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CHAPTER 3-120

SUBGRANTS AND TRANSFERRING WORK

3-120-00 What does this chapter do?

3-120-10 Where do these policies come from?

3-120-20 Must you get prior OSMRE approval for subgrants or transfers? 

3-120-30 What are our requirements for approving subgrants or transfers?

3-120-40 What must you do when you award subgrants?

3-120-00 What does this chapter do?

This chapter explains our requirements about using a subgrant or contract to transfer financial 

assistance or the actual performance of work under our assistance agreements to a third party. 

This chapter also explains our policy on approving a request to subgrant or transfer work or 

financial assistance to third parties. It also explains the basic principles of awarding and 

administering subgrants. This information applies to all assistance agreements awarded by us, 

the Office of Surface Mining Reclamation and Enforcement (OSMRE).

3-120-10 Where do these policies come from?

These policies are found in the Federal Grant and Cooperative Agreement Act of 1977 (P.L. 95-

224) and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 

Federal Awards, at 2 CFR 200, Subpart D.

3-120-20 Must you get prior OSMRE approval for subgrants or transfers? 

A. Yes, you must obtain our approval before you transfer the actual performance of 

substantive programmatic work to a third party by a contract or other means. You must 

also obtain our approval before you provide financial assistance to a third party by a 

subgrant or other means.

B. If you did not include the transfer in your approved application, you must request our 

approval through a formal amendment to the current award.

C. Subrecipients must obtain your approval before they award any subgrants or contracts 

transferring work.

3-120-30 What are our requirements for approving subgrants or transfers?

A. You must perform a substantive role in carrying out project or program activities under 

an assistance agreement we award to you. We may authorize you to transfer substantive 

programmatic work, or to award financial assistance only if you will continue to perform 

at least one of the following roles:
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1. Principal performer of project activities.

2. Primary beneficiary of Federal financial assistance.

3. Overall administrator of a program in which third parties perform activities or 

receive financial assistance.

B. Generally, we must review the specific circumstances of each application or request 

involving the transfer of work or the award of financial assistance to determine whether 

approval would violate the rule in the previous paragraph. However, if the proposed 

transfer falls into one of the following classes, we may assume that approval would not 

violate the rule:

1. You may contract for construction services under an assistance agreement for 

construction. Construction includes alteration, or renovation of real property.

2. You may subgrant or contract for projects if we awarded your assistance 

agreement under a statute or regulation explicitly intending that your primary 

responsibility is to select projects, and to award, and administer grants, contracts 

or cooperative agreements.

3. You may transfer activities and funds to a collaborating or cooperating 

organization if we awarded your assistance agreement under a statute or 

regulation explicitly intending such collaboration or cooperation.

4. You may transfer activities and funds to a college, university, hospital, or 

government entity if you are a closely affiliated but separately incorporated 

organization whose primary purpose is to receive and administer gifts, grants, 

cooperative agreements and contracts. An example is the transfer of funds to a 

state university from its affiliated research foundation.

C. We may limit the kinds of third parties eligible to perform the work, or receive financial 

assistance under your assistance agreement. However, we will not choose a specific 

entity and directly or indirectly require you to transfer the work, or award the assistance 

to that entity. You must choose your subrecipient or contractor.

D. We will not require you to submit the contract or subgrant documents for our prior 

approval.

3-120-40 What must you do when you award subgrants?

A. If you are a state, then you must follow state law and procedures when you award and 

administer subgrants or financial assistance to local and Indian tribal governments. 
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1. You must also ensure that every subgrant includes any clauses required by 

Federal statute and executive orders and their implementing regulations.

2. You must also ensure that subgrantees are aware of requirements imposed upon 

them by Federal statute and regulation.

3. You must also ensure that a provision for compliance with the record retention 

and access requirements is included in every subgrant.

4. You must also apply substantially the same standards of timing and amount for 

our cash advances to you to any advances of assistance funds you make to 

subgrantees.

5. You must report your subawards on the Federal Funding Accountability and 

Transparency Act Subaward Reporting System (FSRS).

B. All recipients other than states will follow the applicable provisions of the Grants 

Common Rule for awarding and administering subgrants, whether on a cost 

reimbursement or fixed amount basis. 

1 You must ensure that every subgrant includes a provision for compliance with 

applicable provisions of the 2 CFR Part 200 Subpart D.

2. You must ensure that every subgrant includes any clauses required by Federal 

statute, and executive orders, and their implementing regulations

3. You must ensure that subgrantees are aware of requirements imposed upon them 

by Federal statutes and regulations.