20698 Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules

DEPARTMENT OF EDUCATION

34 CFR Part 75

RIN 1880–AA02

Direct Grant Programs

AGENCY: Office of the Chief Financial

Officer, Department of Education.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Secretary proposes to

amend the Education Department

General Administrative Regulations

(EDGAR) that govern discretionary grant

programs. These proposed amendments

would implement new options for the

Department of Education’s

(Department’s) application review

process for discretionary grants. These

changes are intended to improve the

quality of the review process, provide

additional flexibility, and provide

greater opportunities for inexperienced,

‘‘novice applicants’’ to receive funding.

DATES: We must receive your comments

on or before June 1, 2000.

ADDRESSES: Address all comments about

these proposed regulations to Valerie A.

Sinkovits, U.S. Department of

Education, 400 Maryland Avenue SW.,

room 3652, ROB–3, Washington, DC

20202–4248. If you prefer to send your

comments through the Internet use the

following address: comments@ed.gov

You must include the term

‘‘Redesign’’ in the subject line of your

electronic message.

FOR FURTHER INFORMATION CONTACT:

Valerie Sinkovits. Telephone: (202)

708–7568. If you use a

telecommunications device for the deaf

(TDD), you may call the Federal

Information Relay Service (FIRS) at 1–

800–877–8339.

Individuals with disabilities may

obtain this document in an alternative

format (e.g., Braille, large print,

audiotape, or computer diskette) on

request to the contact person listed in

the preceding paragraph.

SUPPLEMENTARY INFORMATION:

I. Invitation to Comment

We invite you to submit comments

and recommendations regarding these

proposed regulations. To ensure that

your comments have maximum effect in

developing the final regulations, we

urge you to identify clearly the specific

section or sections of the proposed

regulations that each of your comments

addresses and to arrange your comments

in the same order as the proposed

regulations.

We invite you to assist us in

complying with the specific

requirements of Executive Order 12866

and its overall requirement of reducing

regulatory burden that might result from

these proposed regulations. Please let us

know of any further opportunities we

should take to reduce potential costs or

increase potential benefits while

preserving the effective and efficient

administration of the programs affected

by these regulations.

During and after the comment period,

you may inspect all public comments

about these proposed regulations in

room 3652, Regional Office Building 3,

Seventh and D Streets, S.W.,

Washington, DC, between the hours of

8:30 a.m. and 4:00 p.m., Eastern time,

Monday through Friday of each week

except Federal holidays.

Assistance to Individuals With

Disabilities in Reviewing the

Rulemaking Record

On request we will supply an

appropriate aid, such as a reader or

print magnifier, to an individual with a

disability who needs assistance to

review the comments or other

documents in the public rulemaking

record for these proposed regulations. If

you want to schedule an appointment

for this type of aid, you may call (202)

205–8113 or (202) 260–9895. If you use

a TDD, you may call the Federal

Information Relay Service at 1–800–

877–8339.

II. Background of the Department’s

Redesign of the Discretionary Grants

Process

The Secretary takes this action to

implement several recommendations

made by a Department discretionary

grants reengineering team (team). In

January of 1995, the Department’s

Reinvention Coordinating Council

(RCC), chaired by the Deputy Secretary

of Education, chartered a team of

Department staff to redesign the

discretionary grants process, including

the application review process, to

increase customer satisfaction and to

ensure the best use of the Department’s

resources. The team was comprised of

staff members from across the

Department who had a wealth of

knowledge of, and experience with, the

Department’s discretionary grants

process and programs. Current and

former Department grant recipients, as

well as unsuccessful applicants,

provided helpful comments,

suggestions, and recommendations to

the team for improving the discretionary

grants process. The team received input

from a variety of organizations,

including institutions of higher

education, State educational agencies,

local educational agencies, and

nonprofit organizations. In addition,

numerous Department staff who are

involved in all phases of the

discretionary grants process, from

appropriations through grant close-out,

provided input and recommendations

on ways to improve the grants process.

Furthermore, the team researched the

discretionary grants processes of other

Federal agencies, including the National

Science Foundation and the National

Institutes of Health.

The team presented its preliminary

design for the new discretionary grants

process in May of 1995 at a design

review conference for Department staff

and customers. Based on participant

recommendations and comments, the

team made changes and refinements to

the design. In December of 1995, the

final design was approved for

implementation by the Department’s

Executive Management Committee. Pilot

tests of various aspects of the new

process were conducted during fiscal

year 1996 by several departmental

program offices, and additional

refinements were made based on the

results of an external evaluation. The

Department began to implement the

approved redesigned discretionary

grants process on October 1, 1996. Some

of the most noticeable changes

implemented since 1996 include:

eliminating the Department’s

centralized grants office and forming

discretionary grant teams in the

Department’s program offices that

provide ‘‘one-stop shopping’’ for both

grants administration and programmatic

information; eliminating unnecessary

and time-consuming processes such as

grant negotiations prior to award; and

establishing partnerships with

Department grantees to ensure

successful project outcomes.

III. The Team’s Findings

Although the team gathered data on

all phases of the Department’s

discretionary grants process, the

majority of comments and suggestions

from customers and staff alike focused

on the review of grant applications—a

crucial activity that plays a major role

in determining which applicants will be

funded.

A. Review Procedures

The team’s analysis of the

Department’s current application review

process showed that the same basic

review procedures are generally used for

all program competitions, regardless of

the number of applications received, the

average amount of the awards, or the

nature of the program. Both staff and

customers questioned whether it was

cost-effective and efficient for the

Department to employ the same review

Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules 20699

procedures for the smallest grants as it

does for the largest, most complex

grants.

Perhaps more importantly, they

questioned whether using the same

standard review procedures for each of

the Department’s highly diverse

programs would ultimately result in the

selection of the best projects that would

meet unique program goals.

The team determined that the two

most common elements of the

Department’s application review

process are: (1) using numerical scores

to rate applications and (2) using

primarily ‘‘outside reviewers’’ to review

applications; that is, experts who are not

employees of the Federal Government.

1. Numerical Scores

Under current practice, the

Department establishes the maximum

numerical score that an application may

receive under a set of selection criteria

for a competition. The Department then

selects panels of reviewers to rate the

applications under these selection

criteria. Each member of a peer review

panel rates applications by assigning

numerical scores under the selection

criteria. The scores of individual panel

members are typically averaged together

or, in some cases, added together by

Department staff to produce a panel

score for each application. Based on the

panel scores, Department staff prepare

rank order lists of the applications to

assist in making funding determinations

Some departmental program offices

also use a statistical standardization

process that adjusts the scores of each

reviewer to eliminate biases that result

from the scoring preferences of certain

reviewers. For example, some reviewers

may consistently score all assigned

applications higher or lower than other

reviewers.

Because often there are so many

highly qualified applications that score

very close together, the Department may

need to calculate scores to one-tenth or

even one one-hundredth of a point to

determine the rank order. For example,

due to limited program funds, the

Department might be able to fund an

application scoring 97.2. However, an

application scoring 97.1, only one-tenth

of a point less, may not be funded.

2. Peer Reviewers

Both Department staff and customers

placed great importance on the

qualifications of the peer reviewers.

Customers indicated that they expected

a review process that assured a fair and

high quality application review by

trained reviewers with appropriate

backgrounds and subject matter

expertise.

Department staff stressed the

importance of using high-quality

reviewers, but also indicated significant

challenges in engaging ‘‘outside’’

reviewers. Often, qualified, prospective

reviewers have numerous professional

commitments that preclude their

participation in the Department’s review

process. Further, for certain program

specialty areas, the pool of qualified

experts to draw from is limited and the

experts’ time and services are in high

demand.

B. Inexperienced Applicants

Many unsuccessful applicants, as well

as grantees who had received a grant

only after submitting numerous

unsuccessful applications, expressed

frustrations and concerns about the

difficulty that inexperienced applicants

have in obtaining Department

discretionary grant funding. These

customers felt that there was not always

a ‘‘level playing field’’ among applicants

competing for grants. They noted

several factors inhibiting success,

including the lack of organizational

resources to hire professional grant

writers with a proven track record for

producing winning proposals, and the

lack of resources to establish

institutional grant or sponsored research

offices with the mission of securing

grant funding.

C. Building Better Projects

Although the primary goal of the

application review process is to identify

high quality projects that are worthy of

funding, customers indicated that they

expected additional benefits from the

Department’s review process. Numerous

customers stated that thoughtful,

substantive reviewers’ comments

identifying the strengths and

weaknesses of the proposed project

were critical to both the successful

applicant and the unsuccessful

applicant.

Successful applicants felt that

receiving substantive reviewers’

comments prior to the start of their grant

was an especially timely and helpful

tool for improving an already highquality project. Unsuccessful applicants

felt that reviewers’ comments

identifying weaknesses in their

proposed project and suggestions for

improvement would help them

strengthen their proposals for the next

competition. Both successful and

unsuccessful applicants saw

constructive reviewers’ comments as a

form of technical assistance that should

be an integral part of the review process.

IV. Goals for the Redesigned

Application Review Process

In redesigning the discretionary grants

process, particularly the application

review process, the team had several

goals:

• Given the range and diversity of the

Department’s discretionary grant

programs, program offices should have

the flexibility to employ procedures for

reviewing and selecting grants that most

closely meet their individual program

needs and result in the selection of

quality projects and the timely award of

grants.

• Regardless of the application review

procedures the Department uses for a

particular program, the Department

must ensure that, in all cases, trained

and qualified reviewers, with

appropriate backgrounds and expertise,

conduct a high quality review.

• The entire discretionary grants

process must be fair, efficient, costeffective, and result in the issuance of

grant awards when the customers need

them.

V. The Redesigned Application Review

Process

The redesigned application review

process increases the options available

for reviewing and selecting grants so

that the Department can better tailor the

method used for a competition to meet

the needs of the program. Program

offices could continue to use current

review and selection methods, but

would be encouraged to examine the

appropriateness of using the new

methods for their competitions.

A. Quality Band Ratings

The redesigned application review

process presents a new option for rating

applications that focuses on a

qualitative description of the

application’s merit, rather than a

quantitative description (i.e., numerical

scores). Under the redesigned process,

the Department could request that

reviewers group applications of

comparable merit into quality bands,

rather than using numerical ratings to

score and rank applications. The

reviewers would place applications into

one of five possible groupings or quality

bands to denote distinctions in quality

among the applications. Quality bands

would range from highest to lowest

quality (i.e., ‘‘Excellent,’’ ‘‘Very Good,’’

‘‘Good,’’ ‘‘Fair’’ and ‘‘Unacceptable’’).

Under the quality band system of

rating applications, all of the

applications that place in a particular

quality band would be considered

comparable in quality, and therefore,

the Department could support funding

20700 Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules

any of the applications in a fundable

quality band.

In any competition using quality

bands, the Department would rely

heavily on the professional judgement

of the reviewers in the rating of

applications. The individual reviewers

would be instructed to provide strong

written justifications for the quality

band rating assigned to each

application, and include comments that

identify the strengths and weaknesses of

the application. In addition to justifying

the ratings that a reviewer has given to

an application, constructive narrative

reviewers’ comments provide critical

technical assistance that can help

successful applicants improve and

refine their projects and will help

unsuccessful applicants improve the

quality of their proposals for the next

competition. Peer reviewers would

receive training by Department staff

prior to the start of the review regarding

how to provide constructive comments

that are integral to the quality band

rating system.

The Department would first fund all

of the applications in the highest quality

band (i.e., the ‘‘Excellent’’ band) and

then proceed to fund all of the

applications in the next band (i.e., the

‘‘Very Good’’ band), and so on, until all

of the applications in the last band that

merits funding have been funded. If

faced with the inability to fund all of the

applications in a particular quality band

due to limited program funds, the

Secretary would have discretion in

determining which applications to fund

within the band. As recommended by

the team, in exercising that discretion,

the Secretary might use a random

selection procedure to select

applications from within the band until

available funds were exhausted.

Because the Department could commit

to funding any of the applications in

that particular quality band, a random

selection procedure is both a feasible

and fair way of selecting among

applications in a quality band.

It should be noted that the

Department has experience with

qualitative ratings in specific program

competitions. Several Department

programs, such as the Technology

Innovation Challenge Grants Program

and the Field-Initiated Studies Research

Grant Program, have used qualitative

rating systems. In reviewing the

applications, reviewers provided

written justifications supporting the

qualitative ratings assigned to each

application and comments focusing on

the strengths and weaknesses of the

applications.

B. Staff Panel Reviews

Another application review option

recommended by the team was the

increased use of review panels

comprised solely of highly qualified

Department staff. This review option is

available currently to Department

programs, but is not widely used.

However, the Department believes

that this kind of review process might

be appropriate for programs in which

the awards issued were of a relatively

small size or in which a high percentage

of the applications under the program

would ultimately be funded. Further, in

competitions involving a multiple tier

review process, in which two or three

review panels or tiers evaluate

applications, Department staff might be

used by program offices to participate in

one of the initial tiers of review to help

determine which applications should be

forwarded to the next tier for further

consideration.

The team noted the following

beneficial aspects of using an internal

review and evaluation process for

certain program competitions: (1) A

high quality review is conducted by ‘‘inhouse’’ Department experts, with

appropriate backgrounds and subject

matter expertise, who are familiar with

the laws, regulations, and policies

affecting the program and (2) the review

process is more cost-effective and

efficient, as the need to conduct

application reviews off-site is reduced

or eliminated, and the fiscal and

logistical considerations of recruiting,

selecting, and engaging non-Federal

readers is reduced, or, in some cases,

eliminated.

C. Novice Applicants

In order to address customer concerns

about the difficulties that inexperienced

applicants face in getting discretionary

grant funding from the Department, the

team recommended that, if legally

permissible and consistent with the

intent and purpose of the program,

Department program offices could set

aside funds to be awarded to novice

applicants. The team suggested a

streamlined application process for

novice applicants, consisting of a brief

application, submitted by the applicants

for a smaller than average grant under

the program; review and evaluation by

Department staff members to establish

that the applications are of sufficient

quality to merit funding; use of a

random selection process when the

Department does not have sufficient

funds to fund all of the qualified novice

applications; and closer monitoring and

technical assistance after award for

novice grantees.

To meet individual program needs,

program offices might use other review

and selection procedures to assist

novice applicants in obtaining funding.

For example, instead of conducting a

separate competition for novice

applicants, a program office might hold

only one competition open to all eligible

applicants, including novice applicants.

Under a competitive preference for a

program competition using numerical

scores, a novice applicant could receive

a certain number of additional points

based on its status as a novice. Likewise,

in a program competition using quality

bands, the Secretary could take into

consideration the applicants’ ‘‘novice’’

status in making funding decisions. For

example, if all of the applications in a

quality band could not be funded due to

limited program funds, the Secretary

could fund all, or a certain percentage

of the novice applications in that band

before funding other applications in that

band.

In all cases, novice grantees would be

required to follow the same regulations

and requirements as other grantees

under the program, and, as mentioned

earlier, more stringent conditions might

be imposed, if needed, on novice

grantees, such as more frequent

monitoring by the Department.

VI. Section-by-Section Analysis of the

Proposed Regulations

A. Section 75.105 Annual Priorities

This section would be amended to

reflect the use of annual priorities in

competitions that use quality bands to

evaluate applications. Under proposed

paragraph (c)(2)(i)(B) of this section,

when selecting applications in quality

bands, the Secretary may consider the

extent to which or how well the

application meets the priority in

selecting applications for funding.

The following hypothetical example

illustrates how this would work. The

Secretary publishes an application

notice for a competition under the ABC

School Technology Program, telling

applicants that the Secretary will use

quality bands to evaluate applications.

The notice also states that the Secretary

will give competitive preference to

applications under this competition

based on the extent to which or how

well an application meets the following

priority: significant involvement by

members of the business community in

the design and implementation of the

project. In response to the application

notice, the Secretary receives many

applications under the ABC School

Technology Program. The Secretary has

sufficient funds to select all of the

applications in the ‘‘Excellent’’ band,

Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules 20701

but only has sufficient funds to select 10

of the 30 applications in the ‘‘Very

Good’’ band. Twelve of the 30

applications in the ‘‘Very Good’’ band

address the priority.

In deciding which 10 applications to

fund, the Secretary may consider the

extent to which or how well the 12

applications address the priority. The

Secretary may conclude, after reviewing

the applications and the peer reviewers’

comments, that eight of the 12

applications extensively address the

priority and provide detailed

information about how the applicant

would implement the priority. The

Secretary would select the 8 applicants

that effectively addressed the priority,

before funding other applications.

The Secretary would document how

the Secretary made the decision as to

which of the eight applications

addressed the priority effectively such

that they deserved to be selected over

other applications and would include

that documentation in the file for each

application that addressed the priority.

The four applications that did not

address the priority effectively enough

to be given priority selection would be

treated as equal to the 18 remaining

applications that did not address the

priority at all. The Secretary would then

select the final two applications from

the remaining 22 applications. The

Secretary either could use random

selection, or could rely on information

regarding the selection criteria or other

requirements relevant to the selection of

applications in making the final

selection, regardless of whether the

applications addressed the priority.

A. Section 75.201 How the Selection

Criteria Will Be Used.

This section would be amended to

state that the application package or

notice published in the Federal Register

provided to applicants includes certain

information for competitions that use

quality bands to evaluate applications.

B. Section 75.209 Selection Criteria

Based on Statutory Provisions

This section would be amended to

reflect how the Secretary would use

statutory criteria, along with other

criteria established by the Department,

in competitions that use quality bands

to evaluate applications.

C. Section 75.217 How Does the

Secretary Select Applications for

Grants?

Paragraph (c) of this section would be

revised to reflect the use of quality

bands to evaluate applications. Under

proposed paragraph (d), the Secretary

would continue to make the final

decision as to which applications to

fund, whether the Secretary used rank

ordering or quality bands. The proposed

regulations would continue the

Secretary’s authority to determine

which applications to fund after

considering the information in the

application, and the quality of the

application, as determined under

paragraph (c). Proposed paragraph (d)

would also retain the provision that the

Secretary could consider more

information than was available to

reviewers to make sure that all factors

were properly weighed in the selection

process. For example, a group of

reviewers might rank an application

very high. However, the Secretary might

have information about the applicant’s

unsatisfactory past performance under

prior Department grants (e.g., improper

use of funds or failure to achieve its

approved project goals and objectives).

The Secretary could consider this

information under paragraph (d)(1)(iii)

and decide not to fund the application.

A new paragraph (e) would be added

to reflect the Secretary’s ability to refuse

consideration of applications that do not

meet a minimum cut-off score or

minimum quality band rating. The

Secretary would have flexibility in

deciding whether the cut-off score or

quality band rating should be

established in the application notice for

the competition or after determining the

overall quality of applications submitted

under a competition.

D. Section 75.223 What Procedures

Apply When the Secretary Uses Quality

Bands to Evaluate Applications?

A new section 75.223 would be added

to describe the procedures the Secretary

would use under competitions that use

quality bands to evaluate applications.

These proposed regulations would

permit reviewers to group applications

under the following five quality bands:

‘‘Excellent,’’ ‘‘Very Good,’’ ‘‘Good,’’

‘‘Fair,’’ and ‘‘Unacceptable.’’ Under

proposed § 75.223(b), the Secretary

would not fund any application placed

in the ‘‘Unacceptable’’ band.

In cases where the Secretary selected

an application for funding from the

‘‘Fair’’ band, the Secretary would

maintain, in the grant file, changes the

applicant made to the application

showing how the applicant addressed

those aspects of the proposed grant that

were lacking. Further, the Secretary

could impose additional requirements

on the grant to ensure that those aspects

that were lacking in the original

application are implemented properly.

Under proposed paragraph (c) of this

section the experts would rate the

applications against the program’s

selection criteria and then group

applications of comparable merit into

the same quality band, so that there

would be no rank order within a quality

band.

Proposed paragraph (d) would add a

provision outlining what would happen

if the Secretary grouped applications in

non-numerical quality bands and there

were more applications within any one

quality band worthy of funding than

available funds would allow. In such

situations, the Secretary would use his

discretion to select applications and

could select randomly from within the

quality band in exercising that

discretion.

Proposed paragraph (d) would also

address the possibility that different

members of a panel might put the same

application in different quality bands. In

these cases, the Secretary would have to

resolve the conflict, using all available

information. For example, if two

reviewers rated an application in the

‘‘Very Good’’ and one rated the

application in the ‘‘Excellent’’ band, the

Secretary might conclude that the

application should be considered with

the applications that were rated in the

‘‘Very Good’’ band, as that view

predominated in the consideration of

the reviewers. In other cases, the

Secretary might find that one of the

reviewers misunderstood portions of the

application and misjudged the

application. This might produce a threereviewer split, where one member rated

the application in the ‘‘Excellent’’ band,

one member rated the application in the

‘‘Very Good’’ band and the third

member rated the application in the

‘‘Unacceptable’’ band. If the Secretary

determined that the third reviewer

misjudged the application, the Secretary

would look at the ratings of the other

two reviewers to decide in which band

to rate the application. This kind of

judgement is similar to what happens

under the current system, when the

Secretary decides not to fund an

application that was within the funding

range because the average of the scores

for an application was unjustifiably high

due to a misreading of the application

by one of the reviewers.

The Secretary would direct employees

of the Department who act as

competition managers or monitors to

point out to reviewers variances in

evaluations so these kinds of conflicts

can be resolved in most cases during the

review process. In any case, these issues

would be resolved before the Secretary

makes final selection decisions. In no

case would a reviewer be directed to

change an evaluation, only to consider

whether the reviewer fully considered

all of the information in the application.

20702 Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules

The Secretary will monitor the

development of the Department’s use of

quality bands to determine if any further

regulatory clarification is needed to

resolve issues that may arise from

reviewers placing applications in

different quality bands.

E. Section 75.224 What Are the

Procedures for Using a Multiple Tier

Review Process To Evaluate

Applications?

Proposed § 75.224 would codify a

practice that has evolved in some

program offices of the Department

involving the use of more than one

review of an application. This review by

more than one group of reviewers is

known as ‘‘multiple tier review.’’ A

multiple tier review process might be

used by a program office to gain

different perspectives on an application.

For example, one panel of researchers

and another panel of practitioners might

be asked to review the applications for

a particular program competition. More

commonly, a multiple tier review

process is used to narrow the pool of

applicants that will be considered for

funding. After the first or second tiers of

the review, only some of the

applications are forwarded to the next

tier for further consideration. Under the

multiple tier review process, the

Secretary could refuse to consider an

application in the second or third tier of

review if it did not meet a minimum

score or place in a certain minimum

quality band level in the previous tier’s

review. The Secretary could establish

the minimum score or quality band

either in the application notice for the

competition or after considering the

overall range in the quality of the

applications. For example, if a large

number of the applications were rated

in the ‘‘Excellent’’ and ‘‘Very Good’’

bands in the first tier of the review, and

funds were only available to fund a

small number of the applications, the

Secretary could decide to eliminate

from further review any applications

that rated below the ‘‘Excellent’’ band.

When a multiple tier review process

is used as a means for narrowing the

pool of applications that will be

considered for funding, it would not be

unusual for an application to receive a

considerably different rating in the

second or third tier than it did under the

previous tier’s review, even from the

same reviewers. Although the reviewers

in the second or third tier are still rating

applications under the same selection

criteria, the applications are now being

reviewed within the context of a higher

quality pool of applications, which has

the potential for affecting the reviewers’

rating practices. For this reason, the

Secretary does not believe that these

differences in ratings indicate errors in

judgement at the prior tier.

The Secretary would also have

discretion under proposed paragraph (d)

to refuse consideration of an application

that was rejected by any one of the

groups evaluating the application in the

same tier. For example, in a competition

for a major statistical grant, the

Secretary might choose at the first tier

to have applications reviewed by a

panel of statisticians and another panel

of educators and citizens. If the

statistical panel found the statistical

model of an application valid but the

panel of educators and citizens found

that the result of the applicant’s analysis

would not advance education issues, the

Secretary could refuse to consider that

application in the next tier of the review

process.

F. Section 75.225 What Procedures

Does the Secretary Use if the Secretary

Decides to Give Special Consideration to

Novice Applicants?

Proposed new section 75.225 would

be added to respond to the concerns of

some applicants that they could not get

a grant from the Department unless they

had already received a grant. Proposed

section 75.225 (a) would define novice

applicants as applicants that have never

received a grant or a subgrant from the

Department program under which they

seek funding, and have not had an

active discretionary grant from the

Federal Government in the five years

before the deadline date for applications

under the program.

In cases where an applicant had

participated in a group that received a

grant from the Department, such as a

consortium or partnership, but had not

acted as the grantee (fiscal agent) under

the regulations for group applications in

§§ 75.127–75.129, the applicant would

not be treated as having had a previous

grant under that program. However, if

the applicant had been the grantee for

the group application, then the

applicant would be treated as having

had a grant under the program that

made the award.

When applying for assistance under a

program that would use the novice

application procedures, an applicant

that met the definition of ‘‘novice

applicant’’ and wanted to receive

special consideration as a novice

applicant would check a box on the

Department’s Application for Federal

Education Assistance form (ED 424) to

certify that it met all novice applicant

requirements for the funding program.

Under proposed paragraph (c), the

Secretary would have discretion in

appropriate circumstances to set up a

separate competition for novice

applicants. This novice competition

would not be used when the

Department would be funding a highly

complicated research project, or large

projects that would require coordination

among a group of organizations. As an

example, the Department could set up a

novice competition in which novice

applicants compete for small ‘‘seed

money’’ grants and are required to

submit only brief applications

addressing how they meet the selection

criteria for the program. The

information about how the novice

competition would be managed would

appear in the application notice for the

competition.

The Secretary would also have

discretion under proposed paragraph (c)

to give special consideration to novice

applications as part of a competition not

explicitly restricted to novice

applicants. If the Secretary chose this

means of considering novice

applications in a rank-order

competition, the Secretary would give a

novice application a certain number of

additional points, as stated in the

application notice for the competition,

based on its status as a novice. Also, as

mentioned earlier in this preamble, a

program office using quality band

ratings could give priority to novice

applications by selecting a certain

percentage of, or all, novice applications

within a band before selecting other

applications in that band.

Finally, proposed paragraph (d)

would authorize the Secretary to place

special conditions on a novice grantee

to help ensure that it successfully

completes the project. For example, to

facilitate close monitoring of the grant,

the novice grantee might be required to

submit performance reports on a

quarterly basis.

Clarity of the Regulations

Executive Order 12866 and the

President’s Memorandum of June 1,

1998 on ‘‘Plain Language in Government

Writing’’ require each agency to write

regulations that are easy to understand.

The Secretary invites comments on

how to make these proposed regulations

easier to understand, including answers

to questions such as the following:

• Are the requirements in the

proposed regulations clearly stated?

• Do the proposed regulations contain

technical terms or other wording that

interferes with their clarity?

• Does the format of the proposed

regulations (grouping and order of

sections, use of headings, paragraphing,

etc.) aid or reduce their clarity?

• Would the proposed regulations be

easier to understand if we divided them

Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules 20703

into more (but shorter) sections? (A

‘‘section’’ is preceded by the symbol

‘‘§ ’’ and a numbered heading; for

example, § 75.217 How the Secretary

selects applications for new grants.)

• Could the description of the

proposed regulations in the

SUPPLEMENTARY INFORMATION section of

this preamble be more helpful in

making the proposed regulations easier

to understand? If so, how?

• What else could we do to make the

proposed regulations easier to

understand?

Send any comments that concern how

the Department could make these

proposed regulations easier to

understand to the person listed in the

ADDRESSES section of the preamble.

Regulatory Flexibility Act Certification

The Secretary certifies that these

proposed regulations would not have a

significant economic impact on a

substantial number of small entities.

The small entities affected would be

small local educational agencies, tribal

governments, community-based

organizations, nonprofit organizations,

and institutions of higher education.

The novice applicant procedures in

these regulations would benefit small

entities by giving them a greater

opportunity to receive awards from the

Department. The flexibility in these

regulations would benefit all entities,

including small entities, by improving

customer service and increasing the

quality of the application review

process.

Paperwork Reduction Act of 1995

These proposed regulations do not

contain any information collection

requirements.

Intergovernmental Review

These proposed regulations are not

subject to the requirements of Executive

Order 12372 and the regulations in 34

CFR part 79. However, many of the

programs that these proposed

regulations would apply to are subject

to Executive Order 12372 and the

regulations in 34 CFR part 79.

Assessment of Educational Impact

The Secretary particularly requests

comments on whether the proposed

regulations would require transmission

of information that any other agency or

authority of the United States gathers or

makes available.

Electronic Access to This Document

You may view this document, as well

as all other Department of Education

documents published in the Federal

Register, in text or Adobe Portable

Document Format (PDF) on the Internet

at either of the following sites:

http://ocfo.ed.gov/fedreg.htm

http://www.ed.gov/news.html

To use the PDF you must have the

Adobe Acrobat Reader Program with

Search, which is available free at either

of the previous sites. If you have

questions about using the PDF, call the

U.S. Government Printing Office (GPO),

toll free, at 1–888–293–6498; or in the

Washington, D.C., area at (202) 512–

1530.

Note: The official version of this document

is the document published in the Federal

Register. Free Internet access to the official

edition of the Federal Register and the Code

of Federal Regulations is available on GPO

Access at: http://www.access.gpo.gov/nara/

index.html

(Catalog of Federal Domestic Assistance

Number does not apply.)

List of Subjects in 34 CFR Part 75

Administrative practice and

procedure, Education Department, Grant

programs—education, Grant

administration, Incorporation by

reference, Performance reports,

Reporting and recordkeeping

requirements, Unobligated funds.

Dated: April 12, 2000.

Richard W. Riley,

Secretary of Education.

For the reasons discussed in the

preamble, the Secretary proposes to

amend part 75 of title 34 of the Code of

Federal Regulations as follows:

PART 75—DIRECT GRANT

PROGRAMS

1. The authority citation for Part 75

continues to read as follows:

Authority: 20 U.S.C. 1221e–3 and 3474,

unless otherwise noted.

2. Section 75.105 is amended by

revising paragraph (c)(2)(i) to read as

follows:

§ 75.105 Annual priorities.

* * * * *

(c) * * *

(2) * * *

(i)(A) If the Secretary prepares a rank

order of the applications, the Secretary

may assign some or all bonus points to

an application depending upon the

extent to which or how well the

application meets the priority. These

points are in addition to any points the

applicant earns under the selection

criteria (see § 75.200(b)). The

application notice states the maximum

number of additional points that the

Secretary may award to an application

depending upon the extent to which or

how well the application meets the

priority.

(B) If the Secretary selects

applications in quality bands, the

Secretary may consider the extent to

which or how well the application

meets the priority in selecting

applications.

* * * * *

3. Section 75.201 is revised to read as

follows:

§ 75.201 How the selection criteria will be

used.

(a) In the application package or a

notice published in the Federal

Register, the Secretary informs

applicants of—

(1) The selection criteria chosen;

(2) The factors selected for

considering the selection criteria, if any;

and

(3) The Secretary’s decision whether

to prepare a rank order of applications

or group applications in non-numerical

quality bands. (See 34 CFR 75.217(c))

(b) If the Secretary prepares a rank

order of applications, the Secretary also

informs applicants of—

(1) The total possible score for all of

the criteria for a competition; and

(2) The assigned weight or maximum

possible score for each criterion or

factor under that criterion.

(c) If the Secretary prepares a rank

order of applications and no points or

weights are assigned to the selection

criteria and factors used for the

competition, the Secretary evaluates

each selection criterion equally and

within each criterion, each factor

equally.

(Authority: 20 U.S.C. 1221e–3 and 3474)

4. Section 75.209 is amended by

revising paragraph (a)(2) to read as

follows.

§ 75.209 Selection criteria based on

statutory provisions.

(a) * * *

* * * * *

(2)(i) If the Secretary prepares a rank

order of applications, assigning the

maximum possible score for each of the

criteria established under paragraph

(a)(1) of this section.

(ii) If the Secretary groups

applications in non-numerical quality

bands, the Secretary considers statutory

criteria with the other criteria under

§ 75.223(c).

* * * * *

5. Section 75.217 is revised to read as

follows:

§ 75.217 How does the Secretary select

applications for new grants?

(a) The Secretary selects applications

for new grants on the basis of the

authorizing statute, the selection

20704 Federal Register / Vol. 65, No. 74 / Monday April 17, 2000 / Proposed Rules

criteria, and any priorities or other

requirements that have been published

in the Federal Register and apply to the

selection of applications.

(b)(1) The Secretary may use experts

to evaluate the applications submitted

under a competition.

(2) These experts may include

individuals who are not employees of

the Federal Government.

(c) Based solely on the evaluation of

the quality of the applications according

to the selection criteria, the Secretary

either—

(1) Prepares a rank order of the

applications; or

(2) Groups applications into nonnumerical quality bands in accordance

with the procedures in § 75.223.

(d) The Secretary determines the

order in which applications will be

selected, after considering the following:

(1) The information in each

application.

(2) The quality of the applications as

determined under § 75.217(c).

(3) Any other information—

(i) Relevant to a criterion, priority, or

other requirement that applies to the

selection of applications for new grants;

(ii) Concerning the applicant’s

performance and use of funds under a

previous award under any Department

program; and

(iii) Concerning the applicant’s failure

under any Department program to

submit a performance report or its

submission of a performance report of

unacceptable quality.

(e)(1) The Secretary may refuse to

consider applications that do not meet

a minimum cut-off score or minimum

quality band.

(2) The Secretary may establish the

minimum cut-off score or quality

band—

(i) In the application notice published

in the Federal Register; or

(ii) After reviewing the applications to

determine the overall range in the

quality of applications received.

(Authority: 20 U.S.C. 1221e–3 and 3474)

5. New §§ 75.223, 75.224 and 74.225

are added to subpart D under the

undersignated center heading ‘‘selection

procedures’’ to read as follows:

§ 75.223 What procedures apply when the

Secretary uses quality bands to evaluate

applications?

(a) If the Secretary uses quality bands

to evaluate applications, the quality

bands are—

(1) Excellent, if the application is

outstanding in all respects and deserves

the highest priority for support;

(2) Very good, if the application is of

high quality in nearly all respects and

should be supported if at all possible;

(3) Good, if the application is a

quality proposal that is worthy of

support;

(4) Fair, if the application is

acceptable but lacking in one or more

aspects and there are issues that need to

be addressed before it can be considered

for funding;

(5) Unacceptable, if the application

has serious deficiencies and should not

be funded.

(b) The Secretary does not fund any

application that is placed in the

Unacceptable band.

(c) The experts must assign an overall

band rating for each application, after

considering the quality of the

application under each criterion.

(d) If there are more applications

within any one quality band than can be

funded with remaining funds, the

Secretary decides which applications to

fund based solely on the Secretary’s

discretion and may select randomly in

exercising that discretion.

(Authority: 20 U.S.C. 1221e–3 and 3474).

§ 75.224 What are the procedures for

using a multiple tier review process to

evaluate applications?

(a) The Secretary may use a multiple

tier review process to evaluate

applications.

(b) The Secretary may refuse to review

applications in any tier that do not meet

a minimum cut-off score or minimum

quality band established for the prior

tier.

(c) The Secretary may establish the

minimum cut-off score or quality

band—

(1) In the application notice published

in the Federal Register; or

(2) After reviewing the applications to

determine the overall range in the

quality of applications received.

(d) The Secretary may, in any tier—

(1) Use more than one group of

experts to gain different perspectives on

an application; and

(2) Refuse to consider an application

if the application is rejected under

paragraph (b) of this section by any one

of the groups used in the prior tier.

(Authority: 20 U.S.C. 1221e–3 and 3474)

§ 75.225 What procedures does the

Secretary use if the Secretary decides to

give special consideration to novice

applications?

(a) As used in this section, ‘‘Novice

applicant’’ means an applicant for a

grant from ED that—

(1) Has never received a grant or

subgrant under the program from which

it seeks funding; and

(2) Has not had an active

discretionary grant from the Federal

Government in the five years before the

deadline date for applications under the

program.

(b) For the purposes of paragraph

(a)(2) of this section, a grant is active

until the end of the grant’s project or

funding period, including any

extensions of those periods that extend

the grantee’s authority to obligate funds.

(c) If the Secretary determines that

special consideration of novice

applications is appropriate, the

Secretary may either—

(1) Establish a separate competition

for novice applicants; or

(2) Give competitive preference to

novice applicants under the procedures

in 34 CFR 75.105(c)(2).

(d) Before making a grant to a novice

applicant, the Secretary imposes special

conditions, if necessary, to ensure the

grant is managed effectively and project

objectives are achieved.

(Authority: 20 U.S.C. 1221e–3 and 3474)

[FR Doc. 00–9558 Filed 4–14–00; 8:45 am]

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