This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

54291 

Vol. 73, No. 183 

Friday, September 19, 2008 

DEPARTMENT OF AGRICULTURE 

Agricultural Research Service 

7 CFR Part 550 

RIN–0518–AA03 

General Administrative Policy for NonAssistance Cooperative Agreements 

AGENCY: Agricultural Research Service, 

REE, USDA. 

ACTION: Final rule. 

SUMMARY: This Part establishes uniform 

guidelines within the Research, 

Education, and Economics (REE) 

mission area on the use, award, and 

administration of cooperative 

agreements awarded under the authority 

of 7 U.S.C. 3318(b). 

DATES: Effective Date: October 1, 2008. 

FOR FURTHER INFORMATION CONTACT: Kim 

Hicks, (301) 504–1141. 

SUPPLEMENTARY INFORMATION: 

Background 

Section 1424 of the Food Security Act 

of 1985, Public Law No. 99–198, 

amended Section 1472(b) of the 

National Agricultural Research, 

Extension, and Teaching Policy Act of 

1977 (7 U.S.C. 3318(b)) to authorize the 

Secretary to use a cooperative agreement 

as a legal instrument reflecting a 

relationship between the Secretary and 

a State cooperative institution, State 

department of agriculture, college, 

university, other research or educational 

institution or organization, Federal or 

private agency or organization, 

individual, or any other party, if the 

Secretary determines (a) the objectives 

of the agreement will serve a mutual 

interest of the parties to the agreement 

in agricultural research, extension, and 

teaching activities, including statistical 

reporting; and (b) all parties will 

contribute resources to the 

accomplishment of those objectives. 

The cooperative agreements 

authorized by 7 U.S.C. 3318(b) have 

been determined to be neither 

procurement nor assistance in nature 

and, therefore, not subject to the 

provisions of Federal Grant and 

Cooperative Agreement Act of 1977. 

These cooperative agreements are 

exempt from Department of Agriculture 

(USDA) rules and regulations 

promulgated at 7 CFR 3015, 3016, and 

3019. The agreements covered by this 

rule are characterized by mutual interest 

and benefit to both parties, and reflect 

the unique cooperative relationship that 

exists between the REE agencies and the 

various public and private organizations 

engaged in the conduct of agricultural 

research, extension, and teaching 

activities. 

Although the nonassistance 

cooperative agreements described in 

this rule are substantively different than 

the Federal assistance-type cooperative 

agreements used by most Federal 

awarding agencies and are not subject to 

the grants management Common Rule 

found at 2 CFR 215, ‘‘Uniform 

Administrative Requirements for Grants 

and Agreements With Institutions of 

Higher Education, Hospitals and Other 

Non-profit Organizations,’’ REE has 

decided to apply many of the provisions 

of the Common Rule as a matter of good 

business practice. Many of the standards 

and provisions of the Common Rule 

have been adopted in whole or in part 

in the proposed rule because they 

embody principles of good management 

and sound financial stewardship 

important to all Federal assistance and 

nonassistance awards. Additionally, we 

have included by reference specific 

provisions of other Federal assistancetype or procurement guidance 

documents such as 7 CFR 3052, 42 

U.S.C. 6962, and the Cash Management 

Improvement Act, codified at 31 CFR 

part 205, for the same reasons. 

Comments 

On September 21, 2006, the Office of 

Management and Budget (OMB) 

reviewed the workplan on the proposed 

rule and determined the docket to be 

not significant. The proposed rule was 

published in the Federal Register on 

July 26, 2007, and the comment period 

ended on September 24, 2007. 

We received two comments; one 

comment that was irrelevant to the 

proposed rule and one comment from 

the University of California, Oakland, 

California. 

The University of California 

welcomed the proposed rule and 

commended the Agency for its efforts, 

especially with regard to explicit 

adoption of some of the prior approval 

authorities consistent with OMB 

Circular A–21. The University 

expressed concerns with regard to 

resource contributions and payment 

frequency. These concerns are duly 

noted. However, ARS implemented the 

same guidelines for resource 

contributions and payment frequency as 

part of the general provisions governing 

all ARS ‘‘Non-assistance Cooperative 

Agreements’’ on September 1, 2004. The 

same requirements are stated verbatim 

in the proposed rule. ARS and the 

University have cooperated successfully 

under these guidelines for nearly four 

years with minimal disruption to 

routine business operations. Therefore, 

ARS is making no changes to the final 

rule. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. The rule has 

been determined to be not significant for 

the purposes of Executive Order 12866. 

Executive Order 12372 

The programs covered by this rule are 

listed in the Catalog of Federal Domestic 

Assistance (CFDA) under the following 

CFDA numbers: The Agricultural 

Research Service found at 10.001; the 

Economics Research Service found at 

10.250; and the National Agricultural 

Statistics Service found at 10.950. 

Because this rule does not authorize 

any programs or program expenditures, 

this notice is not subject to Executive 

Order 12372, which requires 

intergovernmental consultation with 

State and local officials. (See 7 CFR part 

3015, subpart V.) 

Executive Order 12988—Civil Justice 

Reform 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under this rule, (1) State and 

local laws and regulations will not be 

preempted; (2) no retroactive effect will 

be given to this rule; and (3) 

administrative proceedings will not be 

required before parties may file suit in 

court challenging this rule. 


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Paperwork Reduction Act 

In accordance with section 3507(d) of 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the information 

collection or recordkeeping 

requirements included in this rule will 

be submitted for approval to OMB. 

List of Subjects in Part 550 

Agricultural research, Non-assistance, 

Procedural rules, Research, Science and 

technology. 

■ For the reasons stated in the preamble, 

the Department of Agriculture, 

Agriculture Research Service, amends 7 

CFR chapter V by adding part 550 as set 

forth below. 

PART 550—GENERAL 

ADMINISTRATIVE POLICY FOR NONASSISTANCE COOPERATIVE 

AGREEMENTS 

Subpart A—General 

Sec. 

550.1 Purpose and scope. 

550.2 Definitions. 

550.3 Applicability. 

550.4 Eligibility. 

550.5 Competition. 

550.6 Duration. 

550.7 Exceptions. 

550.8 Conflicting policies and deviations. 

550.9 Other applicable regulations. 

550.10 Special Award Conditions. 

Subpart B—Formation of Agreements 

550.11 Purpose. 

550.12 Statutory authorization required 

(REE Agency). 

550.13 Mutuality of interest. 

550.14 Indirect costs/tuition remission. 

550.15 Resource contribution. 

550.16 Project development. 

550.17 Peer review. 

550.18 Assurances/certifications. 

Subpart C—Management of Agreements 

Financial Management 

550.19 Purpose. 

550.20 Standards for financial management 

systems. 

550.21 Funding availability. 

550.22 Payment. 

550.23 Program income. 

550.24 Non-Federal audits. 

550.25 Allowable costs. 

Program Management 

550.26 Monitoring program performance. 

550.27 Prior approvals. 

550.28 Publications and acknowledgement 

of support. 

550.29 Press releases. 

550.30 Advertising. 

550.31 Questionnaires and survey plans. 

550.32 Project supervision and 

responsibilities. 

550.33 Administrative supervision. 

550.34 Research misconduct. 

550.35 Rules of the workplace. 

Equipment/Property Standards 

550.36 Purpose of equipment/property 

standards. 

550.37 Title to equipment. 

550.38 Equipment. 

550.39 Equipment replacement insurance 

550.40 Supplies and other expendable 

property. 

550.41 Federally owned property. 

550.42 Intangible property. 

Procurement Standards 

550.43 Purpose of procurement standards. 

550.44 Cooperator responsibilities. 

550.45 Standards of conduct. 

550.46 Competition. 

550.47 Cost and price analysis. 

550.48 Procurement records. 

550.49 Contract administration. 

550.50 Contract provisions. 

Reports and Records 

550.51 Purpose of reports and records. 

550.52 Reporting program performance. 

550.53 Financial reporting. 

550.54 Invention disclosure and utilization 

reporting. 

550.55 Retention and access requirements 

for records. 

Suspension, Termination and Enforcement 

550.56 Purpose of suspension, termination, 

and enforcement. 

550.57 Suspension and termination. 

550.58 Enforcement. 

Subpart D—Close Out 

550.59 Purpose. 

550.60 Closeout procedures. 

550.61 Subsequent adjustments and 

continuing responsibilities. 

550.62 Collection of amounts due. 

Authority: Section 1472(b) of the National 

Agricultural Research, Extension, and 

Teaching Policy Act of 1977, as amended (7 

U.S.C. 3318(b)). 

Subpart A—General 

§ 550.1 Purpose and scope. 

This Part establishes REE-wide 

standards of USDA’s award and 

administration of non-assistance 

cooperative agreements executed under 

the authority of Section 1472(b) of the 

National Agricultural Research, 

Extension, and Teaching Policy Act of 

1977, as amended (7 U.S.C. 3318(b)). 

These agreements are neither 

procurement nor assistance in nature, 

and therefore, are not subject to the 

Federal Grant and Cooperative 

Agreements Act of 1977. Accordingly, 

proper use of these cooperative 

agreements will promote and facilitate 

partnerships between the REE Agency 

and the Cooperator in support of 

research, extension and education 

projects of mutual benefit to each party. 

§ 550.2 Definitions. 

Accrued expenditures means the 

charges incurred by the Cooperator 

during a given period requiring the 

provision of funds for: 

(1) Goods and other tangible property 

received; 

(2) Services performed by employees, 

contractors, subrecipients, and other 

payees; and 

(3) Other amounts becoming owed 

under programs for which no current 

services or performance is required. 

Acquisition cost of equipment means 

the net invoice price of the equipment, 

including the cost of modifications, 

attachments, accessories, or auxiliary 

apparatus necessary to make the 

property usable for the purpose for 

which it was acquired. Other charges, 

such as the cost of installation, 

transportation, taxes, duty or protective 

in-transit insurance, shall be included 

or excluded from the unit acquisition 

cost in accordance with the Cooperator’s 

regular accounting practices. 

Advance means a payment made to a 

Cooperator upon its request either 

before outlays are made by the 

Cooperator or through the use of 

predetermined payment schedules. 

Authorized Departmental Officer 

(ADO) means the REE Agency’s official 

delegated authority to negotiate, award, 

administer, suspend, and terminate nonassistance cooperative agreements. 

Authorized Departmental Officer’s 

Designated Representative (ADODR) 

means the REE Agency’s technical 

representative, acting within the scope 

of delegated authority, who is 

responsible for participating with the 

Cooperator in the accomplishment of a 

cooperative agreement’s objectives and 

monitoring and evaluating the 

Cooperator’s performance. 

Award means a non-assistance 

cooperative agreement which provides 

money or in-kind services or property in 

lieu of money, to an eligible Cooperator. 

The term does not include: Financial 

assistance awards in the form of grants, 

cooperative agreements, loans, loan 

guarantees, interest subsidies, or 

insurance; direct payments of any kind 

to individuals; and contracts which are 

required to be entered into and 

administered under procurement laws 

and regulations. 

CFR means the Code of Federal 

Regulations. 

Closeout means the process by which 

a REE Agency determines that all 

applicable administrative actions and 

all required work under the agreement 

has been completed by the Cooperator 

and REE Agency. 

Contract means a procurement 

contract entered into by the cooperator 

or a subcontractor of the cooperator 

pursuant to the cooperative agreement. 


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Cooperator means any State 

agricultural experiment station, State 

cooperative extension service, all 

colleges and universities, other research 

or education institutions and 

organizations, Federal and private 

agencies and organizations, individuals, 

and any other party, either foreign or 

domestic, receiving an award from a 

REE Agency. 

Disallowed costs means those charges 

incurred under the cooperative 

agreement that REE determines to be 

unallowable, in accordance with the 

applicable Federal cost principles or 

other terms and conditions contained in 

the cooperative agreement. 

Electronic Funds Transfer (EFT) 

means electronic payment methods 

used to transfer funds to a Cooperator’s 

bank account (including HHS/PMS). 

Equipment means tangible 

nonexpendable personal property 

contributed or acquired by either an 

REE Agency or by the Cooperator, 

having a useful life of more than one 

year and an acquisition cost of $5000 or 

more per unit. However, consistent with 

Cooperator policy, lower limits may be 

established. 

Funding period means the period of 

time when Federal funding is available 

for obligation by the Cooperator. 

HHS–PMS means the Department of 

Health and Human Services/Payment 

Management System (also see EFT). 

i-Edison (Interagency Edison) is a 

database, which provides Federal 

grantee/Cooperator organizations and 

participating Federal agencies with the 

technology to electronically manage 

extramural invention portfolios in 

compliance with Federal reporting 

requirements. 

Intangible property means, 

trademarks, copyrights, patents and 

patent applications. 

Obligations means the amounts of 

orders placed, contracts and grants 

awarded, services received and similar 

transactions during a given period that 

require payment by the Cooperator 

during the same or a future period. 

OMB means the Office of Management 

and Budget. 

Outlays or expenditures means 

charges made to the project or program. 

Outlays and expenditures also include 

cash disbursements for direct charges 

for goods and services, the amount of 

indirect expense incurred, the value of 

in-kind contributions applied, and the 

net increase (or decrease) in the 

amounts owed by the Cooperator for 

goods and other property received, for 

services performed by employees, 

contractors, subrecipients, and other 

payees and other amounts becoming 

owed under programs for which no 

current services or performance are 

required. 

Peer Review is a process utilized by 

REE Agencies to: 

(1) Determine if agency sponsored 

research projects have scientific merit 

and program relevance; 

(2) Provide peer input and make 

improvements to project design and 

technical approaches; 

(3) Provide insight on how to conduct 

the highest quality research in support 

of Agency missions and programs. 

Personal property means property of 

any kind except real property. It may be 

tangible, having physical existence, or 

intangible, having no physical 

existence, such as copyrights, patents, 

or securities. 

Principle Investigator (PI) means the 

individual, designated by the 

Cooperator, responsible for directing 

and monitoring the performance, the 

day-to-day activities, and the scientific 

and technical aspects of the 

Cooperator’s portion of a REE funded 

project. The PI works jointly with the 

ADODR in the development of project 

objectives and all other technical and 

performance related aspects of the 

program or project. See additional 

responsibilities of PI in § 550.32. 

Prior approval means written 

approval by an ADO evidencing prior 

consent. 

Program income means gross income 

earned by the Cooperator that is directly 

generated by a supported activity or 

earned as a result of the award. Program 

income includes, but is not limited to, 

income from fees for services 

performed, the use or rental of real or 

personal property acquired under 

federally funded projects, the sale of 

commodities or items fabricated under 

an award, and license fees and royalties 

on patents and copyrights. Program 

income does not include the receipt of 

principal on loans, rebates, credits, 

discounts, etc., or interest earned on any 

of them, or interest earned on advances 

of Federal funds. 

Project costs means all allowable 

costs, incurred by the Cooperator and 

the REE Agency toward the completion 

of the project. 

Project period means the period 

established in the cooperative 

agreement during which Federal 

contributions begin and end. 

Property means, unless otherwise 

stated, personal property, equipment, 

intangible property. 

Publications mean all types of paper 

based media including electronic and 

audio media. 

Real property means land, including 

land improvements, structures and 

appurtenances thereto, but excludes 

movable machinery and equipment. 

REE Agency means the USDA Agency 

that enters into a cooperative agreement 

with the cooperator. 

State Cooperative Institutions are 

defined in statute as institutions 

designated or receiving funds pursuant 

to: 

(1) The First Morrill Act—The Land 

Grant Institutions. 

(2) The Second Morrill Act—The 1890 

Institutions. 

(3) The Hatch Act of 1887—The State 

Agricultural Experiment Stations. 

(4) The Smith-Lever Act—The State 

Extension Services. 

(5) The McIntire-Stennis Act of 

1962—The Cooperating Forestry 

Schools. 

(6) Public Law 95–113, Section 

1430—A college or university having an 

accredited college of veterinary 

medicine or a department of veterinary 

science or animal pathology or similar 

unit conducting animal health and 

disease research in a State Agricultural 

Experiment Station. 

(7) Public Law 97–98, Section 

1475b—Colleges, universities, and 

Federal laboratories having a 

demonstrated capacity in aquaculture 

research. 

(8) Public Law 97–98, Section 1480— 

Colleges, universities, and Federal 

laboratories having a demonstrated 

capacity of rangeland research. 

(9) Equity in Educational Land—Grant 

Status Act of 1994 (7 U.S.C. 301 note) 

1994 Institutions. 

Subaward means an award in the 

form of money or in-kind services or 

property in lieu of money, made under 

an award by a Cooperator to an eligible 

subrecipient or by a subrecipient to a 

lower tier subrecipient. 

Subrecipient means the legal entity to 

which a subaward is made and which 

is accountable to the Cooperator for the 

use of the funds provided. The term 

may include foreign or international 

organizations (such as agencies of the 

United Nations) at the discretion of the 

REE Agency. 

Supplies means all personal property 

excluding equipment, intangible 

property, as defined in this section, and 

inventions of a contractor conceived or 

first actually reduced to practice in the 

performance of work under a funding 

agreement (‘‘subject inventions’’), as 

defined in 37 CFR part 401, ‘‘Rights to 

Inventions Made by Nonprofit 

Organizations and Small Business Firms 

Under Government Grants, Contracts, 

and Cooperative Agreements.’’ 

Suspension means an action by a REE 

Agency that temporarily withdraws 

Federal sponsorship under an award, 


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pending corrective action by the 

Cooperator or pending a decision to 

terminate the award by the REE Agency. 

Suspension of an award is a separate 

action from suspension under Federal 

Agency regulations implementing 

Executive Orders 12549 and 12689, 

‘‘Debarment and Suspension.’’ 

Termination means the cancellation 

of Federal sponsorship, in whole or in 

part, under an agreement at any time 

prior to the date of completion. 

Unliquidated obligations are the 

amount of obligations incurred by the 

Cooperator for which an outlay has not 

been recorded. 

Unobligated balance means the 

portion of the funds authorized by the 

REE Agency that has not been obligated 

by the Cooperator and is determined by 

deducting the cumulative obligations 

from the cumulative funds authorized. 

Unrecovered indirect cost means the 

difference between the amount awarded 

and the amount, which could have been 

awarded under the Cooperator’s 

approved negotiated indirect cost rate. 

U.S.C. means the United States Code. 

USDA means the United States 

Department of Agriculture. 

§ 550.3 Applicability. 

This Part applies to all REE nonassistance cooperative agreements 

awarded under the authority of 7 U.S.C. 

3318(b). 

§ 550.4 Eligibility. 

REE agencies may enter into nonassistance cooperative agreements with 

State agricultural experiment stations, 

State cooperative extension services, all 

colleges and universities, other research 

or education institutions and 

organizations, Federal and private 

agencies and organizations, individuals, 

and any other party, either foreign or 

domestic, to further research, extension, 

or teaching programs in the food and 

agricultural sciences. (7 U.S.C. 

3318(b)(1)). 

§ 550.5 Competition. 

REE agencies may enter into nonassistance cooperative agreements, as 

authorized by this Part, without regard 

to any requirements for competition. (7 

U.S.C. 3318(e)). 

§ 550.6 Duration. 

REE may enter into non-assistance 

cooperative agreements for a period not 

to exceed five years. 

§ 550.7 Exceptions. 

This Part does not apply to: 

(a) USDA Federal Financial 

Assistance agreements subject to 7 CFR 

3015, 3016, or 3019. 

(b) Procurement contracts or other 

agreements subject to the Federal 

Acquisition Regulation (FAR) or the 

Agriculture Acquisition Regulation 

(AgAR); on Agreements providing loans 

or insurance directly to an individual. 

§ 550.8 Conflicting policies and deviations. 

This Part supersedes and takes 

precedence over any individual REE 

regulations and directives dealing with 

the award and administration of nonassistance cooperative agreements 

entered into under the delegated 

authority of 7 U.S.C. 3318(b). This Part 

may only be superseded, in whole or in 

part, by either a specifically worded 

statutory provision or a waiver 

authorized by the USDA–REE– 

Administrative and Financial 

Management (AFM)-Extramural 

Agreements Division (EAD) or any 

successor organization. Responsibility 

for developing, interpreting, and 

updating this Part is assigned to the 

USDA–REE–AFM–EAD or any 

successor organization. 

§ 550.9 Other applicable regulations. 

Related issuances are in other Parts of 

the CFR and the U.S.C. as follows: 

(a) 7 CFR Part 3017 ‘‘Governmentwide 

Debarment and Suspension’’; 

(b) 7 CFR Part 3018 ‘‘New Restrictions 

on Lobbying’’; 

(c) 7 CFR Part 3052 ‘‘Audits of States, 

Local Governments, and Nonprofit 

Organizations’’; 

(d) 7 CFR 3015.175 (b) ‘‘Copyrights’’; 

(e) 37 CFR 401.14 ‘‘Standard Patent 

Rights Clause’’; 

(f) 15 U.S.C. 205a et seq.—‘‘The 

Metric Conversion Act, as amended by 

the Omnibus Trade and 

Competitiveness Act’’; 

(g) 42 U.S.C. 6962 ‘‘Resource 

Conservation and Recovery Act 

(RCRA)’’. 

§ 550.10 Special Award Conditions. 

(a) REE Agencies may impose special 

conditions and/or additional 

requirements to a non-assistance 

agreement if a Cooperator: 

(1) Has a history of poor performance, 

(2) Is not financially stable, 

(3) Has a management system that 

does not meet the standards prescribed 

in this Part, 

(4) Has not conformed to the terms 

and conditions of a previous award, or 

(5) Is not otherwise responsible. 

(b) Special conditions and/or 

additional requirements may be added 

to an award provided that the 

Cooperator is notified in writing as to: 

the nature of the additional 

requirements, the reason why the 

additional requirements are being 

imposed, the nature of the corrective 

action needed, the time allowed for 

completing the corrective actions, and 

the method for requesting 

reconsideration of the additional 

requirements imposed. Any special 

conditions shall be promptly removed 

once the conditions that prompted them 

have been corrected. 

Subpart B—Formation of Agreements 

§ 550.11 Purpose. 

Sections 550.12 through 550.18 

prescribe instructions and other preaward matters to be used in establishing 

a non-assistance cooperative agreement. 

§ 550.12 Statutory authorization required 

(REE Agency). 

REE Agencies must have 

programmatic statutory authority for the 

proposed project prior to entering into 

any non-assistance cooperative 

agreement. 

§ 550.13 Mutuality of interest. 

The REE Agency shall document both 

parties interest in the project. Mutual 

interest exists when both parties benefit 

in the same qualitative way from the 

objectives of the agreement. If one party 

to the agreement would independently 

have an interest in the project, which is 

shared by the other party, and both 

parties pool resources to obtain the end 

result of the project, mutual interest 

exists. 

§ 550.14 Indirect cost/tuition remission. 

(a) Indirect Cost. (1) State Cooperative 

Institutions: Payment of indirect costs to 

State Cooperative Institutions in 

connection with non-assistance 

cooperative agreements awarded under 

the authority of 7 U.S.C. 3318(b) is 

prohibited. This prohibition does not 

apply to funds for international 

agricultural programs conducted by a 

State cooperative institution and 

administered by the Secretary or to 

funds provided by a Federal agency for 

such cooperative program or project 

through a fund transfer, advance or 

reimbursement. (7 U.S.C. 3319.) 

(2) Non-Profit Organizations: Payment 

of indirect costs to non-profit 

institutions in connection with USDA 

cooperative agreement, under the 

authority of 7 U.S.C. 3318(b), is limited 

to 10 percent of the total direct cost of 

the project. (Annual Appropriations Bill 

for Agriculture and Related agencies, 

General Provisions.) 

(3) All other cooperating 

organizations: With the exception of 

paragraphs (a)(1) and (2) of this section, 

payment of indirect costs is allowable in 

connection with REE non-assistance 

cooperative agreements. Reimbursement 


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of indirect costs is limited to the 

percentage(s) established in the 

Cooperator’s negotiated indirect cost 

rate schedule. 

(4) In any case, the REE Agency shall 

not reimburse indirect costs prior to 

receipt of the Cooperator’s negotiated 

indirect cost rate schedule. 

(b) Tuition Remission. (1) State 

Cooperative Institutions: 

Reimbursement of tuition expenses to 

State Cooperative Institutions in 

connection with REE non-assistance 

cooperative agreements is prohibited. (7 

U.S.C. 3319) 

(2) All other cooperating 

organizations: Except for paragraph 

(b)(1) of this section, tuition remission 

is an allowable expense as determined 

in accordance with the cost principles 

applicable to the Cooperator. REE 

agencies shall negotiate and approve 

such payments as related to the scope 

and objectives of the non-assistance 

agreement. 

§ 550.15 Resource contribution. 

Each party must contribute resources 

towards the successful completion of 

the project. Required resource 

contributions must be substantial 

enough to substantiate a true stake in 

the project as determined by the ADO. 

(a) REE Agency’s Contribution. The 

REE Agency’s contribution must consist 

of the total in-house costs to the REE 

Agency and the total amount to be 

reimbursed by the REE Agency to the 

Cooperator for all allowable costs agreed 

to in advance as reflected in the 

cooperative agreement. 

(b) Cooperator’s Contribution. (1) The 

Cooperator’s contribution must be no 

less than 20 percent of the total of the 

resource contributions under the 

cooperative agreement. Resource 

contributions of the Cooperator must 

consist of a sufficient amount of 

itemized direct costs to substantiate a 

true stake in the project as determined 

by the ADO. The Cooperator’s 

contribution must be maintained at 20 

percent of Federal funding throughout 

the life of the cooperative agreement. 

(2) Cooperators share of contributions 

may consist of ‘‘in-kind’’ contributions 

and may also include unrecoverable 

indirect costs. Such costs may be 

accepted as part of the Cooperator’s 

resource contribution when all of the 

following criteria are met: 

(i) Costs are verifiable from the 

Cooperator’s records. 

(ii) Costs are not included as 

contributions for any other federally 

assisted project or program. 

(iii) Costs are necessary and 

reasonable for proper and efficient 

accomplishment of project or program 

objectives. 

(iv) Costs are allowable under the 

applicable cost principles. 

(v) Costs are not paid by the Federal 

Government under another award, 

except where authorized by Federal 

statute to be used for cost sharing or 

matching. 

(vi) Costs conform to other provisions 

of this Part, as applicable. 

(3) Volunteer services furnished by 

professional and technical personnel, 

consultants, and other skilled and 

unskilled labor may be counted as 

resource contributions if the service is 

an integral and necessary part of an 

approved project or program. Rates for 

volunteer services shall be consistent 

with those paid for similar work in the 

Cooperator’s organization. In those 

instances in which the required skills 

are not found in the Cooperator 

organization, rates shall be consistent 

with those paid for similar work in the 

labor market in which the Cooperator 

competes for the kind of services 

involved. In either case, paid fringe 

benefits that are reasonable, allowable, 

and allocable may be included in the 

valuation. 

(4) When an employer other than the 

Cooperator furnishes the services of an 

employee, these services shall be valued 

at the employee’s regular rate of pay 

(plus an amount of fringe benefits that 

are reasonable, allowable, and allocable, 

but exclusive of overhead costs), 

provided these services are in the same 

skill for which the employee is normally 

paid. 

(5) Donated supplies may include 

such items as expendable equipment, 

office supplies, laboratory supplies or 

workshop and classroom supplies. 

Value assessed to donated supplies 

included in the cost sharing or matching 

share shall be reasonable and shall not 

exceed the fair market value of the 

property at the time of the donation. 

(6) The value of donated property 

shall be determined in accordance with 

the usual accounting policies of the 

Cooperator, with the following 

qualifications. 

(i) The value of donated land and 

buildings shall not exceed its fair 

market value at the time of donation to 

the Cooperator as established by an 

independent appraiser (e.g., certified 

real property appraiser or General 

Services Administration representative) 

and certified by a responsible official of 

the Cooperator. 

(ii) The value of donated equipment 

shall not exceed the fair market value of 

equipment of the same age and 

condition at the time of donation. 

(iii) The value of donated space shall 

not exceed the fair rental value of 

comparable space as established by an 

independent appraisal of comparable 

space and facilities in a privately owned 

building in the same locality. 

(iv) The value of loaned equipment 

shall not exceed its fair rental value. 

(v) The following requirements 

pertain to the Cooperator’s supporting 

records for in-kind contributions from 

third parties. 

(A) Volunteer services shall be 

documented and, to the extent feasible, 

supported by the same methods used by 

the Cooperator for its own employees. 

(B) The basis for determining the 

valuation for personal service, material, 

equipment, buildings, and land shall be 

documented. 

§ 550.16 Project development. 

REE provides partial funding to 

Cooperators to support research projects 

that contribute to REE program 

objectives and help carry out the REE 

mission. The Cooperator’s PI and the 

REE Agency’s ADODR shall jointly 

develop the following documentation: 

(a) Project Plan—A plan that shall be 

jointly developed by the REE ADODR 

and the Cooperator that is compliant 

with an REE program requirement. The 

project plan will utilize the REE 

provided format for external peer 

review. 

(b) Statement of Work—A detailed 

statement of work shall be jointly 

planned, developed and prepared by the 

Cooperator’s PI and the awarding 

Agency’s ADODR consisting of the 

following: 

(1) Objective 

(2) Approach 

(3) Statement of Mutual Interest 

(4) Performance Responsibilities 

(5) Mutual Agreements 

(c) Budget—A plan that shall be 

jointly developed by the REE ADODR 

and the Cooperator PI outlining the 

following resource contributions: 

(1) Total amount to be reimbursed by 

the REE Agency to the Cooperator. 

(Direct and Indirect Costs as applicable) 

(2) Total in-house costs to the REE 

Agency. (Direct and indirect costs) 

(3) Total in-house costs to the 

Cooperator. (Direct and indirect costs) 

§ 550.17 Peer review. 

Upon request of the REE Agency, 

cooperators may be requested to provide 

documentation in support of peer 

review activities and cooperator 

personnel may be requested to 

participate in peer review forums to 

assist the REE Agency in their reviews. 


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§ 550.18 Assurances/certifications. 

(a) Governmentwide Debarment and 

Suspension (Non procurement)—7 CFR 

3017; 

(b) Governmentwide requirements for 

Drug-Free Workplace—7 CFR 3021; 

(c) Non-discrimination. The 

Cooperator assures compliance with the 

following requirement: No person in the 

United States shall, on the grounds of 

race, color, national origin, sex, age, 

religion, political beliefs, or disability, 

be excluded from participation in, be 

denied the benefits of, or be otherwise 

subjected to discrimination under any 

project or activity under a nonassistance cooperative agreement. 

(d) Protection of Human Subjects 

Requirements: The Cooperator assures 

compliance with the following 

provisions regarding the rights and 

welfare of human subjects: 

(1) The Cooperator is responsible for 

safeguarding the rights and welfare of 

any human subjects involved in 

research, development, and related 

activities supported by this Agreement. 

The Cooperator may conduct research 

involving human subjects only as 

prescribed in the statement of work and 

as approved by the Cooperator’s 

Cognizant Institutional Review Board. 

Prior to conducting such research, the 

Cooperator shall obtain and document a 

legally sufficient informed consent from 

each human subject involved. No such 

informed consent shall include any 

exculpatory language through which the 

subject is made to waive, or to appear 

to waive, any of his or her legal rights, 

including any release of the Cooperator 

or its agents from liability for 

negligence. 

(2) The Cooperator agrees to comply 

with U.S. Department of Health and 

Human Services’ regulations regarding 

human subjects, appearing in 45 CFR 

part 46 (as amended). 

(3) It will comply with REE policy, 

which is to assure that the risks do not 

outweigh either potential benefits to the 

subjects or the expected value of the 

knowledge sought. 

(4) Selection of subject or groups of 

subjects shall be made without regard to 

sex, race, color, religion, or national 

origin unless these characteristics are 

factors to be studied. 

(e) Animal Welfare Act Requirements: 

The Cooperator assures compliance 

with the Animal Welfare Act, as 

amended, 7 U.S.C. 2131, et seq., and the 

regulations promulgated thereunder by 

the Secretary of Agriculture (9 CFR, 

Subchapter A) pertaining to the care, 

handling, and treatment of warmblooded animals held or used for 

research, teaching, or other activities 

supported by Federal funds. The 

Cooperator may request registration of 

facilities and a current listing of 

licensed dealers from the Regional 

Office of the Animal and Plant Health 

Inspection Service (APHIS), USDA, for 

the Region in which their facility is 

located. The location of the appropriate 

APHIS Regional Office, as well as 

information concerning this 

requirement, may be obtained by 

contacting the Senior Staff Officer, 

Animal Care Staff, USDA/APHIS, 

4700 River Road, Riverdale, Maryland 

20737. 

(f) Recombinant DNA Research 

Requirements: The Cooperator assures 

that it will assume primary 

responsibility for implementing proper 

conduct on recombinant DNA research 

and it will comply with the National 

Institute of Health Guidelines for 

Recombinant DNA Research, as revised. 

(1) If the Cooperator wishes to send or 

receive registered recombinant DNA 

material which is subject to quarantine 

laws, permits to transfer this material 

into the U.S. or across state lines may 

be obtained by contacting USDA/ 

APHIS/PPQ, Scientific Services— 

Biotechnology Permits, 4700 River 

Road, Unit 133, Riverdale, Maryland 

20737. In the event that the Cooperator 

has not established the necessary 

biosafety committee, a request for 

guidance or assistance may be made to 

the USDA Recombinant DNA Research 

Officer. 

(2) [Reserved] 

(g) Agriculture Bioterrorism 

Protection Act Requirements: The 

Cooperator assures compliance with the 

Agriculture Bioterrorism Protection Act 

of 2002, as implemented at 7 CFR part 

331 and 9 CFR part 121, by agreeing that 

it will not possess, use, or transfer any 

select agent or toxin without a 

certificate of registration issued by the 

Agency. 

Subpart C—Management of 

Agreements 

Financial Management 

§ 550.19 Purpose. 

Sections 550.20 through 550.25 of this 

subpart prescribe standards for financial 

management systems and program 

management requirements. 

§ 550.20 Standards for financial 

management systems. 

(a) REE agencies shall require 

Cooperators to relate financial data to 

performance data. 

(b) Cooperators’ financial 

management systems shall provide for 

the following: 

(1) Accurate, current, and complete 

disclosure of the financial results of 

each REE sponsored project or program 

in accordance with the reporting 

requirements set forth in § 550.53 of this 

part. REE requires financial reporting on 

an accrual basis; however, the 

Cooperator shall not be required to 

establish an accrual accounting system. 

These Cooperators shall develop such 

accrual data through best estimate for 

their reports on the basis of an analysis 

of the documentation on hand. 

(2) Records that identify the source 

and application of funds for federally 

sponsored activities. These records shall 

contain information pertaining to 

Federal awards, authorizations, 

obligations, unobligated balances, 

assets, outlays, income and interest. 

(3) Effective control over and 

accountability for all funds, property 

and other assets. Cooperators shall 

adequately safeguard all such assets and 

assure they are used solely for 

authorized purposes. 

(4) Comparison of outlays with budget 

amounts for each award. Whenever 

appropriate, financial information 

should be related to performance and 

unit cost data. 

(5) Written procedures to minimize 

the time elapsing between the transfer of 

funds to the Cooperator from the U.S. 

Treasury and the issuance or 

redemption of a check, warrant or 

payment by other means for program 

purposes by the Cooperator. To the 

extent that the provisions of the Cash 

Management Improvement Act (CMIA) 

(Pub. L. 101–453) govern, payment 

methods of State agencies, 

instrumentalities, and fiscal agents shall 

be consistent with CMIA Treasury-State 

Agreements or the CMIA default 

procedures codified at 31 CFR part 205, 

‘‘Rules and procedures for efficient 

Federal State funds transfer.’’ 

(6) Written procedures for 

determining the reasonableness, 

allocability and allowability of costs in 

accordance with the provisions of the 

applicable Federal cost principles and 

the terms and conditions of the award. 

(7) Accounting records including cost 

accounting records that are supported 

by source documentation. 

(c) Where bonds are required in the 

situations described above, the bonds 

shall be obtained from companies 

holding certificates of authority as 

acceptable sureties, as prescribed in 

31 CFR part 223, ‘‘Surety Companies 

Doing Business with the United States.’’ 

§ 550.21 Funding availability. 

The funding period will begin on the 

date of final signature, unless otherwise 

stated on the agreement, and continue 

for the project period specified on the 

cover page of the cooperative agreement. 


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§ 550.22 Payment. 

(a) Payment methods shall minimize 

the time elapsing between the transfer of 

funds from the U.S. Treasury and the 

issuance or redemption of a check, 

warrant, or payment by other means by 

the Cooperators. Payment methods of 

State agencies or instrumentalities shall 

be consistent with Treasury-State CMIA 

agreements or default procedures 

codified at 31 CFR part 205. 

(b) Reimbursement is the preferred 

method of payment. All payments to the 

Cooperator shall be made via EFT. 

(1) When the reimbursement method 

is used, the REE Agency shall make 

payment within 30 days after receipt of 

the billing, unless the billing is 

improper. 

(2) Cooperators shall be authorized to 

submit requests for payment not more 

than quarterly and not less frequently 

than annually. 

(3) Content of Invoice. 

At a minimum, the Cooperator’s 

invoice shall state the following: 

(i) The name and address of the 

Cooperator; 

(ii) The name and address of the PI; 

(iii) The name and address of the 

financial officer to whom payments 

shall be sent; 

(iv) A reference to the cooperative 

agreement number; 

(v) The invoice date; 

(vi) The time period covered by the 

invoice; and 

(vii) Total dollar amount itemized by 

budget categories (labor, direct costs, 

and indirect costs, etc.). 

(4) To facilitate the EFT process, the 

Cooperator shall provide the following 

information: 

(i) The name, addresses, and 

telephone number of the financial 

institution receiving payment; 

(ii) The routing transit number of the 

financial institution receiving payment; 

(iii) The account to which funds are 

to be deposited; and 

(iv) The type of depositor account 

(checking or savings). 

(c) If the REE Agency has determined 

that reimbursement is not feasible 

because the Cooperator lacks sufficient 

working capital, the REE Agency may 

provide cash on an advance basis 

provided the Cooperator maintains or 

demonstrates the willingness to 

maintain: Written procedures that 

minimize the time elapsing between the 

transfer of funds and disbursement by 

the Cooperator, and financial 

management systems that meet the 

standards for fund control and 

accountability as established in 

§ 550.20. Under this procedure, the REE 

Agency shall advance cash to the 

Cooperator to cover its estimated 

disbursement needs for an initial 

period. The timing and amount of cash 

advances shall be as close as is 

administratively feasible to the actual 

disbursements by the Cooperator 

organization for direct program or 

project costs and the proportionate 

share of any allowable indirect costs. 

(1) Advance payment mechanisms 

include, but are not limited to, Treasury 

check and electronic funds transfer. 

(2) Advance payment mechanisms are 

subject to the requirements of 31 CFR 

part 205. 

(3) Requests for advance payment 

shall be submitted on SF–270, ‘‘Request 

for Advance or Reimbursement.’’ This 

form is not to be used when advance 

payments are made to the Cooperator 

automatically through the use of a 

predetermined payment schedule or if 

precluded by special REE Agency 

instructions for electronic funds 

transfer. 

(4) Cooperators shall maintain 

advances of Federal funds in interest 

bearing accounts, unless 

§ 550.22(c)(4)(i), (ii), or (iii) applies. 

(i) The Cooperator receives less than 

$120,000 in Federal awards per year. 

(ii) The best reasonably available 

interest bearing account would not be 

expected to earn interest in excess of 

$250 per year on Federal cash balances. 

(iii) 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. 

(5) For those entities where CMIA and 

its implementing regulations do not 

apply, interest earned on Federal 

advances deposited in interest bearing 

accounts shall be remitted annually to 

Department of Health and Human 

Services, Payment Management System, 

Rockville, MD 20852. The Cooperator 

for administrative expense may retain 

interest amounts up to $250 per year. 

State universities and hospitals shall 

comply with CMIA, as it pertains to 

interest. If an entity subject to CMIA 

uses its own funds to pay pre-award 

costs for discretionary awards without 

prior written approval from the REE 

Agency, it waives its right to recover the 

interest under CMIA. Thereafter, the 

REE Agency shall reimburse the 

Cooperator for its actual cash 

disbursements. 

(6) Whenever possible, advances shall 

be consolidated to cover anticipated 

cash needs for all awards made by the 

REE Agency to the Cooperator. The 

working capital advance method of 

payment shall not be used for 

Cooperators unwilling or unable to 

provide timely advances to their 

subrecipient to meet the subrecipient’s 

actual cash disbursements. 

(d) To the extent available, 

Cooperators shall disburse funds 

available from repayments to and 

interest earned on program income, 

rebates, refunds, contract settlements, 

audit recoveries and interest earned on 

such funds before requesting additional 

cash payments. 

(e) Unless otherwise required by 

statute, REE Agencies shall not 

withhold payments for proper charges 

made by Cooperators at any time during 

the project period unless the conditions 

of paragraphs (e)(1) or (2) of this section 

apply. 

(1) A Cooperator has failed to comply 

with the project objectives, the terms 

and conditions of the award, or REE 

reporting requirements. 

(2) The Cooperator owes a debt to the 

United States which is subject to offset 

pursuant to 7 CFR part 3 and Federal 

Clause Collection Standard; 31 CFR 

parts 901 through 904. 

(f) Standards governing the use of 

banks and other institutions as 

depositories of funds advanced or 

reimbursed under awards are as follows: 

(1) Except for situations described in 

§ 550.22(f)(2), REE Agencies shall not 

require separate depository accounts for 

funds provided to a Cooperator or 

establish any eligibility requirements for 

depositories for funds provided to a 

Cooperator. However, Cooperators must 

be able to account for the receipt, 

obligation and expenditure of funds. 

(2) Advances of Federal funds shall be 

deposited and maintained in insured 

accounts whenever possible. 

§ 550.23 Program income. 

(a) REE Agencies shall apply the 

standards set forth in this section in 

requiring Cooperator organizations to 

account for program income related to 

projects financed in whole or in part 

with Federal funds. 

(b) Except as provided in § 550.23(f), 

program income earned during the 

project period shall be retained by the 

Cooperator and shall be added to funds 

committed to the project by the REE 

Agency and Cooperator and used to 

further eligible project or program 

objectives. 

(c) Cooperators shall have no 

obligation to the Federal Government 

regarding program income earned after 

the end of the project period. 

(d) Costs incident to the generation of 

program income may be deducted from 

gross income to determine program 

income, provided these costs have not 

been charged to the award. 

(e) Proceeds from the sale of property 

shall be handled in accordance with the 


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requirements of the Property Standards 

(See §§ 550.36 through 550.42). 

(f) Cooperators shall have no 

obligation to the Federal Government 

with respect to program income earned 

from license fees and royalties for 

copyrighted material, patents, patent 

applications, trademarks, and 

inventions produced under an award. 

However, Patent and Trademark 

Amendments (35 U.S.C. Chapter 25) 

apply to inventions made under an 

experimental, developmental, or 

research award. 

§ 550.24 Non-Federal audits. 

(a) Cooperators and subrecipients that 

are institutions of higher education or 

other non-profit organizations 

(including hospitals) shall be subject to 

the audit requirements contained in the 

Single Audit Act Amendments of 1996 

(31 U.S.C. 7501–7507) and revised OMB 

Circular A–133, ‘‘Audits of States, Local 

Governments, and Non-Profit 

Organizations.’’ 

(b) State and local governments shall 

be subject to the audit requirements 

contained in the Single Audit Act 

Amendments of 1996 (31 U.S.C. 7501– 

7507) and revised OMB Circular A–133, 

‘‘Audits of States, Local Governments, 

and Non-Profit Organizations.’’ 

(c) For-profit hospitals not covered by 

the audit provisions of revised OMB 

Circular A–133 shall be subject to the 

audit requirements of the REE agencies. 

(d) Commercial organizations shall be 

subject to the audit requirements of the 

REE Agency or the prime recipient as 

incorporated into the award document. 

§ 550.25 Allowable costs. 

For each kind of Cooperator, there is 

a set of Federal principles for 

determining allowable costs. 

Allowability of costs shall be 

determined in accordance with the cost 

principles applicable to the entity 

incurring the costs. Thus, allowability of 

costs incurred by State, local or 

federally recognized Indian tribal 

governments is determined in 

accordance with the provisions of OMB 

Circular A–87, ‘‘Cost Principles for 

State, Local, and Indian Tribal 

Governments’’ codified at 2 CFR part 

225. The allowability of costs incurred 

by non-profit organizations is 

determined in accordance with the 

provisions of OMB Circular A–122, 

‘‘Cost Principles for Non-Profit 

Organizations’’ codified at 2 CFR part 

230. The allowability of costs incurred 

by institutions of higher education is 

determined in accordance with the 

provisions of OMB Circular A–21, ‘‘Cost 

Principles for Educational Institutions’’ 

codified at 2 CFR 220. The allowability 

of costs incurred by hospitals is 

determined in accordance with the 

provisions of Subpart E of 45 CFR part 

74. The allowability of costs incurred by 

commercial organizations and those 

non-profit organizations listed in 

Appendix C to Circular A–122 (2 CFR 

part 230) is determined in accordance 

with the contract cost principles and 

procedures of the Federal Acquisition 

Regulation (FAR) at 48 CFR part 31. 

Program Management 

§ 550.26 Monitoring program performance. 

(a) Cooperators are responsible for 

managing the day-to-day operations of 

REE nonassistance awards using their 

established controls and policies, as 

long as they are consistent with REE 

requirements. However, in order to 

fulfill their role in regard to the 

stewardship of Federal funds, REE 

Agencies monitor their agreements to 

identify potential problems and areas 

where technical assistance might be 

necessary. This active monitoring is 

accomplished through review of reports 

and correspondence from the 

cooperator, audit reports, site visits, and 

other information available to the REE 

Agency. It is the responsibility of the 

Cooperator to ensure that the project is 

being performed in compliance with the 

terms and conditions of the award. 

(b) Monitoring of a project or activity 

will continue for as long as the REE 

Agency retains a financial interest in the 

project or activity. REE agencies reserve 

the right to monitor a project after it has 

been administratively closed out and no 

longer providing active support in order 

to resolve issues of accountability and 

other administrative requirements. 

Additional requirements regarding 

reporting and program performance can 

be found in §§ 550.51 through 550.55 of 

this part. 

(c) The REE Agency reserves the right 

to perform site visits at Cooperator 

locations. Access to project or program 

records shall be provided in accordance 

with the provisions of § 550.55. 

§ 550.27 Prior approvals. 

(a) The budget is the financial 

expression of the project or program as 

approved during the award process. REE 

agencies require that all Federal costs be 

itemized on the approved budget. The 

budget shall be related to performance 

for program evaluation purposes. 

(b) Cooperators are required to report 

deviations from budget and program 

plans, and request prior approvals for 

budget and program plan revisions. 

(c) Cooperators shall request prior 

approvals from REE Agencies for one or 

more of the following program or budget 

related reasons. 

(1) Incur pre-award costs up to 

90 days prior to award date. All preaward costs are incurred at the 

Cooperator’s risk (i.e., the REE Agency 

is under no obligation to reimburse such 

costs if for any reason the Cooperator 

does not receive an award or if the 

award is less than anticipated and 

inadequate to cover such costs). 

(2) Change in the scope or the 

objective of the project or program (even 

if there is no associated budget revision 

requiring prior written approval). 

(3) The absence for more than three 

months, or a 25 percent reduction in 

time devoted to the project, by the 

approved project director or principal 

investigator. 

(4) Extensions of time, within 

statutory limitations, to complete 

project objectives. This extension may 

not be requested merely for the purpose 

of using unobligated balances. The 

Cooperator shall request the extension 

in writing with supporting reasons. 

(5) The transfer of amounts budgeted 

for indirect costs to absorb increases in 

direct costs, or vice versa. 

(6) The inclusion of costs that require 

prior approval in accordance with OMB 

Circular A–21, ‘‘Cost Principles for 

Educational Institutions,’’ (2 CFR part 

220), OMB Circular A–122, ‘‘Cost 

Principles for Non-Profit Organizations’’ 

(2 CFR part 230) or 45 CFR part 74 

Appendix E, or 48 CFR part 31, 

‘‘Contract Cost Principles and 

Procedures,’’ as applicable. 

(7) Unless described in the agreement 

and funded in the approved awards, the 

subaward, transfer or contracting out of 

any work under an award. This 

provision does not apply to the 

purchase of supplies, material, 

equipment or general support services. 

(d) When requesting approval for 

budget revisions, Cooperators shall use 

the budget form used in the cooperative 

agreement. 

(e) Within 30 calendar days from the 

date of receipt of the request for budget 

revisions, the ADO shall review the 

request and notify the Cooperator 

whether the budget revisions have been 

approved. 

§ 550.28 Publications and 

acknowledgment of support. 

(a) Publications. REE Agencies and 

the Federal Government shall enjoy a 

royalty-free, nonexclusive, and 

irrevocable right to reproduce, publish 

or otherwise use, and to authorize 

others to use, any materials developed 

in conjunction with a nonassistance 

cooperative agreement or contract under 

such an agreement. 

(b)(1) Cooperators shall acknowledge 

ARS, Economics Research Service 


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(ERS), National Agricultural Statistics 

Service (NASS), and the Cooperative 

State Research, Education, and 

Extension Service (CSREES) support, 

whether cash or in-kind, in any 

publications written or published with 

Federal support and, if feasible, on any 

publication reporting the results of, or 

describing, a Federally supported 

activity as follows: 

‘‘This material is based upon work 

supported by the U.S. Department of 

Agriculture, ll (insert Agency name) 

ll under Agreement No. (Cooperator 

should enter the applicable agreement 

number here).’’ 

(2) All such material must also 

contain the following disclaimer unless 

the publication is formally cleared by 

the awarding agency: 

‘‘Any opinions, findings, conclusion, 

or recommendations expressed in this 

publication are those of the author(s) 

and do not necessarily reflect the view 

of the U.S. Department of Agriculture.’’ 

(3) Any public or technical 

information related to work carried out 

under a non assistance cooperative 

agreement shall be submitted by the 

developing party to the other for advice 

and comment. Information released to 

the public shall describe the 

contributions of both parties to the work 

effort. In the event of a dispute, a 

separate publication may be made with 

effective statements of acknowledgment 

and disclaimer. 

(c) Media. Cooperators shall 

acknowledge awarding Agency support, 

as indicated in § 550.28(b) above, in any 

form of media (print, DVD, audio 

production, etc.) produced with Federal 

support that has a direct production cost 

to the Cooperator of over $5,000. Unless 

the terms of the Federal award provide 

otherwise, this requirement does not 

apply to: 

(1) Media produced under mandatory 

or formula grants or under sub awards. 

(2) Media produced as research 

instruments or for documenting 

experimentation or findings and 

intended for presentation or distribution 

to a USDA/REE audience. 

§ 550.29 Press releases. 

Press releases or other forms of public 

notification will be submitted to the 

REE agency for review prior to release 

to the public. The REE Agency will be 

given the opportunity to review, in 

advance, all written press releases and 

any other written information to be 

released to the public by the Cooperator, 

and require changes as deemed 

necessary, if the material mentions by 

name the REE Agency or the USDA, or 

any USDA employee or research unit or 

location. 

§ 550.30 Advertising. 

The Cooperator will not refer in any 

manner to the USDA or agencies thereof 

in connection with the use of the results 

of the project without prior specific 

written authorization by the awarding 

Agency. Information obtained as a result 

of the project will be made available to 

the public in printed or other forms by 

the awarding Agency at its discretion. 

The Cooperator will be given due credit 

for its cooperation in the project. Prior 

approval is required. 

§ 550.31 Questionnaires and survey plans. 

The Cooperator is required to submit 

to the REE Agency copies of 

questionnaires and other forms for 

clearance in accordance with the 

Paperwork Reduction Act of 1980 and 

5 CFR part 1320. 

§ 550.32 Project supervision and 

responsibilities. 

(a) The Cooperator is responsible and 

accountable for the performance and 

conduct of all Cooperator employees 

assigned to the project. The REE Agency 

does not have authority to supervise 

Cooperator employees or engage in the 

employer employee relationship. 

(b) The PI shall: 

(1) Work jointly with the ADODR in 

the development of the project 

statement of work; 

(2) Work jointly with the ADODR in 

the development of the project budget; 

(3) Report, and obtain approval for, 

any change in the project budget; 

(4) Report, and obtain approval for, 

any change in the scope or objectives of 

the project; 

(5) Assure that technical project 

performance and financial status reports 

are submitted on a timely basis in 

accordance with the terms and 

conditions of the award; 

(6) Advise the ADODR of any issues 

that may affect the timely completion of 

the project; 

(7) Assure that the Cooperator meets 

its commitments under the terms and 

conditions of the non-assistance 

agreement; 

(8) Assure that appropriate 

acknowledgements of support are 

included in all publications, in 

accordance with § 550.28 of this Part. 

(9) Assure that inventions are 

appropriately reported in accordance 

with § 550.54 of this Part; and 

(10) Upon request, provide the REE 

Agency with a project plan for use for 

external peer review. 

§ 550.33 Administrative supervision. 

REE employees are prohibited from 

engaging in matters related to 

cooperator employer/employee relations 

such as personnel, performance and 

time management issues. The 

cooperator is solely responsible for the 

administrative supervision of its 

employees. 

§ 550.34 Research misconduct. 

(a) The Cooperator bears the primary 

responsibility for prevention and 

detection of research misconduct and 

for the inquiry, investigation and 

adjudication of research misconduct 

alleged to have occurred in association 

with their own institution. 

(b) The Cooperator shall: 

(1) maintain procedures for 

responding to allegations or instances of 

research misconduct that has the 

following components: 

(i) Objectivity; 

(ii) Due process; 

(iii) Whistle blower protection; 

(iv) Confidentiality; 

(v) Timely resolution; 

(2) Promptly conduct an inquiry into 

any allegation of research misconduct; 

(3) Conduct an investigation if an 

inquiry determines that the allegation or 

apparent instance of research 

misconduct has substance; 

(4) Provide appropriate separation of 

responsibilities between those 

responsible for inquiry and 

investigation, and those responsible for 

adjudication; 

(5) Advise REE Agency of outcome at 

end of inquiries and investigations into 

allegations or instances of research 

misconduct; and 

(6) Upon request, provide the REE 

Agency, upon request, hard copy (or 

website address) of their policies and 

procedures related to research 

misconduct. 

(c) Research misconduct or allegations 

of research misconduct shall be reported 

to the USDA Research Integrity Officer 

(RIO) and/or to the USDA, Office of 

Inspector General (OIG) Hotline. 

(1) The USDA RIO can be reached at: 

USDA Research Integrity Officer, 214–W 

Whitten Building, Washington, DC 

20250, Telephone: 202–720–5923, 

Email: researchintegrity@usda.gov. 

(2) The USDA OIG Hotline can be 

reached on: 1–800–424–9121. 

§ 550.35 Rules of the workplace. 

Cooperator employees, while engaged 

in work at the REE Agency’s facilities, 

will abide by the Agency’s standard 

operating procedures regarding the 

maintenance of laboratory notebooks, 

dissemination of information, 

equipment operation standards, hours of 

work, conduct, and other incidental 

matters stated in the rules and 

regulations of the Agency. 


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Equipment/Property Standards 

§ 550.36 Purpose of equipment/property 

standards. 

Sections 550.37 through 550.42 of this 

part set forth uniform standards 

governing management and disposition 

of property furnished by the Federal 

Government or acquired by the 

Cooperator with funds provided by the 

Federal Government. The Cooperator 

may use its own property management 

standards and procedures provided it 

observes other applicable provisions of 

this Part. 

§ 550.37 Title to equipment. 

(a) As authorized by 7 U.S.C. 3318(d), 

title to expendable and nonexpendable 

equipment, supplies, and other tangible 

personal property purchased with 

Federal funding in connection with a 

non assistance cooperative agreement 

shall vest in the Cooperator from date of 

acquisition unless otherwise stated in 

the cooperative agreement. 

(b) Notwithstanding any other 

provision of this rule the REE Agency 

may, at its discretion, retain title to 

equipment described in paragraph (a) of 

this section that is or may be purchased 

with Federal funds when the REE 

agency determines that it is in the best 

interest of the Federal Government. 

§ 550.38 Equipment. 

(a) The Cooperator shall not use 

equipment acquired with Federal funds 

to provide services to non-Federal 

outside organizations for a fee that is 

less than private companies charge for 

equivalent services, unless specifically 

authorized by Federal statute, for as 

long as the Federal Government retains 

an interest in the equipment. 

(b) The Cooperator shall use the 

equipment in the project or program for 

which it was acquired as long as 

needed, whether or not the project or 

program continues to be supported by 

Federal funds and shall not encumber 

the property without approval of the 

REE Agency. When no longer needed for 

the original project or program, the 

Cooperator shall use the equipment in 

connection with its other federallysponsored activities, in the following 

order of priority: 

(1) Activities sponsored by the REE 

Agency which funded the original 

project, then 

(2) Activities sponsored by other 

Federal awarding agencies. 

(c) During the time that equipment is 

used on the project or program for 

which it was acquired, the Cooperator 

shall make it available for use on other 

projects or programs if such other use 

will not interfere with the work on the 

project or program for which the 

equipment was originally acquired as 

may be determined by the REE Agency. 

First preference for such other use shall 

be given to other projects or programs 

sponsored by the REE Agency that 

financed the equipment; second 

preference shall be given to projects or 

programs sponsored by other Federal 

awarding agencies. If equipment is 

owned by the Federal Government, use 

on other activities not sponsored by the 

Federal Government shall be 

permissible if authorized by the REE 

Agency. User charges shall be treated as 

program income. 

(d) When acquiring replacement 

equipment, unless otherwise directed by 

the REE Agency, the Cooperator shall 

use the equipment to be replaced as 

trade-in or sell the equipment and use 

the proceeds to offset the costs of the 

replacement equipment subject to the 

approval of the REE Agency. 

(e) The Cooperator’s property 

management standards for equipment 

acquired with Federal funds and 

federally owned equipment shall 

include all of the following. 

(1) Equipment records shall be 

maintained accurately and shall include 

the following information: 

(i) A description of the equipment; 

(ii) Manufacturer’s serial number, 

model number, Federal stock number, 

national stock number, or other 

identification number; 

(iii) Source of the equipment, 

including the award number; 

(iv) Whether title vests in the 

Cooperator or the Federal Government; 

(v) Acquisition date (or date received, 

if the equipment was furnished by the 

Federal Government) and cost; 

(vi) Information from which one can 

calculate the percentage of Federal 

participation in the cost of the 

equipment (not applicable to equipment 

furnished by the Federal Government); 

(vii) Location and condition of the 

equipment and the date the information 

was reported; 

(viii) Unit acquisition cost; and 

(ix) Ultimate disposition data, 

including date of disposal and sales 

price or the method used to determine 

current fair market value where a 

Cooperator compensates the REE 

Agency for its share. 

(2) Equipment owned by the Federal 

Government shall be identified to 

indicate Federal ownership. 

(3) A physical inventory of equipment 

shall be taken and the results reconciled 

with the equipment records at least once 

every two years and a copy provided to 

the ADO responsible for the agreement. 

Any differences between quantities 

determined by the physical inspection 

and those shown in the accounting 

records shall be investigated to 

determine the causes of the difference. 

The Cooperator shall, in connection 

with the inventory, verify the existence, 

current utilization, and continued need 

for the equipment. 

(4) A control system shall be in effect 

to insure adequate safeguards to prevent 

loss, damage, or theft of the equipment. 

Any loss, damage, or theft of equipment 

shall be investigated and fully 

documented. If the Federal Government 

owns the equipment, the Cooperator 

shall promptly notify the REE Agency. 

(5) Adequate maintenance procedures 

shall be implemented to keep the 

equipment in good condition. 

(6) Where the Cooperator is 

authorized or required to sell the 

equipment, proper sales procedures 

shall be established which provide for 

competition to the extent practicable 

and result in the highest possible return. 

(f) When the Cooperator no longer 

needs the equipment, the equipment 

shall be used for other activities in 

accordance with the following 

standards. For equipment with a current 

per unit fair market value of $5,000 or 

more, the Cooperator may retain the 

equipment for other uses provided that 

compensation is made to the original 

REE Agency or its successor. The 

amount of compensation shall be 

computed by applying the percentage of 

Federal participation in the cost of the 

original project or program to the 

current fair market value of the 

equipment. If the Cooperator has no 

need for the equipment, the Cooperator 

shall request disposition instructions 

from the REE Agency. The REE Agency 

shall determine whether the equipment 

can be used to meet the Agency’s 

requirements. If no requirement exists 

within that Agency, the availability of 

the equipment shall be reported to the 

General Services Administration (GSA) 

by the REE Agency to determine 

whether a requirement for the 

equipment exists in other Federal 

agencies. The REE Agency shall issue 

instructions to the Cooperator no later 

than 120 calendar days after the 

Cooperator’s request and the following 

procedures shall govern. 

(1) If so instructed or if disposition 

instructions are not issued within 120 

calendar days after the Cooperator’s 

request, the Cooperator shall sell the 

equipment and reimburse the REE 

Agency an amount computed by 

applying to the sales proceeds the 

percentage of Federal participation in 

the cost of the original project or 

program. However, the Cooperator shall 

be permitted to deduct and retain from 

the Federal share $500 or ten percent of 


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the proceeds, whichever is less, for the 

Cooperator’s selling and handling 

expenses. 

(2) If the Cooperator is instructed to 

ship the equipment elsewhere, the 

Cooperator shall be reimbursed by the 

Federal Government by an amount 

which is computed by applying the 

percentage of the Cooperator’s 

participation in the cost of the original 

project or program to the current fair 

market value of the equipment, plus any 

reasonable shipping or interim storage 

costs incurred. 

(3) If the Cooperator is instructed to 

otherwise dispose of the equipment, the 

Cooperator shall be reimbursed by the 

REE Agency for such costs incurred in 

its disposition. 

(4) The REE Agency may reserve the 

right to transfer the title to the Federal 

Government or to a third party named 

by the Federal Government when such 

third party is otherwise eligible under 

existing statutes. Such transfer shall be 

subject to the following standards. 

(i) The equipment shall be 

appropriately identified in the award or 

otherwise made known to the 

Cooperator in writing. 

(ii) The REE Agency shall issue 

disposition instructions within 120 

calendar days after receipt of a final 

inventory. The final inventory shall list 

all equipment acquired with federal 

funds and federally owned equipment. 

If the REE Agency fails to issue 

disposition instructions within the 120 

calendar days, the Cooperator shall 

apply the standards of this section, as 

appropriate. 

(iii) When the REE Agency exercises 

its right to take title, the equipment 

shall be subject to the provisions for 

federally owned equipment. 

§ 550.39 Equipment replacement 

insurance. 

If required by the terms and 

conditions of the award, the Cooperator 

shall provide adequate insurance 

coverage for replacement of equipment 

acquired with Federal funds in the 

event of loss or damage to such 

equipment. 

§ 550.40 Supplies and other expendable 

property. 

(a) Title to supplies and other 

expendable property shall vest in the 

Cooperator upon acquisition. If there is 

a residual inventory of unused supplies 

exceeding $5,000 in total aggregate 

value upon termination or completion 

of the project or program and the 

supplies are not needed for any other 

federally-sponsored project or program, 

the Cooperator shall retain the supplies 

for use on non-Federal sponsored 

activities or sell them, but shall, in 

either case, compensate the Federal 

Government for its share. The amount of 

compensation shall be computed in the 

same manner as for equipment. 

(b) The Cooperator shall not use 

supplies acquired with Federal funds to 

provide services to non-Federal outside 

organizations for a fee that is less than 

private companies charge for equivalent 

services, unless specifically authorized 

by Federal statute as long as the Federal 

Government retains an interest in the 

supplies. 

§ 550.41 Federally-owned property. 

(a) Title to federally-owned property 

remains vested in the Federal 

Government. Cooperators shall submit 

annually an inventory listing of 

federally-owned property in their 

custody to the REE Agency. Upon 

completion of the award or when the 

property is no longer needed, the 

Cooperator shall report the property to 

the REE Agency for further Federal 

Agency utilization. 

(b) If the REE Agency has no further 

need for the property, it shall be 

declared excess and reported to the 

GSA, unless the REE Agency has 

statutory authority to dispose of the 

property by alternative methods (e.g., 

the authority provided by the Federal 

Technology Transfer Act (15 U.S.C. 

3710 (i)) to donate research equipment 

to educational and non-profit 

organizations in accordance with 

Executive Order 12999, ‘‘Education 

technology: ensuring Opportunity for all 

children in the next century.’’ 

Appropriate instructions shall be issued 

to the Cooperator by the REE Agency. 

§ 550.42 Intangible property. 

(a) The Cooperator may copyright any 

work that is subject to copyright and 

was developed, by the Cooperator, or 

jointly by the Federal Government and 

the Cooperator, or for which ownership 

was purchased, under a cooperative 

agreement. REE Agencies reserve a 

royalty-free, nonexclusive and 

irrevocable right to reproduce, publish, 

or otherwise use the work for Federal 

purposes, and to authorize others to do 

so for Federal purposes. 

(b) Cooperators are subject to 

applicable regulations governing patents 

and inventions, including governmentwide regulations issued by the 

Department of Commerce at 37 CFR part 

401, ‘‘Rights to Inventions Made by 

Nonprofit Organizations and Small 

Business Firms Under Government 

Grants, Contracts and Cooperative 

Agreements.’’ 

(c) The REE Agency has the right to: 

(1) Obtain, reproduce, publish or 

otherwise use the data first produced 

under a cooperative agreement; and 

(2) Authorize others to receive, 

reproduce, publish, or otherwise use 

such data for Federal purposes. 

(d)(1) In addition, in response to a 

Freedom of Information Act (FOIA) 

request for research data relating to 

published research findings produced 

under a cooperative agreement that were 

used by the Federal Government in 

developing an Agency action that has 

the force and effect of law, the REE 

Agency shall request, and the 

Cooperator shall provide, within a 

reasonable time, the research data so 

that they can be made available to the 

public through the procedures 

established under the FOIA. If the REE 

Agency obtains the research data solely 

in response to a FOIA request, the 

Agency may charge the requester a 

reasonable fee equaling the full 

incremental cost of obtaining the 

research data. This fee should reflect 

costs incurred by the Agency, the 

Cooperator, and applicable 

subrecipients. This fee is in addition to 

any fees the Agency may assess under 

the FOIA (5 U.S.C. 552(a)(4)(A)). 

(2) The following definitions apply for 

purposes of paragraph (d) of this 

section: 

(i) Research data is defined as the 

recorded factual material commonly 

accepted in the scientific community as 

necessary to validate research findings, 

but not any of the following: 

preliminary analyses, drafts of scientific 

papers, plans for future research, peer 

reviews, or communications with 

colleagues. This ‘‘recorded’’ material 

excludes physical objects (e.g., 

laboratory samples). Research data also 

do not include: 

(A) Trade secrets, commercial 

information, materials necessary to be 

held confidential by a researcher until 

they are published, or similar 

information which is protected under 

law; and 

(B) Personnel and medical 

information and similar information the 

disclosure of which would constitute a 

clearly unwarranted invasion of 

personal privacy, such as information 

that could be used to identify a 

particular person in a research study. 

(ii) Published is defined as either 

when: 

(A) Research findings are published in 

a peer-reviewed scientific or technical 

journal; 

(B) A Federal Agency publicly and 

officially cites the research findings in 

support of an Agency action that has the 

force and effect of law; or 


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(C) Used by the Federal Government 

in developing an Agency action that has 

the force and effect of law is defined as 

when an Agency publicly and officially 

cites the research findings in support of 

an Agency action that has the force and 

effect of law. 

(e) All rights, title, and interest in any 

Subject Invention made solely by 

employee(s) of the REE Agency shall be 

owned by the REE Agency. All rights, 

title, and interest in any Subject 

Invention made solely by at least one (1) 

employee of the REE Agency and at 

least one (1) employee of the Cooperator 

shall be jointly owned by the Agency 

and the Cooperator, subject to the 

provisions of 37 CFR part 401. 

(f) REE Agencies shall have a 

nonexclusive, nontransferable, 

irrevocable, paid-up license to practice 

or have practiced for or on behalf of the 

United States the subject invention 

throughout the world. 

Procurement Standards 

§ 550.43 Purpose of procurement 

standards. 

Sections 44 through 50 set forth 

standards for use by Cooperators in 

establishing procedures for the 

procurement of supplies and other 

expendable property, equipment and 

other services with Federal funds. These 

standards are furnished to ensure that 

such materials and services are obtained 

in an effective manner and in 

compliance with the provisions of 

applicable Federal statutes and 

executive orders. No additional 

procurement standards or requirements 

shall be imposed by the Federal 

awarding agencies upon Cooperators, 

unless specifically required by Federal 

statute or executive order or approved 

by OMB. 

§ 550.44 Cooperator responsibilities. 

The standards contained in this 

section do not relieve the Cooperator of 

the contractual responsibilities arising 

under its contract(s). The Cooperator is 

the responsible authority, without 

recourse to the REE Agency, regarding 

the settlement and satisfaction of all 

contractual and administrative issues 

arising out of procurements entered into 

in support of a nonassistance agreement. 

This includes disputes, claims, award 

protests, source evaluation or other 

matters of a contractual nature. Matters 

concerning violation of statute are to be 

referred to such Federal, State or local 

authority, as may have proper 

jurisdiction. 

§ 550.45 Standards of conduct. 

The Cooperator shall maintain written 

standards of conduct governing the 

performance of its employees engaged 

in the award and administration of 

contracts. No employee, officer, or agent 

shall participate in the selection, award, 

or administration of a contract 

supported by Federal funds if a real or 

apparent conflict of interest would be 

involved. Such a conflict would arise 

when the employee, officer, or agent, 

any member of his or her immediate 

family, his or her partner, or an 

organization which employs or is about 

to employ any of the parties indicated 

herein, has a financial or other interest 

in the firm selected for an award. The 

officers, employees, and agents of the 

Cooperator shall neither solicit nor 

accept gratuities, favors, or anything of 

monetary value from contractors, or 

parties to subagreements. However, 

Cooperators may set standards for 

situations in which the financial interest 

is not substantial or the gift is an 

unsolicited item of nominal value. The 

standards of conduct shall provide for 

disciplinary actions to be applied for 

violations of such standards by officers, 

employees, or agents of the Cooperator. 

§ 550.46 Competition. 

(a) All procurement transactions shall 

be conducted in a manner to provide, to 

the maximum extent practical, open and 

free competition. The Cooperator shall 

be alert to organizational conflicts of 

interest as well as noncompetitive 

practices among contractors that may 

restrict or eliminate competition or 

otherwise restrain trade. In order to 

ensure objective contractor performance 

and eliminate unfair competitive 

advantage, contractors that develop or 

draft specifications, requirements, 

statements of work, invitations for bids 

and/or requests for proposals shall be 

excluded from competing for such 

procurements. Awards shall be made to 

the bidder or offeror whose bid or offer 

is responsive to the solicitation and is 

most advantageous to the Cooperator, 

price, quality and other factors 

considered. Solicitations shall clearly 

set forth all requirements that the bidder 

or offer shall fulfill in order for the bid 

or offer to be evaluated by the 

Cooperator. Any and all bids or offers 

may be rejected when it is in the 

Cooperator’s interest to do so. 

(b) Contracts shall be made only with 

responsible contractors who possess the 

potential ability to perform successfully 

under the terms and conditions of the 

proposed procurement. Consideration 

shall be given to such matters as 

contractor integrity, record of past 

performance, financial and technical 

resources or accessibility to other 

necessary resources. In certain 

circumstances, contracts with certain 

parties are restricted by agencies’ 

implementation of Executive Orders 

12549 and 12689, ‘‘Debarment and 

Suspension.’’ 

(c) Recipients shall, on request, make 

available for the REE Agency, pre-award 

review and procurement documents, 

such as request for proposals or 

invitations for bids, independent cost 

estimates, etc. 

§ 550.47 Cost and price analysis. 

Some form of cost or price analysis 

shall be made and documented in the 

procurement files in connection with 

every procurement action. Price analysis 

may be accomplished in various ways, 

including the comparison of price 

quotations submitted, market prices and 

similar indicia, together with discounts. 

Cost analysis is the review and 

evaluation of each element of cost to 

determine reasonableness, allocability 

and allowability. 

§ 550.48 Procurement records. 

Procurement records and files for 

purchases in excess of the small 

purchase threshold shall include the 

following at a minimum: 

(a) Basis for contractor selection; 

(b) Justification for lack of 

competition when competitive bids or 

offers are not obtained; and 

(c) Basis for award cost or price. 

§ 550.49 Contract administration. 

A system for contract administration 

shall be maintained to ensure contractor 

conformance with the terms, conditions 

and specifications of the contract and to 

ensure adequate and timely followup of 

all purchases. Recipients shall evaluate 

contractor performance and document, 

as appropriate, whether contractors 

have met the terms, conditions and 

specifications of the contract. 

§ 550.50 Contract provisions. 

The recipient shall include, in 

addition to provisions to define a sound 

and complete agreement, the following 

provisions in all contracts. The 

following provisions shall also be 

applied to subcontracts. 

(a) Contracts in excess of the 

simplified acquisition threshold shall 

contain contractual provisions or 

conditions that allow for administrative, 

contractual, or legal remedies in 

instances in which a contractor violates 

or breaches the contract terms, and 

provide for such remedial actions as 

may be appropriate. 

(b) All contracts in excess of the 

simplified acquisition threshold shall 

contain suitable provisions for 

termination by the cooperator, including 

the manner by which termination shall 


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be effected and the basis for settlement. 

In addition, such contracts shall 

describe conditions under which the 

contract may be terminated for default 

as well as conditions where the contract 

may be terminated because of 

circumstances beyond the control of the 

contractor. 

(c) All negotiated contracts (except 

those for less than the simplified 

acquisition threshold) awarded by 

recipients shall include a provision to 

the effect that the recipient, the REE 

Agency, the Comptroller General of the 

United States, or any of their duly 

authorized representatives, shall have 

access to any books, documents, papers 

and records of the contractor which are 

directly pertinent to a specific program 

for the purpose of making audits, 

examinations, excerpts and 

transcriptions. 

(d) All contracts, including small 

purchases, awarded by recipients and 

their contractors shall contain the 

procurement provisions of Appendix A, 

2 CFR part 215, as applicable. 

Reports and Records 

§ 550.51 Purpose of reports and records. 

Sections 550.52 through 550.55 set 

forth the procedures for monitoring and 

reporting on the Cooperator’s financial 

and program performance and the 

necessary reporting format. They also 

set forth record retention requirements, 

and property and equipment inventory 

reporting requirements. 

§ 550.52 Reporting program performance. 

(a) The REE Agency shall prescribe 

the frequency with which performance 

reports shall be submitted. Performance 

reports shall not be required more 

frequently than quarterly or, less 

frequently than annually. Annual 

reports shall be due 90 calendar days 

after the grant year; quarterly or semiannual reports shall be due 30 days after 

the reporting period. The REE Agency 

may require annual reports before the 

anniversary dates of multiple year 

agreements in lieu of these 

requirements. The final performance 

reports are due 90 calendar days after 

the expiration or termination of the 

period of agreement. 

(b) When required, performance 

reports shall contain, for each award, 

detailed information on each of the 

following. 

(1) A comparison of actual 

accomplishments with the goals and 

objectives established for the period and 

the findings of the investigator. 

Whenever appropriate and the output of 

programs or projects can be readily 

quantified, such quantitative data 

should be related to cost data for 

computation of unit costs. 

(2) Reasons why established goals 

were not met, if appropriate. 

(3) Other pertinent information 

including, when appropriate, analysis 

and explanation of cost overruns or high 

unit costs. 

(c) Cooperators shall not be required 

to submit more than the original and 

two copies of performance reports. 

(d) Cooperators shall immediately 

notify the REE Agency of developments 

that have a significant impact on the 

award-supported activities. Also, 

notification shall be given in the case of 

problems, delays, or adverse conditions 

which materially impair the ability to 

meet the objectives of the award. This 

notification shall include a statement of 

the action taken or contemplated, and 

any assistance needed to resolve the 

situation. 

§ 550.53 Financial reporting. 

Financial Status Report. 

(a) Each REE Agency shall require 

Cooperators to report the status of funds 

as approved in the budget for the 

cooperative agreement. A financial 

status report shall consist of the 

following information: 

(1) The name and address of the 

Cooperator. 

(2) The name and address of the PI. 

(3) The name, address, and signature 

of the financial officer submitting the 

report. 

(4) A reference to the cooperative 

agreement. 

(5) Period covered by the report. 

(6) An itemization of actual dollar 

amounts expended on the project during 

the reporting period (in line with the 

approved budget) and cumulative totals 

expended for each budget category from 

the starting date of the cooperative 

agreement. 

(b) The REE Agency shall determine 

the frequency of the Financial Status 

Report for each project or program, 

considering the size and complexity of 

the particular project or program. 

However, the report shall not be 

required more frequently than quarterly 

or less frequently than annually. A final 

report shall be required at the 

completion of the agreement. 

(c) The REE Agency shall require 

Cooperators to submit the financial 

status report (an original and no more 

than two copies) no later than 30 days 

after the end of each specified reporting 

period for quarterly and semi-annual 

reports, and 90 calendar days for annual 

and final reports. Extensions of 

reporting due dates may be approved by 

the REE Agency upon request of the 

Cooperator. 

§ 550.54 Invention disclosure and 

utilization reporting. 

(a) The Cooperator shall report 

Invention Disclosures and Utilization 

information electronically via i-Edison 

Web Interface at: www.iedison.gov. 

(b) If access to InterAgency Edison is 

unavailable, the invention disclosure 

should be sent directly to: Division of 

Extramural Intentions and Technology 

Resources, 6705 Rockledge Drive, (RKL 

1), Suite 310, MSC 7980, Bethesda, 

Maryland 20892–7750. 

§ 550.55 Retention and access 

requirements for records. 

(a) This section sets forth 

requirements for record retention and 

access to records for awards to 

Cooperators. REE agencies shall not 

impose any other record retention or 

access requirements upon Cooperators, 

excepting as set out in § 550.42(d). 

(b) Financial records, supporting 

documents, statistical records, and all 

other records pertinent to an award 

shall be retained for a period of 3 years 

from the date of submission of the final 

expenditure report or, for awards that 

are renewed quarterly or annually, from 

the date of the submission of the 

quarterly or annual financial report, as 

authorized by the REE Agency. The only 

exceptions are the following: 

(1) If any litigation, claim, or audit is 

started before the expiration of the 3- 

year period, the records shall be 

retained until all litigation, claims or 

audit findings involving the records 

have been resolved and final action 

taken; 

(2) Records for real property and 

equipment acquired with Federal funds 

shall be retained for 3 years after final 

disposition; 

(3) When records are transferred to or 

maintained by the REE Agency, the 3- 

year retention requirement is not 

applicable to the Cooperator; 

(4) Indirect cost rate proposals, cost 

allocations plans, etc., as specified in 

paragraph (f) of this section. 

(c) Copies of original records may be 

substituted for the original records if 

authorized by the REE Agency. 

(d) The REE Agency shall request 

transfer of certain records to its custody 

from Cooperators when it determines 

that the records possess long-term 

retention value. However, in order to 

avoid duplicate record keeping, a REE 

Agency may make arrangements for 

Cooperators to retain any records that 

are continuously needed for joint use. 

(e) The REE Agency, the Inspector 

General, Comptroller General of the 

United States, or any of their duly 

authorized representatives, have the 

right of timely and unrestricted access 


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to any books, documents, papers, or 

other records of Cooperators that are 

pertinent to the awards, in order to 

make audits, examinations, excerpts, 

transcripts and copies of such 

documents. This right also includes 

timely and reasonable access to a 

Cooperator’s personnel for the purpose 

of interview and discussion related to 

such documents. The rights of access in 

this paragraph are not limited to the 

required retention period, but shall last 

as long as records are retained. 

(f) No Cooperator shall disclose its 

records that are pertinent to an award 

until the Cooperator provides notice of 

the intended disclosure with copies of 

the relevant records to the REE Agency. 

(g) Indirect cost rate proposals, cost 

allocations plans, etc. Paragraphs (g)(1) 

and (g)(2) of this section apply to the 

following types of documents, and their 

supporting records: Indirect cost rate 

computations or proposals, cost 

allocation plans, and any similar 

accounting computations of the rate at 

which a particular group of costs is 

chargeable (such as computer usage 

charge back rates or composite fringe 

benefit rates). 

(1) If submitted for negotiation. If the 

Cooperator submits to the REE Agency 

or the subrecipient submits to the 

Cooperator the proposal, plan, or other 

computation to form the basis for 

negotiation of the rate, then the 3-year 

retention period for its supporting 

records starts on the date of such 

submission. 

(2) If not submitted for negotiation. If 

the Cooperator is not required to submit 

to the REE Agency or the subrecipient 

is not required to submit to the 

Cooperator the proposal, plan, or other 

computation for negotiation purposes, 

then the 3-year retention period for the 

proposal, plan, or other computation 

and its supporting records starts at the 

end of the fiscal year (or other 

accounting period) covered by the 

proposal, plan, or other computation. 

Suspension, Termination, and 

Enforcement 

§ 550.56 Purpose of suspension, 

termination, and enforcement. 

Sections § 550.57 and § 550.58 of this 

part set forth uniform suspension, 

termination, and enforcement 

procedures. 

§ 550.57 Suspension and termination. 

Awards may be suspended or 

terminated in whole or in part if 

paragraphs (a), (b), or (c) of this section 

apply. 

(a) The REE Agency may terminate 

the award, if a Cooperator materially 

fails to comply with the provisions of 

this rule or the terms and conditions of 

an award. 

(b) The REE Agency with the consent 

of the Cooperator, in which case the two 

parties shall agree upon the termination 

conditions, including the effective date 

and, in the case of partial termination, 

the portion to be terminated. 

(c) If costs are allowed under an 

award, the responsibilities of the 

Cooperator referred to in § 550.32, 

including those for property 

management as applicable, shall be 

considered in the termination of the 

award, and provision shall be made for 

continuing responsibilities of the 

Cooperator after termination, as 

appropriate. 

§ 550.58 Enforcement. 

(a) Remedies for noncompliance. If a 

Cooperator materially fails to comply 

with the terms and conditions of an 

award, whether stated in a Federal 

statute, regulation, assurance, 

application, or notice of award, the REE 

Agency may, in addition to imposing 

any of the special conditions outlined in 

§ 550.10, take one or more of the 

following actions. 

(1) Temporarily withhold cash 

payments pending correction of the 

deficiency by the Cooperator or more 

severe enforcement action by the REE 

Agency. 

(2) Disallow all or part of the cost of 

the activity or action not in compliance. 

(3) Wholly or partly suspend or 

terminate the current award. 

(4) Withhold further awards for the 

project or program. 

(5) Take other remedies that may be 

legally available. 

(b) Effects of suspension and 

termination. Costs of a Cooperator 

resulting from obligations incurred by 

the Cooperator during a suspension or 

after termination of an award are not 

allowable unless the REE Agency 

expressly authorizes them in the notice 

of suspension or termination or 

thereafter. Other Cooperator costs 

during suspension or after termination 

which are necessary and not reasonably 

avoidable are allowable if paragraphs 

(b)(1) and (2) of this section apply. 

(1) The costs result from obligations 

which were properly incurred by the 

Cooperator before the effective date of 

suspension or termination, are not in 

anticipation of it, and in the case of a 

termination, are non-cancellable. 

(2) The costs would be allowable if 

the award were not suspended or 

expired normally at the end of the 

funding period in which the termination 

takes effect. 

(3) Relationship to debarment and 

suspension. The enforcement remedies 

identified in this section, including 

suspension and termination, do not 

preclude a Cooperator from being 

subject to debarment and suspension 

under Executive Orders 12549 and 

12689 and USDA implementing 

regulations (7 CFR part 3017). 

Subpart D—Close Out 

§ 550.59 Purpose. 

Sections 550.60 through 550.62 of this 

part contain closeout procedures and 

other procedures for subsequent 

disallowances and adjustments. 

§ 550.60 Closeout procedures. 

(a) Cooperators shall submit, within 

90 calendar days after the date of 

completion of the award, all financial, 

performance, and other reports as 

required by the terms and conditions of 

the award. The REE Agency may 

approve extensions to the reporting 

period when requested by the 

Cooperator. 

(b) Unless the REE Agency authorizes 

an extension, a Cooperator shall 

liquidate all obligations incurred under 

the award not later than 90 calendar 

days after the funding period or the date 

of completion as specified in the terms 

and conditions of the award or in 

Agency implementing instructions. 

(c) The REE Agency shall make 

prompt payments to a Cooperator for 

allowable reimbursable costs under the 

award being closed out. 

(d) The Cooperator shall promptly 

refund any balance of unobligated cash 

advanced or paid by the REE Agency 

that it is not authorized to retain for use 

in other projects. OMB Circular A–129 

governs unreturned amounts that 

become delinquent debts. 

(e) When authorized by the terms and 

conditions of the award, the REE 

Agency shall make a settlement for any 

upward or downward adjustments to 

the Federal share of costs after closeout 

reports are received. 

(f) The Cooperator shall account for 

any personal property acquired with 

Federal funds or received from the 

Federal Government in accordance with 

§§ 550.36 through 550.42. 

(g) In the event a final audit has not 

been performed prior to the closeout of 

an award, the REE Agency shall retain 

the right to recover an appropriate 

amount after fully considering the 

recommendations on disallowed costs 

resulting from the final audit. 

§ 550.61 Subsequent adjustments and 

continuing responsibilities. 

The closeout of an award does not 

affect any of the following: 


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(a) The right of the REE Agency to 

disallow costs and recover funds on the 

basis of a later audit or other review. 

(b) The obligation of the Cooperator to 

return any funds due as a result of later 

refunds, corrections, or other 

transactions. 

(c) Audit requirements in § 550.24. 

(d) Property management 

requirements in §§ 550.36 through 

550.42. 

(e) Records retention as required in 

§ 550.56. 

§ 550.62 Collection of amounts due. 

(a) Any funds paid to a Cooperator in 

excess of the amount to which the 

Cooperator is finally determined to be 

entitled under the terms and conditions 

of the award constitute a debt to the 

Federal Government. If not paid within 

a reasonable period after the demand for 

payment, the REE Agency may in 

accordance with 7 CFR part 3, reduce 

the debt by— 

(1) Making an administrative offset 

against other requests for 

reimbursements, or 

(2) Withholding advance payments 

otherwise due to the Cooperator, or 

(3) Taking other action permitted by 

statute. 

(b) Except as otherwise provided by 

law, the REE Agency shall charge 

interest on an overdue debt in 

accordance with 31 CFR part 900, 

‘‘Federal Claims Collection Standards.’’ 

Gale A. Buchanan, 

Chief Scientist, USDA, Under Secretary, 

Research, Education, and Economics. 

[FR Doc. E8–21941 Filed 9–18–08; 8:45 am] 

BILLING CODE 3410–03–P 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

7 CFR Parts 1951 and 4274 

RIN: 0570–AA70 

Intermediary Relending Program 

AGENCY: Rural Business-Cooperative 

Service, USDA. 

ACTION: Direct final rule. 

SUMMARY: The Rural BusinessCooperative Service (RBS) amends its 

regulations for the Intermediary 

Relending Program (IRP). This action is 

needed to address several contradictions 

between the servicing and processing 

regulations. The intended effect of this 

action is to incorporate consistent 

language in both regulations as it relates 

to loan limits for ultimate recipients, 

eligible vs. ineligible uses of funds, and 

include a requirement on the extent to 

which ultimate recipients are assisted 

by the loans made. The changes will 

result in eliminating inconsistencies 

within the regulations and provide 

clarity and guidance that will allow the 

program to operate more efficiently and 

effectively. 

DATES: This direct final rule is effective 

November 3, 2008, unless USDA Rural 

Development receives written adverse 

comments or written notice of intent to 

submit adverse comments on or before 

October 20, 2008. If USDA Rural 

Development receives such comments 

or notice, USDA Rural Development 

will publish a timely document in the 

Federal Register withdrawing the direct 

final rule. 

ADDRESSES: You may submit adverse 

comments or notice of intent to submit 

adverse comments to this rule by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Submit written comments via 

the U.S. Postal Service to the Branch 

Chief, Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, STOP 0742, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0742. 

• Hand Delivery/Courier: Submit 

written comments via Federal Express 

Mail or other courier service requiring a 

street address to the Branch Chief, 

Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, 300 7th Street, SW., 7th 

Floor, Washington, DC 20024. 

All written comments will be 

available for public inspection during 

regular work hours at 300 7th Street, 

SW., 7th Floor address listed above. 

FOR FURTHER INFORMATION CONTACT: Lori 

A. Washington, Loan Specialist, 

Specialty Lenders Division, Rural 

Business-Cooperative Service, U.S. 

Department of Agriculture, STOP 3225, 

1400 Independence Ave., SW., 

Washington, DC 20250–3225, 

Telephone (202) 720–9815, E-mail 

lori.washington@wdc.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Classification 

This rule has been determined to be 

not significant for purposes of Executive 

Order 12866 and has been reviewed by 

the Office of Management and Budget 

(OMB). 

Programs Affected 

The Catalog of Federal Domestic 

Assistance number for the program 

impacted by this action is 10.767, 

Intermediary Relending Program. 

Intergovernmental Review 

The IRP is subject to the provisions of 

Executive Order 12372, which requires 

intergovernmental consultation with 

State and local officials. USDA Rural 

Development has conducted 

intergovernmental consultation in the 

manner delineated in RD Instruction 

1940–J, ‘‘Intergovernmental Review of 

Rural Development Programs and 

Activities,’’ and in 7 CFR part 3015, 

subpart V. 

Civil Justice Reform 

This direct final rule has been 

reviewed under Executive Order 12988, 

Civil Justice Reform. In accordance with 

this rule: (1) All State and local laws 

and regulations that are in conflict with 

this rule will be preempted, (2) no 

retroactive effect will be given this rule, 

and (3) administrative proceedings in 

accordance with the regulations of the 

Agency at 7 CFR part 11 must be 

exhausted before bringing suit in court 

challenging action taken under this rule 

unless those regulations specifically 

allow bringing suit at an earlier time. 

Environmental Impact Statement 

This document has been reviewed in 

accordance with 7 CFR Part 1940, 

Subpart G, ‘‘Environmental Program.’’ 

USDA Rural Development has 

determined that this action does not 

constitute a major Federal action 

significantly affecting the quality of the 

human environment, and, in accordance 

with the National Environmental Policy 

Act of 1969, Public Law 91–190, an 

Environmental Impact Statement is not 

required. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

USDA Rural Development must prepare 

a written statement, including a costbenefit analysis, for proposed and final 

rules with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, or 

tribal governments, in the aggregate, or 

to the private sector of $100 million or 

more in any 1 year. When such a 

statement is needed for a rule, section 

205 of UMRA generally requires USDA 

Rural Development to identify and 

consider a reasonable number of 

regulatory alternatives and adopt the 

least costly, more cost effective, or least 

burdensome alternative that achieves 

the objectives of the rule. 

This rule contains no Federal 

mandates (under the regulatory 


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