```

[House Report 112-484]
[From the U.S. Government Publishing Office]

112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-484

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

 
             GRANT REFORM AND NEW TRANSPARENCY ACT OF 2011

                                _______
                                

  May 15, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Issa, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3433]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 3433) 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, report favorably thereon 
with amendments and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     2
Section-by-Section...............................................    13
Explanation of Amendments........................................    16
Committee Consideration..........................................    16
Application of Law to the Legislative Branch.....................    16
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    16
Statement of General Performance Goals and Objectives............    16
Federal Advisory Committee Act...................................    16
Unfunded Mandate Statement.......................................    16
Earmark Identification...........................................    17
Committee Estimate...............................................    17
Budget Authority and Congressional Budget Office Cost Estimate...    17
Changes in Existing Law Made by the Bill as Reported.............    18
Minority Views...................................................    24

    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
    Page 2, after line 7, strike the item relating to section 
7402 in the table of contents proposed to be inserted and 
insert the following:

``7402. Merit-based selection procedure requirements in awarding 
grants.
  Page 11, line 5, strike ``name, title, and employer'' and 
insert ``employer, and either the name and title or a unique 
identifier,''.

                     Committee Statement and Views

                          PURPOSE AND SUMMARY

    From 1990 to 2010, Federal outlays for grants more than 
quadrupled, rising from $135 billion to more than $600 billion. 
In FY 2010, grants consumed nearly one-fifth of the entire 
Federal budget. Despite this increased grant spending, which 
seems likely to continue, little attention has been paid to 
ensuring that grants are awarded fairly and transparently, or 
that grant funds are accomplishing the purposes for which they 
are intended. The dramatic surge in Federal grant spending has 
left taxpayer dollars vulnerable to waste, fraud, 
mismanagement, and abuse. Identifying and reducing these 
vulnerabilities in the awarding and administering of grant 
programs has never been as critical as it is today. 
Transparency can provide a check on waste, fraud, and abuse in 
government spending.\1\ Today, however, all too often, Federal 
grant spending is carried out in an opaque and relatively 
secretive way.
---------------------------------------------------------------------------
    \1\See, e.g., Testimony of Earl Devaney before the Committee on 
Oversight and Government Reform, June 14, 2011, available at http://
oversight.house.gov/images/stories/Testimony/Devaney_Testimony_2.pdf, 
at 4 (``Devaney Testimony'') (``Transparency can cause embarrassment, 
which, in turn, causes self-correcting behavior'').
---------------------------------------------------------------------------
    H.R. 3433, the Grant Reform and New Transparency Act of 
2011, or GRANT Act, is intended to strengthen Federal grant 
programs on a government-wide basis. The bill aims to improve 
the grant process at all stages of the grant life cycle. The 
bill requires greater accountability in grantees' use of grant 
funds, addresses the agency close-out process following 
completion of the grant, and directs attention to the need for 
a highly trained workforce to effectively award and administer 
Federal grant funds.
    The centerpiece of the bill, however, is the enhanced 
transparency it brings to discretionary grant spending. The 
bill requires transparency in the decision-making process 
surrounding the award of discretionary grants. The bill opens 
Federal grant spending to closer scrutiny by the public, 
watchdog groups, media, Executive-Branch management, and 
Congress.
    The bill's transparency provisions apply only to 
discretionary grants--not to formula grants, block grants, or 
entitlements. The curtailing of earmarks means that the 
Executive Branch has greater discretion to allocate funds among 
projects. American taxpayers have the right to expect free 
access to accurate, comprehensive, and useful information 
describing how Federal agencies exercise that discretion. The 
bill requires that agencies use merit-based selection 
procedures that promote the use of competition. It does not 
prescribe the precise procedures to be used to carry out 
specific grant programs. What it does is establish baseline 
standards, such as requiring advance notice of grant 
opportunities and the disclosure of the evaluative criteria 
that will be used in selecting among grant applications. 
Agencies have flexibility to address specific matters that may 
be important to their mission, such as the consideration of 
unsolicited proposals or the enumeration of appropriate 
exceptions to general procedures.
    The bill's transparency provisions require that grant award 
information, including a copy of the successful grant 
application, be posted on a grants website. Importantly, under 
the bill, agencies are not required to post any information on 
the website that would otherwise be exempt under the Freedom of 
Information Act. The Committee expects that agencies will 
develop procedures and safeguards to protect proprietary or 
privileged information, including patentable ideas or trade 
secrets, from being disclosed. The Committee believes that the 
grant applicant is in the best position to initially identify 
material in its application or proposal that should be 
considered for redaction prior to posting on a publicly 
accessible website. The Committee expects that agencies can 
meet the bill's requirements while preserving the 
confidentiality of certain information by requesting that 
applicants submit a publicly available version of an 
application either at the time it submits an application, or 
within 15 days after notice of award. In addition, the bill 
allows the agency to delay the public disclosure of the 
application or redacted application of a successful applicant, 
under limited circumstances, for up to three years.
    The bill is intended to also bring transparency to the 
agency's competitive grant decision-making process by requiring 
disclosure of the award decision documentation and rankings of 
successful applications. Applicants and the public should be 
able to understand from information posted on an agency's 
website why a decision was made to choose a particular grant 
applicant from among a pool of competing applicants. In this 
regard, it is common practice for agencies to provide scores 
and rankings to proposals received, based on the merit of the 
grant application submitted, as judged by peer reviewers or 
evaluators. The bill does not prohibit an agency from choosing 
not to follow the rankings of applications in awarding a 
particular grant; it only requires that the agency explain and 
post the rationale for such decisions.
    The bill also adds transparency to the close-out phase of 
the grant process. Upon completion of the grant, the agency 
must post any final reports that were required to be submitted 
by the grantee under the grant. Such information can be useful 
in determining whether a grant accomplished the purpose 
intended.
    The GRANT Act requires each agency to post on its website a 
grant solicitation forecast identifying potential grant 
opportunities it expects to be available in the upcoming year. 
The Committee believes that comprehensive grants transparency 
should include some form of predictive information about future 
planning for grants. Aside from listing specific upcoming 
competitions and deadlines, agencies should disclose any broad 
goals and objectives they intend to pursue as part of their 
grantee selection process. This requirement is intended to 
provide greater opportunities for smaller organizations to 
compete for projects by giving them advance notice and time to 
prepare. This opportunity for increased competition should 
result in greater innovation and better outcomes for agency 
grant programs. The Committee recognizes that the budget and 
appropriations process may limit the ability of agencies to 
definitively identify future grant opportunities. Accordingly, 
the forecast is not binding on agencies but should be based on 
the best information available.
    The GRANT Act includes two other measures to improve the 
discretionary grant-making process and to promote transparency. 
First, it requires agencies to evaluate potential grantees to 
ensure they have the necessary financial systems in place and 
are capable of performing the grant. This requirement will help 
agencies avoid problems that have occurred when organizations 
ill-equipped to carry out a project use funds for unallowable 
purposes or are unable to successfully carry out the grant. 
Second, the bill promotes transparency and open decision-making 
by providing disappointed applicants for grants valued at more 
than $100,000 with an opportunity for a debriefing, in which 
the agency will explain why, e.g., an applicant was not funded, 
or not funded at the level sought.
    The GRANT Act contains several reporting requirements 
covering all types of grants. First, the bill directs the 
Office of Management and Budget (OMB) to report on a 
government-wide basis the amount of undisbursed grant funds in 
grant accounts that is expired, and thus no longer eligible to 
be used to carry out the grant. Second, the bill directs the 
Government Accountability Office (GAO) to report on several 
aspects of the grant workforce--those individuals who award and 
monitor Federal grants, and whose performance is so critical to 
the success of these programs. Finally, the bill contains a 
provision requiring OMB to submit a plan to Congress for 
improving the single audit process, a key tool in ensuring 
grantee accountability. The bill identifies several elements to 
be addressed and requires the plan be submitted within 6 months 
of enactment. OMB is then to report on implementation of the 
plan.

                  BACKGROUND AND NEED FOR LEGISLATION

    For the past two years, the Committee has examined the need 
to improve the transparency of Federal information, 
particularly Federal spending data. The Committee's efforts 
have included seven hearings,\2\ the formation of the 
Congressional Transparency Caucus,\3\ and extensive outreach 
and research by Republican and Democratic Committee staff. The 
Committee on Oversight and Government Reform was prompted to 
inquire into waste, fraud and abuse in the grant system due to 
the unprecedented surge in grant spending that occurred as part 
of the American Recovery and Reinvestment Act (Recovery 
Act).\4\ The initial inquiry focused primarily upon the 
deficiencies in the operation of Grants.gov, as well as its 
operational failures.\5\ More recently, the Committee broadened 
this inquiry to examine grants in a more general manner.
---------------------------------------------------------------------------
    \2\``Preventing Stimulus Waste and Fraud: Who are the Watchdogs?'' 
March 19, 2009; ``Tracking the Money: Preventing Waste, Fraud and Abuse 
of Recovery Act Funding,'' July 8, 2009; ``Tracking the Money: How 
Recovery Act Recipients Account for their Use of Stimulus Dollars,'' 
Nov. 19, 2009; ``The Freedom of Information Act: Crowd-Sourcing 
Government Oversight,'' March 17, 2011; ``Achieving Transparency and 
Accountability in Federal Spending,'' June 14, 2011; ``Transparency 
Through Technology: Evaluating Federal Open-Government Initiatives,'' 
March 11, 2011 (Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and Procurement Reform); ``Improving 
Oversight and Accountability in Federal Grant Programs,'' June 23, 2011 
(Subcommittee on Technology, Information Policy, Intergovernmental 
Relations and Procurement Reform).
    \3\See Press Release, ``Issa, Quigley Announce Bipartisan 
Transparency Caucus,'' March 24, 2010.
    \4\P.L. 111-5 (Feb. 17, 2009).
    \5\See, Letter from OGR to Sheila Conley, Deputy Assistant 
Secretary for Grants, U.S. Department of Health and Human Services 
(June 15, 2009) (on file with the Committee). Response of Richard 
Turman, Acting Assistant Secretary for Resources and Technology, U.S. 
Department of Health and Human Services (August 28, 2009) (on file with 
the Committee).
---------------------------------------------------------------------------

                          SUBCOMMITTEE HEARING

    On June 23, 2011, the Subcommittee on Technology, 
Information Policy, Intergovernmental Relations and Procurement 
Reform held a hearing to explore the issues surrounding grant 
transparency, management and oversight. The hearing, 
``Improving Oversight and Accountability in Federal Grant 
Programs,'' comprised two panels; the first panel presented 
experts from GAO, the Congressional Research Service (CRS), the 
Department of Justice (DOJ) Office of the Inspector General 
(OIG), and OMB. The second panel featured Oklahoma Senator Tom 
Coburn, who discussed the findings from his report regarding 
grant waste, fraud and abuse at the National Science Foundation 
(NSF).
    In the first panel, Jeanette Franzel, Managing Director of 
GAO's financial management assurance team, testified that there 
are weaknesses in the control systems of grants at all points 
in the grant cycle.\6\ Ms. Franzel testified that GAO's audits 
found that agencies awarded discretionary grants without 
adequately documenting the grantee selection process. GAO found 
that in some instances, agencies did not perform pre-award 
reviews until after the grants had been awarded. GAO found 
numerous weaknesses in the award process used by agencies, 
including a lack of documentation explaining the results of 
grant award decisions and weak internal controls for ensuring 
that grant applications would be evaluated consistently by peer 
reviewers.\7\ In the post-award stage, she stated that agencies 
need to improve oversight of grantee activities and management 
of Federal funds, noting that effective oversight procedures 
based on internal control standards for monitoring the 
recipients' use of awarded funds are key to ensuring that 
waste, fraud, and abuse are not overlooked.\8\
---------------------------------------------------------------------------
    \6\See Jeanette M. Franzel, GAO Managing Director Financial 
Management and Assurance, Federal Grants: Improvements Needed in 
Oversight and Accountability Processes, Testimony before the House 
Subcommittee on Technology, Information Policy, Intergovernmental 
Relations and Procurement Reform, June 23, 2011, at 6-7 [hereinafter 
GAO Federal Grant Oversight Testimony].
    \7\Id. at 8.
    \8\Id. at 9.
---------------------------------------------------------------------------
    Ms. Franzel also testified that grant closeout procedures 
represent one of the final opportunities to detect unallowable 
uses of funds and that attention is needed to address 
undisbursed balances in Federal grant programs on a government-
wide basis.\9\ She also testified that many grant programs have 
significant levels of improper payments.\10\ Finally, Ms. 
Franzel testified that improvements are needed to make single 
audits a more effective accountability mechanism over Federal 
grant spending.\11\ GAO found, in this regard, that the current 
Federal oversight structure is not adequate to monitor the 
efficiency and effectiveness of the single audit process.
---------------------------------------------------------------------------
    \9\Id. at 10-11.
    \10\Id. at 12.
    \11\Id. at 13.
---------------------------------------------------------------------------
    The second witness was Cynthia Schnedar, Acting Inspector 
General of the Department of Justice. Ms. Schnedar told the 
Subcommittee that the IG had conducted over 60 reviews of 
various DOJ grant programs and found that in some programs 
``inaccurate formulas were used in developing the scores and 
ranks of applicants, which resulted in the allocation of grants 
to 45 entities that should not have received grants, while 
another 34 entities that should have received grants did 
not.''\12\ She also cited examples of inconsistent treatment of 
applicants and a lack of documentation of award decisions, 
particularly when applications ranked lower by peer reviews 
received grants over higher-ranked applications.\13\ Also, Ms. 
Schnedar stated that DOJ needs to improve its procedures to 
reduce risks of conflict of interest in the grant award 
process. For example, one audit of one DOJ program revealed at 
least 23 instances in which peer reviewers signed forms 
indicating they had no conflict of interest with the grant 
applications before the peer reviewers even knew who the grant 
applicants were that they would be reviewing.\14\
---------------------------------------------------------------------------
    \12\Cynthia A. Schnedar, Acting Inspector General, U.S. Department 
of Justice, Testimony before the House Subcommittee on Technology, 
Information Policy, Intergovernmental Relations and Procurement Reform, 
June 23, 2011, at 4 [hereinafter DOJ Federal Grant Oversight 
Testimony].
    \13\Id.
    \14\Id.
---------------------------------------------------------------------------
    The third witness was Natalie Keegan, an analyst with CRS. 
Ms. Keegan also reported problems with transparency, 
particularly in the pre-award stage of the competitive grant-
making process. She testified that there is a lack of clarity 
in the evaluation criteria or formulas agencies use to rank 
applications.\15\ Based on a review of GAO and IG reports, she 
concluded that ``[o]versight of Federal agency grants 
administration is limited by the lack of transparency in the 
award process.''\16\ She went on to describe systemic problems 
with poor screening of peer review panels for conflict of 
interest and the awarding of grants without documentation.\17\
---------------------------------------------------------------------------
    \15\CRS Federal Grant Oversight Testimony, at 2-3.
    \16\Id. at 4.
    \17\Id.
---------------------------------------------------------------------------
    The final witness on the first panel was Daniel Werfel, 
Controller of the Office of Federal Financial Management, 
Office of Management and Budget. He testified that 
``commensurate with the substantial increase in the volume of 
grant awards [over the last decade], there has also been an 
increase in the efforts [to] improve management of grants by 
making [it] easier for applicants to find and apply for grant 
opportunities.''\18\ He stated that today, all Federal agencies 
are using Grants.gov, and OMB is currently exploring ways to 
improve the platform.\19\ Regarding oversight of grant 
programs, Mr. Werfel testified that the single audit is the 
primary tool that Federal agencies use for overseeing their 
grant programs. He pointed out that under OMB's implementing 
guidance to the Single Audit Act, more than 40,000 grantees 
covering over 95 percent of all Federal grant expenditures are 
audited annually.\20\ He stated that the administration remains 
committed to continuing efforts to improve the grant management 
process and identification and mitigation of waste, fraud, and 
abuse and are in the early stages of developing improvements to 
single audits.\21\
---------------------------------------------------------------------------
    \18\Daniel Werfel, Controller, Office of Federal Financial 
Management, Office of Management and Budget, Testimony before the House 
Subcommittee on Technology, Information Policy, Intergovernmental 
Relations and Procurement Reform, June 23, 2011, at 2 [hereinafter OMB 
Federal Grant Oversight Testimony].
    \19\Id.
    \20\Id. at 3.
    \21\Id. at 7.
---------------------------------------------------------------------------
    Senator Coburn presented the findings of his recent Senate 
investigation into waste, fraud and abuse in the grant programs 
at the National Science Foundation (NSF). Senator Coburn's 
report found more than $1.2 billion at the NSF lost to waste, 
fraud, duplication, and mismanagement and an additional $1.7 
billion in undisbursed balances in expired grant accounts.\22\
---------------------------------------------------------------------------
    \22\According to NSF's 2010 financial statements, the agency 
currently has $1.733 billion in ``undisbursed balances in expired grant 
accounts.'' In addition, past audits indicate that significant numbers 
of NSF-supported researchers fail to submit final and annual reports. A 
2005 audit found that approximately 47 percent of the 151,000 final and 
annual project reports required in the past 4 years were submitted late 
or not at all.
---------------------------------------------------------------------------
    At the Subcommittee's hearing, the fundamental absence of 
transparency was a key finding. Chairman Lankford stated in his 
opening remarks that agencies ``don't always disclose 
discretionary grant criteria, and decisions are not well-
documented.'' Ranking Member Gerry Connolly agreed that there 
is a need to improve standards and transparency, noting that 
``applicants cannot look back and see why they won or lost.'' 
These statements were supported and echoed by all expert 
witnesses who offered suggestions in their testimony.\23\ 
``Documenting the basis for final selection decisions 
concerning which proposals will be funded and which will not is 
a commonly-acknowledged best practice in the Federal grant-
making community.''\24\
---------------------------------------------------------------------------
    \23\See, e.g., DOJ Federal Grant Oversight Testimony, at 3 (``We 
believe that the Department still needs to make improvements in the 
following areas: (i) ranking of grant applications; (ii) consistent 
treatment of applicants; (iii) documentation and justification of award 
decisions. . . .'').
    \24\Danny Werfel, OMB Controller, Responses to Questions for the 
Record, submitted to Rep. Lankford, Chair, Subcommittee on Technology, 
Information Policy, Intergovernmental Relations and Procurement Reform, 
Committee on Oversight and Government Reform, July 26, 2011 
[hereinafter OMB QFR Response].
---------------------------------------------------------------------------

                    COMMITTEE RESEARCH AND FINDINGS

    Opportunities to reduce risks and vulnerabilities related 
to Federal grant programs exist throughout the entire life 
cycle of grants, beginning with the award of the grant and the 
process leading up to the award. The manner in which grant 
funds are awarded varies from program to program based on 
specific authorizing legislation. Because of the variability 
among grant programs, policy makers have been reluctant to 
impose a ``one-size-fits-all'' approach to the awarding of 
competitive grants,\25\ leaving the system without a consistent 
standard that can be applied on a government-wide basis. The 
Committee recognizes that reforming the discretionary grant 
award process must be undertaken in a way that respects the 
underlying grant programs and the wide array of existing 
purposes, characteristics, and authorities applicable to those 
programs. Accordingly, the Committee expects that agencies will 
be creative and flexible as they adapt their policies and 
procedures as required under the GRANT Act, while maintaining 
the integrity of their programs.
---------------------------------------------------------------------------
    \25\For purposes of this report, competitive grants are those 
grants awarded after selecting a grantee or grantees from among 
competing applicants.
---------------------------------------------------------------------------
    Legislation authorizing or requiring competitive grants 
often gives agencies considerable latitude in choosing how to 
disburse grant funds to eligible entities. In some cases the 
agency decision-maker will have virtually unilateral and 
unchecked discretion to select one applicant over another. 
While agencies often employ some form of competitive or merit-
based procedures in awarding grants, frequently the process is 
impenetrably opaque. A grant applicant that was not selected 
may not be told why their proposal was not funded or why the 
agency made the award decision that it did. The decisions are 
often unexplained and undocumented, making it virtually 
impossible for the public, an auditor, or an oversight body, to 
determine whether the Federal grant award was based on merit or 
other, improper considerations. The result has been a grant 
process used by agencies to disburse competitive grant funds 
that lacks the most basic of transparency standards. As a 
result, agencies are held less accountable as stewards of 
taxpayer dollars, confidence in the integrity of the grant 
selection process is diminished, and providing effective and 
real-time oversight is made almost impossible.
    Despite existing processes that are generally not open to 
public review or scrutiny, where GAO or IGs have probed 
specific grant award decisions, they frequently uncover 
vulnerabilities to fraud or abuse. For example, in a recent 
report, GAO found that HHS's ``process for determining which 
grant applicants will be awarded grants is primarily based on 
the results of the peer review process,'' but that the process 
``has weak internal controls to ensure that applications are 
evaluated consistently.''\26\ GAO's review also revealed 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.''\27\
---------------------------------------------------------------------------
    \26\Runaway and Homeless Youth Grants: Improvements Needed in the 
Grant Award Process, GAO-10-335 (May 2010).
    \27\Id.
---------------------------------------------------------------------------
    Another GAO review looked at the NIH Institute and Center 
directors' use of priority scores or rankings, which reflect 
the evaluation of applications' scientific merit by NIH's peer 
review process.\28\ Under the NIH process, the NIH directors 
were to set a selective pay line which determines the 
percentile rank an application must have in order to receive 
funding. The directors are supposed to fund only those 
applications with priority scores above the fiscal year's pay 
line. However, GAO found that about 19% of the applications for 
RO1 grants (NIH's main funding mechanism) that NIH funded had 
scientific merit scores below the established pay line.\29\ GAO 
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.''\30\ 
GAO also found that while NIH policy requires documentation 
explaining the reason for funding projects that do not receive 
the highest peer review scores, there is no collection or 
review of this documentation by the NIH director or any other 
oversight body. In addition to NIH's lack of oversight, GAO 
found, ``NIH had not established clear policies related to 
managing conflicts of interest among senior NIH employees who 
have decision-making responsibilities for NIH's research 
efforts, which include NIH's extramural research funding.''\31\
---------------------------------------------------------------------------
    \28\National Institutes of Health: Completion of Comprehensive Risk 
Management Program Essential to Effective Oversight, GAO-09-687 
(September 2009).
    \29\Id.
    \30\Id.
    \31\Id.
---------------------------------------------------------------------------
    GAO also found significant problems with Department of 
Education grant award decisions and found that the Department 
did not follow its own guidance for making grant award 
selections.\32\ Specifically, GAO found:
---------------------------------------------------------------------------
    \32\Discretionary Grants: Further Tightening of Education's 
Procedures for Making Awards Could Improve Transparency and 
Accountability, GAO-06-268 (Feb. 21, 2006).
---------------------------------------------------------------------------
     In one case ``a senior political appointee 
selectively re-reviewed and rescored particular applicants 
after the peer review process had been completed. The panel had 
recommended awarding grants to the top four applicants, based 
on their scores. The senior official ``asked his staff to re-
review the fifth- and sixth-ranked competitors. Based on this 
re-review, the ``order of the fifth and sixth ranked grantees 
was reversed.'' The official then determined that the agency 
should award five, not four awards. To fund five grantees, the 
Department reduced the awards to each of the other grantees by 
16 to 40 percent, without taking into consideration whether the 
reductions would impede the grantee's ability to perform the 
proposed activities and achieve the intended outcomes.
     In about 98 percent of files GAO reviewed, there 
was no evidence that program officers checked a grantee's audit 
history--a key check on an applicant's ability to manage 
Federal grant funds.
     Approximately 45 percent of the grant files did 
not contain documentation that the Department of Education 
screened grant applicants for eligibility.
     Approximately 68 percent of grant files did not 
contain documentation of a thorough analysis of the applicant's 
requested budget to determine whether costs were allowable.\33\
---------------------------------------------------------------------------
    \33\Id.
---------------------------------------------------------------------------
    In 2010, the Office of the Inspector General (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 Recovery Act 
grant selection process.\34\ The DOJ's Office on Violence 
Against Women (OVW) administers formula, block, and 
discretionary grant programs dedicated to reducing and 
prosecuting crimes against women. The OVW received over $380 
million each fiscal year from 2006 to 2008. Although the OVW 
must follow various DOJ and program-level guidelines in making 
discretionary grants, discretionary grant programs provide the 
OVW with wide latitude in determining who should receive an 
award.
---------------------------------------------------------------------------
    \34\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.
---------------------------------------------------------------------------
    The OVW used peer review scores to rank grant applicants. 
The OIG found the OVW did not maintain award decision documents 
in order to have ``an adequate record of the reasons for 
selecting the grantees that it did.'' OIG found ``OVW misplaced 
important award decision documents, including 10 peer review 
scoring sheets,\35\ which should be maintained to substantiate 
why an applicant did or did not receive recommendations for 
discretionary awards.'' Moreover, the OIG found ``a weakness in 
how peer reviewers were screened for conflicts of interest 
before evaluating and scoring applications.''\36\ The OIG audit 
revealed ``[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.''\37\
---------------------------------------------------------------------------
    \35\The OIG ``audit revealed that in tabulating individual 
application scores, OVW peer reviewers added points incorrectly.'' In 
one program alone, OVW staff incorrectly calculated peer review scores 
``for at least 39 out of 76 applications.'' The OIG concluded that 
these miscalculations negatively affected the chances of proposals from 
receiving funds.
    \36\Id.
    \37\Id. (``our review of 148 conflict of interest forms identified 
23 forms that peer reviewers signed and dated before they received 
their assigned application packets. Therefore, we believe some peer 
reviewers attested that they were free from conflicts of interest even 
though they did not yet know the specific applicants and the proposals 
they were to evaluate.'').
---------------------------------------------------------------------------
    Finally, a recent National Academy of Sciences report found 
systemic problems with the grant award practices of the 
Department of Justice's National Institute of Justice 
(NIJ).\38\ The report concluded:
---------------------------------------------------------------------------
    \38\``Strengthening the National Institute of Justice,'' National 
Research Council, The National Academies Press, Washington, DC, (2010).

        ``Improvement is needed in NIJ's internal operations 
        for selecting and managing its programs to bring them 
        in line with the practices of other Federal research 
        agencies. An overriding theme is the need for greater 
        transparency in processes and decisions. Planning 
        activities are not well documented, the signaling of 
        research priorities is haphazard, peer-review feedback 
        to applicants is limited, grant award decisions are not 
        in line with announced intentions, and report review is 
        handled inconsistently by different units. Insufficient 
        transparency contributes to the opinions expressed by 
        practitioners and researchers that NIJ decisions are 
        not made on the basis of scientific criteria. From 
        early announcement of award cycles, to greater 
        information on proposal reviews and decisions, to 
        increased availability of data on awards and award 
        completion, NIJ needs to be better understood by the 
        research and practitioner communities.''\39\ (Emphasis 
        added).
---------------------------------------------------------------------------
    \39\Id. at 7.
---------------------------------------------------------------------------

                IMPROVEMENTS TO THE SINGLE AUDIT PROCESS

    Once grants are awarded, agencies face severe challenges in 
monitoring grantees and have limited tools available to ensure 
that funds are properly used. For example, there is widespread 
agreement that steps should be taken to improve the single 
audit process, a key accountability mechanism, and more focus 
should be given to training agency personnel involved with 
awarding and monitoring grants.
    Testimony before the Subcommittee described weaknesses in 
grant oversight through the existing mechanisms, particularly 
the Single Audit Act.\40\ The Single Audit Act is the primary 
tool for oversight over Federal grant awards.\41\ The Single 
Audit Act requires States, local governments, and nonprofit 
organizations expending $500,000 or more in Federal awards in a 
year to obtain an audit in accordance with the requirements set 
forth in the act.\42\ A single audit consists of: (1) an audit 
and opinions on the fair presentation of the financial 
statements and the Schedule of Expenditures of Federal Awards; 
(2) gaining an understanding of and testing internal control 
over financial reporting and the entity's compliance with laws, 
regulations, and contract or grant provisions that have a 
direct and material effect on certain Federal programs (i.e., 
the program requirements); and (3) an audit and an opinion on 
compliance with applicable program requirements for certain 
Federal programs.\43\ Auditors evaluate the grantee's financial 
statements in order to indentify material non-compliance with 
the terms of grant agreements or Federal regulations or 
laws.\44\ All audits performed under the act are submitted to 
the Federal Audit Clearinghouse, available on a public database 
maintained by the Census Bureau.\45\
---------------------------------------------------------------------------
    \40\See GAO Federal Grant Oversight Testimony, at 13.
    \41\OMB Federal Grant Oversight Testimony, at p.3.
    \42\31 U.S.C. 7501.
    \43\GAO Federal Grant Oversight Testimony, at 2.
    \44\CRS Memo on file with Committee staff.
    \45\OMB Federal Grant Oversight Testimony, at 3.
---------------------------------------------------------------------------
    GAO and others have identified and reported on significant 
concerns with the single audit process that diminish its 
effectiveness as an oversight accountability mechanism.\46\ 
``Specifically, Federal agencies do not systemically use audit 
findings to identify and understand emerging and persistent 
issues related to grant programs and grantee use of 
funds.''\47\ Furthermore, ``time frames of the single audit 
process do not facilitate the timely identification and 
correction of the audit findings.'' GAO has also identified 
concerns regarding the need for OMB to issue its annual single 
audit guidance in a timelier manner.
---------------------------------------------------------------------------
    \46\GAO Federal Grant Oversight Testimony, at 13.
    \47\GAO, Single Audit: Opportunities Exist to Improve the Single 
Audit Process and Oversight, GAO-09-307R (March 2009).
---------------------------------------------------------------------------
    The Committee believes that reforms to single audits are 
warranted. Accordingly, the GRANT Act directs OMB to prepare a 
plan to improve the single audit process, including milestones 
for implementation.

              IMPROVEMENTS TO THE GRANT CLOSE-OUT PROCESS

    Another key oversight weakness involving grant management 
involves the volume of undisbursed funding in expired grant 
accounts. GAO recommended as far back as August 2008 that the 
Director of OMB instruct executive departments and independent 
agencies to annually track the amount of undisbursed grant 
funding remaining in expired grant accounts and report on the 
status and resolution of such funding in their annual 
performance plans and Performance and Accountability 
Reports.\48\ OMB reported that it determined that no additional 
guidance was needed. However, in fiscal year 2010 OMB directed 
agencies funded under the Commerce, Justice, Science, and 
related Agencies Appropriations Act to track undisbursed 
balances in expired grant accounts.\49\ Those agencies were 
required to report this information in the Performance & 
Accountability Reports or Agency Financial Reports and annual 
performance plans and budgets.\50\ OMB states that it is 
conducting a holistic review of how Federal agencies manage 
their grants.\51\
---------------------------------------------------------------------------
    \48\GAO Federal Grant Oversight Testimony, at 11.
    \49\OMB QFR Response, at 5.
    \50\Id.
    \51\Id.
---------------------------------------------------------------------------
    Better tracking of grant accounts maintained in all Federal 
payments systems could identify the expired grants with 
undisbursed balances and make funds available for other 
assistance projects or facilitate the return of these funds to 
the Treasury. However, dozens of past reports from multiple 
agencies suggest that undisbursed balance in expired grant 
accounts are a longstanding challenge and share common grants 
management problems. For example, as stated, NSF is estimated 
to have more than $1.7 billion in expired grant accounts. The 
reports generally attribute the problems to closeouts being a 
low management priority, inconsistent closeout procedures, 
poorly timed communications with grantees, or insufficient 
compliance or enforcement. The GRANT Act addresses this by 
requiring that OMB instruct Executive agencies to identify the 
amounts of undisbursed and expired grant funding remaining in 
grant accounts and report to OMB on the status and resolution 
of these amounts.

                            GRANT WORKFORCE

    Under the Federal Acquisition Regulation (FAR), agency 
heads are required ``to establish and maintain a procurement 
career management program and a system for the selection, 
appointment, and termination of appointment of contracting 
officers.''\52\ The selection and appointment of a contracting 
officer ``must be consistent with Office of Federal Procurement 
Policy's (OFPP) standards for skill-based training in 
performing contracting and purchasing duties as published in 
OFPP Policy Letter No. 05-01, Developing and Managing the 
Acquisition Workforce, April 15, 2005.''\53\ These requirements 
ensure that contracting officers possess the necessary skills 
and expertise to properly represent the government's interests. 
By comparison, there exist no government-wide training or 
accreditation standards applicable to Federal personnel 
involved with awarding or monitoring Federal grants. The bill 
includes a requirement for a broad report from the Government 
Accountability Office intended to identify areas where 
additional focus is needed to improve and support the grant 
workforce.
---------------------------------------------------------------------------
    \52\FAR 1.603-1, citing 41 U.S.C. Sec. 414(4), recodified at 41 
U.S.C. Sec. 1702(b)(3)(F).
    \53\FAR 1.603-1, citing OFPP Policy Letter No. 05-01, Developing 
and Managing the Acquisition Workforce, April 15, 2005 available at 
http://www.whitehouse.gov/omb/procurement _policy_letter_05-01/. (``Not 
later than January 1, 2006, FAI, in partnership with DAU, shall develop 
a certification program that considers a variety of means, including a 
fulfillment process, for assessing and certifying that the education, 
training, and experience requirements for the GS-1102 series, as 
described herein, have been met.'').
---------------------------------------------------------------------------

                          LEGISLATIVE HISTORY

    The GRANT Act builds on previously enacted legislation that 
would enhance the transparency of Federal grant spending, 
particularly the Federal Funding Accountability and 
Transparency Act of 2006 (``FFATA'')\54\ and the Federal 
Financial Assistance Management Improvement Act of 1999 
(``FFAMIA'').\55\ FFATA required the Office of Management and 
Budget (OMB) to establish a website, USASpending.gov, which 
publishes selected information, gleaned from government-wide 
databases, for each Federal grant, loan, and contract. Congress 
enacted the FFAMIA to improve the effectiveness and performance 
of Federal grant programs, simplify the grant application 
process, and reduce the burden on applicants by providing for a 
central website for finding and applying for Federal grants. 
The FFAMIA led to increased transparency of the Federal grants 
process, principally through the creation of a web portal for 
Federal grant applicants to search and apply for Federal 
grants.
---------------------------------------------------------------------------
    \54\Pub. L. No. 109-292.
    \55\Pub. L. No. 106-107 (31 U.S.C. Sec. 6101 note).
---------------------------------------------------------------------------
    Last Congress, both the House and the Senate passed bills 
that would have reauthorized FFAMIA and thereby improved the 
transparency and usefulness of data on the website related to 
grants.\56\ The Senate Homeland Security and Governmental 
Affairs Committee reported that, ``although FFAMIA required the 
development of a common system, including electronic processes, 
through which a grantee could apply for, manage, and report on 
the use of funding, systems for any grant phase beyond the 
application phase had not been developed.''\57\ The Committee 
report pointed out that in his responses to questions for the 
record following his January 14, 2009, confirmation hearing 
before the Senate Homeland Security and Governmental Affairs 
Committee, OMB Director Peter Orszag indicated his support for 
efforts to streamline grant administration, stating, ``I 
believe that improving grants management should be a priority, 
and that we should work toward simplifying the process and 
creating more integrity and transparency in the grant-making 
process. The enactment of [FFATA] was a critical step toward 
greater transparency of grant awards, but significant work 
remains in carrying out the full vision of this law.''\58\ The 
House and Senate versions of the FFAMIA reauthorization bills 
were, however, never reconciled.
---------------------------------------------------------------------------
    \56\S. 303 was passed by the Senate on March 17. The House passed 
S. 303 on December 14, 2009.
    \57\S. Rept. 111-7, March 11, 2009.
    \58\Id. at 4, citing Additional Questions for the Record following 
the Nomination Hearing for Peter Orszag, submitted by Senator George V. 
Voinovich, January 14, 2009.
---------------------------------------------------------------------------
    H.R. 2146, the House-passed DATA Act, would build upon and 
strengthen FFATA and improve the quality of Federal spending 
data. DATA provides improved Federal reporting and transparency 
for all types of Federal spending, including grants. The GRANT 
Act complements the DATA Act, and provides for unprecedented 
transparency throughout the grant life cycle. The Committee 
expects that the website used to implement the GRANT Act will 
be compatible and merged or linked with the website required 
under the DATA Act.
    Representative James Lankford, Chairman of the Subcommittee 
on Technology, Information Policy, Intergovernmental Relations 
and Procurement Reform, introduced the GRANT Act on November 
16, 2011. The bill was amended during a Committee business 
meeting on November 17, 2011. After amending the legislation, 
the Committee favorably reported it by voice vote.

                           Section-by-Section

Section 1. Short title

    This section states that the Act may be cited as the 
``Grant Reform and New Transparency Act of 2011,'' or the 
``GRANT Act.''

Section 2. Table of contents

    This section lists the table of contents.

Section 3. Grants transparency requirements

    This section adds a new Chapter 74 to Subtitle 5 of title 
31, U.S. Code, beginning with:

              Chapter 74--Grants Transparency Requirements

    Section 7401. Definitions. Defines the terms ``grant,'' 
``competitive grant,'' ``executive agency,'' ``board,'' 
``proposal abstract,'' and ``grant reviewer.''
    Section 7402. Merit-based selection procedure requirements 
in awarding grants.
    Requires agencies to establish merit-based selection 
procedures for discretionary grant programs of the agency. 
Requires merit-based selection procedures to include advance 
notification of the grant opportunity; a clear statement of the 
purposes and eligibility requirements; and disclosure of the 
evaluation criteria.
    Section 7403. Pre-award evaluation requirements. Requires 
Executive agencies to conduct an evaluation of the ability of 
the applicant to successfully perform a grant. Specifies those 
factors and considerations to be taken into account in making 
this determination.
    Section 7404. Website relating to Federal grants. Requires 
OMB to upgrade an existing website or establish a public 
website for finding Federal grant opportunities and applying 
for grants so that such website may serve as a central point of 
information for competitive grants. Requires that any such 
website post the announcement and purpose for the: grant; grant 
period; amount of funds available; eligibility; agency point of 
contact; evaluation factors or criteria; process and standards 
for safeguarding against conflicts; and application deadline. 
As part of the requirement to disclose the grant period, 
agencies should indicate whether the grant will be continued, 
that is, whether the announced grant will be one in a series of 
grants expected to be awarded annually for some period of time. 
Specifies that any such website should be accessible with any 
computer platform; provide for searchability by type, purpose, 
funding agency, program source and other relevant criteria; 
manage, track and report the use of competitive grants and 
provide all required certifications and assurances for a 
competitive grant. Requires the publication of grant award 
information, including a copy of the executed grant agreement; 
proposal, application or plan; award decision recommendation 
and rankings; justification for deviating from rankings; 
disclosure of information related to the pool of peer 
reviewers; and disclosure of other grant reviewers. Provides an 
exception to requirement to post the successful proposal under 
limited circumstances. Requires that the final report or other 
written product be posted. Calls for the submission and 
publication of grant solicitation forecasts on the grants 
website. The forecast shall state the subject and purpose of 
the grant; the point of contact; the notice of publication date 
and the estimated award amount. Provides that need not post 
information that would otherwise be exempt from the Freedom of 
Information Act. Requires that the website post the required 
information in a user-friendly, searchable and downloadable 
format.
    Section 7405. Debriefing. Provides that, if requested, for 
a grant over $100,000, the agency shall provide the applicant a 
timely debriefing explaining the basis for the agency's 
decision. The Committee intends that this debriefing afford the 
applicant an opportunity to ask questions about the selection 
process.
    Requires OMB to issue guidance to agencies for establishing 
merit-based selection procedures no later than 60 days after 
the date of enactment. Requires each agency to establish merit-
based selection procedures no later than 180 days after the 
date of enactment. Requires the Comptroller General to submit a 
report to the Committee on Oversight and Government Reform of 
the House of Representatives and the Committee on Homeland 
Security and Governmental Affairs of the Senate describing the 
actions taken by Executive agencies to establish competitive 
procedures no later than 1 year after enactment.

Section 4: Report requirements relating to grants

    This section requires the Director of the Office of 
Management and Budget to issue guidance, no later than 90 days 
after enactment of the Act, to Executive agencies instructing 
each agency to identify amounts of undisbursed grant funding 
remaining in expired accounts.
    Further requires the Director to report to the Committee on 
Oversight and Government Reform of the House of Representatives 
and the Committee on Homeland Security and Governmental Affairs 
of the Senate on the status and resolution of such funding no 
later than 180 days after enactment.
    This section also requires the Comptroller General of the 
United States to submit to the Committee on Oversight and 
Government Reform of the House of Representatives and the 
Committee on Homeland Security and Governmental Affairs of the 
Senate a report on the Federal grants workforce no later than 
180 days after enactment. The report shall address such issues 
as the size of the Federal grants workforce and expected trends 
in Federal employment; adequacy of training opportunities for 
the Federal grants workforce; whether the Federal Acquisition 
Institute or any other existing entity engaged in acquisition 
workforce training should be made available for grant training; 
whether a warrant system similar to that used in the Federal 
acquisition system should be established for Federal officials 
authorized to award grants; the use by executive agencies of 
suspension and debarment actions against grantees; and any 
recommendations for improving the Federal grants workforce. 
Defines the terms ``Executive agency'' and ``Federal grants 
workforce.''

Section 5: Plan for improving the single audit process

    Requires the Director of the Office of Management and 
Budget to submit to the Committee on Oversight and Government 
Reform of the House of Representatives and the Committee on 
Homeland Security and Governmental Affairs of the Senate a plan 
to improve the single audit process. The plan is to include a 
proposed centralized Federal oversight structure for the single 
audit structure, simplified single audit requirements for 
smaller Federal awards, and a proposal to shorten the single 
audit cycle. The plan must identify necessary legislative 
changes and include key milestones.
    Requires the Director of the Office of Management and 
Budget to report on the implementation of each element of the 
plan not later than 180 days after submission of the plan.

                       Explanation of Amendments

    Mr. Cummings offered an amendment to strike the requirement 
in section 3 of the bill in section 7404 that the name, title, 
and employer of peer reviewers who have served as peer 
reviewers in the previous six months. Chairman Lankford offered 
a second degree amendment, striking ``name, title, and 
employer'' in that provision and replacing it with ``employer 
and, either the name and title, or a unique identifier.'' The 
second degree amendment was agreed to by voice vote.

                        Committee Consideration

    On November 17, 2011, the Committee met in open session and 
ordered reported favorably the bill, H.R. 3433, as amended, by 
voice vote, a quorum being present.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill requires greater accountability in grantees' use of 
grant funds; addresses the agency close-out process following 
completion of the grant; and directs attention to the need for 
a highly trained workforce to effectively award and administer 
Federal grant funds. As such this bill does not relate to 
employment or access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement as to 
whether the provisions of the reported include unfunded 
mandates. In compliance with this requirement the Committee has 
received a letter from the Congressional Budget Office included 
herein.

                         Earmark Identification

    H.R. 3433 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 3433. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 3433 from the Director of 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 28, 2012.
Hon. Darrell Issa,
Chairman, Committee on Oversight and Government Reform, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3433, the Grant 
Reform and New Transparency Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jonathan 
Morancy.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 3433--Grant Reform and New Transparency Act of 2011

    H.R. 3433 would amend federal law pertaining to the 
awarding of federal grants. The legislation would require that 
federal agencies use merit-based award procedures in awarding 
grants, unless those grants are block grants, formula grants, 
or they are awarded according to some other standard required 
by statute. The bill also would require additional reports.
    CBO estimates that implementing changes to the grant-award 
system as required under H.R. 3433 would cost less than $1 
million annually over the 2012-2017 period, assuming the 
availability of appropriated funds. Those costs would result 
primarily from preparing reports and making the required 
changes to agency Web sites. The bill also could affect direct 
spending by agencies not funded through annual appropriations, 
such as the Tennessee Valley Authority and Bonneville Power 
Administration; therefore, pay-as-you-go procedures apply. CBO 
estimates, however, that any net increase in spending by those 
agencies would not be significant. Enacting H.R. 3433 would not 
affect revenues.
    Under current law, the agencies that award the most grants 
provide them primarily as formula or block grants or use merit-
based procedures. Most of the provisions of H.R. 3433 would 
continue those current practices. Based on information from 
some of the largest grant-awarding agencies, CBO estimates that 
implementing the bill would lead to a small increase in 
administrative costs to oversee some award changes and to 
prepare additional reports.
    H.R. 3433 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 Jonathan 
Morancy. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *

             SUBTITLE V--GENERAL ASSISTANCE ADMINISTRATION

Chap.                                                               Sec.
      Program Information...........................................6101
     * * * * * * *
      Grant Transparency Requirements...............................7401
     * * * * * * *

              CHAPTER 74--GRANTS TRANSPARENCY REQUIREMENTS

Sec.
7401. Definitions.
7402. Merit-based selection procedure requirements in awarding grants.
7403. Pre-award evaluation requirements.
7404. Website relating to Federal grants.
7405. Debriefing.

Sec. 7401. Definitions

  In this chapter:
          (1) 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.
          (2) Competitive grant.--The term ``competitive 
        grant'' means a 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 provided by section 105 of title 5, 
        except the term does not include the Government 
        Accountability Office.
          (4) Board.--The term ``Board'' means the Recovery 
        Accountability and Transparency Board or any successor 
        entity.
          (5) Proposal abstract.--The term ``proposal 
        abstract'', with respect to a grant proposal, means a 
        summary containing key elements of the grant proposal.
          (6) 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 a grant 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. Merit-based selection procedure requirements in awarding 
                    grants

  (a) Merit-Based Selection Procedures Required.--
          (1) In general.--Except as provided in paragraph (2), 
        an Executive agency shall use merit-based selection 
        procedures in awarding grants.
          (2) Exception for certain grants.--An Executive 
        agency is not required to use merit-based selection 
        procedures in awarding a grant if the grant is a block 
        grant or formula grant for which Federal funds are 
        required to be allocated in accordance with a 
        distribution formula prescribed by law or regulation, 
        or any other grant in which the allocation methodology 
        for the grant funds is mandated by law.
  (b) Requirement for Specific Merit-Based Selection 
Procedures.--Each Executive agency shall establish and make 
publicly available specific merit-based selection procedures 
for each grant program of the agency required under subsection 
(a) to use such procedures.
  (c) Merit-Based Selection Procedures Described.--
          (1) In general.--The merit-based selection procedures 
        required under subsection (a) shall promote the use of 
        competition, and may be tailored to the particular 
        requirements, objectives, and authorities of the 
        agency. The procedures may address matters such as 
        consideration of unsolicited proposals, standards for 
        obtaining a competitive pool of applicants, and 
        exceptions for safety, security, or other 
        circumstances.
          (2) Specific matters included.--The merit-based 
        selection procedures required under subsection (a) 
        shall include, with respect to a grant, the following:
                  (A) Advance notification of the grant 
                opportunity.
                  (B) A clear statement of the purpose, 
                duration (including anticipated grant 
                continuations), and eligibility requirements of 
                the grant.
                  (C) A description of the manner in which 
                applications or proposals for the grant will be 
                evaluated, ranked, and selected for award, 
                including the weighting of any evaluation 
                factors or criteria that will be considered.

Sec. 7403. Pre-award evaluation requirements

  (a) Evaluation Required.--Before awarding a competitive 
grant, an Executive agency shall conduct an evaluation of the 
ability of the prospective grantee to successfully carry out 
the grant.
  (b) Matters Covered.--The evaluation required by subsection 
(a) shall include a review of the following:
          (1) Financial management system.--The capability of 
        the financial management system of the applicant to 
        account for funds.
          (2) Internal controls.--The internal financial and 
        administrative control systems of the applicant.
          (3) Compliance with reporting.--The capability of the 
        applicant to comply with Federal reporting requirements 
        for recipients of Federal funds.
          (4) Past performance and integrity.--The past 
        performance and record of integrity of the applicant.
          (5) Other qualifications and competence.--The ability 
        of the applicant to successfully carry out the purposes 
        of the grant.
  (c) Simplified Evaluation Procedure for Certain Applicants.--
In conducting the evaluation required under subsection (a) with 
respect to an applicant, an Executive agency shall minimize the 
burden on any applicant that has previously received a 
significant volume of Federal grants, and shall consider any 
existing findings with respect to that applicant under the 
single audit process under chapter 75 of title 31 related to 
the matters in subsection (b).

Sec. 7404. Website relating to Federal grants

  (a) Requirement.--The Director of the Office of Management 
and Budget shall upgrade any existing or proposed public 
website for finding Federal grant opportunities and applying 
for such grants so that such website may serve as a central 
point of information and provide full access for applicants for 
competitive grants. The website shall capture in one 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 agency shall post on the grants website maintained under 
this section relevant information about the grant opportunity, 
including the following:
          (1) Announcement and purpose.--The grant announcement 
        and purpose of the grant.
          (2) Grant period.--The time period for performance of 
        the grant and whether the agency anticipates that the 
        grant will be continued.
          (3) Amount of available funds.--The amount of funds 
        available for the grant.
          (4) Eligibility.--A statement of eligibility 
        requirements of the grant.
          (5) Agency point of contact.--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) Evaluation factors or criteria.--A clear 
        statement of the evaluation factors or criteria that 
        the 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) Disclosure of the process and standards for 
        safeguarding against conflicts.--A description of the 
        process and standards to be used by the 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) Deadline.--The deadline for submission of grant 
        applications or proposals.
  (c) Use by Applicants.--The grants website maintained under 
this section shall, to the greatest extent practicable, allow 
grant applicants to--
          (1) use the website with any computer platform;
          (2) search the website for all competitive grants by 
        purpose, funding agency, program source, and other 
        relevant criteria;
          (3) apply for a competitive grant using the website;
          (4) manage, track, and report on the use of 
        competitive grants using the website; and
          (5) provide all required certifications and 
        assurances for a competitive grant using the website.
  (d) Grant Award Information.--
          (1) In general.--For each competitive grant awarded 
        by an Executive agency, the agency shall post on the 
        grants website maintained under this section the 
        information described in paragraph (2). Except as 
        provided in paragraphs (2)(B) and (3), the information 
        shall be posted within 15 days after an Executive 
        agency notifies an applicant that the applicant has 
        been selected to receive a grant award and shall be 
        updated as necessary while the grant to the recipient 
        is being performed.
          (2) Information posted.--For purposes of paragraph 
        (1), the information described in this section with 
        respect to each grant awarded by an Executive agency is 
        the following:
                  (A) Executed grant agreement.--A copy of the 
                final grant agreement, including the terms and 
                conditions and the time period for performance 
                of the grant.
                  (B) Copy of proposal, application, or plan.--
                Subject to paragraph (3), a copy of any 
                proposal, application, or plan submitted for 
                the awarded grant, including any amendment to 
                the proposal, application, or plan (whether 
                made before or after the award of the grant).
                  (C) Award decision documentation and 
                rankings.--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, the numerical ranking of 
                the proposal by grant reviewers, if numerical 
                rankings were assigned.
                  (D) Justification for deviating from 
                rankings.--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.
                  (E) Disclosure of peer reviewers.--The 
                employer, and either the name and title or a 
                unique identifier, of each individual who 
                served as a peer reviewer for the grant program 
                concerned, during the six-month period 
                preceding the award of the grant.
                  (F) Disclosure of other grant reviewers.--The 
                name, title, and employer of each individual 
                who served as a reviewer (other than a peer 
                reviewer) of proposals or applications for the 
                grant, regardless of whether the individual is 
                employed by the Federal government or not.
          (3) Exception to posting requirement.--
        Notwithstanding paragraphs (1) and (2)(B), if the head 
        of the agency determines, with respect to a particular 
        grant award, that posting the proposal, application, or 
        plan at the time described in paragraph (1) would 
        adversely affect an applicant, the agency--
                  (A) may post a proposal abstract or executive 
                summary; and
                  (B) shall post the complete proposal, 
                application, or plan by a date to be determined 
                by the head of the agency, in consultation with 
                the applicant, but not later than three years 
                after the date of the grant award.
  (e) Grant Performance Information.--Unless otherwise 
prohibited by law, with respect to each grant awarded by an 
Executive agency, within 60 days after the end of the period 
for completion of the grant, the agency shall post on the 
grants website maintained under this section the following 
information:
          (1) The final report or other final written product 
        required under the terms of the grant.
          (2) Other related data or results of the grant that 
        the agency considers to be of value to future 
        researchers or in the public interest.
  (f) Submission and Publication of Grant Solicitation Forecast 
on the Grants Website.--
          (1) Requirement.--Not later than November 30 of each 
        year, the head of each Executive agency shall post a 
        forecast, in accordance with paragraph (2), of all 
        grant solicitations that the agency expects to issue 
        for the following calendar year. The forecast shall be 
        based on the best information available and shall not 
        be binding on the agency.
          (2) Matters included.--The forecast shall include, to 
        the extent practicable, the following for each expected 
        grant solicitation:
                  (A) Subject and purpose.--A brief description 
                of the subject and purpose of the grant, 
                organized by the organizational unit of the 
                agency.
                  (B) Point of contact.--Contact information 
                for the organizational unit or individual 
                responsible for the grant, if known, including 
                name, telephone number, and electronic mail 
                address.
                  (C) Notice publication date.--The expected or 
                actual dates for the issuance of the grant 
                solicitation and application and the grant 
                application submission deadline.
                  (D) Award amount.--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.
  (g) Publication of Information.--Nothing in this section 
shall be construed as requiring the publication of information 
otherwise exempt under section 552 of title 5, United States 
Code (popularly referred to as the ``Freedom of Information 
Act'').
  (h) 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 and aggregated;
          (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. 7405. Debriefing

  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 debriefing 
explaining the basis for the agency's award decision, 
including, if applicable, the decision not to award a grant to 
the applicant.

           *       *       *       *       *       *       *

                             MINORITY VIEWS

    H.R. 3433, the Grant Reform and New Transparency Act of 
2011, would increase transparency in the competitive grant 
selection process and would make several other positive changes 
to current law. For example, the bill would require agencies to 
post on a single website key information about grants they 
award, including grant agreements, the criteria used to guide 
the selection of grant recipients, and the numerical rankings 
assigned to grant applications. The bill would also enable 
grant applicants to request a debriefing from an agency if 
their applications are not chosen to receive funding.
    Colleges and universities--which comprise a significant 
portion of the grant recipient community--have expressed 
concern that posting their grant applications online could 
provide competitors access to their proprietary information. 
Although Rep. Connolly introduced an amendment that would have 
allowed organizations to post grant abstracts instead of full 
grant applications, the amendment was not adopted.
    In addition, numerous organizations have written letters 
expressing their desire to protect the anonymity of peer 
reviewers. Although Rep. Murphy introduced an amendment to 
strike the provision requiring the disclosure of peer 
reviewers, the amendment also was not adopted.
    Finally, some Members expressed concerns about the amount 
of paperwork this bill would require for agencies and 
organizations. In order to protect intellectual property, these 
entities would be required to perform extensive redactions to 
every grant application. Estimates suggest that the National 
Science Foundation, for example, would be required to post more 
than 150,000 pages of documents. At a time when federal agency 
and university funding is declining significantly, it would not 
seem prudent to impose such a labor-intensive requirement.
    The majority indicated that they would work with the 
minority to rectify these concerns.
                                                Elijah E. Cummings.
```