National Guard Bureau Master Cooperative Agreement

ATTACHMENT A

 Award Provisions Per 2 CFR Part 200 Page 1 of 86

ATTACHMENT A

PREAMBLE

Order of precedence. The general terms and conditions in this Agreement will not take 

precedence over any Federal statute or Federal regulation published in the CFR. The order of 

precedence of sources of requirements, if applicable to your award, is as follows: Federal 

statutes; Federal regulations in the CFR; OMB guidance in the CFR, at 2 CFR Part 200; awardspecific terms and conditions; the general terms and conditions in this Agreement.

Use of plain language. This Agreement uses plain language to communicate requirements, 

including personal pronouns “you” to denote the recipient and “we” or “us” to denote NGB or 

another DoD Component.
Page 2 of 86

TABLE OF CONTENTS

PART 1: DEFINITIONS OF TERMS USED IN THIS AGREEMENT..............................................4

PART 2: PROGRAM REQUIREMENTS .........................................................................................19

PART 3: NATIONAL POLICY REQUIREMENTS (NP Articles)...................................................20

I. Nondiscrimination national policy requirements. ............................................................................20

II. Environmental national policy requirements. .................................................................................21

III. Other national policy requirements................................................................................................22

PART 4: FINANCIAL AND PROGRAM MANAGEMENT (FMS Articles)..................................26

I. Financial management system standards..........................................................................................26

II. Payments. ........................................................................................................................................27

III. Allowable costs, period of availability of funds, and fee or profit. ...............................................30

IV. Revision of budget and program plans. .........................................................................................31

V. Non-Federal audits..........................................................................................................................32

VI. Cost sharing or matching...............................................................................................................33

VII. Program income. ..........................................................................................................................35

PART 5: PROPERTY ADMINISTRATION (PROP Articles)..........................................................37

I. Title to property................................................................................................................................37

II. Property management system..........................................................................................................37

III. Use and disposition of real property. .............................................................................................39

IV. Use and disposition of equipment and supplies.............................................................................40

V. Intangible property..........................................................................................................................42

PART 6: PROCUREMENT PROCEDURES (PROC Articles).........................................................44

I. Procurement standards for States. ....................................................................................................44

II. Procurement standards for institutions of higher education, nonprofit organizations, local 

governments, and Indian tribes............................................................................................................44

III. Contract provisions for recipient procurements.............................................................................46

PART 7: FINANCIAL, PROGRAMMATIC, AND PROPERTY REPORTING (REP Articles).....50

I. Performance management, monitoring, and reporting. ....................................................................50

II. Financial reporting. .........................................................................................................................50

III. Reporting on property....................................................................................................................51

IV. Reporting on subawards and executive compensation. .................................................................52

PART 8: OTHER ADMINISTRATIVE REQUIREMENTS (OAR Articles)...................................53

I. Maintaining recipient information....................................................................................................53

II. Records retention and access...........................................................................................................53
Page 3 of 86

III. Remedies and termination..............................................................................................................56

IV. Claims, disputes and appeals. ........................................................................................................58

V. Collection of amounts due. .............................................................................................................60

VI. Closeout. ........................................................................................................................................61

VII. Post-closeout adjustments and continuing responsibilities. .........................................................61

PART 9: REQUIREMENTS RELATED TO SUBAWARDS (SUB Articles)..................................63

I. Distinguishing subawards and procurements. ..................................................................................63

II. Pre-award and time of award responsibilities. ................................................................................64

III. Informational content of subawards...............................................................................................65

IV. Financial and program management requirements for subawards. ...............................................67

V. Property requirements for subawards. ............................................................................................70

VI. Procurement procedures to include in subawards. ........................................................................73

VII. Financial, programmatic, and property reporting requirements for subawards. ..........................74

VIII. Other administrative requirements for subawards. .....................................................................75

IX. National Policy Requirements for Subawards...............................................................................78

X. Subrecipient monitoring and related subaward administration.......................................................79

XI. Requirements Concerning Subrecipients’ Lower-tier Subawards.................................................81

XII. Fixed amount subawards..............................................................................................................82
Page 4 of 86

PART 1: DEFINITIONS OF TERMS USED IN THIS AGREEMENT

Section A. Purpose of this part. This part provides definitions of terms used in this 

Agreement.

Section B. Precedence of definitions of terms in national policy requirements.

Some portions of the general terms and conditions in this Agreement use a term in relation to 

compliance with a national policy requirement in a statute, Executive order, or other source

that defines the term differently than Section D of this part. For purposes of that particular 

national policy requirement, the definition of a term provided by the source of the

requirement and any regulation specifically implementing it takes precedence over the 

definition in this part. For the purpose of determining eligibility for an award under the 

Procurement Technical Assistance Cooperative Agreement Program, the definitions in 10 

U.S.C. 2411 take precedence over the definitions in this part.

Section C. Definitions of terms used in the Government-wide cost principles or single 

audit requirements. 

1. The general terms and conditions in this Agreement incorporate by reference the 

provisions of:

a. The implementation of the Single Audit Act requirements for audits of recipients and 

subrecipients that are in Subpart F of OMB guidance in 2 CFR Part 200;

b. The Government-wide cost principles for institutions of higher education, nonprofit 

entities, States, local governments, and Indian tribes that are contained in Subpart E 

of OMB guidance in 2 CFR Part 200; and

c. The cost principles for for-profit entities at subpart 31.2 of the Federal Acquisition 

Regulation (FAR) at 48 CFR Part 31, as supplemented by provisions of the Defense 

Federal Acquisition Regulation Supplement at subpart 231.2 of 48 CFR Part 231.

2. This part includes the definition of a term used in any of the issuances listed in paragraph 

1 of this Section only if the terms and conditions in this Agreement use that term directly. 

If the only usage is indirect--i.e., through an issuance incorporated by reference--then this 

part will not include a definition and you should consult definitions in:

a. Subpart A of the OMB guidance in 2 CFR Part 200 for terms used in Subparts E and 

F of that Part; and

b. FAR Part 2 (48 CFR Part 2) for terms used in the cost principles at 48 CFR Part 31.

Section D. Definitions.

1. Acquire.
Page 5 of 86

Acquire means to:

a. Purchase services; or

b. Obtain property, by purchase, construction, fabrication, development, or otherwise.

2. Acquisition.

Acquisition means the process of acquiring as described in the definition of 

“acquire”.

3. Acquisition cost.

Acquisition cost means the cost of an asset to a recipient or subrecipient, including 

the cost to ready the asset for its intended use.

a. For example, when used in conjunction with:

i. The purchase of equipment, the term means the net invoice price of the 

equipment, including the cost of any modifications, attachments, accessories, or 

auxiliary apparatus necessary to make it usable for the purpose for which it is 

acquired.

ii. Equipment that a recipient or subrecipient constructs or fabricates--or software 

that it develops--under an award, the term includes, when capitalized in 

accordance with generally accepted accounting principles (GAAP):

A. The construction and fabrication costs of that equipment; and

B. The development costs of that software.

b. Ancillary charges, such as taxes, duty, protective in-transit insurance, freight, and 

installation may be included in, or excluded from, the acquisition cost in accordance 

with the recipient’s or subrecipient’s regular accounting practices.

4. Administrative offset.

Administrative offset means an action whereby money payable by the United 

States Government to, or held by the Government for, a recipient is withheld to satisfy a 

delinquent debt the recipient owes the Government.

5. Advance payment.

Advance payment means a payment that DoD or a recipient or subrecipient makes 

by any appropriate payment mechanism, including a predetermined payment schedule, 

before the recipient or subrecipient disburses the funds for project or program purposes.
Page 6 of 86

6. Approved budget.

Approved budget means, in conjunction with a DoD Component award to a 

recipient, the most recent version of the budget the recipient submitted and the DoD 

Component approved (either at the time of the initial award or subsequently), to 

summarize planned expenditures for the project or program under the award. It includes 

all Federal funding made available to the recipient under the award to use for project or 

program purposes and any cost sharing or matching that the recipient is required to 

provide under the award.

7. Assistance.

Assistance means the transfer of a thing of value to a recipient to carry out a 

public purpose of support or stimulation authorized by a law of the United States (see 31 

U.S.C. 6101(3)). Grants, cooperative agreements, and technology investment agreements 

are examples of legal instruments that DoD Components use to provide assistance.

8. Award.

Award means a grant, cooperative agreement, technology investment agreement, 

or other nonprocurement instrument.

9. Award administration office.

Award administration office means a DoD Component office that performs 

assigned post-award functions related to the administration of grants, cooperative 

agreements, technology investment agreements, or other nonprocurement instruments.

10. Award-specific terms and conditions.

Award-specific terms and conditions means requirements that are included in an

individual award and pertain to that particular award specifically. Award-specific 

terms and conditions may be used to modify or supplement general terms and 

conditions.

11. Capital asset.

Capital asset means a tangible or intangible asset used in operations having a 

useful life of more than one year which is capitalized in accordance with GAAP. Capital 

assets include:

a. Land, buildings (facilities), equipment, and intellectual property (including software) 

whether acquired by purchase, construction, manufacture, lease-purchase, exchange, 

or through capital leases; and
Page 7 of 86

b. Additions, improvements, modifications, replacements, rearrangements, 

reinstallations, renovations or alterations to capital assets that materially increase their 

value or useful life (not ordinary repairs and maintenance).

12. Claim.

Claim means a written demand or written assertion by one of the parties to an 

award seeking as a matter of right, the payment of money in a sum certain, the adjustment 

or interpretation of award terms, or other relief arising under or relating to the award. A 

routine request for payment that is not in dispute when submitted is not a claim. The 

submission may be converted to a claim by written notice to the grants officer if it is 

disputed either as to liability or amount, or is not acted upon in a reasonable time.

13. Cognizant agency for indirect costs.

Cognizant agency for indirect costs means the Federal agency responsible for 

reviewing, negotiating, and approving cost allocation plans and indirect cost proposals on 

behalf of all Federal agencies. The cognizant agency for indirect costs for a particular 

entity may be different than the cognizant agency for audit. The cognizant agency for 

indirect costs:

a. For an institution of higher education, nonprofit organization, State, or local 

government is assigned as described in the appendices to OMB guidance in 2 CFR 

Part 200. See 2 CFR 200.19 for specific citations to those appendices.

b. For a for-profit entity, normally will be the agency with the largest dollar amount of 

pertinent business, as described in the Federal Acquisition Regulation at 48 CFR 

42.003.

14. Contract.

Contract means a procurement transaction, as that term is defined in this part. A 

contract is a transaction into which a recipient or subrecipient enters. It is therefore 

distinct from the term “procurement contract,” which is a transaction that a DoD 

Component awards at the prime tier.

15. Contractor.

Contractor means an entity to which a recipient or subrecipient awards a 

procurement transaction (also known as a contract).

16. Cooperative agreement.

Cooperative agreement means a legal instrument which, consistent with 31 

U.S.C. 6305, is used to enter into the same kind of relationship as a grant (see definition 

of “grant” in this part), except that substantial involvement is expected between the 
Page 8 of 86

Department of Defense and the recipient when carrying out the activity contemplated by 

the cooperative agreement. The term does not include “cooperative research and 

development agreements” as defined in 15 U.S.C. 3710a.

17. Cost allocation plan.

Cost allocation plan means either a:

a. Central service cost allocation plan, as defined at 2 CFR 200.9 and described in 

Appendix V to OMB guidance in 2 CFR Part 200; or

b. Public assistance cost allocation plan as described in Appendix VI to 2 CFR Part 200.

18. Cost sharing or matching.

Cost sharing or matching means the portion of project costs not borne by the 

Federal Government, unless a Federal statute authorizes use of any Federal funds for cost 

sharing or matching.

19. Cost-type contract.

Cost-type contract means a procurement transaction awarded by a recipient or a 

subrecipient at any tier under a DoD Component’s grant or cooperative agreement that 

provides for the contractor to be paid on the basis of the actual, allowable costs it incurs 

(plus any fee or profit for which the contract provides).

20. Cost-type subaward

Cost-type subaward means a subaward:

a. That a recipient or subrecipient makes to another entity at the next lower tier; and

b. Provides for payments to the entity that receives the cost-type subaward based on the 

actual, allowable costs it incurs in carrying out the subaward. 

21. Debarment.

Debarment means an action taken by a Federal agency debarring official to 

exclude a person or entity from participating in covered Federal transactions, in 

accordance with debarment and suspension policies and procedures for:

a. Nonprocurement instruments, which are in OMB guidance at 2 CFR Part 180, as 

implemented by the DoD at 2 CFR Part 1125; or

b. Procurement contracts, which are in the Federal Acquisition Regulation at 48 CFR 

9.4.
Page 9 of 86

22. Debt.

Debt means any amount of money or any property owed to a Federal agency by 

any person, organization, or entity except another United States Federal agency. Debts 

include any amounts due from insured or guaranteed loans, fees, leases, rents, royalties, 

services, sales of real or personal property, or overpayments, penalties, damages, interest, 

fines and forfeitures, and all other claims and similar sources.

23. Delinquent debt.

Delinquent debt means a debt:

a. That the debtor fails to pay by the date specified in the initial written notice from the 

agency owed the debt, normally within 30 calendar days, unless the debtor makes 

satisfactory payment arrangements with the agency by that date; and

b. With respect to which the debtor has elected not to exercise any available appeals or 

has exhausted all agency appeal processes.

24. Direct costs.

Direct cost means any cost that is identified specifically with a particular final 

cost objective, in accordance with the applicable cost principles. Costs identified with a 

given award are direct costs of that award.

25. DoD Components.

DoD Components means the Office of the Secretary of Defense, the Military 

Departments, and all Defense Agencies, DoD Field Activities, and other organizational 

entities within the DoD that are authorized to award or administer grants, cooperative 

agreements, and other non-procurement instruments.

26. Equipment.

Equipment means tangible personal property (including information technology 

systems) having a useful life of more than one year and a per-unit acquisition cost which 

equals or exceeds the lesser of:

a. $5,000; or 

b. The recipient’s or subrecipient’s capitalization threshold for financial statement 

purposes.

27. Expenditures.
Page 10 of 86

Expenditures means charges made by a recipient or subrecipient to a project or 

program under an award.

a. The charges may be reported on a cash or accrual basis, as long as the methodology is 

disclosed and is consistently applied.

b. For reports prepared on a cash basis, expenditures are the sum of:

i. Cash disbursements for direct charges for property and services;

ii. The amount of indirect expense charged;

iii. The value of third-party in-kind contributions applied; and

iv. The amount of cash advance payments and payments made to subrecipients.

c. For reports prepared on an accrual basis, expenditures are the sum of:

i. Cash disbursements for direct charges for property and services;

ii. The amount of indirect expense incurred;

iii. The value of third-party in-kind contributions applied; and

iv. The net increase or decrease in the amounts owed by the recipient or 

subrecipient for:

A. Goods and other property received;

B. Services performed by employees, contractors, subrecipients, and other 

payees; and

C. Programs for which no current services or performance are required, such as 

annuities, insurance claims, or other benefit payments.

28. Federal interest.

Federal interest means, in relation to real property, equipment, or supplies 

acquired or improved under an award or subaward, the dollar amount that is the product 

of the:

a. Federal share of total project costs; and

b. Current fair market value of the property, improvements, or both, to the extent the 

costs of acquiring or improving the property were included as project costs.
Page 11 of 86

29. Federal share.

Federal share means the portion of the project costs under an award that is paid 

by Federal funds.

30. Fixed amount subaward

Fixed amount subaward means a subaward:

a. That a recipient or subrecipient makes to another entity at the next lower tier; and

b. Under which the total amount to be paid to the other entity is based on performance 

and results, and not on the actual, allowable costs that entity incurs.

31. General terms and conditions.

General terms and conditions means requirements that apply broadly to a class of 

awards rather than specifically to a particular award. For example, the requirements in 

this Agreement are general terms and conditions because they apply, except as 

modified or supplemented by award-specific terms and conditions, to all applicable 

awards under solicitation number DLA-20130412.

32. Grant.

Grant means a legal instrument which, consistent with 31 U.S.C. 6304, is used to 

enter into a relationship:

a. Of which the principal purpose is to transfer a thing of value to the recipient to carry 

out a public purpose of support or stimulation authorized by a law of the United 

States, rather than to acquire property or services for the DoD’s direct benefit or use.

b. In which substantial involvement is not expected between the Department of Defense 

and the recipient when carrying out the activity contemplated by the grant.

33. Grants officer.

Grants officer means a DoD official with the authority to enter into, administer, 

and/or terminate grants or cooperative agreements.

34. Indian tribe.

Indian tribe means any Indian tribe, band, nation, or other organized group or 

community, including any Alaska Native village or regional or village corporation as 

defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 

Chapter 33), which is recognized as eligible for the special programs and services 

provided by the United States to Indians because of their status as Indians (25 U.S.C. 
Page 12 of 86

450b(e)). See the annually published Bureau of Indian Affairs list of Indian Entities 

Recognized and Eligible to Receive Services.

35. Indirect costs (also known as “Facilities and Administrative,” or F&A, costs).

Indirect costs means those costs incurred for a common or joint purpose 

benefitting more than one cost objective, and not readily assignable to the cost objectives 

specifically benefitted, without effort disproportionate to the results achieved.

36. Institution of higher education.

Institution of higher education has the meaning specified in at 20 U.S.C. 1001.

37. Intangible property.

Intangible property means:

a. Property having no physical existence, such as trademarks, copyrights, patents and 

patent applications; and

b. Property such as loans, notes and other debt instruments, lease agreements, stock and 

other instruments of property ownership, whether the property is considered tangible 

or intangible.

38. Local government.

Local government means any unit of government within a State, including a:

a. County;

b. Borough;

c. Municipality;

d. City;

e. Town;

f. Township;

g. Parish;

h. Local public authority, including any public housing agency under the United States 

Housing Act of 1937;

i. Special district;
Page 13 of 86

j. School district;

k. Intrastate district;

l. Council of governments, whether or not incorporated as a nonprofit corporation under 

State law; and

m. Any other agency or instrumentality of a multi-, regional, or intra-state or local 

government.

39. Management decision.

Management decision means a written decision issued to an audited entity by a 

DoD Component or a recipient or subrecipient from which the audited entity received an 

award or subaward. The DoD Component, recipient, or subrecipient issues the 

management decision to specify the corrective actions that are necessary after evaluating 

the audit findings and the audited entity’s corrective action plan.

40. Nonprocurement instrument.

Nonprocurement instrument means a legal instrument other than a procurement 

contract that a DoD Component may award. Examples include an instrument of financial 

assistance, such as a grant or cooperative agreement, or an instrument of technical 

assistance, which provides services in lieu of money.

41. Nonprofit organization.

Nonprofit organization means any corporation, trust, association, cooperative, or 

other organization, not including an institution of higher education, that:

a. Is operated primarily for scientific, educational, service, charitable, or similar 

purposes in the public interest;

b. Is not organized primarily for profit; and

c. Uses net proceeds to maintain, improve, or expand the operations of the organization.

42. Obligation.

Obligation means:

a. When used in conjunction with a DoD Component’s action, a legally binding 

agreement that will result in outlays, either immediately or in the future. Examples of 

actions through which a DoD Component incurs an obligation include the signature 
Page 14 of 86

of a grant, cooperative agreement, or technology investment agreement authorizing 

the recipient to use funds under the award.

b. When used in conjunction with a recipient’s or subrecipient’s use of funds under an 

award or subaward, an order placed for property and services, a contract or subaward 

made, or a similar transaction during a given period that requires payment during the 

same or a future period.

43. Office of Management and Budget.

Office of Management and Budget means the Executive Office of the President, 

United States Office of Management and Budget.

44. Outlays.

Outlays means “expenditures,” as defined in this part.

45. Participant support costs.

Participant support costs means direct costs for items such as stipends or 

subsistence allowances, travel allowances, and registration fees paid to or on behalf of 

participants or trainees (but not employees) in connection with conferences, or training 

projects.

46. Period of performance.

Period of performance means the time during which a recipient or subrecipient

may incur new obligations to carry out the work authorized under an award or subaward, 

respectively.

47. Personal property.

Personal property means property other than real property. It may be tangible, 

having physical existence, or intangible, such as copyrights, patents, and securities.

48. Procurement contract.

Procurement contract means a legal instrument which, consistent with 31 U.S.C. 

6303, reflects a relationship between the Federal Government and a State, a local 

government, or other recipient when the principal purpose of the instrument is to acquire 

property or services for the direct benefit or use of the Federal Government. A 

procurement contract is a prime tier transaction and therefore distinct from a recipient’s 

or subrecipient’s “procurement transaction” or “contract” as defined in this part.

49. Procurement transaction.
Page 15 of 86

Procurement transaction means a legal instrument by which a recipient or 

subrecipient purchases property or services it needs to carry out the project or program 

under its prime award or subaward, respectively. A procurement transaction is distinct 

both from “subaward” and “procurement contract,” as those terms are defined in this part.

50. Program income.

Program income means gross income earned by a recipient or subrecipient that is 

directly generated by a supported activity or earned as a result of an award or subaward. 

a. Program income includes, but is not limited to, income earned under this award from:

i. Fees for services performed;

ii. The use or rental of real or personal property for which the recipient or 

subrecipient is accountable under the award or subaward (whether acquired 

under the award or subaward, or other Federal awards from which 

accountability for the property was transferred);

iii. The sale of commodities or items fabricated under the award or subaward; and

iv. License fees and royalties on patents and copyrights.

b. Program income does not include:

i. Interest earned on advances of Federal funds;

ii. Proceeds from the sale of real property or equipment under the award; or

iii. Unless otherwise specified in Federal statute or regulation, or the terms and 

conditions of the award or subaward:

A. Rebates, credits, discounts, and interest earned on any of them; or

B. Governmental revenues, including any taxes, special assessments, levies, 

fines, and similar revenues raised by the recipient or subrecipient.

c. Costs incidental to the generation of program income may be deducted from the gross 

provided those costs have not been charged to the federal award. 2 CFR 200.307(b).

d. It is NGB policy (i.e. prior approval has been granted) to add the amount of program 

income collected to the total budgeted amount for that project or activity. 2 CFR 

200.307(e)(2)

51. Project costs.
Page 16 of 86

Project costs means the total of:

a. Allowable costs incurred under an award by the recipient, including costs of any 

subawards and contracts under the award; and

b. Cost sharing or matching contributions that are required under the award, which 

includes voluntary committed (but not voluntary uncommitted) contributions and the 

value of any third-party in-kind contributions.

52. Property.

Property means real property and personal property (equipment, supplies, 

intangible property, and debt instruments), unless stated otherwise.

53. Real property.

Real property means land, including land improvements, structures and 

appurtenances thereto, but excluding moveable machinery and equipment.

54. Recipient.

Recipient means an entity that receives an award directly from a DoD

Component. The term does not include subrecipients.

55. Research.

Research means basic, applied, and advanced research.

56. Simplified acquisition threshold. See 2 CFR 200.1

57. State.

State means any State of the United States, the District of Columbia, the 

Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the 

Commonwealth of the Northern Mariana Islands, and any agency or instrumentality 

thereof exclusive of local governments.

58. Subaward.

Subaward means a legal instrument by which a recipient or subrecipient at any 

tier below a DoD Component prime award, transfers--for performance by an entity at the 

next lower tier--a portion of the substantive program for which the DoD Component’s 

prime award provided financial assistance. A subaward is either a cost-type or a fixed 

amount subaward.
Page 17 of 86

59. Subrecipient.

Subrecipient means an entity that receives a subaward.

60. Supplies.

Supplies means all tangible personal property, including a computing device, 

acquired under an award that does not meet the definition of equipment in this part.

61. Suspension.

Suspension means either:

a. When used in the context of a specific award or subaward to an entity, the temporary 

withdrawal of authority for that entity to obligate funds under the award or subaward, 

pending its taking corrective action or a decision to terminate the award or subaward.

b. When used in the context of an entity, an action by a DoD Component’s suspending

official under 2 CFR Part 1125, DoD’s regulation implementing OMB guidance on 

nonprocurement debarment and suspension in 2 CFR Part 180, to immediately 

exclude the entity from participating in covered Federal Government transactions, 

pending completion of an investigation and any legal or debarment proceedings that 

ensue.

62. Technology Investment Agreement.

Technology investment agreement means one of a special class of assistance 

instruments used to increase involvement of commercial firms in defense research 

programs and for other purposes related to integration of the commercial and defense 

sectors of the nation's technology and industrial base. Technology investment 

agreements include one kind of cooperative agreement with provisions tailored for 

involving commercial firms, as well as one kind of assistance transaction other than a 

grant or cooperative agreement. Technology investment agreements are subject to, and 

described more fully in, 32 CFR Part 37.

63. Termination.

Termination means the ending of an award or subaward, in whole or in part, at 

any time prior to the planned end of period of performance.

64. Third-party in-kind contribution.

Third-party in-kind contribution means the value of a non-cash contribution (i.e., 

property or services) that:
Page 18 of 86

a. A non-Federal third party contributes, without charge, either to a recipient or 

subrecipient at any tier under a DoD Component’s award; and

b. Is identified in the approved budget of the DoD Component’s award as a contribution 

being used toward meeting the award’s cost sharing or matching requirements (which 

includes voluntary committed, but not voluntary uncommitted, contributions).

65. Unique entity identifier.

Unique entity identifier means the identifier required for System for Award 

Management registration to uniquely identify entities with which the Federal Government 

does business (currently the Dun and Bradstreet Data Universal Numbering System, or 

DUNS, number).

66. Unobligated balance.

Unobligated balance means the amount of funds under an award or subaward that 

the recipient or subrecipient has not obligated. The amount is computed by subtracting 

the cumulative amount of the recipient’s or subrecipient’s unliquidated obligations and 

expenditures of funds from the cumulative amount of funds that it was authorized to 

obligate under the award or subaward.

67. Voluntary (committed or uncommitted) cost sharing.

a. Voluntary cost sharing means cost sharing that an entity pledges voluntarily in its 

application or proposal (i.e., not due to a stated cost sharing requirement in the 

program announcement to which the entity’s application or proposal responds).

b. Voluntary committed cost sharing means voluntary cost sharing that a DoD 

Component accepts through inclusion in the approved budget for the project or 

program and as a binding requirement of the terms and conditions of the award made 

to the entity in response to its application or proposal.

c. Voluntary uncommitted cost sharing means voluntary cost sharing that does not meet 

the criteria in paragraph 67.b of this Section.

68. Working capital advance.

Working capital advance means a payment method under which funds are 

advanced to a recipient or subrecipient to cover its estimated disbursement needs for a 

given initial period, after which payment is made by way of reimbursement.
Page 19 of 86

PART 2: PROGRAM REQUIREMENTS

Section A. Allowability of certain costs and cost sharing contributions. The allowability 

of certain costs and cost sharing or matching contributions is addressed in this Section. The 

allowability of costs and cost sharing or matching contributions is addressed more generally 

in FMS Articles III and VI, respectively.

1. Third-party in-kind contributions. Among other things, contributions must be allowable 

under the applicable cost principles. With regard to third-party in-kind contributions, this 

means that contributions are allowable only if they are items that would have been 

necessary to include in the budget as direct costs had they not been donated.

Acceptable third-party in-kind contributions are performed by the third party for the 

direct benefit of the project/supported activity. Activities performed by third parties in 

their ordinary course of business, in pursuit of their own organization’s mission, are 

usually not acceptable as in-kind contributions just because those activities coincidentally 

support the project/supported activity.

Anything that is normally available free of charge to the project/supported activity or 

clients is not acceptable as a third-party in-kind contribution (e.g., use of a public library). 

“Discounts” are never acceptable third-party in-kind contributions. You may count a 

third-party in-kind contribution towards the award’s cost sharing or matching 

requirement only after you receive and use it. You may not count third-party

contributions or donations that were made available for you to use, but that you do not 

actually use.

2. Food and beverages. With the exception of non-local travel for project/supported activity

personnel, any cost related to the providing food and/or beverages for either

project/supported activity personnel or clients is unallowable for either reimbursement or 

towards your cost sharing or matching, including use as a third-party in-kind 

contribution. This does not prohibit the charging of reasonable fees to attendees of 

project/supported activity events, such as a conference or workshop, to pay for necessary 

refreshments. These fees constitute program income and must be accounted for as such 

(refer to FMS Article VII).

3. Memberships. The cost of individual memberships in any business, technical, and 

professional organization is not allowable.

4. Indirect costs. The indirect cost rate established between the state and HHS applies to 

this award. 

5. Indirect costs cannot include any costs agreed-upon as direct costs. For states in which 

the USPFO and the grantee have established a Centralized Personnel Plan (CPP), an 

indirect rate which does not exclude CPP costs is unallowable for reimbursement or 

advance.
Page 20 of 86

Section B. Additional guidance on program income. You are permitted by Part 4, Article 

VII to earn program income under this award when doing so does not interfere with the 

program the award supports. 

1. You may deduct costs incidental to the generation of program income as long as those 

costs are not charged to this award (which includes those costs being counted toward any 

cost sharing or matching you are required to provide). 2 CFR 200.307(b).

2. As permitted by 2 CFR 200.307(f), the period during which grantees are required to 

report program income attributable to an activity funded in whole or in part by this award, is 

extended to include any and every subsequent period during which the grantee receives an 

award which itself requires reporting of program income attributable to the same activity.

PART 3: NATIONAL POLICY REQUIREMENTS

Article I. Nondiscrimination national policy requirements. (Mar 2015) 

By signing this award or accepting funds under this award, you assure that you will comply with 

applicable provisions of the national policies prohibiting discrimination:

1. On the basis of race, color, or national origin, in Title VI of the Civil Rights Act of 1964 

(42 U.S.C. 2000d et seq.), as implemented by DoD regulations at 32 CFR Part 195.

2. On the basis of gender, blindness, or visual impairment, in Title IX of the Education 

Amendments of 1972 (20 U.S.C. 1681 et seq.), as implemented by DoD regulations at 32 

CFR Part 196.

3. On the basis of age, in the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), as 

implemented by Department of Health and Human Services regulations at 45 CFR Part

90.

4. On the basis of disability, in the Rehabilitation Act of 1973 (29 U.S.C. 794), as 

implemented by Department of Justice regulations at 28 CFR Part 41 and DoD 

regulations at 32 CFR Part 56.

5. On the basis of disability in the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et 

seq.) related to physically handicapped persons’ ready access to, and use of, buildings 

and facilities for which Federal funds are used in design, construction, or alteration.
Page 21 of 86

Article II. Environmental national policy requirements. (Mar 2015)

You must:

1. Comply with applicable provisions of the Clean Air Act (42 U.S.C. 7401, et seq.) and 

Clean Water Act (33 U.S.C. 1251, et seq.).

2. Immediately identify to us, as the Federal awarding agency, any potential impact that you 

find this award may have on:

a. The quality of the human environment, including wetlands, and provide any help we 

may need to comply with the National Environmental Policy Act (NEPA, at 42 

U.S.C. 4321 et seq.) and assist us to prepare Environmental Impact Statements or 

other environmental documentation. In such cases, you may take no action that will 

have an adverse environmental impact (e.g., physical disturbance of a site such as 

breaking of ground) or limit the choice of reasonable alternatives until we provide 

written notification of Federal compliance with NEPA.

b. Flood-prone areas, and provide any help we may need to comply with the National 

Flood Insurance Act of 1968 and Flood Disaster Protection Act of 1973 (42 U.S.C. 

4001 et seq.), which require flood insurance, when available, for federally assisted 

construction or acquisition in flood-prone areas.

c. Use of land and water resources of coastal zones, and provide any help we may need 

to comply with the Coastal Zone Management Act of 1972 (16 U.S.C. 1451, et seq.).

d. Coastal barriers along the Atlantic and Gulf coasts and Great Lakes’ shores, and 

provide help we may need to comply with the Coastal Barriers Resource Act (16 

U.S.C. 3501 et seq.), concerning preservation of barrier resources.

e. Any existing or proposed component of the National Wild and Scenic Rivers system, 

and provide any help we may need to comply with the Wild and Scenic Rivers Act of 

1968 (16 U.S.C. 1271 et seq.).

f. Underground sources of drinking water in areas that have an aquifer that is the sole or 

principal drinking water source, and provide any help we may need to comply with 

the Safe Drinking Water Act (42 U.S.C. 300h-3).

3. Comply with applicable provisions of the Lead-Based Paint Poisoning Prevention Act 

(42 U.S.C. 4821-4846), as implemented by the Department of Housing and Urban 

Development at 24 CFR Part 35. The requirements concern lead-based paint in buildings 

owned by the Federal Government or housing receiving Federal assistance.
Page 22 of 86

Article III. Other national policy requirements. (Mar 2015)

1. Debarment and suspension. You must comply with requirements regarding debarment 

and suspension in Subpart C of 2 CFR Part 180, as adopted by DoD at 2 CFR Part 1125. 

This includes requirements concerning your principals under this award, as well as 

requirements concerning your procurement transactions and subawards that are 

implemented in PROC Articles I through III and SUB Article II.

2. Drug-free workplace. You must comply with drug-free workplace requirements in 

Subpart B of 2 CFR Part 26, which is the DoD implementation of 41 U.S.C. chapter 81, 

“Drug-Free Workplace.”

3. Lobbying.

a. You must comply with the restrictions on lobbying in 31 U.S.C. 1352, as 

implemented by DoD at 32 CFR Part 28, and submit all disclosures required by that 

statute and regulation. 

b. You must comply with the prohibition in 18 U.S.C. 1913 on the use of Federal funds, 

absent express Congressional authorization, to pay directly or indirectly for any 

service, advertisement or other written matter, telephone communication, or other 

device intended to influence at any time a Member of Congress or official of any 

government concerning any legislation, law, policy, appropriation, or ratification.

c. If you are a nonprofit organization described in section 501(c)(4) of title 26, United 

States Code (the Internal Revenue Code of 1968), you may not engage in lobbying 

activities as defined in the Lobbying Disclosure Act of 1995 (2 U.S.C., chapter 26). 

If we determine that you have engaged in lobbying activities, we will cease all 

payments to you under this and other awards and terminate the awards unilaterally for 

material failure to comply with the award terms and conditions.

4. Officials not to benefit. You must comply with the requirement that no member of 

Congress shall be admitted to any share or part of this agreement, or to any benefit 

arising from it, in accordance with 41 U.S.C. 6306.

5. Hatch Act. If applicable, you must comply with the provisions of the Hatch Act (5 U.S.C. 

1501-1508) concerning political activities of certain State and local government 

employees, as implemented by the Office of Personnel Management at 5 CFR Part 151, 

which limits political activity of employees or officers of State or local governments 

whose employment is connected to an activity financed in whole or part with Federal 

funds.
Page 23 of 86

6. Native American graves protection and repatriation. If you control or possess Native 

American remains and associated funerary objects, you must comply with the requirements 

of 43 CFR Part 10, the Department of the Interior implementation of the Native American 

Graves Protection and Repatriation Act of 1990 (25 U.S.C., chapter 32).

7. Fly America Act. You must comply with the International Air Transportation Fair 

Competitive Practices Act of 1974 (49 U.S.C. 40118), commonly referred to as the “Fly 

America Act,” and implementing regulations at 41 CFR 301-10.131 through 301-10.143. 

The law and regulations require air transport of people or property to, from, between or 

within a country other than the United States, the cost of which is supported under this 

award, to be performed by or under a cost-sharing arrangement with a U.S. flag carrier, if 

service is available.

8. Use of United States-flag vessels. You must comply with the following award term 

specified by the Department of Transportation at 46 CFR 381.7, in regulations 

implementing the Cargo Preference Act of 1954: 

a. Pursuant to Pub. L. 83-664 (43 U.S.C. 1241(b)), at least 50 percent of any equipment, 

materials or commodities procured, contracted for or otherwise obtained with funds 

under this award, and which may be transported by ocean vessel, must be transported 

on privately owned United States-flag commercial vessels, if available.

b. Within 20 days following the date of loading for shipments originating within the 

United States or within 30 working days following the date of loading for shipments 

originating outside the United States, a legible copy of a rated, “on-board” 

commercial ocean bill-of-lading in English for each shipment of cargo described in 

paragraph 8.a of this Article shall be furnished to both our award administrator 

(through you in the case of your contractor’s bill-of-lading) and to the Division of 

National Cargo, Office of Market Development, Maritime Administration, 

Washington, DC 20590.

9. Historic preservation. You must identify to us any:

a. Property listed or eligible for listing on the National Register of Historic Places that will 

be affected by this award, and provide any help we may need, with respect to this award, 

to comply with Section 106 of the National Historic Preservation Act of 1966 (16 U.S.C. 

470f), as implemented by the Advisory Council on Historic Preservation regulations at 

36 CFR Part 800 and Executive Order 11593, “Identification and Protection of Historic 

Properties,” [3 CFR, 1971-1975 Comp., p. 559].

b. Potential under this award for irreparable loss or destruction of significant scientific, 

prehistorical, historical, or archeological data, and provide any help we may need, with 

respect to this award, to comply with the Archaeological and Historic Preservation Act 

of 1974 (16 U.S.C. 469a-1, et seq.).
Page 24 of 86

10. Constitution Day. You must comply with Public Law 108-447, Div. J, Title I, Sec. 111 

(36 U.S.C. 106 note), which requires each educational institution receiving Federal funds 

in a Federal fiscal year to hold an educational program on the United States Constitution 

on September 17th during that year for the students served by the educational institution.

11. Trafficking in persons. You must comply with requirements concerning trafficking in 

persons specified in the award term at 2 CFR 175.15(b), as applicable.

12. Whistleblower protections. You must comply with 10 U.S.C. 2409, including the:

a. Prohibition on reprisals against employees disclosing certain types of information to 

specified persons or bodies; and

b. Requirement to notify your employees in writing, in the predominant native language 

of the workforce, of their rights and protections under that statute.

13. Internal confidentiality agreements. Section 743 of the Financial Services and General 

Government Appropriations Act, 2015 (Division E of the Consolidated and Further 

Continuing Appropriations Act, 2015, Pub. L. 113-235) prohibits us from providing 

funds through grants and cooperative agreements to entities with certain internal 

confidentiality agreements or statements.

a. By signing this Master Cooperative Agreement, any appendix hereto and any other 

NGB-funded agreement referring to this MCA, you represent that:

i. You will not require any of your employees, contractors, or subrecipients 

seeking to report fraud, waste, or abuse to sign or comply with internal 

confidentiality agreements or statements prohibiting or otherwise restricting 

those employees, contractors, or subrecipients from lawfully reporting that 

waste, fraud, or abuse to a designated investigative or law enforcement 

representative of a Federal department or agency authorized to receive such 

information; and

ii. You will notify your employees, contractors, or subrecipients that any

prohibitions and restrictions of any internal confidentiality agreements 

inconsistent with this prohibition are no longer in effect.

iii. You will notify the grants officer immediately should the required 

representation no longer be accurate.

b. This prohibition does not contravene requirements applicable to Standard Form 312, 

Form 4414, or any other form issued by a Federal department or agency governing 

the nondisclosure of classified information.
Page 25 of 86

c. If we determine that you are not in compliance with this provision, we:

i. Will prohibit your use of funds under this award; and 

ii. May pursue other remedies available for your material failure to comply with 

the award terms and conditions.
Page 26 of 86

PART 4: FINANCIAL AND PROGRAM MANAGEMENT

Article I. Financial management system standards. (Mar 2015)

Section A. System standard for States. As a State, you must expend and account for funds 

under this award in accordance with:

1. Applicable State laws; and

2. To the extent they comply with the requirements of Section B of this Article, your 

procedures for expending and accounting for your own State funds.

Section B. System standards for all recipients. Your financial management system must 

provide for:

1. Inclusion, in your accounts, of the following information about each DoD grant or 

cooperative agreement that you receive:

a. That you received it from the Department of Defense;

b. The number and title listed in the Catalog of Federal Domestic Assistance for the 

DoD program under which the award was made;

c. The DoD award number;

d. The year (your fiscal year) in which you received the award;

2. Accurate, current, and complete disclosure of the financial results of the award needed to 

comply with financial and programmatic reporting requirements that are specified in REP 

Articles I and II of these general terms and conditions, as supplemented by any 

award-specific terms and conditions of this award concerning reporting requirements. If 

you are asked at any time under this award to report financial information on an accrual 

basis, you:

a. Need not establish an accrual accounting system if you maintain your records on a 

different basis; and

b. May develop the accrual data based on an analysis of the data you have on hand.

3. Records that identify adequately the sources of funds for all activities funded by DoD 

awards, including any required cost sharing or matching, and the application of those 

funds. This includes funding authorizations; your obligations and expenditures of the 

funds; unobligated balances; property and other assets under the award; program income; 

and interest.
Page 27 of 86

4. Effective control over, and accountability for, all funds, property, and other assets under 

this award. You must adequately safeguard all assets and assure they are used solely for 

authorized purposes (see Section C of this Article for additional requirements concerning 

internal controls).

5. Comparison of expenditures under this award for project or program purposes with 

amounts in the approved budget for those purposes.

6. Written procedures:

a. To implement requirements specified in FMS Article II, “Payments;”

b. For determining the allowability of costs, which for this award are determined in 

accordance with FMS Article III, “Allowable costs, period of availability of funds, 

and fee or profit,” of these general terms and conditions supplemented by any 

award-specific terms and conditions of this award that relate to allowability of costs.

Section C. Internal controls. Your system of internal controls must conform to OMB 

guidance in 2 CFR 200.303. With respect to paragraph (e) of 2 CFR 200.303, your internal 

control system must include measures to safeguard any information that Federal statute, 

Executive order, or regulation requires to be protected (e.g., personally identifiable or export 

controlled information), whether generated under the award or provided to you and identified 

as being subject to protection.

Article II. Payments. (Mar 2015)

Section A. Awards to States. This award is subject to Subpart B of 31 CFR Part 205 

(Department of the Treasury regulations implementing the Cash Management Improvement 

Act). Consistent with Subpart B of 31 CFR Part 205:

1. Payment method, timing, and amounts. You must:

a. Minimize the time between your receipt of a payment under this award and your 

disbursement of those funds for program purposes.

b. Limit the amount of each advance payment request to the minimum amount you need 

to meet your actual, immediate cash requirements for carrying out the program or 

project.

c. Submit each advance payment request approximately 10 days before you anticipate 

disbursing the requested amount for program purposes, so that your receipt of the 

funds will be as close in time as is administratively feasible to your actual cash outlay 

for direct program or project costs and the proportionate share of any allowable 

indirect costs.
Page 28 of 86

2. Interest. Neither you nor we will incur any interest liability due to a difference in timing 

between your receipt of payments under this award and your disbursement of those funds 

for program purposes. 

Section B. Awards to institutions of higher education, nonprofit organizations, local 

governments, and Indian tribes.

1. Payment method. Unless the award-specific terms and conditions of this award provide 

otherwise, you are authorized to request advance payments under this award. That 

authorization is contingent on your continuing to maintain, or demonstrating the 

willingness to maintain, written procedures that minimize the time elapsing between your 

receipt of each payment and your disbursement of the funds for program purposes. 

2. Amounts requested. You must:

a. Limit the amount of any advance payment request to the minimum amount needed to 

meet your actual, immediate cash requirements for carrying out the purpose of the 

approved program or project, including direct program or project costs and a 

proportionate share of any allowable indirect costs.

b. Exclude from any payment request amounts you are withholding from payments to 

contractors to assure satisfactory completion of the work. You may request those 

amounts when you make the payments to the contractors or to escrow accounts 

established to assure satisfactory completion of the work.

c. Exclude from any payment request amounts from any of the following sources that 

are available to you for program purposes under this award: program income, 

including repayments to a revolving fund; rebates; refunds; contract settlements; audit 

recoveries; and interest earned on any of those funds. You must disburse those funds 

for program purposes before requesting additional funds from us.

3. Timing of requests. For any advance payment you request, you should submit the request 

approximately 10 days before you anticipate disbursing the requested amount for 

program purposes. With time for agency processing of the request, that should result in 

payment as close as is administratively feasible to your actual disbursements for program 

or project purposes.

4. Frequency of requests. You may request payments as often as you wish unless you have 

been granted a waiver from requirements to receive payments by electronic funds transfer 

(EFT). If you have been granted a waiver from EFT requirements, the award-specific 

terms and conditions of this award specify the frequency with which you may submit 

payment requests.

5. Withholding of payments. We will withhold payments for allowable costs under the 

award at any time during the period of performance only if one or more of the following 

applies:
Page 29 of 86

a. We suspend either payments or the award, or disallow otherwise allowable costs, as a 

remedy under OAR Article III due to your material failure to comply with Federal 

statutes, regulations, or the terms and conditions of this award. If we suspend 

payments and not the award, we will release withheld payments upon your 

subsequent compliance. If we suspend the award, then amounts of payments are 

subject to adjustment in accordance with the terms and conditions of OAR Article III.

b. You are delinquent in a debt to the United States as defined in OMB Circular A-129, 

“Policies for Federal Credit Programs and Non-Tax Receivables,” in which case we 

may, after reasonable notice, inform you that we will not make any further payments 

for costs you incurred after a specified date until you correct the conditions or 

liquidate the indebtedness to the Federal Government.

c. The award-specific terms and conditions include additional requirements that provide 

for withholding of payments based on conditions identified during our pre-award risk 

evaluation, in which case you should have been notified about the nature of those 

conditions and the actions needed to remove the additional requirements.

6. Depository requirements.

a. There are no eligibility requirements for depositories you use for funds you receive 

under this award.

b. You are not required to deposit funds you receive under this award in a depository 

account separate from accounts in which you deposit other funds. However, FMS 

Article I requires that you be able to account for the receipt, obligation, and 

expenditure of all funds under this award.

c. You must deposit any advance payments of funds you receive under this award in 

insured accounts whenever possible and, unless any of the following apply, you must 

deposit them in interest-bearing accounts:

i. You receive a total of less than $120,000 per year under Federal grants and 

cooperative agreements.

ii. You would not expect the best reasonably available interest-bearing account to 

earn interest in excess of $500 per year on your cash balances of advance 

payments under Federal grants and cooperative agreements.

iii. The best reasonably available interest-bearing account would require you to 

maintain an average or minimum balance higher than it would be feasible for 

you to do within your expected Federal and non-Federal cash balances.

iv. A foreign government or banking system precludes your use of interest-bearing 

accounts.
Page 30 of 86

d. You may retain for administrative expenses up to $500 per year of interest that you 

earn on advance payments you receive under this award and other Federal grants and 

cooperative agreements. You must remit annually the rest of the interest to the 

Department of Health and Human Services, Payment Management System, using the 

procedures set forth in 2 CFR 200.305(b)(9).

Section C. Electronic funds transfer and other payment procedural instructions or 

information.

1. Electronic funds transfer. Unless the award-specific terms and conditions of this award 

provide otherwise, you will receive payments under this award by electronic funds 

transfer.

2. Reimbursement method of payment. You are authorized to request payment by 

reimbursement instead of requesting advance payments. This may reduce the 

administrative burden necessary to comply with the requirements in this Article that 

apply when you request payment in advance, for example, timing your requests to 

coincide with your actual disbursements and remitting interest. 

Article III. Allowable costs, period of availability of funds, and fee or profit. (Mar 2015)

Section A. Allowable costs. This Section specifies which Federal cost principles must be 

used in determining the allowability of costs charged to this award, a subrecipient’s costs 

charged to any cost-type subaward that you make under this award, and a contractor’s costs 

charged to any cost-type procurement contract into which you enter under this award. These 

cost principles also govern the allowable costs that you or a subrecipient of a subaward at any 

tier below this award may consider when establishing the amount of any fixed amount 

subaward or fixed price procurement contract at the next lower tier. The cost principles to be 

used in each case depends on the type of entity incurring the cost under the award, subaward, 

or contract.

1. General case. If you, your subrecipient, or your contractor is:

a. An institution of higher education, the allowability of costs must be determined in 

accordance with provisions of Subpart E of OMB guidance in 2 CFR Part 200 other 

than 2 CFR 200.400(g), supplemented by Appendix III to that Part.

b. A nonprofit organization other than a hospital or institution of higher education, the 

allowability of costs must be determined in accordance with provisions of Subpart E 

of OMB guidance in 2 CFR Part 200 other than 2 CFR 200.400(g), supplemented by 

Appendices IV and VIII to that Part. In accordance with guidance in 2 CFR 

200.401(c), a nonprofit organization listed in Appendix VIII to 2 CFR Part 200 is 

subject to the cost principles for for-profit entities specified in paragraph 1.d of this 

Section.

c. A State, local government, or Indian tribe, the allowability of costs must be 

determined in accordance with applicable provisions of Subpart E of OMB guidance 
Page 31 of 86

in 2 CFR Part 200 other than 2 CFR 200.400(g), supplemented by Appendices V 

through VII to that Part.

d. A for-profit entity (other than a hospital) or a nonprofit organization listed in 

Appendix VIII to 2 CFR Part 200, the allowability of costs must be determined in 

accordance with:

i. The cost principles for commercial organizations in the Federal Acquisition 

Regulation at subpart 31.2 of 48 CFR Part 31, as supplemented by provisions of 

the Defense Federal Acquisition Regulation Supplement at subpart 231.2 of 48 

CFR Part 231; and

ii. The additional provisions on allowability of audit costs, in 32 CFR 34.16(f).

2. Exception. You may use your own cost principles in determining the allowability of a 

contractor’s costs charged to a cost-type procurement contract under this award--or in 

pricing for a fixed-price contract based on estimated costs--as long as your cost principles 

comply with the Federal cost principles that paragraph A.1 of this Section identifies as 

applicable to the contractor.

Section B. Period of availability of funds. You may charge to this award only allowable 

costs incurred during the period of performance specified in this award, including any 

subsequent modifications to it.

Section C. Fee or profit.

1. You may not receive any fee or profit under this award.

2. You may not use funds available to you under this award to pay fee or profit for an entity 

of any type to which you make a subaward.

3. You may pay fee or profit to an entity with which you enter into a procurement 

transaction to purchase goods or general support services for your use in carrying out the 

project or program under the award.

Article IV. Revision of budget and program plans. (Mar 2015)

Section A. Revisions requiring prior approval. You must request prior approval from the 

Grants Officer and OPR-PM for any of the following program or budget revisions [Note that 

neither this provision nor any other provision in the award terms is a dispensation from the 

requirements of fiscal law]:

1. A change in the scope or objective of the project or program under this award, even if 

there is no associated budget revision that requires our prior approval.

2. The inclusion of direct costs that require prior approval in accordance with the applicable 

cost principles, as identified in FMS Article III.
Page 32 of 86

3. The transfer to other categories of expense of funds included in the approved budget for 

participant support costs, as defined at 2 CFR 200.75.

4. A subaward to another entity under which it will perform a portion of the substantive 

project or program under the award, if it was not included in the approved budget. This 

does not apply to your contracts for acquisition of supplies, equipment, or general support 

services you need to carry out the program.

5. Any change in the cost sharing or matching you provide under the award, as included in 

the approved budget, for which FMS Article VI requires prior approval.

6. A transfer of funds among direct cost categories or programs, functions, and activities, if 

the total anticipated amount of Federal funding of your award exceeds the simplified 

acquisition threshold and the cumulative amount of the transfers exceeds or is expected to 

exceed 10 percent of the approved budget.

7. The need arises for additional Federal funds to complete the project or program.

Section B. Procedures. We will review each request you submit for prior approval for a 

budget or program change and, within 30 calendar days of our receipt of your request, we 

will write or e-mail you to either:

To the extent we can, should

1. Notify you whether your request is approved; or

2. Inform you that we still are considering the request, in which case we will let you know 

when you may expect our decision.

Article V. Non-Federal audits. (Mar 2015)

Section A. Requirements for entities subject to the Single Audit Act. You and each 

subrecipient under this award that is an institution of higher education, nonprofit 

organization, State, local government, or Indian tribe must comply with the audit 

requirements specified in Subpart F of 2 CFR Part 200, which is the OMB implementation of 

the Single Audit Act, as amended (31 U.S.C. chapter 75).

Section B. Requirements for for-profit entities. Any for-profit entity that receives a 

subaward from you under this award is subject to the audit requirements specified in 

32 CFR 34.16, with the following differences:

1. Rather than having the subrecipient provide the audit reports to a DoD Component, as 

specified in 32 CFR 34.16(c), your subaward terms and conditions will require the 

subrecipient to provide the reports to you. If the for-profit entity is unwilling to agree to 
Page 33 of 86

provide the auditor’s report to you, contact the grants officer for this award to discuss an 

alternative approach for carrying out audit oversight of the subaward.

2. You--rather than the Defense Contract Management Agency as provided in 32 CFR 

34.16(d)(2)(ii)--will be responsible for resolution of audit findings that pertain to your 

subaward. 

Article VI. Cost sharing or matching. (Mar 2015) 

Section A. Required cost sharing or matching.

1. Cost sharing or matching required under this award is shown in the award and included in 

the approved budget. That cost sharing or matching includes all:

a. Cash and third-party in-kind contributions.

b. Contributions to the project or program made either by or through (if made by a third 

party) you and any subrecipients.

2. You must obtain our prior approval if you wish to:

a. Change the percentage of cost sharing or matching required under this award; or

b. Use any third-party in-kind contribution that was not included in the most recently 

approved budget toward cost sharing or matching required under this award.

Section B. Allowability as cost sharing or matching. Each cash or third-party in-kind 

contribution toward any cost sharing or matching required under this award, whether put 

forward by you or a subrecipient under a subaward that you make, is allowable as cost 

sharing or matching if:

1. You (or the subrecipient, if it is a subrecipient contribution) maintain records from which 

one may verify that the contribution was made to the project or program and, if it is a 

third-party in-kind contribution, its value.

2. The contribution is not counted as cost sharing or matching for any other Federal award.

3. The contribution is:

a. Allowable under the cost principles applicable to you (or the subrecipient, if it is a 

subrecipient contribution) under FMS Article III of these terms and conditions; and

b. Allocable to the project or program and reasonable.

4. The Government does not pay for the contribution through another Federal award, unless 

that award is under a program that has a Federal statute authorizing application of that 
Page 34 of 86

program’s Federal funds to other Federal programs’ cost sharing or matching 

requirements.

5. The value of the contribution is not reimbursed by the Federal share of this award as 

either a direct or indirect cost.

6. The contribution conforms to the other terms and conditions of this award, including the 

award-specific terms and conditions.

Section C. (Reserved)

Section D. Valuation of services or property that you or subrecipients contribute or 

donate. Services or property contributed or donated toward cost sharing or matching by you 

or subrecipients are distinct from third-party contributions or donations to you or 

subrecipients, which are addressed in Section E of this Article. Values established for 

contributions of services or property by you or a subrecipient must be the amounts allowable 

in accordance with the cost principles applicable to the entity making the contribution (i.e., 

you or the subrecipient), as identified in FMS Article III. For property, that generally is 

depreciation.

Section E. Valuation of third-party in-kind contributions. 

1. General. If a third party furnishes goods or services to you or subrecipients that are to be 

counted toward cost sharing or matching under this award, the entity to which the third 

party furnishes the goods or services (i.e., you or a subrecipient) must document the fair 

market value of those in-kind contributions and, to the extent feasible, support those 

values using the same methods the entity uses internally.

2. Valuation of third-party services. You must establish values for third-party volunteer 

services and services of third parties’ employees furnished to you or subrecipients as 

follows:

a. Volunteer services. Volunteer services furnished by third-party professional and 

technical personnel, consultants, and other skilled and unskilled labor must be valued 

in accordance with 2 CFR 200.306(e).

b. Services of third parties’ employees. When a third party organization furnishes the 

services of its employees to you or a subrecipient, values for the contributions must 

be established in accordance with 2 CFR 200.306(f).

c. Additional requirement for donations to nonprofit organizations. For volunteer 

services or services of third parties’ employees furnished to a nonprofit organization:

i. OMB guidance in 200.434(e) also applies and may require the nonprofit 

organization to allocate a proportionate share of its applicable indirect costs to 

the donated services.
Page 35 of 86

ii. The indirect costs that the nonprofit organization allocates to the donated 

services in that case must be considered project costs and may be either 

reimbursed under the award or counted toward required cost sharing or 

matching, but not both.

3. Valuation of third-party property. You must establish values for third-party property 

furnished to you or subrecipients as follows:

a. Supplies donated by third parties. When a third party organization donates supplies 

(e.g., office, laboratory, workshop, or classroom supplies), the value that may be 

counted toward cost sharing or matching may not exceed the fair market value of the 

supplies at the time of donation.

b. Use of space donated by third parties. If a third party makes space available for use 

by you or a subrecipient, the value that you may count toward cost sharing or 

matching may not exceed the fair rental value of comparable space as established by 

an independent appraisal, as described in 2 CFR 200.306(i)(3).

Article VII. Program income. (Mar 2015)

Section A. Earning program income. You may earn program income under this award 

when doing so does not interfere with the program the award supports.

Section B. Costs of generating program income. You may deduct costs incidental to the 

generation of program income as long as those costs are not charged to this award (which 

includes their being counted toward any cost sharing or matching you are required to 

provide).

Section C. License fees and royalties. You have no obligations to the Federal Government 

with respect to program income earned under this award from license fees and royalties for 

patents or patent applications, copyrights, trademarks, or inventions developed or produced 

under the award.

Section D. Reporting program income.

You must report on each request for reimbursement or advance (SF 270) that you submit in 

accordance with REP Article II the program income that you earn and any that you use during 

the reporting period covered by that SF-270.

1. Program income increases the budgeted amount of the award (total of federal and state 

funding) or for that particular project or activity. 

2. The federal share of program income is accounted for as federal funds advanced to the 

state.
Page 36 of 86

3. You must report on each request for reimbursement or advance (SF 270) that you 

submit the amount of program income that you earn during the reporting period 

covered by that SF-270.

Section E. Duration of accountability for program income. 

The period during which you are required to report program income attributable to an activity 

funded in whole or in part by this award, is extended to include any and every subsequent 

period during which the grantee receives an award which itself requires reporting of program 

income attributable to the same activity.
Page 37 of 86

PART 5: PROPERTY ADMINISTRATION

Article I. Title to property. (Mar 2015)

Section A. Title to property acquired under this award. 

1. Title to real property, equipment, and supplies that you acquire (whether by purchase, 

construction or fabrication, development, or otherwise) and charge as direct project costs 

under this award vests in you, the recipient. Title to intangible property that you acquire 

(other than by developing or producing it) under this award also vests in you.

2. That title is a conditional title, subject to the terms and conditions in Part 5, Articles IIIV, Section C of PROP Article V, and REP Article III of this award.

3. There is a Federal interest in the property, other than intangible property that you develop 

or produce under the award. For real property, equipment, and intangible property, we 

retain this Federal interest until final disposition of the property under Part 5, Article III 

(for real property), Part 5 Article IV (for equipment), or Section C of Part 5, Article V 

(for intangible property that is acquired, other than by developing or producing it), a 

period that in some cases may extend beyond closeout of this award.

Section B. Property trust relationship. Other than intangible property that you develop or 

produce under the award, you hold any real property, equipment, or intangible property that 

you acquire or improve under this award in trust for the beneficiaries of the project or 

program that you are carrying out under the award.

Section C. Federal interest in property improved under the award.

1. The Government has an interest in improvements (as distinct from ordinary repairs and 

maintenance) you make to an item of real property or equipment if you charge the costs 

of the improvements as direct costs to this award. 

2. We thereby acquire an interest in the property if the Government did not previously have 

one. If the Government already had an interest in the property, the value of that Federal 

interest in the property increases by the amount of the Federal interest in the 

improvements.

3. The property is subject to Section B of this Article and the terms and conditions of Part 5, 

Articles II-IV and Part 7, Article III that are applicable to real property or equipment 

acquired under the award.

4. The Federal interest must be addressed at the time of property disposition.

Article II. Property management system. (Mar 2015)

Section A. Insurance coverage for real property and equipment. You must, at a 

minimum, provide the equivalent insurance coverage for real property and equipment 
Page 38 of 86

acquired or improved under this award as you provide for real property and equipment that 

you own.

Section B. Other management system standards for a State. Your property management 

system for equipment acquired or improved in whole or in part under this award must be in 

accordance with your State laws and procedures.

Section C. Other management system standards for an institution of higher education, 

nonprofit organization, local government, or Indian tribe. Your procedures for managing 

equipment (including replacement equipment) acquired or improved in whole or in part 

under this award must, as a minimum, meet the requirements in this Section.

1. Records. You must maintain records that include for each item of equipment:

a. A description of the item.

b. The serial or other identification number.

c. Who holds title (e.g., you or the Government and, if the latter, which Federal agency).

d. The source of funding for the equipment, including the award number.

e. The acquisition date and cost of the equipment (or improvement to the equipment).

f. The location, use, and condition of the equipment.

g. Information from which one can calculate the amount of the Federal interest in the 

acquisition or improvement of the item (this amount is zero after you compensate us 

for the Federal interest in the item or improvement).

h. Any data on the ultimate disposition of the item including the date of disposal and 

sale price.

2. Inventory. You must take a physical inventory of equipment in which there is a Federal 

interest and reconcile the results with your records at least once every 2 years.

3. Control system. You must:

a. Maintain an internal property control system with adequate safeguards to prevent 

loss, damage, or theft of equipment.

b. Investigate any loss, damage, or theft and notify the award administration office if it 

involved equipment in which there is a Federal interest under the award.

4. Maintenance. You must maintain equipment acquired or improved in whole or in part 

under the award in good condition.
Page 39 of 86

Article III. Use and disposition of real property. (Mar 2015)

Section A. Use of real property. 

1. You must use real property acquired or improved under this award for the originally 

authorized purpose as long as needed for that purpose. During that time, you may not:

a. Dispose of the property except to acquire replacement property under this award, in 

which case you may use the proceeds from the disposition as an offset to the cost of 

the replacement property; or

b. Encumber the title or other interests in the property without the approval of the award 

administration office identified in this award.

2. During the time that the real property is used for the originally authorized purpose, you 

may make the property available for use on other projects or programs, but only if that 

use will not interfere with the property’s use as needed for its originally authorized 

purpose.

a. First preference must be given to other projects or programs supported by DoD 

Components and second preference to those supported by other Federal agencies.

b. Third preference is for other projects or programs not currently supported by the 

Federal Government. You should charge user fees for use of the property in those 

cases, if it is at all practicable.

3. When the real property is no longer needed for the originally authorized purpose, with the 

written approval of the award administration office, you may delay final disposition of 

the property to use it on other federally sponsored projects or programs. A condition for 

the award administration office’s approval is that the other projects or programs have 

purposes consistent with those authorized for support by the DoD Component that made 

the award under which the property was acquired or improved.

Section B. Disposition of real property. When you no longer need real property for the 

originally authorized purpose, you must obtain disposition instructions from the award 

administration office except as provided in paragraph A.3 of this Article. Those instructions 

will provide for one of the following three alternatives, which are that you:

1. Retain title after compensating us for the Federal interest in the property, which is to be 

computed as specified in the definition of “Federal interest.”

2. Sell the property and compensate us for the Federal interest in the property, as described 

in 2 CFR 200.311(c)(2).

3. Transfer title to us or a third party we designate, as described in 2 CFR 200.311(c)(3).
Page 40 of 86

Article IV. Use and disposition of equipment and supplies. (Mar 2015)

Section A. Property subject to this Article. This Article specifies requirements for use and 

disposition of equipment and supplies. The types of property to which this Article applies 

are:

1. Supplies that you acquire either by purchase or by donation as cost sharing or matching 

under this award; and

2. Equipment for which title is vested conditionally in you, pending resolution of a Federal

interest in the equipment. That includes equipment with a conditional title resulting from 

your having, either under this award or under a previous award from which you 

transferred accountability for the equipment to this award:

a. Directly charged as project costs, in whole or in part, the acquisition (by purchase, 

construction or fabrication, or development) of equipment; or

b. Directly charged as project costs improvements to the equipment that meet the criteria 

given in paragraph C.1 of PROP Article I.

Section B. Requirements for a State’s use and disposition of equipment. You:

1. Must use the equipment for the authorized purposes of the project or program during the 

period of performance, or until the property is no longer needed for those purposes.

2. May not encumber the property without the prior written approval of the award 

administration office.

3. Must use and dispose of the equipment in accordance with your State laws and 

procedures, subject to the following condition. For any item of equipment that is no 

longer needed for the originally authorized purpose and has a current fair market value 

greater than $5,000, the disposition process must include either your:

a. Payment of compensation to us in the amount of the Federal interest in the 

equipment; or

b. Contacting the award administration office to work out a mutually agreeable 

alternative that takes into account the Federal and State interests in that item of 

equipment. Examples of alternatives, subject to the agreement of the award 

administration office, include:

i. Deferring final disposition to allow continued use of the equipment on other 

federally supported projects or programs, as described in 2 CFR 200.313(c)(1);
Page 41 of 86

ii. Agreeing to transfer title to the Federal Government or a third party, with 

compensation to you for the State interest in the equipment, as described in 2 

CFR 200.313(e)(3).

Section C. Use of equipment by an institution of higher education, nonprofit 

organization, local government, or Indian tribe. You:

1. Must use the equipment for the authorized purposes of the project or program under this 

award until the equipment is no longer needed for those purposes, whether or not the 

project or program continues to be supported by this award.

2. May not encumber the equipment without the prior written approval of the award 

administration office.

3. During the time that the equipment is used for the project or program under this award:

a. You must make the equipment available for use on other projects or programs but 

only if that use will not interfere with the equipment’s use as needed for the project or 

program supported by this award.

i. First preference must be given to other projects or programs supported or 

previously supported by DoD Components and second preference to those 

supported or previously supported by other Federal agencies.

ii. Third preference is for other projects or programs not supported by the Federal 

Government. You should charge user fees for use of the equipment in those 

cases, if it is at all practicable.

b. You may use the equipment, if you need to acquire replacement equipment, as a 

trade-in or sell it (using sales procedures designed to ensure the highest possible 

return) and use the proceeds from the sale to offset the cost of the replacement 

equipment.

4. When the equipment is no longer needed for the project or program under this award, you 

may defer final disposition of the equipment and continue to use it on other federally 

sponsored projects or programs. You must give first priority to other projects or 

programs supported by DoD Components.

5. Notwithstanding the authorization in FMS Article VII to earn program income, you may 

not use equipment in which there currently is a Federal interest--whether you acquired it 

under this award or are otherwise accountable for it under this award--to provide services 

for a fee that is less than private companies charge for equivalent services.

Section D. Disposition of equipment by an institution of higher education, nonprofit 

organization, local government, or Indian tribe. You must request disposition instructions 

from the award administration office when either original or replacement equipment acquired 
Page 42 of 86

under this award is no longer needed for the original project or program or for other federally 

sponsored activities as described in paragraph C.4 of this Article.

1. We may issue disposition instructions that:

a. Allow you to retain, sell, or otherwise dispose of each item of equipment with a 

current fair market value of $5,000 or less with no further obligation to the Federal

Government; or

b. Require you to transfer title to the equipment to a Federal agency or a third party, in 

which case you are entitled to compensation from us for the non-Federal interest in 

the equipment.

2. If we fail to provide disposition instructions for any item of equipment within 120 

calendar days of receiving your request, you may retain or sell the equipment but you 

must compensate us for the amount of the Federal interest in the equipment.

3. If you sell the equipment:

a. You use must sales procedures designed to ensure the highest possible return; and

b. You may deduct and retain for selling and handling expenses either $500 or ten 

percent of the proceeds, whichever is less.

Section E. Use and disposition of supplies acquired under this award.

1. Use. As long as we retain a Federal interest in supplies acquired under this award either 

by purchase or by donation as cost sharing or matching, you may not use the supplies to 

provide services to other organizations for a fee that is less than private companies charge 

for equivalent services, notwithstanding the authorization in FMS Article VII to earn 

program income.

2. Disposition. If you have a residual inventory of unused supplies with aggregate value 

exceeding $5,000 at the end of the period of performance under this award, and the 

supplies are not needed for any other Federal award, you must retain the supplies or sell 

them but must in either case compensate us for the amount of the Federal interest in the 

supplies. You may deduct and retain for selling and handling expenses either $500 or ten 

percent of the proceeds, whichever is less.

Article V. Intangible property. (Mar 2015)

Section A. Copyrights asserted in works developed or purchased under the award.

1. You may assert copyright in any work that:

a. You develop or purchase under this award; and
Page 43 of 86

b. Is eligible for copyright protection.

2. With respect to any work in which you assert copyright, as described in paragraph A.1 of 

this Section, the Department of Defense reserves a royalty-free, nonexclusive and 

irrevocable license to:

a. Reproduce, publish, or otherwise use the work for Federal Government purposes; and

b. Authorize others to reproduce, publish, or otherwise use the work for Federal 

Government purposes.

Section B. Data produced under the award. The Federal Government has the right to:

1. Obtain, reproduce, publish, or otherwise use the data produced under this award; and

2. Authorize others to receive, reproduce, publish, or otherwise use the data produced under 

this award for Federal Government purposes.

Section C. Intangible property obtained, but not developed or produced, under the 

award.

1. Applicability. This Section applies to a patent, patent application, copyright, or other 

intangible property obtained, but not developed or produced, under this award.

2. Use. You:

a. Must use the intangible property for the authorized purpose under this award until the 

intangible property is no longer needed for that purpose, whether or not that purpose 

is still being supported by this award.

b. May not encumber the intangible property without the prior written approval of the 

award administration office.

3. Disposition. When the intangible property is no longer needed for the originally 

authorized purpose, you must contact the award administration office to arrange for 

disposition in accordance with the procedures specified for disposition of equipment in 

either section B or D of PROP Article IV, as applicable.
Page 44 of 86

PART 6: PROCUREMENT PROCEDURES

Article I. Procurement standards for States. (Mar 2015) 

Section A. Use of State procurement system. Subject only to the conditions in Sections B 

through D of this Article, you must use the same policies and procedures to procure supplies, 

equipment, real property, and services under this award that you use when you procure those 

items for State purposes using non-Federal funds. 

Section B. Procurement of recovered materials. You must comply with the Resource 

Conservation and Recovery Act requirements described in OMB guidance in 2 CFR 200.322.

Section C. Debarment and suspension. You must comply with restrictions on awarding 

procurement transactions to excluded or disqualified parties and other requirements specified 

by OMB guidelines on nonprocurement debarment and suspension at 2 CFR Part 180, as 

implemented by DoD at 2 CFR Part 1125.

Section D. Contract provisions. You must include provisions in your procurement 

transactions under this award to require the contractors’ compliance with the requirements 

specified in PROC Article III, as applicable.

Article II. Procurement standards for institutions of higher education, nonprofit 

organizations, local governments, and Indian tribes. (Mar 2015)

Section A. General procurement standards.

1. For procurement under this award, you must comply with the following paragraphs of 

OMB guidance in 2 CFR 200.318:

a. 200.318(a) concerning documented procurement procedures;

b. 200.318(b) concerning oversight of contractors;

c. 200.318(c) concerning standards of conduct and conflicts of interest;

d. 200.318(e) concerning intergovernmental or inter-entity agreements;

e. 200.318(g) concerning value engineering;

f. 200.318(i) concerning procurement records;

g. 200.318(j) concerning time and material type contracts; and

h. 200.318(k) concerning settlement of issues arising out of procurements.

2. You must comply with OMB guidance in paragraph (d) of 2 CFR 200.318 concerning 

purchases of unnecessary or duplicative items.
Page 45 of 86

3. You are encouraged, as described in paragraph (f) of 2 CFR 200.318, to use Federal 

excess or surplus property in lieu of purchasing new equipment and property whenever 

such use is feasible and reduces project costs, with the following clarification. The 

encouragement to use Federal excess or surplus property is contingent not only on its 

being feasible but also on its not reducing the efficiency or effectiveness with which you 

can achieve the award’s purposes. For example, the encouragement does not extend to 

use of older models of excess or surplus equipment under a research or related training 

award to an institution of higher education when use of current models would accelerate 

data acquisition or enable better training of future scientists and engineers in the latest 

research techniques.

4. You must do business only with responsible contractors who are able to perform, as 

described in OMB guidance in 2 CFR 200.318(h). Related to that, you must comply 

with restrictions on awarding procurement transactions to excluded or disqualified 

parties and other requirements specified by OMB guidelines on nonprocurement 

debarment and suspension at 2 CFR Part 180, as implemented by DoD at 2 CFR 

Part 1125.

Section B. Competition. You must award procurement transactions under this DoD award 

using the procedures related to competition that are described in OMB guidance in 2 CFR 

200.319.

Section C. Procurement methods. You must award procurement transactions under this 

award using methods described in OMB guidance in 2 CFR 200.320.

Section D. Contracting with small and minority businesses, women’s business 

enterprises, and labor surplus area firms. You must take the affirmative steps described in 

OMB guidance in 2 CFR 200.321 when awarding procurement transactions under this award.

Section E. Contract cost and price. When awarding a contract under this award, you must 

follow the procedures related to costs and price that are described in OMB guidance in 2 

CFR 200.323, using the applicable cost principles specified in FMS Article III.

Section F. Contract provisions. You must include provisions in your procurement 

transactions under this award to require the contractors’ compliance with the requirements 

specified in PROC Article III, as applicable.

Section G. Procurement of recovered materials. If you are a political subdivision of a 

State, you must comply with the Resource Conservation and Recovery Act requirements 

described in OMB guidance in 2 CFR 200.322.

Section H. Review of procurement documents. Upon our request, you must make 

available:

1. Technical specifications on proposed procurements, as described in 2 CFR 200.324(a).
Page 46 of 86

2. Pre-procurement documents for our review, as described in 2 CFR 200.324(b) unless you 

are exempt from that requirement under 2 CFR 200.324(c).

Article III. Contract provisions for recipient procurements. (Mar 2015)

Section A. Contract provisions for administrative requirements. 

1. Remedies. In any contract under this award for an amount in excess of the simplified 

acquisition threshold, you must provide for administrative, contractual, or legal remedies, 

including any appropriate sanctions and penalties, when the contractor violates or 

breaches the contract terms.

2. Termination. In any contract for an amount in excess of $10,000, you must specify: 

conditions under which you may terminate the contract for cause or convenience; the 

procedures for termination; and the basis to be used for settlement.

3. Allowable costs under cost-type contracts. In any cost-type contract with an entity, you 

must include a clause to permit the entity to charge to the contract only costs that are 

allowable under the cost principles that FMS Article III identifies as applicable to that 

type of entity, as supplemented by any other terms and conditions related to allowability 

of costs that are included in this award to you.

4. Rights in copyright and data. You must include in each contract under this award a 

provision requiring that the contractor:

a. Grant the Government a royalty-free, nonexclusive and irrevocable right to:

i. Reproduce, publish, or otherwise use for Federal purposes any work that is 

subject to copyright and that the contractor develops, or acquires ownership of, 

under this award; and

ii. Authorize others to reproduce, publish, or otherwise use such work for Federal 

purposes.

b. Grant the Government the right to:

i. Obtain, reproduce, publish, or otherwise use data produced under this award; 

and

ii. Authorize others to receive, reproduce, publish, or otherwise use such data for 

Federal purposes.

c. Include in each subcontract it makes the requirements described in:
Page 47 of 86

i. Paragraphs A.4.a.i and ii of this Section, to provide for Government rights in 

any works subject to copyright that the subcontractor develops, or acquires 

ownership of, under this award; and

ii. Paragraphs A.4.b.i and ii of this Section, to provide for Government rights in 

any data that the subcontractor produces under this award.

5. Access to records. 

a. In any negotiated, cost-type or time and materials contract for an amount in excess of 

the simplified acquisition threshold, you must provide for access to any of the 

contractor’s books, documents, papers, and records that are directly pertinent to that 

contract, to enable and support audits, examinations, excerpts, and transcriptions. 

The contract provision must provide access to those records for all of the following 

and their duly authorized representatives:

i. You;

ii. Us as the Federal awarding agency, including our Inspector General; and

iii. The Comptroller General of the United States.

b. In any audit services contract for performance of an audit required by the Single 

Audit Act, as implemented by OMB in Subpart F of 2 CFR Part 200, you must 

provide for the access to audit documentation described in 2 CFR 200.517(b).

6. Records retention.

a. In any negotiated, cost-type or time and materials contract for an amount in excess of 

the simplified acquisition threshold, you must provide for retention of all records that 

are directly pertinent to that contract for 3 years after you make final payment and all 

pending matters are closed.

b. In any audit services contract for performance of an audit required by the Single 

Audit Act, as implemented by OMB in Subpart F of 2 CFR Part 200, you must 

provide for the retention of audit documentation described in 2 CFR 200.517(a).

7. Reporting. In any contract awarded under this award, you must include any provision for 

the contractor’s reporting to you that may be needed in order for you to meet your 

requirements under this award to report to us.

Section B. Contract provisions for national policy requirements.

1. Equal employment opportunity. You must include the clause provided in 41 CFR 60-

1.4(b) in any “federally assisted construction contract” (as defined in 41 CFR 60-1.3) 

under this award unless provisions of 41 CFR Part 60-1 exempt the contract from the 
Page 48 of 86

requirement. The clause will require the contractor to comply with equal opportunity 

requirements in 41 CFR chapter 60.

2. Wage Rate Requirements (Construction), formerly the Davis-Bacon Act. With respect to 

each construction contract for more than $2,000 to be awarded using funding provided 

under this award, you must:

a. Place in the solicitation under which the contract will be awarded a copy of the 

current prevailing wage determination issued by the Department of Labor;

b. Condition the decision to award the contract upon the contractor’s acceptance of that 

prevailing wage determination;

c. Include in the contract the clauses specified at 29 CFR 5.5(a) in Department of Labor 

regulations at 29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts 

Governing Federally Financed and Assisted Construction,” to require the contractor’s 

compliance with the Wage Rate Requirements (Construction), as amended (40 U.S.C. 

3141-44, 3146, and 3147); and

d. Report all suspected or reported violations to the award administration office 

identified in this award.

3. Copeland Act prohibition on kickbacks. In each contract under this award to construct, 

complete, or repair a building or work, you must:

a. Include a provision requiring the contractor to comply with the anti-kickback 

provisions of the Copeland Act (18 U.S.C. 874 and 40 U.S.C. 3145), as supplemented 

by Department of Labor regulations at 29 CFR Part 3, “Contractors and 

Subcontractors on Public Building or Public Work Financed in Whole or in Part by 

Loans or Grants from the United States.”

b. Report all suspected or reported violations to the award administration office 

identified in this award.

4. Clean air and water requirements. You must:

a. In each contract for an amount greater than $150,000 under this award, include a 

clause requiring the contractor to comply with applicable provisions of the Clean Air 

Act (42 U.S.C. 7401-7671q), Federal Water Pollution Control Act (33 U.S.C. 

1251-1387), and standards, orders, or regulations issued under those acts; and

b. Report any violations of the Acts, standards, orders, or regulations to both the award 

administration office identified in this award and the appropriate regional office of the 

Environmental Protection Agency.
Page 49 of 86

5. Nonprocurement suspension and debarment. Unless you have an alternate method for 

requiring the contractor’s compliance, you must include a clause in each contract for an 

amount equal to or greater than $25,000 and in each contract for federally required audit 

services to require the contractor to comply with Office of Management and Budget 

guidance on nonprocurement suspension and debarment in 2 CFR Part 180, Subpart C, as 

implemented by Department of Defense regulations at 2 CFR Part 1125.

6. Byrd Amendment anti-lobbying requirements. In each contract for an amount exceeding 

$100,000, you must include a clause requiring the contractor to submit to you the 

certification and any disclosure forms regarding lobbying that are required under 31 

U.S.C. 3152, as implemented by the Department of Defense at 32 CFR Part 28.

7. Purchase of recovered materials by States or political subdivisions of States. In each 

contract under which the contractor may purchase items designated in Environmental 

Protection Agency (EPA) regulations in 40 CFR Part 247, subpart B, you must include a 

clause requiring the contractor to comply with applicable requirements in those EPA 

regulations, which implement Section 6002 of the Resource Conservation and Recovery 

Act of 1976, as amended (42 U.S.C. 6962).

8. Fly America requirements. In each contract under which funds provided under this award 

might be used to participate in costs of international air travel or transportation for people 

or property, you must include a clause to require the contractor to:

a. Comply with the International Air Transportation Fair Competitive Practices Act of 

1974 (49 U.S.C. 40118, also known as the "Fly America" Act), as implemented by 

the General Services Administration at 41 CFR 301-10.131 through 301-10.143, 

which provides that U.S Government-financed international air travel and 

transportation of personal effects or property must use a U.S. Flag air carrier or be 

performed under a cost-sharing arrangement with a U.S. carrier, if such service is 

available; and

b. Include the requirements of the Fly America Act in all subcontracts that might 

involve international air transportation.

9. Cargo preference for United States flag vessels. In each contract under which equipment, 

material, or commodities may be shipped by oceangoing vessels, you must include the 

clause specified in Department of Transportation regulations at 46 CFR 381.7(b) to 

require that at least 50 percent of equipment, materials or commodities purchased or 

otherwise obtained with Federal funds under this award, and transported by ocean vessel, 

be transported on privately owned U.S. flag commercial vessels, if available.
Page 50 of 86

PART 7: FINANCIAL, PROGRAMMATIC, AND PROPERTY 

REPORTING

Article I. Performance management, monitoring, and reporting. (Mar 2015)

Section A. Required reporting periods, forms, format, data elements, frequency, due 

dates and procedures for interim and final performance reports. 

1. Required reporting periods, forms, format, data elements, frequency, due dates and 

procedures for interim and final performance reports can be found in each Appendix, if 

applicable.

Section B. Extensions of due dates. You may request extensions of the due dates that 

Section A of this Article specifies for interim and final reports, respectively. You must 

provide the reasons for your request and we will approve extensions that are adequately 

justified.

Section C. Reporting significant developments. You must report the following 

information to us as soon as you become aware of it:

1. Problems, delays, or adverse conditions that will materially impair your ability to meet 

the objectives of this award. This disclosure must include a statement of the action taken, 

or contemplated, and any assistance needed to resolve the situation.

2. Favorable developments which will enable you to meet schedules and objectives sooner 

or at less cost than anticipated or produce more or different beneficial results than 

originally planned.

Section D. Site visits. We reserve the right to make site visits as warranted to monitor 

program performance under this award.

Article II. Financial reporting. (Mar 2015)

Section A. Required reporting form, format, or data elements for interim and final 

financial reports. You must use the SF 270 and complete all applicable elements.

Section B. Interim financial reports: frequency, reporting periods, and due dates. 

Reports, frequency, reporting periods and due dates can be found in each Appendix, if 

applicable. 

Section C. Final financial report. Due date can be found in each Appendix, if applicable.

Section D. Extensions of due dates. You may request extensions of the due dates for 

specified reports. You must provide the reasons for your request, and the Grants Officer will 

approve extensions that are adequately justified.
Page 51 of 86

Section E. Where and how to submit financial reports. You must submit the SF 270 as 

directed by the Grants Officer identified in the award. 

Article III. Reporting on property. (Mar 2015)

Section A. Real property. The requirements specified in 2 CFR part 200 for tracking and 

reporting on real property in which, as a result of the current and previous awards, the federal 

government has an interest, are met for real properties supported by NGB cooperative 

agreements by the reporting requirements imposed by NGB, the Army and the Air Force. 

This term of these awards independently requires you meet those requirements (e.g. PRIDE, 

FISP, etc.) as they may change.

Section B. Equipment and supplies. Paragraphs B.1 through B.4 apply to equipment or 

supplies for which you are accountable under this award and in which there is a Federal 

interest (whether that interest is due to you or a subrecipient having acquired or improved the 

property under this award, or a transfer of the accountability for the property to this award 

from another award). 

1. Periodic status report. There is no requirement for periodic reporting during the period of 

performance.

2. Notifications of loss, damage, or theft. You must comply with applicable requirements in 

PROP Article II governing your property management system to promptly notify the 

award administration office of any loss, damage, or theft of equipment.

3. Requests for disposition instructions. You must comply with applicable requirements in 

PROP Article IV to request disposition instructions for equipment, either during the 

period of performance or at closeout.

4. Closeout accounting.

a. Equipment. You must account to the award administration office for equipment at 

the time of closeout of this award, as required by Section D of OAR Article VI.

b. Supplies. If you have a residual inventory of unused supplies that meets the criteria 

specified in paragraph E.2 of PROP Article IV, you must as part of your closeout 

accounting arrange with the award administration office for the compensation that 

paragraph specifies for the Federal interest in the supplies.

Section C. Intangible property. This Section applies to intangible property for which you 

are accountable under this award.

1. Copyrights and data. You are not required to submit periodic reports about works 

developed or purchased under this award in which copyright was asserted, or about data 

produced under the award. However, because the Federal Government has the rights in 
Page 52 of 86

the works and data that Sections A and B of PROP Article V specify, you must provide 

information about the works and data if we request it.

2. Intangible property obtained, but not developed or produced, under the award. You must 

comply with requirements in Section C of Part 5, Article V to request disposition 

instructions for intangible property obtained, but not developed or produced, under the 

award.

Article IV. Reporting on subawards and executive compensation. (Mar 2015)

You must report information about subawards and executive compensation as specified in the 

award provision in Appendix A to 2 CFR Part 170, “Reporting subaward and executive 

compensation information,” modified as follows: 

1. The Web site “http://www.fsrs.gov” cited in paragraphs a.2.i. and a.3 of the award 

provision is replaced by “http://www.fsrs.gov or successor OMB designated Web site for 

reporting subaward information”;

2. The Web site “https://www.sam.gov” cited in paragraph b.2.i. of the award provision is 

replaced by “https://www.sam.gov or successor OMB designated Web site for reporting 

information on total compensation”; and

3. The reference to “Sec. ___.210 of the attachment to OMB Circular A-133, ‘Audits of 

States, Local Governments, and Non-Profit Organizations’” in paragraph e.3.ii of the 

award provision is replaced by “2 CFR 200.330, as implemented in Part 9, Article I of 

this award.”
Page 53 of 86

PART 8: OTHER ADMINISTRATIVE REQUIREMENTS

Article I. Maintaining recipient information. (Mar 2015)

1. Unless you are exempted from this requirement based on the criteria provided in OMB 

guidance in section 25.110 of 2 CFR Part 25, you must maintain the currency of 

information about yourself in the system the Federal Government specifies as the 

repository for information about its business partners (currently the System for Award 

Management).

2. You must maintain the information in that system until you submit the final financial 

report required under this award or receive the final payment, whichever is later.

3. You must review and update the information at least annually after your initial 

registration in the system and more frequently if required by changes in your information.

Article II. Records retention and access. (Mar 2015)

Section A. Records retention period. Except as provided in Sections B through D of this 

Article:

1. You must keep records related to any real property and equipment acquired, in whole or 

in part, using Federal funds under the award for 6 years and three months after final 

disposition of the property.

2. You must keep records related to rate proposals for indirect or facilities and 

administration costs, cost allocation plans, and supporting records such as indirect cost 

rate computations and any similar accounting computations of the rate at which a 

particular group of costs is chargeable (such as computer usage chargeback or composite 

fringe benefit rates) as follows:

a. If you are required to submit a proposal, plan, or other computations to your Federal 

cognizant agency for indirect costs, as the basis for negotiation of a rate, you must 

keep the submissions and all supporting records for 6 years and three months from the 

date on which you were required to make the submissions.

b. If you are not required to submit a proposal, plan, or other computation as the basis 

for negotiation, you must keep the proposal, plan, other computation, and supporting 

records for 6 years and three months from the end of the fiscal year or other 

accounting period covered by the proposal, plan, or other computation.

3. You must keep other financial records, supporting documents, statistical records, and 

other records pertinent to this award for a period of 6 years and three months from the 

date you submit your final financial report under the award.

Section B. Extensions of retention period due to litigation, claim, or audit. 
Page 54 of 86

1. If any litigation, claim, or audit begins before the end of the required retention period 

specified in Section A of this Article and the final action related to the litigation, claim, or 

audit is not taken before the end of the retention period, you must retain all records 

related to this award that may be involved in the litigation, claim, or audit until all 

findings involving the records have been resolved and final action taken.

2. We may disallow costs and recover funds under this award based on an audit or other 

review of records you elected to retain beyond the retention period required by this 

Article, even if the audit or review begins after the end of the required retention period 

specified in Section A of this Article. Thus, the “retention period,” as that term is used in 

OMB guidance in 2 CFR 200.344(a)(1), is extended as described in 2 CFR 200.333(b) to 

include the entire period during which we and our authorized representatives continue to 

have access to those records under paragraph F.2 of this Article.

Section C. Records for joint or long-term use.

1. Joint use. To avoid duplicate recordkeeping for records that you and we both need to use 

on a continuous basis, we may ask you to make special arrangements with us, by mutual 

agreement, to make records available for joint and continuous use.

2. Long-term use. If we determine that some records will be needed longer than the 3-year 

period specified in Section A of this Article, we may request that you either:

a. Retain the records for a longer period of time; or

b. Transfer the records to our custody for long-term retention.

3. Retention requirements for transferred records. For any records transferred to our 

custody, you are not subject to the records retention requirements in Section A of this 

Article.

Section D. Methods for collecting, transmitting, and storing information.

1. You should, whenever practicable, collect, transmit, and store information related to this 

award in open and machine readable formats rather than in closed formats or on paper. 

However, if you request it, we will:

a. Provide award related-information to you on paper; and

b. Accept award related-information from you on paper. In that case, we will not 

require more than an original and two copies.

2. When your original records are in an electronic form that cannot be altered, you do not 

need to create and retain paper copies of those records.

3. When your original records are on paper, you may substitute electronic versions 

produced through duplication or using other forms of electronic media, provided that:
Page 55 of 86

a. You conduct periodic quality control reviews of the records;

b. You provide reasonable safeguards against alteration of the records; and

c. The records remain readable.

Section E. Access to records.

1. Scope of Government access rights.

a. We as the awarding agency, the Federal Government Inspectors General, the 

Comptroller General of the United States, and any of our authorized representatives 

have the right of access to any documents, papers, or other records you have that are 

pertinent to this award, in order to make audits, examinations, excerpts, and 

transcripts.

b. This right also includes timely and reasonable access to your personnel for the 

purposes of interview and discussion related to the records.

c. As described in OMB guidance at 2 CFR 200.336(b), the access to records described 

in this Section will include access to the true name of a victim of a crime only under 

extraordinary and rare circumstances.

i. You are required to provide that access only in response to a court order or 

subpoena pursuant to a bona fide confidential investigation, or in response to a 

request duly authorized by the head of the DoD Component or his or her 

designee; and

ii. You must take appropriate steps to protect this sensitive information.

2. Duration of Government access rights. We have the access rights described in paragraph 

F.1 of this Section as long as you retain the records.

3. Public access. 

a. You must comply with requirements to protect information that Federal statute, 

Executive order, or regulation requires to be protected (e.g., personally identifiable or 

export controlled information), to include both information generated under this 

award and information provided to you and identified as being subject to protection. 

Other than those limitations on dissemination of information, we place no restrictions 

on you that limit public access to your records pertinent to this award.

b. We do not place any requirements on you to permit public access to your records 

separate from any Federal, State, local, or tribal statute that may require you to do so.
Page 56 of 86

c. The Freedom of Information Act (FOIA, 5 U.S.C. 552) does not apply to records in 

your possession but records you provide to us generally will be subject to FOIA, with 

the applicable exemptions.

Article III. Remedies and termination. (Mar 2015)

Section A. Remedies for noncompliance.

1. If you materially fail to comply with a term or condition of this award or an applicable 

Federal statute or regulation, we may amend this award to impose specific additional 

conditions as described in OMB guidance in 2 CFR 200.207. If we determine that the 

imposition of those additional conditions is insufficient to remedy the noncompliance, we 

may take one or more of the following actions that we deem appropriate to the 

circumstances:

a. Temporarily withhold cash payments pending:

i. Your correction of the deficiency; or

ii. Our taking more severe enforcement action.

b. Disallow (that is, deny both use of funds and any applicable cost sharing or matching 

credit for) all or part of the cost of the activity or action not in compliance;

c. Suspend or terminate this award, in whole or in part (suspension of an award is a 

separate and distinct action from suspension of a person under 2 CFR parts 180 and 

1125, as noted in paragraph A.3 of this Article);

d. Withhold further awards to you for the project or program that is not in compliance;

e. Take any other action legally available to us under the circumstances.

2. You may raise an objection to our taking any remedy we take under paragraph A.1 of this 

Section and will be given an opportunity to provide information and documentation 

challenging the action. The procedures are those specified in OAR Article IV for claims 

and disputes.

3. Our use of any remedy under paragraph A.1 of this Section, including suspension or 

termination of the award, does not preclude our referring the noncompliance to a 

suspension and debarment official and asking that official to consider initiating a 

suspension or debarment action under 2 CFR Part 1125, the DoD implementation of 

OMB guidance at 2 CFR Part 180.

Section B. Termination.

1. This award may be terminated in whole or in part as follows:
Page 57 of 86

a. Unilaterally by the Government. We will provide a notice of termination if we 

unilaterally terminate this award in whole or in part, which we may do for either of 

the following reasons:

i. Your material failure to comply with the award terms and conditions. If we 

terminate the award for that reason, we will report the termination to the Federal 

Awardee Performance and Integrity Information System (FAPIIS). In 

accordance with 41 U.S.C. §2313, each Federal awarding official must review 

and consider the information in FAPIIS with regard to any proposal or offer 

before awarding a grant or contract.

ii. The program office does not have funding for an upcoming increment if this 

award is incrementally funded. In that case, the Government’s financial 

obligation does not exceed the amount currently obligated under the award.

b. By mutual agreement. With your consent, we may terminate this award, in whole or 

in part, for any reason. In that case, you and we must agree to:

i. The termination conditions, including the effective date; and

ii. In the case of a partial termination, the portion to be terminated.

c. Unilaterally by the recipient. You may unilaterally terminate this award, in whole or 

in part, by sending us written notification that states:

i. The reasons for the termination;

ii. The effective date; and

iii. In the case of partial termination, the portion to be terminated. In that case, 

however, we may terminate the award in its entirety if we determine that the 

remaining portion of the award will not accomplish the purposes for which we 

made the award.

2. If this award is terminated in its entirety before the end of the performance period, you 

must complete the closeout actions for which you are responsible under OAR Article VI. 

The due date for each action is to be measured relative to the date of termination.

3. If this award is only partially terminated before the end of the performance period, with a 

reduced or modified portion of the award continuing through the end of the performance 

period, then closeout actions will occur at the end of the performance period as specified 

in Part 8, Article VI.

4. You will continue to have all of the post-closeout responsibilities that OAR Article VII

specifies for you if this award is wholly or partially terminated before the end of the 

performance period.
Page 58 of 86

Section C. Effects of suspension or termination of the award on allowability of costs. If 

we suspend or terminate this award prior to the end of the period of performance, costs 

resulting from obligations that you incurred:

1. Before the effective date of the suspension or termination are allowable if:

a. You properly incurred those obligations;

b. You did not incur the obligations in anticipation of the suspension or termination; 

c. In the case of termination, the costs resulted from obligations that were noncancellable after the termination; and

d. The costs would have been allowable if we had not suspended or terminated the 

award and it had expired normally at the end of the period of performance.

2. During the suspension or after the termination are not allowable unless we expressly 

authorize them, either in the notice of suspension or termination or subsequently. 

Article IV. Claims, disputes and appeals. (Mar 2015)

Section A. Grant Appeal Authority. The Grant Appeal Authority is as determined by the 

Chief, National Guard Bureau.

Section B. Submission of claims.

1. Your claims. To submit a claim arising out of this award, you must submit it in writing 

to the grants officer for decision, specify the nature and basis for the relief you are 

requesting, and include all data that supports your claim.

2. Government claims. You will receive a written grants officer’s decision if a DoD claim 

arises out of this award.

Section C. Alternative dispute resolution.

1. We encourage resolution of all issues related to this award by mutual agreement between 

you and the grants officer.

2. If you and the grants officer are unable to resolve an issue through unassisted 

negotiations, we encourage use of Alternative Dispute Resolution (ADR) procedures to 

try to do so. ADR procedures are any voluntary means, such as mini-trials or mediation, 

used to resolve issues in controversy. ADR procedures may be used prior to submission 

of a claim or at any other time prior to the Grant Appeal Authority’s decision on any 

appeal you submit.
Page 59 of 86

Section D. Grants officer decisions for claims you submit. 

1. Within 60 calendar days of receiving your claim, the grants officer will either:

a. Transmit a written decision that:

i. Identifies data on which the decision is based; and

ii. Identifies and provides the mailing address for the Grant Appeal Authority to 

whom you would submit an appeal of the decision if you elect to do so; or

b. If more time is required to render a written decision, notify you of a specific date 

when he or she will render the decision and inform you of the reason for delaying it.

2. The grants officer’s decision will be final unless you decide to appeal, in which case we 

encourage use of ADR procedures as noted in Section C of this Article.

Section E. Formal administrative appeals. 

1. Right to appeal. You have the right to appeal a grants officer’s decision to the Grant 

Appeal Authority identified in Section A of this Article.

2. Notice of appeal. You may appeal a grants officer’s decision within 90 calendar days of 

receiving the decision by submitting a written notice of appeal to the Grant Appeal 

Authority and grants officer. If you elect to use ADR procedures, you are allowed an 

additional 60 calendar days to submit the written notice of appeal to them.

3. Appeal file. Within 30 calendar days of the grants officer’s receipt of your notice of 

appeal, you should receive the appeal file with copies of all documents relevant to the 

appeal. You may supplement the file with other documents you deem relevant and with a 

memorandum in support of your position for the Grant Appeal Authority’s consideration. 

The Grant Appeal Authority may request additional information from you.

4. Decision. Unless the Grant Appeal Authority decides to conduct fact-finding procedures 

or an oral hearing on the appeal, the appeal will be decided solely on the basis of the 

written record. Any fact-finding or hearing will be conducted using procedures that the 

Grant Appeal Authority deems appropriate.

Section F. Representation. You may be represented by counsel or any other designated 

representative in any claim, appeal, or ADR proceeding, as long as the representative is not 

otherwise prohibited by law or regulation from appearing before the DoD Component 

concerned.

Section G. Non-exclusivity of remedies. Nothing in this Article is intended to limit your 

right to any remedy under the law.
Page 60 of 86

Article V. Collection of amounts due. (Mar 2015)

Section A. Establishing a debt.

1. Any amount paid to you in excess of the amount to which you are determined to be 

entitled under the terms and conditions of this award constitutes a debt to the Federal 

Government.

2. A grants officer will attempt to resolve any claim of your indebtedness arising out of this 

award by mutual agreement.

3. If the grants officer fails to resolve the claim in that manner, you will receive a written 

notice of the grants officer’s decision formally determining the debt, as described in 

paragraph B.2 of OAR Article IV. The notice will describe the debt, including the 

amount, name and address of the official who determined the debt, and a copy of that 

official’s determination.

Section B. Debt delinquency and appeals.

1. Within 30 calendar days of the grants officer’s decision, you must either pay the amount 

owed to the address provided in the written notice or inform the grants officer that you 

intend to appeal the decision. Appeal procedures are described in OAR Article IV.

2. If you elect not to appeal, any amounts not paid within 30 calendar days of the grants 

officer’s decision will be a delinquent debt.

3. If you elect to appeal the grants officer’s decision, you will have 90 calendar days after 

receipt of the grants officer’s decision to file your appeal unless Alternative Dispute 

Resolution (ADR) procedures are used, as described in section C of OAR Article IV, in 

which case you will have 150 calendar days.

Section C. Demand letter, interest, and debt collection.

1. If within 30 calendar days of the grants officer’s decision, you neither pay the amount 

due nor provide notice of your intent to appeal the grants officer’s decision, the grants 

officer will send you a demand letter identifying a payment office that will be responsible 

for any further debt collection activity.

2. If you do not pay by the due date specified in the written demand letter, the Federal 

Government may collect part or all of the debt by:

a. Making an administrative offset against your requests for reimbursements under 

Federal awards;

b. Withholding advance payments otherwise due to you; and
Page 61 of 86

c. Any other action permitted by Federal statute.

3. The debt will bear interest, and may include penalties and other administrative costs, in 

accordance with applicable provisions of the DoD Financial Management Regulation 

(DoD 7000.14-R), which implements the Federal Claims Collection Standards. The date 

from which interest is computed is not extended by litigation or the filing of any form of 

appeal.

Article VI. Closeout. (Mar 2015)

Section A. Liquidation of obligations. Unless the award administration office authorizes an 

extension of the due date, you must liquidate all obligations that you incurred under this 

award not later than 120 calendar days after the end date of the period of performance.

Section B. Refunds of unobligated balances. You must promptly refund to the award 

administration office any balances of unobligated cash that we have advanced or paid to you.

Section C. Final reports. You must submit the:

1. Final performance report under this award no later than the date specified in Section A of 

Part 7, Article I, subject to any extensions granted under Section B of that article; and

2. Final financial report under this award no later than the date specified in Section C of Part 

7, Article II, subject to any extensions granted under Section D of that article.

3. Other final reports that are required under this award no later than 90 calendar days after 

the end date of the period of performance, unless you request an extension of the due date 

and the award administration office approves the request.

Section D. Accounting for property. You must account for any real property, equipment,

supplies, and intangible property that you and any subrecipients acquired or improved under 

the award, in accordance with Part 5, Articles I through V.

Article VII. Post-closeout adjustments and continuing responsibilities. (Mar 2015)

Section A. Adjustments. The closeout of this award does not affect:

1. Our right to disallow costs and recover funds on the basis of a later audit or other review, 

as long as we make the determination that the costs are disallowed and notify you about 

that determination within the extended records retention period specified in paragraph 

B.2 of Part 8, Article II of these terms and conditions.

2. Your obligation to return any funds due to the Federal Government as a result of later 

refunds, corrections, or other transactions (to include any adjustments in final indirect 

cost rates).
Page 62 of 86

Section B. Continuing responsibilities. After closeout of this award, you must continue to 

comply with terms and conditions of this award that have applicability beyond closeout, 

including requirements concerning:

1. Audits, as specified in FMS Article V, which cover periods of time during which you 

expended funds under this award.

2. Management, use, and disposition of any real property or equipment acquired under this 

award in which we continue to have a Federal interest after closeout, as specified in 

PROP Articles I through IV.

3. Retention of, and access to, records related to this award, as specified in OAR Article II.
Page 63 of 86

PART 9: REQUIREMENTS RELATED TO SUBAWARDS

Article I. Distinguishing subawards and procurements. (Mar 2015)

Section A. Required recipient determination. For each transaction into which you enter 

with another entity at the next tier below this award, you must determine whether the 

transaction is a subaward or procurement.

Section B. Considerations in making the determination.

1. The primary purpose of the transaction between you and the other entity is the key factor 

you must use to determine whether the transaction is a subaward or a procurement.

a. The transaction is a subaward and the other entity therefore a subrecipient if the 

transaction’s primary purpose is for you to transfer--for performance by the other 

entity--a portion of the substantive program for which we are providing financial 

assistance to you through this award. You will continue to be accountable to us for 

performance of the project or program under the award, including portions performed 

by any subrecipients.

b. The transaction is a procurement and the other entity therefore your contractor if the 

transaction’s primary purpose is for you to purchase goods or services that you need 

to perform the substantive program supported by this award. The distinction from a 

subaward is the contractor is not performing a portion of the substantive program as a 

result of the transaction.

2. What you call the transaction is not a factor in distinguishing a subaward from a 

procurement. If the transaction meets the criterion in paragraph B.1.a of this Article, it is 

a subaward for purposes of the requirements of this award even if you call and consider 

the transaction a “contract.”

Section C. Effect of the determination on the next-tier transaction. 

1. Process for awarding the transaction. One important consequence of your determining 

whether a next-tier transaction is a subaward or procurement is that there are different 

requirements governing the pre-award and time of award processes that you use to award 

the transaction.

a. Part 9, Article II of this award specifies pre-award and time of award responsibilities 

for subawards.

b. Part 6, Articles I and II of this award govern pre-award and time of award process for 

awarding procurement transactions.

2. Transaction terms and conditions. A second important consequence of your determining 

whether a next-tier transaction is a subaward or procurement is that the terms and 
Page 64 of 86

conditions you include in a subaward differ from those you include in a procurement 

transaction.

a. Section C of Part 9, Article II of this award addresses requirements you must include 

in subaward terms and conditions. Those requirements are generally either identical 

with or directly related to requirements in the general terms and conditions of this 

award with which you must comply. They include national policy requirements as 

well as administrative requirements in areas such as financial and programmatic 

management, property administration, procurement, and reporting.

b. PROC Article III of this award lists requirements you must include in a procurement 

transaction when applicable to the procurement.

Article II. Pre-award and time of award responsibilities. (Mar 2015) 

Section A. Requirements for unique entity identifiers.

1. Definition of “entity.” For purposes of the unique entity identifier requirements in 

paragraphs A.2 and 3 of this Section, “entity” has the meaning given in paragraph C.3 of 

the Appendix to OMB guidance in 2 CFR Part 25.

2. Pre-notification of potential subrecipients. You must notify potential subrecipients that no 

entity may receive a subaward from you under this award unless it has provided its 

unique entity identifier to you.

3. Restriction on making subawards.

a. General. You may not make a subaward to an entity unless the prospective 

subrecipient:

i. Is an eligible entity, as defined in 10 U.S.C. 2411; and 

ii. Has provided its unique entity identifier to you.

b. Exception. You may make a subaward to an entity that has not provided its unique 

entity identifier to you in rare cases in which you requested and we approved an 

exemption from the requirement for the entity to provide a unique entity identifier, 

based on the criteria in paragraph 25.110(d) of OMB guidance in 2 CFR Part 25.

Section B. Pre-award risk assessment.

1. Before making a subaward to an entity, you must perform a risk assessment of the 

prospective subrecipient, as described in 2 CFR 200.331(b). OMB guidance in 2 CFR 

200.205(c) provides examples of factors you may consider in evaluating risk.

2. As part of the risk assessment under paragraph B.1 of this Article, you must:
Page 65 of 86

a. Verify that neither the prospective subrecipient nor its principals under the subaward 

are excluded or disqualified from participating in the transaction, in accordance with 

requirements in Subpart C of OMB guidance in 2 CFR Part 180, as implemented by 

DoD at 2 CFR Part 1125; and

b. If warranted by risks you identify, determine whether to impose award-specific terms 

and conditions in the subaward to mitigate the risks.

i. These award-specific terms and conditions may be in addition to, or differ from, 

the terms and conditions that SUB Articles IV through IX of this award require 

you to include in subawards.

ii. They may include items such as those listed in OMB guidance in 2 CFR 

200.207(a)(1) through (6).

iii. Your procedures for imposing and removing the additional or different 

requirements must comply with the procedural guidance in 2 CFR 200.207(b) 

and (c).

Section C. Subaward content.

1. Cost-type subawards. 

a. Part 9, Article III of this award specifies informational content that you must include 

in each cost-type subaward.

b. Part 9, Articles IV through VIII specify administrative requirements that you must 

include, as applicable, in each cost-type subaward.

c. Part 9, Article IX of this award specifies national policy requirements that you must 

include, as applicable, in each cost-type subaward.

2. Fixed amount type subawards. SUB Article XII of this award specifies informational 

content and administrative and national policy requirements that you must include in any 

fixed amount subaward that you make.

3. Additional subaward terms and conditions. You may include other requirements in your 

subawards that you need in order to meet your responsibilities under this award for 

performance of the project or program (including portions performed by subrecipients) 

and compliance with applicable administrative and national policy requirements.

Section D. Subaward and executive compensation reporting. You must report subaward 

obligating actions and information on subrecipients’ executive compensation as required by 

REP Article IV of this award.

Article III. Informational content of subawards. (Mar 2015)
Page 66 of 86

Section A. Informational content in general. You must include in each subaward (and 

each subsequent amendment to a subaward that alters the amount of the subaward) the 

information specified in OMB guidance in 2 CFR 200.331(a)(1), “Federal Award 

Identification,” with the clarifications provided in Sections B through G of this Article.

Section B. Federal award identification number and award date. The “Federal Award 

Identification Number” and “Federal Award Date” described in 2 CFR 200.331(a)(1)(iii) and 

(iv), respectively, are the award number and award date for this award to you. You must 

provide the information in a way that makes it clear that the subaward is under this DoD 

award.

Section C. Amount of Federal funds obligated.

1. The “Amount of Federal Funds Obligated by this action” that is described in 2 CFR 

200.331(a)(1)(vi) is either:

a. The amount of your obligation to the subrecipient, if the terms and conditions of this 

award do not require you to provide any cost sharing or matching for the project or 

program the award supports; or

b. The amount of the Federal share of your subaward obligation if this award does 

require cost sharing or matching, which in that case is the product of:

i. The Federal share of total project costs under this DoD award to you, as a 

percentage of those total project costs; and

ii. The total amount of project costs obligated for the subaward action.

2. Note that the total project costs of the award and subaward, as used in paragraphs C.1.b.i 

and ii of this Section include any cost sharing or matching that you or the subrecipient 

provides if you are counting it toward the cost sharing or matching required under this 

award.

Section D. Total amount obligated to the subrecipient. The “Total Amount of Federal 

Funds Obligated to the Subrecipient,” as described in 2 CFR 200.331(a)(1)(vii), is the 

cumulative amount to date of the amounts described in Section C of this Article.

Section E. Total Amount of the Federal Award. The “Total Amount of the Federal 

Award,” as described in 2 CFR 200.331(a)(1)(viii), is the total amount through the end of the 

subaward that you and the subrecipient mutually agreed upon, to include: funding obligated 

to date, any future anticipated funding increments, and any options you may exercise in the 

future.

Section F. Federal awarding agency, pass-through entity, and awarding official. The 

“Name of Federal awarding agency” and “pass-through entity,” as those terms are used in 2 

CFR 200.331(a)(1)(x) are the Department of Defense and the business name associated with 

your registration in the System for Award Management. In that same paragraph of 2 CFR 
Page 67 of 86

Part 200, the “awarding official” is the individual in your organization who made the 

subaward.

Section G. Indirect cost rate. With respect to the requirement in 2 CFR 200.331(a)(1)(xiii) 

for the subaward to include the “Indirect cost rate for the Federal award”:

1. The rate the subaward must include is the subrecipient’s rate, whether it is a rate set by 

negotiation with a Federal Government agency or you, or is the de minimis rate described 

in 2 CFR 200.414(f).

2. You are required to include the indirect cost rate only if the subrecipient is willing to 

share that information with you and assents that information about its rate is not 

proprietary. If a subrecipient is not willing to share information about its indirect cost 

rate with you, consult the grants officer for this award to explore alternative ways to 

assess the reasonableness of costs of the subaward.

Article IV. Financial and program management requirements for subawards. (Mar 2015) 

Section A. Purposes of this Article in relation to other Articles. 

1. This Article specifies administrative requirements concerning financial and program 

management that you must include in the terms and conditions of each cost-type

subaward that you make under this award. 

2. It thereby addresses the flow down to subrecipients of requirements with which you must 

comply under Part 4, Articles I through VII of this award.

3. Part 9, Article XII of this award addresses which of these administrative requirements 

you must include in any fixed-amount subaward that you make, if we approve you 

making any fixed-amount subawards under this award.

Section B. Financial management standards. You must include in any subaward you 

make under this award the requirements of:

1. Sections A through C of Part 4, Article I of this award if the subrecipient is a state;

2. Sections B and C of Part 4, Article I if the subrecipient is an institution of higher 

education, nonprofit organization, local government, or Indian tribe; or 

3. 32 CFR 34.11 if the subrecipient is a for-profit entity.

Section C. Payments.

1. Subawards to States. You must include the provisions of Section A of Part 4, Article II 

of this award in each subaward you make to a State;
Page 68 of 86

2. Subawards to institutions of higher education, nonprofit organizations, local 

governments, and Indian tribes. The following paragraphs specify requirements you must 

include in subawards to institutions of higher education, nonprofit organizations, local 

governments, and Indian tribes.

a. Payment method.

i. If you are authorized to request advance payments under this award, you must 

authorize a subrecipient to request advance payments unless:

A. It does not maintain, or demonstrate the willingness to maintain, written 

procedures that minimize the time elapsing between its receipt of each 

payment and its disbursement of the funds for project or program purposes;

B. You impose a requirement for the subrecipient to be paid by reimbursement 

as a result of your risk evaluation of the subrecipient under Part 9, Article II 

of this award. 

ii. If you do not authorize advance payments for one of the reasons given in 

paragraph C.2.a.i of this Article, you must specify either reimbursement or 

working capital advances as the payment method in accordance with OMB 

guidance in 2 CFR 200.305(b)(3) and (4).

b. Payment timing and amount.

i. Advances. You must limit advance payments to the minimum amounts needed 

and time the payments to be in accordance with the subrecipient’s actual, 

immediate cash requirements in carrying out the project or program under the 

subaward. The timing and amount of your advance payments to the 

subrecipient must be as close as is administratively feasible to the subrecipient’s 

actual disbursements for direct project costs and the proportionate share of any 

allowable indirect costs. Your subawards also must include the requirements of 

paragraphs B.2.b and c of Part 4, Article II to specify costs subrecipients must 

exclude from amounts of their advance payment requests.

ii. Reimbursements or working capital advances. You must follow OMB guidance 

in 2 CFR 200.305(b)(3) and (4) concerning timing and amount of 

reimbursements or working capital advances.

c. Frequency of requests. You must allow the subrecipient to request advance payments 

or reimbursements, including those associated with the working capital advance 

payment method, as often as it wishes if you pay using electronic funds transfers and 

at least monthly otherwise.

d. Other requirements.
Page 69 of 86

i. You must include the requirements of paragraph B.5 of Part 4, Article II of this 

award concerning withholding of payments.

ii. You must include the provisions of paragraph B.6 of Part 4, Article II 

concerning depositories in each subaward that authorizes the subrecipient to 

request advance payments.

3. Subawards to for-profit entities. In each subaward that you make to a for-profit entity, 

you must include terms and conditions that provide for payment to the subrecipient 

consistent with 32 CFR 34.12.

Section D. Allowable costs, period of availability of funds, and fee and profit.

1. You must include in each cost-type subaward a requirement that the allowability of costs 

under the subaward (and any lower-tier subawards or procurement contracts into which 

the subrecipient enters) must be determined in accordance with the applicable cost 

principles identified in Section A of Part 4, Article III of this award.

2. You must specify in each subaward the period of availability of funds for any project or 

program purpose so that the period neither begins before nor ends after the period during 

which you may use funds available to you under this award for that same project or 

program purpose.

3. You must include in each subaward the provisions concerning fee or profit that are in 

Section C of Part 4, Article III of this award.

Section E. Revision of budget and program plans. You must include in each subaward 

provisions requiring the subrecipient to request your approval for any change in the subaward 

budget or program that would cause a budget or program change under this award for which 

Section A of Part 4, Article IV requires you to first obtain our prior approval. You may not 

approve any budget or program revision that is inconsistent with the purpose or terms and 

conditions of this award.

Section F. Non-Federal audits. You must include a provision in each subaward that you 

make under this award to require the subrecipient entity to comply with the audit 

requirements applicable to that entity, as specified in either Section A or Section B of Part 4,

Article V.

Section G. Cost sharing or matching requirements. If you make a subaward under which 

the subrecipient may provide contributions or donations of cash or third-party in-kind 

contributions to be counted toward any cost sharing or matching that is required under this 

award, you must include provisions in that subaward to specify:

1. The criteria governing the allowability as cost sharing or matching of the types of cash or 

third-party in-kind contributions that the subrecipient may contribute or donate. Those 

criteria are specified in:
Page 70 of 86

a. Sections B through C of Part 4, Article VI of this award if the subaward is to a State, 

institution of higher education, nonprofit organization, local government, or Indian 

tribe.

b. Paragraph 32 CFR 34.13(a) if the subaward is to a for-profit entity.

2. The methods for determining and documenting the values of those contributions or 

donations to be counted as cost sharing or matching. Those methods are specified in:

a. Sections D and E of Part 4, Article VI of this award if the subaward is to a State, 

institution of higher education, nonprofit organization, local government, or Indian 

tribe.

b. 32 CFR 34.13(b) if the subaward is to a for-profit entity.

Section H. Program income. You must include requirements concerning program income 

in subawards, as follows:

1. You must require the subrecipient to account to you when it earns any program income 

under the subaward or uses it, so that you can prepare reports you are required to submit 

to us.

2. You must include the provisions of Sections A through C of Part 4, Article VII of this 

award.

3. You must specify the deduction or addition alternative, or a combination of these 

alternatives, for the subrecipient’s use of any program income it earns. A subrecipient 

that you require to use the deduction alternative, as opposed to the addition alternative 

described in Section D of Part 4, Article VII of this award, will subtract program income 

from the total allowable costs under the subaward to determine net allowable costs for 

purposes of determining the amount of your obligation to the subrecipient and any cost 

sharing or matching you require of the subrecipient. 

In any case, you must still use the addition alternative described in Section D of Part 4,

Article VII of this award for the total amount of program income earned, which includes 

amounts earned by you and your subrecipients. That is, while you may require a 

particular subrecipient to use the deduction alternative for the purpose of the subaward, 

program income earned under that subaward will still increase the total amount of this 

award (i.e., the sum of the Federal share and any cost sharing or matching).

Article V. Property requirements for subawards. (Mar 2015) 

Section A. Purposes of this Article in relation to other Articles. 

1. This Article specifies administrative requirements concerning property that you must 

include in the terms and conditions of each subaward that you make under this award. 
Page 71 of 86

2. It thereby addresses the flow down to subrecipients of requirements with which you must 

comply under Part 5, Articles I through V of this award.

Section B. Title to property.

1. Subawards to institutions of higher education, nonprofit organizations, States, local 

governments, or Indian tribes. You must include terms and conditions in each subaward 

to flow down to the subrecipient the provisions of:

a. Section A of Part 5, Article I concerning vesting of title to property acquired under 

the subaward.

b. Sections B and C of Part 5, Article I that are applicable to types of property that the 

subrecipient may acquire, improve, or for which it may otherwise be accountable 

under the subaward.

2. Subawards to for-profit entities. 

a. Real property and equipment. You must obtain the prior approval of the DoD grants 

officer before permitting any for-profit subrecipient to acquire or improve real 

property or equipment in whole or in part with Federal funds.

i. If the grants officer does not grant the approval, you must include a subaward 

provision that prohibits the firm from using Federal funds provided under the 

subaward to acquire or improve real property or equipment.

ii. If the approval is granted, you must include a subaward provision specifying 

that title vesting and Federal interest are governed by provisions of 32 CFR 

34.21(b) and (c).

b. Supplies. You must include a subaward provision specifying that vesting of title to 

supplies is governed by provisions of 32 CFR 34.24(a), subject to the use and 

disposition requirements of 32 CFR 34.24(b).

Section C. Property management system. If you make a subaward under which the 

subrecipient either may acquire or improve equipment, you must include in the subaward:

1. If the subrecipient is a State, applicable provisions of:

a. Section A of Part 5, Article II concerning insurance for real property and equipment.

b. Section B of Part 5, Article II concerning other property management system 

standards.

2. If the subrecipient is an institution of higher education, nonprofit organization, local 

government, or Indian tribe, applicable provisions of:
Page 72 of 86

a. Section A of Part 5, Article II concerning insurance for real property and equipment.

b. Section C of Part 5, Article II concerning other property management system 

standards.

3. Applicable provisions of 32 CFR 34.22(a) and 34.23 if the subrecipient is a for-profit 

entity and you obtained the grants officer’s prior approval for the firm’s acquisition of 

equipment under the subaward.

Section D. Use and disposition of real property. If the subrecipient of a subaward you 

make under this award may acquire or improve real property, then you must include in the 

subaward:

1. Use. The requirements concerning use of real property:

a. In Section A of Part 5, Article III if the subaward is to an institution of higher 

education, nonprofit organization, State, local government, or Indian tribe, unless the 

award-specific terms and conditions of this award provide otherwise; and

b. In 32 CFR 34.21(d) if the subaward is to a for-profit entity and you obtained the 

grants officer’s prior approval for the firm’s acquisition of real property under the 

subaward.

2. Disposition. Provisions to require the subrecipient to request disposition instructions 

through you when the property is no longer needed for its originally authorized purpose, 

so that you can meet your responsibilities to us under Section B of Part 5, Article III to 

address the Federal interest in the property.

Section E. Use and disposition of equipment and supplies. If you make a subaward under 

which the subrecipient may acquire or improve equipment, or acquire supplies, you must 

include in the subaward, as applicable:

1. If the subaward is to a State:

a. The requirements in Sections B and E of Part 5, Article IV concerning use and 

disposition of equipment and supplies, except that you must require the State to 

contact you instead of the award administration office when it is ready to arrange 

disposition of equipment or address the Federal interest in supplies; and

b. Provisions such as those in Section A of Part 5, Article IV that make clear the 

applicability of those requirements.

2. If the subaward is to an institution of higher education, nonprofit organization, local 

government, or Indian tribe:
Page 73 of 86

a. The requirements in Sections C and E of Part 5, Article IV concerning use of 

equipment and use and disposition of supplies;

b. Provisions such as those in Section A of Part 5, Article IV that make clear the 

applicability of those requirements; and

c. Provisions to require the subrecipient to request disposition instructions from you 

when equipment is no longer needed for its originally authorized purpose, so that you 

can meet your responsibilities to us under Section B or D of Part 5, Article IV to 

address the Federal interest in the equipment.

3. If the subaward is to a for-profit entity:

a. The requirements concerning use and disposition of supplies in 32 CFR 34.24(b);

b. And you obtained the grants officer’s prior approval for the firm’s acquisition of 

equipment under the subaward:

i. The requirements concerning use of equipment in 32 CFR 34.21(d);

ii. Provisions such as those in Section A of Part 5, Article IV that make clear the 

applicability of those requirements; and

iii. Provisions to require the subrecipient to request disposition instructions from 

you when equipment is no longer needed for its originally authorized purpose, 

so that you can meet your responsibilities to us under Section B or D of Part 5,

Article IV to address the Federal interest in the equipment.

Section F. Intangible property. You must include in a subaward provisions specifying the 

requirements of:

1. Sections A through C of Part 5, Article V if the subaward is to an institution of higher 

education, nonprofit organization, State, local government, or Indian tribe.

2. Section A of Part 5, Article V as it applies to works developed under the subaward and 

Section B of Part 5, Article V if the subaward is to a for-profit entity.

Article VI. Procurement procedures to include in subawards. (Mar 2015) 

Section A. Purposes of this Article in relation to other Articles. 

1. This Article specifies administrative requirements concerning procurement procedures 

that you must include in the terms and conditions of each subaward that you make under 

this award. 

2. It thereby addresses the flow down to subrecipients of requirements with which you must 

comply under Part 6, Articles I through III of this award.
Page 74 of 86

Section B. Subaward to a State. In any subaward that you make to a State, you must 

include the requirements of Part 6, Article I and applicable sections of PROC Article III of 

this award.

Section C. Subaward to an institution of higher education, nonprofit organization, local 

government, or Indian tribe. In any subaward that you make to an institution of higher 

education, nonprofit organization, local government, or Indian tribe:

1. You must include the requirements of Sections A through G of Part 6, Article II and 

applicable sections of Part 6, Article III of this award.

2. You must include the requirement for the subrecipient to make available to you, upon 

request:

a. Technical specifications of proposed procurements, under the conditions described in 

OMB guidance at 2 CFR 200.324(a); and

b. Other procurement documents for pre-procurement review, under the conditions 

described in 2 OMB guidance at CFR 200.324(b).

Section D. Subaward to a for-profit entity. In each subaward that you make to a for-profit 

entity, you must include terms and conditions for the subrecipient’s compliance with the 

requirements in 32 CFR 34.31.

Article VII. Financial, programmatic, and property reporting requirements for subawards. 

(Mar 2015) 

Section A. Purposes of this Article in relation to other Articles. 

1. This Article specifies administrative requirements concerning reporting that you must 

include in the terms and conditions of each subaward that you make under this award. 

2. It thereby addresses the flow down to subrecipients of requirements with which you must 

comply under Part 7, Articles I through III of this award.

Section B. Performance reporting.

1. You must include terms and conditions in each subaward to require the subrecipient to 

provide any performance information you need, by the time you need it, to comply with 

the performance reporting requirements in Part 7, Article I and other terms and conditions 

of this award.

2. You may specify a form, format, or data elements the subrecipient uses to provide the 

information to you (you need not require the subrecipient to use the same form, format, 

or data elements that Part 7, Article I specifies for your reporting to us).
Page 75 of 86

Section C. Financial reporting.

1. You must include terms and conditions in each subaward to require the subrecipient to 

provide any financial information you need, by the time you need it, to comply with the 

financial reporting requirements in Part 7, Article II and other terms and conditions of 

this award.

2. You may specify a form, format, or data elements the subrecipient uses to provide the 

information to you (you need not require the subrecipient to use the same form, format, 

or data elements that Part 7, Article II specifies for your reporting to us).

Section D. Reporting on property.

1. Each subaward you make under this award must include provisions concerning property 

reporting as described in paragraph D.2 of this Section if the subrecipient may, under the 

subaward:

a. Acquire or improve real property or equipment; or

b. Acquire supplies or intangible property.

2. The subaward provisions must require the subrecipient to give you the information you 

need about the property in order to meet your responsibilities to us under Sections A 

through C of Part 7, Article III and Part 6, Articles II through V.

Article VIII. Other administrative requirements for subawards. (Mar 2015) 

Section A. Purposes of this Article in relation to other Articles. 

1. This Article specifies other administrative requirements that you either must or should 

include in the terms and conditions of each subaward that you make under this award. 

2. It thereby addresses the flow down to subrecipients of requirements with which you must 

comply under Part 8, Articles I through VII of this award.

Section B. Maintenance of subrecipient information. Your subaward terms and 

conditions do not need to include any of the requirements of Part 8, Article I, as those 

requirements do not flow down to subrecipients.

Section C. Records retention and access. In each subaward you make under this award:

1. If the subaward is to an institution of higher education, nonprofit organization, State, 

local government, or Indian tribe:

a. You must include the requirements of Section A of Part 8, Article II with the 

additional condition that, for any subrecipient under this award that does not have a 
Page 76 of 86

federally approved rate for indirect or facilities and administrative costs and that does 

not use the de minimis rate described in 2 CFR 200.414(f), you must:

i. Require the subrecipient to keep records that support its indirect or facilities and 

administrative costs charged to the subaward for 3 years from the end of the 

fiscal year (or other accounting period) to which the costs apply; and

ii. Keep any plan or computation the subrecipient submits to you to serve as a 

basis for your determining the reasonableness and allowability of indirect or 

facilities and administrative costs of the subaward, for 3 years from the end of 

the fiscal year (or other accounting period) to which the proposal, plan, or 

computation applies.

b. You must include the requirements of Sections B, C, and F of Part 8, Article II.

c. You must include provisions that enable you to comply with the requirements of 

Section D of Part 8, Article II concerning records for joint or long-term use.

d. You must include provisions that establish the same rights and responsibilities for the 

subrecipient under the subaward that Section E of Part 8, Article II establishes for you 

under this award.

e. You may not impose any other record retention or access requirements on the 

subrecipient.

2. If the subaward is to a for-profit entity, the records retention and access provisions of 32 

CFR 34.42.

Section D. Remedies and termination. The terms and conditions of each subaward you 

make under this award should specify your rights and responsibilities and those of the 

subrecipient if you take a remedial action to address a subrecipient’s noncompliance with an 

applicable Federal statute or regulation or the terms and conditions of your subaward. Each 

subaward’s terms and conditions should:

1. Identify remedial actions you may take to address the subrecipient’s noncompliance. 

Available remedies are described in:

a. OMB guidance in 2 CFR 200.338 for a subaward to an institution of higher 

education, nonprofit organization, State, local government, or Indian tribe; and

b. 32 CFR 34.52 for a subaward to a for-profit entity.

2. With respect to termination specifically:

a. Identify conditions under which you, the subrecipient, or both (by mutual agreement) 

may terminate the subaward, in whole or in part, as described in:
Page 77 of 86

i. OMB guidance in 2 CFR 200.339(a) for a subaward to an institution of higher 

education, nonprofit organization, State, local government, or Indian tribe; and

ii. 32 CFR 34.51 for a subaward to a for-profit entity.

b. Inform the subrecipient that you will provide it with a notice of termination if you 

unilaterally terminate the award.

c. Specify that you and the subrecipient remain responsible for applicable requirements 

addressed in Sections G and H of this Article concerning closeout, post-closeout 

adjustments, and continuing responsibilities.

3. With respect to either suspension or termination of the subaward, inform the subrecipient 

about the criteria that you will use to either allow or disallow subaward costs, which are 

in:

a. Section C of Part 8, Article III for a subaward to an institution of higher education, 

nonprofit organization, State, local government, or Indian tribe; and

b. 32 CFR 34.52(c) for a subaward to a for-profit entity.

Section E. Disputes, hearings, and appeals. Each subaward’s terms and conditions should 

specify any rights the subrecipient has to a hearing, appeal, or other administrative 

proceeding if it disputes a decision you render in administering its subaward. You must 

comply with any statute or regulation that affords the subrecipient an opportunity for a 

hearing, appeal, or other administrative proceeding and is applicable to the dispute.

Section F. Collection of amounts due. Although your subaward terms and conditions do 

not need to include any of the requirements of OAR Article V because those requirements do 

not flow down to subrecipients, you should consider including provisions to specify what you 

would need from the subrecipient if you owed a debt to the Government under this award 

that is related to its subaward.

Section G. Closeout.

1. In each subaward that you make to an institution of higher education, nonprofit 

organization, State, local government, or Indian tribe, you must include provisions to 

require the subrecipient to:

a. Liquidate all obligations that it incurred under the subaward not later than 90 calendar 

days after the end date of the period of performance of either the subaward or this 

award, whichever is earlier, unless you grant an extension.

b. Promptly refund to you any balances of unobligated cash that you advanced or paid to 

the subrecipient.
Page 78 of 86

c. Submit to you:

i. Any information you need from the subrecipient to meet your responsibilities to 

us for an accounting of property, under Section D of Part 8, Article VI; and

ii. Not later than 90 calendar days after the end date of the period of performance

of this award, unless you grant the subrecipient an extension, any information 

you need to meet your responsibilities to us for final reports, under Section C of 

Part 8, Article VI.

2. In each subaward that you make to a for-profit entity, you must include the terms and 

conditions that you deem necessary for you to be able to comply with the requirements in 

Part 8, Article VI.

Section H. Post-closeout adjustments and continuing responsibilities. 

You must include provisions in each subaward to require the subrecipient to provide what 

you need in order to comply with the requirements of Part 8, Article VII.

SUB Article IX. National policy requirements for subawards. (Mar 2015) 

Section A. General.

1. You must include provisions in the terms and conditions of each subaward you make to 

require the subrecipient entity’s compliance with each of the national policy requirements 

in Sections B through D of this Article that you determine is applicable, given the type of 

entity receiving the subaward and activities it will be carrying out under the subaward.

2. If an entity to which you are about to make a subaward will not accept an award 

provision requiring its compliance with a national policy requirement that you determine 

to be applicable, you must alert the award administration office immediately. You may 

not omit an applicable national policy requirement in order to make the subaward.

3. If at any time during the performance of a subaward, you learn that--or receive a credible 

allegation that--the subrecipient is not complying with an applicable national policy 

requirement, you must alert the award administration office immediately.

Section B. Nondiscrimination national policy requirements. You must include provisions 

in each subaward to require the subrecipient’s compliance with the nondiscrimination 

national policy requirements specified in NP Article I, as applicable. 

Section C. Environmental national policy requirements. You must include provisions in 

each subaward to require that:

1. The subrecipient comply with the Clean Air and Clean Water Acts specified in paragraph 

1 of NP Article II, as applicable.
Page 79 of 86

2. Provide any information you need, when you need it, in order to comply with the 

requirement to immediately notify us of potential environmental impacts specified in 

paragraph 2 of NP Article II, as applicable, due to activities under the award (which 

includes subaward activities).

Section D. Other national policy requirements. You must include provisions in each 

subaward to require the subrecipient’s compliance with the national policy requirements in 

the following portions of NP Article III of this award, as applicable:

1. Paragraph 1 on debarment and suspension.

2. Paragraphs 3.a and b on lobbying.

3. Paragraphs 4 through 13 on officials not to benefit, Hatch Act, Native American graves, 

fly America, United States flag vessels, military recruiters and Reserve Officers Training 

Corps, historic preservation, Constitution Day, trafficking in persons, and whistleblower 

protections.

SUB Article X. Subrecipient monitoring and other post-award administration. (Mar 2015)

Section A. General requirement for subrecipient monitoring. You must do the postaward monitoring of the subrecipient’s activities under each subaward that is needed in order 

for you to ensure, to the best of your ability to do so, that:

1. The subrecipient carries out the portion of the substantive project or program under this 

award that, as described in paragraph B.1.a of SUB Article I:

a. Your subaward transferred for the subrecipient’s performance, which is the 

subaward’s primary purpose; and

b. For which you are accountable to us.

2. The subrecipient is using project funds under the subaward (including any cost sharing or 

matching the subrecipient provides that is counted as project funds in the approved 

budget of this award) for authorized purposes.

3. The subrecipient’s performance under the subaward is in compliance with applicable 

Federal statutes and regulations, and the terms and conditions of your subaward.

Section B. Subrecipient monitoring actions.

1. Required monitoring actions. You must, as part of your post-award monitoring of each 

subrecipient:

a. Review the financial and programmatic information that your subaward terms and 

conditions require the subrecipient to provide, in accordance with Sections B and C of 

Part 9, Article VII of this award.
Page 80 of 86

b. Follow up and ensure that the subrecipient takes timely and appropriate action to 

remedy deficiencies detected through any means, including audits and on-site 

reviews.

c. With respect to audits of subrecipients that are required under Part 4, Article V of this 

award:

i. Verify that the subrecipient is audited in accordance with those requirements, as 

applicable (note that Section F of Part 9, Article IV requires you to include 

those audit requirements for the subrecipient in the subaward’s terms and 

conditions).

ii. Resolve and issue a management decision for audit findings that pertain to your 

subaward. Doing so is a requirement under either Section A or B of Part 4,

Article V of this award (Section B requires that explicitly and Section A does so 

by implementing OMB guidance in 2 CFR 200.521, as well as other portions of 

Subpart F of that Part).

iii. Consider whether you need to adjust your own records related to this award 

based on results of audits, on-site reviews or other monitoring of the 

subrecipient and, as applicable, notify the award administration office.

2. Other monitoring actions. OMB guidance in 2 CFR 200.331(e)(1) through (3) describes

other actions that may be useful as part of your subrecipient monitoring program, 

depending on the outcomes of the pre-award risk assessment you conducted in 

accordance with Section B of Part 9, Article II.

Section C. Remedies and subaward suspension or termination. With respect to any 

subaward under this award, you must:

1. Consider whether you need to take any remedial action if you determine that the 

subrecipient is noncompliant with an applicable Federal statute or regulation or the terms 

and conditions of your subaward, as described in Section D of Part 9, Article VIII.

2. Provide a notice of termination to the subrecipient if you terminate its subaward 

unilaterally for any reason prior to the end of the period of performance.

3. In the case of either suspension or termination of a subaward prior to the end of the 

period of performance, allow or disallow subaward costs in accordance with Section C of 

Part 8, Article III.

Section D. Subaward closeout. 

1. You must close out each subaward that you make under this award when you either:
Page 81 of 86

a. Determine that the subrecipient has completed its programmatic performance under 

the subaward and all applicable administrative actions; or

b. Terminate the subaward, if you do so prior to completion of the subrecipient’s 

programmatic performance.

2. With respect to the closeout of each subaward:

a. You must pay the subrecipient promptly for allowable and reimbursable costs.

b. Consistent with the terms and conditions of the subaward, you must make a 

settlement for any upward or downward adjustments to the Federal share of costs 

after you receive the information you need from the subrecipient to close out the 

subaward.

c. You should complete the closeout of the subaward no later than one year after you 

receive and accept the final reports and other information from the subrecipient that 

you need to close out the subaward.

Article XI. Requirements concerning subrecipients’ lower-tier subawards. (Mar 2015)

Section A. Purpose. This Article specifies requirements you must include in any cost-type 

subaward under which you determine that the subrecipient of your subaward may make 

lower-tier cost-type subawards to other entities.

Section B. Requirements for lower-tier subawards. Your cost-type subaward terms and 

conditions must require your subrecipient, with respect to each lower-tier cost-type subaward 

that it makes, to:

1. Ensure that the lower-tier transaction is a subaward, rather than a procurement, by 

making the determination that Part 9, Article I of this award requires you to make for 

your subawards.

2. Conduct the pre-award risk assessment of its intended subrecipient that Section B of Part 

9, Article II of this award requires you to make for your subawards.

3. Include in any cost-type subaward it makes at the next tier:

a. The informational content that Part 9, Article III specifies;

b. The administrative requirements that Part 9, Articles IV through VIII of this award 

specify;

c. The national policy requirements that Part 9,Article IX of this award specifies, as 

applicable; and
Page 82 of 86

d. The requirements of this Article if the next-tier subrecipient may make even lowertier cost-type subawards to other entities.

4. Carry out the subrecipient monitoring and other post-award administration 

responsibilities specified in Part 9, Article X of this award.

Article XII. Fixed amount subawards. (Mar 2015)

Section A. Limitations on use. 

1. You may not use a fixed amount subaward:

a. If the total award value over the life of the subaward will exceed the simplified 

acquisition threshold.

b. Unless the project or program scope is specific, with definite outcomes, and you are 

able to establish a reasonable estimate of the actual costs of accomplishing those 

outcomes.

c. If you will predetermine a set amount or percentage of cost sharing or matching that 

the subrecipient must provide under its subaward.

d. If the subrecipient will be acquiring any real property or equipment under the 

subaward.

2. For fixed amount subawards not prohibited by paragraph 1 of this Section, you must 

obtain our prior approval before making a fixed amount type of subaward.

a. Section A of Part 4, Article IV requires you to obtain our prior approval before you 

make any subaward. If you do not identify the subaward as a fixed amount subaward 

when you obtain that approval, then you must subsequently request separate approval 

before awarding it as a fixed amount type of subaward.

b. If a subaward is identified as a fixed amount type of subaward in the budget you 

submit for our approval, then our approval of the budget is the required prior 

approval.

Section B. Use of fixed amount subawards. A fixed amount type subaward might be 

appropriate if you obtain the prior approval required by paragraph A.2 of this Article and:

1. You determine that the portion of the project or program under this award which the 

subrecipient will be carrying out under the subaward has one or more specific outcomes 

with the following characteristics:

a. You can define the outcomes well enough to specify them at the time you make the 

subaward. Note that outcomes are distinct from inputs needed to achieve the 
Page 83 of 86

outcomes, such as amounts or percentages of time that subrecipient employees or 

other participants will spend on the project or program.

b. The accomplishment of each outcome will be observable and verifiable by you when 

it occurs, so that you will not need to rely solely on the subrecipient’s assurance of 

that accomplishment.

c. The subrecipient associates its projected costs with outcomes in the proposal it 

submits to you, and you are confident that the costs of accomplishment of the 

outcomes will equal or exceed the subaward amount. This requires either that you 

have a high degree of confidence:

i. In your estimate of the costs associated with accomplishing the well-defined and 

observable outcomes, based on the prospective subrecipient’s proposal (and 

using the applicable cost principles in Part 4, Article III as a guide); or

ii. That those costs will be within a finite range, rather than a specific amount, so 

that you may provide an amount of funding under the subaward that does not 

exceed the lower end of the range, with the provision that the subrecipient 

agrees to provide any balance above that amount that ultimately is needed to 

accomplish the outcomes. Your subaward then would include a term or 

condition to reflect the subrecipient’s agreement to provide that balance (which 

would be in an amount to be post-determined, when the outcomes are 

accomplished). Note that this is distinct from a situation in which you 

predetermine a set amount or percentage of cost sharing or matching that the 

subrecipient must provide under its subaward, a situation in which paragraph 

A.1.c of this Article prohibits use of a fixed amount subaward.

2. The subaward is based on a fixed rate per unit of outcome (or “unit cost”) and you have 

both the confidence:

a. That is described in paragraph B.1.c of this Article in the estimated costs associated 

with each unit of outcome; and

b. In the subrecipient’s guarantee that it can accomplish at least the number of units of 

outcome on which your total subaward amount will be based (i.e., the product of the 

unit cost and the number of units of outcome the subrecipient guarantees to 

accomplish).

3. Note, however, that not every fixed rate subaward is also a fixed amount subaward. If 

you have confidence in the unit cost but not also in the subrecipient’s ability to guarantee 

the number of units of outcome that it will accomplish, then you should set a 

not-to-exceed award amount based on the number of units desired and reduce the 

subaward amount at the end if the subrecipient accomplishes fewer than that number.
Page 84 of 86

Section C. Informational content of fixed amount subawards. You must include in each 

fixed amount subaward the informational content, other than the indirect cost rate, that is 

described in Part 9, Article III of this award.

Section D. Terms and conditions addressing administrative requirements.

1. General. This Section:

a. Specifies the minimum set of terms and conditions addressing administrative 

requirements that you must include in fixed amount subawards, in lieu of the more 

extensive set specified in Part 9, Articles IV through X for cost-type subawards.

b. Does not preclude your including other requirements that you need in order to meet 

your responsibilities under this award for performance of the project or program 

(including portions performed by subrecipients) and compliance with applicable 

administrative and national policy requirements.

2. Financial and program management requirements.

a. Financial management system standards. For a subaward to other than a for-profit 

entity, your subaward must require the subrecipient to include the information 

specified in paragraph B.1 of Part 4, Article I in its financial management system, for

the purposes of the non-federal audits required by paragraph 2.d of this Section.

b. Payments. Your payments must be based on accomplishment of the outcomes and 

associated costs that you used to establish the award amount, rather than on 

subrecipient expenditures for project or program purposes. Milestone payments 

before the end of the subaward’s period of performance may be appropriate if there 

are outcomes that the subrecipient will accomplish at different times during that 

period.

c. Revision of budget and program plans. You must:

i. Request our prior approval for any change in principal investigator, project 

leader, project partner, or scope or objective of the subaward; and

ii. Therefore include a requirement in the subaward for the subrecipient to request 

that approval through you.

d. Non-federal audits. You must include the requirement for non-Federal audits 

described in Section F of Part 9, Article IV. The audits are intended to focus on 

compliance with the performance requirements in the subaward terms and conditions 

and not to review actual costs as they would for a cost-type subaward.

3. Intangible property. You must include the applicable requirements concerning intangible 

property, as described in Section F of Part 9, Article V.
Page 85 of 86

4. Reporting requirements. You must include requirements for reporting that you need in 

order to meet your responsibilities under this award for reporting to us.

5. Other administrative requirements. 

a. Records retention and access.

i. You must include the requirements for records retention and access in paragraph

A.3 and Sections B and F of Part 8, Article II, as applicable, if the subaward is 

to an institution of higher education, nonprofit organization, State, local 

government, or Indian tribe. You may not impose any other records retention or 

access requirements on the subrecipient.

ii. You must include the corresponding requirements of 32 CFR 34.42 if the 

subaward is to a for profit entity.

b. Remedies and termination. You must include:

i. The requirements concerning remedies and termination that are described in 

paragraphs D.1 and 2 of Part 9, Article VIII;

ii. Provisions addressing any hearing and appeal rights the subrecipient has, as 

described in Section E of Part 9, Article VIII; and

iii. Terms and conditions addressing adjustment of the amount of the subaward 

based on review of the actual costs incurred if it is terminated before the 

subrecipient accomplishes all of the specified outcomes.

c. Continuing responsibilities. You must include requirements concerning continuing 

responsibilities for audits and records retention and access that are described in 

paragraphs B.1 and 3 of Part 8, Article VII.

d. Collection of amounts due. You should consider including requirements concerning 

collection of amounts due, as described in Section F of Part 9, Article VIII.

6. Required certification. You must:

a. Include a requirement for the subrecipient to provide to you the certification required 

by 2 CFR 200.201(b)(5); and

b. Include terms and conditions addressing adjustment of the amount of the subaward if 

the required level of activity or effort is not carried out.

Section E. National policy requirements for fixed amount subawards. You must include 

in the terms and conditions of each fixed amount subaward the national policy requirements 

that Part 9, Article IX of this award specifies, as applicable.
Page 86 of 86

Section F. Subrecipient monitoring and other post award administration. You must 

carry out the subrecipient monitoring and post-award administration actions specified in Part 

9, Article X, as applicable.

Section G. Fixed amount subawards at lower tiers. 

1. Authority. If you wish to allow a subrecipient of a cost-type subaward to use fixed 

amount subawards at the next tier, your subaward terms and conditions must require the 

subrecipient to submit a request through you to obtain our prior approval for use of that 

type of subaward.

2. Subaward requirements. If your subrecipient is authorized to use lower-tier fixed 

amount subawards, as described in paragraph 1 of this Section, your subaward’s terms 

and conditions must: 

a. Require the subrecipient, before it makes any lower-tier fixed amount subaward, to:

i. Ensure that the lower-tier transaction is a subaward, rather than a procurement,

by making the determination that Part 9, Article I of this award requires you to 

make for your subawards.

ii. Conduct the pre-award risk assessment of its intended subrecipient that Section 

B of Part 9, Article II of this award requires you to make for your subawards.

b. Include the requirements specified in Sections A through F of this Article.