 
head or designee to allow you to be involved in the transaction, as 
permitted under Sec.  180.135.


Sec.  180.210   Which nonprocurement transactions are covered 
transactions?

    All nonprocurement transactions, as defined in Sec.  180.970, are 
covered transactions unless listed in the exemptions under Sec.  
180.215.


Sec.  180.215  Which nonprocurement transactions are not covered 
transactions?

    The following types of nonprocurement transactions are not covered 
transactions:
    (a) A direct award to:
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization;
    (3) An entity owned (in whole or in part) or controlled by a 
foreign government; or
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) A benefit to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits 
received in an individual's business capacity are not excepted). For 
example, when a person receives social security benefits under the 
Supplemental Security Income provisions of the Social Security Act, 42 
U.S.C. 1301 et seq., those benefits are not covered transactions and, 
therefore, are not affected if the person is excluded.
    (c) Federal employment.
    (d) A transaction that a Federal agency needs to respond to a 
national or agency recognized emergency or disaster.
    (e) A permit, license, certificate, or similar instrument issued as 
a means to regulate public health, safety, or the environment, unless a 
Federal agency specifically designates it to be a covered transaction.
    (f) An incidental benefit that results from ordinary governmental 
operations.
    (g) Any other transaction if:
    (1) The application of an exclusion to the transaction is 
prohibited by law; or
    (2) A Federal agency's regulation exempts it from coverage under 
this part.
    (h) Notwithstanding paragraph (a) of this section, covered 
transactions must include non-procurement and procurement transactions 
involving entities engaged in activity that contributed to or is a 
significant factor in a country's non-compliance with its obligations 
under arms control, nonproliferation or disarmament agreements, or 
commitments with the United States. Federal agencies and primary tier 
non-procurement recipients must not award, renew, or extend a non-
procurement transaction or procurement transaction, regardless of 
amount or tier, with any entity listed in SAM.gov Exclusions on the 
basis of involvement in activities that violate arms control, 
nonproliferation or disarmament agreements, or commitments with the 
United States (see section 1290 of the National Defense Authorization 
Act for Fiscal Year 2017). The head of a Federal agency may grant an 
exception to this requirement under 2 CFR 180.135 and with the 
concurrence of the OMB Director.


Sec.  180.220   Are any procurement contracts included as covered 
transactions?

    (a) Covered transactions under this part:
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded under 
nonprocurement covered transactions.
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction covered under Sec.  180.210, and the contract amount is 
expected to equal or exceed $25,000.
    (2) The contract requires the consent of an official of a Federal 
agency. In that case, the contract is always a covered transaction 
regardless of the amount or who awarded it. For example, it could be a 
subcontract awarded by a contractor at a tier below a nonprocurement 
transaction, as shown in the Appendix to this part.
    (3) The contract is for Federally-required audit services.
    (c) A subcontract also is a covered transaction if:
    (1) It is awarded by a participant in a procurement transaction 
under a nonprocurement transaction of a Federal agency that extends the 
coverage of paragraph (b)(1) of this section to additional tiers of 
contracts (see the diagram in the Appendix to this part showing that 
optional lower tier coverage); and
    (2) The value of the subcontract is expected to equal or exceed 
$25,000.


Sec.  180.225   How do I know if a transaction in which I may 
participate is a covered transaction?

    As a participant in a transaction, you will know that it is a 
covered transaction because of the Federal agency regulations governing 
the transaction. The appropriate Federal agency official or participant 
at the next higher tier who enters into the transaction with you will 
tell you that you must comply with applicable portions of this part.

[[Page 69413]]

Subpart C--Responsibilities of Participants Regarding Transactions 
Doing Business With Other Persons


Sec.  180.300   What must I do before I enter into a covered 
transaction with another person at the next lower tier?

    When you enter into a covered transaction with another person at 
the next lower tier, you must verify that the person with whom you 
intend to do business is not excluded or disqualified. You do this by:
    (a) Checking SAM.gov Exclusions; or
    (b) Collecting a certification from that person; or
    (c) Adding a clause or condition to the covered transaction with 
that person.


Sec.  180.305   May I enter into a covered transaction with an excluded 
or disqualified person?

    (a) As a participant, you may not enter into a covered transaction 
with an excluded person unless the Federal agency responsible for the 
transaction grants an exception under Sec.  180.135.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction unless you have obtained an 
exception under the disqualifying statute, Executive Order, or 
regulation.


Sec.  180.310   What must I do if a Federal agency excludes a person 
with whom I am already doing business in a covered transaction?

    (a) As a participant, you may continue covered transactions with an 
excluded person if the transactions were in existence when the Federal 
agency excluded the person. However, you are not required to continue 
the transactions, and you may consider termination. You should decide 
whether to terminate and the type of termination action, if any, only 
after a thorough review to ensure that the action is proper and 
appropriate.
    (b) You may not renew or extend covered transactions (other than 
no-cost time extensions) with any excluded person unless the Federal 
agency responsible for the transaction grants an exception under Sec.  
180.135.


Sec.  180.315  May I use the services of an excluded person as a 
principal under a covered transaction?

    (a) As a participant, you may continue to use the services of an 
excluded person as a principal under a covered transaction if you were 
using that person's services in the transaction before the person was 
excluded. However, you are not required to continue using that person's 
services as a principal. You should decide whether to discontinue that 
person's services only after a thorough review to ensure that the 
action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as 
a principal under a covered transaction unless the Federal agency 
responsible for the transaction grants an exception under Sec.  
180.135.


Sec.  180.320  Must I verify that principals of my covered transactions 
are eligible to participate?

    (a) Yes. As a participant, you are responsible for determining 
whether your principals of your covered transactions are excluded or 
disqualified from participating in the transaction.
    (b) You may decide the method and frequency by which you do so. You 
may, but are not required to check SAM.gov Exclusions.


Sec.  180.325   What happens if I do business with an excluded person 
in a covered transaction?

    As a participant, if you knowingly do business with an excluded 
person, the Federal agency responsible for your transaction may 
disallow costs, annul or terminate the transaction, issue a stop work 
order, debar or suspend you, or take other remedies as appropriate.


Sec.  180.330  What requirements must I pass down to persons at lower 
tiers with whom I intend to do business?

    Before entering into a covered transaction with a participant at 
the next lower tier, you must require that participant to:
    (a) Comply with this subpart as a condition of participating in the 
transaction. You may do so using any method(s) unless the regulation of 
the Federal agency responsible for the transaction requires you to use 
specific methods.
    (b) Pass the requirement to comply with this subpart to each person 
the participant enters into a covered transaction at the next lower 
tier.

Disclosing Information--Primary Tier Participants


Sec.  180.335   What information must I provide before entering into a 
covered transaction with a Federal agency?

    Before you enter into a covered transaction at the primary tier, 
you, as the participant, must notify the Federal agency office that is 
entering into the transaction with you if you know that you or any of 
the principals for that covered transaction:
    (a) Are presently excluded or disqualified;
    (b) Have been convicted within the preceding three years of any of 
the offenses listed in Sec.  180.800(a) or had a civil judgment 
rendered against you for one of those offenses within that time period;
    (c) Are presently indicted for or otherwise criminally or civilly 
charged by a governmental entity (Federal, State, or local) with the 
commission of any of the offenses listed in Sec.  180.800(a); or
    (d) Have had one or more public transactions (Federal, State, or 
local) terminated within the preceding three years for cause or 
default.


Sec.  180.340   If I disclose unfavorable information required under 
Sec.  180.335, will I be prevented from participating in the 
transaction?

    As a primary tier participant, disclosing unfavorable information 
about yourself or a principal under Sec.  180.335 will not necessarily 
cause a Federal agency to deny your participation in the covered 
transaction. The Federal agency will consider the information when 
determining whether to enter into the covered transaction. The Federal 
agency will also consider any additional information or explanation you 
elect to submit with the disclosed information.


Sec.  180.345   What happens if I fail to disclose information required 
under Sec.  180.335?

    If a Federal agency later determines that you failed to disclose 
information under Sec.  180.335 that you knew at the time you entered 
into the covered transaction, the Federal agency may:
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.


Sec.  180.350  What must I do if I learn of information required under 
Sec.  180.335 after entering into a covered transaction with a Federal 
agency?

    At any time after you enter into a covered transaction, you must 
give immediate written notice to the Federal agency office with which 
you entered into the transaction if you learn either that:
    (a) You failed to disclose information earlier, as required by 
Sec.  180.335; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec.  180.335.

[[Page 69414]]

Disclosing Information--Lower Tier Participants


Sec.  180.355  What information must I provide to a higher tier 
participant before entering into a covered transaction with that 
participant?

    Before you enter into a covered transaction with a person at the 
next higher tier, you, as a lower tier participant, must notify that 
person if you know that you or any of the principals are presently 
excluded or disqualified.


Sec.  180.360  What happens if I fail to disclose information required 
under Sec.  180.355?

    When a Federal agency later determines that you failed to tell the 
person at the higher tier that you were excluded or disqualified at the 
time you entered into the covered transaction with that person, the 
agency may pursue any available remedies, including suspension and 
debarment.


Sec.  180.365  What must I do if I learn of information required under 
Sec.  180.355 after entering into a covered transaction with a higher 
tier participant?

    At any time after you enter into a lower tier covered transaction 
with a person at a higher tier, you must provide immediate written 
notice to that person if you learn either that:
    (a) You failed to disclose information earlier, as required by 
Sec.  180.355; or
    (b) Due to changed circumstances, you or any of the principals for 
the transaction now meet any of the criteria in Sec.  180.355.

Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions


Sec.  180.400  May I enter into a transaction with an excluded or 
disqualified person?

    (a) As a Federal agency official, you may not enter into a covered 
transaction with an excluded person unless you obtain an exception 
under Sec.  180.135.
    (b) You may not enter into any transaction with a person 
disqualified from that transaction unless you obtain a waiver or 
exception under the statute, Executive Order, or regulation that is the 
basis for the person's disqualification.


Sec.  180.405  May I enter into a covered transaction with a 
participant if a principal of the transaction is excluded?

    As a Federal agency official, you may not enter into a covered 
transaction with a participant if you know that a principal of the 
transaction is excluded unless you obtain an exception under Sec.  
180.135.


Sec.  180.410  May I approve a participant's use of the services of an 
excluded person?

    After entering into a covered transaction with a participant, you, 
as a Federal agency official, may not approve a participant's use of an 
excluded person as a principal under that transaction unless you obtain 
an exception under Sec.  180.135.


Sec.  180.415  What must I do if a Federal agency excludes the 
participant or a principal after I enter into a covered transaction?

    (a) As a Federal agency official, you may continue covered 
transactions with an excluded person or under which an excluded person 
is a principal if the transactions were in existence when the person 
was excluded. However, you are not required to continue the 
transactions, and you may consider termination. You should decide 
whether to terminate and the type of termination action, if any, only 
after a thorough review to ensure that the action is proper and 
appropriate.
    (b) You may not renew or extend covered transactions (other than 
no-cost time extensions) with any excluded person or under which an 
excluded person is a principal unless you obtain an exception under 
Sec.  180.135.


Sec.  180.420  May I approve a transaction with an excluded or 
disqualified person at a lower tier?

    If a transaction at a lower tier is subject to your approval, you, 
as a Federal agency official, may not approve:
    (a) A covered transaction with a person who is currently excluded 
unless you obtain an exception under Sec.  180.135; or
    (b) A transaction with a person who is disqualified from that 
transaction unless you obtain a waiver or exception under the statute, 
Executive Order, or regulation that is the basis for the person's 
disqualification.


Sec.  180.425  When do I check to see if a person is excluded or 
disqualified?

    As a Federal agency official, you must check to see if a person is 
excluded or disqualified before you:
    (a) Enter into a primary tier covered transaction;
    (b) Approve a principal in a primary tier covered transaction;
    (c) Approve a lower tier participant if your Federal agency's 
approval of the lower tier participant is required; or
    (d) Approve a principal in connection with a lower tier transaction 
if your Federal agency's approval of the principal is required.


Sec.  180.430  How do I check to see if a person is excluded or 
disqualified?

    You check to see if a person is excluded or disqualified in two 
ways:
    (a) As a Federal agency official, you must check SAM.gov Exclusions 
when you take any action listed in Sec.  180.425.
    (b) You must review the information that a participant gives you, 
as required by Sec.  180.335, about its status or the status of the 
principals of a transaction.


Sec.  180.435  What must I require of a primary tier participant?

    As a Federal agency official, you must require each participant in 
a primary tier covered transaction to:
    (a) Comply with subpart C as a condition of participation in the 
transaction; and
    (b) Communicate the requirement to comply with subpart C to persons 
at the next lower tier with whom the primary tier participant enters 
into covered transactions.


Sec.  180.440  What action may I take if a primary tier participant 
knowingly does business with an excluded or disqualified person?

    If a participant knowingly does business with an excluded or 
disqualified person, you, as a Federal agency official, may refer the 
matter for suspension and debarment consideration. You may also 
disallow costs, annul or terminate the transaction, issue a stop work 
order, or take any other appropriate remedy.


Sec.  180.445  What action may I take if a primary tier participant 
fails to disclose the information required under Sec.  180.335?

    As a Federal agency official, if you determine that a participant 
failed to disclose information, as required by Sec.  180.335, at the 
time it entered into a covered transaction with you, you may:
    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.


Sec.  180.450  What action may I take if a lower tier participant fails 
to disclose the information required under Sec.  180.355 to the next 
higher tier?

    As a Federal agency official, if you determine that a lower tier 
participant failed to disclose information, as required by Sec.  
180.355, at the time it entered into a covered transaction with a 
participant at the next higher tier, you may pursue any remedies 
available to you, including the initiation of a suspension or debarment 
action.

[[Page 69415]]

Subpart E--System for Award Management (SAM.gov) Exclusions


Sec.  180.500  What is the purpose of the System for Award Management 
(SAM.gov) Exclusions?

    The SAM.gov Exclusions is a widely available source of the most 
current information about persons who are excluded or disqualified from 
covered transactions.


Sec.  180.505  Who uses SAM.gov Exclusions?

    (a) Federal agency officials use SAM.gov Exclusions to determine 
whether to enter into a transaction with a person, as required under 
Sec.  180.430.
    (b) Participants also may, but are not required to, use SAM.gov 
Exclusions to determine if:
    (1) Principals of their transactions are excluded or disqualified, 
as required under Sec.  180.320; or
    (2) Persons with whom they are entering into covered transactions 
at the next lower tier are excluded or disqualified.
    (c) The SAM.gov Exclusions are available to the general public.


Sec.  180.510  Who maintains SAM.gov Exclusions?

    GSA maintains SAM.gov Exclusions. When a Federal agency takes an 
action to exclude a person under the nonprocurement or procurement 
debarment and suspension system, the agency enters the information 
about the excluded person into SAM.gov Exclusions.


Sec.  180.515  What specific information is in SAM.gov Exclusions?

    (a) At a minimum, SAM.gov Exclusions indicate:
    (1) The full name (where available) and address of each excluded 
and disqualified person, in alphabetical order, with cross-references 
if more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for the action;
    (6) The Federal agency and name and telephone number of the agency 
point of contact for the action; and
    (7) The unique entity identifier approved by the GSA of the 
excluded or disqualified person, if available.
    (b)(1) The SAM.gov Exclusions includes a field for the Taxpayer 
Identification Number (TIN), or the Social Security Number (SSN) for an 
individual, of an excluded or disqualified person.
    (2) Agencies disclose an individual's SSN to verify an individual's 
identity only if permitted under the Privacy Act of 1974 and, if 
appropriate, the Computer Matching and Privacy Protection Act of 1988, 
as codified in 5 U.S.C. 552(a).


Sec.  180.520  Who places the information into SAM.gov Exclusions?

    Federal agency officials who take actions to exclude persons under 
this part or officials who are responsible for identifying disqualified 
persons must enter the following information about those persons into 
SAM.gov Exclusions:
    (a) Information required by Sec.  180.515(a);
    (b) The Taxpayer Identification Number (TIN) of the excluded or 
disqualified person, including the Social Security Number (SSN) for an 
individual, if the number is available and may be disclosed under the 
law;
    (c) Information about an excluded or disqualified person, within 
three business days, after:
    (1) Taking an exclusion action;
    (2) Modifying or rescinding an exclusion action;
    (3) Finding that a person is disqualified; or
    (4) Finding that there has been a change in the status of a person 
who is listed as disqualified.


Sec.  180.525  Whom do I ask if I have questions about a person in 
SAM.gov Exclusions?

    If you have questions about a listed person in SAM.gov Exclusions, 
ask the point of contact for the Federal agency that placed the 
person's name into SAM.gov Exclusions. You may find the Federal agency 
point of contact from SAM.gov Exclusions.


Sec.  180.530  Where can I find SAM.gov Exclusions?

    You may access SAM.gov Exclusions through the internet, currently 
at https://www.sam.gov.

Subpart F--General Principles Relating to Suspension and Debarment 
Actions


Sec.  180.600  How do suspension and debarment actions start?

    When Federal agency officials receive information from any source 
concerning a cause for suspension or debarment, they will promptly 
report it, and the agency will investigate. The officials refer the 
question of whether to suspend or debar you to their suspending or 
debarring official for consideration, if appropriate.


Sec.  180.605  How does suspension differ from debarment?

    Suspension differs from debarment in that:

------------------------------------------------------------------------
        A suspending official . . .          A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary       Imposes debarment for a
 status of ineligibility for procurement     specified period as a final
 and nonprocurement transactions, pending    determination that a person
 completion of an investigation or legal     is not presently
 or debarment proceeding.                    responsible.
(b) Must:
(1) Have adequate evidence that there may   ............................
 be a cause for debarment of a person; and
(2) Conclude that immediate action is       Must conclude, based on a
 necessary to protect the Federal interest.  preponderance of the
                                             evidence, that the person
                                             has engaged in conduct that
                                             warrants debarment.
(c) Usually imposes the suspension first,   Imposes debarment after
 and then promptly notifies the suspended    giving the respondent
 person, giving the person an opportunity    notice of the action and an
 to contest the suspension and have it       opportunity to contest the
 lifted.                                     proposed debarment.
------------------------------------------------------------------------

Sec.  180.610  What procedures does a Federal agency use in suspension 
and debarment actions?

    In deciding whether to suspend or debar you, a Federal agency 
handles the actions as informally as practicable, consistent with 
principles of fundamental fairness.
    (a) For suspension actions, a Federal agency uses the procedures in 
this subpart and subpart G.
    (b) For debarment actions, a Federal agency uses the procedures in 
this subpart and subpart H.

[[Page 69416]]

Sec.  180.615  How does a Federal agency notify a person of a 
suspension or debarment action?

    (a) The suspending or debarring official sends a written notice to 
the last known street address, facsimile number, or email address of:
    (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners, 
officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons.


Sec.  180.620  Do Federal agencies coordinate suspension and debarment 
actions?

    Yes, when more than one Federal agency has an interest in a 
suspension or debarment, the agencies may consider designating one 
Federal agency as the lead agency for making the decision. Agencies are 
encouraged to establish methods and procedures for coordinating their 
suspension and debarment actions.


Sec.  180.625  What is the scope of a suspension or debarment?

    If you are suspended or debarred, the suspension or debarment is 
effective as follows:
    (a) Your suspension or debarment constitutes suspension or 
debarment of all of your divisions and other organizational elements 
from all covered transactions unless the suspension or debarment 
decision is limited:
    (1) By its terms to one or more specifically identified 
individuals, divisions, or other organizational elements; or
    (2) To specific types of transactions.
    (b) Any affiliate of a participant may be included in a suspension 
or debarment action if the suspending or debarring official:
    (1) Officially names the affiliate in the notice; and
    (2) Gives the affiliate an opportunity to contest the action.


Sec.  180.630  May a Federal agency impute the conduct of one person to 
another?

    For purposes of actions taken under this part, a Federal agency may 
impute conduct as follows:
    (a) Conduct imputed from an individual to an organization. A 
Federal agency may impute the fraudulent, criminal, or other improper 
conduct of any officer, director, shareholder, partner, employee, or 
other individual associated with an organization to that organization 
when the improper conduct occurred in connection with the individual's 
performance of duties for or on behalf of that organization, or with 
the organization's knowledge, approval or acquiescence. The 
organization's acceptance of the benefits derived from the conduct is 
evidence of knowledge, approval, or acquiescence.
    (b) Conduct imputed from an organization to an individual or 
between individuals. A Federal agency may impute the fraudulent, 
criminal, or other improper conduct of any organization to an 
individual, or from one individual to another individual, if the 
individual to whom the improper conduct is imputed either participated 
in, had knowledge of, or reason to know of the improper conduct.
    (c) Conduct imputed from one organization to another organization. 
A Federal agency may impute the fraudulent, criminal, or other improper 
conduct of one organization to another organization when the improper 
conduct occurred in connection with a partnership, joint venture, joint 
application, association, corporation, company, or similar arrangement 
or with the organization's knowledge, approval, or acquiescence, or 
when the organization to whom the improper conduct is imputed has the 
power to direct, manage, control or influence the activities of the 
organization responsible for the improper conduct. Acceptance of the 
benefits derived from the conduct is evidence of knowledge, approval, 
or acquiescence.


Sec.  180.635  May a Federal agency resolve an administrative action in 
lieu of debarment or suspension?

    Yes. A Federal agency may resolve an administrative action in lieu 
of debarment or suspension by entering into an agreement at any time if 
it is in the Federal Government's best interest.


Sec.  180.640  May an agreement to resolve an administrative action 
include a voluntary exclusion?

    Yes. If a Federal agency enters into an agreement to resolve an 
administrative action with you in which you agree to be excluded, it is 
called a voluntary exclusion and has a government-wide effect.


Sec.  180.645  Do other Federal agencies know if an agency agrees to a 
voluntary exclusion?

    (a) Yes. The Federal agency agreeing to the voluntary exclusion 
enters information about it into SAM.gov Exclusions.
    (b) Also, any agency or person may contact the Federal agency that 
agreed to the voluntary exclusion to find out the details of the 
voluntary exclusion.


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

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


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

    The suspending or debarring official who enters into an 
administrative agreement with you must report information about the 
agreement in SAM.gov within three business days after entering into the 
agreement. The suspending and debarring official must use the 
Contractor Performance Assessment Reporting System (CPARS) to enter or 
amend information in SAM.gov. This information is required by section 
872 of the Duncan Hunter National Defense Authorization Act for Fiscal 
Year 2009 (41 U.S.C. 2313).


Sec.  180.660  Will administrative agreement information about me in 
SAM.gov be corrected or updated?

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

Subpart G--Suspension


Sec.  180.700  When may the suspending official issue a suspension?

    Suspension is a serious action. Using the procedures of this 
subpart and subpart F of this part, the suspending official may impose 
suspension only when that official determines that:
    (a) There exists an indictment for, or other adequate evidence to 
suspect, an offense listed under Sec.  180.800(a), or
    (b) There exists adequate evidence to suspect any other cause for 
debarment listed under Sec.  180.800(b) through (d); and
    (c) Immediate action is necessary to protect the public interest.


Sec.  180.705  What does the suspending official consider in issuing a 
suspension?

    (a) In determining the adequacy of the evidence to support the 
suspension, the

[[Page 69417]]

suspending official considers how much information is available, how 
credible it is given the circumstances, whether or not important 
allegations are corroborated, and what inferences can reasonably be 
drawn as a result.
    (b) In making this determination, the suspending official may 
examine:
    (1) The basic documents, including grants, cooperative agreements, 
loan authorizations, contracts, and other relevant documents;
    (2) An indictment, criminal information, conviction, civil 
judgment, or other official findings by Federal, State, or local bodies 
that determine factual or legal matters constitutes adequate evidence 
for purposes of suspension actions; and
    (3) Other indicators of adequate evidence that may include, but are 
not limited to, warrants and their accompanying affidavits.
    (c) In deciding whether immediate action is needed to protect the 
public interest, the suspending official has wide discretion. For 
example, the suspending official may infer the necessity for immediate 
action to protect the public interest either from the nature of the 
circumstances giving rise to a cause for suspension or from potential 
business relationships or involvement with a program of the Federal 
Government.


Sec.  180.710  When does a suspension take effect?

    A suspension is effective when the suspending official signs the 
decision to suspend.


Sec.  180.715  What notice does the suspending official give me if I am 
suspended?

    After deciding to suspend you, the suspending official promptly 
sends you a Notice of Suspension advising you:
    (a) That you have been suspended;
    (b) That your suspension is based on:
    (1) An indictment;
    (2) A criminal information;
    (3) A conviction;
    (4) A civil judgment;
    (5) Other adequate evidence that you have committed irregularities 
that seriously reflect on the propriety of further Federal Government 
dealings with you; or
    (6) Conduct of another person that has been imputed to you or your 
affiliation with a suspended or debarred person;
    (c) Of any other irregularities supporting your suspension in terms 
sufficient to put you on notice without disclosing certain evidence in 
the Federal Government's pending or contemplated legal proceedings;
    (d) Of the cause(s) upon which the suspending official relied under 
Sec.  180.700 for imposing suspension;
    (e) That your suspension is for a temporary period pending the 
completion of an investigation or resulting legal or debarment 
proceedings;
    (f) Of the applicable provisions of this subpart, subpart F, and 
any other Federal agency procedures governing suspension decision-
making; and
    (g) Of the government-wide effect of your suspension from 
procurement and nonprocurement programs and activities.


Sec.  180.720  How may I contest a suspension?

    As a respondent, if you wish to contest a suspension, you or your 
representative must provide the suspending official with information in 
opposition to the suspension. You may do this orally or in writing. 
While oral statements may be a part of the official record, any 
information provided orally that you consider important must also be 
submitted in writing for the official record.


Sec.  180.725  How much time do I have to contest a suspension?

    (a) As a respondent, you or your representative must either send or 
make arrangements to appear and present the information and argument to 
the suspending official within 30 days after you receive the Notice of 
Suspension.
    (b) The Federal agency taking the action considers the notice to be 
received by you:
    (1) When delivered, if the Federal agency mails the notice to the 
last known street address, or five days after the agency sends it if 
the letter is undeliverable;
    (2) When sent, if the Federal agency sends the notice by facsimile 
or five days after the agency sends it if the facsimile is 
undeliverable; or
    (3) When delivered, if the Federal agency sends the notice by email 
or five days after the agency sends it if the email is undeliverable.


Sec.  180.730  What information must I provide to the suspending 
official if I contest the suspension?

    (a) In addition to any information and argument in opposition, as a 
respondent, your submission to the suspending official must identify:
    (1) Specific facts that contradict the statements contained in the 
Notice of Suspension. A general denial is insufficient to raise a 
genuine dispute over facts material to the suspension;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing Executive Order 12549 and all similar actions taken by 
Federal, State, or local agencies, including administrative agreements 
that affect only those agencies;
    (3) All criminal and civil proceedings not included in the Notice 
of Suspension that grew out of facts relevant to the cause(s) stated in 
the notice; and
    (4) All of your affiliates.
    (b) Your submission must also identify any of the paragraphs in 
Sec.  180.730(a) that do not apply to you.
    (c) If you fail to disclose this information or provide false 
information, the Federal agency taking the action may seek further 
criminal, civil, or administrative action against you, as appropriate.


Sec.  180.735  Under what conditions do I get an additional opportunity 
to challenge the facts on which the suspension is based?

    (a) As a respondent, you will not have an additional opportunity to 
challenge the facts if the suspending official determines that:
    (1) Your suspension is based upon an indictment, conviction, civil 
judgment, or other findings by a Federal, State, or local body for 
which an opportunity to contest the facts was provided;
    (2) Your presentation in opposition contains only general denials 
to the information contained in the Notice of Suspension;
    (3) The issues raised in your presentation in opposition to the 
suspension are not factual in nature, or are no material to the 
suspending official's initial decision to suspend, or the official's 
decision whether to continue the suspension; or
    (4) On the basis of advice from the Department of Justice, an 
office of the United States Attorney, a State attorney general's 
office, or a State or local prosecutor's office, that substantial 
interests of the government in pending or contemplated legal 
proceedings based on the same facts as the suspension would be 
prejudiced by conducting fact-finding.
    (b) You will have an opportunity to challenge the facts if the 
suspending official determines that:
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the suspension.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the suspending official or designee must conduct 
additional proceedings to resolve those facts.

[[Page 69418]]

Sec.  180.740  Are suspension proceedings formal?

    (a) Suspension proceedings are conducted in a fair and informal 
manner. The suspending official may use flexible procedures to allow 
you to present matters in opposition. In so doing, the suspending 
official is not required to follow formal rules of evidence or 
procedure in creating an official record upon which the official will 
base a final suspension decision.
    (b) As a respondent, you or your representative must submit any 
documentary evidence you want the suspending official to consider.


Sec.  180.745  How is fact-finding conducted?

    (a) If fact-finding is conducted:
    (1) You may present witnesses and other evidence and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made, 
unless you, as a respondent, and the Federal agency agree to waive it 
in advance. If you want a copy of the transcribed record, you may 
purchase it.


Sec.  180.750  What does the suspending official consider in deciding 
whether to continue or terminate my suspension?

    (a) The suspending official bases the decision on all information 
contained in the official record. The record includes:
    (1) All information in support of the suspending official's initial 
decision to suspend you;
    (2) Any further information and argument presented in support of, 
or opposition to, the suspension; and
    (3) Any transcribed record of fact-finding proceedings.
    (b) The suspending official may refer disputed material facts to 
another official for findings of fact. The suspending official may 
reject any resulting findings, in whole or in part, only after 
specifically determining them to be arbitrary, capricious, or clearly 
erroneous.


Sec.  180.755  When will I know whether the suspension is continued or 
terminated?

    The suspending official must make a written decision whether to 
continue, modify, or terminate your suspension within 45 days of 
closing the official record. The official record closes upon the 
suspending official's receipt of final submissions, information, and 
findings of fact, if any. The suspending official may extend that 
period for good cause.


Sec.  180.760  How long may my suspension last?

    (a) If legal or debarment proceedings are initiated at the time of 
or during your suspension, the suspension may continue until the 
conclusion of those proceedings. However, a suspension may not exceed 
12 months if proceedings are not initiated.
    (b) The suspending official may extend the 12-month limit under 
paragraph (a) of this section for an additional 6 months if an office 
of a U.S. Assistant Attorney General, U.S. Attorney, or other Federal, 
State, or local responsible prosecuting official requests an extension 
in writing. In no event may a suspension exceed 18 months without 
initiating proceedings under paragraph (a) of this section.
    (c) The suspending official must notify the appropriate officials 
under paragraph (b) of this section of an impending termination of a 
suspension at least 30 days before the 12-month period expires to allow 
the officials an opportunity to request an extension.

Subpart H--Debarment


Sec.  180.800  What are the causes for debarment?

    A Federal agency may debar a person for:
    (a) Conviction of or civil judgment for:
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public or private 
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including 
those proscribing price fixing between competitors, allocation of 
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery, 
falsification, or destruction of records, making false statements, 
violating Federal criminal tax laws, receiving stolen property, making 
false claims, or obstruction of justice; or
    (4) Commission of any other offense indicating a lack of business 
integrity or business honesty that seriously and directly affects your 
present responsibility;
    (b) Violation of the terms of a public agreement or transaction so 
serious as to affect the integrity of a Federal agency program, such 
as:
    (1) A willful failure to perform in accordance with the terms of 
one or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory 
performance of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or 
requirement applicable to a public agreement or transaction;
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before 
October 1, 1988, or a procurement debarment by any Federal agency taken 
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
    (2) Knowingly doing business with an ineligible person, except as 
permitted under Sec.  180.135;
    (3) Failure to pay a single substantial debt, or a number of 
outstanding debts (including disallowed costs and overpayments, but not 
including sums owed the Federal Government under the Internal Revenue 
Code) owed to any Federal agency or instrumentality, provided the debt 
is uncontested by the debtor or, if contested, provided that the 
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion 
agreement entered into under Sec.  180.640 or of any other agreement 
that resolves a debarment or suspension action; or
    (5) Violation of the provisions of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701); or
    (d) Any other cause that is so serious or compelling in nature that 
it affects your present responsibility.


Sec.  180.805  What notice does the debarring official give me if I am 
proposed for debarment?

    After consideration of the causes in Sec.  180.800, if the 
debarring official proposes to debar you, the official sends you a 
Notice of Proposed Debarment, pursuant to Sec.  180.615, advising you:
    (a) That the debarring official is considering debarring you;
    (b) The reasons for proposing to debar you in terms sufficient to 
put you on notice of the conduct or transactions upon which the 
proposed debarment is based;
    (c) The cause(s) under Sec.  180.800 upon which the debarring 
official relied for proposing your debarment;
    (d) The applicable provisions of this subpart, subpart F of this 
part, and any other Federal agency procedures governing debarment; and
    (e) The government-wide effect of a debarment from procurement and 
nonprocurement programs and activities.


Sec.  180.810   When does a debarment take effect?

    Unlike a suspension, a debarment is not effective until the 
debarring official issues a decision. The debarring official does not 
issue a decision until the respondent has had an opportunity to contest 
the proposed debarment.

[[Page 69419]]

Sec.  180.815  How may I contest a proposed debarment?

    As a respondent, if you wish to contest a proposed debarment, you 
or your representative must provide the debarring official with 
information in opposition to the proposed debarment. You may do this 
orally or in writing. While oral statements may be a part of the 
official record, any information provided orally that you consider 
important must also be submitted in writing for the official record.


Sec.  180.820   How much time do I have to contest a proposed 
debarment?

    (a) As a respondent, you or your representative must either send or 
make arrangements to appear and present the information and argument to 
the debarring official within 30 days after you receive the Notice of 
Proposed Debarment.
    (b) The Federal agency taking the action considers the Notice of 
Proposed Debarment to be received by you:
    (1) When delivered, if the Federal agency mails the notice to the 
last known street address, or five days after the agency sends it if 
the letter is undeliverable;
    (2) When sent, if the Federal agency sends the notice by facsimile 
or five days after the agency sends it if the facsimile is 
undeliverable; or
    (3) When delivered, if the Federal agency sends the notice by email 
or five days after the agency sends it if the email is undeliverable.


Sec.  180.825  What information must I provide to the debarring 
official if I contest the proposed debarment?

    (a) In addition to any information and argument in opposition, as a 
respondent, your submission to the debarring official must identify:
    (1) Specific facts that contradict the statements contained in the 
Notice of Proposed Debarment. Include any information about any of the 
factors listed in Sec.  180.860. A general denial is insufficient to 
raise a genuine dispute over facts material to the debarment;
    (2) All existing, proposed, or prior exclusions under regulations 
implementing Executive Order 12549 and all similar actions taken by 
Federal, State, or local agencies, including administrative agreements 
that affect only those agencies;
    (3) All criminal and civil proceedings not included in the Notice 
of Proposed Debarment that grew out of facts relevant to the cause(s) 
stated in the notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information or provide false 
information, the Federal agency taking the action may seek further 
criminal, civil, or administrative action against you, as appropriate.


Sec.  180.830  Under what conditions do I get an additional opportunity 
to challenge the facts on which the proposed debarment is based?

    (a) As a respondent, you will not have an additional opportunity to 
challenge the facts if the debarring official determines that:
    (1) Your debarment is based upon a conviction or civil judgment;
    (2) Your presentation in opposition contains only general denials 
to the information contained in the Notice of Proposed Debarment; or
    (3) The issues raised in your presentation in opposition to the 
proposed debarment are not factual in nature, or are not material to 
the debarring official's decision whether to debar.
    (b) You will have an additional opportunity to challenge the facts 
if the debarring official determines that:
    (1) The conditions in paragraph (a) of this section do not exist; 
and
    (2) Your presentation in opposition raises a genuine dispute over 
facts material to the proposed debarment.
    (c) If you have an opportunity to challenge disputed material facts 
under this section, the debarring official or designee must conduct 
additional proceedings to resolve those facts.


Sec.  180.835  Are debarment proceedings formal?

    (a) Debarment proceedings are conducted in a fair and informal 
manner. The debarring official may use flexible procedures to allow 
you, as a respondent, to present matters in opposition. In so doing, 
the debarring official is not required to follow formal rules of 
evidence or procedure in creating an official record upon which the 
official will base the decision on whether to debar.
    (b) You or your representative must submit any documentary evidence 
you want the debarring official to consider.


Sec.  180.840  How is fact-finding conducted?

    (a) If fact-finding is conducted:
    (1) You may present witnesses and other evidence and confront any 
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the 
record.
    (b) A transcribed record of fact-finding proceedings must be made 
unless you, as a respondent, and the Federal agency agree to waive it 
in advance. If you want a copy of the transcribed record, you may 
purchase it.


Sec.  180.845   What does the debarring official consider in deciding 
whether to debar me?

    (a) The debarring official may debar you for any of the causes in 
Sec.  180.800. However, the official need not debar you even if a cause 
for debarment exists. The official may consider the seriousness of your 
acts or omissions and the mitigating or aggravating factors set forth 
at Sec.  180.860.
    (b) The debarring official bases the decision on all information 
contained in the official record. The record includes:
    (1) All information in support of the debarring official's proposed 
debarment;
    (2) Any further information and argument presented in support of, 
or in opposition to, the proposed debarment; and
    (3) Any transcribed record of fact-finding proceedings.
    (c) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring official may 
reject any resultant findings, in whole or in part, only after 
specifically determining them to be arbitrary, capricious, or clearly 
erroneous.


Sec.  180.850   What is the standard of proof in a debarment action?

    (a) In any debarment action, the Federal agency must establish the 
cause for debarment by a preponderance of the evidence.
    (b) If the proposed debarment is based upon a conviction or civil 
judgment, the standard of proof is met.


Sec.  180.855  Who has the burden of proof in a debarment action?

    (a) The Federal agency has the burden to prove that a cause for 
debarment exists.
    (b) Once a cause for debarment is established, you as a respondent 
have the burden of demonstrating to the satisfaction of the debarring 
official that you are presently responsible and that debarment is not 
necessary.


Sec.  180.860  What factors may influence the debarring official's 
decision?

    This section lists the mitigating and aggravating factors that the 
debarring official may consider in determining whether to debar you and 
the length of your debarment period. The debarring official may 
consider other factors if appropriate in light of the circumstances of 
a particular case. The existence or nonexistence of any factor, such as 
one of those set forth in this section, is not necessarily 
determinative of your present responsibility. In making a debarment 
decision, the debarring official may consider the following factors:

[[Page 69420]]

    (a) The actual or potential harm or impact that results or may 
result from the wrongdoing.
    (b) The frequency of incidents or duration of the wrongdoing.
    (c) Whether there is a pattern or prior history of wrongdoing. For 
example, if you have been found by another Federal agency or a State 
agency to have engaged in wrongdoing similar to that found in the 
debarment action, the existence of this fact may be used by the 
debarring official in determining that you have a pattern or prior 
history of wrongdoing.
    (d) Whether you are or have been excluded or disqualified by an 
agency of the Federal Government or have not been allowed to 
participate in State or local contracts or assistance agreements on a 
basis of conduct similar to one or more of the causes for debarment 
specified in this part.
    (e) Whether you have entered into an administrative agreement with 
a Federal agency or a State or local government that is not government-
wide but is based on conduct similar to one or more of the causes for 
debarment specified in this part.
    (f) Whether and to what extent you planned, initiated, or carried 
out the wrongdoing.
    (g) Whether you have accepted responsibility for the wrongdoing and 
recognize the seriousness of the misconduct that led to the cause for 
debarment.
    (h) Whether you have paid or agreed to pay all criminal, civil, and 
administrative liabilities for the improper activity, including any 
investigative or administrative costs incurred by the government, and 
have made or agreed to make full restitution.
    (i) Whether you have cooperated fully with the government agencies 
during the investigation and any court or administrative action. In 
determining the extent of cooperation, the debarring official may 
consider when the cooperation began and whether you disclosed all 
pertinent information known to you.
    (j) Whether the wrongdoing was pervasive within your organization.
    (k) The kind of positions held by the individuals involved in the 
wrongdoing.
    (l) Whether your organization took appropriate corrective action or 
implemented remedial or protective measures in the form of procedures, 
policies, and programs to effectively address the activity cited as a 
basis for the debarment.
    (m) Whether your principals tolerated the offense.
    (n) Whether you brought the activity cited as a basis for the 
debarment to the attention of the appropriate government agency in a 
timely manner.
    (o) Whether you have fully investigated the circumstances 
surrounding the cause for debarment and, if so, made the result of the 
investigation available to the debarring official.
    (p) Whether you had effective standards of conduct and internal 
control systems in place at the time the questioned conduct occurred.
    (q) Whether you have taken appropriate disciplinary action against 
the individuals responsible for the activity which constitutes the 
cause for debarment.
    (r) Whether you have had adequate time to eliminate the 
circumstances within your organization that led to the cause for the 
debarment.
    (s) Whether your business, technical, or professional license(s) 
has been suspended, terminated, or revoked.
    (t) Other factors that are appropriate to the circumstances of a 
particular case.


Sec.  180.865   How long may my debarment last?

    (a) If the debarring official decides to debar you, your period of 
debarment will be based on the seriousness of the cause(s) upon which 
your debarment is based. Generally, debarment should not exceed three 
years. However, if circumstances warrant, the debarring official may 
impose a longer period of debarment.
    (b) In determining the period of debarment, the debarring official 
may consider the factors in Sec.  180.860. If a suspension has preceded 
your debarment, the debarring official must consider the time you were 
suspended.
    (c) If the debarment is for a violation of the provisions of the 
Drug-Free Workplace Act of 1988, your period of debarment may not 
exceed five years.


Sec.  180.870  When do I know if the debarring official debars me?

    (a) The debarring official must make a written decision whether to 
debar within 45 days of closing the official record. The official 
record closes upon the debarring official's receipt of final 
submissions, information, and findings of fact, if any. The debarring 
official may extend that period for good cause.
    (b) The debarring official sends you written notice, pursuant to 
Sec.  180.615, that the official decided either:
    (1) Not to debar you; or
    (2) To debar you. In this event, the notice:
    (i) Refers to the Notice of Proposed Debarment;
    (ii) Specifies the reasons for your debarment;
    (iii) States the period of your debarment, including the effective 
dates; and
    (iv) Advises you that your debarment is effective for covered 
transactions and contracts that are subject to the Federal Acquisition 
Regulations (48 CFR chapter 1) throughout the executive branch of the 
Federal Government unless an agency head or an authorized designee 
grants an exception.


Sec.  180.875   May I ask the debarring official to reconsider a 
decision to debar me?

    Yes. As a debarred person, you may ask the debarring official to 
reconsider the debarment decision or to reduce the time period or scope 
of the debarment. However, you must submit your request in writing and 
support it with documentation.


Sec.  180.880   What factors may influence the debarring official 
during reconsideration?

    The debarring official may reduce or terminate your debarment based 
on:
    (a) Newly discovered material evidence;
    (b) A reversal of the conviction or civil judgment upon which your 
debarment was based;
    (c) A bona fide change in ownership or management;
    (d) Elimination of other causes for which the debarment was 
imposed; or
    (e) Other reasons the debarring official finds appropriate.


Sec.  180.885   May the debarring official extend a debarment?

    (a) Yes. The debarring official may extend a debarment for an 
additional period if that official determines that an extension is 
necessary to protect the public interest.
    (b) However, the debarring official may not extend a debarment 
solely on the basis of the facts and circumstances upon which the 
initial debarment action was based.
    (c) If the debarring official decides that a debarment for an 
additional period is necessary, the debarring official must follow the 
applicable procedures in this subpart, and subpart F, to extend the 
debarment.

Subpart I--Definitions


Sec.  180.900   Adequate evidence.

    Adequate evidence means information sufficient to support the 
reasonable belief that a particular act or omission has occurred.


Sec.  180.905   Affiliate.

    Persons are affiliates of each other if, directly or indirectly, 
either one controls or has the power to control the other or a third 
person controls or has

[[Page 69421]]

the power to control both. The ways a Federal agency may determine 
control include, but are not limited to:
    (a) Interlocking management or ownership;
    (b) Identity of interests among family members;
    (c) Shared facilities and equipment;
    (d) Common use of employees; or
    (e) A business entity organized following the exclusion of a person 
with the same or similar management, ownership, or principal employees 
as the excluded person.


Sec.  180.910  Agent or representative.

    Agent or representative means any person who acts on behalf of or 
who is authorized to commit a participant in a covered transaction.


Sec.  180.915  Civil judgment.

    Civil judgment means the disposition of a civil action by any court 
of competent jurisdiction, whether by verdict, decision, settlement, 
stipulation, or other disposition which creates a civil liability for 
the complained of wrongful acts or a final determination of liability 
under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-
3812).


Sec.  180.920  Conviction.

    Conviction means:
    (a) A judgment or any other determination of guilt of a criminal 
offense by any court of competent jurisdiction, whether entered upon a 
verdict or plea, including a plea of nolo contendere; or
    (b) Any other resolution that is the functional equivalent of a 
judgment, including probation before judgment and deferred prosecution. 
A disposition without the participation of the court is the functional 
equivalent of a judgment only if it includes an admission of guilt.


Sec.  180.925  Debarment.

    Debarment means an action taken by a debarring official under 
Subpart H to exclude a person from participating in covered 
transactions and transactions covered under the Federal Acquisition 
Regulations (48 CFR chapter 1). A person so excluded is debarred.


Sec.  180.930   Debarring official.

    Debarring official means a Federal agency official who is 
authorized to impose debarment. A debarring official is either:
    (a) The agency head; or
    (b) An official designated by the agency head.


Sec.  180.935  Disqualified.

    Disqualified means that a person is prohibited from participating 
in specified Federal procurement or nonprocurement transactions as 
required under a statute, Executive order (other than Executive Orders 
12549 and 12689), or other authority. Examples of disqualifications 
include persons prohibited under--
    (a) The Davis-Bacon Act (40 U.S.C. 3142);
    (b) The equal employment opportunity acts and Executive orders; or
    (c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C. 
1368), and Executive Order 11738 (38 FR 25161).


Sec.  180.940   Excluded or exclusion.

    Excluded or exclusion means:
    (a) That a person or commodity is prohibited from being a 
participant in covered transactions, whether the person has been 
suspended; debarred; proposed for debarment under 48 CFR part 9, 
subpart 9.4; voluntarily excluded; or
    (b) The act of excluding a person.


Sec.  180.945  System for Award Management (SAM.gov) Exclusions.

    System for Award Management (SAM.gov) Exclusions means the list 
maintained and disseminated by the General Services Administration 
(GSA) containing the names and other information about ineligible 
persons.


Sec.  180.950  Federal agency.

    Federal agency means any United States executive department, 
military department, defense agency, or any other executive branch 
agency. For the purposes of this part, other agencies of the Federal 
Government are not considered ``agencies'' unless they issue 
regulations adopting the government-wide Debarment and Suspension 
system under Executive Orders 12549 and 12689.


Sec.  180.955   Indictment.

    Indictment means an indictment for a criminal offense. A 
presentment, information, or other filing by a competent authority 
charging a criminal offense will be given the same effect as an 
indictment.


Sec.  180.960  Ineligible or ineligibility.

    Ineligible or ineligibility means that a person or commodity is 
prohibited from covered transactions because of an exclusion or 
disqualification.


Sec.  180.965   Legal proceedings.

    Legal proceeding means any criminal proceeding or any civil 
judicial proceeding, including a proceeding under the Program Fraud 
Civil Remedies Act of 1986 (31 U.S.C. 3801-3812), to which the Federal 
Government or a State or local government or quasi-governmental 
authority is a party. The term also includes appeals from those 
proceedings.


Sec.  180.970  Nonprocurement transaction.

    (a) Nonprocurement transaction means any transaction, regardless of 
type (except procurement contracts), including, but not limited to, the 
following:
    (1) Grants;
    (2) Cooperative agreements;
    (3) Scholarships;
    (4) Fellowships;
    (5) Contracts of assistance;
    (6) Loans;
    (7) Loan guarantees;
    (8) Subsidies;
    (9) Insurances;
    (10) Payments for specified uses; and
    (11) Donation agreements.
    (b) A nonprocurement transaction at any tier does not require the 
transfer of Federal funds.


Sec.  180.975   Notice.

    Notice means a written communication served in person, sent by 
certified mail or its equivalent, or sent electronically by email or 
facsimile. (See Sec.  180.615.)


Sec.  180.980   Participant.

    Participant means any person who submits a proposal for or enters 
into a covered transaction, including an agent or representative of a 
participant.


Sec.  180.985   Person.

    Person means any individual, corporation, partnership, association, 
unit of government, or legal entity, regardless of how organized.


Sec.  180.990   Preponderance of the evidence.

    Preponderance of the evidence means proof by information that, 
compared with information opposing it, leads to the conclusion that the 
fact at issue is more probably true than not.


Sec.  180.995   Principal.

    Principal means:
    (a) An officer, director, owner, partner, principal investigator, 
or another person within a participant with management or supervisory 
responsibilities related to a covered transaction; or
    (b) A consultant or other person, whether or not employed by the 
participant or paid with Federal funds, who:
    (1) Is in a position to handle Federal funds;
    (2) Is in a position to influence or control the use of those 
funds; or,
    (3) Occupies a technical or professional position capable of

[[Page 69422]]

substantially influencing the development or outcome of an activity 
required to perform the covered transaction.


Sec.  180.1000  Respondent.

    Respondent means a person against whom a Federal agency has 
initiated a debarment or suspension action.


Sec.  180.1005   State.

    (a) State means:
    (1) Any of the states of the United States;
    (2) The District of Columbia;
    (3) The Commonwealth of Puerto Rico;
    (4) Any territory or possession of the United States; or
    (5) Any agency or instrumentality of a State.
    (b) For purposes of this part, State does not include institutions 
of higher education, hospitals, or units of local government.


Sec.  180.1010   Suspending official.

    (a) Suspending official means a Federal agency official authorized 
to impose suspension. The suspending official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.


Sec.  180.1015  Suspension.

    Suspension is an action taken by a suspending official under 
subpart G of this part that immediately prohibits a person from 
participating in covered transactions and transactions covered under 
the Federal Acquisition Regulations (48 CFR chapter 1) for a temporary 
period, pending completion of a Federal agency investigation and any 
judicial or administrative proceedings that may ensue. A person so 
excluded is suspended.


Sec.  180.1020  Voluntary exclusion or voluntarily excluded.

    (a) Voluntary exclusion means a person's agreement to be excluded 
under the terms of a settlement between the person and one or more 
agencies. Voluntary exclusion must have a government-wide effect.
    (b) Voluntarily excluded means the status of a person who has 
agreed to a voluntary exclusion.

Appendix A to Part 180--Covered Transactions

BILLING CODE 3110-01-P

[[Page 69423]]

[GRAPHIC] [TIFF OMITTED] TP05OC23.078

BILLING CODE 3110-01-C
0
8. Revise part 182 to read as follows:

PART 182--GOVERNMENT-WIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE 
(FINANCIAL ASSISTANCE)

Sec.
182.5 What does this part do?
182.10 How is this part organized?
182.15 To whom does the guidance apply?
182.20 What must a Federal agency do to implement the guidance?
182.25 What must a Federal agency address in its implementation of 
the guidance?
182.30 Where does a Federal agency implement the guidance?
182.40 How is the guidance maintained?
Subpart A--Purpose and Coverage
182.100 How is this part written?
182.105 Do terms in this part have special meanings?
182.110 What do subparts A through F of this part do?
182.115 Does this part apply to me?
182.120 Are any of my Federal assistance awards exempt from this 
part?
182.125 Does this part affect the Federal contracts that I receive?
Subpart B--Requirements for Recipients Other Than Individuals
182.200 What must I do to comply with this part?
182.205 What must I include in my drug-free workplace statement?
182.210 To whom must I distribute my drug-free workplace statement?
182.215 What must I include in my drug-free awareness program?

[[Page 69424]]

182.220 By when must I publish my drug-free workplace statement and 
establish my drug-free awareness program?
182.225 What actions must I take concerning employees who are 
convicted of drug violations in the workplace?
182.230 How and when must I identify workplaces?
Subpart C--Requirements for Recipients Who Are Individuals
182.300 What must I do to comply with this part if I am an 
individual recipient?
Subpart D--Responsibilities of Agency Awarding Officials
182.400 What are my responsibilities as an agency awarding official?
Subpart E--Violations of This Part and Consequences
182.500 How are violations of this part determined for recipients 
other than individuals?
182.505 How are violations of this part determined for recipients 
who are individuals?
182.510 What actions will the Federal Government take against a 
recipient determined to have violated this part?
182.515 Are there any exceptions to those actions?
Subpart F--Definitions
182.605 Award.
182.610 Controlled substance.
182.615 Conviction.
182.620 Cooperative agreement.
182.625 Criminal drug statute.
182.630 Debarment.
182.635 Drug-free workplace.
182.640 Employee.
182.645 Federal agency or agency.
182.650 Grant.
182.655 Individual.
182.660 Recipient.
182.665 State.
182.670 Suspension.

    Authority: 41 U.S.C. 8101-8106; 31 U.S.C. 503; 31 U.S.C. 6307.


Sec.  182.5  What does this part do?

    This part provides guidance for Federal agencies on the portion of 
the Drug-Free Workplace Act of 1988 (41 U.S.C. 8101-8106, as amended) 
that applies to grants. It also applies the provisions of the Act to 
cooperative agreements and other financial assistance awards, as a 
matter of Federal Government policy.


Sec.  182.10  How is this part organized?

    This part is organized into two segments.
    (a) Sections 182.5 through 182.40 contain general policy direction 
for Federal agencies' use of the uniform policies and procedures in 
subparts A through F.
    (b) Subparts A through F contain uniform government-wide policies 
and procedures for Federal agency use to specify the:
    (1) Types of awards that are covered by drug-free workplace 
requirements;
    (2) Drug-free workplace requirements with which a recipient must 
comply;
    (3) Actions required of a Federal agency awarding official; and
    (4) Consequences of a violation of drug-free workplace 
requirements.


Sec.  182.15  To whom does the guidance apply?

    This part provides guidance to Federal agencies. Publication of 
this guidance in the Code of Federal Regulations (CFR) does not change 
its nature--it is guidance and not regulation. Federal agencies' 
implementation of this guidance governs the rights and responsibilities 
of other persons affected by the drug-free workplace requirements.


Sec.  182.20  What must a Federal agency do to implement the guidance?

    To comply with the requirement in 41 U.S.C. 8106 for government-
wide regulations, each Federal agency that awards grants or cooperative 
agreements or makes other financial assistance awards that are subject 
to the drug-free workplace requirements in subparts A through F of the 
guidance must issue a regulation consistent with those subparts.


Sec.  182.25   What must a Federal agency address in its implementation 
of the guidance?

    Each Federal agency's implementing regulation:
    (a) Must establish drug-free workplace policies and procedures for 
that Federal agency's Federal awards consistent with this guidance. 
When adopted by a Federal agency, the provisions of the guidance have a 
regulatory effect on that Federal agency's awards.
    (b) Must address some matters for which the guidance in this part 
gives the Federal agency discretion. Specifically, the regulation must:
    (1) State whether the Federal agency:
    (i) Has a central point to which a recipient may send the 
notification of a conviction that is required under Sec.  182.225(a) or 
Sec.  182.300(b); or
    (ii) Requires the recipient to send the notification to the Federal 
agency awarding official or their designee for each Federal award.
    (2) Either:
    (i) State that the Federal agency head is the official authorized 
to determine under Sec.  182.500 or Sec.  182.505 that a recipient has 
violated the drug-free workplace requirements; or
    (ii) Provide the title of the official designated to make that 
determination.
    (c) May also, at t