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[Senate Report 114-407]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 723
114th Congress        }                                 {       Report
                                 SENATE
 2nd Session          }                                 {      114-407
_______________________________________________________________________

                                     

             GRANT REFORM AND NEW TRANSPARENCY ACT OF 2016

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2972

           TO AMEND TITLE 31, UNITED STATES CODE, TO PROVIDE
  TRANSPARENCY AND REQUIRE CERTAIN STANDARDS IN THE AWARD OF FEDERAL 
                     GRANTS, AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

               December 20, 2016.--Ordered to be printed

   Filed, under authority of the order of the Senate of December 10 
                  (legislative day, December 9), 2016
                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

69-010                         WASHINGTON : 2016 

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
            Jennifer L. Scheaffer, Professional Staff Member
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
               Mary Beth Schultz, Minority Chief Counsel
        Robert H. Bradley II, Minority Professional Staff Member
                     Laura W. Kilbride, Chief Clerk

                                                      Calendar No. 723
114th Congress        }                                 {       Report
                                 SENATE
 2nd Session          }                                 {      114-407

======================================================================

 
             GRANT REFORM AND NEW TRANSPARENCY ACT OF 2016

                                _______
                                

               December 20, 2016.--Ordered to be printed

   Filed, under authority of the order of the Senate of December 10 
                  (legislative day, December 9), 2016

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 2972]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2972) to amend 
title 31, United States Code, to provide transparency and 
require certain standards in the award of Federal grants, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill, as amended, do pass.

                            C O N T E N T S

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................7
 IV. Section-by-Section Analysis......................................7
  V. Evaluation of Regulatory Impact.................................10
 VI. Congressional Budget Office Cost Estimate.......................10
VII. Changes in Existing Law Made by the Bill, as Reported...........11

                         I. Purpose and Summary

    S. 2972, the Grant Reform and New Transparency Act of 2016 
or GRANT Act, seeks to improve the Federal competitive grant 
process by increasing transparency and providing further 
assistance to competitive grant applicants. Specifically, the 
bill strives to ensure a more open grant process by requiring 
the Office of Management and Budget (OMB) to post all Federal 
competitive grant opportunities on one central website, where 
information on eligibility requirements, evaluation factors, 
and anticipated timetables of award dates, among other relevant 
information, can be accessed.
    The bill also gives several tools to applicants who are not 
awarded competitive grants to improve their future 
applications, including the posting of sample winning grant 
proposals on the central grant website, and the opportunity for 
those who are not awarded a grant to request an explanation 
from the awarding agency. Finally, the bill aims to reduce 
waste, fraud, and duplication in competitive grants by 
codifying current regulations requiring that, before awarding 
competitive grants, agencies review the ability of grant 
applicants to carry out grants, including their past grant 
performance and ability to comply with financial reporting 
standards. The bill also requires, to the extent practicable, 
an interagency search for duplication in research grants.

              II. Background and the Need for Legislation

    The Federal Government awarded more than $600 billion in 
total grants in each of the last three years.\1\ While the 
purpose and recipients of Federal grants are diverse, 
transparency and accountability is needed in the grants 
process.
---------------------------------------------------------------------------
    \1\USASpending.gov, Overview of Awards by Fiscal Year, available at 
https://www.usaspending.gov/transparency/Pages/OverviewOfAwards.aspx.
---------------------------------------------------------------------------
    This Congress, the Committee has been conducting oversight 
and implementing reforms of Federal grants processes. Senators 
James Lankford, Ron Johnson, Tom Carper, and Kirsten Gillibrand 
requested that the Government Accountability Office (GAO) study 
the progress made by the Council on Financial Assistance Reform 
(COFAR) in implementing their priority goals along with actions 
that agencies are taking to implement the merit-based review 
processes for grants required under regulations titled the new 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards (2 CFR 200), also known as the 
``Super Circular''.\2\ Further, on November 30, 2015, the 
Committee approved the Grants Oversight and New Efficiency Act 
(S. 1115) that seeks to identify and close out expired grants. 
S. 1115 was signed into law on January 28, 2016.\3\
---------------------------------------------------------------------------
    \2\Letter from Sens. Lankford, Johnson, Carper, and Gillibrand, to 
the Government Accountability Office (Jul. 15, 2015) (on file with 
Comm. staff).
    \3\Pub. L. No. 114-117.
---------------------------------------------------------------------------
    The GRANT Act follows on this work and the findings of 
seven oversight hearings held in the U.S. House of 
Representatives between 2009 and 2011 that examined the grant 
life cycle for areas of waste, fraud, and abuse.\4\ The 
hearings, convened before the publication of the Super 
Circular, found that there are opportunities to strengthen the 
award-making processes at various stages, including pre-award 
vetting, notice of funding opportunities, agency decision 
making, and post-decision feedback for applicants. The bill 
aims to combine some of these suggested improvements with the 
goals of providing clear, consistent, and beneficial 
information for grant applicants while addressing the potential 
for waste, fraud, and abuse.
---------------------------------------------------------------------------
    \4\Preventing Stimulus Waste and Fraud: Who are the Watchdogs?: 
Hearing Before the Oversight and Gov't Reform Comm., 111th Cong. 
(2009); Tracking the Money: Preventing Waste, Fraud and Abuse of 
Recovery Act Funding: Hearing Before the Oversight and Gov't Reform 
Comm., 111th Cong. (2009); Tracking the Money: How Recovery Act 
Recipients Account for their Use of Stimulus Dollars: Hearing Before 
the Oversight and Gov't Reform Comm., 111th Cong. (2009); The Freedom 
of Information Act: Crowd-Sourcing Government Oversight: Hearing Before 
the Oversight and Gov't Reform Comm., 111th Cong. (2009); Achieving 
Transparency and Accountability in Federal Spending: Hearing Before the 
Oversight and Gov't Reform Comm., 112th Cong. (2011); Transparency 
Through Technology: Evaluating Federal Open-Government Initiatives: 
Hearing Before the Oversight and Gov't Reform Comm. Subcomm. on 
Technology Information Policy, Intergovernmental Relations and 
Procurement Reform, 112th Cong. (2011); Improving Oversight and 
Accountability in Federal Grant Programs: Hearing Before the Oversight 
and Gov't Reform Comm. Subcomm. on Technology Information Policy, 
Intergovernmental Relations and Procurement Reform, 112th Cong. (2011).
---------------------------------------------------------------------------

Pre-award evaluation requirements

    On December 26, 2013, the OMB and the COFAR issued the 
Super Circular, which updated, consolidated, and streamlined 
eight existing guidance documents that outline the use, 
administration, and audit processes for Federal award 
disbursements.\5\ One critical component included in the Super 
Circular is the pre-evaluation protocols that each agency must 
follow in the grant award-making process. These requirements 
are meant to provide agencies with a number of factors that can 
be used to evaluate applicants, such as a grant applicant's 
financial management capabilities, internal controls, financial 
performance history, reports and findings from any past audits, 
and whether the applicant has received Federal funds from other 
sources, before distributing funds to grant recipients.\6\ The 
bill codifies the pre-evaluation criteria established in the 
Super Circular to convey Congressional support for the process 
and to further the implementation of these practices by Federal 
grant-making agencies.
---------------------------------------------------------------------------
    \5\Office of Management and Budget, 78 FR 78589, Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards, available at https://www.federalregister.gov/
articles/2013/12/26/2013-30465/uniform-administrative-requirements-
cost-principles-and-audit-requirements-for-federal-awards.
    \6\Id. at 200.205.
---------------------------------------------------------------------------
    In a 2006 report on discretionary grants awarded by the 
Department of Education (DOE), the GAO examined a selection of 
grant awards from 2003 and 2004. During this inquiry, the GAO 
found that in about 98 percent of files GAO reviewed for these 
grants, there was no evidence that program officers checked a 
grantee's audit history--a key check, the agency claimed, on an 
applicant's ability to manage Federal grant funds.\7\ The same 
report found approximately 45 percent of the grant files did 
not contain documentation that the DOE screened grant 
applicants for eligibility, though program officials asserted 
that such screenings do occur.
---------------------------------------------------------------------------
    \7\GOV'T ACCOUNTABILITY OFFICE,GAO-06-268, DISCRETIONARY GRANTS: 
FURTHER TIGHTENING OF EDUCATION'S PROCEDURES FOR MAKING AWARDS COULD 
IMPROVE TRANSPARENCY AND ACCOUNTABILITY (2006), available at http://
www.gao.gov/new.items/d06268.pdf.
---------------------------------------------------------------------------
    The bill's codification of the pre-evaluation criteria set 
forth in the Super Circular (2 CFR 200.205) is not intended to 
create new burdens or reporting requirements on applicants or 
agencies that are already in compliance with the current 
protocols. Moreover, the bill would establish simplified 
procedures that allow agencies to ease the application and 
vetting process for frequent grant applicants or applicants 
deemed by Federal agencies to be a low risk for mismanaging 
funds.
    The bill also includes a new requirement for research 
grants during the pre-award process, under which agencies 
would, to the extent practicable, review grant applicants for 
any interagency duplication of efforts. These screenings may 
utilize text-similarity searches. In 2013, Nature Magazine 
published an article suggesting that between $70 million and 
$200 million in Federal funds may have been awarded to projects 
that were already receiving funding from other grant 
programs.\8\ The report utilized text-similarity detection 
software developed by one of the authors to discover potential 
duplication and overlap in winning grant proposals among grant 
programs at multiple agencies. Though the review could not 
definitively identify all duplication due to Freedom of 
Information Act restrictions, nor whether agencies had 
discovered the potential duplication and made appropriate 
adjustments, the authors recommended that funding agencies curb 
duplicate funding by using text-similarity software to identify 
proposals which need closer scrutiny.
---------------------------------------------------------------------------
    \8\Harold R. Garner, Lauren J. McIver and Michael B. Waitzkin, Same 
Work, twice the Money?, Vol. 493, Nature Magazine (Jan. 31, 2013 ), 
available at http://www.nature.com/articles/
493599a.epdf?referrer_access_token=WMdGmBM7Ei-fZ7hTVH2YCtRgN0jAjWel9 
jnR3ZoTv0Nsapw4DXe_u-tPWvCB0XaT03gVgCt1tTDQLWmIDfiEi7l7k58Y_3xuj 
7TWlwuc2dIzVYNugDYYUAujXzjbllawyV_IYpQknVDHtFLPRImE3VJYsQ-qd-UzCcqAi 
MX396XQ%3D&tracking_referrer=www.nature.com.
---------------------------------------------------------------------------
    Multiple grants in the same field or topic is a common and 
necessary occurrence. However, with multiple agencies awarding 
grants to similar fields, it could be helpful for Federal 
agencies to maintain awareness of other ongoing Federal efforts 
so that unnecessary duplication or fragmentation does not 
occur, provided that such an endeavor does not negatively 
impact the grant programs in question. It is the Committee's 
intent that this review should not discourage awarding grants 
to proposals similar to existing research, particularly repeat 
studies, which are necessary to confirming research findings, 
but rather to make agencies aware of potential duplicative 
efforts within other grant programs, particularly multiple 
proposals or grant applications from the same applicant.

Accessibility of information by potential grantees

    One of the primary goals of the GRANT Act is to help 
provide the information and tools necessary for any applicant 
to submit a successful grant application. To this end, the bill 
requires each agency to make information available about the 
award process for discretionary, competitive grants while 
ensuring applicants have greater opportunities and more 
information about the decision-making process. This includes 
each agency posting basic information about each grant 
opportunity on grants.gov, including the factors that will be 
used to evaluate proposals--as required by the Super Circular--
while encouraging the use of grants.gov as a one-stop shop to 
apply for grants. Agencies may offer additional alternative 
methods for applicants to submit applications, proposals, and 
other relevant documents, should the applicant prefer 
alternative methods, but it is the Committee's intent that 
agencies must at least offer the grants.gov application option. 
The bill also requires agencies to post a sample of winning 
grant proposals so that potential applicants without the 
resources to hire a professional grant writer can examine the 
substance of a successful application.

Transparency in the decision-making process

    Decisions made by grant officers and peer review panels 
determine the recipients of billions of dollars in taxpayer 
dollars. This is a significant responsibility that necessitates 
strong oversight and accountability. The bill requires 
additional information on the decision-making process for 
Federal grants, requiring agencies to post the number of 
applicants, the criteria used, and whether they used numerical 
rankings or other recommendations from peer reviewers. The 
provision requires an agency to post a written explanation for 
grant award decisions that were not consistent with the 
numerical rankings or recommendations from the peer review 
board.
    There have been several cases discovered by the GAO or 
Offices of Inspectors General (OIGs) that found grants have 
been awarded in problematic circumstances. In a 2010 review of 
the Department of Health and Human Service (HHS)'s runaway and 
homeless youth grants, the GAO noted that ``[f]inal funding 
decision memos used to internally document grant award 
decisions for 2007 and 2008 did not contain supporting 
information regarding why applications with high scores were 
not funded.''\9\ Though the GAO did recognize that ``the agency 
is permitted to use its discretion to deny grants based on 
other reasons,'' the report concluded that ``[w]ithout fully 
documenting and permanently recording its rationale for 
exercising its discretion to deny grants to highly scored 
applicants, the agency decision-making process is not 
transparent.'' Similarly, a 2009 GAO report found that in 
Fiscal Year 2007, Institute and Center (IC) directors from the 
National Institute of Health (NIH) selected about 19 percent of 
the applications for Research Project Grants Programs that year 
that had scientific merit scores below the established scoring 
percentile for the program, due to other evaluation 
factors.\10\ The GAO noted that ``IC directors have discretion 
when making final extramural decisions and are not required to 
fund applications based strictly on the scores resulting from 
the evaluation of their scientific merit,'' and that ``ICs are 
required under NIH policy to document the corresponding 
rationale used'' when taking outside factors into account. 
However, the report also determined that this level of 
discretion exercised by institute and center directors 
``represent[s] an area of potential risk'' because of their 
``latitude in making these decisions,'' and that the 
documentation for these decisions are not required to be 
submitted to or collected by the NIH's Office of the 
Director.\11\
---------------------------------------------------------------------------
    \9\Gov't Accountability Office, GAO-10-335, Runaway and Homeless 
Youth Grants: Improvements Needed in the Grant Award Process (2010), 
available at http://www.gao.gov/assets/310/304262.pdf.
    \10\Gov't Accountability Office, GAO-09-687, National Institutes of 
Health: Completion of Comprehensive Risk Management Program Essential 
to Effective Oversight (2009), available at http://www.gao.gov/assets/
300/295085.pdf.
    \11\Id.
---------------------------------------------------------------------------
    In 2010, the OIG of the U.S. Department of Justice (DOJ) 
released a report on the OIG's audit of the Office on Violence 
Against Women's (OVW) Recovery Act grant selection process.\12\ 
The DOJ's OVW used peer review scores to rank grant applicants. 
However, the OIG found a number of issues with the peer review 
scoring system at OVW, including a number of troubling 
incidents where the peer rankings were miscalculated, 
potentially depriving qualified applicants from receiving 
funds. The report also noted that at times the program omitted 
information from or misplaced important award decision 
documents. The OIG recommended that the office improve how it 
maintains these documents to have ``an adequate record of the 
reasons for selecting the grantees that it did.''\13\
---------------------------------------------------------------------------
    \12\U.S. Department of Justice, Office of Inspector General, Audit 
Division, The Office on Violence Against Women's Recovery Act Grant 
Selection Process, Audit Report 10-31 (July 2010), available at http://
www.justice.gov/oig/reports/OBD/a1031.pdf.
    \13\Id.
---------------------------------------------------------------------------
    There are many legitimate reasons to award grants in a 
manner that is inconsistent with the numerical rankings, such 
as the need for geographic diversity or ensuring that the 
dispersal of research funding is balanced across fields and 
disciplines. The bill should not impact the ability for 
agencies to award grants in a manner that is inconsistent with 
their rankings. Transparency into the decision-making process 
through a written justification for any reordering will provide 
for enhanced accountability in the award process and prevent 
similar situations to those outlined above.

Post-decision explanation for applicants

    In addition to requiring that agencies post written 
technical assistance with grant opportunities, the GRANT Act 
requires that agencies provide certain grant applicants with a 
direct interaction describing the basis for the award decision. 
Any applicant for a grant award in an amount larger than 
$100,000 may request a direct interaction from the agency 
describing the basis for the award decision. This provision is 
intended to support grant applicants in the application process 
by providing appropriate feedback and assistance to applicants 
who may be unable to hire specialized grant writers. It will 
guarantee that an unsuccessful applicant can seek a minimum 
level of feedback if and when they are applying for a higher-
value award.

Conflicts of interest review

    To have a fair and objective grant-making process, 
integrity in the decisions to award grants is of the upmost 
importance. There have been circumstances in the past where 
agencies have been determined to have practiced lax conflicts 
of interest policies. In a 2007 report, the GAO found that 
while ``NIH has undertaken a number of activities to improve 
its polices and processes related to conflicts of interest,'' 
the NIH had not established clear recusal policies for managing 
conflicts of interest among senior NIH employees who have 
decision-making responsibilities for the NIH's research 
efforts.\14\ In an investigation into OVW grants, the OIG found 
``a weakness in how peer reviewers were screened for conflicts 
of interest before evaluating and scoring applications.''\15\ 
The OIG audit revealed that ``[i]n at least 23 instances, peer 
reviewers signed and dated conflict of interest forms before 
the date they were assigned specific applications to review,'' 
though the OIG did not identify any specific instances of 
conflicts of interest.\16\
---------------------------------------------------------------------------
    \14\Gov't Accountability Office, GAO-07-319, NIH Conflict of 
Interest: Recusal Policies for Senior Employees Need Clarification 
(2007), available at http://www.gao.gov/assets/270/260235.pdf.
    \15\U.S. Department of Justice, Office of Inspector General, Audit 
Division, The Office on Violence Against Women's Recovery Act Grant 
Selection Process, Audit Report 10-31 (July 2010), available at http://
www.justice.gov/oig/reports/OBD/a1031.pdf.
    \16\Id.
---------------------------------------------------------------------------
    Any conflicts of interest that may exist either in the peer 
review process or within the grant-awarding agency are 
corruptive and could favor certain groups of applicants at the 
cost of others. 2 CFR 200.112 of the Super Circular requires 
Federal agencies to establish conflict of interest policies for 
grant awards. However, to ensure that agencies publish and 
comply with rigorous conflicts of interest policies, the bill 
requires that each grant award-making agency's respective OIG 
perform a review of that agency's conflicts of interest policy.

                        III. Legislative History

    S. 2972, the Grant Reform and New Transparency Act of 2016, 
was introduced May 23, 2016, by Senator James Lankford. The 
bill was referred to the Senate Committee on Homeland Security 
and Governmental Affairs.
    The Committee considered S. 2972 at a business meeting on 
May 25, 2016. A modified substitute amendment was offered by 
Senator Lankford that requires that agencies post a set of 
sample winning grant proposals awarded under the same or 
similar program within the last three years, rather than all 
winning grant proposals. The amendment also conformed the pre-
award evaluation provision to align it with the existing 
processes established by 2 CFR 200.205, rather than add 
duplicative evaluations, and simplifies pre-award evaluation 
procedures for grantees deemed to be ``low-risk'' by agencies. 
No other amendments were offered.
    The Committee adopted the Lankford modified substitute 
amendment, and ordered the bill, as amended, be reported 
favorably by roll call vote with 12 yeas to 2 nays. Senators 
voting in the affirmative were Senators Johnson, Portman, Paul, 
Lankford, Ayotte, Ernst, Sasse, Carper, McCaskill, Tester, 
Heitkamp, and Peters. For the record only, Senators McCain and 
Enzi voted yes by proxy. The Senators voting in the negative 
were Senators Baldwin and Booker.

        IV. Section-by-Section Analysis of the Bill, as Reported

Section 1. Short title

    This section establishes the short title of the bill as the 
``Grant Reform and New Transparency Act of 2016'' or the 
``GRANT Act''.

Section 2. Grants transparency requirements

    Amends Subtitle V of title 31, U.S.C., by inserting a new 
chapter adding transparency requirements for competitive 
grants. The new chapter 74 contains five sections.
    Sec. 7401 provides definitions for several terms to be used 
in chapter 74, including ``applicant,'' ``competitive grant,'' 
``executive agency,'' ``grant,'' and ``grant reviewer.'' Most 
significantly, because the legislation improves transparency 
measures for only ``competitive grants,'' this section defines 
the term to mean discretionary grants awarded by Executive 
agencies using merit-based selection procedures.
    Sec. 7402 requires that certain risk evaluations be 
performed by an agency prior to awarding a competitive grant. 
First, this section requires Executive agencies to conduct an 
evaluation of the risk posed by an applicant to successfully 
carry out the grant in accordance with 2 CFR 200.205, also 
known as the Super Circular, or any successor. The Super 
Circular requires that agencies evaluate grant applicants for 
risks posed by a number of factors, which could include 
financial stability, quality of management systems, ability to 
perform grant functions, ability to adhere to Federal laws and 
regulations, and past performance history, including the 
results of previous audits.
    In addition to the risk factors in the Super Circular, Sec. 
7402 directs agencies to review research grants to identify any 
interagency duplication of effort, which may be completed 
through a text-similarity detection process. The bill directs 
that this be done to the greatest extent practicable.
    This section also directs agencies to identify applicants 
which pose a relatively low risk of failing to execute the 
grant successfully and properly, to minimize the burden on 
those applicants and use any existing findings for the 
applicant under the single audit process described in chapter 
75 of title 31, U.S.C.
    Subsections 7403 (a) and (b) require that the Director of 
OMB maintain one public website, grants.gov or its successor, 
which allows users to find and apply to all Federal competitive 
grant opportunities. For each competitive grant opportunity 
announced by an Executive agency, the agency will be required 
to post specific information about the grant opportunity in a 
searchable format. Information required to be posted includes 
the announcement and purpose of the grant, the anticipated 
period of performance and whether the agency anticipates 
continuing the grant, the amount of funds available for the 
grant (if a specific sum is reserved), a statement of 
eligibility requirements of the grant, and a point of contact 
at the agency for questions. Also required is a clear statement 
of evaluation factors or criteria that the Executive agency 
intends to use for evaluation, a description of the process and 
standards to be used by the Executive agency to determine that 
each grant reviewer does not have a prohibited conflict of 
interest with respect to the evaluation of the grant 
application, the anticipated deadline for grant application 
submissions, and a set of sample winning grant proposals 
awarded by the same or similar program within the last three 
years.
    Subsection 7403(c) requires, to the greatest extent 
practicable, that the grants website allow applicants to use 
the website with any widely-used computer platform and to 
search the website for all competitive grants by certain 
criteria, including purpose, funding agency, and program 
source. The website must also allow applicants to apply for 
competitive grants using the website where practicable.
    Subsection 7403(d) provides that each agency shall make 
detailed grant guidance and written technical assistance 
available to grant applicant on the grants website. For each 
grant awarded, within 30 days after the date on which the grant 
is awarded, each agency must post on the grants website an 
explanation for the basis of the selection decisions for the 
grant, and the number of proposals received for the grant. The 
agency must also post whether or not winning grant applications 
or proposals were awarded consistent with a numerical ranking 
or other recommendations by grant reviewers. In any case in 
which the award of the grant is not consistent with numerical 
rankings or other recommendations made by grant reviewers, the 
agency must post written justification explaining the rationale 
for making such a decision.
    Subsection 7403(d) also allows agencies to redact 
personally-identifiable information from any posts on the 
grants website as required by this section. Additionally, 
agencies may not post any sensitive information on the grants 
website which the Executive agency determines would adversely 
affect an applicant.
    Subsection 7403(e) requires that agencies publish a 
forecast of all nonemergency grant solicitations that an agency 
expects to issue for the following calendar year. This forecast 
is to be published not later than November 30 of each year, or 
not later than 60 days after the Executive agency is 
appropriated funds for the fiscal year, whichever is later, and 
is nonbinding on the agency, though it is required to be based 
on the best information available. The forecast is required to 
include for each grant, to the extent practicable, a brief 
description of the subject and purpose, a point of contact, and 
the expected or actual dates for issuing the grant 
solicitation, application and submission deadline. The forecast 
is to also contain estimations of the amount of the average 
grant award, the maximum and minimum amounts of each award (if 
applicable) and the total number of grant awards to be made, as 
well as a description of the total amount available to be 
awarded.
    Subsection 7403(f) clarifies that nothing in section 7403 
shall be interpreted as requiring information which would be 
exempted from disclosure according to the Freedom of 
Information Acts (FOIA) (5 U.S.C. 552) to be posted on the 
grants website. However, the exemption in 5 U.S.C. 552(b)(5), 
which exempts inter-agency or intra-agency memorandums or 
letters which would not be available by law to a party other 
than an agency in litigation with the agency from FOIA 
requests, does not apply to pre-decisional documents required 
to be posted under this section to explain the basis for grant 
selection decisions and to justify decisions that do not follow 
the rankings or recommendations of grant reviewers.
    Subsection 7403(g) states that the grants website, to the 
extent practicable, should make all information required by 
section 7403 available in its original format and without 
charging a fee or requiring a license or registration. The 
grants website must also: allow the information to be searched, 
downloaded in bulk, disseminated via automatic electronic 
means, and freely shared by the public, such as by social 
media; use permanent uniform resource locators for the required 
information; and provide an opportunity for the public to 
provide input about the usefulness of the site and to make 
recommendations for improvement.
    Section 7404 states that, if requested by an applicant for 
a competitive grant, for each grant award made by an agency in 
an amount larger than $100,000, the agency must provide the 
applicant for the grant with a direct interaction describing 
the basis for the award decision of the agency. This 
interaction should be timely and should include, if applicable, 
the basis for the decision not to award a grant to the 
applicant.
    Section 7405 requires that no later than 18 months after 
the date of enactment, the Inspector General of each Executive 
agency that awards competitive grants will conduct a review of 
the effectiveness of the conflict of interest policy of the 
agency. This should include a review of a random selection of 
peer review processes for competitive grants to detect 
favoritism within the peer review process.
    Section 2(b) of the bill is a clerical amendment to reflect 
the new chapter 74 of title 31, United States Code.

Section 3. Grants Workforce Report

    This section provides definitions for the terms ``Executive 
Agency'' and ``Federal Grants Workforce'' for the purposes of 
this section. The section also requires the GAO to issue a 
report to relevant Congressional committees, not later 180 days 
after the date of enactment, examining the Federal grants 
workforce. This report should address the size of the Federal 
grants workforce and expected employment trends, the adequacy 
of training opportunities for the workforce, whether the 
Federal Acquisition Institute or similar entities engaged in 
acquisition workforce training should be made available for 
grant workforce training, and whether a warrant system similar 
to the Federal acquisition system should be established for 
Federal officials authorized to award grants. The report should 
also examine suspension and debarment actions taken against 
grantees by agencies during the preceding three year period, 
and the level of agency resources assigned to the suspension 
and debarment functions. Finally, the report should make any 
necessary recommendations for improving the Federal grants 
workforce.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                  December 7, 2016.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2972, the Grant 
Reform and New Transparency Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lara 
Robillard.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 2972--Grant Reform and New Transparency Act of 2016

    S. 2972 would amend federal law pertaining to awards of 
grants across federal agencies. The legislation would require 
agencies to conduct additional evaluation of applicants for 
merit-based grants, to upgrade federal websites related to 
grants, and to prepare additional reports.
    S. 2972 would largely codify existing practices for merit-
based grants. CBO estimates that implementing changes to the 
grant-award system as required under S. 2972 would cost less 
than $1 million annually over the 2017-2021 period, subject to 
the availability of appropriated funds.
    Enacting the bill also could affect direct spending by 
agencies not funded through annual appropriations; therefore, 
pay-as-you-go procedures would apply. CBO estimates, however, 
that any net increase in spending by those agencies would not 
be significant. Enacting S. 2972 would not affect revenues.
    S. 2972 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Lara Robillard. 
The estimate was approved by Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 2972 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *

TITLE 31--MONEY AND FINANCE

           *       *       *       *       *       *       *

Subtitle V--General Assistance Administration

           *       *       *       *       *       *       *

CHAPTER 74--GRANTS TRANSPARENCY REQUIREMENTS

           *       *       *       *       *       *       *

              CHAPTER 74--GRANTS TRANSPARENCY REQUIREMENTS

Sec.
7401. Definitions.
7402. Pre-award evaluation requirements.
7403. Website relating to Federal grants.
7404. Postdecision explanation for failed applicants.
7405. Inspector General review of peer review process.

SEC. 7401. DEFINITIONS

    In this chapter:
          (1) Applicant.--The term `applicant' means an entity 
        that submits a proposal or application for a grant.
          (2) Competitive grant.--The term `competitive grant' 
        means a discretionary grant entered into through the 
        use of merit-based selection procedures for the purpose 
        of allocating funds authorized under a grant program of 
        an Executive agency.
          (3) Executive agency.--The term `Executive agency' 
        has the meaning given the term in section 105 of title 
        5, except the term does not include the Government 
        Accountability Office.
          (4) Grant.--The term `grant' means an award of 
        Federal financial assistance through a grant agreement 
        or cooperative agreement making payment in cash or in 
        kind to a recipient to carry out a public purpose 
        authorized by law.
          (5) Grant reviewer.--The term `grant reviewer', with 
        respect to a grant--
                  (A) means any individual who reviews, 
                evaluates, or participates in the decision to 
                select an applicant for award of the grant; and
                  (B) includes--
                          (i) a peer reviewer;
                          (ii) a merit reviewer; and
                          (iii) a member of a technical 
                        evaluation panel or board or a special 
                        emphasis panel.

SEC. 7402. PRE-AWARD EVALUATION REQUIREMENTS

    (a) Evaluation Required.--
          (1) In general.--Before awarding a competitive grant 
        and after determining eligibility and conducting a 
        merit-based review, an Executive agency shall conduct 
        an evaluation of the risk posed by an applicant to 
        successfully carry out the grant in accordance with 
        section 200.205 of title 2, Code of Federal regulations 
        (or any successor thereto).
          (2) Review of interagency duplication.--To the extent 
        practicable, each evaluation conducted under paragraph 
        (1) shall include a review of any interagency 
        duplication of efforts for research grants, which may 
        be completed through a text-similarity detection 
        process.
    (b) Simplified Evaluation Procedure for Certain 
Applicants.--
          (1) Definition.--In this subsection, the term 
        `covered applicant' means an applicant that, based on a 
        risk assessment conducted by the Executive agency, is 
        determined to pose a relatively low risk of failing to 
        execute the grant successfully and properly.
          (2) Procedure.--In conducting the evaluation required 
        under subsection (a) with respect to a covered 
        applicant, an Executive agency shall--
                  (A) minimize the burden on the covered 
                applicant; and
                  (B) consider any existing findings with 
                respect to the covered applicant under the 
                single audit process under chapter 75 of this 
                title related to the matters described in 
                subsection (b).

SEC. 7403. WEBSITE RELATING TO FEDERAL GRANTS

    (a) Requirement.--The Director of the Office of Management 
and Budget shall consult with Executive agencies to upgrade 
grants.gov or any proposed successor public website for finding 
Federal grant opportunities and applying for those grants so 
that the website--
          (1) may serve as a central point of information and 
        provide full access for applicants for competitive 
        grants; and
          (2) shall capture in 1 site, or provide electronic 
        links to, other relevant databases.
    (b) Notice of Competitive Grant Funds Availability.--At the 
time an Executive agency issues a solicitation or otherwise 
announces the availability of funds for a competitive grant, 
the Executive agency shall post on the grants website 
maintained under this section, in a searchable electronic 
format, relevant information about the grant opportunity, 
including--
          (1) the grant announcement and purpose of the grant;
          (2) the anticipated period of performance for new 
        awards and whether the Executive agency anticipates 
        that the grant will be continued;
          (3) in the case of an announcement with respect to 
        which a specific sum is reserved, the amount of funds 
        available for the grant;
          (4) a statement of eligibility requirements for the 
        grant;
          (5) contact information for the Executive agency, 
        including the name, telephone number, and electronic 
        mail address of a specific person or persons 
        responsible for answering questions about the grant and 
        the application process for the grant;
          (6) a clear statement of the evaluation factors or 
        criteria that the Executive agency intends to use to 
        evaluate and rank grant applications or proposals 
        submitted, including the weight to be applied to each 
        factor or criterion;
          (7) a description of the process and standards to be 
        used by the Executive agency to determine that each 
        grant reviewer does not have a prohibited conflict of 
        interest, as defined by applicable statute or 
        regulation, with respect to the evaluation or review of 
        a grant application or proposal, or the decision to 
        award a grant;
          (8) the anticipated deadline for submission of grant 
        applications or proposals; and (9) a set of sample 
        winning grant proposals awarded under the same or 
        similar program within the last 3 years.
    (c) Use by Applicants.--The grants website maintained under 
this section shall, to the greatest extent practicable, allow 
applicants to--
          (1) use the website with any widely-used computer 
        platform;
          (2) search the website for all competitive grants by 
        purpose, funding agency, program source, and other 
        relevant criteria; and
          (3) apply for a competitive grant using the website.
    (d) Technical Assistance for Grantees.--
          (1) In general.--Each Executive agency shall make 
        available on the grants website maintained under this 
        section detailed grant guidance and written technical 
        assistance for applicants.
          (2) Grant award process information posted.--With 
        respect to each grant awarded by an Executive agency, 
        the Executive agency shall, not later than 30 days 
        after the date on which the grant is awarded, post on 
        the grants website maintained under this section--
                  (A) documentation explaining the basis for 
                the selection decision for the grant, the 
                number of proposals received for the grant, 
                and, with respect to the proposal that resulted 
                in the grant award, whether the grant was 
                awarded consistent with a numerical ranking or 
                other recommendations by grant reviewers; and
                  (B) in any case in which the award of the 
                grant is not consistent with the numerical 
                rankings or any other recommendations made by 
                grant reviewers, a written justification 
                explaining the rationale for the decision not 
                to follow the rankings or recommendations.
          (3) Sensitive information.--
                  (A) Personally identifiable information.--
                Each Executive agency may redact any personally 
                identifiable information from a post on the 
                grants website maintained under this section.
                  (B) Adverse information.--An Executive agency 
                may not post on the grants website maintained 
                under this section any sensitive information 
                that the Executive agency determines would 
                adversely affect an applicant.
    (e) Submission and Publication of Grant Solicitation 
Forecast on the Grants Website.--
          (1) Requirement.--Not later than November 30 of each 
        fiscal year or not later than 60 days after the date on 
        which amounts are appropriated to an Executive agency 
        for a fiscal year, whichever is later, the head of the 
        Executive agency shall post a forecast, in accordance 
        with paragraph (2), of all nonemergency grant 
        solicitations that the Executive agency expects to 
        issue for the following calendar year, which--
                  (A) shall be based on the best information 
                available; and
                  (B) shall not be binding on the Executive 
                agency.
          (2) Matters included.--The forecast required under 
        paragraph (1) shall include, to the extent practicable, 
        for each expected grant solicitation in a machine-
        readable format--
                  (A) a brief description of the subject and 
                purpose of the grant, organized by the 
                organizational unit of the Executive agency;
                  (B) contact information for the 
                organizational unit or individual responsible 
                for the grant, if known, including name, 
                telephone number, and electronic mail address;
                  (C) the expected or actual dates for the 
                issuance of the grant solicitation and 
                application and the grant application 
                submission deadline;
                  (D) the estimated amount of the average grant 
                award, the estimated maximum and minimum 
                amounts of the grant award, if applicable, and 
                the estimated total number of grant awards to 
                be made; and
                  (E) a description of the total amount 
                available to be awarded.
    (f) Publication of Information.--
          (1) In general.--Except as provided in paragraph (2), 
        nothing in this section shall be construed to require 
        the publication of information otherwise exempt from 
        disclosure under section 552 of title 5 (commonly 
        referred to as the `Freedom of Information Act').
          (2) Limitation.--The exemption under section 
        552(b)(5) of title 5 shall not exempt from publication 
        predecisional documents required to be posted pursuant 
        to the requirements under subsection (d)(2).
    (g) Transparency of Information.--To the extent 
practicable, the grants website maintained under this section 
shall--
          (1) make the information described in this section 
        available in its original format;
          (2) make the information described in this section 
        available without charge, license, or registration 
        requirement;
          (3) permit the information described in this section 
        to be searched;
          (4) permit the information described in this section 
        to be downloaded in bulk;
          (5) permit the information described in this section 
        to be disseminated via automatic electronic means;
          (6) permit the information described in this section 
        to be freely shared by the public, such as by social 
        media;
          (7) use permanent uniform resource locators for the 
        information described in this section; and
          (8) provide an opportunity for the public to provide 
        input about the usefulness of the site and 
        recommendations for improvements.

SEC. 7404. POSTDECISION EXPLANATION FOR FAILED APPLICANTS

    If requested by an applicant for a competitive grant, for 
each grant award made in an amount in excess of $100,000 
pursuant to a merit-based selection procedure, an Executive 
agency shall provide the applicant with a timely direct 
interaction describing the basis for the award decision of the 
Executive agency, including, if applicable, the decision not to 
award a grant to the applicant.

SEC. 7405. INSPECTOR GENERAL REVIEW OF PEER REVIEW PROCESS

    Not later than 18 months after the date of enactment of the 
Grant Reform and New Transparency Act of 2016, the Inspector 
General of each Executive agency that awards competitive grants 
shall conduct a review of the effectiveness of the conflicts of 
interest policy of the Executive agency, including a review of 
a random selection of peer review processes, with respect to 
the peer review process for competitive grants in order to 
detect favoritism.

                                  [all]
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