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###### Department of Energy

###### Office of Energy Efficiency and Renewable Energy

# AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

# ACTION:

Notice of Objective Merit Review Procedure.

# SUMMARY:

This Notice establishes the procedure for program offices operating under the authority of the Assistant Secretary for Energy Efficiency and Renewable Energy in conducting the objective merit review of discretionary financial assistance and Other Transaction Authority funding applications. The effective date for the Objective Merit Review Procedure contained in this notice is March 18, 2011.

# FOR FURTHER INFORMATION CONTACT:

U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585-0121, 1-877-337-3463.

# SUPPLEMENTARY INFORMATION:

## Table of Contents

I. Introduction

II. Applicability of Notice

III. Objective Merit Review Procedure

IV. Merit Review Advisory Report

V. Application of Program Policy Factors

VI. Selection

VII. Deviations

*I. Introduction*                    —The Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy (EERE) hereby gives notice of the procedure for the objective merit review of projects seeking discretionary financial assistance. The procedures described in this notice implement the objective merit review provisions of the DOE Financial Assistance Rules at 10 CFR 600.13. Specifically, this notice covers the procedure for applications received competitively and non-competitively. This notice also provides procedures for establishing peer and merit review panels, naming a Federal Merit Review Manager, conducting merit reviews, and preparing a Merit Review Advisory Report for the Selection Official.                

DOE provides financial assistance, in the form of grants cooperative agreements and technology investment agreements. The principal purpose of these transactions is the transfer of a thing of value, usually money but occasionally property or other items of value, to a recipient to accomplish a public purpose identified. DOE funds only those programs authorized by Federal statute. Financial assistance may be either discretionary or mandatory. Discretionary financial assistance means DOE provides funding to a recipient of DOE's choosing; DOE has the discretion to select a recipient as well as the size of the award. Mandatory financial assistance means DOE must provide the assistance to the entities named and the amounts stated by statute.

These procedures do not cover acquisition. Financial assistance differs from an acquisition, which refers to instruments used when the principal purpose of the transaction is the acquisition of supplies or services for the direct benefit of the Government. The procedures pursuant to this notice do not apply to acquisitions, which are covered by the Federal Acquisition Regulations (FAR).

*II. Applicability of Notice*                    —These procedures apply to the evaluation of discretionary financial assistance applications received for programs within the DOE EERE.                

*(a) Distinction Between Solicited Applications and Unsolicited Proposals*                    —Solicited applications constitute direct responses by interested organizations or individuals to DOE Funding Opportunity Announcements (FOA) in the form of applications for discretionary financial assistance awards. Funding opportunities are announced using the process set forth in 10 CFR 600.8. When a proposal is submitted solely on the proposer's initiative, and the idea, method or approach would be ineligible for assistance under a recent, current, or planned solicitation, and if, as determined by DOE, a competitive solicitation would not be appropriate, the proposal is considered an unsolicited proposal. Unsolicited proposals are awarded on a non-competitive basis using the criteria set forth in 10 CFR 600.6(c). The two types of proposals are treated differently for                           ( print page 17847)                        merit review and the processes are described below.                

*(b) Renewals*                    —A renewal award adds one or more budget periods to an existing award's project period. Applications for renewal awards may be submitted competitively (against a FOA that provides for renewal applications) or non-competitively.                

*(c) Non-competitive Actions*                    —Non-competitive actions are reviewed and approved in a manner similar to that of unsolicited proposals using the criteria set forth in 10 CFR 600.6(c) and as described in Section III(d), herein.                

                    III. Objective Merit Review Procedure—                    *(a) Definition and Purpose*                    —A merit review constitutes the process of evaluating applications for discretionary financial assistance while using established criteria. Reviews shall be thorough, consistent, and independent, and completed by individuals knowledgeable in the field or subject matter for which support is requested (                    *see*                     Appendix 1 for EERE merit reviewer qualification guidelines). The purpose of the merit review is to provide advice and recommendations on the scientific and technical merits of an application for consideration by the Selection Official. The Selection Official has authority to select applications for negotiation of a financial assistance award.                

*(b) Review Standards—Solicited Applications—1. Initial Compliance Review*                    —EERE will review each financial assistance application received for conformance with initial review criteria and administrative requirements published in the FOA, program rule or notice.                

i. Any application not meeting the initial review criteria will be determined to be non-compliant and precluded from further technical merit review.

ii. Any applicant that is determined to be non-compliant will be notified in writing, along with the reasons the application will not be evaluated further.

iii. Applications meeting the initial compliance review criteria will be reviewed for merit in accordance with the stated evaluation criteria in the FOA, program rule or notice.

2. Merit Review of Solicited Applications—The Merit Review Panel (Panel) will conduct an objective merit review for each application that passes the initial compliance review, using the criteria published in the FOA, program rule, or notice. The criteria to be used in the merit review and the other mandatory information specified in 10 CFR 600.8 must be included in the FOA, program rule or notice. Typically, the merit review criteria will be weighted individually to reflect their relative importance in the overall merit of the application. The Panel will review solicited applications based on information in the FOA. The merit review will typically include the following attributes:

i. Applications that pass the initial compliance review will be reviewed by the Federal Merit Review Panel. Peer review panels will provide individual evaluations, which may include a score to the Federal Merit Review Manager. DOE Federal Merit Review Panel will provide a consensus rating (numeric, adjectival, or comparable) for each criterion outlined in the FOA, program rule or notice based on the strengths and weaknesses of the applications.

ii. An overall consensus rating will be determined for each application by the DOE Federal Merit Review Panel.

iii. The DOE Federal Merit Review Panel will prepare a Merit Review Advisory Report for the Selection Official. The report will discuss the peer review, if any. The DOE Federal Merit Review Panel will establish a selection range to include applications that were deemed technically acceptable. The recommended selection range will be determined at the conclusion of the DOE Federal Merit Review Panel meeting. Rationale for the range must be included in the Merit Review Advisory Report.

(c) Review Standards—Unsolicited Proposals—1. Unsolicited proposals will receive an initial review to determine if the proposal will be eligible under 10 CFR 600.6(c). For an unsolicited proposal to be eligible for an award, a proposal must meet one of the following criteria:

i. The activity to be funded is necessary to the satisfactory completion of, or is a continuation or renewal of, an activity presently being funded by DOE or another Federal agency, and for which competition for support would have a significant adverse effect on continuity or completion of the activity.

ii. The activity is being or would be conducted by the applicant using its own resources or those donated or provided by third parties; however, DOE support of that activity would enhance the public benefits to be derived and DOE knows of no other entity which is conducting or is planning to conduct such an activity.

iii. The applicant is a unit of government and the activity to be supported is related to performance of a governmental function within the subject jurisdiction, thereby precluding DOE provision of support to another entity.

iv. The applicant has exclusive domestic capability to perform the activity successfully, based upon unique equipment, proprietary data, technical expertise, or other such unique qualifications.

v. The award implements an agreement between the United States Government and a foreign government to fund a foreign applicant.

vi. Time constraints associated with a public health, safety, welfare or national security requirement preclude competition.

vii. The proposed project was submitted as an unsolicited proposal and represents a unique or innovative idea, method, or approach which would not be eligible for financial assistance under a recent, current, or planned solicitation, and if, as determined by DOE, a competitive solicitation would not be appropriate.

viii. The responsible program Assistant Secretary, Deputy Administrator, or other official of equivalent authority determines that a noncompetitive award is in the public interest. This authority may not be delegated.

2. Unsolicited proposals that pass the initial review shall be reviewed against the criteria outlined in EERE's Guide for the Submission of Unsolicited Proposals by a Merit Review Panel. These criteria include:

i. Unique and innovative methods, approaches or concepts demonstrated by the proposal;

ii. Overall scientific/technical or socioeconomic merit of the proposed activity;

iii. Potential contribution of the effort to the DOE's specific mission;

iv. The proposer's capabilities, related experience, facilities, techniques, or unique combinations of these which are integral factors for achieving the proposal objectives;

v. The qualifications, capabilities, and experience of the proposed principal investigator, team leader, or key personnel who are critical in achieving the proposal objectives;

vi. The realism of the proposed costs; and

vii. The availability of funding to support the proposed project, and the relative merit of the project compared with others that could be supported with the same funds.

                    (                    *See http://www.netl.doe.gov/​business/​usp/​USPGuide.pdf).*

                    3. When the substance of an unsolicited proposal is available to the Government without restriction from another source, or closely resembles that of a pending competitive solicitation, or does not demonstrate an innovative and                           ( print page 17848)                        unique method, approach or concept, the unsolicited proposal shall not be accepted.                     *See*                     Federal Acquisition Regulation (FAR), part 15.607(a).                

                    4. Additional guidance for reviewing noncompetitive proposals, including renewal applications, and the template for the review plan are provided in Appendix C of the DOE Merit Review Guide for Financial Assistance (available at                     *http://www.management.energy.gov/​documents/​meritrev.pdf*). Appendix C of the DOE Merit Review Guide for Financial Assistance, rather than Sections IV-VI of this Notice, applies to the review of unsolicited proposals.                

(d) The Merit Review Panel—1. The Merit Review Panel can be established in many ways. It should always include at least one DOE Federal employee. Non-DOE Federal experts may be part of the Merit Review Panel as Peer Reviewers, but are not required. The most typical arrangements are a peer review panel and a DOE Federal employee; a peer review panel and a DOE Federal panel; or only a DOE Federal panel. Peer review panels and DOE Federal panels should include at least three technically qualified individuals. Merit review that involves a Federal review panel is preferred over merit review that involves only one Federal reviewer. The names of the Merit Review Panel will not be released to the public.

                    2.                     *Merit Review Panel Member Selection.*                     The DOE Senior Procurement Executive (SPE) has the ultimate responsibility for designating a Selection Official. DOE officials, in accordance with the applicable designation, may be appointed as the Selection Official. The SPE may delegate authority to designate a Selection Official to other DOE officials. Examples of officials to whom the authority may be delegated include the Deputy Assistant Secretary, the Executive Director of Field Operations, Head of Contracting Activity, the Program Managers, or other similar positions within DOE. The Selection Official may not be a member of the Merit Review Panel. Members of the Merit Review Panel must be qualified personnel. Non-DOE Peer Reviewers may include qualified personnel from Federal agencies, other Government entities, academia, industry, and DOE contractors, including national laboratory employees. The Contracting Officer may serve on the Merit Review Panel in an ex officio capacity.                

                    3.                     *Conflicts of Interest.*                     The Federal Merit Review Manager, in consultation with Legal Counsel or the Contracting Officer, shall review instances of potential conflicts involving members of the Merit Review Panel. Merit Review Panel members must act in a manner consistent with 5 CFR part 2635*et seq.*                     Merit Review Panel members with a conflict of interest shall immediately notify the Federal Merit Review Manager of the conflict of interest and comply with any mitigation measures required by the Federal Merit Review Manager, including excusing themselves from all deliberations involving the application for which they have a conflict of interest.                

i. In determining potential conflicts, the Federal Merit Review Manager shall give close scrutiny to reviewers who perform any of the following:

a. Have any decision-making role regarding the application or provide technical assistance to the applicant in regards to the application;

b. Audit the recipient for the project; or

c. If included in the review, will give the appearance of a conflict of interest.

ii. Situations that could be perceived as conflicts of interest may include:

a. The application being reviewed was submitted by a reviewer's recent student, recent teacher, former employer, close personal friend or relative of the reviewer, spouse, or the reviewer's minor children.

b. The application being reviewed was submitted by a person with whom the reviewer has had longstanding differences.

c. The application being reviewed is similar to projects being conducted by the reviewer or by the reviewer's organization.

iii. When situations arise that present a perceived or actual conflict of interest, the Federal Merit Review Manager, with consultation from Legal Counsel, may permit reviewers to participate if a Conflict of Interest (COI) waiver is granted and an acceptable mitigation plan is implemented. The mitigation implemented shall be reflected in the Merit Review Advisory Report. However, in no event will a waiver be granted to permit a reviewer to evaluate an application/proposal for his/her/host or affiliated organization or if participation is prohibited by language in the FOA.

iv. Each member of the Merit Review Panel, including ex-officio members, shall sign a Confidentiality and Conflict of Interest Certification and Acknowledgement, which requires adherence to the following guidelines:

a. Reviewers shall not discuss the evaluation process with any unauthorized personnel.

b. Reviewers shall not divulge their identities to any applicant.

c. Reviewers shall not contact applicants.

d. Reviewers shall not discuss the Panel proceedings outside of the Merit Review Panel meeting, even after the selection and award.

                    e. Reviewers shall not accept any invitations, gratuities (                    *i.e.,*                     meals, gifts, favors, etc.), or job offers from any applicant. If a reviewer is offered any invitations, gratuities, or job offers by or on behalf of any applicant, the reviewer shall immediately report it to the Contracting Officer.                

f. Reviewers shall only evaluate information provided by the applicants in the applications and only evaluate against the published criteria. No additional criteria are to be considered by the Panel.

g. Typically, reviewers shall initially rate all applications independently and without consultation between reviewers.

h. Reviewers will inform the Federal Merit Review Manager of any personal or organizational conflicts of interest arising out of applications they are asked to review.

i. Reviewers may contact the Federal Merit Review Manager to obtain clarifications regarding applications.

                    For more details see the DOE's Merit Review Guide for Financial Assistance at                     *http://www.management.energy.gov/​documents/​meritrev.pdf.*

                    4.                     *Authorized Uses of Information.*                     The Merit Review Panel must act in a manner consistent with 10 CFR 600.15 when dealing with applications containing trade secrets, privileged, confidential commercial, and/or financial information.                

                    5.                     *Federal Merit Review Manager*                    —The Selection Official must appoint a person from the EERE headquarters program as Federal Merit Review Manager of the Merit Review Panel. The Federal Merit Review Manager is responsible for:                

i. Selecting the Merit Review Panel members and obtaining approval from the EERE Program Manager;

ii. Ensuring a comprehensive and robust Evaluation and Selection Plan;

iii. Overseeing the merit review process and all panel meetings, ensuring that merit review procedures are followed consistently, as well as applicable statutes and regulations including, but not limited to, the Federal Advisory Committee Act, 5 U.S.C. App. 2;

iv. Ensuring that Merit Review Panel members understand the evaluation criteria and merit review procedures/process;

                    v. In the event of multiple Merit Review Panels due to large number of                           ( print page 17849)                        applications, ensuring consistency among the panels;                

vi. Ensure each application is evaluated by the Merit Review Panel in accordance with the Evaluation and Selection Plan;

vii. Ensuring that reviewers provide sound, well documented evaluations;

viii. Addressing any unexpected or unique circumstances presented and maintaining the integrity of the Merit Review process;

ix. Reviewing and approving the written summary of the evaluation and recommendations for the Selection Official via the Merit Review Advisory Report;

x. Performing the merit review duties of a regular Merit Review Panel member, if necessary or appropriate;

xi. Ensuring that the Contracting Officer and Legal Counsel take appropriate action to mitigate conflicts of interest of Merit Review Panel members as discussed in section III(d)(3) herein;

xii. Recommending application of the program policy factors, when appropriate; ensuring that the Merit Review Advisory Report is prepared in conformity with guidance set out in Part IV, herein; and

xiii. Making a presentation, if requested, to the Selection Official and other advisors to the Selection Official in the form of a pre-selection briefing.

                    6.                     *Co-Federal Merit Review Manager*                    —The Selection Official may appoint a person from the program's field staff as Co-Federal Merit Review Manager. The Co-Federal Merit Review Manager is responsible for:                

i. Preparing the Evaluation and Selection Plan for Federal Merit Review Manager and Selection Official approval;

ii. Managing merit review logistics, including panel meetings, etc.;

iii. Obtaining signed certificates of confidentiality from all Merit Review Panel members to be kept on file at the issuing agency;

iv. Preparing the written summary of the evaluation and recommendations for the Selection Official via the Merit Review Advisory Report;

v. Ensuring that the Merit Review Advisory Report is prepared in conformity with guidance set out in Part V, herein;

vi. Performing the merit review duties of a regular Merit Review Panel member, if necessary or appropriate;

vii. Working with the Federal Merit Review Manager to ensure that the technical merit review procedures are followed consistently when carrying out the technical merit review. In the event of multiple merit review panels due to large number of applications, the Federal Merit Review Manager shall ensure consistency among the panels;

viii. Working with the Contracting Officer and Legal Counsel to take appropriate action to mitigate conflicts of interest of Merit Review Panel members as discussed in section III(d)(3) herein;

ix. Assisting the Federal Merit Review Manager with the merit review process;

x. Assuring control and security of applications;

xi. Preparing the Merit Review Advisory Report for the Selection Official;

xii. Assisting in making a presentation, if requested, to the Selection Official and other advisors to the Selection Official in the form of a pre-selection briefing;

xiii. Notifying unsuccessful applicants; and

xiv. Maintaining all merit review documentation.

7. Non-DOE Peer Reviewers typically will provide additional expertise to the DOE Federal Merit Review Panel. Peer reviewers provide specialized expertise and technical input to the DOE Federal Merit Review Panel by reviewing applications and providing written and sometimes verbal comments and ratings (numeric, adjectival or comparable) based on their reviews of applications. Peer Reviewers must be fully briefed by the Federal Merit Review Manager regarding the review criteria and the peer reviewers must be aware that any criteria not specified in the solicitation must not be used to evaluate the applications. Peer Reviewers must sign a Confidentiality and Conflict of Interest Certification and Acknowledgement, as provided in 10 CFR 600.13(d). All Peer Reviewers forward their comments and scores as required to the Merit Review Panel. At the DOE Federal Merit Review Panel's discretion, all or a subset of the Peer Reviewers may be invited to present their scores and identified strengths and weaknesses so the DOE Federal Merit Review Panel may discuss the Peer Reviewers' comments and better understand the Peer Reviewers' scores and comments. However, unless specifically allowed by statute, the Peer Reviewers may not provide consensus scores or comments to the DOE Federal Merit Review Panel. The DOE Federal Merit Review Panel will dismiss all non-Federal reviewers prior to making any decisions regarding recommendations to the Selection Official for award selection or establishment of the selection range.

i. The Merit Review Panel should only task the minimum number of Peer Reviewers necessary to effectively review the submitted applications; and

ii. Selection of Peer Reviewers shall be done in accordance with the selection of members of the Merit Review Panel, part III(d)(2) herein.

                    IV.                     *Merit Review Advisory Report—*                    The purpose of the Merit Review Advisory Report is to present the findings of the Merit Review Panel and recommend applications that merit funding to the Selection Official. The Federal Merit Review Manager shall provide the complete report for review and obtain concurrence from the Contracting Officer and Legal Counsel prior to submitting the report to the Selection Official. The report will typically include four sections—one to establish the purpose of the report, a second to document the compliance review performed, a third to record the merit review process used and any deviations from protocol, and a fourth that contains a draft Selection Statement for execution by the Selection Official. In addition, relevant attachments will be included as referenced below.                

(a) Section 1 shall include the following:

1. A brief statement as to the purpose of the Merit Review Advisory Report; and

2. A brief summary of the number of applications received and the number deemed technically acceptable by the DOE Federal Merit Review Panel for selection for negotiation of award.

(b) Section 2 shall include the following:

1. A list of applications rejected in the Initial Compliance Review, if any; and

2. A list of the reasons why the application was rejected and not comprehensively reviewed.

(c) Section 3 shall include the following:

1. The number of members on the DOE Federal Merit Review Panel and the number of peer reviewers, their names and a brief discussion of their qualifications, a statement that all applications were independently reviewed in accordance with the requirements contained herein, and a statement that all Panel members, including ex-officio members, signed a Confidentiality and Conflict of Interest Certification and Acknowledgement;

2. A discussion of the peer review process for all applications;

3. Details of the Merit Review Panel meeting and the process followed, including a discussion of any deviations, such as issues with conflicts of interest;

                    4. A discussion of the development of consensus scores for each application, the ranking process, the number of                           ( print page 17850)                        applications deemed technically acceptable, and any observations or findings that impacted the decision regarding the acceptable selection range; and                

5. Details of the Panel's process to set the selection range, and a reference to the final list of applications deemed technically acceptable in the Record of Consensus Scores for All Applications.

(d) Section 4 shall include the following:

1. A request for action from the Selection Official regarding application of the program policy factors and selection of applications for negotiation of award; and

2. Instructions regarding these actions and subsequent communication of his/her decision to the Contracting Officer.

(e) Attachments to the Merit Review Advisory Report shall include the following:

1. Record of Consensus Strengths and Weaknesses for each application;

2. Record of Consensus Scores for All Applications;

3. Program Policy Factor Information Sheet; and

4. Draft Selection Statement for execution by the Selection Official.

                    (f) For non-competitive applications including renewal applications, the report to the Selection official will consist of individual review forms and a summary statement consistent with that found in Appendix C of the DOE Merit Review Guide for Financial Assistance (available at                     *http://www.management.energy.gov/​documents/​meritrev.pdf*). Additionally, a Selection Statement will be prepared to document the Selection Official's selection of the project.                

                    V.                     *Application of program policy factors*                    —Each application deemed technically acceptable by the Merit Review Panel may receive a program policy review by the Selection Official or personnel designated by the Selection Official. The Selection Official may, at his/her discretion, consider the program policy factors when making selections.                

                    VI.                     *Selection*                    —The Selection Official will complete the Selection Statement. The Selection Official will document all selections with a written narrative, noting which program policy factors, if any, were applied in making the selections. The Selection Official shall notify the Contracting Officer in the selection statement of the applications designated as “alternate.” In addition, the Selection Official may identify negotiation strategies, if any, in the second page of the Selection Statement entitled “Negotiation Strategy.”                

                    VII.                     *Deviations*                    —If an EERE program office intends to deviate from these procedures for merit review of an application or a class of applications but will still follow the rules of 10 CFR 600.13, that office must obtain written permission from the Assistant Secretary of Energy Efficiency and Renewable Energy. Permission to use procedures which deviate from 10 CFR 600 must be requested in writing addressed to the responsible DOE Contracting Officer in accordance with 10 CFR 600.4. The Head of Contracting Activity has the authority to approve such procedures for a single case deviation, while the Director, Procurement and Assistance Management (Senior Procurement Executive) has the authority to approve a class deviation. A deviation may be authorized only upon written determination that the deviation is necessary for any of the reasons set forth in 10 CFR 600.4(b).                

Henry Kelly,

Acting Assistant Secretary, Energy Efficiency and Renewable Energy, U.S. Department of Energy.

# Appendix 1—Energy Efficiency and Renewable Energy Reviewer Qualification Guidelines—May 28, 2010

For typical EERE Funding Opportunity Announcements (FOAs), examples of reviewer qualifications are identified below. Stronger qualifications may be needed for certain FOAs. For example, the Energy Innovation Hubs are modeled after Bell Labs, which recruited the nation's best and brightest and sought a level of scientific quality not possible in all R&D endeavors. The Department plans to invest more than $120 million over five years in the Hubs, with a possible extension to ten years. Therefore, reviewer selection criteria should be consistent with the high quality of science expected and the significant level of investment. Reviewer qualifications for typical EERE FOAs:
    -  At least 5 years of experience in a relevant field.                          People with less experience should have some other strong credentials,                          e.g.,                          a PhD with a strong publication or patent record specific to the technology being evaluated, a young investigator award, or a strong pedigree (e.g., a PhD from a high caliber institution or under a recognized leader in the field). If a newly minted PhD with a strong pedigree is being considered as a reviewer, he/she should have some additional accomplishments such as a seminal paper in the field, or an invited talk to a major conference.                    
    -  Publications and Patents.                          This could include having a significant number of peer-reviewed publications and/or patents in the technology being evaluated. For those who have a lengthy and diverse publication history, the timeframe of publications and/or patents should reflect that the reviewer's knowledge of the technology is relevant and not outdated.                    
    -  Other evidence that the person is a recognized expert in the field.                          This could include having managed a public policy program that has had a national impact, a record of bringing innovations to the market, or holding key patents.                    
    -  An advanced degree                          (Ph.D., Sc.D., D.Eng., M.S., or M.B.A.) in a relevant field. Those with a Bachelors degree should have more experience and/or a record of accomplishments indicating their expertise in the field.                    
    -  Relevant awards.                          This would include being a recipient of a National Medal of Science, American Chemical Society National Award, Young Investigator Award, R&D 100 Award, or other awards specific to a technology (                         e.g.,                          Fuel Cell Seminar Award).                    
    -  Key Society Membership.                          Member of the National Academy of Sciences (NAS) or Engineering (NAE) member, American Physics Society Fellow, National Laboratory Fellow.                    

[FR Doc. 2011-7581 Filed 3-30-11; 8:45 am]

BILLING CODE 6450-01-P