Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Rules and Regulations 67347 

2Amendment 172 to Annex 1, Personnel 

Licensing, does not affect the maximum age 

permitted for pilots of engaged in single-pilot 

operations. Pilots serving in single-pilot operations 

must be below 60 years of age. 3On March 25, 2014, ICAO notified the FAA that 

the date of implementation is anticipated to be 

November 13, 2014, to the extent the majority of 

ICAO contracting States have not registered their 

disapproval before July 14, 2014. On October 1, 

2014, the FAA confirmed that ICAO has not 

amended the implementation date of November 13, 

2014. 

4The 2009 final rule implemented the crew 

pairing requirements by amending part 121 as well 

as the regulations applicable to pilots with 

certificates issued under part 61, including a special 

purpose pilot authorization issued in accordance 

with § 61.77. As discussed in footnote 5, foreign air 

carrier operations and certain other operations 

conducted with U.S. registered aircraft solely 

outside of the U.S. must comply with ICAO 

standards in Annex 1 to the Convention on 

International Civil Aviation without further agency 

action. 

5The agency notes that in accordance with 14 

CFR 129.5(b), ‘‘Each foreign air carrier conducting 

operations within the United States must conduct 

its operations in accordance with the Standards 

contained in Annex 1 (Personnel Licensing), Annex 

6 (Operation of Aircraft), Part I (International 

Commercial Air Transport—Aeroplanes) or Part III 

(International Operations—Helicopters), as 

appropriate, and in Annex 8 (Airworthiness of 

Aircraft) to the Convention on International Civil 

Aviation.’’ Additionally, in accordance with 14 CFR 

129.1(b), operations of U.S. registered aircraft solely 

outside of the U.S. in common carriage by a foreign 

person or a foreign air carrier must also be in 

compliance with the ICAO Standards identified in 

14 CFR 129.5(b). Accordingly, for these operations, 

the ICAO amendment to the crew pairing limitation 

applies without further change to title 14 of the 

Code of Federal Regulations. The FAA further notes 

that beginning on the date of the ICAO amendment 

implementation, as an ICAO member state, no 

foreign air carrier conducting operations under part 

129 may conduct operations to or from the United 

States with any pilot who has reached 65 years of 

age. This same limitation applies to operations 

covered by 14 CFR 129.1(b). 

6The FAA expects to make conforming changes 

to 14 CFR 61.3(j), 61.77(g) and 121.383(d)(2) and 

(e)(2). 

[c](1), shall cease to be effective on such 

date as the Convention on International 

Civil Aviation provides that a pilot who 

has attained 60 years of age may serve 

as pilot-in-command in international 

commercial operations without regard 

to whether there is another pilot in the 

flight deck crew who has not attained 

age 60.’’ 

During a meeting of the ICAO Council 

on March 3, 2014, Council members 

adopted Amendment 172 to Annex 1, 

Personnel Licensing. The amendment 

removes the requirement in Standard 

2.1.10 to pair a pilot in command over 

age 60 with a pilot under age 60. 

Without the pairing requirement, all 

pilots on multi-pilot crews serving in 

international air transport commercial 

operations may continue to serve as 

long as they have not reached 65 years 

of age.2 The Council anticipates 

implementation of Amendment 172 to 

Annex 1, Personnel Licensing, to be 

November 13, 2014.3 Accordingly, on 

November 13, 2014, the pilot pairing 

limitation in 49 U.S.C. 44729(c)(1) 

ceases to be effective. 

‘‘Part 121 Pilot Age Limit’’ Final Rule 

On July 15, 2009, the Federal Aviation 

Administration (FAA) published the 

‘‘Part 121 Pilot Age Limit’’ final rule (74 

FR 34229) to conform FAA regulations 

to the statutory requirements in the Fair 

Treatment for Experienced Pilots Act 

(codified at 49 U.S.C. 44729). Based on 

the statutory authority in 49 U.S.C. 

44729, the 2009 final rule raised the 

pilot age limitation from 60 to 65 and 

added the pilot pairing requirement for 

pilots conducting part 121 operations 

and other multi-pilot operations 

between or over the territory of more 

than one country using U.S. registered 

airplanes.4

In the final rule preamble, the agency 

stated that it believed that the Fair 

Treatment for Experienced Pilots Act 

intended to harmonize FAA regulations 

with the ICAO standard pertaining to 

pilot age limitations and pilot pairing 

requirements, which would encompass 

international operations in addition to 

the part 121 operations identified by the 

Act. See 74 FR 34229, 34230 (July 15, 

2009). The ICAO standard pertaining to 

pilot age limitations and pilot pairing 

applies to pilots serving in operations 

between his or her home state and 

another country as well as between two 

territories outside of his or her home 

state. Accordingly, to harmonize the 

agency’s regulations with the ICAO 

standard and further the intent of the 

Act, the 2009 final rule added the pilot 

age limitations and pilot pairing 

requirement for pilots conducting 

operations between two international 

territories using U.S. registered 

airplanes.5 As a result, for multi-pilot 

operations, the final rule increased the 

maximum age for a pilot to serve and 

added the pilot pairing requirement for 

part 121 operations and certain other 

international air service and air 

transportation operations using 

airplanes on the U.S. registry (14 CFR 

121.383(d) and (e), 61.3(j) and 61.77(g)). 

Effect of ICAO Amendment and Sunset 

of 49 U.S.C. 44729(c)(1) on Enforcement 

of FAA Regulations 

As discussed previously, 49 U.S.C. 

44729(c)(2) states that the pilot pairing 

requirement in 49 U.S.C. 44729(c)(1) 

ceases to be effective when ICAO 

amends its standard to remove the pilot 

pairing limitation. Once the pilot 

pairing limitation of 49 U.S.C. 

44729(c)(1) ceases to be effective, the 

statutory basis for pilot pairing in 

§§ 121.383(d)(2), 121.383(e)(2), 61.3(j)(2) 

and 61.77(g) of title 14 of the Code of 

Federal Regulations will no longer exist 

and those regulations will be contrary to 

49 U.S.C. 44729. For this reason, 

beginning on the date the ICAO 

amendment is implemented, the FAA 

will no longer enforce the crew pairing 

requirements contained in14 CFR 

121.383(d)(2), 121.383(e)(2), 61.3(j)(2) 

and 61.77(g). 

The FAA has initiated a rulemaking to 

conform applicable relevant regulations 

to the statute and anticipates 

publication of a final rule in 2015.6

Issued in Washington, DC, on November 5, 

2014. 

Reginald C. Govan, 

Chief Counsel. 

[FR Doc. 2014–26783 Filed 11–12–14; 8:45 am] 

BILLING CODE 4910–13–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

14 CFR Part 1260 

RIN 2700–AD79 

Profit and Fee Under Federal Financial 

Assistance Awards 

AGENCY: National Aeronautics and 

Space Administration. 

ACTION: Final rule. 

SUMMARY: NASA is revising the NASA 

Grant & Cooperative Agreement 

Handbook to clarify that NASA does not 

pay profit or fee on Federal Financial 

Assistance awards, i.e. grants and 

cooperative agreements, to non-profit 

organizations. This rule makes changes 

to NASA regulations to reflect that 

revision. 

DATES: Effective December 15, 2014. 

FOR FURTHER INFORMATION CONTACT: 

William Roets, NASA Office of 

Procurement, Contract Management 

Division, Suite 5K34, 202–358–4483, 

william.roets-1@nasa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

NASA published a proposed rule for 

Profit and Fee under Financial 

Assistance Awards in the Federal 

Register on January 11, 2012 (77 FR 

1657). The public comment period 

closed on March 11, 2012. By the end 

of the established comment period, 

NASA received comments from one 

entity. However, those comments were 

subsequently determined to have been 

submitted to the incorrect docket and 

were not applicable to the proposed 

rule. After the specified end date for the 


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67348 Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Rules and Regulations 

submission of comments had passed, 

three organizations submitted late 

comments to the proposed rule. NASA 

accepted the late comments. Based on 

the comments received and subsequent 

revisions to the proposed rule, NASA 

published a second proposed rule in the 

Federal Register on February 25, 2014 

(79 FR 10346). The public comment 

period closed on April 28, 2014. By the 

end of the established comment period, 

NASA received comments from three 

entities. After the specified end date for 

the submission of comments had 

passed, one organization submitted 

supplementary comments to their 

original comments. NASA accepted 

these late comments. 

II. Discussion and Analysis 

Historically, NASA has discouraged 

the payment of profit or fee under its 

Federal Financial Assistance awards 

because payment in excess of costs is 

inconsistent with the intent of grants 

and cooperative agreements which 

provide funding in the form of financial 

assistance to recipients for their 

performance of a public purpose. For 

commercial firms, payment of profit or 

fee is specifically prohibited under 

NASA grants and cooperative 

agreements (See NASA Grant and 

Cooperative Handbook, Subpart 

1274.204). Because this prohibition does 

not include non-profit organizations, 

NASA’s policy has been misinterpreted 

and inconsistent application has 

occurred. 

Therefore, this final rule extends the 

prohibition on the payment of profit or 

fee to all recipients of NASA grants and 

cooperative agreements, alleviating the 

misinterpretation and inconsistent 

application of the policy. 

Based on a review of the public 

comments discussed below, NASA has 

concluded that no change to the second 

proposed rule is necessary. NASA 

received comments from three 

respondents. New comments, not 

already addressed in response to the 

first proposed rule, are discussed below. 

Comments that were received in 

response to the first proposed rule were 

addressed in the second proposed rule 

at 79 FR 10346, February 25, 2014. 

Comment 1: Respondent inquired if 

this rule impacts NASA Grant and 

Cooperative Handbook, Subpart 

1274.204(f), profit applicability, which 

allows profit in some cases. 

Response: This rule does not impact 

NASA Grant and Cooperative 

Handbook, Subpart 1274.204(f). Profit 

associated with cooperative agreements 

awarded to commercial firms may be 

paid by the recipient to subcontractors 

in accordance with Subpart 1274.204(f). 

Comment 2: Respondent inquired as 

to whether profit or fee can be paid in 

the situation where a private consultant 

might be hired to help inform the effort. 

Private consultant’s hourly rate could 

have profit or fee built into the rate and 

we may not have visibility into the 

components (direct and indirect costs, 

profit, etc. . . .) that comprise the 

hourly rate. 

Response: This rule does not impact 

this situation. In this case, the hourly 

rate would invariably represent a 

commercial market rate for these 

services where a detailed cost 

breakdown of the hourly rate by cost 

element would not be required. Thus, 

profit or fee analysis would not be 

required. 

Comment 3: Prohibiting the payment 

of profit or fee to non-profit 

organizations will have a devastating 

and large detrimental effect on nonprofit organizations and their partners. 

Response: NASA continues to support 

non-profit entities and the valuable 

contributions they supply to the NASA 

mission. NASA has historically 

discouraged the payment of profit or fee 

to non-profit entities. The intent of this 

rule is to clarify this point that NASA 

will not pay for profit or fee where 

profit or fee is defined as the amount 

above allowable costs. Management fees 

that are allowable costs within the 

guidelines established in OMB Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards 

(2 CFR Chapter I, Chapter II, Parts 200, 

215, 220, 225, and 230) will continue to 

be paid. 

Comment 4: Management fee is 

intended to provide a non-profit entity 

with a modest source of funds to meet 

business expenses that are not 

reimbursable. Non-profits have many 

costs that are not allowable under 

government regulations but must be 

paid by non-profit entities in order to 

keep operating. Without management 

fee, non-profits would find it impossible 

to continue operations. 

Response: NASA pays for business 

expenses/costs that are reimbursable in 

accordance with the guidelines in OMB 

Uniform Administrative Requirements, 

Cost Principles, and Audit 

Requirements for Federal Awards (2 

CFR Chapter I, Chapter II, Parts 200, 

215, 220, 225, and 230). Paying business 

expenses/costs that are not reimbursable 

through a management fee would be 

circumventing these OMB guidelines, 

and inappropriate for financial 

assistance instruments. 

Comment 5: Respondent stated that 

NASA’s interpretation of statutory 

authorities was too narrowly focused 

and that NASA has the statutory 

authority to pay a management fee to 

non-profit entities. 

Response: NASA agrees that the 

Space Act of 1958 (42 U.S.C. 2473(c)(5)) 

provides NASA with broad authority 

and discretion to award grants and 

cooperative agreements to fulfill its 

mission. However, these authorities do 

not expressly or explicitly allow for the 

payment of profit or fee, sometimes 

referred to as a management fee, when 

such fee is defined as the amount above 

allowable costs. The payment of profit 

or fee under Federal Financial 

Assistance awards is inconsistent with 

the intent of grants and cooperative 

agreements which provide funding in 

the form of financial assistance to 

recipients for their performance of a 

public purpose and therefore should not 

be allowed. 

Comment 6: Respondent took issue 

with the NASA statement that ‘‘Federal 

agencies are only authorized to pay for 

allowable, allocable, reasonable, and 

necessary costs’’ stating that there is no 

cost principle that requires that a cost 

must be ‘‘necessary’’ to the performance 

of a cooperative agreement. 

Response: Pursuant to OMB Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards, section 200.403, 

Factors affecting allowability of costs, 

‘‘necessary’’ is part of the general 

criteria that a cost must meet in order 

to be allowable under Federal awards. 

Comment 7: Respondent took issue 

with NASA statement that ‘‘grant and 

cooperative agreement regulation is 

incomplete in its coverage of profit and 

fee in that it fails to address non-profit 

organizations’’. Respondent stated that 

this statement is inaccurate. NASA 

Grant Information Circular (GIC) 99–1 is 

specific regulatory action regarding 

payment of management fees on grants 

and cooperative agreements to nonprofit entities. 

Response: NASA Grant Information 

Circulars (GICs) are non-regulatory, 

internal guidance and the grant and 

cooperative agreement regulation 

referred to was the NASA Grant and 

Cooperative Agreement Handbook 

which is codified beginning at 14 CFR 

part 1260. 

Comment 8: Respondent stated that 

the final OMB Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements for Federal Awards 

(2 CFR Chapter I, Chapter II, Parts 200, 

215, 220, 225, and 230) rule provides 

NASA the authority to authorize fee or 

profit under an award. Specifically, the 

guidance states that ‘‘the non-Federal 

entity may not earn or keep any profit 

resulting from Federal financial 


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Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Rules and Regulations 67349 

assistance, unless expressly authorized 

by the terms and conditions of the 

Federal award’’. 

Response: In implementing the OMB 

Uniform Administrative Requirements, 

Cost Principles, and Audit 

Requirements for Federal Awards 

(2 CFR Chapter I, Chapter II, Parts 200, 

215, 220, 225, and 230), it is NASA 

policy to not pay profit or fee under 

grant and cooperative agreement 

awards. NASA maintains that it is 

inappropriate to pay profit and fee 

under its Federal Financial Assistance 

awards because payment in excess of 

costs is inconsistent with the intent of 

grant and cooperative agreements which 

provide funding in the form of financial 

assistance to recipients for their 

performance of a public purpose. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

IV. Regulatory Flexibility Act 

NASA certifies that this final rule will 

not have a significant economic impact 

on a substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because the rule does not impose any 

additional requirements on small 

entities and currently less than 1 

percent of recipients of NASA grants 

and cooperative agreements receive 

profit or management fees. 

V. Paperwork Reduction Act 

The Paper Reduction Act (Pub. L. 

104–13) is not applicable because the 

prohibition on payment of profit and 

management fees by NASA does not 

require the submission of any 

information by recipients that requires 

the approval of the Office of 

Management and Budget under 44 

U.S.C. 3501, et seq. 

List of Subjects in 14 CFR 1260 

Colleges and universities, Business 

and Industry, Grant programs, Grants 

administration, Cooperative agreements, 

State and local governments, Non-profit 

organizations, Commercial firms, 

Recipients. 

Cynthia Boots, 

Alternate Federal Register Liaison 

Accordingly, 14 CFR Part 1260 is 

amended as follows: 

PART 1260–GRANTS AND 

COOPERATIVE AGREEMENTS 

■ 1. The authority citation for 14 CFR 

1260 continues to read as follows: 

Authority: 42 U.S.C. 2473(c)(1), Pub. L. 97– 

258, 96 Stat. 1003 (31 U.S.C. 6301, et seq.), 

and OMB Circular A–110. 

■ 2. In § 1260.4, paragraph (b)(2) is 

revised to read as follows: 

§ 1260.4 Applicability. 

* * * * * 

(b) * * * 

(2) Payment of fee or profit is 

consistent with an activity whose 

principal purpose is the acquisition of 

goods and services for the direct benefit 

or use of the United States Government, 

rather than an activity whose principal 

purpose is assistance. Therefore, the 

grants officer shall use a procurement 

contract, rather than assistance 

instrument, in all cases where fee or 

profit is to be paid to the recipient of the 

instrument or the instrument is to be 

used to carry out a program where fee 

or profit is necessary to achieving 

program objectives. Grants and 

cooperative agreements shall not 

provide for the payment of fee or profit 

to the recipient. 

* * * * * 

■ 3. In § 1260.10, paragraph (b)(1)(iv) is 

added to read as follows: 

§ 1260.10 Proposals. 

* * * * * 

(b) * * * 

(1) * * * 

(iv) Payment of fee or profit is 

consistent with an activity whose 

principal purpose is the acquisition of 

goods and services for the direct benefit 

or use of the United States Government, 

rather than an activity whose principal 

purpose is assistance. Therefore, the 

grants officer shall use a procurement 

contract, rather than assistance 

instrument, in all cases where fee or 

profit is to be paid to the recipient of the 

instrument or the instrument is to be 

used to carry out a program where fee 

or profit is necessary to achieving 

program objectives. Grants and 

cooperative agreements shall not 

provide for the payment of fee or profit 

to the recipient. 

* * * * * 

■ 4. In § 1260.14, paragraph (e) is added 

to read as follows: 

§ 1260.14 Limitations. 

* * * * * 

(e) Payment of fee or profit is 

consistent with an activity whose 

principal purpose is the acquisition of 

goods and services for the direct benefit 

or use of the United States Government, 

rather than an activity whose principal 

purpose is assistance. Therefore, the 

grants officer shall use a procurement 

contract, rather than assistance 

instrument, in all cases where fee or 

profit is to be paid to the recipient of the 

instrument or the instrument is to be 

used to carry out a program where fee 

or profit is necessary to achieving 

program objectives. Grants and 

cooperative agreements shall not 

provide for the payment of fee or profit 

to the recipient. 

[FR Doc. 2014–26856 Filed 11–12–14; 8:45 am] 

BILLING CODE 7510–13–P 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Part 404 

[Docket No. SSA–2009–0038] 

RIN 096–AH03 

Revised Medical Criteria for Evaluating 

Genitourinary Disorders; Correction 

AGENCY: Social Security Administration. 

ACTION: Final rule; correction. 

SUMMARY: This document corrects a 

misspelling in the regulatory language 

of our final rulemaking published in the 

Federal Register on Friday, October 10, 

2014, titled Revised Medical Criteria for 

Evaluating Genitourinary Disorders. 

DATES: Effective December 9, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Cheryl A. Williams, Office of Medical 

Policy, Social Security Administration, 

6401 Security Boulevard, Baltimore, 

Maryland 21235–6401, (410) 965–1020. 

For information on eligibility or filing 

for benefits, call our national toll-free 

number, 1–800–772–1213, or TTY 1– 

800–325–0778, or visit our Internet site, 

Social Security Online, at http://

www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: On 

October 10, 2014 we published a final 

rulemaking in the Federal Register at 79 

FR 61221. The final rulemaking 

contained an incorrect spelling of 

exstrophic. We are correcting that 

misspelling. 


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