69250 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

factor(s), as deemed necessary by 

official personnel. This would ensure 

issuance of an accurate grade. 

Comment Review 

GIPSA received no comments during 

the comment period. 

Final Action 

Accordingly, GIPSA is revising 7 CFR 

868.1 to redefine the definitions of 

appeal and Board appeal inspection 

services, and revising the regulatory text 

in 7 CFR 868.60 to revise the conditions 

for requesting appeal and Board appeal 

inspection services. 

List of Subjects in 7 CFR Part 868 

Administrative practice and 

procedure, Agricultural commodities. 

■ For reasons set out in the preamble, 7 

CFR part 868 is proposed to be amended 

as follows: 

PART 868—GENERAL REGULATIONS 

AND STANDARDS FOR CERTAIN 

AGRICULTURAL COMMODITIES 

■ 1. The authority citation for part 868 

continues to read as follows: 

Authority: Secs. 202–208, 60 Stat. 1087, as 

amended (7 U.S.C. 1621, et seq.) 

■ 2. Section 868.1, paragraphs (b)(3), 

and (b)(6) are revised to read as follows: 

§ 868.1 Meaning of terms. 

* * * * * 

(b) * * * 

(3) Appeal inspection service. A 

review by the Service of the result(s) of 

an original inspection or retest 

inspection service. 

* * * * * 

(6) Board appeal inspection service. A 

review by the Board of Appeals and 

Review of the result(s) of an original 

inspection or appeal inspection service 

on graded commodities. 

* * * * * 

■ 3. Section 868.60, paragraph (b) and 

the OMB citation at the end of the 

section are revised to read as follows: 

§ 868.60 Who may request appeal 

inspection service. 

* * * * * 

(b) Kind and scope of request. When 

the results for more than one kind of 

service are reported on a certificate, an 

appeal inspection or Board appeal 

inspection service, as applicable, may 

be requested on any or all kinds of 

services reported on the certificate. The 

scope of an appeal inspection service 

will be limited to the scope of the 

original inspection or, in the case of a 

Board appeal inspection service, the 

original or appeal inspection service. A 

request for appeal inspection of a retest 

inspection will be based upon the scope 

of the original inspection. If the request 

specifies a different scope, the request 

shall be dismissed. Provided, however, 

that an applicant for service may request 

an appeal or Board appeal inspection of 

specific factor(s) or official grade and 

factors. In addition, appeal and Board 

appeal inspection for grade may include 

a review of any pertinent factor(s), as 

deemed necessary by official personnel. 

(Approved by the Office of Management and 

Budget under control number 0580–0013). 

James E. Link, 

Administrator, Grain Inspection, Packers and 

Stockyards Administration. 

[FR Doc. 05–22586 Filed 11–14–05; 8:45 am] 

BILLING CODE 3410–EN–M 

DEPARTMENT OF ENERGY 

10 CFR Parts 600 and 603 

RIN 1991–AB72 

Assistance Regulations 

AGENCY: Department of Energy. 

ACTION: Interim final rule. 

SUMMARY: The Department of Energy 

(DOE) is adding a new part to the DOE 

assistance regulations to establish 

policies and procedures to implement 

the ‘‘other transaction authority’’

granted to the Secretary of Energy by 

section 1007 of the Energy Policy Act of 

2005. DOE has decided to implement 

other transaction authority through the 

award and administration of technology 

investment agreements (TIAs). TIAs are 

a new class of assistance instrument for 

DOE, but they have been used by the 

Department of Defense (DoD) for many 

years to support or stimulate defense 

research projects involving for-profit 

firms, especially commercial firms that 

do business primarily in the commercial 

marketplace. The new part 603 is 

similar to the DoD regulation; both 

provide contracting officers greater 

flexibility to negotiate award provisions 

in areas that can present barriers to 

those commercial firms (e.g., 

intellectual property, audits, and cost 

principles). DOE also is revising 10 CFR 

part 600, subpart A, to conform it with 

the new part. 

DATES: Effective Date: This interim final 

rule is effective on March 15, 2006. 

Comment Date: Written comments must 

be received by December 15, 2005. 

ADDRESSES: You may submit comments, 

identified by RIN Number 1991–AB72, 

by any of the following methods: 

1. E-mail to trudy.wood@hq.doe.gov. 

Include RIN 1991–AB72 and ‘‘TIA’’ in 

the subject line of the e-mail. Please 

include the full body of your comments 

in the text of the message or as an 

attachment. 

2. Federal eRulemaking Portal: 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

3. Mail: Address the comments to 

Trudy Wood, U.S. Department of 

Energy, Office of Procurement and 

Assistance Policy (ME–61), 1000 

Independence Avenue, SW., 

Washington, DC 20585. Due to potential 

delays in DOE’s receipt and processing 

of mail sent through the U.S. Postal 

Service, we encourage respondents to 

submit comments electronically to 

ensure timely receipt. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Trudy Wood, Office of Procurement and 

Assistance Policy, Department of 

Energy, at 202–827–1336. 

SUPPLEMENTARY INFORMATION: 

I. Background 

II. Discussion of Rule Provisions 

III. Discussion on Conforming Changes to 10 

CFR Part 600 

IV. Procedural Requirements 

A. Review Under Executive Order 12866 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act 

D. Review Under the National 

Environmental Policy Act 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under the Treasury and General 

Government Appropriations Act, 2001 

J. Review Under Executive Order 13211 

K. Review Under the Small Business 

Regulatory Enforcement Fairness Act 

V. Approval of the Office of the Secretary of 

Energy 

I. Background 

Section 1007 of the Energy Policy Act 

of 2005 (Pub. L. 109–58) amends section 

646 of the Department of Energy (DOE) 

Organization Act by adding a subsection 

(g) which authorizes the Secretary of 

Energy to enter into transactions (other 

than contracts, cooperative agreements, 

and grants) subject to the same terms 

and conditions as the Secretary of 

Defense under section 2371 of title 10, 

United States Code. Pursuant to 10 

U.S.C. 2371, the Department of Defense 

(DoD) has developed types of 

cooperative agreements and other 

transactions to support research with 

potential for both commercial and 

defense applications. In 1997, DoD 

issued interim guidance that merged 

various cooperative agreements and 

other transactions that were similar to 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69251 

each other into a single class of 

assistance instruments called 

technology investment agreements 

(TIAs). DoD published a regulation in 

2003 (68 FR 47150, August 7, 2003) 

establishing policies and procedures for 

the award and administration of TIAs. 

Today DOE is publishing interim final 

regulations as a new part 603 to the DOE 

assistance regulations to establish 

policies and procedures to implement 

the Department’s ‘‘other transaction 

authority.’’ These regulations were 

developed on an expedited basis in 

order to comply with the statutory 

requirement to issue guidance within 90 

days of enactment of the Energy Policy 

Act of 2005. DOE will continue to 

review and evaluate transactions 

authorized and carried out by other 

Federal agencies under similar 

authority. This evaluation, which will 

be considered in formulating the final 

rule as well as internal guidance, 

includes an assessment of training and 

experience requirements for contracting 

officers, the use of independent audits, 

cost sharing, tracking of transactions, 

and knowledge management. The 

Department is seeking public comment 

on these interim final regulations in 

accordance with subsection 646(g)(6)(B) 

of the DOE Organization Act. Consistent 

with subsection 646(g)(6)(C) of the same 

Act, DOE will not carry out any 

transactions under section 646 until 

DOE considers comments received in 

response to this notice and makes the 

guidelines final. 

DOE used the DoD TIA regulation as 

the basis for developing the new part 

603, but tailored the regulation to fit 

DOE requirements and procedures. 

Today’s rule permits DOE to enter into 

a TIA, a special type of assistance 

instrument, with a for-profit firm or a 

consortium that includes a for-profit 

firm after a determination is made that 

a contract, grant, or cooperative 

agreement is not feasible or appropriate. 

A TIA can be either a type of 

cooperative agreement with more 

flexible provisions tailored to 

accommodate the financial 

management, property management, 

and purchasing systems of commercial 

firms, but with standard intellectual 

property provisions, or a transaction 

‘‘other than’’ a grant or cooperative 

agreement if the intellectual property 

requirements vary from the Bayh-Dole 

statute (Chapter 18 of Title 35, U.S.C.) 

and the DOE patent statutes (42 U.S.C. 

5908 and 42 U.S.C 2182). The two types 

of TIAs have similar requirements 

except for the intellectual property 

requirements. 

DOE is also amending the existing 10 

CFR part 600, subpart A, which 

establishes general requirements for 

financial assistance awards. The 

revision extends the application of 

subpart A to TIAs. 

II. Discussion of Rule Provisions 

Part 603 is similar to the DoD Grant 

and Agreements Regulations, 32 CFR 

part 37, Technology Investment 

Agreements. Like the DoD regulation, 

the new part 603 provides guidance to 

DOE contracting officers who award or 

administer TIAs, rather than to the TIA 

recipient. However, potential TIA 

recipients may have an interest in part 

603 because it tells the contracting 

officer how to craft award terms and 

conditions that legally bind the 

recipient. The following paragraphs 

describe the subparts of part 603 and 

highlight some of the major 

requirements. 

Subpart A contains general 

information about TIAs. It explains the 

purpose, form and uses of a TIA and 

identifies other DOE assistance 

regulations that apply to the award and 

administration of a TIA. 

Subpart B describes when the 

contracting officer may use a TIA. 

Section 603.210 limits the use of a 

TIA to instances when a for-profit firm 

is the recipient, a member of a 

consortium, or is involved in the 

commercial application of the results of 

the project. The section states that a TIA 

is particularly useful for an award to a 

consortium because such collaborations 

build new relationships among 

performers in the technology base, 

which can improve the overall quality 

of the research, development, and 

demonstration (RD&D), and provide a 

self-governance mechanism. The more 

flexible terms and conditions of a TIA 

often make it easier to accommodate the 

needs of commercial firms that do not 

traditionally do business with the 

government. 

Section 603.215 states that recipients 

are to provide, to the maximum extent 

practicable, at least half of the costs of 

the RD&D project. The purpose of cost 

sharing is to ensure that recipients have 

a vested interest in the project’s success. 

Section 603.230 states that contracting 

officers may not use a TIA if a recipient 

is to receive fee or profit. The basis for 

the policy is that fee or profit, while 

appropriate for a procurement contract 

used in a buyer-seller relationship, is 

not appropriate for an assistance 

instrument used to accomplish a public 

purpose of support or stimulation in a 

project of mutual interest to the 

recipient and the Government. 

Subpart C addresses expenditurebased and fixed-support TIAs. An 

expenditure-based TIA is somewhat 

analogous to a cost-type procurement 

contract or grant. A fixed-support TIA is 

somewhat analogous to a fixed-price 

procurement contract. Section 603.315 

describes the advantages of a fixedsupport TIA, which include reducing or 

eliminating post-award requirements 

that may be a disincentive for a 

commercial firm to participate in the 

RD&D. 

Subpart D states the policy to use 

competitive procedures to award TIAs. 

It also discusses the format and content 

of the program announcement or 

announcement. 

Subpart E addresses contracting 

officer’s responsibilities, prior to 

awarding TIAs, for determining that 

potential recipients are qualified and 

evaluating business aspects of the 

proposed transaction. The contracting 

officer must analyze funding, cost 

sharing and the ability of the recipient 

to successfully complete the project. In 

addition, if the recipient is a consortium 

that is not formally incorporated, the 

contracting officer must examine the 

collaboration agreement to ensure that 

the management plan is sound and that 

there is an effective working 

relationship among the members. 

Subparts F and G specify 

administrative requirements for TIAs. 

Subpart F addresses organization-wide 

system requirements for financial 

management, property management, 

and purchasing. To reduce 

administrative burden, the general 

policy is to have each type of 

organization that participates in a TIA 

continue to use its present 

administrative systems. Subpart G 

addresses award-specific administrative 

requirements, such as payment 

methods, revision of budget and 

program plans, intellectual property, 

reporting, and termination and 

enforcement. 

Overall, subparts F and G give 

contracting officers considerable 

latitude to negotiate award provisions in 

areas that sometimes are sources of 

concern for commercial firms. 

Two portions of subpart F may be of 

particular interest to potential 

recipients. Sections 603.640 through 

603.675 address audit requirements for 

expenditure-based TIAs. Under 

§ 603.650, contracting officers may 

authorize use of Independent Public 

Accountants (IPAs) for audits of forprofit firms under certain conditions. 

When IPAs are used, § 603.660 requires 

the audits to be performed in 

accordance with the Generally Accepted 

Government Auditing Standards 

(GAGAS) issued by the Government 

Accountability Office (GAO). Much of 

the GAGAS parallel the Generally 

69252 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

Accepted Auditing Standards used by 

the private sector. 

Section 603.680 of subpart F 

establishes the general policy for capital 

assets, including equipment that forprofit firms may need to perform the 

RD&D under TIAs. The policy calls for 

allowing a firm to charge to an 

expenditure-based TIA only 

depreciation or use charges for real 

property and equipment used on a TIA, 

except in certain circumstances. The 

contracting officer may grant an 

exception and permit a firm to charge 

the full acquisition cost of a capital asset 

to the RD&D project. However, if the full 

acquisition cost of the capital asset is 

charged to the award, § 603.680 

provides that although the recipient 

takes title to the property, the property 

is subject to the disposition process in 

10 CFR 600.321(f). 

A portion of subpart G may be of 

particular interest to potential 

recipients. Sections 603.840 through 

§ 603.875 address data and patent rights 

and provide contracting officers 

guidelines for negotiating provisions 

appropriate to a wide variety of 

circumstances that may arise. 

Subpart H details contracting officer’s 

responsibilities at the time of award. 

The section that may be of most interest 

to potential TIA recipients is § 603.1010, 

which lists substantive issues that must 

be addressed in the award document. 

Subpart I addresses internal agency 

procedures for post-award 

administration. 

Subpart J includes definitions used in 

this part. The definitions in 10 CFR 

600.3 also apply to TIAs. 

III. Discussion of Conforming Changes 

to 10 CFR Part 600 

Today’s rule makes the following 

conforming changes to 10 CFR part 600, 

subpart A. 

1. Under the authority paragraph, the 

rule adds the authority that allows DOE 

to enter into transactions that are other 

than contracts, cooperative agreements 

or grants. 

2. In § 600.1, the rule amends the last 

sentence to make subpart A apply to 

technology investment agreements as 

well as grants and cooperative 

agreements and states that the guidance 

for technology investment agreements is 

contained in part 603. 

3. In § 600.6(c), the rule amends the 

paragraph to make the noncompetitive 

financial assistance requirements 

applicable to TIAs as well as grants and 

cooperative agreements. 

4. In § 600.8(a), the rule amends the 

paragraph to make the program 

announcement requirements applicable 

to TIAs as well as grants and 

cooperative agreements. 

5. In § 600.16(b), the rule amends the 

paragraph to make the provision 

applicable to TIAs as well as grants and 

cooperative agreements and adds the 

appropriate cites for awards made under 

subpart D and part 603. 

6. In § 600.17, the rule amends the 

paragraph to clarify that the Notice of 

Financial Assistance Award form (DOE 

F 4600.1) is required only for grants and 

cooperative agreements awarded under 

part 600. 

7. In § 600.23, the rule corrects the 

cite for the debarment and suspension 

procedures. The debarment and 

suspension procedures also apply to 

TIAs and are referenced in part 603. 

8. In § 600.26(a), the rule amends the 

paragraph to state that the project period 

must be specified in the award since the 

Notice of Financial Assistance Award 

(DOE Form 4600.1) is not appropriate 

for TIAs. 

IV. Procedural Requirements 

A. Review Under Executive Order 12866 

Today’s regulatory action has been 

determined not to be ‘‘a significant 

regulatory action’’ under Executive 

Order 12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (October 4, 1993). 

Accordingly, this action is not subject to 

review under that Executive Order by 

the Office of Information and Regulatory 

Affairs (OIRA) of the Office of 

Management and Budget (OMB). 

B. Review Under Regulatory Flexibility 

Act of 1980 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis for any rule that by law must 

be proposed for public comment, unless 

the agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. As required by 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking’’ (67 FR 53461, 

August 16, 2002), DOE published 

procedures and policies to ensure that 

the potential impacts of its draft rules 

on small entities are properly 

considered during the rulemaking 

process (68 FR 7990, February 19, 2003), 

and has made them available on the 

Office of General Counsel’s Web site: 

http://www.gc.doe.gov. DOE has 

reviewed today’s interim final rule 

under the provisions of the Regulatory 

Flexibility Act and the procedures and 

policies published on February 19, 

2003. This regulatory action will not 

have a significant adverse impact on a 

substantial number of small entities 

because under part 603, small entities 

are subject either to requirements that 

parallel government-wide requirements 

that OMB Circular A–110 establishes for 

other assistance awards, or to less 

burdensome requirements that enable 

firms from the commercial marketplace 

to participate in DOE research, 

development, and demonstration. On 

the basis of the foregoing, DOE certifies 

that the interim final rule does not have 

a significant economic impact on a 

substantial number of small entities. 

DOE did not prepare a regulatory 

flexibility analysis for this rulemaking. 

C. Review Under the Paperwork 

Reduction Act of 1995 

This regulatory action will not impose 

any additional reporting or 

recordkeeping requirements subject to 

approval under the Paperwork 

Reduction Act. Participant reporting 

and recordkeeping requirements in part 

603 either are parallel to, or less 

burdensome than, government-wide 

requirements already established in 

OMB Circular A–110. 

D. Review Under the National 

Environmental Policy Act 

DOE has concluded that promulgation 

of this rule falls into a class of actions 

that would not individually or 

cumulatively have a significant impact 

on the human environment, as 

determined by DOE’s regulations 

implementing the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321 et seq.). Specifically, this 

rule establishes guidelines and 

procedures for application and review, 

administration, audit and closeout of 

assistance instruments, and, therefore, is 

covered under the Categorical Exclusion 

in paragraph A6 to subpart D, 10 CFR 

part 1021. Accordingly, neither an 

environmental assessment nor an 

environmental impact statement is 

required. 

E. Review Under Executive Order 13132 

Executive Order 13132, 64 FR 43255 

(August 4, 1999), imposes certain 

requirements on agencies formulating 

and implementing policies or 

regulations that preempt State law or 

that have federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and carefully assess the necessity 

for such actions. The Executive Order 

also requires agencies to have an 

accountable process to ensure 

meaningful and timely input by State 

and local officials in the development of 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69253 

regulatory policies that have federalism 

implications. On March 14, 2000, DOE 

published a statement of policy 

describing the intergovernmental 

consultation process it will follow in the 

development of such regulations (65 FR 

13735). DOE has examined today’s 

proposed rule and has determined that 

it does not preempt State law and does 

not have a substantial direct effect on 

the States, on the relationship between 

the national government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government. No further action 

is required by Executive Order 13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform,’’ 61 FR 4729 (February 7, 1996), 

imposes on Federal agencies the general 

duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. Section 3(b) of 

Executive Order 12988 specifically 

requires that Executive agencies make 

every reasonable effort to ensure that the 

regulation: (1) Clearly specifies the 

preemptive effect, if any; (2) clearly 

specifies any effect on existing Federal 

law or regulation; (3) provides a clear 

legal standard for affected conduct 

while promoting simplification and 

burden reduction; (4) specifies the 

retroactive effect, if any; (5) adequately 

defines key terms; and (6) addresses 

other important issues affecting clarity 

and general draftsmanship under any 

guidelines issued by the Attorney 

General. Section 3(c) of Executive Order 

12988 requires Executive agencies to 

review regulations in light of applicable 

standards in section 3(a) and section 

3(b) to determine whether they are met 

or it is unreasonable to meet one or 

more of them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, this rule 

meets the relevant standards of 

Executive Order 12988. 

G. Review Under the Unfunded 

Mandates Act of 1995 

This regulatory action does not 

contain a Federal mandate that will 

result in the expenditure by State, local, 

and tribal governments, in aggregate, or 

by the private sector of $100 million or 

more in any one year. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule or policy that may affect 

family well-being. Today’s rule will not 

have any impact on the autonomy or 

integrity of the family as an institution. 

Accordingly, DOE has concluded that it 

is not necessary to prepare a Family 

Policymaking Assessment. 

I. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

The Treasury and General 

Government Appropriations Act, 2001, 

44 U.S.C. 3516 note, provides for 

agencies to review most disseminations 

of information to the public under 

implementing guidelines established by 

each agency pursuant to general 

guidelines issued by OMB. OMB’s 

guidelines were published at 67 FR 

8452 (February 22, 2002), and DOE’s 

guidelines were published at 67 FR 

62446 (October 7, 2002). DOE has 

reviewed today’s interim final rule 

under the OMB and DOE guidelines and 

has concluded that it is consistent with 

applicable policies in those guidelines. 

J. Review Under Executive Order 13211 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use, 66 FR 28355 (May 

22, 2001), requires Federal agencies to 

prepare and submit to OIRA a Statement 

of Energy Effects for any proposed 

significant energy action. A ‘‘significant 

energy action’’ is defined as any action 

by an agency that promulgated or is 

expected to lead to promulgation of a 

final rule, and that: (1) Is a significant 

regulatory action under Executive Order 

12866, or any successor order and (2) is 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy, or (3) is designated by the 

Administrator of OIRA as a significant 

energy action. For any proposed 

significant energy action, the agency 

must give a detailed statement of any 

adverse effects on energy supply, 

distribution, or use should the proposal 

be implemented, and of reasonable 

alternatives to the action and their 

expected benefits on energy supply, 

distribution, and use. Today’s regulatory 

action is not a significant energy action. 

Accordingly, DOE has not prepared a 

Statement of Energy Effects. 

K. Review Under the Small Business 

Regulatory Enforcement Fairness Act 

As required by 5 U.S.C. 801, DOE will 

report to Congress on the promulgation 

of today’s rule prior to its effective date. 

The report will state that it has been 

determined that the rule is not a ‘‘major 

rule’’ as defined by 5 U.S.C. 801(2). 

V. Approval of the Office of the 

Secretary of Energy 

The Office of the Secretary has 

approved the issuance of this rule. 

List of Subjects 

10 CFR Part 600 

Administrative practice and 

procedure, Assistance programs. 

10 CFR Part 603 

Accounting, administrative practice 

and procedure, Financial assistance 

programs, Grant programs, Reporting 

and recordkeeping requirements, 

Technology investments. 

Issued in Washington, DC on November 7, 

2005. 

Richard H. Hopf, 

Director, Office of Procurement and 

Assistance Management, Office of 

Management, Department of Energy. 

Robert C. Braden, 

Director, Office of Acquisition and Supply 

Management, National Nuclear Security 

Administration. 

■ For the reasons stated in the preamble, 

part 600 of chapter II, title 10 of the 

Code of Federal Regulations, is 

amended as follows: 

PART 600—FINANCIAL ASSISTANCE 

RULES 

■ 1. The authority citation for part 600 

continues to read as follows: 

Authority: 42 U.S.C. 7101 et seq.; 31 U.S.C. 

6301–6308; 50 U.S.C. 2401 et seq., unless 

otherwise noted. 

§ 600.1 [Amended] 

■ 2. Section 600.1, the last sentence is 

revised to read as follows: 

§ 600.1 Purpose. 

* * * This subpart (Subpart A) sets 

forth the general policies and 

procedures applicable to the award and 

administration of grants, cooperative 

agreements, and technology investment 

agreements. The specific guidance for 

technology investment agreements is 

contained in part 603. 

§ 600.6 [Amended] 

■ 3. In § 600.6(c), the first sentence is 

amended by removing ‘‘grant or 

cooperative agreement’’ and adding 

‘‘grant, cooperative agreement, or 

69254 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

technology investment agreement’’ in 

lieu thereof. 

§ 600.8 [Amended] 

■ 4. In § 600.8(a), the first sentence is 

amended by removing ‘‘grant or 

cooperative agreement’’ and adding 

‘‘grant, cooperative agreement, or 

technology investment agreement’’ in 

lieu thereof. 

§ 600.16 [Amended] 

■ 5. Section 600.16(b) is amended as 

follows: 

■ a. The first sentence is amended by 

removing ‘‘grant or cooperative 

agreement’’ and adding ‘‘grant, 

cooperative agreement, or technology 

investment agreement’’ in lieu thereof. 

■ b. The first sentence is amended by 

removing ‘‘§§ 600.125(e) or 600.230 of 

this part’’ and adding ‘‘§§ 600.125(e), 

600.230, 600.317(b), or 603.830’’ in lieu 

thereof. 

§ 601.17 [Amended] 

■ 6. Section 600.17 is amended by 

removing ‘‘Each financial assistance 

award’’ and adding ‘‘Each grant and 

cooperative agreement awarded under 

this part’’ in lieu thereof. 

§ 601.23 [Amended] 

■ 7. Section 600.23 is amended by 

removing ‘‘10 CFR part 1036’’ and 

adding ‘‘10 CFR part 606’’ in lieu 

thereof. 

§ 600.26 [Amended] 

■ 8. Section 600.26(a) is amended by 

removing ‘‘on the Notice of Financial 

Assistance Award (DOE Form 4600.1)’’

and adding ‘‘in the award document’’ in 

lieu thereof. 

■ 9. Part 603 is added to read as follows: 

PART 603—TECHNOLOGY 

INVESTMENT AGREEMENTS 

Subpart A—General 

Sec. 

603.100 Purpose. 

603.105 Description. 

603.110 Use of TIAs. 

603.115 Approval requirements. 

603.120 Contracting officer warrant 

requirements. 

603.125 Applicability of other parts of the 

DOE Assistance Regulations. 

Subpart B—Appropriate Use of Technology 

Investment Agreements 

603.200 Contracting officer responsibilities. 

603.205 Nature of the project. 

603.210 Recipients. 

603.215 Recipient’s commitment and cost 

sharing. 

603.220 Government participation. 

603.225 Benefits of using a TIA. 

603.230 Fee or profit. 

Subpart C—Requirements for ExpenditureBased and Fixed-Support Technology 

Investment Agreements 

603.300 Difference between an expenditurebased and a fixed-support TIA. 

603.305 Use of a fixed-support TIA. 

603.310 Use of an expenditure-based TIA. 

603.315 Advantages of a fixed-support TIA. 

Subpart D—Competition Phase 

603.400 Competitive procedures. 

603.405 Announcement format. 

603.410 Announcement content. 

603.415 Cost sharing. 

603.420 Disclosure of information. 

Subpart E—Pre-Award Business Evaluation 

603.500 Pre-award business evaluation. 

603.505 Program resources. 

Recipient Qualification 

603.510 Recipient qualifications. 

603.515 Qualification of a consortium. 

Total Funding 

603.520 Reasonableness of total project 

funding. 

Cost Sharing 

603.525 Value and reasonableness of the 

recipient’s cost sharing contribution. 

603.530 Acceptable cost sharing. 

603.535 Value of proposed real property or 

equipment. 

603.540 Acceptability of fully depreciated 

real property or equipment. 

603.545 Acceptability of costs of prior 

RD&D. 

603.550 Acceptability of intellectual 

property. 

603.555 Value of other contributions. 

Fixed-Support or Expenditure-Based 

Approach 

603.560 Estimate of project expenditures. 

603.565 Use of a hybrid instrument. 

Accounting, Payments, and Recovery of 

Funds 

603.570 Determining milestone payment 

amounts. 

603.575 Repayment of Federal cost share. 

Subpart F—Award Terms Affecting 

Participants’ Financial, Property, and 

Purchasing Systems 

603.600 Administrative matters. 

603.605 General policy. 

603.610 Flow down requirements. 

Financial Matters 

603.615 Financial management standards 

for for-profit firms. 

603.620 Financial management standards 

for nonprofit participants. 

603.625 Cost principles or standards 

applicable to for-profit participants. 

603.630 Use of Federally-approved indirect 

cost rates for for-profit firms. 

603.635 Cost principles for nonprofit 

participants. 

603.640 Audits of for-profit participants. 

603.645 Periodic audits and award-specific 

audits of for-profit participants. 

603.650 Designation of auditor for for-profit 

participants. 

603.655 Frequency of periodic audits of forprofit participants. 

603.660 Other audit requirements. 

603.665 Periodic audits of nonprofit 

participants. 

603.670 Flow down audit requirements to 

subrecipients. 

603.675 Reporting use of IPA for 

subawards. 

Property 

603.680 Purchase of real property and 

equipment by for-profit firms. 

603.685 Management of real property and 

equipment by nonprofit participants. 

603.690 Requirements for Federally-owned 

property. 

603.695 Requirements for supplies. 

Purchasing 

603.700 Standards for purchasing systems 

of for-profit firms. 

603.705 Standards for purchasing systems 

of nonprofit organizations. 

Subpart G—Award Terms Related to Other 

Administrative Matters 

603.800 Scope. 

Payments 

603.805 Payment methods. 

603.810 Method and frequency of payment 

requests. 

603.815 Withholding payments. 

603.820 Interest on advance payments. 

Revision of Budget and Program Plans 

603.825 Government approval of changes in 

plans. 

603.830 Pre-award costs. 

Program Income 

603.835 Program income requirements. 

Intellectual Property 

603.840 Negotiating data and patent rights. 

603.845 Data rights requirements. 

603.850 Marking of data. 

603.855 Protected data. 

603.860 Rights to inventions. 

603.865 March-in rights. 

603.870 Marking of documents related to 

inventions. 

603.875 Foreign access to technology and 

U.S. Competitiveness provisions. 

Financial and Programmatic Reporting 

603.880 Reporting requirements. 

603.885 Updated program plans and 

budgets. 

603.890 Final performance report. 

603.895 Protection of information in 

programmatic reports. 

603.900 Receipt of final performance report. 

Records Retention and Access Requirements 

603.905 Record retention requirements. 

603.910 Access to a for-profit participant’s 

records. 

603.915 Access to a nonprofit participant’s 

records. 

Termination and Enforcement 

603.920 Termination and enforcement 

requirements. 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69255 

Subpart H—Executing the Award 

603.1000 Contracting officer’s 

responsibilities at time of award. 

The Award Document 

603.1005 General responsibilities. 

603.1010 Substantive issues. 

603.1015 Execution. 

Reporting Information About the Award 

603.1020 File documents. 

Subpart I—Post-Award Administration 

603.1100 Contracting officer’s post-award 

responsibilities. 

603.1105 Advance payments or payable 

milestones. 

603.1110 Other payment responsibilities. 

603.1115 Single audits. 

603.1120 Award-specific audits. 

Subpart J—Definitions of Terms Used in 

this Part 

603.1205 Advance. 

603.1210 Articles of collaboration. 

603.1215 Assistance. 

603.1220 Award-specific audit. 

603.1225 Cash contributions. 

603.1230 Commercial firm. 

603.1235 Consortium. 

603.1240 Cooperative agreement. 

603.1245 Cost sharing. 

603.1250 Data. 

603.1255 Equipment. 

603.1260 Expenditure-based award. 

603.1265 Expenditures or outlays. 

603.1270 Grant. 

603.1275 In-kind contributions. 

603.1280 Institution of higher education. 

603.1285 Intellectual property. 

603.1290 Participant. 

603.1295 Periodic audit. 

603.1300 Procurement contract. 

603.1305 Program income. 

603.1310 Program official. 

603.1315 Property. 

603.1320 Real property. 

603.1325 Recipient. 

603.1330 Supplies. 

603.1335 Termination. 

603.1340 Technology investment 

agreement. 

Appendix A to Part 603—Applicable Federal 

Statutes, Executive Orders, and 

Government-wide Regulations 

Appendix B to Part 603—Flow Down 

Requirements for Purchases of Goods 

and Services 

Authority: 42 U.S.C. 7101 et seq.; 31 U.S.C. 

6301–6308; 50 U.S.C. 2401 et seq., unless 

otherwise noted. 

Subpart A—General 

§ 603.100 Purpose. 

This part establishes uniform policies 

and procedures for the implementation 

of DOE’s ‘‘other transaction’’ authority 

and for award and administration of a 

technology investment agreement (TIA). 

§ 603.105 Description. 

(a) A TIA is a special type of 

assistance instrument used to increase 

involvement of commercial firms in the 

Department of Energy’s (DOE) research, 

development and demonstration (RD&D) 

programs. A TIA, like a cooperative 

agreement, requires substantial Federal 

involvement in the technical or 

management aspects of the project. A 

TIA may be either a type of cooperative 

agreement or a type of assistance 

transaction other than a cooperative 

agreement, depending on the 

intellectual property provisions. A TIA 

is either: 

(1) A type of cooperative agreement 

with more flexible provisions tailored 

for commercial firms (as distinct from a 

cooperative agreement subject to all of 

the requirements in 10 CFR 600), but 

with intellectual property provisions in 

full compliance with the DOE 

intellectual property statutes (i.e., BayhDole statute and 42 U.S.C. 2182 and 

5908, as implemented in 10 CFR 

600.325). The authority to award this 

type of TIA is 42 U.S.C. 7256(a), as well 

as any program-specific statute that 

provides authority to award cooperative 

agreements; or 

(2) An assistance transaction other 

than a cooperative agreement, if its 

intellectual property provisions vary 

from the Bayh-Dole statute and 42 

U.S.C. 2182 and 5908, which require the 

Government to retain certain 

intellectual property rights and require 

differing treatment between large 

businesses and nonprofit organizations 

or small businesses. The authority to 

award this type of TIA is 42 U.S.C. 

7256(g), as well as any program-specific 

statute that provides authority to award 

assistance agreements. 

(b) The two types of TIAs have similar 

requirements, except for the intellectual 

property requirements. If the contracting 

officer determines there is a unique, 

exceptional need to vary from the 

standard intellectual property 

requirements in 10 CFR 600.325, the 

TIA becomes an assistance transaction 

other than a cooperative agreement. 

§ 603.110 Use of TIAs. 

The ultimate goal for using a TIA is 

to broaden the technology base available 

to meet DOE mission requirements and 

foster within the technology base new 

relationships and practices to advance 

the national economic and energy 

security of the United States, to promote 

scientific and technological innovation 

in support of that mission, and to ensure 

the environmental cleanup of the 

national nuclear weapons complex. A 

TIA therefore is designed to: 

(a) Reduce barriers to participation in 

RD&D programs by commercial firms 

that deal primarily in the commercial 

marketplace. A TIA allows contracting 

officers to tailor Government 

requirements and lower or remove 

barriers if it can be done with proper 

stewardship of Federal funds. 

(b) Promote new relationships among 

performers in the technology base. 

Collaborations among commercial firms 

that deal primarily in the commercial 

marketplace, firms that regularly 

perform on the DOE RD&D programs 

and nonprofit organizations can 

enhance overall quality and 

productivity. 

(c) Stimulate performers to develop 

and use new business practices and 

disseminate best practices throughout 

the technology base. 

§ 603.115 Approval requirements. 

An officer of the Department who has 

been appointed by the President by and 

with the advice and consent of the 

Senate and who has been delegated the 

authority from the Secretary must 

approve the award of a TIA and may 

perform other functions of the Secretary 

as set forth in 42 U.S.C. 7256(g). This 

authority may not be re-delegated. The 

DOE or National Nuclear Security 

Administration (NNSA) Senior 

Procurement Executive also must 

concur in the award of a TIA. 

§ 603.120 Contracting officer warrant 

requirements. 

A contracting officer may award or 

administer a TIA only if the contracting 

officer’s warrant authorizes the award or 

administration of a TIA. 

§ 603.125 Applicability of other parts of the 

DOE Assistance Regulations. 

(a) TIAs are explicitly covered in this 

part and 10 CFR part 600, subpart A—

General. 10 CFR part 600, subpart A, 

addresses general matters that relate to 

assistance instruments. 

(b) Three additional parts of the DOE 

Assistance Regulations apply to TIAs, 

although they do not mention a TIA 

explicitly. They are: 

(1) 10 CFR part 601—lobbying 

restrictions apply by law (31 U.S.C. 

1352) to a TIA that is a cooperative 

agreement and as a matter of DOE policy 

to a TIA that is an assistance transaction 

other than a cooperative agreement. 

(2) 10 CFR part 606—debarment and 

suspension requirements apply because 

they cover nonprocurement instruments 

in general; and 

(3) 10 CFR part 607—drug-free workplace (financial assistance) requirements 

apply because they cover all assistance 

instruments. 

(c) Other portions of 10 CFR part 600 

apply to a TIA as referenced in part 603. 

69256 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

Subpart B—Appropriate Use of 

Technology Investment Agreements 

§ 603.200 Contracting officer 

responsibilities. 

Contracting officers may use a TIA 

only in appropriate situations. To do so, 

the use of a TIA must be justified based 

on: 

(a) The nature of the project, as 

discussed in § 603.205; 

(b) The type of recipient, addressed in 

§ 603.210; 

(c) The recipient’s commitment and 

cost sharing, as described in § 603.215; 

(d) The degree of involvement of the 

Government program official, as 

discussed in § 603.220; and 

(e) The contracting officer’s judgment 

that the use of a TIA could benefit the 

RD&D objectives in ways that likely 

would not happen if another type of 

instrument were used (i.e., a contract, 

grant or cooperative agreement is not 

feasible or appropriate). Answers to the 

four questions in § 603.225 form the 

basis for the contracting officer’s 

judgment. 

§ 603.205 Nature of the project. 

Judgments relating to the nature of the 

project include: 

(a) The principal purpose of the 

project is to carry out a public purpose 

of support or stimulation of RD&D (i.e., 

assistance), rather than acquiring goods 

or services for the benefit of the 

Government (i.e., acquisition); 

(b) To the maximum extent 

practicable, the TIA does not support 

RD&D that duplicates other RD&D being 

conducted under existing programs 

carried out by the DOE; and 

(c) The use of a standard contract, 

grant or cooperative agreement for the 

project is not feasible or appropriate (see 

questions in § 603.225). 

§ 603.210 Recipients. 

(a) A TIA requires one or more forprofit firms to be involved either in the: 

(1) Performance of the RD&D project; 

or 

(2) The commercial application of the 

results. 

(i) In those cases where there is only 

a non-profit performer or a consortium 

of non-profit performers or non-profit 

performs and FFRDC contractors, if and 

as authorized, the performers must have 

at least a tentative agreement with a 

specific for-profit partner or partners 

who plan on being involved in the 

commercial application of the results. 

(ii) In consultation with legal counsel, 

the contracting officer should review the 

agreement between the performers and 

their for-profit partner to ensure that the 

for-profit partner is committed to being 

involved in the commercial application 

of the results. 

(b) A TIA may be particularly useful 

for awards to consortia (a consortium 

may include one or more for-profit 

firms, as well as State or local 

government agencies, institutions of 

higher education, other nonprofit 

organizations, or FFRDC contractors, if 

and as authorized) because: 

(1) If multiple performers are 

participating as a consortium, they may 

be more equal partners in the 

performance of the project than usually 

is the case with a prime recipient and 

subawards. All of performers are more 

likely to be directly involved in 

developing and revising plans for the 

RD&D effort, reviewing technical 

progress, and overseeing financial and 

other business matters. That feature 

makes consortia well suited to building 

new relationships among performers in 

the technology base, a principal 

objective for the use of a TIA. 

(2) In addition, interactions among the 

participants within a consortium 

potentially provide a self-governance 

mechanism. The potential for additional 

self-governance is particularly good 

when a consortium includes multiple 

for-profit participants that normally are 

competitors within an industry. 

(c) A TIA may be used for carrying out 

RD&D performed by single firms or 

multiple performers (e.g., a teaming 

arrangement) in prime award-subaward 

relationships. In awarding a TIA in 

those cases, however, consideration 

should be given to providing for greater 

involvement of the program official or a 

way to increase self-governance (e.g., a 

prime award with multiple subawards 

arranged so as to give the subrecipients 

more insight into and authority and 

responsibility for the programmatic and 

business aspects of the overall project 

than they usually have). 

§ 603.215 Recipient’s commitment and 

cost sharing. 

(a) The contracting officer should 

evaluate whether the recipient has a 

strong commitment to and self-interest 

in the success of the project and 

incorporating the technology into 

products and processes for the 

commercial marketplace. Evidence of 

that commitment and interest should be 

found in the proposal, in the recipient’s 

management plan, or through other 

means. 

(b) The contracting officer must seek 

cost sharing. The purpose of cost share 

is to ensure that the recipient incurs real 

risk that gives it a vested interest in the 

project’s success; the willingness to 

commit to meaningful cost sharing is a 

good indicator of a recipient’s selfinterest. The requirements are that: 

(1) To the maximum extent 

practicable, the non-Federal parties 

carrying out a RD&D project under a TIA 

are to provide at least half of the costs 

of the project; and 

(2) The parties must provide the cost 

sharing from non-Federal resources 

unless otherwise provided by law. 

(c) The contracting officer may 

consider whether cost sharing is 

impracticable in a given case, unless 

there is a statutory requirement for cost 

sharing that applies to the particular 

program under which the award is to be 

made. Before deciding that cost sharing 

is impracticable, the contracting officer 

should carefully consider if there are 

other factors that demonstrate the 

recipient’s self-interest in the success of 

the current project. 

§ 603.220 Government participation. 

A TIA is used to carry out cooperative 

relationships between the Federal 

Government and the recipient(s) which 

require substantial involvement of the 

Government in the execution of the 

RD&D. For example, program officials 

will participate in recipients’ periodic 

reviews of progress and may be 

substantially involved with the 

recipients in the resulting revisions of 

plans for future effort. 

§ 603.225 Benefits of using a TIA. 

Before deciding that a TIA is 

appropriate, the contracting officer also 

must judge that using a TIA could 

benefit the RD&D objectives in ways that 

likely would not happen if another type 

of assistance instrument were used (e.g., 

a cooperative agreement subject to all of 

the requirements of 10 CFR part 600). 

The contracting officer, in conjunction 

with Government program officials, 

must consider the questions in 

paragraphs (a) through (d) of this 

section, to help identify the benefits that 

may justify using a TIA and reducing 

some of the usual requirements. The 

contracting officer must report the 

answers to these questions to help the 

DOE measure the benefits of using a 

TIA. Note full concise answers are 

required only to questions that relate to 

the benefits perceived for using the TIA, 

rather than another type of funding 

instrument, for the particular project. A 

simple ‘‘no’’ or ‘‘not applicable’’ is a 

sufficient response for other questions. 

The questions are: 

(a) Will the use of a TIA permit the 

involvement of any commercial firms or 

business units of firms that would not 

otherwise participate in the project? If 

so: 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69257 

(1) What are the expected benefits of 

those firms’ or divisions’ participation 

(e.g., is there a specific technology that 

could be better, more readily available, 

or less expensive)? 

(2) Why would they not participate if 

an instrument other than a TIA were 

used? The contracting officer should 

identify specific provisions of the TIA 

or features of the TIA award process that 

enable their participation. For example, 

if the RD&D effort is based substantially 

on a for-profit firm’s privately 

developed technology and the 

Government may be a major user of any 

commercial product developed as a 

result of the award, a for-profit firm may 

not participate unless the Government’s 

intellectual property rights in the 

technology are modified. 

(b) Will the use of a TIA allow the 

creation of new relationships among 

participants in a consortium, at the 

prime or subtier levels, among business 

units of the same firm, or between nonFederal participants and the Federal 

Government that will foster better 

technology? If so: 

(1) Why do these new relationships 

have the potential for fostering 

technology that is better, more 

affordable, or more readily available? 

(2) Are there provisions of the TIA or 

features of the TIA award process that 

enable these relationships to form? If so, 

the contracting officer should be able to 

identify specifically what they are. If 

not, the contracting officer should be 

able to explain specifically why the 

relationships could not be created if 

another type of assistance instrument 

were used. For example, a large 

business firm may not be willing to 

participate in a consortium or teaming 

arrangement with small business firms 

and nonprofit firms under a standard 

cooperative agreement because those 

entities have invention rights under the 

Bayh-Dole statute that are not available 

to large businesses. A large business 

firm may be willing to participate in a 

consortium or teaming arrangement 

only if all partners are substantially 

equal with regard to the allocation of 

intellectual property rights. 

(c) Will the use of a TIA allow firms 

or business units of firms that 

traditionally accept Government awards 

to use new business practices in the 

execution of the RD&D project that will 

foster better technology, new technology 

more quickly or less expensively, or 

facilitate partnering with commercial 

firms? If so: 

(1) What specific benefits result from 

the use of these new practices? The 

contracting officer should be able to 

explain specifically the potential for 

those benefits. 

(2) Are there provisions of the TIA or 

features of the TIA award process that 

enable the use of the new practices? If 

so, the contracting officer should be able 

to identify those provisions or features 

and explain why the practices could not 

be used if the award were made using 

another type of assistance instrument. 

(d) Are there any other benefits of the 

use of a TIA that could help DOE meet 

its objectives in carrying out the project? 

If so, the contracting officer should be 

able to identify specifically what they 

are, how they can help meet the 

objectives, what features of the TIA or 

award process enable DOE to realize 

them, and why the benefits likely would 

not be realized if an assistance 

instrument other than a TIA were used. 

§ 603.230 Fee or profit. 

The contracting officer may not use a 

TIA if any participant is to receive fee 

or profit. Note that this policy extends 

to all performers of the project, 

including any subawards for substantive 

program performance, but it does not 

preclude participants’ or subrecipients’

payment of reasonable fee or profit 

when making purchases from suppliers 

of goods (e.g., supplies and equipment) 

or services needed to carry out the 

RD&D. 

Subpart C—Requirements for 

Expenditure-Based and Fixed-Support 

Technology Investment Agreements 

§ 603.300 Difference between an 

expenditure-based and a fixed-support TIA. 

The contracting officer may negotiate 

expenditure-based or fixed-support 

award terms for either types of TIA 

subject to the requirements in this 

subpart. The fundamental difference 

between an expenditure-based and a 

fixed-support TIA is: 

(a) For an expenditure-based TIA, the 

amounts of interim payments or the 

total amount ultimately paid to the 

recipient are based on the amounts the 

recipient expends on project costs. If a 

recipient completes the project specified 

at the time of award before it expends 

all of the agreed-upon Federal funding 

and recipient cost sharing, the Federal 

Government may recover its share of the 

unexpended balance of funds or, by 

mutual agreement with the recipient, 

amend the agreement to expand the 

scope of the RD&D project. An 

expenditure-based TIA, therefore, is 

analogous to a cost-type procurement 

contract or grant. 

(b) For a fixed-support TIA, the 

amount of assistance is established at 

the time of award and is not meant to 

be adjusted later. In that sense, a fixedsupport TIA is somewhat analogous to 

a fixed-price procurement contract. 

§ 603.305 Use a fixed-support TIA. 

The contracting officer may use a 

fixed-support TIA if: 

(a) The agreement is to support or 

stimulate RD&D with outcomes that are 

well defined, observable, and verifiable; 

(b) The resources required to achieve 

the outcomes can be estimated well 

enough to ensure the desired level of 

cost sharing (see example in 

§ 603.560(b)); and 

(c) The agreement does not require a 

specific amount or percentage of 

recipient cost sharing. In cases where 

the agreement does require a specific 

amount or percentage of cost sharing, a 

fixed-support TIA is not practicable 

because the agreement has to specify 

cost principles or standards for costs 

that may be charged to the project; 

require the recipient to track the costs 

of the project; and provide access for 

audit to allow verification of the 

recipient’s compliance with the 

mandatory cost sharing. A fixed-support 

TIA may not be used if there is: 

(1) A requirement (e.g., in statute or 

policy determination) for a specific 

amount or percentage of recipient cost 

sharing; or 

(2) The contracting officer, in 

consultation with the program official, 

otherwise elects to include in the TIA a 

requirement for a specific amount or 

percentage of cost sharing. 

§ 603.310 Use of an expenditure-based 

TIA. 

In general, the contracting officer 

must use an expenditure-based TIA 

under conditions other than those 

described in § 603.305. Reasons for any 

exceptions to this general rule must be 

documented in the award file and must 

be consistent with the policy in 

§ 603.230 that precludes payment of fee 

or profit to participants. 

§ 603.315 Advantages of a fixed-support 

TIA. 

In situations where the use of a fixedsupport TIA is permissible (see 

§§ 603.305 and 603.310), its use may 

encourage some commercial firms’

participation in the RD&D. With a fixedsupport TIA, the contracting officer can 

eliminate or reduce some post-award 

requirements that sometimes are cited 

as disincentives for those firms to 

participate. For example, a fixedsupport TIA need not: 

(a) Specify minimum standards for 

the recipient’s financial management 

system; 

(b) Specify cost principles or 

standards stating the types of costs the 

recipient may charge to the project; 

69258 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

(c) Provide for financial audits by 

Federal auditors or independent public 

accountants of the recipient’s books and 

records; 

(d) Set minimum standards for the 

recipient’s purchasing system; or 

(e) Require the recipient to prepare 

financial reports for submission to the 

Federal Government. 

Subpart D—Competition Phase 

§ 603.400 Competitive procedures. 

DOE policy is to award a TIA using 

competitive procedures and a meritbased selection process, as described in 

10 CFR 600.6 and 600.13, respectively: 

(a) In every case where required by 

statute; and 

(b) To the maximum extent feasible, 

in all other cases. If it is not feasible to 

use competitive procedures, the 

contracting officer must comply with 

the requirements in 10 CFR 600.6(c). 

§ 603.405 Announcement format. 

The announcement must use the 

government-wide standard format for 

program announcements of funding 

opportunities (see 10 CFR 600.8). If the 

contracting officer, in consultation with 

the program official, decides that a TIA 

is among the types of instruments that 

may be awarded under an 

announcement, the additional elements 

described in §§ 603.410 through 603.420 

should be included in the 

announcement. 

§ 603.410 Announcement content. 

Once the contracting officer, in 

consultation with the program official, 

considers the factors described in 

Subpart B of this part and decides that 

a TIA is among the types of instruments 

that may be awarded pursuant to a 

program announcement, it is important 

to state that fact in the announcement. 

The announcement also should state 

that a TIA is more flexible than a 

traditional financial assistance 

agreement and that requirements are 

negotiable in areas such as audits and 

intellectual property rights that may 

cause concern for commercial firms. 

Doing so should increase the likelihood 

that commercial firms will be willing to 

submit proposals. 

§ 603.415 Cost sharing. 

To help ensure a competitive process 

that is fair and equitable to all potential 

proposers, the announcement should 

state clearly: 

(a) That, to the maximum extent 

practicable, the non-Federal parties 

carrying out a RD&D project under a TIA 

are to provide at least half of the costs 

of the project (see § 603.215(b)); 

(b) The types of cost sharing that are 

acceptable; 

(c) How any in-kind contributions 

will be valued, in accordance with 

§§ 603.530 through 603.555; and 

(d) Whether any consideration will be 

given to alternative approaches a 

proposer may offer to demonstrate its 

strong commitment to and self-interest 

in the project’s success, in accordance 

with § 603.215. 

§ 603.420 Disclosure of information. 

The announcement should tell 

potential proposers that: 

(a) For all TIAs, information described 

in paragraph (b) of this section is 

exempt from disclosure requirements of 

the Freedom of Information Act 

(FOIA)(codified at 5 U.S.C. 552) for a 

period of five years after the date on 

which the DOE receives the information 

from them; and 

(b) As provided in 42 U.S.C. 7256(g) 

incorporating certain provisions of 10 

U.S.C. 2371, disclosure is not required, 

and may not be compelled, under FOIA 

during that period if: 

(1) A proposer submits the 

information in a competitive or 

noncompetitive process that could 

result in the award of a TIA; and 

(2) The type of information is among 

the following types that are exempt: 

(i) Proposals, proposal abstracts, and 

supporting documents; and 

(ii) Business plans and technical 

information submitted on a confidential 

basis. 

(c) If proposers desire to protect 

business plans and technical 

information for five years from FOIA 

disclosure requirements, they must 

mark them with a legend identifying 

them as documents submitted on a 

confidential basis. After the five-year 

period, information may be protected 

for longer periods if it meets any of the 

criteria in 5 U.S.C. 552(b) (as 

implemented by the DOE in 10 CFR part 

1004) for exemption from FOIA 

disclosure requirements. 

Subpart E—Pre-Award Business 

Evaluation 

§ 603.500 Pre-award business evaluation. 

(a) The contracting officer must 

determine the qualification of the 

recipient, as described in §§ 603.510 

and 603.515. 

(b) As the business expert working 

with the program official, the 

contracting officer also must address the 

financial aspects of the proposed 

agreement. The contracting officer must: 

(1) Determine that the total amount of 

funding for the proposed effort is 

reasonable, as addressed in § 603.520. 

(2) Assess the value and determine 

the reasonableness of the recipient’s 

proposed cost sharing contribution, as 

discussed in §§ 603.525 through 

603.555. 

(3) If contemplating the use of a fixedsupport rather than expenditure-based 

TIA, ensure that its use is justified, as 

explained in §§ 603.560 and 603.565. 

(4) Determine amounts for milestone 

payments, if used, as discussed in 

§ 603.570. 

§ 603.505 Program resources. 

Program officials can be a source of 

information for determining the 

reasonableness of proposed funding 

(e.g., on labor rates, as discussed in 

§ 603.520) or establishing observable 

and verifiable technical milestones for 

payments (see § 603.570). 

Recipient Qualification 

§ 603.510 Recipient qualifications. 

Prior to award of a TIA, the 

contracting officer’s responsibilities for 

determining that the recipient is 

qualified are the same as those for 

awarding a grant or cooperative 

agreement. If the recipient is a 

consortium that is not formally 

incorporated, the contracting officer has 

the additional responsibility described 

in § 603.515. 

§ 603.515 Qualification of a consortium. 

(a) When the prospective recipient of 

a TIA is a consortium that is not 

formally incorporated, the contracting 

officer must also, in consultation with 

legal counsel, review the management 

plan in the consortium’s collaboration 

agreement to ensure that the 

management plan is sound and that it 

adequately addresses the elements 

necessary for an effective working 

relationship among the consortium 

members. An effective working 

relationship is essential to increase the 

project’s chances of success. 

(b) The collaboration agreement, 

commonly referred to as the articles of 

collaboration, is the document that sets 

out the rights and responsibilities of 

each consortium member. It binds the 

individual consortium members 

together. The document should discuss, 

among other things, the consortium’s 

(1) Management structure; 

(2) Method of making payments to 

consortium members; 

(3) Means of ensuring and overseeing 

members’ efforts on the project; 

(4) Provisions for members’ cost 

sharing contributions; and 

(5) Provisions for ownership and 

rights in intellectual property developed 

previously or under the agreement. 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69259 

Total Funding 

§ 603.520 Reasonableness of total project 

funding. 

In cooperation with the program 

official, the contracting officer must 

assess the reasonableness of the total 

estimated budget to perform the RD&D 

that will be supported by the agreement. 

(a) Labor. Much of the budget likely 

will involve direct labor and associated 

indirect costs, which may be 

represented together as a ‘‘loaded’’ labor 

rate. The program official is an essential 

advisor on reasonableness of the overall 

level of effort and its composition by 

labor category. The contracting officer 

also may rely on experience with other 

awards as the basis for determining 

reasonableness. 

(b) Real property and equipment. In 

almost all cases, the project costs should 

normally include only depreciation or 

use charges for real property and 

equipment of for-profit participants, in 

accordance with § 603.680. Remember 

that the budget for an expenditure-based 

TIA may not include depreciation of a 

participant’s property as a direct cost of 

the project if that participant’s practice 

is to charge the depreciation of that type 

of property as an indirect cost, as many 

organizations do. 

Cost Sharing 

§ 603.525 Value and reasonableness of the 

recipient’s cost sharing contribution. 

The contracting officer must: 

(a) Determine that the recipient’s cost 

sharing contributions meet the criteria 

for cost sharing and determine values 

for them, in accordance with §§ 603.530 

through 603.555. In doing so, the 

contracting officer must: 

(1) Ensure that there are affirmative 

statements from any third parties 

identified as sources of cash 

contributions, and 

(2) Include in the award file an 

evaluation that documents how the 

values of the recipient’s contributions to 

the funding of the project were 

determined. 

(b) Judge that the recipient’s cost 

sharing contribution, as a percentage of 

the total budget, is reasonable. To the 

maximum extent practicable, the 

recipient must provide at least half of 

the costs of the project, in accordance 

with § 603.215. 

§ 603.530 Acceptable cost sharing. 

The contracting officer may accept 

any cash or in-kind contributions that 

meet all of the following criteria. 

(a) In the contracting officer’s 

judgment, they represent meaningful 

cost sharing that demonstrates the 

recipient’s commitment to the success 

of the RD&D project. Cash contributions 

clearly demonstrate commitment and 

they are strongly preferred over in-kind 

contributions. 

(b) They are necessary and reasonable 

for accomplishment of the RD&D 

project’s objectives. 

(c) They are costs that may be charged 

to the project under § 603.625 and 

§ 603.635, as applicable to the 

participant making the contribution. 

(d) They are verifiable from the 

recipient’s records. 

(e) They are not included as cost 

sharing contributions for any other 

Federal award. 

(f) They are not paid by the Federal 

Government under another award, 

unless otherwise provided by law. 

§ 603.535 Value of proposed real property 

or equipment. 

The contracting officer rarely should 

accept values for cost sharing 

contributions of real property or 

equipment that are in excess of 

depreciation or reasonable use charges, 

as discussed in § 603.680 for for-profit 

participants. The contracting officer 

may accept the full value of a donated 

capital asset if the real property or 

equipment is to be dedicated to the 

project and the contracting officer 

expects that it will have a fair market 

value that is less than $5,000 at the 

project’s end. In those cases, the 

contracting officer should value the 

donation at the lesser of: 

(a) The value of the property as shown 

in the recipient’s accounting records 

(i.e., purchase price less accumulated 

depreciation); and 

(b) The current fair market value. The 

contracting officer may accept the use of 

any reasonable basis for determining the 

fair market value of the property. If 

there is a justification to do so, the 

contracting officer may accept the 

current fair market value even if it 

exceeds the value in the recipient’s 

records. 

§ 603.540 Acceptability of fully depreciated 

real property or equipment. 

The contracting officer should limit 

the value of any contribution of a fully 

depreciated asset to a reasonable use 

charge. In determining what is 

reasonable, the contracting officer must 

consider: 

(a) The original cost of the asset; 

(b) Its estimated remaining useful life 

at the time of the negotiations; 

(c) The effect of any increased 

maintenance charges or decreased 

performance due to age; and 

(d) The amount of depreciation that 

the participant previously charged to 

Federal awards. 

§ 603.545 Acceptability of costs of prior 

RD&D. 

The contracting officer may not count 

any participant’s costs of prior RD&D as 

a cost sharing contribution. Only the 

additional resources that the recipient 

will provide to carry out the current 

project (which may include pre-award 

costs for the current project, as 

described in § 603.830) are to be 

counted. 

§ 603.550 Acceptability of intellectual 

property. 

(a) In most instances, the contracting 

officer should not count costs of patents 

and other intellectual property (e.g., 

copyrighted material, including 

software) as cost sharing because: 

(1) It is difficult to assign values to 

these intangible contributions; 

(2) Their value usually is a 

manifestation of prior research costs, 

which are not allowed as cost share 

under § 603.545; and 

(3) Contributions of intellectual 

property rights generally do not 

represent the same cost of lost 

opportunity to a recipient as 

contributions of cash or tangible assets. 

The purpose of cost share is to ensure 

that the recipient incurs real risk that 

gives it a vested interest in the project’s 

success. 

(b) The contracting officer may 

include costs associated with 

intellectual property if the costs are 

based on sound estimates of market 

value of the contribution. For example, 

a for-profit firm may offer the use of 

commercially available software for 

which there is an established license fee 

for use of the product. The costs of the 

development of the software would not 

be a reasonable basis for valuing its use. 

§ 603.555 Value of other contributions. 

For types of participant contributions 

other than those addressed in 

§§ 603.535 through 603.550, the general 

rule is that the contracting officer is to 

value each contribution consistently 

with the cost principles or standards in 

§ 603.625 and § 603.635 that apply to 

the participant making the contribution. 

When valuing services and property 

donated by parties other than the 

participants, the contracting officer may 

use as guidance the provisions of 10 

CFR 600.313(b)(2) through (b)(5). 

Fixed-Support or Expenditure-Based 

Approach 

§ 603.560 Estimate of project 

expenditures. 

(a) To use a fixed-support TIA, rather 

than an expenditure-based TIA, the 

contracting officer must have 

confidence in the estimate of the 

69260 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

expenditures required to achieve welldefined outcomes. Therefore, the 

contracting officer must work carefully 

with program officials to select 

outcomes that, when the recipient 

achieves them, are reliable indicators of 

the amount of effort the recipient 

expended. However, the estimate of the 

required expenditures need not be a 

precise dollar amount, as illustrated by 

the example in paragraph (b) of this 

section, if: 

(1) The recipient is contributing a 

substantial share of the costs of 

achieving the outcomes, which must 

meet the criteria in § 603.305(a); and 

(2) The contracting officer is confident 

that the costs of achieving the outcomes 

will be at least a minimum amount that 

can be specified and the recipient is 

willing to accept the possibility that its 

cost sharing percentage ultimately will 

be higher if the costs exceed that 

minimum amount. 

(b) To illustrate the approach, 

consider a project for which the 

contracting officer is confident that the 

recipient will have to expend at least 

$800,000 to achieve the specified 

outcomes. The contracting officer must 

determine, in conjunction with program 

officials, the minimum level of recipient 

cost sharing required to demonstrate the 

recipient’s commitment to the success 

of the project. For purposes of this 

illustration, let that minimum recipient 

cost sharing be 60% of the total project 

costs. In that case, the Federal share 

should be no more than 40% and the 

contracting officer could set a fixed 

level of Federal support at $320,000 

(40% of $800,000). With that fixed level 

of Federal support, the recipient would 

be responsible for the balance of the 

costs needed to complete the project. 

(c) Note, however, that the level of 

recipient cost sharing negotiated should 

be based solely on the level needed to 

demonstrate the recipient’s 

commitment. The contracting officer 

may not use a shortage of Federal 

Government funding for the program as 

a reason to try to persuade a recipient 

to accept a fixed-support TIA, rather 

than an expenditure-based instrument, 

or to accept responsibility for a greater 

share of the total project costs than it 

otherwise is willing to offer. If there is 

insufficient funding to provide an 

appropriate Federal Government share 

for the entire project, the contracting 

officer should re-scope the effort 

covered by the agreement to match the 

available funding. 

§ 603.565 Use of a hybrid instrument. 

For a RD&D project that is to be 

carried out by a number of participants, 

the contracting officer may award a TIA 

that provides for some participants to 

perform under fixed-support 

arrangements and others to perform 

under expenditure-based arrangements. 

This approach may be useful, for 

example, if a commercial firm that is a 

participant will not accept an agreement 

with all of the post-award requirements 

of an expenditure-based award. Before 

using a fixed-support arrangement for 

that firm’s portion of the project, the 

agreement must meet the criteria in 

§ 603.305. 

Accounting, Payments, and Recovery of 

Funds 

§ 603.570 Determining milestone payment 

amounts. 

(a) If the contracting officer selects the 

milestone payment method (see 

§ 603.805), the contracting officer must 

assess the reasonableness of the 

estimated amount for reaching each 

milestone. This assessment enables the 

contracting officer to set the amount of 

each milestone payment to approximate 

the Federal share of the anticipated 

resource needs for carrying out that 

phase of the RD&D effort. 

(b) The Federal share at each 

milestone need not be the same as the 

Federal share of the total project. For 

example, the contracting officer might 

deliberately set payment amounts with 

a larger Federal share for early 

milestones if a project involves a startup company with limited resources. 

(c) For an expenditure-based TIA, if 

the contracting officer establishes 

minimum cost sharing percentages for 

each milestone, those percentages 

should be indicated in the agreement. 

(d) For a fixed-support TIA, the 

milestone payments should be 

associated with the well-defined, 

observable, and verifiable technical 

outcomes (e.g., demonstrations, tests, or 

data analysis) that are established for 

the project in accordance with 

§§ 603.305(a) and 603.560(a). 

§ 603.575 Repayment of Federal cost 

share. 

In accordance with the Energy Policy 

Act of 2005 (Pub. L. 109–58), section 

988(e), the contracting officer may not 

require repayment of the Federal share 

of a cost-shared TIA as a condition of 

making an award, unless otherwise 

authorized by statute. 

Subpart F—Award Terms Affecting 

Participants’ Financial, Property, and 

Purchasing Systems 

§ 603.600 Administrative matters. 

This subpart addresses ‘‘systemic’’

administrative matters that place 

requirements on the operation of a 

participant’s financial management, 

property management, or purchasing 

system. Each participant’s systems are 

organization-wide and do not vary with 

each agreement. Therefore, a TIA should 

address systemic requirements in a 

uniform way for each type of participant 

organization. 

§ 603.605 General policy. 

The general policy for an expenditurebased TIA is to avoid requirements that 

would force participants to use different 

financial management, property 

management, and purchasing systems 

than they currently use for: 

(a) Expenditure-based Federal 

procurement contracts and assistance 

awards in general, if they receive them; 

or 

(b) Commercial business, if they have 

no expenditure-based Federal 

procurement contracts and assistance 

awards. 

§ 603.610 Flow down requirements. 

If it is an expenditure-based award, 

the TIA must require participants to 

provide the same financial management, 

property management, and purchasing 

systems requirements to a subrecipient 

that would apply if the subrecipient 

were a participant. For example, a forprofit participant would require a 

university subrecipient to comply with 

the requirements that apply to a 

university participant. Note that this 

policy applies to subawards for 

substantive performance of portions of 

the RD&D project supported by the TIA 

and not to participants’ purchases of 

goods or services needed to carry out 

the RD&D. 

Financial Matters 

§ 603.615 Financial management 

standards for-profit firms. 

(a) To avoid causing needless changes 

in participants’ financial management 

systems, an expenditure-based TIA will 

make for-profit participants that 

currently perform under other 

expenditure-based Federal procurement 

contracts or assistance awards subject to 

the same standards for financial 

management systems that apply to those 

other awards. Therefore, if a for-profit 

participant has expenditure-based DOE 

assistance awards other than a TIA, the 

TIA must apply the standards in 10 CFR 

600.311. The contracting officer may 

grant an exception and allow a for-profit 

participant that has other expenditurebased Federal Government awards to 

use an alternative set of standards that 

meets the minimum criteria in 

paragraph (b) of this section, if there is 

a compelling programmatic or business 

reason to do so. For each case in which 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69261 

an exception is granted, the contracting 

officer must document the reason in the 

award file. 

(b) For an expenditure-based TIA, the 

contracting officer is to allow and 

encourage each for-profit participant 

that does not currently perform under 

expenditure-based Federal procurement 

contracts or assistance awards (other 

than a TIA) to use its existing financial 

management system as long as the 

system, as a minimum: 

(1) Complies with Generally Accepted 

Accounting Principles. 

(2) Effectively controls all project 

funds, including Federal funds and any 

required cost share. The system must 

have complete, accurate, and current 

records that document the sources of 

funds and the purposes for which they 

are disbursed. It also must have 

procedures for ensuring that project 

funds are used only for purposes 

permitted by the agreement (see 

§ 603.625). 

(3) Includes, if advance payments are 

authorized under § 603.805, procedures 

to minimize the time elapsing between 

the payment of funds by the 

Government and the firm’s 

disbursement of the funds for program 

purposes. 

§ 603.620 Financial management 

standards for nonprofit participants. 

So as not to force system changes for 

any State, local government, institution 

of higher education, or other nonprofit 

organization, expenditure-based TIA 

requirements for the financial 

management system of any nonprofit 

participant are to be the same as those 

that apply to the participant’s other 

Federal assistance awards. Specifically, 

the requirements are those in: 

(a) 10 CFR 600.220 for State and local 

governments; and 

(b) 10 CFR 600.121(b) for other 

nonprofit organizations, with the 

exception of nonprofit Governmentowned, contractor-operated (GOCO) 

facilities and Federally Funded 

Research and Development Centers 

(FFRDCs) that are excepted from the 

definition of ‘‘recipient’’ in 10 CFR 

600.101. If a GOCO or FFRDC is a 

participant, the contracting officer must 

specify appropriate standards that 

conform as much as practicable with 

requirements in their procurement 

contract. 

§ 603.625 Cost principles or standards 

applicable to for-profit participants. 

(a) So as not to require any firm to 

needlessly change its cost accounting 

system, an expenditure-based TIA is to 

apply the Government cost principles in 

48 CFR part 31 to for-profit participants 

that currently perform under 

expenditure-based Federal procurement 

contracts or assistance awards (other 

than a TIA) and therefore have existing 

systems for identifying allowable costs 

under those principles. If there are 

programmatic or business reasons to do 

otherwise, the contracting officer may 

grant an exception from this 

requirement and use alternative 

standards as long as the alternative 

satisfies the conditions described in 

paragraph (b) of this section; if an 

exception is granted the reasons must be 

documented in the award file. 

(b) For other for-profit participants, 

the contracting officer may establish 

alternative standards in the agreement 

as long as that alternative provides, as 

a minimum, that Federal funds and 

funds counted as recipients’ cost 

sharing will be used only for costs that: 

(1) A reasonable and prudent person 

would incur in carrying out the RD&D 

project contemplated by the agreement. 

Generally, elements of cost that 

appropriately are charged are those 

identified with RD&D activities under 

the Generally Accepted Accounting 

Principles (see Statement of Financial 

Accounting Standards Number 2, 

‘‘Accounting for Research and 

Development Costs,’’ October 1974). 

Moreover, costs must be allocated to 

DOE and other projects in accordance 

with the relative benefits the projects 

receive. Costs charged to DOE projects 

must be given consistent treatment with 

costs allocated to the participants’ other 

RD&D activities (e.g., activities 

supported by the participants 

themselves or by non-Federal sponsors). 

(2) Are consistent with the purposes 

stated in the governing Congressional 

authorizations and appropriations. The 

contracting officer is responsible for 

ensuring that provisions in the award 

document address any requirements 

that result from authorizations and 

appropriations. 

§ 603.630 Use Federally approved indirect 

cost rates for for-profit firms. 

In accordance with the general policy 

in § 603.605, the contracting officer 

must require a for-profit participant that 

has Federally approved indirect cost 

rates for its Federal procurement 

contracts to use those rates to 

accumulate and report costs under an 

expenditure-based TIA. This includes 

both provisional and final rates that are 

approved up until the time that the TIA 

is closed out. 

§ 603.635 Cost principles for nonprofit 

participants. 

So as not to force financial system 

changes for any nonprofit participant, 

an expenditure-based TIA will provide 

that costs to be charged to the RD&D 

project by any nonprofit participant 

must be determined to be allowable in 

accordance with: 

(a) OMB Circular A–87, if the 

participant is a State or local 

governmental organization; 

(b) OMB Circular A–21, if the 

participant is an institution of higher 

education; 

(c) 45 CFR part 74, Appendix E, if the 

participant is a hospital; or 

(d) OMB Circular A–122, if the 

participant is any other type of 

nonprofit organization (the cost 

principles in 48 CFR parts 31 and 231 

are to be used by any nonprofit 

organization that is identified in 

Circular A–122 as being subject to those 

cost principles). 

§ 603.640 Audits of for-profit participants. 

If the TIA is an expenditure-based 

award, the contracting officer must 

include in it an audit provision that 

addresses, for each for-profit 

participant: 

(a) Whether the for-profit participant 

must have periodic audits, in addition 

to any award-specific audits, as 

described in § 603.645; 

(b) Whether the Defense Contract 

Audit Agency (DCAA) or an 

independent public accountant (IPA) 

will perform required audits, as 

discussed in § 603.650; 

(c) How frequently any periodic 

audits are to be performed, addressed in 

§ 603.655; and 

(d) Other matters described in 

§ 603.660, such as audit coverage, 

allowability of audit costs, auditing 

standards, and remedies for 

noncompliance. 

§ 603.645 Periodic audits and awardspecific audits of for-profit participants. 

The contracting officer needs to 

consider requirements for both periodic 

audits and award-specific audits (as 

defined in § 603.1295 and § 603.1220, 

respectively). The way that an 

expenditure-based TIA addresses the 

two types of audits will vary, depending 

upon the type of for-profit participant. 

(a) For for-profit participants that are 

audited by the DCAA or other Federal 

auditors, as described in §§ 603.650(b) 

and 603.655, specific requirements for 

periodic audits need not be added 

because the Federal audits should be 

sufficient to address whatever may be 

needed. The inclusion in the TIA of the 

standard access-to-records provision for 

those for-profit participants, as 

discussed in § 603.910(a), gives the 

necessary access in the event that the 

contracting officer later needs to request 

69262 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

audits to address award-specific issues 

that arise. 

(b) For each other for-profit 

participant, the contracting officer: 

(1) Should require that the participant 

have an independent auditor (i.e., the 

DCAA or an independent public 

accountant (IPA)) conduct periodic 

audits of its systems if it expends 

$500,000 or more per year in TIAs and 

other Federal assistance awards. A 

prime reason for including this 

requirement is that the Federal 

Government, for an expenditure-based 

award, necessarily relies on amounts 

reported by the participant’s systems 

when it sets payment amounts or 

adjusts performance outcomes. The 

periodic audit provides some assurance 

that the reported amounts are reliable. 

(2) Must ensure that the award 

provides an independent auditor the 

access needed for award-specific audits, 

to be performed at the request of the 

contracting officer if issues arise that 

require audit support. However, 

consistent with the government-wide 

policies on single audits that apply to 

nonprofit participants (see § 603.665), 

the contracting officer should rely on 

periodic audits to the maximum extent 

possible to resolve any award-specific 

issues. 

§ 603.650 Designation of auditor for forprofit participants. 

The auditor identified in an 

expenditure-based TIA to perform 

periodic and award-specific audits of a 

for-profit participant depends on the 

circumstances, as follows: 

(a) DCAA or an IPA will be the 

auditor for a for-profit participant that 

does not meet the criteria in paragraph 

(b) of this section. Note that the 

allocable portion of the costs of the 

IPA’s audit may be reimbursable under 

the TIA, as described in § 603.660(b). 

The IPA should be the one that the 

participant uses to perform other audits 

(e.g., of its financial statement), to 

minimize added burdens and costs. 

(b) Except as provided in paragraph 

(c) of this section, the Federal cognizant 

agency (e.g., DCAA) must be identified 

as the auditor for any for-profit 

participant that is subject to Federal 

audits because it is currently performing 

under a Federal award that is subject to 

the: 

(1) Cost principles in 48 CFR part 31 

of the Federal Acquisition Regulation 

(FAR); or 

(2) Cost Accounting Standards in 48 

CFR Chapter 99. 

(c) If there are programmatic or 

business reasons that justify the use of 

an auditor other than the Federal 

cognizant agency for a for-profit 

participant that meets the criteria in 

paragraph (b) of this section, the 

contracting officer may provide that an 

IPA will be the auditor for that 

participant in which case the reasons for 

this decision must be documented in 

the award file. 

§ 603.655 Frequency of periodic audits of 

for-profit participants. 

If an expenditure-based TIA provides 

for periodic audits of a for-profit 

participant by an IPA, the contracting 

officer must specify the frequency for 

those audits. The contracting officer 

should consider having an audit 

performed during the first year of the 

award, when the participant has its IPA 

do its next financial statement audit, 

unless the participant already had a 

systems audit due to other Federal 

awards within the past two years. The 

frequency thereafter may vary 

depending upon the dollars the 

participant is expending annually under 

the award, but it is not unreasonable to 

require an updated audit every two to 

three years to verify that the 

participant’s systems continue to be 

reliable (the audit then would cover the 

two or three-year period between 

audits). 

§ 603.660 Other audit requirements. 

If an expenditure-based TIA provides 

for audits of a for-profit participant by 

an IPA, the contracting officer also must 

specify: 

(a) What periodic audits are to cover. 

It is important to specify audit coverage 

that is only as broad as needed to 

provide reasonable assurance of the 

participant’s compliance with award 

terms that have a direct and material 

effect on the RD&D project. 

(b) Who will pay for periodic and 

award-specific audits. The allocable 

portion of the costs of any audits by 

IPAs may be reimbursable under the 

TIA. The costs may be direct charges or 

allocated indirect costs, consistent with 

the participant’s accounting system and 

practices. 

(c) The auditing standards that the 

IPA will use. The contracting officer 

must provide that the IPA will perform 

the audits in accordance with the 

Generally Accepted Government 

Auditing Standards. 

(d) The available remedies for 

noncompliance. The agreement must 

provide that the participant may not 

charge costs to the award for any audit 

that the contracting officer determines 

was not performed in accordance with 

the Generally Accepted Government 

Auditing Standards or other terms of the 

agreement. It also must provide that the 

Government has the right to require the 

participant to have the IPA take 

corrective action and, if corrective 

action is not taken, that the agreements 

officer has recourse to any of the 

remedies for noncompliance identified 

in 10 CFR 600.352(a). 

(e) Where the IPA is to send audit 

reports. The agreement must provide 

that the IPA is to submit audit reports 

to the contracting officer. It also must 

require that the IPA report instances of 

fraud directly to the Office of Inspector 

General (OIG), DOE. 

(f) The retention period for the IPA’s 

working papers. The contracting officer 

must specify that the IPA is to retain 

working papers for a period of at least 

three years after the final payment, 

unless the working papers relate to an 

audit whose findings are not fully 

resolved within that period or to an 

unresolved claim or dispute (in which 

case, the IPA must keep the working 

papers until the matter is resolved and 

final action taken). 

(g) Who will have access to the IPA’s 

working papers. The agreement must 

provide for Government access to 

working papers. 

§ 603.665 Periodic audits of nonprofit 

participants. 

An expenditure-based TIA is an 

assistance instrument subject to the 

Single Audit Act (31 U.S.C. 7501–7507), 

so nonprofit participants are subject to 

the requirements under that Act and 

OMB Circular A–133. Specifically, the 

requirements are those in: 

(a) 10 CFR 600.226 for State and local 

governments; and 

(b) 10 CFR 600.126 for other nonprofit 

organizations. 

§ 603.670 Flow down audit requirements to 

subrecipients. 

(a) In accordance with § 603.610, an 

expenditure-based TIA must require 

participants to flow down the same 

audit requirements to a subrecipient 

that would apply if the subrecipient 

were a participant. 

(b) For example, a for-profit 

participant that is audited by the DCAA: 

(1) Would flow down to a university 

subrecipient the Single Audit Act 

requirements that apply to a university 

participant; 

(2) Could enter into a subaward 

allowing a for-profit participant, under 

the circumstances described in 

§ 603.650(a), to use an IPA to do its 

audits. 

(c) This policy applies to subawards 

for substantive performance of portions 

of the RD&D project supported by the 

TIA, and not to participants’ purchases 

of goods or services needed to carry out 

the RD&D. 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69263 

§ 603.675 Reporting use of IPA for 

subawards. 

An expenditure-based TIA should 

require participants to report to the 

contracting officer when they enter into 

any subaward allowing a for-profit 

subawardee to use an IPA, as described 

in § 603.670(b)(2). 

Property 

§ 603.680 Purchase of real property and 

equipment by for-profit firms. 

(a) With the two exceptions described 

in paragraph (b) of this section, the 

contracting officer must require a forprofit firm to purchase real property or 

equipment with its own funds that are 

separate from the RD&D project. The 

contracting officer should allow the firm 

to charge to an expenditure-based TIA 

only depreciation or use charges for real 

property or equipment (and the cost 

estimate for a fixed-support TIA only 

would include those costs). Note that 

the firm must charge depreciation 

consistently with its usual accounting 

practice. Many firms treat depreciation 

as an indirect cost. Any firm that 

usually charges depreciation indirectly 

for a particular type of property must 

not charge depreciation for that property 

as a direct cost to the TIA. 

(b) In two situations, the contracting 

officer may grant an exception and 

allow a for-profit firm to use project 

funds, which includes both the Federal 

Government and recipient shares, to 

purchase real property or equipment 

(i.e., to charge to the project the full 

acquisition cost of the property). The 

two circumstances, which should be 

infrequent for equipment and extremely 

rare for real property, are those in which 

either: 

(1) The real property or equipment 

will be dedicated to the project and has 

a current fair market value that is less 

than $5,000 by the time the project 

ends; or 

(2) The contracting officer gives prior 

approval for the firm to include the full 

acquisition cost of the real property or 

equipment as part of the cost of the 

project (see § 603.535). 

(c) If the contracting officer grants an 

exception in either of the circumstances 

described in paragraphs (b)(1) and (2) of 

this section, the real property or 

equipment must be subject to the 

property management standards in 10 

CFR 600.321(b) through (e). As provided 

in those standards, the title to the real 

property or equipment will vest 

conditionally in the for-profit firm upon 

acquisition. A TIA, whether it is a fixedsupport or expenditure-based award, 

must specify that any item of equipment 

that has a fair market value of $5,000 or 

more at the conclusion of the project 

also will be subject to the disposition 

process in 10 CFR 600.321(f), whereby 

the Federal Government will recover its 

interest in the property at that time. 

§ 603.685 Management of real property 

and equipment by nonprofit participants. 

For nonprofit participants, a TIA’s 

requirements for vesting of title, use, 

management, and disposition of real 

property or equipment acquired under 

the award are the same as those that 

apply to the participant’s other Federal 

assistance awards. Specifically, the 

requirements are those in: 

(a) 10 CFR 600.231 and 600.232, for 

participants that are States and local 

governmental organizations; and 

(b) 10 CFR 600.132 and 600.134, for 

other nonprofit participants, with the 

exception of nonprofit GOCOs and 

FFRDCs that are exempted from the 

definition of ‘‘recipient’’ in 10 CFR 

600.101. If a GOCO or FFRDC is a 

participant, the contracting officer must 

specify appropriate standards that 

conform as much as practicable with the 

requirements in its procurement 

contract. Note also that: 

(1) If the TIA is a cooperative 

agreement, 31 U.S.C. 6306 provides 

authority to vest title to tangible 

personal property in a nonprofit 

institution of higher education or in a 

nonprofit organization whose primary 

purpose is conducting scientific 

research, without further obligation to 

the Federal Government; and 

(2) A TIA therefore must specify any 

conditions on the vesting of title to real 

property or equipment acquired by any 

such nonprofit participant. 

§ 603.690 Requirements for Federallyowned property. 

If DOE provides Federally-owned 

property to any participant for the 

performance of RD&D under a TIA, the 

contracting officer must require that 

participant to account for, use, and 

dispose of the property in accordance 

with: 

(a) 10 CFR 600.322, if the participant 

is a for-profit firm. 

(b) 10 CFR 600.232(f), if the 

participant is a State or local 

governmental organization. Note that 10 

CFR 600.232(f) contains additional 

requirements for managing the property. 

(c) 10 CFR 600.133(a) and 600.134(f), 

if the participant is a nonprofit 

organization other than a GOCO or 

FFRDC (requirements for GOCOs and 

FFRDCs should conform with the 

property standards in their procurement 

contracts). 

§ 603.695 Requirements for supplies. 

An expenditure-based TIA’s 

provisions should permit participants to 

use their existing procedures to account 

for and manage supplies. A fixedsupport TIA should not include 

requirements to account for or manage 

supplies. 

Purchasing 

§ 603.700 Standards for purchasing 

systems of for-profit firms. 

(a) If the TIA is an expenditure-based 

award, it should require for-profit 

participants that currently perform 

under DOE assistance instruments 

subject to the purchasing standards in 

10 CFR 600.331 to use the same 

requirements for the TIA, unless there 

are programmatic or business reasons to 

do otherwise (in which case the reasons 

must be documented in the award file). 

(b) Other for-profit participants under 

an expenditure-based TIA should be 

allowed to use their existing purchasing 

systems, as long as they flow down the 

applicable requirements in Federal 

statutes, Executive Orders or 

Government-wide regulations (see 

Appendices A and B to this part for a 

list of those requirements). 

§ 603.705 Standards for purchasing 

systems of nonprofit organizations. 

So as not to force system changes for 

any nonprofit participant, an 

expenditure-based TIA should provide 

that each nonprofit participant’s 

purchasing system comply with: 

(a) 10 CFR 600.236, if the participant 

is a State or local governmental 

organization. 

(b) 10 CFR 600.140 through 10 CFR 

600.149, if the participant is a nonprofit 

organization other than a GOCO or 

FFRDC that is excepted from the 

definition of ‘‘recipient’’ in 10 CFR 

600.101. If a GOCO or FFRDC is a 

participant, the TIA must specify 

appropriate standards that conform as 

much as practicable with requirements 

in its procurement contract. 

Subpart G—Award Terms Related to 

Other Administrative Matters 

§ 603.800 Scope. 

This subpart addresses administrative 

matters that do not impose organizationwide requirements on a participant’s 

financial management, property 

management, or purchasing system. 

Because an organization does not have 

to redesign its systems to accommodate 

award-to-award variations in these 

requirements, TIAs may differ in the 

requirements that they specify for a 

given participant, based on the 

circumstances of the particular RD&D 

69264 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

project. To eliminate needless 

administrative complexity, the 

contracting officer should handle some 

requirements, such as the payment 

method, in a uniform way for the 

agreement as a whole. 

Payments 

§ 603.805 Payment methods. 

A TIA may provide for: 

(a) Reimbursement, as described in 10 

CFR 600.312(a)(1), if it is an 

expenditure-based award. 

(b) Advance payments, as described 

in 10 CFR 600.312(a)(2), subject to the 

conditions in 10 CFR 600.312(b)(2)(i) 

through (iii). 

(c) Payments based on payable 

milestones. These are payments made 

according to a schedule that is based on 

predetermined measures of technical 

progress or other payable milestones. 

This approach relies upon the fact that, 

as the RD&D progresses throughout the 

term of the agreement, observable 

activity will be taking place. The 

recipient is paid upon the 

accomplishment of a predetermined 

measure of progress. A fixed-support 

TIA must use this payment method (this 

does not preclude use of an initial 

advance payment, if there is no 

alternative to meeting immediate cash 

needs). Payments based on payable 

milestones is the preferred method of 

payment for an expenditure-based TIA 

if well-defined outcomes can be 

identified. 

§ 603.810 Method and frequency of 

payment requests. 

The procedure and frequency for 

payment requests depend upon the 

payment method, as follows: 

(a) For either reimbursements or 

advance payments, the TIA must allow 

recipients to submit requests for 

payment at least monthly. The 

contracting officer may authorize the 

recipients to use the forms or formats 

described in 10 CFR 600.312(d). 

(b) If the payments are based on 

payable milestones, the recipient will 

submit a report or other evidence of 

accomplishment to the program official 

at the completion of each predetermined 

activity. If the award is an expenditurebased TIA that includes minimum cost 

sharing percentages for milestones (see 

10 CFR 603.570(c), the recipient must 

certify in the report that the minimum 

cost sharing requirement has been met. 

The contracting officer may approve 

payment to the recipient after receiving 

validation from the program manager 

that the milestone was successfully 

reached. 

§ 603.815 Withholding payments. 

A TIA must provide that the 

contracting officer may withhold 

payments in the circumstances 

described in 10 CFR 600.312(g), but not 

otherwise. 

§ 603.820 Interest on advance payments. 

If an expenditure-based TIA provides 

for either advance payments or payable 

milestones, the agreement must require 

the recipient to: 

(a) Maintain in an interest-bearing 

account any advance payments or 

milestone payment amounts received in 

advance of needs to disburse the funds 

for program purposes unless: 

(1) The recipient receives less than 

$120,000 in Federal grants, cooperative 

agreements, and TIAs per year; 

(2) The best reasonably available 

interest-bearing account would not be 

expected to earn interest in excess of 

$1,000 per year on the advance or 

milestone payments; or 

(3) The depository would require an 

average or minimum balance so high 

that it would not be feasible within the 

expected Federal and non-Federal cash 

resources for the project. 

(b) Remit annually the interest earned 

to the contracting officer. 

Revision of Budget and Program Plans 

§ 603.825 Government approval of 

changes in plans. 

If it is an expenditure-based award, a 

TIA must require the recipient to obtain 

the contracting officer’s prior approval if 

there is to be a change in plans that may 

result in a need for additional Federal 

funding (this is unnecessary for a fixedsupport TIA because the recipient is 

responsible for additional costs of 

achieving the outcomes). Other than 

that, the program official’s substantial 

involvement in the project should 

ensure that the Government has advance 

notice of changes in plans. 

§ 603.830 Pre-award costs. 

Pre-award costs, as long as they are 

otherwise allowable costs of the project, 

may be charged to an expenditure-based 

TIA only with the specific approval of 

the contracting officer. All pre-award 

costs are incurred at the recipient’s risk 

(e.g. , DOE is not obligated to reimburse 

the costs if, for any reason, the recipient 

does not receive an award, or if the 

award is less than anticipated and 

inadequate to cover the costs). 

Program Income 

§ 603.835 Program income requirements. 

A TIA must apply the standards of 10 

CFR 600.314 for program income that 

may be generated. The TIA must also 

specify if the recipient is to have any 

obligation to the Federal Government 

with respect to program income 

generated after the end of the project 

period (.e., the period, as established in 

the award document, during which 

Federal support is provided). 

Intellectual Property 

§ 603.840 Negotiating data and patent 

rights. 

(a) The contracting officer must confer 

with program officials and assigned 

intellectual property counsel to develop 

an overall strategy for intellectual 

property that takes into account 

inventions and data that may result 

from the project and future needs the 

Government may have for rights in 

them. The strategy should take into 

account program mission requirements 

and any special circumstances that 

would support modification of standard 

patent and data terms, and should 

include considerations such as the 

extent of the recipient’s contribution to 

the development of the technology; 

expected Government or commercial 

use of the technology; the need to 

provide equitable treatment among 

consortium or team members; and the 

need for the DOE to engage nontraditional Government contractors with 

unique capabilities. 

(b) Because a TIA entails substantial 

cost sharing by recipients, the 

contracting officer must use discretion 

in negotiating Government rights to data 

and patentable inventions resulting 

from the RD&D under the agreements. 

The considerations in §§ 603.845 

through 603.875 are intended to serve as 

guidelines, within which there is 

considerable latitude to negotiate 

provisions appropriate to a wide variety 

of circumstances that may arise. 

§ 603.845 Data rights requirements. 

(a) If the TIA is a cooperative 

agreement, the requirements at 10 CFR 

600.325(d), Rights in data-general rule, 

apply. The ‘‘Rights in Data—General’’

provision in Appendix A to Subpart D 

of 10 CFR 600 normally applies. This 

provision provides the Government 

with unlimited rights in data first 

produced in the performance of the 

agreement, except as provided in 

paragraph (c) Copyright. However, in 

certain circumstances, the ‘‘Rights in 

Data—Programs Covered Under Special 

Protected Data Statutes’’ provision in 

Appendix A may apply. 

(b) If the TIA is an assistance 

transaction other than a cooperative 

agreement, the requirements at 10 CFR 

600.325(e), Rights in data—programs 

covered under special protected data 

statutes, normally apply. The ‘‘Rights in 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69265 

Data—Programs Covered Under Special 

Data Statutes’’ provision in Appendix A 

to Subpart D of 10 CFR 600 may be 

modified to accommodate particular 

circumstances (e.g., access to or 

expanded use rights in protected data 

among consortium or team members), or 

to list data or categories of data that the 

recipient must make available to the 

public. In unique cases, the contracting 

officer may negotiate special data rights 

requirements that vary from those in 10 

CFR 600.325. Modifications to the 

standard data provisions must be 

approved by intellectual property 

counsel. 

§ 603.850 Marking of data. 

To protect the recipient’s interests in 

data, the TIA should require the 

recipient to mark any particular data 

that it wishes to protect from disclosure 

with a specific legend specified in the 

agreement identifying the data as data 

subject to use, release, or disclosure 

restrictions. 

§ 603.855 Protected data. 

In accordance with law and 

regulation, the contracting officer must 

not release or disclose data marked with 

a restrictive legend (as specified in 

§ 603.850) to third parties, unless they 

are parties authorized by the award 

agreement or the terms of the legend to 

receive the data and are subject to a 

written obligation to treat the data in 

accordance with the marking. 

§ 603.860 Rights to inventions. 

(a) The contracting officer should 

negotiate rights in inventions that 

represent an appropriate balance 

between the Government’s interests and 

the recipient’s interests. 

(1) The contracting officer has the 

flexibility to negotiate patent rights 

requirements that vary from that which 

the Bayh-Dole statute (Chapter 18 of 

Title 35, U.S.C.) and 42 U.S.C. 2182 and 

5908 require. A TIA becomes an 

assistance transaction other than a 

cooperative agreement if its patent 

rights requirements vary from those 

required by these statutes. 

(2) If the TIA is a cooperative 

agreement, the patent rights provision of 

10 CFR 600.325(b) or (c) or 10 CFR 

600.136 applies, depending on the type 

of recipient. Unless a class waiver has 

been issued, it will be necessary for a 

large, for-profit business to request a 

patent waiver to obtain title to subject 

inventions. 

(b) The contracting officer may 

negotiate Government rights that vary 

from the statutorily-required patent 

rights requirements described in 

paragraph (a)(2) of this section when 

necessary to accomplish program 

objectives and foster the Government’s 

interests. Doing so would make the TIA 

an assistance transaction other than a 

cooperative agreement. The contracting 

officer must decide, with the help of the 

program manager and assigned 

intellectual property counsel, what best 

represents a reasonable arrangement 

considering the circumstances, 

including past investments of the 

recipient to development of the 

technology, contributions under the 

current TIA, and potential commercial 

and Government markets. Any change 

to the standard patent rights provisions 

must be approved by assigned 

intellectual property counsel. 

(c) Taking past investments as an 

example, the contracting officer should 

consider whether the Government or the 

recipient has contributed more 

substantially to the prior RD&D that 

provides the foundation for the planned 

effort. If the predominant past 

contributor to the particular technology 

has been: 

(1) The Government, then the TIA’s 

patent rights provision should be the 

standard provision as set forth in 10 

CFR 600.325(b) or (c), or 10 CFR 

600.136, as applicable. 

(2) The recipient, then less restrictive 

patent requirements may be appropriate, 

which would make the TIA an 

assistance transaction other than a 

cooperative agreement. The contracting 

officer normally would, with the 

concurrence of intellectual property 

counsel, allow the recipient to retain 

title to subject inventions without going 

through the process of obtaining a 

patent waiver as required by 10 CFR 

784. For example, with the concurrence 

of intellectual property counsel, the 

contracting officer also could eliminate 

or modify the nonexclusive paid-up 

license for practice by or on behalf of 

the Government to allow the recipient to 

benefit more directly from its 

investments. 

§ 603.865 March-in rights. 

A TIA’s patent rights provision 

should include the Bayh-Dole march-in 

rights set out in paragraph (j) of the 

Patent Rights (Small Business Firms and 

Nonprofit Organization) provision in 

Appendix A to subpart D of 10 CFR 600, 

or an equivalent clause, concerning 

actions that the Government may take to 

obtain the right to use subject 

inventions, if the recipient fails to take 

effective steps to achieve practical 

application of the subject inventions 

within a reasonable time. The march-in 

provision may be modified to best meet 

the needs of the program. However, only 

infrequently should the march-in 

provision be entirely removed (e.g., if a 

recipient is providing most of the 

funding for a RD&D project, with the 

Government providing a much smaller 

share). 

§ 603.870 Marking of documents related to 

inventions. 

To protect the recipient’s interest in 

inventions, the TIA should require the 

recipient to mark documents disclosing 

inventions it desires to protect by 

obtaining a patent. The recipient should 

mark the documents with a legend 

identifying them as intellectual property 

subject to public release or public 

disclosure restrictions, as provided in 

35 U.S.C. 205. 

§ 603.875 Foreign access to technology 

and U.S. competitiveness provisions. 

(a) Consistent with the objective of 

enhancing national security and United 

States competitiveness by increasing the 

public’s reliance on the United States 

commercial technology, the contracting 

officer must include provisions in a TIA 

that addresses foreign access to 

technology developed under the TIA. 

(b) A provision must provide, as a 

minimum, that any transfer of the 

technology must be consistent with the 

U.S. export laws, regulations and the 

Department of Commerce Export 

Regulation at Chapter VII, Subchapter C, 

Title 15 of the CFR (15 CFR parts 730 

through 774), as applicable. 

(c) A provision should also provide 

that any products embodying, or 

produced through the use of, any 

created intellectual property, will be 

manufactured substantially in the 

United States, and that any transfer of 

the right to use or sell the products 

must, unless the Government grants a 

waiver, require that the products will be 

manufactured substantially in the 

United States. In individual cases, the 

contracting officer, with the approval of 

the program official and intellectual 

property counsel, may waive or modify 

the requirement of substantial 

manufacture in the United States at the 

time of award, or subsequent thereto, 

upon a showing by the recipient that: 

(1) Alternative benefits are being 

secured for the United States taxpayer 

(e.g., increased domestic jobs 

notwithstanding foreign manufacture); 

(2) Reasonable but unsuccessful 

efforts have been made to transfer the 

technology under similar terms to those 

likely to manufacture substantially in 

the United States; or 

(3) Under the circumstances domestic 

manufacture is not commercially 

feasible. 

69266 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

Financial and Programmatic Reporting 

§ 603.880 Reports requirements. 

A TIA must include requirements 

that, as a minimum, provide for periodic 

reports addressing program performance 

and, if it is an expenditure-based award, 

business/financial status. The 

contracting officer must require 

submission of the reports at least 

annually, and may require submission 

as frequently as quarterly (this does not 

preclude a recipient from electing to 

submit more frequently than quarterly 

the financial information that is 

required to process payment requests if 

the award is an expenditure-based TIA 

that uses reimbursement or advance 

payments under § 603.810(a)). The 

requirements for the content of the 

reports are as follows: 

(1) The program portions of the 

reports must address progress toward 

achieving performance goals and 

milestones, including current issues, 

problems, or developments. 

(2) The business/financial portions of 

the reports, applicable only to 

expenditure-based awards, must 

provide summarized details on the 

status of resources (federal funds and 

non-federal cost sharing), including an 

accounting of expenditures for the 

period covered by the report. The report 

should compare the resource status with 

any payment and expenditure schedules 

or plans provided in the original award; 

explain any major deviations from those 

schedules; and discuss actions that will 

be taken to address the deviations. The 

contracting officer may require a 

recipient to separately identify in these 

reports the expenditures for each 

participant in a consortium and for each 

programmatic milestone or task, if the 

contracting officer, after consulting with 

the program official, judges that those 

additional details are needed for good 

stewardship. 

§ 603.885 Updated program plans and 

budgets. 

In addition to reports on progress to 

date, a TIA may include a provision 

requiring the recipient to annually 

prepare an updated technical plan for 

future conduct of the research effort and 

a revised budget if there is a significant 

change from the initial budget. 

§ 603.890 Final performance report. 

A TIA must require a final 

performance report that addresses all 

major accomplishments under the TIA. 

§ 603.895 Protection of information in 

programmatic reports. 

If a TIA is awarded under the 

authority of 42 U.S.C. 7256(g) (i.e., it is 

a type of assistance transaction ‘‘other 

than’’ a contract, grant or a cooperative 

agreement), the contracting officer may 

inform a participant that the award is 

covered by a special protected data 

statute, which provides for the 

protection from public disclosure, for a 

period of up to 5 years after the date on 

which the information is developed, any 

information developed pursuant to this 

transaction that would be trade secret, 

or commercial or financial information 

that is privileged or confidential, if the 

information had been obtained from a 

non-Federal party. 

§ 603.900 Receipt of final performance 

report. 

If a final report is required, the TIA 

should make receipt of the report a 

condition for final payment. If the 

payments are based on payable 

milestones, the submission and 

acceptance of the final report by the 

Government representative will be 

incorporated as an event that is a 

prerequisite for one of the payable 

milestones. 

Records Retention and Access 

Requirements 

§ 603.905 Record retention requirements. 

A TIA must require participants to 

keep records related to the TIA (for 

which the agreement provides 

Government access under § 603.910) for 

a period of three years after submission 

of the final financial status report for an 

expenditure-based TIA or final program 

performance report for a fixed-support 

TIA, with the following exceptions: 

(a) The participant must keep records 

longer than three years after submission 

of the final financial status report if the 

records relate to an audit, claim, or 

dispute that begins but does not reach 

its conclusion within the 3-year period. 

In that case, the participant must keep 

the records until the matter is resolved 

and final action taken. 

(b) Records for any real property or 

equipment acquired with project funds 

under the TIA must be kept for three 

years after final disposition. 

§ 603.910 Access to a for-profit 

participant’s records. 

(a) If a for-profit participant currently 

grants access to its records to the DCAA 

or other Federal Government auditors, 

the TIA must include for that 

participant the standard access-torecords requirements at 10 CFR 

600.342(e). If the agreement is a fixedsupport TIA, the language in 10 CFR 

600.342(e) may be modified to provide 

access to records concerning the 

recipient’s technical performance, 

without requiring access to the 

recipient’s financial or other records. 

Note that any need to address access to 

technical records in this way is in 

addition to, not in lieu of, the need to 

address rights in data (see § 603.845). 

(b) For other for-profit participants 

that do not currently give the Federal 

Government direct access to their 

records and are not willing to grant full 

access to records pertinent to the award, 

the contracting officer may negotiate 

limited access to the recipient’s 

financial records. For example, if the 

audit provision of an expenditure-based 

TIA gives an IPA access to the 

recipient’s financial records for audit 

purposes, the Federal Government must 

have access to the IPA’s reports and 

working papers and the contracting 

officer need not include a provision 

requiring direct Government access to 

the recipient’s financial records. For 

both fixed-support and expenditurebased TIAs, the TIA must include the 

access-to-records requirements at 10 

CFR 600.342(e) for records relating to 

technical performance. 

§ 603.915 Access to a nonprofit 

participant’s records. 

A TIA must include for any nonprofit 

participant the standard access-torecords requirement at: 

(a) 10 CFR 600.242(e), for a 

participant that is a State or local 

governmental organization; 

(b) 10 CFR 600.153(e), for a 

participant that is a nonprofit 

organization. The same requirement 

applies to any GOCO or FFRDC, even 

though nonprofit GOCOs and FFRDCs 

are exempted from the definition of 

‘‘recipient’’ in 10 CFR 600.101. 

Termination and Enforcement 

§ 603.920 Termination and enforcement 

requirements. 

(a) Termination. A TIA must include 

the following conditions for 

termination: 

(1) An award may be terminated in 

whole or in part by the contracting 

officer, if a recipient materially fails to 

comply with the terms and conditions 

of the award. 

(2) Subject to a reasonable 

determination by either party that the 

project will not produce beneficial 

results commensurate with the 

expenditure of resources, that party may 

terminate in whole or in part the 

agreement by providing at least 30 days 

advance written notice to the other 

party, provided such notice is preceded 

by consultation between the parties. The 

two parties will negotiate the 

termination conditions, including the 

effective date and, in the case of partial 

termination, the portion to be 

terminated. If either party determines in 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69267 

the case of partial termination that the 

reduced or modified portion of the 

award will not accomplish the purpose 

for which the award was made, the 

award may be terminated in its entirety. 

(3) Unless otherwise negotiated, for 

terminations of an expenditure based 

TIA, DOE’s maximum liability is the 

lesser of: 

(i) DOE’s share of allowable costs 

incurred up to the date of termination, 

or 

(ii) The amount of DOE funds 

obligated to the TIA. 

(4) Unless otherwise negotiated, for 

terminations of a fixed-support based 

TIA, DOE shall pay the recipient a 

proportionate share of DOE’s financial 

commitment to the project based on the 

percent of project completion as of the 

date of termination. 

(5) Notwithstanding paragraphs (3) 

and (4) of this section, if the award 

includes milestone payments, the 

Government has no obligation to pay the 

recipient beyond the last completed and 

paid milestone if the recipient decides 

to terminate. 

(b) Enforcement. The standards of 10 

CFR 600.352 (for enforcement) and the 

procedures in 10 CFR 600.22 (for 

disputes and appeals) apply. 

Subpart H—Executing the Award 

§ 603.1000 Contracting officer’s 

responsibilities at time of award. 

At the time of the award, the 

contracting officer must: 

(a) Ensure that the award document 

contains the appropriate terms and 

conditions and is signed by the 

appropriate parties, in accordance with 

§§ 603.1005 through 603.1015. 

(b) Document the analysis of the 

agreement in the award file, as 

discussed in § 603.1020. 

(c) Provide information about the 

award to the office responsible for 

reporting on TIAs. 

The Award Document 

§ 603.1005 General responsibilities. 

The contracting officer is responsible 

for ensuring that the award document is 

complete and accurate. The document 

should: 

(a) Address all issues; 

(b) State requirements directly. It is 

not helpful to readers to incorporate 

statutes or rules by reference, without 

sufficient explanation of the 

requirements. The contracting officer 

generally should not incorporate clauses 

from the Federal Acquisition Regulation 

(48 CFR parts 1–53) or Department of 

Energy Acquisition Regulation (48 CFR 

parts 901–970) because those provisions 

are designed for procurement contracts 

that are used to acquire goods and 

services, rather than for a TIA or other 

assistance instruments. 

(c) Be written in clear and concise 

language, to minimize potential 

ambiguity. 

§ 603.1010 Substantive issues. 

Each TIA is designed and negotiated 

individually to meet the specific 

requirements of the particular project, 

so the list of substantive issues that will 

be addressed in the award document 

may vary. Every award document must 

address: 

(a) Project scope. The scope is an 

overall vision statement for the project, 

including a discussion of the project’s 

purpose, objectives, and detailed 

commercial goals. It is a critical 

provision because it provides a context 

for resolving issues that may arise 

during post-award administration. In a 

fixed-support TIA, the well-defined 

outcomes that reliably indicate the 

amount of effort expended and serve as 

the basis for the level of the fixed 

support must be clearly specified (see 

§§ 603.305 and 603.560(a)). 

(b) Project management. The TIA 

should describe the nature of the 

relationship between the Federal 

Government and the recipient; the 

relationship among the participants, if 

the recipient is an unincorporated 

consortium; and the overall technical 

and administrative management of the 

project. A TIA is used to carry out 

collaborative relationships between the 

Federal Government and the recipient. 

Consequently, there must be substantial 

involvement of the DOE program official 

(see § 603.220) and usually the 

contracting officer. The program official 

provides technical insight, which differs 

from the usual technical oversight of a 

project. The management provision also 

should discuss how modifications to the 

TIA are made. 

(c) Termination, enforcement, and 

disputes. A TIA must provide for 

termination, enforcement remedies, and 

disputes and appeals procedures, in 

accordance with § 603.920. 

(d) Funding. The TIA must: 

(1) Show the total amount of the 

agreement and the total period of 

performance. 

(2) If the TIA is an expenditure-based 

award, state the Government’s and 

recipient’s agreed-upon cost shares for 

the project period and for each budget 

period. The award document should 

identify values for any in-kind 

contributions, determined in accordance 

with §§ 603.530 through 603.555, to 

preclude later disagreements about 

them. 

(3) Specify the amount of Federal 

funds obligated and the performance 

period for those obligated funds. 

(4) State, if the agreement is to be 

incrementally funded, that the 

Government’s obligation for additional 

funding is contingent upon the 

availability of funds and that no legal 

obligation on the part of the 

Government exists until additional 

funds are made available and the 

agreement is amended. The TIA also 

must include a prior approval 

requirement for changes in plans 

requiring additional Government 

funding, in accordance with § 603.825. 

(e) Payment. The TIA must identify 

the payment method and tell the 

recipient how, when, and where to 

submit payment requests, as discussed 

in §§ 603.805 through 603.815. The 

payment method must take into account 

sound cash management practices by 

avoiding unwarranted cash advances. 

For an expenditure-based TIA, the 

payment provision must require the 

return of interest should excess cash 

balances occur, in accordance with 

§ 603.820. For any TIA using the 

milestone payment method described in 

§ 603.805(c), the TIA must include 

language notifying the recipient that the 

contracting officer may adjust amounts 

of future milestone payments if a 

project’s expenditures fall too far below 

the projections that were the basis for 

setting the amounts (see § 603.575(c) 

and § 603.1105(c)). 

(f) Records retention and access to 

records. The TIA must include the 

records retention requirement at 

§ 603.910. The TIA also must provide 

for access to for-profit and nonprofit 

participants’ records, in accordance 

with § 603.915 and § 603.920. 

(g) Patents and data rights. In 

designing the patents and data rights 

provision, the TIA must set forth the 

minimum required Federal Government 

rights in intellectual property generated 

under the award and address related 

matters, as provided in §§ 603.840 

through 603.875. It is important to 

define all essential terms in the patent 

rights provision. 

(h) Foreign access to technology and 

U.S. competitiveness. The TIA must 

include provisions, in accordance with 

§ 603.875, concerning foreign access and 

domestic manufacture of products using 

technology generated under the award. 

(i) Title to, management of, and 

disposition of tangible property. The 

property provisions for for-profit and 

nonprofit participants must be in 

accordance with §§ 603.685 through 

603.700. 

(j) Financial management systems. 

For an expenditure-based award, the 

69268 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

TIA must specify the minimum 

standards for financial management 

systems of both for-profit and nonprofit 

participants, in accordance with 

§§ 603.615 and 603.620. 

(k) Allowable costs. If the TIA is an 

expenditure-based award, it must 

specify the standards that both for-profit 

and nonprofit participants are to use to 

determine which costs may be charged 

to the project, in accordance with 

§§ 603.625 through 603.635, as well as 

§ 603.830. 

(l) Audits. If a TIA is an expenditurebased award, it must include an audit 

provision for both for-profit and 

nonprofit participants and 

subrecipients, in accordance with 

§§ 603.640 through 603.670 and 

§ 603.675. 

(m) Purchasing system standards. The 

TIA should include a provision 

specifying the standards in §§ 603.700 

and 603.705 for purchasing systems of 

for-profit and nonprofit participants, 

respectively. 

(n) Program income. The TIA should 

specify requirements for program 

income, in accordance with § 603.835. 

(o) Financial and programmatic 

reporting. The TIA must specify the 

reports that the recipient is required to 

submit and tell the recipient when and 

where to submit them, in accordance 

with §§ 603.880 through 603.900. 

(p) Assurances for applicable national 

policy requirements. The TIA must 

incorporate assurances of compliance 

with applicable requirements in Federal 

statutes, Executive Orders, or 

regulations (except for national policies 

that require certifications). Appendix A 

to this part contains a list of commonly 

applicable requirements that should be 

augmented with any specific 

requirements that apply to a particular 

TIA (e.g., general provisions in the 

appropriations act for the specific funds 

that are being obligating). 

(q) Other matters. The agreement 

should address any other issues that 

need clarification, including the name 

of the contracting officer who will be 

responsible for post-award 

administration and the statutory 

authority or authorities for entering into 

the TIA. In addition, the agreement 

must specify that it takes precedence 

over any inconsistent terms and 

conditions in collateral documents such 

as attachments to the TIA or the 

recipient’s articles of collaboration. 

§ 603.1015 Execution. 

(a) If the recipient is a consortium that 

is not formally incorporated and the 

consortium members prefer to have the 

agreement signed by all of them 

individually, the agreement may be 

executed in that manner. 

(b) If they wish to designate one 

consortium member to sign the 

agreement on behalf of the consortium 

as a whole, the determination whether 

to execute the agreement in that way 

should not be made until the 

contracting officer reviews the 

consortium’s articles of collaboration 

with legal counsel. 

(1) The purposes of the review are to: 

(i) Determine whether the articles 

properly authorize one participant to 

sign on behalf of the other participants 

and are binding on all consortium 

members with respect to the RD&D 

project; and 

(ii) Assess the risk that otherwise 

could exist when entering into an 

agreement signed by a single member on 

behalf of a consortium that is not a legal 

entity. For example, the contracting 

officer should assess whether the 

articles of collaboration adequately 

address consortium members’ future 

liabilities related to the RD&D project 

(e.g., whether they will have joint and 

severable liability). 

(2) After the review, in consultation 

with legal counsel, the contracting 

officer should determine whether it is 

better to have all of the consortium 

members sign the agreement 

individually or to allow them to 

designate one member to sign on all 

members’ behalf. 

Reporting Information About the 

Award 

§ 603.1020 File documents. 

The award file should include an 

analysis which: 

(a) Briefly describes the program and 

details the specific commercial benefits 

that should result from the project 

supported by the TIA. If the recipient is 

a consortium that is not formally 

incorporated, a copy of the signed 

articles of collaboration should be 

attached. 

(b) Describes the process that led to 

the award of the TIA, including how 

DOE solicited and evaluated proposals 

and selected the one supported through 

the TIA. 

(c) Explains the basis for the decision 

that a TIA was the most appropriate 

instrument, in accordance with the 

factors in Subpart B of this part. The 

explanation must include the answers to 

the relevant questions in § 603.225(a) 

through (d). 

(d) Explains how the recipient’s cost 

sharing contributions was valued in 

accordance with §§ 603.530 through 

603.555. For a fixed-support TIA, the 

file must document the analysis 

required (see § 603.560) to set the fixed 

level of Federal support; the 

documentation must explain how the 

recipient’s minimum cost share was 

determined and how the expenditures 

required to achieve the project outcomes 

were estimated. 

(e) Documents the results of the 

negotiation, addressing all significant 

issues in the TIA’s provisions. 

Subpart I—Post-Award Administration 

§ 603.1100 Contracting officer’s postaward responsibilities. 

Generally, the contracting officer’s 

post-award responsibilities are the same 

responsibilities as those for any 

cooperative agreement. Responsibilities 

for a TIA include: 

(a) Participating as the business 

partner to the DOE program official to 

ensure the Government’s substantial 

involvement in the RD&D project. This 

may involve attendance with program 

officials at kickoff meetings or postaward conferences with recipients. It 

also may involve attendance at the 

consortium management’s periodic 

meetings to review technical progress, 

financial status, and future program 

plans. 

(b) Tracking and processing of reports 

required by the award terms and 

conditions, including periodic business 

status reports, programmatic progress 

reports, and patent reports. 

(c) Handling payment requests and 

related matters. For a TIA using advance 

payments, that includes reviews of 

progress to verify that there is continued 

justification for advancing funds, as 

discussed in § 603.1105(b). For a TIA 

using milestone payments, it includes 

making any needed adjustments in 

future milestone payment amounts, as 

discussed in § 603.1105(c). 

(d) Making continuation awards for 

subsequent budget periods, if the 

agreement includes separate budget 

periods. See 10 CFR 600.26(b). Any 

continuation award is contingent on 

availability of funds, satisfactory 

progress towards meeting the 

performance goals and milestones, 

submittal of required reports, and 

compliance with the terms and 

conditions of the award. 

(e) Coordinating audit requests and 

reviewing audit reports for both single 

audits of participants’ systems and any 

award-specific audits that may be 

needed, as discussed in §§ 603.1115 and 

603.1120. 

(f) Responding, after coordination 

with program officials and intellectual 

property counsel, to recipient requests 

for permission to assign or license 

intellectual property to entities that do 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69269 

not agree to manufacture substantially 

in the United States, as described in 

§ 603.875(b). Before granting approval 

for any technology, the contracting 

officer must secure assurance that any 

such assignment is consistent with 

license rights for Government use of the 

technology, and that other conditions 

for any such transfer are met. 

§ 603.1105 Advance payments or payable 

milestones. 

The contracting officer must: 

(a) For any expenditure-based TIA 

with advance payments or payable 

milestones, forward to the responsible 

payment office any interest that the 

recipient remits in accordance with 

§ 603.820(b). The payment office will 

return the amounts to the Department of 

the Treasury’s miscellaneous receipts 

account. 

(b) For any expenditure-based TIA 

with advance payments, consult with 

the program official and consider 

whether program progress reported in 

periodic reports, in relation to reported 

expenditures, is sufficient to justify the 

continued authorization of advance 

payments under § 603.805(b). 

(c) For any expenditure-based TIA 

using milestone payments, work with 

the program official at the completion of 

each payable milestone or upon receipt 

of the next business status report to: 

(1) Compare the total amount of 

project expenditures, as recorded in the 

payable milestone report or business 

status report, with the projected budget 

for completing the milestone; and 

(2) Adjust future payable milestones, 

as needed, if expenditures lag 

substantially behind what was 

originally projected and the contracting 

officer judges that the recipient is 

receiving Federal funds sooner than 

necessary for program purposes. Before 

making adjustments, the contracting 

officer should consider how large a 

deviation is acceptable at the time of the 

milestone. For example, suppose that 

the first milestone payment for a TIA is 

$50,000, and that the awarding official 

set the amount based on a projection 

that the recipient would have to expend 

$100,000 to reach the milestone (i.e., the 

original plan was for the recipient’s 

share at that milestone to be 50% of 

project expenditures). If the milestone 

payment report shows $90,000 in 

expenditures, the recipient’s share at 

this point is 44% ($40,000 out of the 

total $90,000 expended, with the 

balance provided by the $50,000 

milestone payment of Federal funds). 

For this example, the contracting officer 

should adjust future milestones if a 6% 

difference in the recipient’s share at the 

first milestone is judged to be too large, 

but not otherwise. Remember that 

milestone payment amounts are not 

meant to track expenditures precisely at 

each milestone and that a recipient’s 

share will increase as it continues to 

perform RD&D and expend funds, until 

it completes another milestone to trigger 

the next Federal payment. 

§ 603.1110 Other payment responsibilities. 

Regardless of the payment method, 

the contracting officer should ensure 

that: 

(a) The request complies with the 

award terms; 

(b) Available funds are adequate to 

pay the request; 

(c) The recipient will not have excess 

cash on hand, based on expenditure 

patterns; and 

(d) Payments are not withheld, except 

in one of the circumstances described in 

10 CFR 600.312(g). 

§ 603.1115 Single audits. 

For audits of for-profit participant’s 

systems, under §§ 603.640 through 

603.660, the contracting officer is the 

focal point for ensuring that participants 

submit audit reports and for resolving 

any findings in those reports. The 

contracting officer’s responsibilities 

regarding single audits of nonprofit 

participant’s systems are identified in 

the DOE ‘‘Guide to Financial 

Assistance.’’

§ 603.1120 Award-specific audits. 

Guidance on when and how the 

contracting officer should request 

additional audits for an expenditurebased TIA is identical to the guidance 

in 10 CFR 600.316(d). If the contracting 

officer requires an award-specific 

examination or audit of a for-profit 

participant’s records related to a TIA, 

the contracting officer must use the 

auditor specified in the award terms and 

conditions, which should be the same 

auditor who performs periodic audits of 

the participant. 

Subpart J—Definitions of Terms Used 

in This Part 

The terms defined in 10 CFR 600.3 

apply to all DOE financial assistance, 

including a TIA. In addition to those 

terms, the following terms are used in 

this part. 

§ 603.1205 Advance. 

A payment made to a recipient before 

the recipient disburses the funds for 

program purposes. Advance payments 

may be based upon a recipient’s request 

or a predetermined payment schedule. 

§ 603.1210 Articles of collaboration. 

An agreement among the participants 

in a consortium that is not formally 

incorporated as a legal entity, by which 

they establish their relative rights and 

responsibilities (see § 603.515). 

§ 603.1215 Assistance. 

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 used to provide assistance. 

§ 603.1220 Award-specific audit. 

An audit of a single TIA, usually done 

at the cognizant contracting officer’s 

request, to help resolve issues that arise 

during or after the performance of the 

RD&D project. An award-specific audit 

of an individual award differs from a 

periodic audit of a participant (as 

defined in § 603.1295). 

§ 603.1225 Cash contributions. 

A recipient’s cash expenditures made 

as contributions toward cost sharing, 

including expenditures of money that 

third parties contributed to the 

recipient. 

§ 603.1230 Commercial firm. 

A for-profit firm or segment of a forprofit firm (e.g., a division or other 

business unit) that does a substantial 

portion of its business in the 

commercial marketplace. 

§ 603.1235 Consortium. 

A group of RD&D-performing 

organizations that either is formally 

incorporated or that otherwise agrees to 

jointly carry out a RD&D project (see 

definition of ‘‘articles of collaboration,’’

in § 603.1210). 

§ 603.1240 Cooperative agreement. 

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 

§ 603.1270), except that substantial 

involvement is expected between the 

DOE 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. 

§ 603.1245 Cost sharing. 

A portion of project costs from nonFederal sources that are borne by the 

recipient or non-Federal third parties on 

behalf of the recipient, rather than by 

the Federal Government. 

§ 603.1250 Data. 

Recorded information, regardless of 

form or the media on which it may be 

69270 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

recorded. The term includes technical 

data and computer software. It does not 

include information incidental to 

administration, such as financial, 

administrative, cost or pricing, or other 

management information related to the 

administration of a TIA. 

§ 603.1255 Equipment. 

Tangible property, other than real 

property, that has a useful life of more 

than one year and an acquisition cost of 

$5,000 or more per unit. 

§ 603.1260 Expenditure-based award. 

A Federal Government assistance 

award for which the amounts of interim 

payments or the total amount ultimately 

paid (i.e., the sum of interim payments 

and final payment) are subject to 

redetermination or adjustment, based on 

the amounts expended by the recipient 

in carrying out the purposes for which 

the award was made, as long as the 

redetermination or adjustment does not 

exceed the total Government funds 

obligated to the award. Most Federal 

Government grants and cooperative 

agreements are expenditure-based 

awards. 

§ 603.1265 Expenditures or outlays. 

Charges made to the project or 

program. They may be reported either 

on a cash or accrual basis, as shown in 

the following table: 

If reports are prepared on a . . . Expenditures are the sum of . . . 

(a) Cash basis .......................................................................................... (1) Cash disbursements for direct charges for goods and services; 

(2) The amount of indirect expense charged; 

(3) The value of third party in-kind contributions applied; and 

(4) The amount of cash advances and payments made to any other organizations for the performance of a part of the RD&D effort. 

(b) Accrual basis ....................................................................................... (1) Cash disbursements for direct charges for goods and services; 

(2) The amount of indirect expense incurred; 

(3) The value of in-kind contributions applied; and 

(4) The net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by 

employees, contractors, and other payees and other amounts becoming owed under programs for which no current services or performance are required. 

§ 603.1270 Grant. 

A legal instrument which, consistent 

with 31 U.S.C. 6304, is used to enter 

into a relationship: 

(a) The principal purpose of which 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 

Department of Energy’s direct benefit or 

use. 

(b) In which substantial involvement 

is not expected between the DOE and 

the recipient when carrying out the 

activity contemplated by the grant. 

§ 603.1275 In-kind contributions. 

The value of non-cash contributions 

made by a recipient or non-Federal third 

parties toward cost sharing. 

§ 603.1280 Institution of higher education. 

An educational institution that: 

(a) Meets the criteria in section 101 of 

the Higher Education Act of 1965 (20 

U.S.C. 1001); and 

(b) Is subject to the provisions of OMB 

Circular A–110, ‘‘Administrative 

Requirements for Grants and 

Agreements with Institutions of Higher 

Education, Hospitals, and Other NonProfit Organizations,’’ as implemented 

by the Department of Energy at 10 CFR 

600, Subpart B. 

§ 603.1285 Intellectual property. 

Patents, trademarks, copyrights, mask 

works, protected data, and other forms 

of comparable property protected by 

Federal law and foreign counterparts. 

§ 603.1290 Participant. 

A consortium member or, in the case 

of an agreement with a single for-profit 

entity, the recipient. Note that a forprofit participant may be a firm or a 

segment of a firm (e.g., a division or 

other business unit). 

§ 603.1295 Periodic audit. 

An audit of a participant, performed 

at an agreed-upon time (usually a 

regular time interval), to determine 

whether the participant as a whole is 

managing its Federal awards in 

compliance with the terms of those 

awards. Appendix A to this part 

describes what such an audit may cover. 

A periodic audit of a participant differs 

from an award-specific audit of an 

individual award (as defined in 

§ 603.1220). 

§ 603.1300 Procurement contract. 

A federal government procurement 

contract. It is 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 non-government 

entity when the principal purpose of the 

instrument is to acquire property or 

services for the direct benefit or use of 

the Federal Government. See the more 

detailed definition of the term 

‘‘contract’’ at 48 CFR 2.101. 

§ 603.1305 Program income. 

Gross income earned by the recipient 

or a participant that is generated by a 

supported activity or earned as a direct 

result of a TIA. Program income 

includes but is not limited to: income 

from fees for performing services; the 

use or rental of real property, 

equipment, or supplies acquired under 

a TIA; the sale of commodities or items 

fabricated under a TIA; and license fees 

and royalties on patents and copyrights. 

Interest earned on advances of Federal 

funds is not program income. 

§ 603.1310 Program official. 

A federal government program 

manager, project officer, scientific 

officer, or other individual who is 

responsible for managing the technical 

program being carried out through the 

use of a TIA. 

§ 603.1315 Property. 

Real property, equipment, supplies, 

and intellectual property, unless stated 

otherwise. 

§ 603.1320 Real property. 

Land, including land improvements, 

structures and appurtenances thereto, 

but excluding movable machinery and 

equipment. 

§ 603.1325 Recipient. 

An organization or other entity that 

receives a TIA from DOE. Note that a 

for-profit recipient may be a firm or a 

segment of a firm (e.g., a division or 

other business unit). 

Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 69271 

§ 603.1330 Supplies. 

Tangible property other than real 

property and equipment. Supplies have 

a useful life of less than one year or an 

acquisition cost of less than $5,000 per 

unit. 

§ 603.1335 Termination. 

The cancellation of a TIA, in whole or 

in part, at any time prior to either: 

(a) The date on which all work under 

the TIA is completed; or 

(b) The date on which Federal 

sponsorship ends, as given in the award 

document or any supplement or 

amendment thereto. 

§ 603.1340 Technology investment 

agreement. 

A TIA is a special type of assistance 

instrument used to increase 

involvement of commercial firms in the 

DOE research, development and 

demonstration (RD&D) programs. A TIA, 

like a cooperative agreement, requires 

substantial Federal involvement in the 

technical or management aspects of the 

project. A TIA may be either a type of 

cooperative agreement or a type of 

assistance transaction other than a 

cooperative agreement, depending on 

the intellectual property provisions. A 

TIA is either: 

(a) A type of cooperative agreement 

with more flexible provisions tailored 

for involving commercial firms (as 

distinct from a cooperative agreement 

subject to all of the requirements in 10 

CFR part 600), but with intellectual 

property provisions in full compliance 

with the DOE intellectual property 

statutes (i.e., Bayh-Dole statute and 42 

U.S.C. sections 2182 and 5908, as 

implemented in 10 CFR 600.325); or 

(b) An assistance transaction other 

than a cooperative agreement, if its 

intellectual property provisions vary 

from the Bayh-Dole statute and 42 

U.S.C. sections 2182 and 5908, which 

require the Government to retain certain 

intellectual property rights, and require 

differing treatment between large 

businesses and nonprofit organizations 

or small businesses. 

Appendix A to Part 603—Applicable 

Federal Statutes, Executive Orders, and 

Government-Wide Regulations 

Whether the TIA is a cooperative 

agreement or a type of assistance transaction 

other than a cooperative agreement, the terms 

and conditions of the agreement must 

provide for recipients’ compliance with 

applicable Federal statutes, Executive Orders 

and Government-wide regulations. This 

appendix lists some of the more common 

requirements to aid in identifying ones that 

apply to a specific TIA. The list is not 

intended to be all-inclusive, however; the 

contracting officer may need to consult legal 

counsel to verify whether there are others 

that apply (e.g., due to a provision in the 

appropriations act for the specific funds in 

use or due to a statute or rule that applies to 

a particular program or type of activity). 

A. Certifications 

All financial assistance applicants, 

including applicants requesting a TIA must 

comply with the prohibitions concerning 

lobbying in a Government-wide common rule 

that the DOE has codified at 10 CFR part 601. 

The ‘‘List of Certifications and Assurances for 

SF 424(R&R)’’ on the DOE Applicant and 

Recipient page at http://grants.pr.doe.gov 

includes the Government-wide certification 

that must be provided with a proposal for a 

financial assistance award, including a TIA. 

B. Assurances That Apply to a TIA 

Currently the DOE approach to 

communicating Federal statutes, Executive 

Orders and Government-wide regulations is 

to provide potential applicants a list of 

‘‘National Policies Assurances to be 

Incorporated as Award Terms’’ in the 

program announcement (This list is available 

on the Applicant and Recipient Page at 

http://grants.pr.doe.gov under Award 

Terms). The contracting officer should follow 

this approach for announcements that allow 

for the award of a TIA. The contracting 

officer should normally incorporate by 

reference or attach the list of national policy 

assurances to a TIA award. Of these 

requirements, the following four assurances 

apply to all TIA: 

1. Prohibitions on discrimination 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 DOE 

regulations at 10 CFR part 1040. These apply 

to all financial assistance. They require 

recipients to flow down the prohibitions to 

any subrecipients performing a part of the 

substantive RD&D program (as opposed to 

suppliers from whom recipients purchase 

goods or services). 

2. Prohibitions on discrimination on the 

basis of age, in the Age Discrimination Act 

of 1975 (42 U.S.C. 6101, et seq.) as 

implemented by DOE regulations at 10 CFR 

part 1040. They apply to all financial 

assistance and require flow down to 

subrecipients. 

3. Prohibitions on discrimination on the 

basis of handicap, in section 504 of the 

Rehabilitation Act of 1973 (29 U.S.C. 794) as 

implemented by DOE regulations at 10 CFR 

part 1041. They apply to all financial 

assistance and require flow down to 

subrecipients. 

4. Preferences for use of U.S.-flag air 

carriers in the International Air 

Transportation Fair Competitive Practices 

Act of 1974 (49 U.S.C. 40118), which apply 

to uses of U.S. Government funds. 

C. Other Assurances 

Additional assurance requirements may 

apply in certain circumstances, as follows: 

1. If construction work is to be done under 

a TIA or its subawards, it is subject to the 

prohibitions in Executive Order 11246 on 

discrimination on the basis of race, color, 

religion, sex, or national origin. 

2. If the RD&D involves human subjects or 

animals, it is subject to the requirements 

codified by the Department of Health and 

Human Services at 45 CFR part 46 and 

implemented by DOE at 10 CFR part 745 and 

rules on animal acquisition, transport, care, 

handling and use in 9 CFR parts 1 through 

4, Department of Agriculture rules and rules 

of the Department of Interior at 50 CFR parts 

10 through 24 and Commerce at 50 CFR parts 

217 through 277, respectively. See item a. or 

b., respectively, under the heading ‘‘Live 

organisms’’ included on the DOE ‘‘National 

Policy Assurances to Be Incorporated As 

Award Terms’’ on the Applicant and 

Recipient Page. 

3. If the RD&D involves actions that may 

affect the environment, it is subject to the 

National Environmental Policy Act, and may 

also be to subject to nation policy 

requirements for flood-prone areas, coastal 

zones, coastal barriers, wild and scenic 

rivers, and underground sources of drinking 

water. 

4. If the project may impact a historic 

property, it is subject to the National Historic 

Preservation Act of 1966 (16 U.S.C. 470, et 

seq.). 

Appendix B to Part 603—Flow Down 

Requirements for Purchases of Goods 

and Services 

A. As discussed in § 603.705, the 

contracting officer must inform recipients of 

any requirements that flow down to their 

purchases of goods or services (e.g., supplies 

or equipment) under their TIA. Note that 

purchases of goods or services differ from 

subawards, which are for substantive RD&D 

program performance. 

B. Appendix A to 10 CFR part 600, subpart 

D lists eight requirements that commonly 

apply to firms’ purchases under grants or 

cooperative agreements. Of those eight, two 

that apply to all recipients’ purchases under 

a TIA are: 

1. Byrd Anti-Lobbying Amendment (31 

U.S.C. 1352). A contractor submitting a bid 

to the recipient for a contract award of 

$100,000 or more must file a certification 

with the recipient that it has not and will not 

use Federal appropriations for certain 

lobbying purposes. The contractor also must 

disclose any lobbying with non-Federal 

funds that takes place in connection with 

obtaining any Federal award. For further 

details, see 10 CFR part 601, the DOE’s 

codification of the Government-wide 

common rule implementing this amendment. 

2. Debarment and suspension. Recipients 

may not make contract awards that exceed 

the simplified acquisition threshold 

(currently $100,000) and certain other 

contract awards may not be made to parties 

listed on the General Services Administration 

(GSA) ‘‘List of Parties Excluded from Federal 

Procurement and Nonprocurement Programs. 

The GSA list contains the names of parties 

debarred, suspended, or otherwise excluded 

by agencies, and parties declared ineligible 

under statutory or regulatory authority other 

than Executive Orders 12549 (3 CFR, 1986 

Comp., p. 189) and 12689 (3 CFR, 1989 

Comp., p. 235). For further details, see 

subparts A through E of 10 CFR part 606, 

which is the DOE’s codification of the 

69272 Federal Register / Vol. 70, No. 219 / Tuesday, November 15, 2005 / Rules and Regulations 

Government-wide common rule 

implementing Executive Orders 12549 and 

12689. 

C. One other requirement applies only in 

cases where construction work is to be 

performed under the TIA with Federal funds 

or recipient funds counted toward required 

cost sharing: 

1. Equal Employment Opportunity. If the 

TIA includes construction work, the 

contracting officer should inform the 

recipient that Department of Labor 

regulations at 41 CFR 60–1.4(b) prescribe a 

clause that must be incorporated into 

construction awards and subawards. Further 

details are provided in Appendix B to 10 CFR 

part 600 subpart D, item 1. 

[FR Doc. 05–22475 Filed 11–14–05; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 97 

[Docket No. 30464; Amdt. No. 3140] 

Standard Instrument Approach 

Procedures, Weather Takeoff 

Minimums; Miscellaneous 

Amendments 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This amendment establishes, 

amends, suspends, or revokes Standard 

Instrument Approach Procedures 

(SIAPs) and/or Weather Takeoff 

Minimums for operations at certain 

airports. These regulatory actions are 

needed because of the adoption of new 

or revised criteria, or because of changes 

occurring in the National Airspace 

System, such as the commissioning of 

new navigational facilities, addition of 

new obstacles, or changes in air traffic 

requirements. These changes are 

designed to provide safe and efficient 

use of the navigable airspace and to 

promote safe flight operations under 

instrument flight rules at the affected 

airports. 

DATES: This rule is effective November 

15, 2005. The compliance date for each 

SIAP and/or Weather Takeoff 

Minimums is specified in the 

amendatory provisions. 

The incorporation by reference of 

certain publications listed in the 

regulations is approved by the Director 

of the Federal Register as of November 

15, 2005. 

ADDRESSES: Availability of matters 

incorporated by reference in the 

amendment is as follows: 

For Examination 

1. FAA Rules Docket, FAA 

Headquarters Building, 800 

Independence Avenue, SW., 

Washington, DC 20591; 

2. The FAA Regional Office of the 

region in which the affected airport is 

located; 

3. The National Flight Procedures 

Office, 6500 South MacArthur Blvd., 

Oklahoma City, OK 73169; or 

4. The National Archives and Records 

Administration (NARA). For 

information on the availability of this 

material at NARA, call 202–741–6030, 

or go to: http://www.archives.gov/ 

federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html. 

For Purchase 

Individual SIAP and Weather Takeoff 

Minimums copies may be obtained 

from: 

1. FAA Public Inquiry Center (APA–

200), FAA Headquarters Building, 800 

Independence Avenue, SW., 

Washington, DC 20591; or 

2. The FAA Regional Office of the 

region in which the affected airport is 

located. 

By Subscription 

Copies of all SIAPs and Weather 

Takeoff Minimums mailed once every 2 

weeks, are for sale by the 

Superintendent of Documents, U.S. 

Government Printing Office, 

Washington, DC 20402. 

FOR FURTHER INFORMATION CONTACT: 

Donald P. Pate, Flight Procedure 

Standards Branch (AFS–420), Flight 

Technologies and Programs Division, 

Flight Standards Service, Federal 

Aviation Administration, Mike 

Monroney Aeronautical Center, 6500 

South MacArthur Blvd., Oklahoma City, 

OK 73169 (Mail Address: P.O. Box 

25082, Oklahoma City, OK 73125) 

telephone: (405) 954–4164. 

SUPPLEMENTARY INFORMATION: This 

amendment to Title 14 of the Code of 

Federal Regulations, part 97 (14 CFR 

part 97), establishes, amends, suspends, 

or revokes SIAPs and/or Weather 

Takeoff Minimums. The complete 

regulatory description of each SIAP 

and/or Weather Takeoff Minimums is 

contained in official FAA form 

documents which are incorporated by 

reference in this amendment under 5 

U.S.C. 552(a), 1 CFR part 51, and 14 

CFR part 97.20. The applicable FAA 

Forms are identified as FAA Forms 

8260–3, 8260–4, 8260–5 and 8260–15A. 

Materials incorporated by reference are 

available for examination or purchase as 

stated above. 

The large number of SIAPs and/or 

Weather Takeoff Minimums, their 

complex nature, and the need for a 

special format make their verbatim 

publication in the Federal Register 

expensive and impractical. Further, 

airmen do not use the regulatory text of 

the SIAPs and/or Weather Takeoff 

Minimums but refer to their depiction 

on charts printed by publishers of 

aeronautical materials. Thus, the 

advantages of incorporation by reference 

are realized and publication of the 

complete description of each SIAP and/ 

or Weather Takeoff Minimums 

contained in FAA form documents is 

unnecessary. The provisions of this 

amendment state the affected CFR 

sections, with the types and effective 

dates of the SIAPs and/or Weather 

Takeoff Minimums. This amendment 

also identifies the airport, its location, 

the procedure identification and the 

amendment number. 

The Rule 

This amendment to 14 CFR part 97 is 

effective upon publication of each 

separate SIAP and/or Weather Takeoff 

Minimums as contained in the 

transmittal. Some SIAP and/or Weather 

Takeoff Minimums amendments may 

have been previously issued by the FAA 

in a Flight Data Center (FDC) Notice to 

Airmen (NOTAM) as an emergency 

action of immediate flight safety relating 

directly to published aeronautical 

charts. The circumstances which 

created the need for some SIAP, and/or 

Weather Takeoff Minimums 

amendments may require making them 

effective in less than 30 days. For the 

remaining SIAPs and/or Weather 

Takeoff Minimums, an effective date at 

least 30 days after publication is 

provided. 

Further, the SIAPs and/or Weather 

Takeoff Minimums contained in this 

amendment are based on the criteria 

contained in the U.S. Standard for 

Terminal Instrument Procedures 

(TERPS). In developing these SIAPs 

and/or Weather Takeoff Minimums, the 

TERPS criteria were applied to the 

conditions existing or anticipated at the 

affected airports. Because of the close 

and immediate relationship between 

these SIAPs and/or Weather Takeoff 

Minimums and safety in air commerce, 

I find that notice and public procedure 

before adopting these SIAPs and/or 

Weather Takeoff Minimums are 

impracticable and contrary to the public 

interest and, where applicable, that 

good cause exists for making some 

SIAPs and/or Weather Takeoff 

Minimums effective in less than 30 

days.