Department of Commerce 

Grants and Cooperative 

Agreements Manual

Grants and Cooperative Agreements Manual

OAM/GMD

24 October 2016

Interim Change 1, Dated 25 January 2018
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Contents

Summary of Interim Change 1 ......................................................................................................................5

1. PREFACE..................................................................................................................................................6

2. INTRODUCTION ......................................................................................................................................9

A. Purpose ............................................................................................................................................ 9

B. Authority.......................................................................................................................................... 9

C. Coverage .......................................................................................................................................... 9

D. Effect on Other Issuances................................................................................................................ 9

E. Government-Wide Requirements Used in the Administration of DOC Awards.............................. 9

3. GLOSSARY OF TERMS AND ACRONYMS ...............................................................................................13

A. Definitions...................................................................................................................................... 13

B. Abbreviations................................................................................................................................. 16

4. RESPONSIBILITIES IN GRANTS ADMINISTRATION.................................................................................18

A. Chief Financial Officer and Assistant Secretary for Administration............................................... 18

B. Office of Acquisition Management (OAM) .................................................................................... 18

C. Office of General Counsel.............................................................................................................. 20

D. Office of Inspector General............................................................................................................ 23

E. Finance and Budget Office............................................................................................................. 24

F. Grants Office.................................................................................................................................. 25

G. Liaison Responsibilities.................................................................................................................. 28

H. Program Office............................................................................................................................... 29

I. Property Management Office........................................................................................................ 31

5. RELATIONSHIPS WITH OUTSIDE ENTITIES ............................................................................................33

A. Overview........................................................................................................................................ 33

B. Grants............................................................................................................................................. 33

C. Cooperative Agreements............................................................................................................... 33

D. Procurement Contracts.................................................................................................................. 35

E. Other Types of Agreements........................................................................................................... 35

6. TYPES OF FINANCIAL ASSISTANCE FUNDS AND AWARDS ....................................................................37

This manual is for internal Department of Commerce use only. It is to be used by operating units, 

grants offices and all involved in the grants and cooperative agreements lifecycle. This manual is 

maintained by the Grants Management Division within the Office of Acquisition Management.
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A. Discretionary Funds....................................................................................................................... 37

B. Nondiscretionary Funds................................................................................................................. 38

7. TYPES OF APPLICATIONS ......................................................................................................................39

A. Pre-applications............................................................................................................................. 39

B. Competitive Applications............................................................................................................... 39

C. Noncompetitive Applications ........................................................................................................ 40

D. Supplemental Applications............................................................................................................ 41

8. MERIT REVIEW, SELECTION, APPROVAL, AND NOTIFICATION PROCEDURES ......................................42

A. Overview........................................................................................................................................ 42

B. Review Standards........................................................................................................................... 42

C. Evaluation and Selection Requirements for Competition ............................................................. 44

D. Review Process for Applications for Competitive Awards............................................................. 46

E. Review Process for Applications for Institutional Awards............................................................. 47

F. Review Process for Applications for Noncompetitive Awards Made with Discretionary Funds... 47

G. Review Process for Applications for Awards Mandated or Limited by Statute............................. 49

H. Congressional Notification............................................................................................................. 49

I. Obligation of Funds........................................................................................................................ 50

J. Notice to Applicants....................................................................................................................... 50

9. PRE-AWARD ADMINISTRATIVE REQUIREMENTS..................................................................................51

A. Application Package....................................................................................................................... 51

B. Recommendation for Funding ....................................................................................................... 52

C. Budget Analysis.............................................................................................................................. 53

D. Costs............................................................................................................................................... 53

E. Executive Order (E.O.) 12372 (Intergovernmental Review of Federal Programs)......................... 55

F. Applicant’s Management and Financial Capabilities..................................................................... 55

G. Review of Recipient’s Risk.............................................................................................................. 56

H. Awards to Insular Areas................................................................................................................. 57

I. Preparation of Financial Assistance Award.................................................................................... 57

10. POST AWARD ADMINISTRATION REQUIREMENTS...............................................................................60

A. Official Award File.......................................................................................................................... 60

B. USASpending.gov........................................................................................................................... 62

C. Costs under DOC Awards............................................................................................................... 62

D. Amendments.................................................................................................................................. 63

E. Project Monitoring......................................................................................................................... 63
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F. Recipient Responsibilities.............................................................................................................. 63

11. ENFORCEMENT.....................................................................................................................................65

A. Overview........................................................................................................................................ 65

B. Enforcement .................................................................................................................................. 65

C. Concurrent Actions........................................................................................................................ 67

12. AWARD CLOSE-OUT ...........................................................................................................................69

A. Responsibilities ............................................................................................................................ 69

B. Unobligated Funds ....................................................................................................................... 69

C. Deobligation of Funds .................................................................................................................. 69

D. Retention of Records.................................................................................................................... 70

E. Unilateral Termination and/or Administrative Closeout............................................................... 70

Appendix A: Sample Business Official’s Notice to Submit Documentation......................................... 73

Appendix B: Sample Missing Data Report and Due Diligence Checklist.............................................. 75

Appendix C: Sample Unilateral Termination and/or Unilateral Closeout Memorandum................... 77

13. AUDITS..................................................................................................................................................78

A. Audit Requirements....................................................................................................................... 78

B. Other Audits................................................................................................................................... 78

C. Access to Recipient Records .......................................................................................................... 79

D. Audit Resolution ............................................................................................................................ 79

E. Audit Implementation.................................................................................................................... 80

14. ESTABLISHMENT AND COLLECTION OF FINANCIAL ASSISTANCE-RELATED DEBTS ..............................81

A. Standards for the Establishment and Collection of Debts............................................................. 81

B. Establishment of a Debt................................................................................................................. 81

C. Debt Collection .............................................................................................................................. 82

D. Impact of Delinquent Federal Debts on Award Eligibility.............................................................. 83

E. Exceptions...................................................................................................................................... 85

Exhibit A – Sample Notice and Demand Letter/Audit Resolution Determination ............................... 86

15. GRANTS ADMINISTRATION POLICIES AND REQUIREMENTS ................................................................91

A. Anti-Deficiency Act......................................................................................................................... 91

B. Bona Fide Needs Rule .................................................................................................................... 91

C. Conflicts of Interest........................................................................................................................ 91

D. Consulting Services........................................................................................................................ 92

E. Coordination with DOC and Other Federal Agencies .................................................................... 92

F. DOC Forms..................................................................................................................................... 93
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G. Freedom of Information Act (FOIA)............................................................................................... 93

H. Management and Institutional Grant Reviews.............................................................................. 93

I. Privacy Act...................................................................................................................................... 94

J. Recipient Name Change................................................................................................................. 94

K. Requests for Prior Approval........................................................................................................... 94

L. Statutory Authority........................................................................................................................ 94

M. Transfer of Award .......................................................................................................................... 94

N. Transfer of Funds........................................................................................................................... 96

O. Waivers and Deviations ................................................................................................................. 96

16. CONSTRUCTION AWARDS ....................................................................................................................97

A. Purpose .......................................................................................................................................... 97

B. Authority........................................................................................................................................ 97

C. Scope of Chapter............................................................................................................................ 97

D. Policy.............................................................................................................................................. 97

E. General Requirements................................................................................................................... 98

F. Disbursement of Grant Funds and Financial Administration....................................................... 109

G. Award Amendments.................................................................................................................... 110

H. Post-Construction Requirements................................................................................................. 112

Appendix A: Applicable Regulations, OMB Circulars and Agency-specific Guidance........................ 117

17. GUIDELINES FOR THE PREPARATION OF PUBLIC NOTICES ANNOUNCING THE AVAILABILITY OF 

FINANCIAL ASSISTANCE: NOTICE OF FUNDING OPPORTUNITY (NOFO) AND FEDERAL REGISTER 

NOTICES..............................................................................................................................................119

A. Background .................................................................................................................................. 119

B. Format of NOFO........................................................................................................................... 120

C. Publication in the Federal Register.............................................................................................. 130

D. Federal Register Format Requirements....................................................................................... 130

E. Coordination and Clearance ........................................................................................................ 134

18. MULTI-YEAR FUNDING PROCEDURES.................................................................................................135

A. General......................................................................................................................................... 135

B. Multi-Year Awards....................................................................................................................... 135

C. Multi-Year Funding Principles...................................................................................................... 135

D. Preparation of New Award .......................................................................................................... 137

E. Preparation of Amendment(s)..................................................................................................... 137
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Summary of Interim Change 1

1. For standardization, the Grants Manual now uses “notice of funding opportunity” (NOFO) and 

“specific award condition” (SAC) as found in the Uniform Guidance. See §200.203 Notices of 

funding opportunities and §200.207 Specific conditions.

2. Page 11 (2.E.5 & 6), incorporated the RT&Cs and the term, Research Terms and Conditions 

(RT&Cs) for Federal awards (vice Governmentwide RTCs).

3. Page 13 (3.A.2.b), added definition for a NOFO amendment. This supports the changes to CH 

17.

4. Page 30 (4.H.16), revised the Program Officer’s review/evaluation of reports.

5. Page 69 (12.C), qualified the “Deobligation of Funds” timeline/review of the final SF-425 (added 

Note).

6. Page 78 (13.A.3.b), corrected the non-Federal recipient’s reporting requirement of expenditures 

for its fiscal year.

7. Removed EDA’s Exhibits found in Chapter 16 and provided a Point of Contact for the most up-todate versions. See page 118.

8. Page 119 (17.A.2), updated DOC policies for amending NOFOs. 

9. Page 125 (17.B.2.d.(5)), updated SPOC link as provided by OMB (via FACE email notice).

10. Page 128 (17.B.2.h.(1)), updated language.

Additionally, the Table of Contents is now “linked” to the applicable Chapter/section. Clicking 

on a particular element within the Table will “jump” you to the applicable page.
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1. PREFACE

A. The Department of Commerce (DOC) was established on February 14, 1903, to promote 

American businesses and trade. Its broad range of responsibilities include, but are not limited to, 

expanding U.S. exports, developing innovative technologies, gathering and disseminating statistical data, 

measuring economic growth, granting patents, promoting minority entrepreneurship, providing 

effective management and environmental stewardship of the nation’s coastal and marine resources, 

and predicting and monitoring the weather. Although DOC’s missions are very diverse, they are unified 

by one overarching mandate -- to work with the business community to foster economic growth and the 

creation of new American jobs to ensure sustainable economic opportunities. 

B. DOC may award Federal financial assistance (e.g., a grant or cooperative agreement) when 

authorized by law. While Federal agencies generally have “inherent” authority to enter into contracts to 

procure goods or services for their own use, there is no comparable inherent authority to enter into 

financial assistance relationships. Therefore, the relevant legislation must be studied to determine 

whether a financial assistance relationship is authorized at all, and if so, under what circumstances and 

conditions. There is no general Department-wide financial assistance authority and the Federal Grant 

and Cooperative Agreement Act of 1977 (31 U.S.C. §§ 6301-6308), in and of itself, does not provide such 

authority.1 Such authority must be provided by specific statute. The operating unit’s basic legislation 

must be analyzed to determine whether an assistance relationship is authorized, and if so, under what 

circumstances and conditions. The following operating units are authorized to provide financial 

assistance: 

1. Census Bureau. Census provides cooperative agreements to make awards to, or conclude 

cooperative agreements with appropriate entities, including any Federal, State, or local governmental 

unit, or institution of higher education, to aid and promote statistical, research, and methodology 

activities related to the Census Bureau mission under Title 13 of the United States Code. Awards 

provided under this notice support the Census Bureau and the Dept. of Commerce by: (1) developing 

and analyzing information for program and policy considerations; and, (2) undertaking special research.

2. Economic Development Administration (EDA). EDA leads the federal economic development 

agenda by promoting innovation and competitiveness, preparing American regions for growth and 

success in the worldwide economy. EDA investment assistance is available to rural and urban areas of 

the Nation experiencing or threatened with substantial economic distress, including high levels of 

unemployment, low income levels, significant declines in per-capita income, sudden major lay-offs or 

plant closures, or natural or other major disasters. EDA works in partnership with eligible applicants, 

including State and local governments, district organizations, public or private non-profit organizations, 

Indian tribes, and institutions of higher education. 

3. International Trade Administration (ITA). ITA is responsible for most non-agricultural U.S. trade 

issues and works with the Office of the U.S. Trade Representative in coordinating U.S. trade policy. ITA 

 1 The Federal Grant and Cooperative Agreement Act is designed to ensure that agencies use the legal 

instrument that suits the intended and authorized relationship (e.g., a contract when an agency is purchasing 

goods or services for the agency’s direct benefit or use; a grant to support a recipient in carrying out a public 

purpose of support or stimulation authorized by a law). 
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operates through four principal units: Market Access and Compliance, Trade Development, Import 

Administration, and U.S. and Foreign Commercial Service. ITA provides grants and cooperative 

agreements through several programs to promote trade, investment, and commercial relations, and 

maintains comprehensive commercial and economic data on particular countries and regions of the 

world. ITA grant and cooperative agreement programs are also intended to strengthen domestic export 

competitiveness, and promote U.S. industry's increased participation in international markets.

4. Minority Business Development Agency (MBDA). MBDA is the only Federal agency created 

specifically to foster the establishment and growth of minority-owned businesses in the United States. 

Through grants and cooperative agreements, MBDA provides financial assistance to public and private 

organizations that provide a wide-range of business development services to minority entrepreneurs 

through a nation-wide network. 

5. National Institute of Standards and Technology (NIST). NIST provides grants and cooperative 

agreements to aid U.S. industry through research and services, contributes to public health and safety, 

supports U.S. scientific and engineering research communities, and works with state and local 

organizations to either establish or expand existing services for small to medium sized 

manufacturers. These services address critical needs in areas such as production techniques, technology 

applications, and business practices.

6. National Oceanic and Atmospheric Administration (NOAA). NOAA is a federal agency focused on 

the condition of the oceans and the atmosphere. Through grants and cooperative agreements, NOAA 

plays several distinct roles within DOC – supplier of environmental information products, provider of 

environmental stewardship services and leader in applied scientific research.

7. National Telecommunications and Information Administration (NTIA). NTIA is the principal 

executive branch advisor to the President on domestic and international communications and 

information policies. It ensures effective and efficient Federal use of the electromagnetic spectrum, 

develops (with other Federal agencies) policies for international communications and standards-setting 

organizations, serves as the Federal telecommunications research and engineering center, and 

administers grants and cooperative agreements to public and non-profit organizations for projects that 

incorporate information and telecommunications technology. 

a. First Responder Network Authority (FirstNet). As described in the Middle Class Tax Relief 

and Job Creation Act of 2012, 47 U.S.C. §§ 1401-1473, FirstNet holds a single, nationwide Federal 

Communications Commission (FCC) license to use Band 14 spectrum frequencies for the purposes of 

developing, building and operating the Nationwide Public Safety Broadband Network (NPSBN) and 

awards grants to assist eligible state, county and municipal public safety entities (incumbents) in 

relocating their currently active communication operations from Band 14 to other frequency 

assignments allocated by the FCC. 

C. The DOC administers a diverse array of programs and projects concerned with the entire 

spectrum of business and economic development concerns as outlined above. Departmental operating 

units and Grants Offices are responsible for the award, administration, and monitoring of these 

programs under a variety of legislative authorities, governing regulations, policies, and procedures using 

mandatory and discretionary grants and cooperative agreements. Awards are made to a wide variety of 

recipients, including state and local governments, for-profit or commercial organizations, non-profit 
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organizations, and educational institutions. The administration of DOC grant and cooperative 

agreement programs requires adherence not only to the program objectives for which funds are 

awarded, but also to sound business practices, as well as laws, regulations, policies, and procedures 

governing grants and cooperative agreements.

D. The DOC views its relationship with grant and cooperative agreement recipients as a 

partnership, with the recipient providing the effort and expertise necessary to carry out approved 

activities and the Department providing financial assistance and involvement as appropriate. In 

implementing these respective roles, DOC has established Grants Management Offices and Program 

Offices. Grants Management Offices serve as the focal point for the business management aspects of 

grants administration, including maintenance of official files and receipt of most required reports from 

award recipients. The Grants Officer is the DOC official authorized to award grants and cooperative 

agreements and make decisions on requests for any changes to or revisions of any aspect of awards, 

including but not limited to, terms and conditions, budgets, and program plans (i.e., scopes of work). 

The Program Officers serve as the focal point for the programmatic, scientific/technical aspects of the 

programs and projects. Questions concerning interpretation of grant and cooperative agreement policy 

or the applicability of certain policies to particular programs should be directed to the designated DOC 

Grants Officer.

E. Department-wide responsibility for developing and implementing financial assistance 

administrative and operational policies rests with the Office of Acquisition Management (OAM) under 

the Department’s Chief Financial Officer and Assistant Secretary for Administration (CFO/ASA).

F. This Grants Manual (Manual) is intended to provide a common understanding of the framework 

for the administration of grants and cooperative agreements within which DOC staff and responsible 

recipient officials must operate.

G. Questions concerning this manual should be directed to the cognizant Grants Officer or the 

Director, Grants Management Division, Office of Acquisition Management, U.S. Department of 

Commerce, Room 1854, Washington, D.C. 20230, telephone number: (202) 482-0602. 
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2. INTRODUCTION

A. Purpose 

This Manual sets forth DOC guidance on Federal award administration and provides DOC with a 

uniform set of minimum procedures to govern the award lifecycle, from the requirements for 

announcing the availability of Federal funding, including the Notice of Funding Opportunity (NOFO) and 

request for applications (RFA), to reviewing, awarding, managing, and closing out awards. The Manual 

references policies and procedures for use by DOC offices and operating units for ensuring the 

consistent implementation of legislation, regulations, Office of Management and Budget (OMB) 

circulars, executive orders (EOs), and Departmental policies and procedures related to financial 

assistance. The Manual is for internal use by DOC personnel and does not create any rights or liabilities 

with respect to the public or any third party. It is to be used by operating units, Grants Offices, and all 

involved in the Federal award lifecycle. This Manual is maintained by the Grants Management Division 

within the Office of Acquisition Management. 

B. Authority 

This Manual is issued pursuant to the authority of 5 U.S.C. § 301 (Departmental Regulations) and 

Department Organization Order (DOO) 10-5 (Chief Financial Officer and Assistant Secretary for 

Administration). 

C. Coverage 

This Manual applies to all DOC operating units in their award, management, and administration of 

grants and cooperative agreements. This Manual shall have the same force and effect as a Department 

Administrative Order (DAO). Amendments (substantive changes) or revisions (corrections or updates) to 

the Manual may be developed and issued by the Director, Office of Acquisition Management (OAM). 

Proposed amendments to this Manual will be distributed for review and comment. 

D. Effect on Other Issuances 

This Manual provides guidance for the administration of Federal awards, and supersedes all 

previous financial assistance directives, including notices and orders. DOC operating units may issue 

supplemental operating unit-specific policies and procedures to cover items not covered by this Manual 

to address programmatic requirements that do not conflict with the provisions of this Manual or to 

implement unique statutory requirements and regulations. If an operating unit has specific statutory or 

regulatory requirements that necessitate policies, procedures, or restrictions not covered by the 

Manual, the operating unit may develop supplemental policies and procedures addressing the specific 

requirements. The supplements must be consistent with this Manual. The heads of operating units or 

other appropriate officials of operating units must submit supplements, and any revisions thereto, and 

an assurance that the supplement is consistent with the requirements in this Manual to the Office of 

Inspector General (OIG), the Office of General Counsel (OGC), and OAM for timely review and comment 

prior to internal issuance and use. 

E. Government-Wide Requirements Used in the Administration of DOC Awards 

As a condition of receiving Federal financial assistance awards, DOC enforces recipient compliance 

through government-wide requirements. Operating units, recipients and subrecipients shall administer 

all DOC financial assistance awards in accordance with applicable statutes, regulations, EOs, and OMB 
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circulars that may be attached to the expenditure of Federal funds. A list of requirements includes, but 

is not limited to the following:

1. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards codified at 2 CFR Part 200 (Uniform Guidance). 

a. In accordance with the Federal Register notice published on December 19, 2014 (79 FR 

75871) and the regulation at 2 CFR § 1327.101, effective December 26, 2014, the DOC adopted the 

Uniform Guidance. The Uniform Guidance streamlines the language from eight OMB circulars, 

including cost principles (OMB Circulars A-21, A-87, A-122), administrative requirements (OMB

Circulars A-102 and A-110), and audit requirements (OMB Circulars A-50 and A-133), into one 

consolidated set of guidance applicable to Federal financial assistance awards. For awards made on 

or after December 26, 2014, the Uniform Guidance supersedes DOC’s uniform administrative 

requirements set out at 15 CFR Parts 14 and 24.

2. Contract Cost Principles and Procedures (48 CFR Part 31).

a. The Uniform Guidance supersedes cost principles set out in OMB Circulars and codified at 2

CFR Parts 220, 225, and 230, but does not supersede the Contract Cost Principles, which generally 

apply to for-profit entities. At 2 CFR § 200.101(c), the Uniform Guidance provides that agencies may, 

but are not required to, apply Subparts A through E of 2 CFR Part 200, which include the cost 

principles at Subpart E, to for-profit entities. Therefore, the Grants Officer in consultation with the 

Program Office may elect to apply the cost principles under the Uniform Guidance (see Subpart E to 

2 CFR Part 200) or the Contract Cost Principles when making an award to a for-profit entity.

3. Other Requirements.

a. OMB Circular A-50 Revised (Audit Follow-Up), except as superseded by 2 CFR Part 200 (see 2 

CFR § 200.104 (Supersession));

b. OMB Circular A-129 Revised (Policies for Federal Credit Programs and Non-Tax Receivables);

c. 2 CFR Part 1326 (Nonprocurement Debarment and Suspension);

d. 2 CFR Part 1329 (Governmentwide Requirements for Drug-Free Workplace (Financial 

Assistance));

e. 5 CFR Part 1320 (Controlling Paperwork Burdens on the Public);

f. 15 CFR Part 8 (Nondiscrimination in Federally Assisted Programs of the Department of 

Commerce – Effectuation of Title VI of the Civil Rights Act of 1964);

g. 15 CFR Part 8a (Nondiscrimination on the Basis of Sex in Education Programs or Activities 

Receiving Federal Financial Assistance);

h. 15 CFR Part 8b (Prohibition of Discrimination Against the Handicapped in Federally Assisted 

Programs Operated by the Department of Commerce);

i. 15 CFR Part 11 (Uniform Relocation Assistance and Real Property Acquisition for Federal and 

Federally Assisted Programs);

j. 2 CFR Part 200, Appendix 1, D.5 (Intergovernmental Review);

k. 15 CFR Part 20 (Nondiscrimination on the Basis of Age in Programs or Activities Receiving 

Federal Financial Assistance);

l. 15 CFR Part 19 (Commerce Debt Collection);

m. 15 CFR Part 25 (Program Fraud Civil Remedies);
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n. 15 CFR Part 27 (Protection of Human Subjects);

o. 15 CFR Part 28 (New Restrictions on Lobbying);

p. 15 CFR Part 273 (Metric Conversion Policy for Federal Agencies);

q. 31 CFR Part 223 (Surety Companies Doing Business with the United States);

r. 31 CFR Part 900-904 (Federal Claims Collection Standards);

s. 37 CFR Part 401 (Rights to Inventions Made by Nonprofit Organizations and Small Business 

Firms under Government Grants, Contracts, and Cooperative Agreements);

t. EO 13653 (Nov 1, 2013, Preparing the United States for the Impacts of Climate Change);

u. EO 13693 (Mar 19, 2015, Planning for Federal Sustainability in the Next Decade);

v. EO’s 12549 and 12689 (Debarment and Suspension); and

w. Assurances contained in OMB Standard Forms: Form SF-424B (Assurances –

Non-Construction Programs) and Form SF-424D (Assurances – Construction Programs), which 

reference laws and regulations that may apply to particular awards.

4. DOC Standard Terms and Conditions (ST&Cs). The ST&Cs list all applicable statutes, 

regulations, EOs, OMB circulars, provisions of the Uniform Guidance, any other incorporated 

terms and conditions, and approved applications. The ST&Cs generally apply to DOC financial 

assistance awards and a recipient receiving a DOC financial assistance award must comply and 

require each of its subrecipients employed in the completion of the project to comply with the 

ST&Cs.

5. Research Terms and Conditions (RT&Cs) for Federal awards. Issuance of the revised RT&Cs was 

announced in the March 14, 2017 Federal Register (82 FR 13660). The RT&Cs address and 

implement the Uniform Guidance issued by OMB. The Department of Commerce commenced 

implementation of the RT&Cs effective October 1, 2017. 

6. For awards designated on the Form CD-450 (Financial Assistance Award) as Research, both the 

ST&Cs and the RT&Cs as implemented by the Department, apply to the award. The RT&Cs as 

well as the Department’s implementation statement, agency specific requirements, prior 

approval matrix, and subaward requirements are posted on the National Science Foundation’s 

website – https://www.nsf.gov/awards/managing/rtc.jsp. The ST&Cs and the RT&Cs are 

generally intended to harmonize with each other; however, where the ST&Cs and the RT&Cs 

differ in a Research award, the RT&Cs prevail, unless otherwise indicated in a specific award 

condition.

7. Order of Precedence. The following is the order of legal precedence for grants and cooperative 

agreements. There should be no conflicting guidance but, in the event of a discrepancy, the

order of precedence for DOC grants and program officials is listed in descending order: public 

laws, regulations, applicable notices published in the Federal Register, EOs, OMB circulars, DOC 

ST&Cs, operating unit standard award conditions (if any), and specific award conditions.

[Note: Specific award conditions may take precedence over DOC ST&Cs, on a case-by-case basis, when 

allowed by the ST&Cs, statute, or regulation.]

[Note: An annual appropriation act can include general provisions stating national policy requirements 

that apply to the use of financial assistance funds appropriated by the act. Because these requirements 

can be of limited duration and because they can vary from year to year and from one agency’s 
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appropriations act to another agency’s appropriations, the Grants Officer must know the agency or 

agencies and fiscal year(s) of the appropriation being obligated and may need to consult the FALD or the 

Budget Office if the requirements applicable to those appropriations are unknown.]

[Note: DOC or individual operating units may adopt further requirements and policies related to 

research involving human subjects.] 
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3. GLOSSARY OF TERMS AND ACRONYMS 

Refer to the Uniform Guidance, Subpart A (Acronyms and Definitions) for an expanded record of 

definitions and acronyms used in the Federal financial assistance community.

A. Definitions

1. Administrative Offset. Satisfying a debt by withholding funds payable by the United States 

(including funds payable by the United States on behalf of a state government) to, or held by the United 

States for, a person to satisfy a debt owed by the person. The term “administrative offset” can include, 

but is not limited to, the offset of Federal salary, vendor, retirement, and Social Security benefit 

payments. The terms “centralized administrative offset” and “centralized offset” refer to the process by 

which the Treasury Department's Financial Management Service offsets Federal payments through the 

Treasury Offset Program.

2. Amendment. 

a. For a Federal award, an amendment is a substantive change made to an award. Examples 

of an amendment to a Federal award include, but are not limited to, the following: continuation, 

renewal, supplemental, no-cost extension, and budget revision.

b. For a Notice of Funding Opportunity (NOFO), an amendment is any change to a 

competition’s substantive application requirements, including but not limited to eligibility 

requirements, required forms, change of dates, and the evaluation criteria.

3. Broad Agency Announcement (BAA). A broad agency announcement is a notice of the potential 

availability of funds that: (a) is general in nature; (b) identifies areas of programmatic interest; (c) 

includes criteria for selecting proposals; (d) seeks the participation of any interested members of the 

public, and, (e) excludes currently existing assistance programs.

4. Budget/Cost Analysis. The review and evaluation of the reasonableness, allowability, and 

allocability of an applicant’s proposed budget data and of the judgmental factors applied in projecting 

the estimated costs. 

5. Competitive Award. An award made with discretionary funds after a solicitation of proposals 

has been published in a NOFO posted at Grants.gov and where DOC chooses a proposal based on merit 

review and the application of established evaluation and selection criteria. The DOC may also treat as 

competitive an award that was solicited and reviewed through another federal agency’s competitive 

process or through a competitive solicitation process developed by several federal agencies acting in 

partnership.

6. Competitive Award Program. A financial assistance program under which funds are awarded 

on the basis of merit or need and to which an applicant is not entitled as a matter of law. 

7. Continuation. An amendment that provides continued funding within the approved project 

period. Unlike a renewal, a continuation does not extend the project period; rather, it provides 

additional funding within an already existing project period. Continuation amendments are used with 

multi-year awards. 
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8. Delinquent Debt. A debt that has not been paid by the date specified in the agency’s initial 

written demand for payment or applicable agreement or instrument (including a post-delinquency 

payment agreement) unless other satisfactory payment arrangements have been made. 

9. Department or DOC. United States Department of Commerce (DOC), unless otherwise 

indicated. As used in this Manual, “Department” or DOC includes the Office of the Secretary of 

Commerce and the operating units. 

10. Discretionary Award Program. A financial assistance program under which DOC can exercise its 

judgment in selecting to whom the funds are awarded. 

11. Discretionary Funds. Funds for which DOC can exercise its judgment in selecting to whom the 

funds are awarded.

12. Fixed Year Funds. Funds, by the terms of an Appropriations Act, available for obligation only for 

a specified period of time. Most often this will be a one-year period, but it may be for several years. 

This term is synonymous with “time limited funds” as used in this Manual.

13. Funding Period. The period of time when Federal funding is available for obligation by the 

recipient. This term is synonymous with “budget period.”

14. Grants.gov. The official Federal government website that allows organizations to electronically 

find and apply for Federal financial assistance. 

15. Grants Officer. The DOC official who is responsible for all business management and 

administrative aspects of a Federal award and the DOC official with the delegated authority to award, 

amend, administer, close out, suspend, and/or terminate grants and cooperative agreements and make 

related determinations and findings. For those operating units with delegated Grants Officer 

responsibilities (EDA, NIST, OS and NOAA), the term Grants Officer, as used in this Manual, means the 

Grants Officers who are identified by the head of the operating unit.

16. Head of Operating Unit. The head of an operating unit includes Secretarial Officers and the 

heads of primary operating units, as defined in Department Organization Order (DOO) 1-1. The heads of 

some operating units are Program Secretarial Officers; in other cases, they are other officers who report 

and are responsible to a Program Secretarial Officer or directly to the Secretary or Deputy Secretary, as 

may be specified.

17. Institutional Award. A grant or cooperative agreement under which funds are awarded based 

on competition with the intent to maintain a long-term partnership between DOC and the recipient so 

that new awards may be made on a noncompetitive basis if the recipient performs satisfactorily and 

submits the appropriate application document, and if the results of the periodic reviews validate the 

effectiveness and continued desirability of the use of institutional awards for the program.

18. Insular Area. The areas defined by Public Law 95-134, Title V, § 501 (1977), as amended (48 

U.S.C. § 1469a), including the Virgin Islands, Guam, American Samoa, and the islands formerly referred 

to as the “Trust Territory of the Pacific Islands”: the Commonwealth of the Northern Mariana Islands, 

the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. 
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19. Interested Party. Any officer, employee or member of the board of directors or other governing 

board of a non-Federal entity, including any other parties that advise, approve, recommend, or 

otherwise participate in the business decisions of the recipient, such as agents, advisors, consultants, 

attorneys, accountants or shareholders. This also includes immediate family and other persons directly 

connected to the Interested Party by law or through a business arrangement.

20. Merit Review. A thorough, consistent, and independent examination of an application based on 

pre-established criteria by persons knowledgeable in the field of endeavor for which support is 

requested. A merit review must be conducted by an impartial, objective, unbiased individual with the 

requisite expertise, knowledge, and experience in a technical field who can evaluate or assess a proposal 

for its value, quality, and likelihood of success. One who conducts a merit review must not have a 

conflict of interest, or the appearance of a conflict of interest, regarding any application under his or her 

review. 

21. Multi-year Award. A financial assistance award which has a period of performance of more 

than 12 months, which is partially funded as of the award date, and is subsequently funded in 

increments. This does not include awards with a period of performance of more than 12 months which 

are fully funded as of the award date. 

22. New Grant/New Award. The initial funding for an award not previously funded by the 

operating unit. A new award is the only type of award that will be issued on Form CD-450 (Financial 

Assistance Award).

23. No-Cost Extension. An amendment that extends the period of performance and funding period 

with no additional funding. 

24. Noncompetitive Award. An award made with discretionary funds but without the benefit of 

competition. 

25. Nondiscretionary Award Program. A financial assistance program under which a statute 

specifically names the intended recipient(s) or limits eligibility to all members of a particular class or 

classes of recipients. 

26. Nondiscretionary Funds. Funds for which a statute specifically names the intended recipient or 

limits the eligibility to all members of a particular class or classes of recipients. 

27. Operating Unit. Organizational entities outside the Office of the Secretary charged with 

carrying out specified substantive functions (i.e., programs) of the DOC, as defined in DOO 1-1. The 

operating units are the components of the DOC through which most of its substantive functions are 

carried out and are delegated authority by the Secretary of Commerce to award financial assistance. 

This term is synonymous with “funding agency” as used in this Manual.

28. Pre-Award Period. The approved period of time allotted to the award prior to the beginning of 

the period of performance as listed on the Form CD-450 (Financial Assistance Award).

29. Program Officer. The DOC official responsible for the technical, scientific, or other 

programmatic aspects of an award/program.
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30. Renewal. An amendment that extends the project period and funding period and adds

additional funds to the award.

31. Revolving Loan Fund. Established in 1975 to create and retain jobs in distressed communities, 

the EDA Revolving Loan Fund (RLF) provides competitive grants to eligible recipients to start or 

recapitalize local RLF’s. Those RLFs in turn provide gap financing at competitive rates to borrowers

otherwise unable to access affordable capital. Eligible uses include real estate, equipment, fixed assets, 

and working capital.

32. Selecting Official. A senior program official of the operating unit who is authorized to make 

final selection recommendations to the Grants Officer for final approval of award applications.

33. System for Award Management Exclusions (SAM Exclusions). A widely available source of the 

most current information about persons who are excluded or disqualified from covered transactions. 

The General Services Administration (GSA) maintains SAM Exclusions. When a Federal agency takes an 

action to exclude a person under the nonprocurement or procurement debarment and suspension 

system, the agency enters the information about the excluded person into SAM Exclusions. SAM 

Exclusions had previously been known as the Excluded Parties List System (EPLS). 

34. Subcontract. A contract under an award by a recipient’s or a sub-recipient’s contractor.

35. Supplemental. An amendment that provides funding over and above the approved budget 

during the current funding period. 

36. Suspension of Award. An enforcement action to temporarily suspend Federal sponsorship (as 

opposed to suspension of payments) under the award pending corrective action by the non-Federal 

entity or a decision to terminate the award. All activities under the award must cease and no costs may 

be incurred by the recipient during the suspension of award, unless the Federal awarding agency or 

pass-through entity expressly authorizes them in the notice of suspension or subsequently. 

37. Suspension of Payment. An action to temporarily withhold payment of funds under the award 

pending correction of identified deficiencies by the non-Federal entity. Activities under the award may 

continue and the non-Federal entity may continue to incur costs during the suspension of payment. 

38. Write-Off. Termination of debt collection activity under the Federal Claims Collection 

Standards. 

B. Abbreviations

AGC/ADTRAX – Office of the Assistant General Counsel for Administration and Transactions

AGC/L&R – Assistant General Counsel for Legislation and Regulation, DOC

ASAP – Automated Standardized Application for Payment

BAA – Broad Agency Announcement

CAIVERS – Credit Alert Interactive Voice Response System 

CENSUS – U.S. Census Bureau, Operating Unit of DOC

CFDA – Catalog of Federal Domestic Assistance

CFO/ASA – Chief Financial Officer and Assistant Secretary for Administration

CFR – Code of Federal Regulations
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CRADA – Cooperative Research and Development Agreement

DAO - Department Administrative Order, DOC 

DOC - Department of Commerce

DOO - Department Organization Order, DOC

EDA - Economic Development Administration, Operating Unit of DOC

EO - Executive Order, White House

EPLS – Excluded Parties List System. The EPLS is now referred to as “SAM Exclusions” and incorporated 

into the System for Award Management (SAM) 

FALD - Federal Assistance Law Division, DOC

FBO - FedBizOpps (Federal Business Opportunities)

FFATA – Federal Funding Accountability and Transparency Act of 2006 or Transparency Act (Pub. L. No.

109-282, as amended by section 6202(a) of Pub. L. No. 110-252 (31 U.S.C. § 6101)

FirstNet – First Responder Network Authority 

FOIA - Freedom of Information Act

GAO – Government Accountability Office

GSA - General Services Administration 

ITA - International Trade Administration, Operating Unit of DOC

MBDA - Minority Business Development Agency, Operating Unit of DOC

MOU - Memorandum of Understanding

NIST - National Institute of Standards and Technology, Operating Unit of DOC

NOAA - National Oceanic and Atmospheric Administration, Operating Unit of DOC

NOFO – Notice of Funding Opportunity

NTIA - National Telecommunications and Information Administration, Operating Unit of DOC 

OCA - Office of Congressional Affairs, DOC 

OAM - Office of Acquisition Management, DOC

OGC - Office of General Counsel, DOC

OIG - Office of Inspector General, DOC

OLIA - Office of Legislative and Intergovernmental Affairs, DOC

OMB - Office of Management and Budget, White House

PA - Privacy Act 

PRA - Paperwork Reduction Act

RFA - Request for Applications

RIN - Regulation Identification Number

SAM - System for Award Management 

SPOC - Single Point of Contact

ST&Cs - DOC Financial Assistance Standard Terms and Conditions

RT&Cs - Research Terms and Conditions for Federal awards

TOP - Treasury Offset Program

U.S.C. - United States Code
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4. RESPONSIBILITIES IN GRANTS ADMINISTRATION

A. Chief Financial Officer and Assistant Secretary for Administration

1. Pursuant to DOO 10-5 (Chief Financial Officer and Assistant Secretary for Administration), the 

DOC CFO/ASA has been designated by the Secretary of Commerce to act as the Grants Officer for the 

Department and is responsible for developing and implementing policies, standards, and procedures for 

the administration of all financial assistance programs of the DOC. 

[Note: Under DOO 10-4 (Assistant Secretary for Economic Development) EDA has been delegated 

authority by the Secretary of Commerce to administer the Public Works and Economic Development Act 

and pertinent provisions of the Trade Act and the America Creating Opportunities to Meaningfully 

Promote Excellence in Technology, Education, and Science (COMPETES) Reauthorization Act of 2010, 

among other matters. This includes grants administration for such programs. In addition, NIST and 

NOAA are delegated through DOOs 30-2A (National Institute of Standards and Technology) and 10-15 

(Under Secretary of Commerce for Oceans and Atmosphere and Administrator of the National Oceanic 

and Atmospheric Administration) respectively, the authority to perform functions in the Federal Grant 

and Cooperative Agreement Act, 31 U.S.C. §§ 6301-08 with regard to making grants and cooperative 

agreements.] 

2. The CFO/ASA hereby delegates to the Grants Officer the authority to approve exceptions to 

awards subject to the provisions of 2 CFR § 200.102 (Exceptions).

[Note: This delegation of authority may not be re-delegated by the Grants Officer.]

B. Office of Acquisition Management (OAM)

OAM is delegated the authority to develop, issue and oversee implementation of policies and 

procedures for the administration of DOC financial assistance programs (including grants, cooperative 

agreements, loans, and loan guarantees) and to oversee implementation of DOC's audit follow-up 

program with respect to financial assistance programs. The OAM Director also serves as the Debarring 

and Suspending Official for DOC nonprocurement actions, and as the Chair of the DOC Grants Council, 

which is the governing body for enterprise wide policy development and implementation in the DOC for 

Federal assistance programs. DOO 10-5 § 1.02.f states that the CFO/ASA “assigns responsibility for 

financial assistance administrative and operational policies to the Director for Acquisition 

Management.” The Grants Management Division (GMD), located within OAM, is responsible for the 

administrative and operational policies for financial assistance for DOC.

The following functions will be performed by GMD:

1. Provide guidance, interpretations, and technical assistance on regulations, policies, and 

procedures for the administration of financial assistance to Grants Officers, Program Offices, and others 

as needed.

2. Develop, prepare, coordinate, and submit notices of Department-wide proposed rulemaking, 

interim final rules, final rules, and other Federal Register notices regarding financial assistance matters 

to the Office of Assistant General Counsel for Legislation and Regulation (AGC/L&R), with copies of 

comments and/or clearances received during coordination.
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3. Provide to OMB and other Federal agencies, after review and comment by appropriate 

operating unit and other Departmental staff, consolidated DOC comments concerning proposed new 

government-wide policies and procedures and proposed revisions to policies and procedures related to 

financial assistance issues.

4. Notify appropriate operating unit and DOC staff of changes and revisions to government-wide 

financial assistance policies and procedures or other matters related to financial assistance.

5. Conduct or participate in reviews, task force groups, or other assessments to assure compliance 

with policies and procedures established for the administration of DOC financial assistance programs.

6. Evaluate, in consultation with other offices as appropriate, status updates provided on 

implementation of financial assistance audit findings.

7. Develop reports on implementation activities of procurement and financial assistance audit 

recommendations as necessary for reporting to Congress by the Secretary of Commerce.

8. Serve as the DOC liaison and single point of contact for DOC with OMB, the Government 

Accountability Office, the Department of the Treasury, Health and Human Services (including 

Grants.gov), and other agencies on financial assistance matters.

9. Coordinate the collection and submission of the information for DOC financial assistance 

transactions to the government-wide database, USASpending.gov.

10. Prepare, issue, and maintain this Manual, and interpret its policies, standards, and procedures.

11. Consider requests for waivers to the provisions of this Manual, as permitted by governing 

statutes and regulations, and notify the Head of the Operating Unit of the decision to approve or deny 

the request. If a waiver is denied, a written explanation will be provided to the requester.

12. Convene Department-wide Grants Council meetings.

13. Review in a timely manner all materials prepared pursuant to the requirements of this Manual 

for conformance to financial assistance regulations, policies, standards, and procedures. These reviews 

will cover all financial assistance programs of the Department and will include, but not be limited to, the 

following documents.

a. Proposed Federal Register notices, when required and related to administration of financial 

assistance programs, including announcements of funding availability, information collection 

activities, and program regulations;

b. Application kits/packages that contain any program-specific forms or requirements beyond 

those listed in Chapter 9 of this Manual;

c. Proposed publications that include financial assistance award management or 

administration procedures or instructions with respect to individual programs or groups of 

programs; and
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d. Other documents as appropriate.

14. Coordinate with the appropriate Grants Officers, program offices and the Federal Assistance 

Law Division (FALD), within the Office of the Assistant General Counsel for Administration and 

Transactions (AGC/ADTRAX), on the establishment of program numbers and updating of text and 

financial assistance information in the Catalog of Federal Domestic Assistance (CFDA).

C. Office of General Counsel

Pursuant to DOO 10-6 (Office of the General Counsel), the functions of the OGC include the 

preparation or examination for legal form and effect of all instruments entered into by the DOC, 

including grants and cooperative agreements. These agreements create legal rights and obligations 

between the government and the recipient. Grant and cooperative agreement instruments must be

authorized under specific statutory authority, may require the issuance by publication in the Federal

Register of rules and notices, and are bound by administrative regulations, DOC policies, EOs, OMB 

Circulars, and the Uniform Guidance. The award, administration, and audit of these agreements may 

present legal issues, rights, liabilities, and the possibility of disputes, which presents the need for timely 

legal advice and guidance. 

1. The OGC provides legal support in the following financial assistance related areas:

a. AGC/L&R coordinates and manages compliance with regulatory requirements. This includes 

coordination, clearance, and submission of items proposed for publication in the Federal Register in 

accordance with the requirements of DOO 10-6, Section 4.01, Subsections a. and g. 

b. FALD provides financial assistance related legal representation, advice, and support to 

Grants Officers and Specialists, Program Officers, OAM, the Nonprocurement Debarring Official, the 

CFO/ASA, and others. The following functions are performed by FALD:

(1) Legal representation before the Government Accountability Office and administrative 

tribunals. FALD also provides direct support to the Grants Officer and to the AGC for Litigation, 

Employment and Oversight (AGC/LEO) in Federal court litigation regarding the award, 

administration, and cost disallowance under grants and cooperative agreements;

(2) Legal analysis to Program Officials and Grants Officers of proposed legislation, authorizing 

statutes and appropriations acts, including implementation by regulation, for assistance programs; 

(3) Participation, as appropriate, in compliance reviews, task force groups, or other 

assessments to ensure compliance with all laws, EOs, regulations, and policies governing DOC 

financial assistance; and

(4) Legal advice and services to the Debt Workout Groups in accordance with the DOC Credit 

and Debt Management Operating Standards and Procedures Handbook, which currently may be 

located on the DOC website at http://www.osec.doc.gov/ofm/credit/cover.html. This includes 

assistance with final terminations, settlements, compromises of claims, and referrals of claims to the 

Department of Justice for collection. The General Litigation Division (Gen Lit), within AGC/LEO, also 

provides legal advice and services relative to debt workout, debt collection, and bankruptcy. In 

addition, the Real Property and Environmental Law Division (RPELD), within AGC/ADTRAX is 
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available for consultation regarding property and environmental concerns laws (e.g., the National 

Environmental Policy Act of 1969 and state analogs, and the Comprehensive Environmental 

Response, Compensation and Liability Act of 1980). Coordination with Gen Lit and RPELD may be 

pursued directly by Program Officials or Grants Officers, or may be coordinated through FALD.

[Note: EDA’s Office of Chief Counsel (OCC) provides direct supporting legal services with respect to 

grants and cooperative agreements to EDA program and grants officials. Therefore, references to 

FALD throughout this Manual generally include EDA counsel with respect to EDA programs. FALD 

assists, reviews, and provides oversight of EDA counsel's legal advice and guidance on DOC and 

government-wide requirements.] 

2. The following decisions or actions raise significant legal issues and require FALD clearance:

a. Proposed rules, interim rules, final rules, Federal Register notices of availability of funds, 

when required, NOFOs, RFAs, and all other federal funding announcements relating to financial 

assistance;

b. Notices of nonprocurement debarment or suspension, determinations, and settlements 

under 2 CFR Part 1326; and

c. Audit appeal determinations under DAO 213-5 (Audit Resolution and Follow-Up) are 

submitted to FALD for review and recommendation before clearance by the AGC/ADTRAX. 

3. The following actions, determinations, and/or documents, for which decision-making authority 

rests with the responsible Program Official, Grants Officer, or the Director, OAM, require FALD review 

and opportunity to comment: 

a. Application kits/packages, technical evaluation forms, and conflict of interest forms for 

reviewers. This includes other documents which establish procedures for awards under a financial 

assistance program;

b. Packages summarizing the competitive review of discretionary funds in accordance with 

Chapter 8 of this Manual. These packages should be reviewed by FALD as early as possible prior to 

approval of awards;

c. Proposed financial assistance competitive awards where the amount of Federal funding 

exceeds the simplified acquisition threshold, which is currently $150,000, and all noncompetitive 

awards, see also 41 U.S.C. § 134 (the simplified acquisition threshold). This includes all amendments 

that accumulate to more than $150,000 in total award funding or add or change the scope of work. 

OGC will consider requests to raise the $150,000 threshold for legal review of competitive awards 

on a program-by-program basis, with the concurrence of the program office, for on-going programs 

that have not had significant legal issues or audit problems in the past three years. OGC will also 

consider requests to change the requirement for legal review of all continuation amendments under 

multi-year awards, as well as review of individual amendments to institutional awards that are 

under the simplified acquisition threshold, but where the underlying award totals more than 

$150,000, as appropriate. Grants Officers may submit a written request setting forth a justification 

for raising the threshold to the FALD Chief, or FALD staff may recommend a waiver to the FALD 
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Chief, who may provide written approval of such a request when warranted. Contact FALD for 

further information;

d. Interagency or other special agreements (IAAs) executing the transfer of funds in or out for 

the award of a grant or cooperative agreement. IAAs can include memoranda of agreement, 

memoranda of understanding, joint project agreements, interagency purchase orders that 

document acceptance by all parties, or any other document that details the terms of an agreement 

and the parties’ acceptance. Agreements can transfer funds from one party to the other, bind one 

or both parties to commit funds or resources to a grant or cooperative agreement, or not involve 

any resources but describe specific responsibilities under the grant or cooperative agreement. All 

IAAs require review and approval by the AGC/ADTRAX, General Law Division (GLD). 

[Note: When DOC provides Federal funds to another Federal agency that is administering a 

collaborative project with the Department, the agreement governing that transfer of funds must 

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits

in a financial assistance award, unless statutorily authorized. See Chapter 9 of this Manual.] 

e. Pre- and post-award risk assessments resulting in the imposition of additional specific award 

conditions pursuant to 2 CFR §§ 200.205 (Federal awarding agency review of risk posed by 

applicants) and 200.207 (Specific conditions);

f. Notices of suspension or termination of awards;

g. Replacement recipients, assignments, and novations, recipient name changes; and

h. Questions regarding selecting officials’ involvement as an independent reviewer. 

4. It is in the best interest of the Department that Program Officials and Grants Officers consider all 

legal ramifications of key decisions related to the award and administration of financial assistance. The 

decision-making authority rests with the responsible Program Officer, Grants Officer, or OAM. The 

following are examples of actions/decisions/documents regarding which FALD may, upon request, 

provide coordinated legal review and comment:

a. Budget certification as to the availability of funds, which shall include representations on the 

following matters, when appropriate:

(1) Time limitation of funds (annual or time-limited funds vs. no-year funds);

(2) Appropriations act; and 

(3) Any other legislative restrictions on appropriations.

b. Questions pertaining to whether Paperwork Reduction Act (PRA), 44 U.S.C. § 3501,

clearance is required for a proposed information collection in connection with a financial assistance 

program, in addition to FALD review of proposed PRA packages being submitted for OMB clearance;
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c. Disputes relating to the terms of the award in discussions or written communications on 

aspects of the grant, particularly on occasions when other parties associated with the award are 

represented by their own attorneys;

d. Audit resolution determinations establishing a debt, claim, or other adverse action against a 

recipient. FALD can also provide services as a mediator, facilitator, or third party negotiator for 

reaching audit resolution determinations when agreement between the Grants Officer, Program

Official, and OIG Auditor (when applicable) cannot be reached;

e. Comments prepared by DOC officials on proposed rules, interim rules, and revisions to OMB 

Circulars applicable to Federal assistance including, but not limited to, the award, administration, 

and audit of grants and cooperative agreements;

f. Congressional, Freedom of Information Act (FOIA), and executive correspondence relating 

to financial assistance;

g. Amendments to awards involving significant or unique issues; and

h. When there is a need for legal interpretation or other legal advice, and any other issues with 

potential legal ramifications.

D. Office of Inspector General

Pursuant to DOO 23-1 (Office of the Inspector General), the OIG is assigned the function of carrying 

out internal, external, financial statement, information and financial system, and special audits affecting 

the programs and activities of the DOC. The following functions will be performed by the OIG:

1. Conduct, supervise, or coordinate Inspector General (IG) audits, inspections, or investigations 

relating to DOC financial assistance programs and operations.

2. Prepare reports on audit resolution activities as necessary for the IG's Semiannual Report to 

Congress.

3. Evaluate, in consultation with other offices as appropriate, responses and proposed actions on 

OIG recommendations.

4. Participate with the Grants Officer in the resolution of OIG audits conducted on financial 

assistance awards funded by DOC.

5. Review and advise on the adequacy of the financial management systems maintained by 

applicants and recipients, the projected or claimed costs, and the projected or reported performance.

6. Provide guidance about audit related matters to Grants Officers, Program Officers, their staffs, 

OAM, and others as needed.

7. Participate as appropriate in reviews, task force groups, or other assessments to assure 

compliance with policies and procedures established for the administration of DOC grant programs.
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8. Recommend policies and procedures to promote economy and efficiency, and to prevent and 

detect fraud, waste, and abuse in DOC financial assistance programs and operations.

E. Finance and Budget Office

The following financial and accounting duties must be assigned and fulfilled in connection with 

financial assistance programs and individual awards:

1. Certify funding availability (this includes assurance that the budgetary line item from which the 

funds originate is compatible with the financial assistance program under which the funds will be 

obligated). If funds for a particular award were transferred from another Federal agency, a copy of the 

interagency agreement reflecting the statutory authority for the transfer of funds to DOC and the 

transferring agency’s statutory authority to provide financial assistance for this purpose must also be 

included as part of the official award file for the subject action;

2. Provide documentation regarding time limitation of funds (e.g., annual funds).

3. Provide citation and, when known, identification of the intended recipient when there is 

statutory or Congressional direction regarding the funding of a project identified in an appropriations 

act or provided in the House, Senate, or Conference Appropriations Committees reports accompanying 

an appropriations act. If the project is identified in the report language and not in the appropriations 

act, consult FALD to identify the independent statutory authority to make a grant for this purpose. 

4. Notify the Grants or Program Officer, as appropriate, of any other restrictions on appropriations.

5. For updates to the CFDA, bureaus will work closely with their respective budget offices to 

validate data accuracy and integrity.

6. Provide full accounting support and financial advice to Grants Officers, Program Officers, the 

operating unit, and others as needed;

7. Provide financial data and reports on grants as requested by other Federal agencies, the 

operating unit, or the Grants Officer;

8. Record the financial transactions associated with each financial assistance award from inception 

to close-out of the final financial report, including obligation and deobligation of funds, payments, 

establishment of accounts receivable, and regularly scheduled billings;

9. As recommended by appropriate grants officials, process requests and documentation for 

disbursement of funds to be issued by electronic funds transfer or by Treasury check when necessary in 

accordance with the provisions of the Debt Collection Improvement Act of 1996;

10. Prepare appropriate billing notice for audit-related and other accounts receivable stemming 

from financial assistance awards, and promptly notify the Grants Officer and the Program Officer when 

accounts receivable become delinquent;

11. Provide access to a listing of delinquent debtors to the Grants Officer for each DOC operating 

unit and to OAM; and
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12. Perform the functions normally assigned to the Finance/Accounting Officer, including those 

stipulated in the DOC Credit and Debt Management Operating Standards and Procedures Handbook.

F. Grants Office

The Grants Officer oversees the business management and administrative aspects of grants and 

cooperative agreements. The Grants Officer or designee will coordinate as appropriate with the 

Program Officers and other appropriate Departmental offices. Grants Officers shall carry out the 

responsibilities identified in Paragraphs 1, 2, 3, and 4 of this section without any re-delegation to other 

parties. The responsibilities outlined in Paragraphs 5 through 27 may be further delegated by the Grants 

Officer to appropriate members of the Grants Officer’s staff. Although these actions may be delegated 

to appropriate members of the Grants Officer’s staff, these duties ultimately remain the responsibilities 

of the Grants Officer. 

[NOTE: The Grants Officer should know what functions are inherently governmental and critical. 

Contractors and grantees cannot perform inherently governmental and critical functions and are 

prohibited from making determinations, approving, and directing functions that should be done by 

Federal officials (e.g., acquisition planning, determining minimum needs of the Federal government, 

deriving contract cost estimates, voting on contract evaluation panels or selecting contract awardees). 

Additionally, a contractor cannot make final contracting decisions, including determining award fees, 

terminations for convenience or cause or order any changes under a contract. Contractors may provide 

support to Federal government decision makers in each of these areas but cannot make the actual 

determinations. For a list of inherently governmental functions, read the OMB Office of Federal 

Procurement Policy Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11–01

(Performance of Inherently Governmental and Critical Functions), available at 

http://www.gpo.gov/fdsys/pkg/FR-2011-09-12/pdf/2011-23165.pdf.]

Grants administration responsibilities are as follows:

1. Approve awards and amendments that obligate or deobligate funds.

2. Suspend or terminate individual awards, excluding debarment or suspension of a recipient as 

provided in 2 CFR Part 1326.

3. Approve final pre-award risk assessment (completed in accordance with 2 CFR § 200.205

(Federal awarding agency review of risk posed by applicants)) and the imposition of specific award 

conditions (in accordance with 2 CFR § 200.207 (Specific conditions)).

4. Approve, as appropriate, exceptions pursuant to the delegation of authority from the CFO/ASA 

in accordance with this chapter.

5. Provide grants administration guidance and support to Program Officers, recipients, and others 

as needed.

6. Maintain the official award files (electronic and/or hard copy).

7. Ensure that each financial assistance award is prepared and administered in accordance with 

applicable statutes, regulations, OMB guidance, EOs, and DOC policies.
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8. Perform cost analyses of proposed budgets to assure that costs in the award budget are 

reasonable, allowable, and allocable in accordance with the applicable cost principles.

9. Ensure that pre-award administrative procedures are carried out, including but not limited to 

the following:

a. Provide assurance that the recipient was competitively selected by the appropriate 

independent or technical review process or that appropriate noncompetitive selection procedures 

were followed in accordance with Chapter 8 of this Manual and that the official award file contains 

the required documentation with respect to selection procedures;

b. Review of any justification for noncompetitive award of discretionary funds and make 

determination of adequacy of that justification and the basis for the justification; 

c. Provide written verification concerning an outstanding delinquent receivable or debt; 

d. If applicable, review of any available Single Audit (see Subpart F to 2 CFR Part 200) or other 

audit report; 

e. Recommend to the Grants Officer and to the Program Official the appropriate funding 

instrument to be used in a particular transaction, i.e., grant, cooperative agreement, or contract and 

development of appropriate specific award conditions defining the role of the Federal Government 

when the level of involvement is determined to be substantial and award of a cooperative 

agreement is warranted;

f. Include DOC ST&Cs in awards, as applicable, as well as any operating unit-specific standard 

and/or specific award conditions required to protect the Federal Government's interest;

g. Examine proposed pre-award costs to determine necessity and applicability to project 

objectives and recommend to the Grants Officer the approval or disapproval of the pre-award costs, 

as appropriate; and

h. Collect all necessary internal clearances (such as OIG, OGC, etc.) for inclusion in the official 

file.

10. Ensure the recipient's compliance with award conditions and recommend appropriate action to 

the Grants Officer when there is non-compliance.

11. Review, as necessary, subcontracts and subgrants by the recipient to determine compliance 

with applicable administrative requirements, requests for foreign travel, and requests for extension of 

reporting periods. 

12. Receive and review financial reports submitted by the recipient to ensure that:

a. Recipients are expending funds at an appropriate rate and that matching requirements are 

being met;

b. Federal disbursements are comparable with the period covered by requests for payment; 
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c. Recipients are not maintaining excess cash on hand;

d. Reports submitted by the recipient agree with DOC accounting records of disbursements;

e. Reports contain information on indirect costs and program income if these items are 

included in the approved budget; and

f. Reports are completed correctly.

13. Review and approve requests for advance or reimbursement or contact the recipient if payment 

cannot be made as requested.

14. Provide proper notice to any recipient in advance of suspending payments, including 

information on how to remedy the suspension, whether it is of the award or of award payments, and 

the assurance that payments will be resumed once the recipient has met requirements.

15. Review recommendations for no-cost amendments (which include, but are not limited to, 

budget revisions, time extensions to the period of performance, or changes in the work schedule or key 

personnel) and approve or notify the Program Office and/or recipient of reason for disapproval.

16. Manage disposition of real property, personal property or supplies acquired in whole or in part 

under a financial assistance award by ensuring that the appropriate Property Management Officer is 

notified of the existence, nature, value, and location of said property under a grant available for 

disposition, as appropriate. 

17. Ensure that the award is administratively closed out, and, as applicable, that the official award 

file is held in the appropriate records holding facility for the appropriate time period before the file is 

destroyed.

18. Review the audit report, the recipient’s response, and the Program Officer's comments and 

prepare the audit resolution proposal in accordance with DAO 213-5.

19. Notify the recipient of any account receivable established and provide required information 

about how to make payment as well as consequences of nonpayment. 

20. Review and process appeals of financial assistance audit resolution determinations in 

accordance with the provisions of DAO 213-5.

21. Monitor open financial assistance audit recommendations; ensure that open recommendations 

are properly implemented.

22. Review in a timely manner the following documents for conformance to government-wide and 

DOC financial assistance administrative requirements: 

a. Proposed Federal Register notices, as required, and Notices of Funding Opportunities;

b. Application kits/packages;
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c. Publications (including information on the DOC, operating unit, or program Internet 

website) that include information on financial assistance award management or administration; 

d. Proposed requests for OMB clearance of information collection activities under financial 

assistance programs; and

e. Other documents as appropriate. 

23. Ensure that quarterly financial assistance transactions are reported accurately and in a timely 

manner to USASpending.gov and all other government reporting systems, as appropriate. 

24. Refer proposed nonprocurement suspension and debarment actions to the Department's 

Debarring and Suspending Official in accordance with provisions contained in 2 CFR Part 1326. 

25. Assure that any FOIA requests for documents in an official award file are reviewed and released 

or withheld in accordance with the provisions of the FOIA. If the Grants Officer is not authorized by 

agency regulations to withhold documents under the FOIA, the Grants Officer must provide responsive 

documents to the appropriate initial denial authority.

26. Notify the recipient when the award is close to completion and provide guidance for close-out 

of the award. 

G. Liaison Responsibilities

Each operating unit that provides funding for financial assistance awards shall establish a central 

liaison to interact with OAM. Each liaison is responsible for performing the following primary duties 

with respect to financial assistance.

1. Policy Implementation.

a. Establish procedures that support the requirements of this Manual and ensure conformance 

with the provisions of this Manual;

b. Review relevant draft regulations;

c. Ensure each program’s compliance with Federal, Departmental, and operating unit grants 

administration requirements; and

d. Implement the policy requirements as set forth in this Manual.

2. Monitoring.

a. Review the operating unit’s grants administration system for compliance with this Manual; 

and

b. Review grant forms and other grant documents for compliance with applicable 

requirements. 

3. Liaison and Coordination.
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a. Answer questions and inquiries on grant-related matters;

b. Coordinate, as appropriate, the operating unit’s consolidated funding and other grantrelated activities;

c. Assure appropriate coordination of proposed publications for the Federal Register, as 

required, through OAM, OGC, and other required DOC offices; and 

d. Disseminate information from OAM to appropriate operating unit personnel and offices.

4. Information Collection, Analysis, and Dissemination. Coordinate preparation and submission of 

reports on grant-related matters for DOC.

H. Program Office

The Program Officer, or assigned operating unit component, is responsible for monitoring and 

oversight of the work being conducted under an award, such as tracking the recipient’s progress,

comparing the actual accomplishments with the goals and objectives established in the award, and 

advising the Grants Officer on all programmatic aspects of the awards. 

[NOTE: The Program Officer should know what functions are inherently governmental and critical. 

Contractors and grantees cannot perform inherently governmental and critical functions and are 

prohibited from making determinations, approving, and directing functions that should done by Federal 

officials (e.g., acquisition planning, determining minimum needs of the Federal government, deriving 

contract costs estimates, voting on contract evaluation panels or selecting recipients are also inherently 

federal functions). Additionally, a contractor cannot make final decisions, including determining 

contract award fees or terminations for convenience or cause. Contractors may provide support to 

Federal government decision makers in each of these areas but cannot make the actual determinations. 

For a list of inherently governmental functions, read the OMB Office of Federal Procurement Policy 

Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11–01 (Performance of 

Inherently Governmental and Critical Functions), available at http://www.gpo.gov/fdsys/pkg/FR-2011-

09-12/pdf/2011-23165.pdf.]

The following are programmatic functions to be performed by the Program Office:

1. Provide programmatic guidance and technical assistance to recipients, Grants Officers, and 

other officials, as necessary.

2. Establish programmatic policy within the scope of authorizing legislation and Departmental 

goals and objectives.

3. Develop the evaluation process, criteria, and weights or relative values used for competitively 

selecting applications.

4. Prepare Federal Register notices, as required, in accordance with Chapter 17 of this Manual, 

announcing the availability of funds. 

5. Prepare NOFO for posting in accordance with Chapter 17 of this Manual. 
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6. Prepare, in consultation with the Grants Officer and with FALD, the application package for the 

program, including any requests for OMB clearance of information collection activities that may be 

required by the program or by individual financial assistance awards under the program.

7. Develop and coordinate the competitive review process in accordance with Chapter 8 of this 

Manual, select qualified reviewers who have no conflicts of interest, ensure that each application

receives the appropriate independent or technical and objective review, and verify that the ranking or 

selection of applications is based on the published selection criteria. 

8. Develop and provide to the Grants Officer written justification for proposed noncompetitive 

awards of discretionary funds and provide basis for justification, in accordance with the terms on this 

Manual 

9. Receive and review applications and proposals. Also review justifications for compliance with 

existing program guidelines, regulations, and legislation, as well as proposed budgets to determine the 

reasonableness, necessity, and adequacy of proposed costs for accomplishing the objectives of the 

proposed award.

10. Establish criteria for evaluating project performance. See 2 CFR § 200.301 (Performance 

Measurement).

11. Provide to the Grants Officer, for the official award file, a complete and accurate funding 

recommendation package in accordance with instructions contained in Chapter 9 of this Manual. This 

includes the packages summarizing the results of the review process, for both competitive and noncompetitive awards as described in Chapter 8 of this Manual. 

12. Provide or make available to the Grants Officer for the official award files: internal memoranda 

and all correspondence (scanned or original signatures required when available) regarding specific 

award files, recipient performance reports, written evaluations of performance reports and of any 

on-site visits. 

13. Notify unsuccessful applicants of decision not to fund an application in accordance with Chapter 

8 of this Manual.

14. Monitor project activities to ensure that goals are being achieved and the project is being

carried out properly.

15. Provide written background and recommendations to the Grants Officer on programmatic 

issues, such as amendments to the project description or budget.

16. Review and evaluate all reports, including financial, performance or technical reports, property, 

and patent reports submitted by the recipient for consistency with the approved project and provide 

copies to the Grants Officer.

17. Report to the Grants Officer, within 30 days of discovery, concerning potential or existing 

problems, financial inconsistencies, or situations of noncompliance and provide recommendations for 

resolution.
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18. Monitor the recipient's purchase and use of property acquired under the award or furnished by 

the Federal Government under the award, and assist the Grants Officer to ensure compliance with the 

Property Standards of the Uniform Guidance (see 2 CFR § 200.310 (Insurance Coverage) through §

200.316 (Property Trust Relationship)), the DOC Personal Property Management Manual, the DOC Real 

Property Management Manual, and any other applicable legal requirements.

19. Review, analyze, and comment on audit reports provided by the Grants Officer for review and 

comment, the recipient’s response to audit reports, and audit determination appeals.

20. Ensure that FOIA requests for documents in Program Office files are reviewed and released or 

withheld in accordance with the provisions of the FOIA. 

21. Ensure compliance with all relevant programmatic statutes, regulations, EOs, and policies (e.g., 

civil rights and environmental issues). These factors should be considered at an early stage in the 

application or proposal review process. This includes encouraging applicants to build environmental

considerations into their own planning processes in a way that facilitates National Environmental Policy 

Act and other environmental compliance requirements. The funding agency, with appropriate 

Department of Commerce oversight, is ultimately responsible for environmental compliance and has a 

duty to enforce recipient compliance as a condition of funding.

22. Recommend to the Grants Officer suspension or termination of the award, when appropriate.

23. Provide one copy each to the Grants Officer and to the Budget Officer of any agreement 

effecting a transfer of funds from other Federal agencies or from another DOC operating unit for 

award(s) and identify to the Grants Officer any restrictions placed on funds that are transferred from 

other Federal agencies for inclusion in a DOC grant or cooperative agreement. 

[Note: A transfer of funds cannot be used to provide Federal assistance unless there is statutory 

authority allowing the transfer. In addition, both the DOC operating unit and the other agency must 

possess the requisite grant-making and mission-related authorities to carry out the work under the 

award. See also Chapter 15 of this Manual.]

[Note: When DOC provides Federal funds to another Federal agency that is administering a 

collaborative project with the Department, the agreement governing that transfer of funds must 

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a 

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

24. Arrange for an independent review to be conducted of institutional grant programs and/or 

awards in accordance with Chapter 15 of this Manual.

25. Ensure that the program is in compliance with provisions of EO 12372 (Intergovernmental 

Review of Federal Programs), and coordinate, as appropriate, with the Office of Legislative and 

Intergovernmental Affairs (OLIA) to determine if the program is covered by EO 12372. 

I. Property Management Office

1. Ensure uniform implementation of operating unit policies and procedures pertaining to the 

administration of property purchased under an award by a non-Federal entity or furnished by the 
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Federal Government under an award. This includes communicating to non-Federal entities the property 

trust relationship that exists when real property, equipment, supplies or intangible property is acquired 

or improved under an award and the operating unit’s requirements regarding the recording of liens or 

other appropriate notices of record to indicate that real or personal property has been acquired or 

improved with a Federal award and that use and disposition conditions apply to the property. See 2 CFR

§ 200.316 (Property trust relationship). 

2. If requested by the Grants Officer, provide guidance to recipients regarding establishing and 

maintaining property accountability systems and the use and control of property acquired under the 

provisions of an award.

3. If requested by the Grants Officer, establish and maintain property accountability records, 

provide property disposition instructions to recipients, and provide a copy of the instructions to the 

Grants Officer.

4. Provide support and assistance to the Grants and Program Officers, as needed, regarding any 

and all property matters, including real property funded or partially funded with Federal funds through a 

financial assistance award.
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5. RELATIONSHIPS WITH OUTSIDE ENTITIES

A. Overview

1. The DOC has a diverse mission that is accomplished via both in-house activities and through 

non-Federal organizations, using instruments reflecting either a financial assistance, procurement, or 

other type of agreement. These instruments are different in purpose and create different relationships 

between the Department and outside parties.

2. The Federal Grant and Cooperative Agreement Act of 1977, as amended, 31 U.S.C. §§ 

6301-6308, (the Act) requires executive agencies to distinguish procurement relationships from 

assistance relationships with non-Federal parties and provides some general guidance on helping make 

these distinctions. The Act requires the use of procurement contracts for all agency acquisition activity, 

and the use of assistance instruments (grants and cooperative agreements) for specified types of 

assistance relationships.

3. This chapter summarizes and augments the guidance in the Act on distinguishing between those 

situations in which a procurement contract, an assistance instrument (grant or cooperative 

agreements), or other type of agreement is the appropriate instrument.

B. Grants

A grant is the legal instrument reflecting a relationship between DOC and a recipient whenever: (a) 

the principal purpose of the relationship is to transfer anything of value in order to accomplish a public 

purpose of support or stimulation authorized by Federal statute, and (b) no substantial involvement is 

anticipated between DOC and the recipient during the performance of the contemplated activity. The 

term "grant," as used in this manual, refers to both a grant(s) and cooperative agreement(s), unless 

specifically stated otherwise. See 31 U.S.C. §§ 6304 and 6101(3) and 2 CFR § 200.51 (Grant agreement).

C. Cooperative Agreements

A cooperative agreement is the legal instrument reflecting a relationship between DOC and a 

recipient whenever: (1) the principal purpose of the relationship is to transfer anything of value to 

accomplish a public purpose of support or stimulation authorized by Federal statute, and (2) substantial 

involvement (e.g., collaboration, participation, or intervention by DOC in the management of the 

project) is anticipated between DOC and the recipient during performance of the contemplated activity. 

See 31 U.S.C. § 6305 and 2 CFR § 200.24 (Cooperative agreement). Cooperative agreements are subject 

to the same laws; regulations; and OMB, Treasury, and other Federal directives as grants. The following 

information may be helpful in deciding whether there is substantial involvement in the scope of work of 

a proposed award.

1. Sections C. and G. of the OMB Guidelines, Implementation of Federal Grant and Cooperative 

Agreement Act of 1977 (43 FR 36860 issued August 18, 1978), describe the characteristics of the factors 

each Grants Officer should consider in deciding whether there will be substantial involvement of the 

organization unit in the performance of activities under the assistance instrument.

2. Listed below are examples of involvement which may be substantial, depending upon the 

circumstances, and examples of situations which would not be considered substantial. The examples 
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are not meant to be a checklist nor does the presence of a single factor necessarily constitute 

substantial involvement. Rather, they illustrate concepts that, in varying degrees or combinations, could 

suggest the use of either a grant or a cooperative agreement. For more detailed examples, see the OMB 

guidelines.

a. The following are examples of requirements that would demonstrate substantial 

involvement if they were included in the terms and conditions of a financial assistance award:

(1) Authority to halt immediately an activity if detailed performance specifications (e.g., 

construction specifications) are not met.

(2) Stipulation that the recipient must meet or adhere to specific procedural requirements 

before subsequent stages of a project may continue.

(3) Approval by an appropriate DOC official of substantive provisions of proposed subawards. 

(4) Notification of changes to key recipient personnel.

(5) Requirement that the appropriate DOC official (1) collaborate with the recipient by working 

jointly with a recipient scientist or technician, in carrying out the scope of work, (2) train recipient 

personnel, or (3) detail Federal personnel to work on the project effort.

(6) Specify direction or redirection of the scope of work due to inter-relationships with other 

projects, such as requiring recipients to achieve a specific level of cooperation with other projects. 

(7) DOC operational involvement during the project to ensure compliance with such statutory 

requirements as civil rights and environmental protection.

(8) Limitation on recipient discretion with respect to scope of work, organizational structure, 

staffing, mode of operations and other management processes, coupled with close monitoring of 

operational involvement during performance.

b. The following are examples of circumstances that would demonstrate non-substantial 

involvement: 

(1) Award follows normal procedures as set forth in 2 CFR Part 200 concerning Federal review 

of recipient’s procurement standards and sole source procurements. 

(2) The DOC program and grants administration offices become involved in the project solely to 

correct deficiencies in project or financial performance.

(3) DOC performs a pre-award survey and requires corrective action to enable the recipient to 

account for Federal funds.
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D. Procurement Contracts

A legal instrument reflecting a relationship between DOC and a business, organization or individual 

whenever: (a) the principal purpose of the relationship is the acquisition, by purchase, lease, or barter, 

of property or services for the direct benefit or use of the Federal Government, or (b) it is determined in 

a specific instance that it is appropriate to use a type of procurement contract. Such a contract is 

governed by the Federal Acquisition Regulation. See 31 U.S.C. § 6303.

E. Other Types of Agreements

There are transactions and agreements other than grants, cooperative agreements, and 

procurement contracts under which DOC can enter into a relationship with outside entities. The Grants 

Officer, OGC (FALD, Contract Law, and GLD), and OAM can offer advice and assistance with respect to 

the appropriate instrument to be used in a specific set of circumstances. Some of these agreements are 

referred to as Memoranda of Understanding (MOUs). Programs should not engage in MOU discussions 

or enter into MOUs if financial assistance is anticipated for an activity or program; instead, in most cases 

a competition should be planned. The MOU format is not appropriate as a substitute for procurement 

contracts or financial assistance awards and is not to be used as a sole source or noncompetitive 

justification for awarding procurement contracts or financial assistance. The cognizant Grants Officer 

and OGC (FALD and GLD), and OAM should be contacted in situations involving an agreement pursuant 

to the Economy Act (31 U.S.C. § 1535) or other funds transfer authority that results in the award of 

financial assistance. In addition, questions about specific types of agreements may be referred to the 

contact offices listed. Additional guidance on other types of agreements may be found in the 

“Department of Commerce Interim Interagency and other Special Agreements Handbook” (April 2004). 

Examples of other types of agreements include, but are not limited to, the following:

1. Cooperative Research and Development Agreement (CRADA). The Technology Transfer Act of 

1986, as amended (15 U.S.C. § 3710a) authorizes legal instruments that provide for cooperative 

research, licensing of patents obtained under a CRADA, and the transfer of technology from DOC to 

another party or from another party to DOC. However, CRADA does not authorize the contribution of 

financial assistance funding to a non-Federal party. An operating unit’s Technology Transfer Office or 

the Office of the Chief Counsel for NIST should be consulted to determine if a CRADA is the appropriate 

instrument in a given situation. 

2. Economy Act Agreement. The Economy Act, 31 U.S.C. § 1535, authorizes agencies to place 

orders with other Federal agencies for goods or services and to pay the actual or estimated costs of the 

goods or services, when certain conditions are met. The OGC’s GLD provides legal advice on agreements 

pursuant to the Economy Act. For Economy Act transactions that may involve the transfer of funds for 

the subsequent award of financial assistance funds, the cognizant Grants Officer and OGC (FALD and 

GLD) should be contacted prior to approval of the agreement. 

[Note: There are instances when DOC operating units receive and/or transfer funds under an 

Economy Act transaction from or to other Federal agencies to make awards of financial assistance. 

Agencies may also have specific statutory authority to receive or transfer funds for particular programs. 

In those circumstances, both the DOC operating unit and the other agency must possess the requisite 

grant-making and mission-related authorities to carry out the work under the award. In addition, 

established financial assistance procedures must be followed in making any award. An MOU may also 

be used to memorialize a relationship where there is no direct exchange of funds between the parties. 
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Activities under the MOU, however, may be carried out through the award of financial assistance when 

established procedures (including competition) for financial assistance awards are followed.]

[Note: When DOC provides Federal funds to another Federal agency that is administering a 

collaborative project with the Department, the agreement governing that transfer of funds must 

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a 

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

3. Joint Project Agreement. DOC’s Joint Project Authority is set forth in 15 U.S.C. § 1525 in the 

second paragraph. This authority permits DOC to engage on an equitable basis and under certain 

conditions in joint projects on matters of mutual interest with non-profit, research, or public 

organizations such as state and local governments. OGC’s GLD must be consulted for advice and 

clearance concerning joint project agreements. 

4. Fellowship. Fellowships in the federal assistance context are made to pursue studies, research, 

and/or professional development (often of an academic nature) authorized by statute. Fellowship 

programs are most often conducted under DOC grants or cooperative agreements made to institutions 

of higher education or non-profit organizations. Fellowships made directly to students are not always 

made under grants or cooperative agreements in DOC. The Grants Officer should be contacted with 

respect to fellowship programs that are funded with grants and cooperative agreements.
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6. TYPES OF FINANCIAL ASSISTANCE FUNDS AND AWARDS

Federal funding for grants and cooperative agreements may be classified on the basis of the amount 

of discretion that DOC has in making funding decisions. The two broad classifications for types of funds 

are “discretionary funds” and “nondiscretionary funds." 

A. Discretionary Funds

Discretionary funds are those funds for which DOC can exercise its judgment in selecting to whom 

the funds are awarded. It is the policy of DOC that discretionary funds are provided only after maximum 

practicable competition among eligible entities. However, there are instances where awards are 

recommended for funding without full and open competition. The three types of awards made with 

discretionary funds are discussed below. 

1. Competitive Awards. These awards are made after a NOFO has been posted at Grants.gov and 

DOC has chosen a proposal based on merit review, including the application of established evaluation 

and selection criteria. The DOC may also treat as competitive an award that was solicited and reviewed 

through another federal agency’s competitive process or through a competitive solicitation process 

developed by several federal agencies acting in partnership. See Chapter 17 of this Manual for 

instructions in preparing Federal Register notices, as required, and NOFOs announcing the availability of 

financial assistance funds. Program officials are encouraged to further publicize notices through 

Internet announcements, mailing lists, presentations at conferences, professional journals, trade 

association newsletters, and other media that are available and accessible to potential applicants. 

2. Institutional Awards.

a. These awards are made with the intent to maintain a long-term partnership between DOC 

and the recipient for those projects established under long term planning goals and objectives 

common to the research and programmatic needs of both parties. 

(1) Renewals may be made on a noncompetitive basis if the recipient performs satisfactorily. 

While this type of award is intended to accommodate a long-term relationship between DOC and 

recipients, the individual awards should not exceed a five-year period. 

(2) The initial request for applications shall be the same as that for competitive awards and 

should mention the intent to establish institutional award status. 

(3) If a recipient of an institutional award is not complying with the terms and conditions of the 

award, that recipient should generally be replaced by an applicant that is selected through full and 

open competition. 

(4) Programs that make institutional awards must conduct periodic reviews in accordance with 

the provisions of Chapter 15 of this Manual. 

b. The Grants Officer is responsible for determining whether a program is designated as an 

institutional award program and may determine that only one or more awards under a program are 

institutional awards. Institutional awards should only be established between an operating unit and 

a recipient for long-term projects that are common to the programmatic goals and objectives of 

DOC and the recipient. 
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c. Institutional awards are not the same as multiyear awards, although they may be 

incrementally funded within an award period. Other projects of long-term duration may be funded 

using DOC Multi-Year Funding procedures prescribed in Chapter 18 of this Manual.

3. Noncompetitive Awards.

a. These awards are made without the benefit of competition. In those instances, when 

noncompetitive awards are recommended for funding, complete and detailed justifications must be 

submitted by the Program Officer, in the form of a “Non-Competitive Justification” memorandum, 

to the Grants Officer for review and approval. Noncompetitive awards using discretionary funds for 

a new award are allowed in only the following situations: 

(1) Future awards under institutional grant programs where the recipient should have been 

initially selected based on competition. The Program Office must provide to the Grants Officer 

summary information about the original competition, or waiver of competition, and the date and 

results of the latest periodic review. 

(2) In instances where the application does not fall within the scope of a published competitive 

notice and the agency determines in accordance with Chapter 8 of this Manual, that the application 

has merit and falls within one of the five listed categories. 

b. Unless otherwise covered by a Broad Agency Announcement (BAA), if more than five 

percent (5%) of the total number of awards made under a program within one fiscal year are made 

on the basis of recipient initiative, the Program Officer should examine the current Federal Register

notice and NOFO, if they exist, and make any corrections deemed necessary to future notices so that 

the solicitation better reflects the goals or needs of the program.

B. Nondiscretionary Funds

Nondiscretionary funds are those funds for which DOC cannot exercise judgment in selecting an 

award recipient. The two types of awards made with nondiscretionary funds are:

1. Awards Mandated by Statute. These mandatory awards are made to organizations that are 

specifically named (not just generally described as to type of organization) in a statute and for which 

funds may be set aside in an appropriations act. The recipient is entitled to the award and has an 

enforceable right to receive financial assistance. 

2. Awards Limited by Statute. These awards are made to organizations for which eligibility has 

been limited by law to a particular class of applicants, every one of which has been notified of the 

availability of funding, and every applicant that applies and that meets statutory requirements is assured 

an award (e.g., there may be special language in an appropriations act directing an agency to make 

awards to every state that applies for funding and meets certain criteria). Depending upon the program 

and its legislation, there may be competition among the eligible applicants for additional funding as an 

incentive for receiving proposals for innovative or pilot/demonstration projects.

[Note: Some programs in DOC are authorized to make awards with both discretionary and 

nondiscretionary funds under different sections of their authorizing statutes.]
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7. TYPES OF APPLICATIONS

Applications for DOC grants and cooperative agreements may be classified into four major 

categories, which are discussed below. Review, selection, approval, and notification procedures for all 

applications shall be as prescribed in Chapter 8 of this Manual.

A. Pre-applications

Program Offices may request pre-applications for one or more of the following reasons: to establish 

productive communications between the Program Office and applicants; to determine an applicant's 

eligibility; and/or to provide an applicant feedback on how well a proposed project is likely to compete 

with other similar projects. One of the advantages of pre-applications is to assist potential applicants by 

giving them realistic feedback on whether their project ideas/proposals align with the goals and 

objectives of a particular program and therefore may be considered competitive for Federal funding and 

to discourage applications that have little or no chance of funding. Such pre-application review is 

intended to allow applicants to avoid incurring significant expenditures in preparing applications that 

are not consistent with the operating unit's program goals and objectives. This pre-application is 

sometimes referred to as a letter of intent.

1. Pre-application Assessment. Under this type of pre-application process, regardless of any 

feedback that a potential applicant may receive in response to a pre-application, the applicant still has a 

right to submit a complete new application under the program. Pre-applications are usually reviewed by 

program staff who may obtain assistance from other reviewers as deemed necessary. The review is 

intended to form the basis for providing feedback or allowable technical assistance to applicants and is 

not a process to provide assistance in the development of an application. 

2. Pre-application Competition. A second type of pre-application process is one in which reviewed 

projects are eliminated from further consideration, based upon explicit criteria expressly set forth in the 

NOFO. 

B. Competitive Applications

Competitive applications are those that have been received as a result of the appropriate 

solicitation of proposals and that will be reviewed based on published evaluation and selection criteria. 

These applications may be for new awards or for amendments. 

1. New Competitive Awards.

a. Competitive applications are submitted pursuant to a competitive NOFO published by a DOC 

operating unit at Grants.gov, as required in section A of Chapter 17 of this Manual. Widespread 

publicizing is strongly encouraged and is recommended (e.g., Internet, mailing lists, conferences, 

professional journals, and trade association newsletters). 

b. All applications must be treated fairly and equitably under the review process. 

2. Competitive Renewal. Competitive renewals are treated the same as a new competitive award. 

This type of application may be accepted unless prohibited by the program’s legislation, regulations, or 

other published policy. Applications for competitive renewal funding must compete for funding with 

applications submitted by other eligible applicants and must be submitted in accordance with any 
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established deadline dates and will be subjected to the applicable review requirements for competitive 

awards. If the application is approved for funding, the Grants Officer shall fund the extended period of 

support as a new funding period and an extension of the original period of performance. Competitive 

renewals are only appropriate in cases where the program’s priorities do not vary from year to year, 

thus allowing a recipient to perform the identical work (for which it was funded in prior years) in the 

current competitive funding year. 

C. Noncompetitive Applications

Noncompetitive applications are those that have been received without benefit of full and open 

competition. Unsolicited noncompetitive applications for new awards of discretionary funds that fall 

within the scope of a competitive announcement will not be funded outside the competitive process 

and should be held for the next competition or promptly returned to the applicant with appropriate 

explanation. Noncompetitive applications may be used for new awards or for amendments.

1. New Noncompetitive Awards. Noncompetitive applications for discretionary funds are to be 

approved only in unusual and extraordinary circumstances and only after the Program Officer and the 

Grants Officer determine: (a) that a noncompetitive award of discretionary funds is warranted by the 

facts; (b) that the application is consistent with DOC missions and plans; (c) and that the official grant file 

contains appropriate justification documentation as required in Chapter 8 of this Manual. 

2. New Awards Mandated or Limited by Statute. These applications may be submitted and 

approved for funding when they are for statutorily authorized awards or for statutorily limited awards. 

These awards are required by Congress in a public law and are made with nondiscretionary funds. 

3. Renewal Amendments. A renewal amendment extends the project and funding periods of an 

award, while adding funds. Appropriate uses of this type of amendment include renewals of 

nondiscretionary awards and renewals of awards that are funded annually based on a NOFO posted at 

Grants.gov, which expressly indicates that awards would be selected for a period of more than one year 

but funded and extended annually, contingent upon the availability of funds, satisfactory performance, 

and at the discretion of DOC. (Program priorities do not change from year to year.) Noncompetitive 

awards of discretionary funds should not normally be given a renewal without competition. If an 

application to renew an existing award is approved for funding, the Grants Officer shall fund the 

extended period of support as a new funding period and an extension of the original period of 

performance. Note that “renewal” and “continuation” are not Federal-wide terms and other Federal 

agencies may use contrasting definitions. 

4. Amendments for Continuations (Multi-year Awards). A continuation amendment is made 

without competition and provides continued funding within an approved period of performance, such as 

when multi-year funding was approved at the time of award approval. Chapter 18 of this Manual 

provides procedures for funding multi-year awards when full funding of the period performance is not 

available at the time of initial award. Note that “renewal” and “continuation” are not Federal-wide 

terms and other Federal agencies may use contrasting definitions.

5. Extension Amendments at No Additional Cost to the Government (No-cost Extensions). Unless 

restricted by statute, regulations, or the terms and conditions of an award, a recipient may notify the 

Grants Officer of its decision to use a one-time noncompetitive extension of the final funding period for 
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up to 12 months beyond the ending date of the funding period as shown on the Financial Assistance 

Award notice. This one-time extension may not be exercised merely for the purpose of using 

unobligated balances. Such extension is made without additional funding. In certain circumstances, 

prior Federal approval is required. See 2 CFR § 200.308 (Revision of budget and program plans). Any 

further no-cost extension requires Grants Officer approval.

D. Supplemental Applications

Supplemental applications are for funding over and above the approved budget during the current 

funding period with no change to the period of performance or the funding period. These applications 

should be submitted and approved prior to the expiration date of the award. Funding for these types of 

amendments is at the sole discretion of the operating unit with final approval of the Grants Officer. In 

addition, supplemental funding is subject to funding constraints or limitations of the operating unit. 

Supplemental applications should fully explain why it is necessary to provide additional Federal funding 

to supplement the last approved budget. Appropriate handling of the competitive nature of 

supplemental funding should be considered on a case-by-case basis. Supplemental applications may 

only be for amendments that clearly are consistent with the approved scope of work and shall not be 

funded merely to avoid competition.

1. Amendments for Administrative Increases to Meet Institution-wide Increased Costs. 

Applications for supplemental funding may be submitted to an operating unit to cover 

organization-wide increased costs, such as those costs associated with salary or fringe benefit increases 

that were not foreseen at the time of the original application. The anticipated cost increases must take 

effect during the current funding period to be eligible for supplemental funding. These applications are 

generally not competed when the increased costs are within 25 percent of the last approved budget. If 

the increased costs are more than 25 percent, the application should be treated in the same manner as 

an application for new competitive awards, as described in this chapter.

2. Amendments for Expansion of a Project or Cost Overrun. Applications for supplemental 

expansion of a current project’s previously approved scope of work or to absorb a cost overrun are 

generally treated in the same manner as an application for new competitive awards as described in this 

chapter. If this type of amendment is recommended by the Program Officer and approved by the Grants 

Officer without competition, the official award file must contain appropriate justification documentation 

to explain and justify the decision not to require competition.
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8. MERIT REVIEW, SELECTION, APPROVAL, AND NOTIFICATION PROCEDURES

A. Overview

It is the policy of DOC to seek full and open competition for award of discretionary funds. Operating 

units must conduct application reviews in accordance with the requirements stipulated in 2 CFR Part 

200. Moreover, DOC financial assistance must be awarded through a merit-based review and selection 

process whenever possible. This Chapter prescribes the standards and procedures for reviewing, 

selecting, approving, and notifying applicants of funding decisions. 

B. Review Standards

1. Applications. All applications for financial assistance should receive a fair, equitable, and 

objective review. 

a. The following are minimum general requirements that must be met in order for any 

application to be processed for funding under DOC financial assistance programs:

(1) Legislative authority to perform the work with financial assistance;

(2) Funding availability; 

(3) Complete application package; and

(4) Scope of work that is consistent with DOC’s mission.

b. Applications should undergo an initial screening for conformance with the minimum general 

requirements and any mandatory technical and administrative requirements stated in the program’s 

regulations and NOFO. The Program Office must document and maintain a record of reason(s) if any 

application is determined to be incomplete. The agency, in its sole discretion, may continue the 

review process for applications with non-substantive issues that may be easily rectified or cured.

c. Applications that meet the requirements of the initial screening are then subject to the 

objective merit review as provided in B.4., below.

2. Nondiscretionary Funds. All awards made with nondiscretionary funds shall be subject to an 

objective merit review by at least one reviewer who is professionally and technically qualified to 

conduct the review. This review is limited to technical and/or cost matters.

3. Discretionary Funds. Except as provided below, all awards made with discretionary funds shall 

be subject to an objective merit review by a group of at least three professionally and technically 

qualified reviewers. This review is limited to technical and/or cost matters and is separate from any 

programmatic review of program and policy factors, which may be considered in making a selection or 

non-selection decision.

4. Merit Reviews of Competitive and Noncompetitive Awards. 
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a. Merit Review of Competitive Awards:

(1) An objective merit review of financial assistance applications is advisory and does not 

replace the authority of the program official responsible for deciding whether to recommend 

funding for an award. 

(2) The merit review criteria for new competitive awards and competitive amendments for 

renewal must be in accordance with evaluation criteria set forth in the applicable program 

regulations and NOFO. The merit review procedures must set forth the relationship between the 

reviewing individuals, or the review committees or groups, and the official who has the final 

decision-making authority. In defining this relationship, the program must set out, at a minimum, 

the decision-making and documentation processes to be followed by the Selecting Official. This 

should cover the procedures to be used when an adverse recommendation has been received 

through the objective merit review process or when selection may be made out of rank order or 

when selection for funding differs from the recommendations resulting from the merit review 

process. Published selection factors, including a program’s funding priorities, may affect final

selection for funding.

b. Merit Review for Noncompetitive Awards:

(1) The merit review for new noncompetitive awards shall consist of an objective merit review 

by a group of at least three professionally and technically qualified reviewers. 

(2) Amendments for noncompetitive renewals and continuations of noncompetitive awards are 

not subject to a merit review by at least three qualified reviewers if there has been no substantial 

change in the scope of work of the original project.

5. Reviewers of Applications. 

a. The DOC program office shall select reviewers on the basis of their professional 

qualifications and expertise. Reviewers of any particular application may be any mixture of Federal 

or non-Federal experts, sometimes including individuals from within the cognizant program office.

b. The Selecting Official should not be involved in the review of applications for the purpose of 

determining whether to recommend the application for approval. If it becomes necessary for a 

Selecting Official to review applications for this purpose, the program office must obtain a 

conflict-of-interest review by FALD and the official grant file must contain documentation 

demonstrating that there is no conflict of interest or that any conflict is resolved. In addition, a 

review panel should have at least one member who is outside the chain of command of the 

Selecting Official whenever possible.

c. Reviewers must evaluate and, in some cases, score the technical merits of applications and 

accompanying proposals. 

d. Reviewers must comply with the requirements for the avoidance of conflict of interest 

discussed at Chapter 15, Section C., of this Manual. In addition, each reviewer must use the 

application information only for review and to treat it in confidence except to the extent that the 
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information is available to the general public from any source without restriction as to its use. 

Further, each reviewer must agree to comply with any notice or restriction placed on the 

application. Upon completion of the review, the reviewer shall return to DOC or destroy all copies 

of the application and accompanying proposals (or abstracts, if any). Unless authorized by DOC, the 

reviewer shall not contact the applicant concerning any aspect of the application. Non-Federal 

reviewers must fill out the Form CD-571 (Reviewer Conflict of Interest and Confidentiality 

Certification for Non-Governmental Peer Reviewers) or an equivalent certification. If equivalent 

certifications are used, FALD should review them for completeness before they are used.

e. When using experts from the private sector to review grant proposals, program officials 

must assess whether the Paperwork Reduction Act (PRA), 44 U.S.C. § 3501 et seq., applies to the 

recruitment. The PRA likely applies if potential reviewers are asked to supply information other 

than a standard resume. Contact the appropriate information collection office for a determination 

on whether the PRA applies.

6. Review Groups/Panels. A review group may take the form of the following:

a. Field Readers/Mail Review. An objective merit review of applications may be obtained by 

using field readers to whom applications are sent for review and comment. Field readers may also 

be used as an adjunct to financial assistance application review committees when, for example, the 

type of expertise needed or the volume of financial assistance applications to be reviewed requires 

such auxiliary capacity.

b. Panels/Ad Hoc Committees. A panel or ad hoc review committee can be used to obtain 

consensus advice or independent recommendations on the technical merits of applications. Panels 

including more than one non-Federal member should not use consensus scoring unless they comply 

with the requirements of the Federal Advisory Committee Act (FACA), 5 U.S.C. App. 1.

c. Federal Advisory Committees. Any advisory group, with limited exceptions, that is 

established or used by a Federal agency and that has at least one member who is not a Federal 

employee, may implicate the Federal Advisory Committee Act. A program office should consult OGC 

if it contemplates using a group that includes any non-Federal individuals, to review financial 

assistance applications. 

C. Evaluation and Selection Requirements for Competition

This Section contains procedures to be followed in conducting a full and open competition for 

discretionary awards. The selection procedures fall into two categories. One category, Group 

Competition, is that in which all applications are grouped together to compete with one another and are 

ranked in order of the independent reviewers’ scores. The second category, Individual Qualification, is a 

review where each single application (the letter of intent (LOI), pre-application, or full proposal) is 

judged individually to determine its qualifications based on published criteria (e.g., the notice may 

stipulate that the first complete applications received that meet the minimum published requirements 

will be approved until the available funds are exhausted). The minimum requirements for each 

selection category are listed below. 
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[Note: The Program Office may also implement additional tiers of internal reviews between the 

independent or technical review and the final selection stage. Additional internal reviews should be

described in the NOFO, along with the evaluation and selection criteria.] 

1. Group Competition. The Program Office must prepare a rank ordering of the applications based 

solely on independent reviewers’ evaluation and scoring of each complete application that meets the 

notice requirements. The Selecting Official must use the reviewer evaluation and any other selection 

criteria published in the solicitation as the standard for making recommendations to determine 

successful applicants. See also 2 CFR § 200.306 (Cost sharing or matching). The Selecting Official must 

prepare a package: (1) demonstrating that the selection process is in compliance with the procedures 

published in the NOFO or in the program regulations, and (2) summarizing the results of the competitive 

review, consisting of the following documentation: 

a. Copy of authorizing legislation and appropriations act (only relevant pages); 

b. Copy of the NOFO soliciting applications, and the Federal Register Notice (FRN), as

applicable;

c. Copy of any review instructions and checklists and other review documents provided to the 

independent reviewers;

d. List of reviewers (which may be coded to protect the identity of the reviewers);

e. List by rank order of the results of the merit review of all LOIs or pre-applications (if the LOIs 

and pre-applications were mandatory and a basis of precluding applicants from submitting full 

proposals), including the review of the LOIs and pre-applications by the independent reviewers, 

reviewers’ scores, and the ranked scores of each application;

f. List of all applications/proposals rejected and the reason(s) for rejection;

g. List by rank order of the results of the merit review of applications/proposals (including the 

review of pre-proposals, if such a review will result in one or more applicants being prohibited from 

submitting full proposals and thereby not being able to compete further for an award) by the 

independent reviewers, to include reviewers’ scores and the ranked scores of each application;

h. Copies of completed reviewer’s score or evaluation sheets;

i. List of applications/proposals selected and recommended for funding by the selecting 

official and the reason as allowed by the published criteria for selection, including justification for 

funding application if out of rank order;

j. A copy of FALD comments, if any, and the Program Officer’s response; and

k. Identification of the Selecting Official. 

2. Individual Qualification. The Program Office must adequately document the selection process

based on the reviewer evaluations of each complete application that meets the notice requirements. 
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The selecting official will use the reviewer/panel evaluations and other selection criteria published in the 

solicitation in making recommendations to determine the successful applicants. The Selecting Official 

must prepare a package: (1) demonstrating that the selection process is in compliance with the 

procedures published in the NOFO, the Federal Register notice, as applicable, or in the program 

regulations, and (2) summarizing the results of the review consisting of the following documentation: 

a. Copy of authorizing legislation and appropriations act (only relevant pages); 

b. Copy of the NOFO soliciting applications, and the Federal Register Notice (FRN), as 

applicable;

c. Copy of any review instructions and checklists and/or other review documents provided to 

the reviewers;

d. List of reviewers (may be coded to protect the identity of the reviewers);

e. Evaluation of the application and accompanying proposal and basis for selection; 

f. A copy of FALD comments, if any, and the Program Officer’s response; and

g. Identification of the Selecting Official.

D. Review Process for Applications for Competitive Awards

1. Posting a NOFO on the OMB-designated governmentwide Web site or Publishing a Federal 

Register Notice, as applicable. Applications must be solicited via a NOFO posted on the OMB-designated 

governmentwide Web site, currently Grants.gov or via a Federal Register Notice, in accordance with 

Chapter 17of this Manual. 

2. Program Office Review. Upon receipt of applications, Program Office staff will review 

applications for completeness and ensure that all requirements of the NOFO, authorizing statute, and 

Federal Register Notice, as applicable, have been met. The Program Office will arrange for all complete 

applications to be reviewed by a group of three or more reviewers in accordance with Section B. of this 

chapter. In coordination with the Grants Office, the Program Office may conduct negotiations with 

applicants deemed meritorious by the review panel and determined by the Program Office to stand a 

reasonable chance of being funded.

3. Grants Office Review. The Grants Office will conduct a final review of all applications

recommended for funding by the Selecting Official. The Grants Officer is the DOC official who makes the 

final decision for the Government on whether to fund an application. The Grants Officer’s final decision 

must be consistent with published policies.

4. OGC Review. The OGC will review grant applications and supporting documents for proposed 

awards where Federal funding exceeds $150,000 (unless a waiver has been granted under the provisions 

of Chapter 4.C.3). The OGC will advise the Grants Officer on all matters related to law and the legal form 

and effect of these proposed award actions. The OGC will be available to assist and respond to questions 

about any individual financial assistance action.
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E. Review Process for Applications for Institutional Awards

1. New Recipients. New recipients under institutional award programs must be selected after full 

and open competition. The procedures in Section D. of this chapter should be followed in the initial 

selection of a new recipient under a discretionary institutional program. 

2. Future Awards. Once a recipient has been approved for funding under an institutional award, 

the procedures used for applications for nondiscretionary funding in Section G. of this chapter will be 

followed for future applications for subsequent new awards under the program if the incumbent 

recipient is performing satisfactorily. 

3. Periodic Reviews. Reviews of programs that make institutional awards must be conducted at 

least once every five years to evaluate the effectiveness and continued desirability of the use of 

institutional awards in accordance with Chapter 15 of this Manual. The results of these reviews must be 

a consideration by both the Program Officer and the Grants Officer in making a determination to 

continue providing funding without competition to each recipient of an institutional award.

F. Review Process for Applications for Noncompetitive Awards Made with 

Discretionary Funds

The following procedures will be followed when the Program Office is considering a noncompetitive 

application for discretionary funding: 

1. Program Office Review. 

a. The Program Office initiates the process of determining whether to fund a noncompetitive 

award with discretionary funds by ascertaining whether the application meets the criteria listed 

below. The Program Office will arrange for the application to be reviewed in accordance with the 

review standards in this chapter. The purpose of this review is to provide advice to the Selecting 

Official as to the technical soundness and merits of the application. If the application does not meet 

the criteria for consideration as a noncompetitive award, the Program Office will return the 

application to the applicant with an explanation as to why it cannot be considered. 

b. If the application warrants review on a noncompetitive basis, an appropriate program 

official must provide a Non-Competitive Justification Memorandum for the noncompetitive award 

to the Grants Officer for approval. The justification for the noncompetitive award must include one 

or more of the conditions listed below and must provide sufficient basis for the determination(s):

(1) Only One Source Identified. There may be instances where only one responsible applicant 

can perform the work of the proposed award. The following are some of the circumstances in which 

this may occur:

(a) The applicant organization has proprietary information necessary for the conduct of the 

work. In the case of the applicant organization having proprietary information, the program officer 

must describe what the proprietary information is that is offered by the applicant and why it is that 

no others could possibly possess the information. The program officer provides this noncompetitive 

justification documentation. An applicant’s claim is not sufficient justification. The program officer 

must state in writing that, based on his or her own expertise or the expertise of others he or she has 

consulted, the applicant has proprietary information necessary for the conduct of the work.
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(b) The applicant organization has made a substantial investment in the activity. In the case of 

the applicant organization having made a substantial investment in the activity, the nature and 

amount of that investment should be described. The applicant’s receipt of previous Federal awards 

for the activity does not constitute substantial investment. The applicant’s own resources must be 

involved.

(c) The applicant organization is proposing a project that involves a unique idea, method, or 

approach. In the case of the applicant organization proposing a project with a unique idea, method, 

or approach the nature of the idea, method, or approach and what makes it unique should be 

described.

(d) The applicant organization is the only organization known to possess the capability to 

perform the work. In the case of the applicant organization being the only one known to possess 

the capability to perform the work, the program officer has to describe how that was determined. 

The justification could be based on the specific situation involving the project (for example, the 

recipient needs to be a university that awards doctoral degrees and the identified recipient is the 

only one in the targeted geographic area which does that) or the program officer’s efforts to 

determine if other organizations can do the work (for example, by contacting other potential 

recipients to determine if they have the capability or interest in carrying out the proposed project). 

(2) Unusual and Compelling Urgency. The work to be conducted is of such an unusual and 

compelling urgency that the public interest would be seriously compromised unless the Program 

Office is allowed to limit or suspend competition for the proposed award.

(3) International Agreement. Competition is precluded by the terms of an international 

agreement or a treaty between the United States and a foreign government or international 

organization.

(4) National Security. Full and open competition is not required when the Secretary of 

Commerce determines in writing that public disclosure of the proposed support to be provided 

under the award would compromise the national security.

(5) Public Interest. Competition is not required when the Head of the Operating Unit or 

designee determines in writing that it is not in the public interest in a particular case to seek full and 

open competition for an award. A rational basis must be set forth in the written determination. An 

example of a situation that might support a public interest determination is the implementation of a 

pilot project. 

c. If the application is determined to be meritorious and appropriate for funding on a 

noncompetitive basis, the Program Office, in conjunction with the Grants Office, will negotiate the 

terms and conditions of the award and the level of funding. 

2. Grants Office Review. The Grants Office will conduct a final review of all proposed 

noncompetitive applications recommended for funding by the selecting official. The Grants Officer is 

the DOC official who makes the final decision for the government on the acceptability of the justification 

for award without competition and whether to fund noncompetitive applications.
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3. OGC Review. The OGC reviews all noncompetitive applications and supporting documentation 

proposed for award to advise the Grants Officer as to legal form and effect, unless review has been 

waived by the FALD Chief.

G. Review Process for Applications for Awards Mandated or Limited by Statute

1. Notice. Only eligible applicants must be notified of the availability of funds for nondiscretionary 

awards. The notice must be in writing and it may take the form of a Federal Register notice, letter to all 

eligible applicants, or other appropriate form(s) of written notice.

2. Program Office Review. The Program Office staff will conduct the initial screening of the 

application(s) in accordance with Section B. of this Chapter, review the application(s) for accuracy and 

completeness, and will conduct any necessary negotiations with the applicant(s). The Program Office 

will arrange for the application(s) to be reviewed by at least one merit reviewer. The purpose of this 

review is to provide advice to the selecting official as to the technical soundness and merits of the 

application. If deficiencies are identified, the applicant will be contacted by the Program Office staff and 

asked to revise the proposal and application accordingly.

3. Grants Office Review. In coordination with the Program Office, OGC, and other offices as 

appropriate, the Grants Office will conduct a final review of all applications for nondiscretionary funds 

that are recommended for funding by the appropriate program official. The Grants Officer is the DOC 

official who approves the application for funding. The Grants Officer’s final decision must be consistent 

with published policies. 

4. OGC Review. The OGC will review all nondiscretionary applications and supporting documents 

for proposed awards to advise the Grants Officer on all matters related to law and the legal form and 

effect of the proposed award actions, unless review has been waived by the FALD Chief. 

H. Congressional Notification

1. Once an award with Federal funding of more than $150,000 is ready to be approved, the Grants 

Office shall provide information for the Congressional notification to DOC Office of Legislative and 

Intergovernmental Affairs (OLIA). The OLIA deployed WebDocFlow-Grants, an automated management 

and notification tool, in January FY 2012. All DOC operating units are expected to interface with 

WebDocFlow-Grants or any successor system and use it in their Congressional notification process. 

Information for awards with Federal funding of $150,000 or less shall be provided to the appropriate 

Congressional affairs office within each operating unit. For multi-year awards, the amount to be 

announced is the initial amount to be obligated, not the total amount of the award; subsequent funding 

is reported when the additional funding is added to the award. 

2. Once an award with Federal funding is ready to be approved, the Grants Office shall update 

both OLIA’s grants notification system so that Congressional notification may be conducted, as well as

USA Spending.gov. For multi-year awards, the amount to be announced is the initial amount to be 

obligated, not the total amount of the award; subsequent funding is reported when the additional 

funding is added to the award. OLIA should notify Congress or other appropriate officials within two 

workdays that the proposed awards are pending and will be made shortly. OLIA may, at its discretion, 

authorize a different procedure for notifying Congress of pending awards. Three workdays after 
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submission of the electronic information, the Grants Officer may approve the award, unless OLIA has 

placed a “hold” on the award in the database. For example, an award not being “held” by OLIA could be 

approved by the Grants Officer on Friday if information was electronically provided to the database on 

Tuesday.

I. Obligation of Funds

The cognizant Grants Officer is the only official authorized to sign awards to obligate funds for the 

Department for grants and cooperative agreements. The Grants Officer’s decision to obligate funds 

must be an independent decision, made only after he/she is personally satisfied that it is appropriate to 

make the award. The Grants Officer’s signature on the Form CD-450 (Financial Assistance Award) or on 

the Form CD-451 (Amendment to Financial Assistance Award) constitutes an obligation of Federal 

funding. Grants Officers must promptly notify Program and Accounting/Finance Offices when funds 

have been obligated.

J. Notice to Applicants

1. Successful Applicants. The Grants Officer will notify successful applicants in a written Award 

Notice when they have been selected for an award. Prior to official Grants Officer notification, other 

officials and employees from the operating unit are prohibited from either formally or informally 

notifying applicants verbally or in writing that they will receive awards.

2. Unsuccessful Applicants. 

a. The Program Officer shall determine the best method for notifying unsuccessful applicants.

These notifications must be in writing and can take place in either of the following ways:

(1) As soon as the Grants Officer has notified the successful applicants in writing that they have 

been selected for an award, the Program Office will notify all unsuccessful applicants that they were 

not selected for funding. 

(2) The Program Office may notify applicants whose applications will not receive merit review 

at the time of this decision. The Program Office may notify all unsuccessful applicants that their 

applications are not being recommended for funding when the Selecting Official has decided which 

applications to recommend to the Grants Officer for further action.

b. Applications, correspondence, and other records relating to unsuccessful (rejected, 

withdrawn, or unfunded) applications may be destroyed three years after rejection or withdrawal. 

Applications not meeting application deadlines or minimum review requirements may be returned 

to the applicant. The policy concerning disposition of unsuccessful applications should be included 

in the NOFO. 

c. Unsuccessful applicants may request a debriefing, which will provide constructive feedback 

that can assist applicants to develop improved proposals in the future. Briefings should take the 

form of advice to applicants on the strengths and weaknesses of their own proposal in terms of the 

published evaluation and review criteria. 
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9. PRE-AWARD ADMINISTRATIVE REQUIREMENTS

A. Application Package

For discretionary competitive programs, each DOC Program Officer must prepare an application 

package, which may be in electronic format. Application packages should include all of the information 

that prospective applicants need to apply for an award under the program involved. The Program 

Officer should consult the Grants Officer when preparing the application package. The application 

package must be cleared by the Grants Officer and reviewed by FALD prior to issuance. Specific 

application package contents may vary; however, application packages must include the following 

minimum information.

1. Copy of the applicable NOFO prepared in accordance with Chapter 17 of this Manual. 

2. Application Forms. Program Officers must use the following OMB-prescribed standard forms, as 

applicable, and/or any other forms approved by DOC and OMB for inclusion in the application package. 

Generally, in the case of paper applications, the applicant is required to submit one original and two 

copies of these forms. Additional copies of these forms and unique or program-specific forms must be 

approved by DOC and OMB in accordance with the requirements of 5 CFR Part 1320 (Controlling 

Paperwork Burdens on the Public).

a. Standard Form 424 - Application for Federal Assistance

b. Standard Form 424A - Budget Information - Non-Construction Programs

c. Standard Form 424B - Assurances - Non-Construction Programs

d. Standard Form 424C - Budget Information - Construction Programs

e. Standard Form 424D - Assurances - Construction Programs

f. Standard Form 424 - Family of Forms for Research and Related Programs

g. Standard Form 424 - Short Organizational Family

h. Standard Form 424 - Individual Form Family

i. Standard Form 424 - Mandatory Family

j. Standard Form LLL - Disclosure of Lobbying Activities

k. Form CD-511 - Certification Regarding Lobbying

l. Form CD-512 - Certification Regarding Lobbying - Lower Tier Covered Transactions 
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3. Information about Intergovernmental Review of Federal Programs in accordance with the 

provisions of EO 12372, if the program is subject to this review. The following information should be 

provided:

a. Reference to a current list of the State Point of Contacts (SPOCs), including their names, 

addresses, and telephone numbers;

b. The address to which the SPOCs should send any State process recommendations; and

c. The specific due date for State process recommendations (formally 60 days after the 

application deadline date), and a statement that the funding agency does not guarantee to 

“accommodate or explain” for State process recommendations received after that date.

B. Recommendation for Funding

Once an application has been identified as one that will be recommended for funding, the Program 

Office staff will ensure that complete application recommendation packages are prepared to be 

forwarded to the Grants Officer. The following are minimum requirements for a complete application 

recommendation package:

1. Application (Form 424 Series or SF-424 Family of forms, or other authorized forms) with original 

or electronic dated signature, including complete proposal with any revisions; a detailed budget 

narrative; a copy of the current approved negotiated indirect cost agreement (if budget includes indirect 

costs and the applicant has a negotiated agreement), as applicable; and signed Forms CD-511, and SFLLL, as applicable. 

2. Recommendation memorandum from the Selecting Official, indicating if the award is intended 

to be a grant or a cooperative agreement. If the award is recommended to be a cooperative agreement, 

the package must include a description of the funding agency’s substantial involvement. The Grants 

Officer will make the final decision concerning the type of funding instrument.

3. Copy of the applicable NOFO or the justification for noncompetitive award as provided in 

Chapter 8 of this Manual; the original documentation of the review panel’s evaluations; and the 

Selecting Official’s basis for determination to recommend for funding based on program priorities if not 

already provided in a summarized package in accordance with Chapter 8 of this Manual. When 

institutional awards are providing additional funding without competition through either a new award 

or an amendment, a summary including the date of the most recent report and brief description of the 

results of the last program review conducted in accordance with provisions of Chapter 15 of this Manual 

must be included.

4. The Budget Officer’s or other responsible official’s certification (e.g., Grants Management 

Information System funding tab or Grants Online procurement request) of availability of funds.

5. Copy of all pertinent pre-award correspondence with the applicant.
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C. Budget Analysis

Prior to award of a grant, the Program Officer and Grants Officer must perform a thorough review 

and evaluation of the applicant's proposed budget data, documentation of which will be maintained in 

the official grant file. Costs charged to a financial assistance award must be allocable, allowable, and 

reasonable. 

1. When the budget data provided by the applicant does not provide the level of detail sufficient 

for an informed analysis to be performed, the Grants Officer or Program Officer shall contact the 

applicant for additional information or clarification. In the unusual circumstance that an award is 

approved without proper and complete budget information, a specific award condition must be 

included in the award requiring submission of needed information within a specified time period. The 

official award file must contain a written justification for approving the award prior to receipt of budget 

information.

2. The budget analysis must include the evaluation of cost data, including a determination that the 

costs proposed are in accordance with applicable cost principles; the evaluation of specific elements of 

costs; and projection of these data to determine the effect on such factors as:

a. The allowability and necessity for individual cost categories;

b. The reasonableness of amounts estimated for necessary costs;

c. The basis used for allocating indirect or overhead costs; and

d. The appropriateness of allocating particular overhead costs to the proposed project as 

direct costs.

3. Projects may be funded in increments as described in Chapter 20, Multi-Year Funding 

Procedures. 

D. Costs

Eligible costs under a DOC financial assistance award must be in accordance with the applicable cost 

principles (2 CFR Part 200, Subpart E). 

[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200 

Subpart E would not apply.]

1. Cost Sharing or Matching Funds. Cash and in-kind contributions that are included in the budget

of the award must be valued in accordance with 2 CFR Part 200.

 

a. All awards that include Federal and non-Federal sharing incorporate a budget (using SF 424a 

or SF 424c) consisting of shared allowable costs. If actual allowable costs are less than the total 

approved budget, the Federal and non-Federal cost shares shall be calculated by applying the 

approved Federal and non-Federal cost share ratios to actual allowable costs. If actual allowable 

costs are greater than the total approved budget, the Federal share shall not exceed the total 

Federal dollar amount authorized by the award.
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b. The non-Federal share, whether in cash or in-kind, is to be paid out at the same general rate 

as the Federal share. Exceptions to this requirement may be granted by the Grants Officer based on 

sufficient documentation demonstrating previously determined plans for, or later commitment of, 

cash or in-kind contributions. In any case, the recipient must meet its cost share commitment over 

the life of the award. The recipient must create and maintain sufficient records justifying all nonfederal sharing requirements to facilitate questions and audits.

c. Waiver for Insular Areas. In accordance with provisions of Public Law 95-134, Title V, § 501 

(1977), as amended (48 U.S.C. 1469a), DOC has determined that any requirement for local matching 

funds less than $200,000 (including in-kind contributions) to be provided by American Samoa, 

Guam, the Virgin Islands, and the Northern Mariana Islands shall be waived, notwithstanding any 

other provision of law. Any matching funds otherwise required by law to be provided by 

government entities of an insular area may be waived at the discretion of the operating unit.

2. Direct Costs. Costs that are directly related and can be traced to the cost of the project being 

supported and that are within approved budget categories may be charged to the award. For example, 

if the budget provides costs only for Personnel, Fringe Benefits, Supplies, Equipment, and Travel, the 

recipient is not allowed to charge to the award costs for Contracting or Consultants without the prior 

written approval of the Grants Officer. 

3. Federal Employee Expenses. Use of award funds (Federal or non-Federal) or the recipient’s 

provision of in-kind goods or services for the purposes of transportation, travel, or any other expenses 

for any Federal employee may raise appropriation augmentation issues. In addition, Department policy 

may prohibit the acceptance of gifts, including travel payments for federal employees, from recipients or 

applicants regardless of the source. Therefore, Program Officers and Grants Officers should contact the 

FALD for guidance should a recipient propose to pay any expenses for any Federal employee.

4. Indirect Cost Rates. At 2 CFR 200.414(c), the Uniform Guidance requires Federal agencies to 

accept federally negotiated indirect cost rates unless certain exceptions apply. See Financial Assistance 

Memorandum 2015-02 (The Department of Commerce’s Policies, Procedures, and General DecisionMaking Criteria for Deviations from Negotiated Indirect Cost Rates under Federal Financial Assistance 

Programs and Awards, July 20, 2015) for direction.

5. Pre-Award Costs. Eligible pre-award costs under a DOC financial assistance award must be in 

accordance with 2 CFR §§ 200.458 (Pre-award costs) and 200.308 (Revision of budget and program 

plans). It is DOC’s policy to waive the prior approval requirement for pre-award costs (up to 90 days) for 

research awards. However, such costs incurred remain at the applicant’s risk. The Grants Officer should 

approve in writing any pre-award costs of more than 90 days and should consult FALD if questions arise 

about the availability of authority. 

6. Profit or Fee. Fee or profit or other increment above cost may not be paid on Department of 

Commerce financial assistance awards unless there is statutory authorization to do so. Requests for fee 

or profit by recipients of any type should be referred to FALD for review. Conference fees to cover 

allowable costs, such as meals (excluding entertainment and alcohol) or room space and materials, are 

considered program income and not fees. Program income is allowable. Recipients should refer to the 

guidance for program income in item 7 below.
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7. Program Income.

a. Recipients are required to account for program income related to projects financed in whole 

or in part with Federal funds. Program income is gross income earned by the recipient that is 

directly generated by a supported activity or earned as a result of the award. Program income 

excludes interest earned on advances and includes, but is not limited to, income from service fees, 

conference fees, sale of commodities, usage or rental fees, and royalties on patents and copyrights.

b. Proceeds from the sale of real and personal property purchased in whole or in part with 

Federal funds is not program income and shall be handled in accordance with the property 

management provisions set forth in the award.

c. Recipients have no obligation to the Federal Government with respect to program income 

earned from license fees and royalties, copyrighted material, patents, patent applications, 

trademarks, or inventions produced under the award, unless otherwise required by statute, agency 

regulations, or the terms and conditions of the award. In particular, inventions made under an 

experimental, developmental, or research award must comply with the requirements of 35 U.S.C. 

Chapter 18 (Patent Rights in Inventions Made with Federal Assistance) and 37 CFR Part 401 (Rights 

to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, 

Contracts, and Cooperative Agreements).

d. The disposition of program income shall be in accordance with the applicable Federal 

administrative requirements and will be specified in the terms and conditions of each award. See 2 

CFR § 200.307 (Program income).

E. Executive Order (E.O.) 12372 (Intergovernmental Review of Federal Programs)

In accordance with E.O. 12372, each operating unit shall provide the states the opportunity for 

consultation on proposed Federal financial assistance and direct Federal development programs. The 

E.O. was issued with the desire to foster intergovernmental partnership and strengthen federalism by 

relying on State and local processes for the coordination and review of proposed Federal financial 

assistance and direct Federal development. Under the E.O., state and local officials, not the Federal 

Government, will determine what Federal programs and activities to review and the procedures for the 

review.

F. Applicant’s Management and Financial Capabilities

DOC policy is to make awards to applicants and recipients who are competently managed, 

responsible, capable, and committed to achieving the objectives of the awards they receive. It is 

essential, therefore, that precautions be taken to award grants only to reliable and capable applicants 

who can reasonably be expected to comply with award requirements. Therefore, operating units will 

conduct a review of risk posed by applicants in accordance with 2 CFR § 200.205 (Federal awarding 

agency review of risk posed by applicants). 
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G. Review of Recipient’s Risk

1. The Grants Officer is charged with determining whether an applicant is sufficiently responsible 

to receive Federal financial assistance in accordance with the requirements established in 2 CFR §§ 

200.205 (Federal awarding agency review of risk posed by applicants) and 200.207 (Specific conditions), 

as applicable. 

2. If sufficiently adverse factors about the applicant are discovered during the course of reviewing 

an application, the Grants Officer may, depending on their nature and severity: 

a. Not make the award;

b. Delay the award until conditions are corrected; or

c. Impose additional specific award conditions as needed, in accordance with 2 CFR § 200.207

(Specific conditions). 

3. In any instance where a Grants Officer intends to deny, or a program office fails to recommend, 

a grant or cooperative agreement to an applicant on the basis of pre-award concerns relating to the 

applicant’s present responsibility, the applicant must be given notice of the Department’s 

determination. In addition, per 2 CFR § 200.212 (Reporting a determination that a non-Federal entity is 

not qualified for a Federal award), the Grants Officer must determine if a report must also be made to 

the designated integrity and performance system accessible through SAM, currently the Federal 

Awardee Performance and Integrity Information System, (FAPIIS). Such a determination relates solely to 

the applicant’s present responsibility and the particular award for which the determination is being 

made, and does not affect the applicant’s eligibility for future awards. The notice to the applicant must 

provide the applicant an opportunity to submit information showing that the Department’s 

determination is in error or otherwise warrants reconsideration. Once an adverse determination has 

been made, an award may be made to the next appropriate applicant. Whenever a determination is 

made which will deny an award based on responsibility concerns, and the denial is part of a long-term 

plan to disqualify the applicant, DOC’s formal debarment and suspension regulations (2 CFR Part 1326) 

must be followed. These regulations provide procedures for excluding organizations from participating 

in Federal procurement and nonprocurement activities on a government-wide basis. Failure to provide 

the appropriate procedures may expose DOC to a valid claim of de facto debarment based on an 

argument by the applicant that it has been denied due process of law. As a practical matter, 

government-wide debarment and suspension under 2 CFR Part 1326 is used only in the most serious 

cases, such as indictment for and/or conviction of criminal offenses.

4. The Grants Officer may take any of the steps identified below if adverse information on the 

recipient, or any key individual associated with the recipient, reflects significantly and adversely on the 

recipient’s honesty or financial integrity, and is discovered after an award is made:

a. Require the removal of personnel from association with the management of and/or 

implementation of the project and require Grants Officer approval of personnel replacements; and

b. Impose additional specific award conditions as needed, in accordance with 2 CFR § 200.207

(Specific conditions); or
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c. Terminate or suspend the award until corrective action has been taken. Such action should 

be taken only after the recipient has been afforded adequate due process as noted in section G.3. of 

this chapter.

d. Require the recipient to make other changes as appropriate.

5. If any of the adverse factors set forth in this chapter are present, the Grants Officer shall 

document the official grants file to indicate the circumstances, the nature of the action taken, and the 

reason.

H. Awards to Insular Areas

Operating units are encouraged to consolidate financial assistance awards to insular areas when 

project activities are similar. If awards are consolidated, operating units shall take the following actions:

1. Provide for a single set of written program and financial reports for each consolidated award, 

instead of individual reports for each project activity which has been consolidated;

2. Receive centrally and distribute all requested reports to appropriate program offices;

3. Designate a primary contact with the recipient on all administrative matters related to the 

consolidated award; 

4. Maintain one official grant file on the consolidated award; and

5. Review cost sharing requirements in accordance with provisions of section D.1. of this chapter.

I. Preparation of Financial Assistance Award

1. Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform 

Guidance). The Uniform Guidance, which is codified at 2 CFR Part 200, applies to most DOC awards, 

regardless of the type of recipient. The Uniform Guidance consolidates and supersedes the 

administrative requirements and cost principles that had formerly been codified at 15 CFR Parts 14 and 

24 (applicable to institutions of higher education, hospitals, other non-profit, and commercial 

organizations and state and local governments, respectively) and 2 CFR Parts 220, 225, and 230, 

applicable to educational institutions; state, local, and Indian Tribal governments; and non-profit 

organizations.

In accordance with 2 CFR 200.101(c), the operating unit may apply Subparts A through E of 2 CFR 

Part 200 to for-profit entities.

a. 48 CFR Part 31 (Contracts with Commercial Organizations) applies to for-profit organizations 

and individuals.

b. Appendix E to 45 CFR Part 74 (Principles for Determining Costs Applicable to Research and 

Development under Grants and Contracts with Hospitals) applies to hospitals other than those that 

are non-profit.
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[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200 

Subpart E would not apply.]

2. Award Document. The Form CD-450 (Financial Assistance Award) or Form CD-451 (Amendment 

to Financial Assistance Award) shall be used as the award documents for all grants or cooperative 

agreements funded by DOC and must comply with 2 CFR § 200.210 (Information contained in a Federal 

award). In addition to the information required for a Federal award, the following must be included.

a. Period of Performance.

(1) The award must include a start date and end date. Project periods should not ordinarily 

exceed five (5) years.

(2) In order to avoid delays that could possibly jeopardize the success of a project or possibly 

result in the recipient putting itself at risk by incurring costs without having a properly executed 

award document, applications should be requested and processed in a timely manner. 

(3) Procedures for funding proposals that include a project description and budget 

incorporating more than one year of activity when only a portion of the entire amount of Federal 

funding is available are found in Chapter 18 of this Manual. 

b. Budget. A budget must be included in every award. It shall be used as the established 

standard for financial monitoring purposes. Changes made to the budget once the award is issued 

must be made in accordance with the DOC Standard Terms and Conditions, applicable regulations, 

and OMB Circulars. Each budget contains a detailed listing of categories of costs which are 

allowable under the award. Only those categories of costs which have funding included in the 

approved budget are considered allowable costs under a grant or cooperative agreement. The 

recipient cannot add a new budget category to an approved budget without prior written approval 

from the Grants Officer. 

c. Specific Award Conditions. In addition to the laws, regulations, 2 CFR Part 200, DOC 

Standard Terms and Conditions, and Program-Specific Terms and Conditions controlling the 

administration of a grant, specific award conditions may also be imposed when justified by 

circumstances. Specific award conditions imposed after the award has been made must be agreed 

to by both the recipient and the Federal Government unless Federal law or regulation provides the 

Federal Government with the right to impose specific award conditions under the grant in 

accordance with 2 CFR §§ 200.205 (Federal awarding agency review of risk posed by applicants) and 

200.207 (Specific conditions). Department-wide or program specific award conditions should be 

used, as applicable, in all DOC grants and cooperative agreements. Other specific award conditions 

may include the following:

(1) When a cooperative agreement is selected as the funding instrument, the award must 

include, at a minimum, those items described in subparagraphs a. through c. below. When not 

clearly and specifically provided for in the application, proposal, or other statement of work that is 

incorporated in the award, specific award conditions shall be included that provide:
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a. A project management plan identifying the respective role, responsibility, obligation, and 

accountability of each project participant;

b. A statement of how project performance will be measured; and

c. A statement delineating the expected level of substantial Federal involvement.

(2) In the event the evaluation of risk of the recipient warrants specific award conditions, the 

Grants Officer will comply with 2 CFR §§ 200.205 (Federal awarding agency review of risk posed by 

applicants) and 200.207 (Specific conditions), as applicable.

(3) Where OMB guidance or DOC regulations and policy permit, the Grants Officer may use 

specific award conditions to waive certain administrative requirements, including requirements in 

the DOC ST&Cs. When waiving these prior approval requirements, the Grants Officer may elect to 

require that the recipient provide notification after a specific action has been taken.

d. Standard Terms and Conditions. 

(1) The Department of Commerce Financial Assistance Standard Terms and Conditions must be 

incorporated into each award, except EDA construction awards and revolving loan fund (RLF) 

awards. 

(2) EDA includes separate standard terms and conditions in its construction-related awards and 

revolving loan fund (RLF) awards, respectively, which derive from the DOC Standard Terms and 

Conditions in consultation with, and after timely consideration and comment from, OAM and FALD.
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10. POST AWARD ADMINISTRATION REQUIREMENTS

A. Official Award File

There shall be a single official award file for each award – which may be paper, electronic, or a 

combination of the two. The Grants Officer shall be the custodian of the official award file, responsible 

for maintaining a complete and accurate official award file, and shall determine where the file is 

maintained. The file shall be DOC’s official record of all administrative, financial, and programmatic 

activities which occurred under the award. The official award file shall be used for managing the award, 

resolving disputes, litigation, audits, reporting to Congress, answering FOIA requests, and for all other 

official purposes. Grants Office and Program Office personnel shall ensure that all pertinent 

correspondence, notes, reports, amendments, and other relevant information are included in the official 

award file. Wherever the Manual requires written documentation, electronic forms of the 

documentation are included, so long as it is clear where the electronic information is located and that it 

can be retrieved as necessary. At a minimum, and as applicable, the official award file must include or 

have available for easy access the following:

1. The original signed application forms, as applicable (SF-424 form family, or OMB approved 

alternative to these forms). In addition, the official file must include required DOC forms including, but 

not limited to, the CD-511 and SF-LLL, when applicable.

2. The original applicant proposal, budget, budget justification, and any amendments to these 

documents. In addition, the NOFO as it appeared on grants.gov.

3. Documentation of the analysis upon which the award selection was based including evaluations, 

scores, justifications, etc. This documentation must clearly demonstrate that the selection procedures 

have met the requirements contained in Chapter 8 of this Manual. 

4. Internal review and clearance documents including all required signatures from the budget 

office, legal counsel, OIG, grants office, and any other pertinent reviews and/or concurrences 

determined to be necessary by the Grants Officer or required by DOC or operating unit policy.

5. Certification that all required and applicable pre-award administrative procedures were 

completed. These procedures include but are not limited to the following:

a. Assurance that the recipient was competitively selected by an independent review process 

or that appropriate noncompetitive review procedures were followed in accordance with Chapter 8 

of this Manual and that the official award file contains the required documentation with respect to 

review and selection procedures; 

b. Applicants shall comply with all requirements stipulated in 2 CFR § 200.205 (Federal 

awarding agency review of risk posed by applicants) related to the review of applicant risk 

requirements; 

c. Verification that a completed Form CD-511 (Certification Regarding Lobbying) is complete;
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d. The appropriate funding instrument was used in a particular transaction, i.e., grant, 

cooperative agreement, or contract, in accordance with 2 CFR § 200.201 (Use of grant agreements 

(including fixed amount awards), cooperative agreements, and contracts); 

e. Assurance that the proposed award was coordinated with any other operating units or 

Federal agencies, as appropriate.

6. Original fully executed award documents and any amendments with all attachments (except 

OMB Circulars and applicable uniform administrative requirements, which will be listed on the award 

document).

7. Memoranda of negotiations with the recipient, if applicable, and correspondence between the 

recipient and the organization unit in the pre-award and post-award phases.

8. Advance understandings or waivers of generally applicable award requirements.

9. Documentation when delegation of authority is authorized in accordance with Chapter 4 of this 

Manual. The following is the minimum documentary information which must be a part of the official file 

when the Grants Officer exercises this delegation of authority:

a. The specific section of 2 CFR Part 200 (see 2 CFR § 200.102 (Exceptions)) for which a less 

restrictive requirement is imposed or for which a case-by-case exception is made;

b. The reason/justification for approval of the less restrictive requirement or the exception; 

and 

c. The specific award condition included in the grant or cooperative agreement to provide the 

less restrictive requirement or exception.

10. Performance/program, financial, patent, property, and other reports submitted by the recipient 

and all written evaluation/clearance by the Program Officer or other officials.

11. Property records, including any documentation relating to disposition of property or the filing of 

security interests. The Tangible Personal Property Report (SF-428) and the Real Property Status Report 

(SF-429) should be included in documentation, as applicable.

12. Recipient requests for changes requiring amendments, and all correspondence and evaluations 

of the proposed changes.

13. Site visit reports, as applicable.

14. Project audit reports, including documentation of actions taken, the resolution and 

implementation of audit findings.

15. Close-out documents including, but not limited to, final financial, progress, property, patent, 

copyright, and other close-out reports required under the terms and conditions of the award.
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16. Other correspondence regarding the project including, but not limited to, interagency and 

Congressional correspondence.

17. Documentation of any agreements to transfer funds from other agencies including, but not 

limited to, interagency agreements pursuant to the Economy Act or other special agreements. The file 

must clearly reference the authority under which funds are transferred, the transferring agency’s 

authority to transfer the funds and its ability to award financial assistance for such a project, and DOC’s 

authority to accept the funds and to award funds for that specific project. 

[Note: When DOC provides Federal funds to another Federal agency that is administering a 

collaborative project with the Department, the agreement governing that transfer of funds must 

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a 

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

B. USASpending.gov

1. The Federal Funding Accountability and Transparency Act, as amended (See 31 U.S.C. § 6101 

note) (FFATA) requires information on Federal awards (Federal financial assistance and obligations) be 

made available to the public via a single, searchable Web site. This information is available at 

USASpending.gov. Recipients and identified subrecipients must include the following required data 

elements in their application: 

a. The name of the entity receiving the award;

b. The amount of the award;

c. Transaction type, funding agency, Catalog of Federal Domestic Assistance Number, and 

descriptive award title;

d. Location of: entity, primary location of performance (City/State/Congressional 

District/Country; and

e. Unique identifier of entity.

2. Reporting Subawards and Executive Compensation. Prime grant recipients awarded a new 

Federal grant greater than or equal to $25,000 on or after October 1, 2010 are subject to FFATA 

subaward reporting requirements as outlined in 2 CFR part 170. The prime recipient is required to file a 

FFATA subaward report by the end of the month following the month in which the prime recipient 

awards any sub-grant greater than or equal to $25,000. See 31 U.S.C. 6101 note. The DOC incorporates 

the award term required by Appendix A of 2 CFR part 170 into all financial assistance awards.

C. Costs under DOC Awards

The Uniform Guidance supersedes cost principles set out in OMB Circulars and codified at 2 CFR 

Parts 220, 225, and 230, but does not supersede the Contract Cost Principles, which generally apply to 

for-profit entities. At 2 CFR § 200.101(c), the Uniform Guidance provides that agencies may, but are not 

required to, apply Subparts A through E of 2 CFR Part 200, which include the cost principles at Subpart E, 

to for-profit entities. Therefore, the Grants Officer in consultation with the Program Office may elect to 
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apply the cost principles under the Uniform Guidance (see Subpart E to 2 CFR Part 200) or the Contract 

Cost Principles when making an award to a for-profit entity.

[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200 

Subpart E would not apply.]

D. Amendments

DOC awards can only be amended, changed or modified by the cognizant Grants Officer. No other 

DOC official is authorized to make amendments, changes, or modifications to awards. For no-cost 

administrative changes, the Grants Officer may elect to issue a letter notifying the recipient of the 

change and documenting said change in the official award file, instead of issuing a CD-451, when the 

change does not meet any of the following criteria: 

• Change in scope or objective; 

• Revisions requiring additional funds; 

• Budget revisions when the cumulative transfers among direct cost categories exceed 10% of the 

total Federal and non-Federal funds authorized by the Grants Officer and the Federal share is 

greater than the Simplified Acquisition Threshold (currently $150,000); 

• Inclusion of costs requiring prior approval, as specified by the Cost Principles at 2 CFR Part 200 

Subpart E; and 

• Under non-construction projects: contracting for, sub-granting, or otherwise obtaining the 

services of a third-party to perform activities central to the purpose of the award.

Examples of when a letter is acceptable for documenting change in the award include: 

• Transfer of funds between direct and indirect cost categories; 

• Foreign travel requiring approval under the Fly America Act; 

• Changes in the federal program officer or grants administration officials; and 

• Notification to recipients of compliance with specific award conditions.

E. Project Monitoring

The purpose of project monitoring is to ensure that recipients fulfill the terms and conditions of 

their awards. Project monitoring shall be the joint responsibility of the Grants Officer, Program Officer, 

award recipient, and/or their designees. Monitoring may include performing site visits, preparing 

written and/or oral reports, holding meetings, or any other form of communication deemed appropriate 

by the Grants Officer for keeping apprised of project progress. See 2 CFR § 200.328 (Monitoring and 

reporting program performance). Grants Officers and Program Officers may request audit assistance 

from the OIG in fulfilling their monitoring responsibilities. Allegations of fraud, waste, and abuse may 

also be referred to the OIG or made anonymously through the OIG Hotline at 1-800-424-5197.

F. Recipient Responsibilities

Recipients of DOC financial assistance awards are responsible for achieving the scope of work and 

other activities delineated in the proposal as incorporated into their awards and any DOC-approved 

amendments thereto. Recipients are also responsible for ensuring that they comply with all of the 

terms and conditions of their awards and with the provisions made as part of the award including, but 
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not limited to, exercising appropriate financial management, accounting, and control over award funds 

and other assets; and reporting to the Grants Officer and Program Officer as required under the terms 

and conditions of their award.

Award recipients that issue subawards, i.e., entities that function in whole or in part as pass-through 

entities, are subject to the requirements of 2 CFR § 200.311 (Real property). These requirements place 

specific obligations on pass-through entities that are similar to the requirements placed on Federal 

agencies for administering financial assistance awards.
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11. ENFORCEMENT

A. Overview

The Grants Officer, in consultation with the Program Office, is authorized to take appropriate actions 

if recipients fail to meet their obligations under awards. Proposed suspensions and terminations must 

be reviewed by FALD prior to execution. Every grant and cooperative agreement contains a provision 

for suspension and/or termination of the award for deficient project performance, poor financial 

management, non-payment of accounts receivable, and/or other non-compliance or deficiency 

problems. Suspension or termination of an individual award is not an action covered by the provisions 

of 2 CFR Part 1326 and Part 180 (Nonprocurement Debarment and Suspension).

B. Enforcement

Enforcement actions may include, but are not limited to, discussions of corrective actions needed, 

written notice delineating needed actions; pre-enforcement warnings; imposition of risk-based specific 

award conditions; suspension of the award, suspension of payment, or both; termination of the award; 

or debarment and suspension of the recipient pursuant to 2 CFR Part 1326 and Part 180. See 2 CFR § 

200.338 (Remedies for noncompliance) and 2 CFR § 200.341 (Opportunities to object, hearings and 

appeals).

1. Pre-Enforcement Actions. If a violation of an award is not material, discussions with the 

recipient of corrective actions needed or a written notice delineating needed actions may be sufficient 

to resolve the situation. Discussions or written notices should identify the problem and establish a time 

frame for the recipient to take corrective action. If the recipient fails to respond or implement 

corrective action, a pre-enforcement warning, which identifies the problem and the expected time 

frame for the recipient to resolve the matter, may be appropriate. A warning should also include the 

actions the operating unit intends to take if the problem is not corrected promptly. 

2. Risk-based Specific Award Conditions. If a recipient materially fails to comply with the terms 

and conditions of an award, the Grants Officer may impose specific award conditions pursuant to 2 CFR 

§ 200.207 (Specific conditions). Such specific conditions may include placing the recipient on 

reimbursement only, or other requirements unique to the circumstances at hand. The recipient must be 

notified in writing of the specific award conditions and informed of corrective actions necessary to 

remove the restrictions in accordance with 2 CFR § 200.207(b). 

3. Suspension of Payments. Suspension of payments is an enforcement action available to the 

Grants Officer when he/she determines it is necessary to temporarily withhold payments of funds 

pending correction of identified deficiencies by the recipient or more severe enforcement action by the 

Grants Officer. Such action may be carried out by suspending the Recipient’s access to the Department 

of Treasury’s Automated Standard Application for Payment (ASAP) System, when the terms of the award 

provide for payments to the recipient through ASAP. The imposition of a suspension of payments does 

not halt activities under an award, and the recipient may continue to incur costs during the suspension 

of payments. Only the Grants Officer is authorized to suspend payments under an award or lift the 

suspension once it is imposed. The recipient must be notified of the suspension in writing. At a 

minimum, the notice must be sent by certified mail or electronically, with confirmation of receipt, and 

must state that the Department is imposing suspension of payments, the reason(s) why, and what 

corrective action the recipient must take in order to remedy the situation. If immediate action is not 
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necessary to protect the government’s interest, the Grants Officer should provide 30 days’ notice, 

informing the recipient that, unless information is received within the 30 days establishing compliance 

by the recipient with the requested remedial actions, the Department will proceed with the suspension 

of payments. A suspension of payments may be imposed regardless of whether the recipient has 

submitted any pending payment requests. If specified corrective actions are not taken, the Grants 

Officer may, after considering the best interests of the government, take more severe enforcement 

action, including termination of the award. 

4. Suspension of Award. Suspension of an award is an enforcement action available to the Grants 

Officer when it is determined that circumstances under an award warrant temporarily halting all 

activities under an award, including making payments to the recipient, pending the recipient taking 

corrective actions as specified by the Grants Officer. Such action may be carried out by suspending the 

Recipient’s access to the Department of Treasury’s ASAP System, when the terms of the award provide 

for payments to the recipient through ASAP. All activities under an award must cease and no costs may 

be incurred by the recipient during the suspension. Only the Grants Officer is authorized to suspend an 

award or lift a suspension once it is imposed. Suspension of an award must be documented in writing 

and included in the official award file. The recipient must be notified of the suspension in writing. At a 

minimum, the notice must be sent by certified mail or electronically with confirmation of receipt, must 

state that the Department is imposing suspension of the award, the reason why, and what the recipient 

can do to remedy the situation. If immediate action is not necessary to protect the government’s 

interest, the Grants Officer should provide a minimum of 30 days’ notice, informing the recipient that, 

unless information is received within the 30 days establishing compliance by the recipient with the 

requested remedial actions, the Department will proceed with the suspension of the award. If specified 

corrective actions are not taken, the Grants Officer may, after considering the best interests of the 

government, take more severe enforcement action, including termination of the award. Suspension of 

an award may result in a no-cost extension of the award period to compensate for the work that was 

not conducted on the project during the suspension. 

5. Termination Noncompliance with Award Terms (frequently referred to as termination for 

cause). The Grants Officer may terminate any DOC award for material noncompliance, which includes, 

but is not limited to, violation of the terms and conditions of the award; failure to perform award 

activities in a satisfactory manner; improper management or use of award funds; or fraud, waste, abuse, 

mismanagement, or criminal activity. All termination for material noncompliance actions must be 

documented in the official award file in writing. The recipient must be notified of the termination action 

in writing using the same minimum requirements listed under a suspension in Paragraph 4., above, if a 

suspension that notified the recipient of potential termination for noncompliance did not precede the 

termination action. See 2 CFR §§ 200.338 and 200.339(a)(1). 

6. Termination for Cause. “Termination for cause” as articulated at 2 CFR § 200.339(a)(2) is a new 

concept in Uniform Guidance issued in 2014, distinguishable from traditional authorized grant 

terminations for noncompliance, by mutual agreement, or by the recipient, as described in 2 CFR

200.339(a). In accordance with guidance provided by OMB, an agency’s authority to terminate for cause 

is relatively circumscribed. OMB explains as follows in the preamble to the Uniform Guidance:

Commenters suggested that language should be added to allow for Federal agency 

termination for cause, because situations often arise beyond the Federal agency’s or nonFederal entity’s control which may require awards to be terminated. This language would prove 
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useful in situations like those encountered during implementation of the Recovery Act or 

Sequestration, where congressional mandates encouraged expedited performance, or changes 

to appropriated amounts require modifications to programs. See 78 Fed. Reg. 78589, 78599 

(Dec. 26, 2013).

Based on this guidance, a Federal awarding agency should only terminate for cause when 

required by a circumstance beyond the agency’s control, such as a Congressional mandate. Absent such 

a circumstance, an agency may not withdraw previously obligated funds. Proposed terminations for 

cause under 2 CFR § 200.339(a)(2) must be reviewed by FALD.

7. Reporting of Termination Actions. When a Federal awarding agency terminates a Federal award 

prior to the end of the period of performance due to the non-Federal entity's material failure to comply 

with the Federal award terms and conditions, the Grants Officer must report the termination to the 

OMB-designated integrity and performance system, currently the Federal Awardee Performance and 

Integrity Information System, (FAPIIS). See 2 CFR § 200.339 (Termination), and 2 CFR § 200.340 

(Notification of termination requirement). The non-Federal entity shall be informed of the FAPIIS 

reporting and their right to comment on the information reported.

C. Concurrent Actions

Occasionally, when considering an administrative enforcement action, the Grants Officer may 

discover or be aware that other actions are concurrently ongoing or are about to be initiated against a 

recipient and/or its officers or employees. Such other actions may include OIG audits and/or 

investigations, and criminal or civil investigations/prosecutions by the Department of Justice. In such 

instances, it is important to coordinate, to the extent possible, any proposed administrative 

enforcement action with the authorities pursuing the other actions, in order to avoid any adverse 

impact on those other actions. Accordingly, when the Grants Officer is proposing enforcement action 

requiring FALD review and an opportunity to comment (suspensions and terminations), or requiring 

FALD clearance (proposed debarments and suspensions under 2 CFR Part 1326 and Part 180), FALD must 

be informed about the other actions, so that it can assist, if necessary, in the proper coordination with 

the other authorities. In addition, FALD must be informed of any other actions when the Grants Officer 

requests FALD’s review of lesser administrative enforcement actions or of non-enforcement termination 

(that is, by mutual agreement or by the Recipient). 

1. Termination by Mutual Agreement or by the Recipient. In financial assistance, the Federal 

Government may not terminate an award unilaterally for the convenience of the government. 

However, per 2 CFR § 200.339(a)(3) and (a)(4), an award may be terminated under the following 

conditions: 

(a) By the Grants Officer with the consent of the recipient, 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; or

(b) By the recipient upon sending to the Grants Officer written notification setting forth the 

reasons for such termination, the effective date, and, in the case of partial termination, the portion 

to be terminated. However, if the Grants Officer determines in the case of partial termination that 
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the reduced or modified portion of the grant will not accomplish the purposes for which the grant 

was made, it may terminate the grant in its entirety.

All termination actions must be documented in the official award file in writing. See 2 CFR § 200.339

(Termination). 

2. Debarment and Suspension of a Recipient. Debarment and suspension of a recipient are actions 

taken pursuant to 2 CFR Part 1326 and Part 180, which implements EO’s 12549 and 12689. The actions 

are intended to debar or suspend a recipient organization from participating in any Federal program, 

government-wide. Debarment and suspension are imposed, not as punishments, but to protect the 

interests of the government. The integrity or present responsibility of an applicant or recipient is at 

issue in a debarment or suspension, and such action is imposed only in egregious circumstances; e.g., 

when a recipient or applicant has been indicted and/or convicted of a criminal offense. All of the 

regulatory requirements of 2 CFR Part 1326 and Part 180 must be met before a recipient organization 

can be debarred or suspended from participation in Federal programs. This action must be 

distinguished from suspension of an individual award by a Grants Officer as discussed above. The FALD 

shall review all proposed debarments and suspensions under 2 CFR Part 1326 and Part 180.
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12. AWARD CLOSE-OUT

Proper award close-out is required for all DOC financial assistance awards. An award expires at 

midnight local time for the recipient on the date which is listed on the last approved amendment (Form 

CD-451) as the "Extend Period of Performance To" date or on the original Financial Assistance Award 

document (Form CD-450) as the "Period of Performance." General procedures for award close-out are 

contained in 2 CFR §§ 200.343 (Closeout) and 200.344 (Post-closeout adjustments and continuing 

responsibilities).

A. Responsibilities

1. The Grants Officer has overall responsibility for ensuring that the award is properly closed-out 

and the necessary documentation is included in the official award file. Once all documentation has been 

received and no further action is required, the Grants Officer shall notify the recipient in writing, with a 

copy of the notification to the Program Officer, that the grant has been satisfactorily closed. 

2. The Grants Officer or designee is responsible for notifying the recipient when the award is 

nearing completion, and for reviewing and evaluating the final financial, performance, property, and 

patent reports, as applicable.

3. When applicable, the Grants Officer will provide the recipient with instructions for disposition of 

property loaned to the recipient by the Federal Government or purchased by the recipient with grant 

funds.

4. The Grants Officer should complete all closeout actions no later than one year after receipt and 

acceptance of all required final reports.

B. Unobligated Funds

1. If at the completion of an award period, the recipient has an unobligated balance of funds on 

hand, those funds shall be promptly returned to the Federal Government. If the funds are not returned 

by the recipient in a timely manner, an account receivable may be established and billed to the 

recipient. Interest, penalties, and administrative charges shall be assessed, as appropriate. 

2. Recipients with outstanding accounts receivable established (e.g., to collect unobligated funds) 

are subject to debt collection procedures at Chapter 14, Section C., of this Manual.

C. Deobligation of Funds

Within ninety (90) calendar days of receipt of the final SF-425 (Federal Financial Report) showing no 

unliquidated obligations, the Grants Officer shall notify the Finance/Accounting Officer to deobligate the 

unobligated balance of funds not disbursed to the recipient. No funds will be deobligated unless 

requested by the Grants Officer.

[Note: The ninety (90) calendar day window above does not apply to those awards that remain open 

due to administrative delays (i.e. for legal issues, to include audit issues or bankruptcy filings as well as 

delays caused by incomplete final indirect cost rate determinations). Under situations where an award 

closeout is administratively delayed, reconciliation of the final SF-425 will be completed once all 

administrative closeout requirements are resolved.]
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D. Retention of Records

1. General procedures for record retention are contained in 2 CFR § 200.333 (Retention 

requirements for records).

2. In cases where a recipient will no longer be in operation after a grant has been completed, the 

operating unit shall require the recipient to:

a. Identify where records pertaining to the grant project will be located for the required three 

(3) year retention period; and 

b. Provide appropriate assurances of government access thereto.

E. Unilateral Termination and/or Administrative Closeout 

1. The Grants Officer will effectuate the unilateral termination and/or administrative closeout of: 

a. expired and unexpired awards pending closeout where the recipient is no longer in 

existence; and 

b. expired awards pending closeout where the recipient is in existence, but is unresponsive to 

bureau notifications and attempts to contact.

2. The unilateral termination and/or administrative closeout procedure does not apply to 

unexpired awards where the recipient is in existence, but is materially non-compliant with the terms 

and conditions of the award. In such cases, the Grants Officer should take appropriate enforcement 

action under the award in accordance with 2 CFR § 200.343 (Closeout), the terms and conditions of the 

award, Chapter 11 of this Manual, and bureau policy. Once an active award is terminated, such an 

award may become subject to this procedure.

3. The unilateral termination and/or administrative closeout procedure also does not apply to 

recipients that are a party to an active bankruptcy case which, in accordance with Chapter 4 of this

Manual should be coordinated with the OGC General Litigation Division with such coordination generally 

through the OGC Federal Assistance Law Division (FALD). The OGC General Litigation Division (through 

FALD) should also be consulted where a recipient is dissolved or reorganized upon an order of the U.S. 

Bankruptcy Court.

4. All operating units are required to satisfy all of the conditions listed below, as well as resident 

operating unit policy, and to document the official award file to adequately capture the operating unit’s 

due diligence efforts in determining that a recipient is no longer in existence and that the award should 

be unilaterally terminated and/or unilaterally closed out by the Grants Officer. Operating units shall:

a. Use all existing contact information (to include electronic mail and telephone numbers) to 

contact the recipient organization. 
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b. Send a letter to the recipient by certified mail, return receipt requested, following the 

general template provided in the Sample Business Official's Notice to Submit Documentation 

(Appendix A of this chapter) to the recipient’s most recent address as reflected in the official award 

file. At the Grants Officer’s discretion and as part of the operating unit’s due diligence process, 

duplicate letters may also be sent to other addresses listed for the recipient. The certified letter 

may be modified from the template to incorporate any necessary operating unit specific 

requirements or policies, provided such requirements are consistent with this Manual. 

c. Conduct a search of SAM to determine if the recipient has an active Central Contractor 

Registry as well as Do-Not-Pay and FAPIIS to determine if there is adverse information concerning 

the recipient.

d. Conduct an electronic search of the Secretary of State website for the State in which the 

recipient is incorporated to determine if the recipient organization remains in existence and is an 

organization in good standing relative to State organizational filings and other State requirements. 

e. Thoroughly document all efforts to contact the recipient. The Missing Data Report and Due 

Diligence Checklist (Appendix B of this chapter) may be used as a general template for the report or 

an appropriate operating unit specific form may be substituted. This report should be completed by 

the assigned Grants Specialist or Team Lead and reviewed by the Grants Officer or other appropriate 

official. The Grants Officer will sign the report once he/she is satisfied that the proper due diligence 

was conducted and that the recipient is no longer in existence. 

In accordance with Chapter 4 of this Manual, FALD review of actions pursuant to this closeout 

procedure is not required, but may be requested by the Grants Officer where there are specific 

questions or concerns relative to a recipient's organizational status or relative to the adequacy of 

the operating unit's due diligence efforts.

f. Upon a determination by the Grants Officer that the recipient is no longer in existence, the 

Grants Officer, using the Sample Unilateral Termination and/or Unilateral Closeout Memorandum 

(Appendix C of this chapter), or an appropriate operating unit specific memorandum, will document 

the official award file relative to the unilateral termination and/or administrative closeout of the 

award, and will further notify the operating unit’s Finance/Accounting Officer to deobligate any 

undisbursed Federal funds relative to the subject financial assistance award. Unexpired awards 

where the recipient is no longer in existence must be unilaterally terminated by the Grants Officer in 

a separate action or as part of the action providing for the administrative closeout of the award. 

Award termination actions must be carried out by the Grants Officer in accordance with 2 CFR § 

200.343 (Closeout), Chapter 11 of this Manual (Enforcement), and resident operating unit policy.

g. In accordance with Chapter 14 of this Manual, the operating unit, in consultation with 

operating unit’s Finance/Accounting Officer and FALD, should investigate the appropriateness of 

establishing an accounts receivable against the recipient for some or all of the Federal award funds 

that are not properly accounted for or expended by the recipient (e.g., a recipient’s failure to file SF425s or to submit A-133 or project-specific audits, as required under the terms and conditions of the 

subject award). 
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h. The unilateral termination and/or administrative closeout of a financial assistance award 

generally does not affect any later disallowance or adjustments relative to the award, including but 

not limited to the Department’s right to disallow costs or to recover funds later determined to be 

due the Federal Government. See 2 CFR §§ 200.343 (Closeout) and 200.344 (Post-closeout 

adjustments and continuing responsibilities).
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Appendix A: Sample Business Official’s Notice to Submit Documentation

[mm/dd/yyyy]

[Organization Name]

Attn: ______________________

Recipient Address 

Reference: Award Number:

Program Title:

Dear [Business Official Name or Representative of the Recipient]:

This notice is regarding the closeout documents for the subject award. In accepting the award, [insert 

recipient name] agreed to comply with the Department of Commerce’s (DOC) policies, including the 

requirement for submitting (final) reports in a timely manner. Despite previous efforts, the following 

report(s) are now delinquent (select as appropriate from this list):

* Final Financial Status Report (SF-425) 

* Final and/or Quarterly Progress Report as applicable 

* Equipment Inventory List Authorization/Purchase

* Final Invention Statement and Certification: As applicable/required

* Audit(s): As applicable/required

* Other Agency specific required documents 

Please submit by e-mail in PDF format the document(s) requested to ___________________. If 

electronic transmissions are not available, hardcopy submissions are acceptable to the following 

address:

____________ Grants Office

Attn: __________________________, Grants Management Specialist

Failure to comply with the terms and conditions of the award, including but not limited to the award’s 

closeout requirements, may result in appropriate enforcement action under the award, including but 

not limited to termination of the award and the establishment of an account receivable against the 

recipient organization. Moreover, the failure to comply with the award’s closeout requirements may 

have a negative impact on future funding from the Department of Commerce.
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[INSERT THIS PARAGRAPH FOR ACTIVE AWARDS] By way of this letter and in accordance with 2 CFR Part 

200, your organization is hereby notified that [insert grant-making operating unit] intends to unilaterally 

terminate this award for material noncompliance, unless the information and documentation set forth 

above is received within 30 days of the date of this letter.] 

Please direct any questions regarding this matter and, also, send any notice(s) that the recipient has 

filed for federal bankruptcy protection to the above-referenced point of contact.

Sincerely,

_____________________________________

Grants Officer
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Appendix B: Sample Missing Data Report and Due Diligence Checklist

Recipient Name:

Project Title:

Award Number:

Project Period:

[mm/dd/yyyy] to [mm/dd/yyyy]

Missing Data Report Instructions:

In the table below, document missing files, letters, reports or other requirements. An "Action" includes any of the following: telephone 

call/message, e-mail, FAX, meeting, or any other form of communication made to obtain the missing document. 

Missing Item/File Action Date

[mm/dd/yyyy] Result/Outcome Remarks and/or Comments
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Appendix B: Sample Missing Data Report and Due Diligence Checklist (continued)

Due Diligence Checklist Instructions:

Complete the checklist below to document the efforts made to contact the recipient. 

Action Date

[mm/dd/yyyy] Result/Outcome Remarks and/or Comments

Contact attempt – email

Contact attempt – telephone

Certified mail

SAM search

Secretary of State website search

Grants Officer Name:

(Type or Print):

Team Lead Name:

(Type or Print):

(Signature) (Signature)
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Appendix C: Sample Unilateral Termination and/or Unilateral Closeout Memorandum

Memorandum

Date: [mm/dd/yyyy]

To: [Insert Grants Team Leader’s Name]

From: [Insert Grants Management Official’s Name]

Subject:Unilateral Termination and/or Unilateral Administrative Closeout 

Recipient Name:

Award Number:

Budget and Project Periods: [mm/dd/yyyy] through [mm/dd/yyyy]

In accordance with Chapter 12 of the Department of Commerce Grants and Cooperative Agreements 

Manual (Award Closeout), the Grants Specialist assigned to this award has made reasonable efforts to 

obtain the outstanding information and documentation from the recipient. Based on these due 

diligence efforts, as documented in the official award file for this project this award is being unilaterally 

terminated and/or is being unilaterally closed out. 

The Finance/Accounting Office is being advised of this action, with a corresponding request that the 

undisbursed award funds in the total amount of $_______ be deobligated from the award. 

[Additionally, an account receivable for the total disbursed award funds will be established in the 

amount of $______.]

_____________________________________ ______________________

Grants Officer Date

Attachment: Missing Data Report and Due Diligence Checklist
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13. AUDITS

A. Audit Requirements

Subpart F to 2 CFR Part 200 (Audit Requirements) implements the Single Audit Act Amendments of 

1996, 31 U.S.C. § 7501 note, establishing uniform audit requirements for non-Federal entities that 

administer Federal awards. To the extent that audits performed in accordance with Subpart F meet DOC 

needs, DOC shall rely upon and use such audits. In accordance with the DOC ST&Cs, for-profit and other 

organizations not covered by the audit provisions of Subpart F shall be subject to the audit requirements 

as stipulated in the award or sub-award document. In accordance with 2 CFR § 200.501(d), a nonFederal entity that expends less than $750,000 annually in Federal awards is exempt from Federal audit 

requirements except as noted in 2 CFR § 200.503 (Relation to other audit requirements), unless a 

program-specific audit is required by a specific award condition and funded by the award.

1. Organization-Wide Audits. Organization-wide audits shall be performed in accordance with the 

Single Audit Act Amendments of 1996, 31 U.S.C. § 7501 note, as implemented by 2 CFR Part 200, 

Subpart F. Recipients that are subject to Subpart F and that expend $750,000 or more annually in 

Federal awards shall have an organization-wide audit performed in accordance with Subpart F except 

when they qualify and elect to have a program-specific audit performed in accordance with exceptions 

in the Subpart. Organization-wide audits will generally be conducted annually, or biannually as 

authorized under 2 CFR § 200.504 (Frequency of audits). 

2. Program-Specific Audits. Program-specific audits are allowable under Subpart F in certain 

circumstances in lieu of the organization-wide audit. Under 2 CFR § 200.501(c), when an auditee 

expends Federal awards under only one Federal program (excluding R&D) and the Federal program's 

statutes, regulations, or the terms and conditions of the Federal award do not require a financial 

statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in 

accordance with 2 CFR § 200.507 (Program-specific audits). A program-specific audit may not be 

conducted for research and development unless all of the Federal awards expended were received from 

the same operating unit, or the same operating unit and the same pass-through entity, and the Grants 

Officer or appropriate representative of the pass-through entity in the case of a subrecipient, approves a 

program-specific audit in advance. Program-specific audits will be conducted annually unless otherwise 

authorized under 2 CFR § 200.504 (Frequency of audits). 

3. Submission of Audit Report and Data Collection Form.

a. Requirements for submission of audit reports, including instructions for data collection forms, 

are set forth in 2 CFR §§ 200.507 (Program-specific audits) and 200.512 (Report submission), and DOC 

ST&Cs. 

b. A non-Federal entity subject to Subpart F of 2 C.F.R. Part 200 must, within 90 days of the end of 

its fiscal year, notify the Grants Officer of the amount of Federal awards, including all DOC and non-DOC 

awards, that the non-Federal entity expended during its fiscal year.

B. Other Audits

An audit of an award may be conducted at any time as indicated in the DOC ST&Cs. The following is 

a list of other audits outside of the Single Audit Act that may be required by DOC.
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1. Audits of For-profit, Organizations, Sole Proprietors, and Individuals. A for-profit organization, 

sole proprietor, or individual receiving a DOC award must have a program-specific or other audit 

performed where the federal share amount awarded is $750,000 or more over the duration of the 

project period, or as specified in the award. The DOC award may include a line item in the budget for 

the cost of the audit. If DOC does not have a program-specific audit guide available for the program, the 

auditor should follow Generally Accepted Government Auditing Standards (GAGAS) and the 

requirements for a program-specific audit as described in 2 CFR Part 200, Subpart F, if applicable. A 

copy of the program-specific audit shall be submitted to the Grants Officer at the address specified in 

the award document.

2. Audit Conducted by the OIG. When an audit is conducted by the OIG, the OIG will usually make 

the arrangements for the audit, whether the audit is performed by the OIG personnel, an independent 

accountant under contract with DOC, or any other Federal, state, or local audit entity.

3. Audit Required by the Award. When an audit is required under a specific award condition, the 

recipient will usually make the arrangements for the audit. The audit shall be performed in accordance 

with a program-specific audit guide, if one is available for that program, or GAGAS and the requirements 

for a program-specific audit as described in Subpart F of 2 CFR Part 200, if applicable. The recipient shall 

submit copies of program-specific audits in accordance with the guidance in the program-specific audit 

guide. If no guide is available, a copy of the audit shall be submitted to the Grants Officer at the address 

specified in the award document.

C. Access to Recipient Records 

Under the Inspector General Act of 1978, as amended, 5 U.S.C. App. 3, § 1 et seq., an audit of the 

award may be conducted at any time. The Federal awarding agency, Inspectors General, the 

Comptroller General of the United States, and the pass-through entity, or any of their authorized 

representatives, must have the right of access to any documents, papers, or other records of the nonFederal entity which are pertinent to the Federal award, in order to make audits, examinations, 

excerpts, and transcripts. The right also includes timely and reasonable access to the non-Federal 

entity's personnel for the purpose of interview and discussion related to such documents. See 2 CFR § 

200.336 (Access to records).

D. Audit Resolution

1. In accordance with DAO 213-5, as revised on May 22, 2015, Department and operating unit 

personnel shall act promptly to resolve both the financial and nonfinancial issues identified in an audit 

report. Comments, arguments, and evidence (if any) submitted by the auditee and the operating unit 

shall be considered in resolving the findings. A DOC decision on the resolution of audit findings and 

recommendations will be made in accordance with the procedures and within the specified timeframes 

identified in DAO 213-5.

2. The audit action official (as defined in DAO 213-5) shall issue the Audit Resolution 

Determination. The Audit Resolution Determination will be maintained in the official grant file and a 

copy will be forwarded to the Program Officer.
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3. Recipients are responsible for the collection of audit-related debts from their subrecipients 

where an audit has determined funds are owed. This does not relieve the recipient of liability for the 

debt.

4. Disputes arising from audit resolution, which cannot be resolved at the bureau or Department 

level shall be decided in accordance with the appeal procedures and specified time frames outlined in 

DOC's "Policies and Procedures for Resolution of Audit-Related Debts," 54 Fed. Reg. 4053 (January 27, 

1989), as clarified and updated in DAO 213-5 (May 22, 2015). The appeal procedure is the last 

opportunity for auditees to provide evidence to support their contentions. The DOC will not accept any 

submission from a recipient regarding an appeal after the established deadline, unless requested by the 

Grants Officer, the OIG, or the OGC. After the Department renders a decision on an appeal, there are no

other administrative appeals available within DOC. 

5. An audit of the award may result in the disallowance of costs incurred by the recipient and the 

establishment of a debt (account receivable) due DOC. 

6. Operating units are responsible for submitting a monthly update of all unresolved audits to 

OAM/GMD by the third Friday of each month.

E. Audit Implementation 

Audit follow-up and implementation shall be conducted in accordance with the requirements of the 

Inspector General Act of 1978, as amended, 5 U.S.C. App. 3, § 1 et seq. and Subpart F of 2 CFR Part 200,

as implemented by DAO 213-5.
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14. ESTABLISHMENT AND COLLECTION OF FINANCIAL ASSISTANCE-RELATED 

DEBTS

A. Standards for the Establishment and Collection of Debts

In accordance with the DOC credit and debt management procedures, debts owed to the DOC, 

including to its operating units, shall be properly and promptly established, billed, and collected. The 

authorities listed below must be adhered to in the establishment and collection of debts related to DOC 

grants and cooperative agreements:

1. Debt Collection Act (DCA) of 1982, as amended (31 U.S.C. § 3701 et seq.) and the Federal Claims 

Collection Standards (31 CFR Parts 900-904); 

2. DOC debt collection regulations set forth in 15 CFR Part 19 (Commerce Debt Collection);

3. 2 CFR § 200.345 (Collections of amounts due);

4. DAO 213-5 (Audit and Evaluation Resolution and Follow-up); 

5. DOC Credit and Debt Management Operating Standards and Procedures 

Handbook (Debt Management Handbook); 

6. OMB Circular A-129 Revised (Policies for Federal Credit Programs and Non-Tax Receivables); and

7. Any other relevant laws, regulations, OMB circulars, and DOC policies, including any DOC 

operating unit-specific policies and procedures.

B. Establishment of a Debt

1. Debts owed to the Department are often established as a result of a financial assistance audit 

resolution between the DOC and a non-federal entity. The establishment of an audit-related debt must 

follow the substantive and due process notice requirements set forth in 31 U.S.C. § 3716(a), 15 CFR § 

19.4, DAO 213-5 and Chapter 8 of the Debt Management Handbook.

2. Debts owed to the Department may be established against a non-federal entity for reasons

other than the resolution of financial assistance audits, such as the disallowance of costs by a Grants 

Officer, or failure of a non-federal entity to meet cost sharing required by the award. In such cases, the 

Grants Officer will provide proper notification to the recipient in accordance with 15 CFR § 19.4 and 

Chapter 8 of the Debt Management Handbook, and will coordinate the billing of the recipient with the 

appropriate accounting or other office. 

3. Both the audit resolution process and the debt collection process require that debtors be given 

notice concerning the debt and an opportunity to inspect and to copy non-privileged records pertaining 

to the DOC debt. All reasonable efforts should be made to satisfy the requirements of both in a single 

process. In particular, the audit resolution determination should, wherever reasonably possible, also 

serve as a demand and notice of intent letter as required by the DCA, as amended. See 15 CFR § 19.4 for 

the elements that must be contained in the notice and demand letter; see also Debt Management 

Handbook, Chapter 8. A sample notice and demand letter is set forth in Exhibit A to this Chapter.
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C. Debt Collection

1. DOC entities shall fairly and aggressively collect debts owed to DOC in accordance with the DCA, 

15 CFR Part 19 and Chapter 8 of the Debt Management Handbook. In this connection, DOC operating 

units shall use Debt Work Groups for follow-up with debtors and for the collection of delinquent debts. 

2. A DOC financial assistance-related debt becomes delinquent when payment in full has not been 

made by the due date specified in the operating unit’s initial written demand for payment, generally 

between 30 and 60 calendar days from the date upon which the debt is established, unless other 

payment arrangements have been made between the operating unit and the debtor (e.g., an 

installment payment plan).

3. Delinquent debts shall be assessed the following charges (see, 31 CFR § 901.9, 15 CFR Part 19.5,

and the Debt Management Handbook Chapter 8):

a. An interest charge on the amount due shall be applied and collected. Interest will accrue on 

the principal, or any portion thereof, owing and unpaid from the date the debt is established until it 

is paid in full. However, interest will automatically be waived on any portion of the principal that is 

paid within 30 calendar days from the date upon which the debt is established. The minimum 

annual rate of interest to be charged is the Department of the Treasury's (Treasury) Current Value of 

Funds. This rate is published annually in the Federal Register by Treasury, and is available on the 

website of Treasury’s Bureau of the Fiscal Service. The assessed rate shall remain fixed for the 

duration of the indebtedness. 

b. A penalty charge, not to exceed six percent a year, shall be added to delinquent debts. The 

charge will accrue on the principal, or any portion thereof, owing and unpaid from the date of 

delinquency, 31 days after the date the debt is established, until it is paid in full. However, the 

charge will automatically be waived on any portion of the principal paid within 90 days of the date 

of delinquency. 

c. An administrative charge (currently $25.00) shall be applied to cover processing and 

handling of the amount due. 

d. In most cases, interest, penalties and administrative costs will continue to accrue during any 

period when collection has been suspended for any reason (e.g., a debtor requested an audit 

appeal) (see 15 CFR § 19.5(c)).

e. For specific information on waiving late charges, whether additional interest, penalty 

charges, or administrative charges, refer to 15 CFR § 19.5(b) and Chapter 8 of the Debt Management 

Handbook.

4. The Grants Officer shall advise the recipient that payment of debts cannot be from funds 

received from DOC or from other Federal financial assistance awards (including program income 

generated under such awards), or result in a reduced level of program activity.

5. Section 5 of the Digital Accountability and Transparency (DATA) Act of 2014 amends 31 U.S.C. § 

3716(c)(6), Administrative Offset, and requires agencies to refer to Treasury valid, delinquent nontax 
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debts for the purpose of administrative offset at 120 days - 60 days earlier than the previous 180-day 

requirement. DOC is cross serviced by Treasury for administrative offset. As a result, effective October 

1, 2015, all debts delinquent by more than 120 days must be referred to Treasury for cross-servicing, 

which will allow for referrals to Treasury for administrative offset. See Debt Management Handbook, 

Chapter 8, Section 1.0. DOC debts delinquent for less than 120 days may be transferred for crossservicing at the election of DOC. The appropriate official must comply with notification requirements 

contained in 15 CFR Part 19, before debts are transferred to Treasury for action. See also 31 CFR Part 

901 (Standards for the administrative collections of claims). 

D. Impact of Delinquent Federal Debts on Award Eligibility 

1. Delinquent debtors are ineligible for and barred from obtaining Federal loans, loan insurance or 

guaranties. As required by 31 U.S.C. § 3720B and 31 CFR § 901.6, Commerce entities will not extend 

financial assistance in the form of a loan, loan guarantee, or loan insurance to any person or 

organization delinquent on a debt owed to a Federal agency. This prohibition does not apply to disaster 

loans, unless otherwise required by statute, and DOC entities may extend credit after the delinquency 

has been resolved. See 15 CFR § 19.17(a) for situations where a waiver of ineligibility may be granted.

2. A debtor who has a judgment lien against the debtor’s property for a debt to the United States 

is not eligible to receive grants, loans or funds until the judgment is paid in full or otherwise satisfied. 

This prohibition does not apply to DOC funds that the debtor is entitled to as a beneficiary. See 15 CFR § 

19.17(b) for situations in which this prohibition may be waived.

3. Unless otherwise prohibited by law and in accordance with 15 CFR § 19.17(c), DOC entities with 

the authority to do so under the circumstances should deny, suspend or revoke licenses, permits or 

other privileges for any inexcusable or willful failure of a debtor to pay a debt. The DOC entity 

responsible for distributing the licenses, permits or other privileges will establish policies and 

procedures governing suspension and revocation for delinquent debtors.

4. In accordance with 15 CFR § 19.17(d), it is the policy of DOC that no award of Federal funds shall 

be made to an applicant who has an outstanding delinquent DOC debt until: 

a. The delinquent account is paid in full;

b. A negotiated repayment schedule is established and at least one payment is received; or

c. Other arrangements satisfactory to DOC are made.

5. Once an outstanding receivable becomes a delinquent Federal debt, no further awards to the 

recipient may be considered until the debt is paid, except in circumstances cited in subparagraph 4, 

above, and discussed in subparagraph 6, below. This includes debts that have been written off, but not 

yet closed out. Although a delinquent debt becomes inactive once it is written off and the operating 

unit takes no further action to collect it, the debt is still owed to the Federal Government. If, however, 

the debt is then closed out by the Finance/Accounting Officer, no further collection action may be taken 

after the debt is reported to the IRS on Form 1099-G (Certain Government Payments) as income to the 

debtor.
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6. Federal policy as established under OMB Circular A-129 (Managing Federal Credit Programs) 

requires the aggressive but fair management of Federal receivables. It is the general policy of DOC that 

delinquent outstanding receivables be repaid in full in a lump sum. Mitigating circumstances may exist 

that justify issuance of an award outside the parameters of the policy if a repayment schedule is 

negotiated and approved and one payment received, or other arrangements satisfactory to DOC are 

made before an award is issued. Issuance of an award to a recipient who has an outstanding debt must 

be in accordance with the guidance provided below. The steps taken to safeguard the Federal 

Government's interests until repayment is made must be noted in the official award file.

a. In the event that a recipient is unable to repay the delinquent debt in one lump sum, a 

repayment schedule may be formally negotiated and entered into by the operating unit and the 

recipient. As long as the recipient is making payments in accordance with the repayment schedule, 

a new award may be made. Recipients must be placed on a reimbursement payment method until 

the debt is paid, unless the Grants Officer authorizes other arrangements.

(1) The Finance/Accounting Officer shall notify the Grants Officer and recipient when payment 

on a repayment schedule is 10 calendar days delinquent.

(2) The Grants Officer may suspend payments under any current award(s) if payment on a 

repayment schedule is 14 calendar days delinquent. The Grants Officer must suspend the current 

award(s) when payment is 30 calendar days delinquent unless the Grants Officer determines and 

sets forth in writing the reasons that it is not in the best interest of the Federal Government to do 

so. This written determination shall become part of the official award file. Before sending the 

request to suspend an award to the Finance/Accounting Officer and the notification of suspension 

to the recipient, the Grants Officer must verify with the Finance/Accounting Officer that the 

repayment schedule remains delinquent.

(3) Suspended awards may be reactivated when payment on the repayment schedule becomes 

current.

(4) The Grants Officer may terminate a suspended award based on nonpayment of the debt.

b. Other extraordinary circumstances may exist which may warrant proceeding with an award 

prior to repayment of a delinquent debt. Circumstances that merit such action include:

(1) The recipient has acknowledged that it owes the debt, and has made satisfactory 

arrangements to repay; or 

(2) The debt is reported as unpaid as a result of an error; or

(3) When a determination is made that:

(i) There may be sufficient justification for delaying repayment of the debt that merits further 

investigation; and 

(ii) Not proceeding with the award will frustrate successful achievement of programmatic goals. 
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The Program Officer shall prepare and sign a written justification for the concurrence of the Grants 

Officer, who shall maintain the documentation in the official award file. The justification must have the 

concurrence of the Head of the Operating Unit or designee and be included in the official award file.

E. Exceptions 

The procedures set forth in this chapter are applicable to all operating units except those that are 

not subject to the disposition of claims under the DCA or its implementing regulations. Where an 

operating unit is not required by law to follow DCA procedures, it must develop and follow its own 

alternative procedures, but to the extent feasible, it also must comply with and employ the guidelines 

set out in this chapter. As set forth in Debt Management Handbook, Chapter 8, Section 1.0, an 

operating unit may follow procedures that differ from those in Chapter 8 of the Debt Management 

Handbook (which are summarized in this Chapter of the DOC Grants Manual) only if approval of 

alternative procedures has been granted in writing by the Deputy Chief Financial Officer and Director for 

Financial Management. Any request for authority to deviate from these procedures must be submitted 

to the Deputy Chief Financial Officer and Director for Financial Management, and be accompanied by 

the proposed alternative in detail. 
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Exhibit A – Sample Notice and Demand Letter/Audit Resolution Determination 

CERTIFIED MAIL – RETURN RECEIPT REQUESTED [Optional]

[Date]

[Name of Recipient/Debtor]

[Address Line 1]

[Address Line 2]

[Add “Attn:” and Name & Title of General Partner, Corporate President, or State Governmental Official, 

as appropriate, for Organizational Recipients/Debtors.] 

RE: [Name of Recipient/Debtor] (Recipient)

Audit Resolution Determination (Letter)

Financial Assistance Agreement Number: _________________________ (Agreement)

Audit Report Number: ___________________ (Audit Report)

Dear ________________: 

Recipient entered into the Agreement with the U. S. Department of Commerce, [Operating Unit]

(Agency). An audit has been performed relating to the Agreement, the Audit Report prepared, and 

Recipient provided a copy of the Audit Report. The Agency has reviewed the Audit Report (which 

includes Recipient comments, if any), determined that Recipient owes the Agency a refund, and 

established a debt in the amount of that refund. A summary of the financial and non-financial findings 

in the Audit Report, and the Agency’s resolution of them, is enclosed as Exhibit A. [See Instructions for

Content.] 

Debt and Demand for Payment

There is currently owing and unpaid by the Recipient to the Agency a debt, described above, in the 

amount of $____________ principal, plus interest thereon at the rate of ____ % per annum. Demand is 

hereby made for payment in full within 30 calendar days of the date of this Letter (Due Date). The 

amount demanded should be paid in one lump sum by the Due Date in accordance with the bill enclosed 

as Exhibit B. [Obtain bill from agency setting up the account receivable. Assure that the content of the 

bill does not conflict with the terms of this Letter.] 

Under the Debt Collection Act of 1982, as amended, 31 U.S.C. § 3701 et seq., and 15 CFR Part 19, 

interest will accrue on the principal, or any portion thereof, owing and unpaid from the date of this 

Audit Resolution Determination until the debt is paid in full. However, interest will automatically be 

waived on any portion of the principal that is paid within 30 days. The rate of interest that Recipient will 

be assessed is specified above and was determined in accordance with 31 U.S.C. § 3717. 

The debt will be delinquent if not paid in full by the Due Date. If the debt becomes delinquent, interest 

will continue to accrue on the principal balance remaining due and unpaid at that time, and Recipient 

will also be assessed both a penalty charge and, to cover the cost of processing and handling the 

delinquent debt, an administrative charge. 
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The penalty charge will accrue on the principal, or any portion thereof, owing and unpaid from the date 

of delinquency, 31 days after the date of this Audit Resolution Determination, until the debt is paid in 

full. However, the penalty charge will automatically be waived on any portion of the principal paid 

within 90 days of the date of delinquency. The penalty charge is ___ % per annum [maximum of 6.0%] 

and the administrative charge is $_____ [currently $25.00]. Both charges are in accordance with 31 

U.S.C. § 3717. 

Interest and penalty charges will continue to be added until the entire debt has been paid in full. This 

includes payment of all principal, interest, and penalty and administrative charges. Keep in mind that 

any sums received will be applied first to administrative and penalty charges, then to interest, and lastly 

to principal. 

Collection Actions

The Agency is entitled to take all appropriate steps to collect delinquent debts and will do so in this case 

if the debt is not paid as demanded above. Those steps may include:

• referring the debt to the U.S. Department of the Treasury for offset of Recipient’s income 

tax refunds, Recipient’s contractor/vendor payments and any other Federal payments, including 

but not necessarily limited to certain benefit payments and loans to Recipient, that are not 

exempt from offset; 

• referring the debt to a private collection agency;

• reporting the debt to a credit bureau;

• referring the debt to the U.S. Department of Justice for litigation;

• reporting the debt, if discharged, to the Internal Revenue Service as potential taxable 

income;

• referring the debt to the U.S. Department of the Treasury for any of the above described 

actions, which referral is required when the debt has been delinquent for 180 days; and 

• performing administrative offset or common law set-off of the debt against any payments or 

credits that may be owned to Recipient by the Agency. 

Also, failure to pay the debt by the Due Date could result in payments being withheld under any current 

Agency awards to Recipient and in the termination of such awards. In addition, Recipient will become 

ineligible for Federal loans (except disaster loans), loan insurance or guaranties. Persons controlled by 

[or controlling] [Add for Organizational Recipients.] Recipient may be similarly ineligible. Also, it is U. S. 

Department of Commerce policy that no award of Federal funds shall be made to a grant or cooperative 

agreement applicant who has an outstanding delinquent debt to the Department. [Finally, the Agency 

may deny, suspend or revoke licenses, permits, or other privileges for any inexcusable or willful failure 

of Recipient to pay the debt.] [Add where agency has such authority.]

The Agency believes that the payment of this debt is entitled to priority treatment in accordance with 31 

U.S.C. § 3713. Failure to satisfy the Agency’s claims before paying the claims of other creditors may 

result in the personal liability of one or more of Recipient’s officers, employees or other representatives 

for this debt. 
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Inspection and Copying of Documents

Recipient has the right to inspect and copy the agency records related to the debt as determined by the 

responsible agency official(s). However, with respect to this debt, the responsible agency official(s) has 

(have) determined that all documents have been previously provided to Recipient or are being provided 

herewith. These documents include the applicable Financial Assistance Agreement, the Audit Report, 

and this Audit Resolution Determination. If Recipient wishes additional copies, the Agency point of 

contact identified at the end of this letter will, upon request, explain the procedures for inspecting and 

copying the originals. [If this is a special case with additional or different documents, refer to and 

enclose such records as are needed to support the proper establishment of the debt. Consult with legal 

counsel respecting such cases.] 

[Waiver of Indebtedness and] [Insert where applicable.] Repayment Agreement

[Recipient has the right to request, pursuant to ________, a waiver of all or a portion of the 

indebtedness. [Add applicable statutory and regulatory authorities. Contact legal counsel for advice 

in this regard.] If Recipient wishes to exercise this right, Recipient must do so within 60 days of the date 

of this Audit Resolution Determination or, if Recipient files a Request for Reconsideration, discussed 

below, then together with that Request. These will be Recipient’s only opportunities to do so.] [Insert 

where applicable.]

Recipient also has the right to request to enter into a written repayment agreement with the 

responsible Agency official(s) to repay the debt, including interest, penalties and administrative charges 

determined by the Agency. If Recipient wishes to exercise this right, Recipient must do so within 60 

days of the date of this Letter or, if Recipient files a Request for Reconsideration, discussed below, then 

within 10 days of the Agency issuing to Recipient a decision on such Request (Reconsideration 

Determination). These will be Recipient’s only opportunities to do so. 

However, keep in mind that while the Agency may forego one or more of the aforementioned debt 

collection activities pending the issuance of the Agency’s decision(s) on Recipient’s request(s), interest 

and, should the debt become delinquent, penalty and administrative charges, will continue to accrue 

unless and until the debt is paid in full. 

[To request a waiver, Recipient must submit an explanation of why, under the pertinent facts and the 

applicable legal authority, Recipient should be granted a waiver of all or part of the indebtedness. 

Recipient must include any and all supporting evidence but may refer to evidence previously submitted 

in lieu of resubmitting such evidence. This submission must be timely made to the Agency at the 

address specified below for the filing of a Request for Reconsideration. The Agency will consider all 

evidence submitted in a timely manner and, in due course, issue a Reconsideration Determination to 

Recipient and, also, make any retroactive adjustments to the debt and refund any overpayment as may 

be appropriate.] [Insert where applicable.]

To request to enter into a repayment agreement, Recipient must complete and return the Financial 

Statement form [U.S. Department of Justice OBD-500 or OBD-500C for individual or corporate 

recipients, respectively] [Insert appropriate form designation.], enclosed as Exhibit C [D if special 

documents related to the debt are attached as discussed above.], together with a proposed repayment 

schedule or, if Recipient is unable to pay the full amount of the debt, a settlement proposal in lieu of the 
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schedule. This submission must be timely made to the Agency at the address specified below for filing a 

Request for Reconsideration. The Agency will review all information and materials submitted in a timely 

manner and any obtained from other sources (e.g., credit reports), and, in due course, issue a 

Reconsideration Determination to Recipient. 

Request for Reconsideration

Recipient has the right to request that the Agency reconsider this Audit Resolution Determination, 

including providing Recipient with a review of any indebtedness established (Request for 

Reconsideration). If Recipient wishes to exercise this right, Recipient must do so within 60 days of the 

date of this Audit Resolution Determination. This will be Recipient’s only opportunity to do so. 

However, keep in mind that while the Agency may forego one or more of the aforementioned debt 

collection activities pending the issuance of the Agency’s Reconsideration Determination, interest and, 

should the debt become delinquent, penalty and administrative charges will continue to accrue unless 

and until the debt is paid in full. The exception would be if the Agency and Recipient previously entered 

into a written repayment agreement, in which case that agreement would apply. 

To request reconsideration, Recipient must file a Request for Reconsideration containing an explanation 

of why, under the pertinent facts and the applicable legal authority, Recipient disagrees with this Audit 

Resolution Determination. Recipient must include any and all supporting evidence but may refer to 

evidence previously submitted in lieu of resubmitting such evidence. This submission must be timely 

made to the address specified below. The Agency will consider all evidence submitted in a timely 

manner and, in due course, issue to Recipient a Reconsideration Determination and, also, make any 

retroactive adjustments to the debt and refund any overpayment as may be appropriate. 

The original and one copy of a Request for Reconsideration must be timely filed with the Agency at: 

US Department of Commerce

[Operating Unit]

1401 Constitution Avenue, NW, Room _____

Washington, DC 20230

Attn: [Agency Point of Contact]

Contemporaneously with filing such a Request, submit one copy thereof to: 

US Department of Commerce

Office of the Inspector General

Principal Assistant IG for Audit and Evaluation

1401 Constitution Avenue, NW, Room 7721, MS H7721

Washington, DC 20230

Attn: [Name and Title of Appropriate OIG Official]

[Other Rights] [Add when applicable.]
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[Recipient’s spouse may claim his or her share of a joint income tax refund by filing Form 8379 with the 

Internal Revenue Service provided that the spouse is not also delinquent on a debt to the United States.] 

[Add for Individual Recipients.]

[If there are any rights and remedies available to Recipient under programmatic statutory or 

regulatory authority under which the debt arose, state what they are and how they may be exercised. 

Consult with legal counsel respecting such provisions.]

Civil and Criminal Penalties

If you knowingly make or provide any false or frivolous statements, representations or evidence, you 

may be liable for civil penalties under the False Claims Act, as amended, 31 U.S.C. § 3729, et seq., or 

other applicable law; and/or subject to criminal penalties under 18 U.S.C. §§ 286, 287, 1001 and 1002, 

or other applicable law. 

Agency Point of Contact

Please direct any questions regarding this matter and, also, any notice that Recipient has filed 

bankruptcy, to _________, the Agency point of contact, at the address for filing a Request for 

Reconsideration, above, or at (___) ___-____. 

Sincerely,

___________________________________

[Name and Title of Responsible Official]

Enclosures

cc: _____________, Principal Assistant IG for Audit and Evaluation
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15. GRANTS ADMINISTRATION POLICIES AND REQUIREMENTS

At a minimum, operating units, recipients and subrecipients, as applicable, shall comply with the 

policies and requirements outlined below. Additionally, the DOC ST&Cs and Section E, Chapter 2 of this 

Manual outline additional government-wide requirements operating units, recipients and subrecipients 

shall use in the administration of all DOC financial assistance awards. 

A. Anti-Deficiency Act

The Anti-Deficiency Act (31 U.S.C. § 1341) prohibits making or authorizing the making of an 

expenditure or obligation in excess of amounts available or involving the government in an obligation in 

advance of an appropriation unless authorized by law. Because awarding financial assistance is an 

obligation of Federal funds, financial assistance funds may not be awarded by DOC unless the funds are 

currently available in a DOC appropriation or fund. For awards to be funded with amounts transferred 

from another agency, the transfer agreement must be complete prior to approval of the award by DOC. 

Questions concerning the Anti-Deficiency Act should be referred to the OGC General Law Division. 

B. Bona Fide Needs Rule

The bona fide needs rule provides that an appropriation which is limited for obligation to a definite 

period is available only for payment of expenses properly incurred during the period of availability or to 

complete awards properly made within that period (31 U.S.C. § 1502(a)). This rule applies to all 

Government activities carried out with appropriated funds. An agency’s “need” in the grant context is 

to make a grant in furtherance of the goals Congress hoped to achieve when it enacted the grantmaking authority. In this context, the agency’s “need” is to make a grant, and the grantee’s use of grant 

funds has no relevance in the assessment of agency needs. For that reason, a bona fide needs analysis 

in the grant context focuses on whether the grant was made during the period of availability of the 

appropriation charged and furthers the authorized purpose of program legislation. See B-289801, 

December 30, 2002. The determining factor is that the grants, at the time of award, further the 

objective of the grant legislation. 

C. Conflicts of Interest

It is the policy of DOC to maintain high standards of conduct to prevent real or apparent conflicts of 

interest in connection with awards. A conflict of interest exists when a person participates in a matter 

which is likely to have a direct and predictable effect on his or her personal or financial interests. A 

conflict also exists where there is an appearance that a person’s objectivity in performing his or her 

responsibilities is impaired. An appearance of impairment of objectivity could result from an 

organizational conflict where, because of other activities or relationships with other persons or entities, 

a person is unable or potentially unable to render impartial assistance or advice to the government. A 

conflict of interest could also result from non-financial gain to the individual, such as benefit to 

reputation or prestige in a professional field. Conflicts could inadvertently occur as program officials 

carry out their responsibilities during the evaluation and selection process, during the review process, 

and as recipients carry out their responsibilities under awards. Conflicts of interest should be avoided, 

but if they are discovered, they should promptly be resolved through disqualification, divestiture, waiver 

or other appropriate measures. Several requirements are applicable to the activities of individuals and 

organizations in the context of financial assistance. 

1. Federal Employees
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a. Under a criminal statute (18 U.S.C. § 208) and Government-wide Standards of Conduct (5 

CFR Part 2635), a Federal employee may not participate in an official capacity in a matter which is 

likely to have a direct and predictable effect on his or her financial interests. An employee also 

should not participate in the evaluation or selection process in any circumstance where his/her 

participation would create the appearance of loss of impartiality, including situations in which one 

of the parties is, or is represented by, a member of the employee’s household, the employee’s 

relative or a person with whom the employee has or is seeking business relations. Any situation 

which creates an actual conflict or the appearance of a conflict should be brought to the attention of 

the Program Officer for appropriate action. Depending on the particular circumstance, resolution 

may consist of disqualification, divestiture, waiver, or other appropriate measures. 

b. In addition to these restrictions, Federal employees should not participate in any activities 

that would result in providing any person or organization a competitive advantage. For example, an 

employee, other than as part of his or her official duties, should not assist an applicant for a 

competitive financial assistance program with the preparation of a proposal to be submitted to the 

employee’s agency. Additionally, an employee, other than as part of his or her official duties, may 

not submit applications for financial assistance to DOC on behalf of any other person or entity. 

2. Review Panel Members. In order to ensure the integrity of the application review process, it is 

essential that reviewers be free from actual or apparent conflicts of interest or appearance of 

impairment of objectivity. In order to identify the existence of a conflict of interest, program officials 

must provide each reviewer with a certification form which sets forth standards for determining the 

existence of a conflict of interest and requires the reviewer to notify the Program Officer of any 

potential or actual conflicts. When a conflict or potential conflict of interest is identified, it must be 

resolved by the Program Officer through appropriate action, such as disqualification, divestiture, or 

waiver.

D. Consulting Services

Grants and cooperative agreements are not to be used as legal instruments for consultant services 

for the purpose of performing in-house organizational studies or other studies for internal government 

use unless allowed by statute.

E. Coordination with DOC and Other Federal Agencies

In order to address duplication of effort in work under DOC awards, projects will be coordinated as 

appropriate with other Federal agency programs, as well as with other operating units within DOC. 

Appropriate coordination shall be conducted for any project whose scope of work overlaps, relates to, 

or duplicates the program mission of another Federal program before an award is approved for funding. 

The DOC supports interagency programs to provide support for research and other programs. It is, 

therefore, sometimes necessary to accommodate the requirements of partner agencies in awards. DOC 

will be as flexible as possible in consideration of partner agency needs for application requirements, 

review and selection procedures and final award notifications. As long as DOC policies and procedures 

are followed, the administration of interagency programs involving DOC may include requirement 

elements from other Federal agencies. In cases where funds are transferred from other Federal 

agencies, documentation of agreements, including but not limited to, any agreements pursuant to the 

Economy Act or Memoranda of Understanding/Agreement, must be included in award files.
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F. DOC Forms

DOC grants administration forms approved for use with grants and cooperative agreements are 

listed below. Operating units must ensure that these are the forms used for their prescribed purposes.

These forms are in addition to any government-wide Standard Forms (SF). 

1. Form CD-450 - Financial Assistance Award 

2. Form CD-451 - Amendment to Financial Assistance Award 

3. Form CD-478 - Federal Assistance Information Sheet 

4. Form CD-511 - Certifications Regarding Lobbying 

5. Form CD-512 - Certification Regarding Lobbying – Lower Tier Transactions 

6. Form CD-571 - Reviewer Conflict of Interest and Confidentiality Certification for NonGovernmental Peer Reviewers 

G. Freedom of Information Act (FOIA)

The Freedom of Information Act (FOIA) (5 U.S.C. § 552) generally provides that any person has a 

right of access to Federal agency records, except to the extent that such records (or portions thereof) 

are protected from disclosure by exemptions. The DOC regulations implementing the FOIA are found at 

Subpart A of 15 CFR Part 4 (Disclosure of Government Information) which sets forth rules for DOC and 

operating units to make requested materials, information, and records publicly available under FOIA. 

Unless prohibited by law and to the extent permitted under the FOIA, contents of applications and 

proposals submitted by successful applicants may be released in response to FOIA requests. In addition, 

2 CFR § 200.315 (Intangible property) requires that research data relating to published research findings 

produced under an award that were used by the Federal Government in developing an agency action 

that has the force and effect of law will be made available to the public through the procedures 

established under the FOIA. 

H. Management and Institutional Grant Reviews

1. Management Reviews. OAM will conduct reviews to evaluate the internal grants administration 

policies and procedures of the operating units, including field or remote locations. NIST, NOAA, and EDA 

grants operating units will be evaluated once every three years. More frequent reviews will be 

scheduled when justified by operational issues. At a minimum, the review team should include 

members from the OGC as well as knowledgeable representatives from operating units other than the 

unit under review. The scope of the review will include but not be limited to compliance with applicable 

public laws, regulations, OMB circulars, this Manual, and internal grants administration policies of the 

operating unit. The review team’s report will be sent to the operating unit for comment prior to 

publication. 

2. Reviews of Institutional Grant Awards. Each financial assistance program that has been

authorized by the Grants Officer to make institutional awards must establish procedures in consultation 
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with the Grants Officer for an independent review and evaluation of the program and/or the 

institutional awards, the performance of the institutional award recipients, and the effectiveness of the 

program and of the recipients in meeting the objectives and goals of the program. At least once every 

five years a review must be conducted and the results of the review, including any findings and 

recommendations, shall be submitted to the Grants Officer in a timely manner, with a copy of the report 

provided to OAM, as appropriate. 

I. Privacy Act

The Privacy Act (PA) (5 U.S.C. § 552a) provides an individual with a legal right to access records 

about herself or himself (subject to exemptions) and the right to request amendment of any record in 

that individual’s PA file that is inaccurate, irrelevant, untimely, or incomplete. The PA also prohibits the 

unauthorized disclosure of PA protected information. The DOC’s regulations implementing the PA are 

found at Subpart B of 15 CFR Part 4 (Disclosure of Government Information).

J. Recipient Name Change

A recipient organization may decide to change its legal name without changing any other aspect of 

the award (e.g., there are no asset or ownership changes). In this instance, the Grants Officer should 

direct the recipient to provide documentation of the name change, such as a copy of a certificate from a 

Secretary of State verifying the change for an incorporated party. If the name change is implemented by 

common law rather than by legal action, the Grants Officer may instead accept an attestation by the 

Chief Executive Officer, President, or equivalent official of the organization, stating that the change 

occurred. The Grants Officer will amend the award to reflect the new name.

K. Requests for Prior Approval

When a recipient is required to obtain approval before taking certain actions with respect to a grant 

or cooperative agreement, the Grants Office shall provide a decision in writing to the recipient within 30 

days of receipt by the awarding agency. If a decision cannot be made within 30 days, the office holding 

the request must acknowledge receipt and inform the recipient in writing within 30 days when a 

decision can be expected. 

L. Statutory Authority

Each financial assistance proposal must be awarded under the proper authorizing statute. The 

Federal Grant and Cooperative Agreement Act (31 U.S.C. §§ 6301-6308) does not provide legislative 

authority to fund financial assistance awards. It merely provides the basis for selecting the appropriate

funding instrument.

M. Transfer of Award

In certain circumstances, the Program Officer, Grants Officer and the recipient may agree that it 

would be in the best interests of the government and the recipient for an award to be transferred by 

DOC to a replacement recipient. 

1. When the two organizations, the Program Officer and the Grants Officer agree that it is in the 

best interests of the Federal Government and the intended beneficiaries of the award to allow the 

transfer, the Grants Officer will amend the award to transfer it to the new recipient organization. In 

such cases, the Program Officer must submit a request to the Grants Officer to change recipients. The 
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request shall include documentation attesting to the original recipient’s and proposed replacement 

recipient’s consent to the proposed transfer. Such documentation should include a written agreement 

between the original recipient and the proposed replacement recipient executed by authorized 

representatives of both parties. In this instance, the organization relinquishing the award will be liable 

for all programmatic activities and all funds expended under the award prior to the effective date of the 

transfer. The relinquishing organization will be responsible for all closeout activities, including having an 

audit performed, if required, for the award prior to the effective date of the transfer. The organization 

to which the award is transferred must submit an application (if appropriate) which includes a proposal 

and detailed budget narrative (a maximum of an original and two copies may be required by the Federal 

awarding agency). The following forms must also be submitted, as applicable: Forms SF-424, SF-424A, 

SF-424B, SF-424C, SF-424D, CD-511, SF-LLL, or any other approved program specific forms. The Program 

Officer will review all documents and make a recommendation as to the applicant’s adequacy to meet 

program requirements which will be forwarded to the Grants Office along with the request. This review 

will be the same as the review of any new application, including a responsibility check on the applicant, 

unless that function is performed by the Grants Office. The language in the amendment must clearly 

delineate the responsibilities of both parties to the transfer. The Grants Officer will consult with the 

FALD on the legal merits of the proposed transfer.

2. Novation Agreement. A novation occurs when one organization takes over all of the liabilities 

and responsibilities of another organization. This might occur as a result of a merger, one organization 

buying another, an organization going out of business and entering into an agreement with another 

organization to take over its business, or a variety of other reasons. 

a. When an organization seeks to transfer an award to another organization as a result of a 

novation agreement, the two organizations should submit a proposed novation agreement to the 

Grants Officer, signed by the CEOs, Presidents, or equivalent fiduciary officers of the two 

organizations. The novation agreement should state that all rights, duties and obligations of the 

award are transferred without further claim and that the new recipient agrees to accept them. 

Furthermore, the new recipient must meet statutory and regulatory eligibility requirements. In the 

case of successor-in-interest organizations, the recipient shall submit relevant documentation 

reflecting the relationship between the recipient and the successor organization.

b. The Grants Officer will consult with the FALD on the legal merits of the proposed novation. 

If the novation is determined to be in order, the Grants Officer will request that the proposed new 

recipient submit an application and an amended proposal (if appropriate) to effect the change in 

award recipient. The application must include an original proposal and detailed budget narrative (as 

well as two copies if required by the Federal awarding agency). The following forms must be 

submitted, as applicable: Forms SF-424, SF-424A, SF-424B, SF-424C, SF-424D, SF-511, SF-LLL, or any 

other approved program specific forms. The Grants Officer will then obtain a review and written 

recommendation regarding the proposed novation from the Program Officer as to the 

programmatic efficacy of the proposed agreement. The Program Officer should examine whether 

the scope of work has changed or if there are other issues arising that would put the initial 

competitive selection in jeopardy because of differences between the original and the new recipient 

and review any related budgetary changes. The Grants Officer must make a responsibility 

determination regarding the new recipient. If the Grants Officer then determines that the award 

should continue, he/she will issue an amendment to the award to effect the transfer to the 

subsuming organization. 
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N. Transfer of Funds

When other agencies transfer funds to DOC for financial assistance programs, DOC must generally 

comply with legislative requirements imposed on the transferred funds (e.g., restrictions contained in a 

transferring agency's appropriation act and/or authorization act). If a statute places specific 

requirements on funds, those requirements generally remain with the funds upon transfer. When there 

is a specific limitation or requirement placed on the funds transferred by law of such transferring 

agency, the DOC award may have to include that limitation or requirement along with DOC terms and 

conditions, as appropriate. It is also possible that DOC may have legislation or requirements applicable 

to funds transferred to it and such requirements would need to be noted in the specific award 

conditions, as appropriate.

[Note: When DOC provides Federal funds to another Federal agency that is administering a 

collaborative project with the Department, the agreement governing that transfer of funds must 

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a 

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

O. Waivers and Deviations

Any request for waivers and/or deviations from the requirements of this Manual must be submitted 

in writing to the Director, OAM, by the Head of Operating Unit or designee. The request must include a 

full explanation of the reason for the request and justification for the deviation or waiver. OAM will 

review the request, coordinate its review with OGC and other appropriate offices, and provide a 

response in accordance with Chapter 4 of this Manual. Requests for waivers and deviations from the 

requirements will be approved only in extraordinary circumstances and when such approval will be in 

the best interest of the Federal Government. Proposed deviations from DOC regulations (e.g., uniform 

administrative requirements) may require that OAM seek prior approval from OMB. 
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16. CONSTRUCTION AWARDS

A. Purpose

This chapter applies when activities under a DOC award involve construction, as described in Section 

C. below. Construction awards are primarily made by three operating units within DOC: EDA, NOAA and 

NIST. This chapter describes the procedures for compliance, reporting, record-keeping, and 

administrative requirements that generally apply to DOC construction awards. Contact the specific 

operating unit for more operating unit-specific information and also see Appendix A (Applicable 

Regulations, OMB Circulars and Agency-specific Guidance) to this chapter for applicable authorities and 

for specific operating unit requirements. Also, when an appropriations statute or other direct statutory 

authority requires an operating unit to provide Federal assistance for a specific project or to a specific 

organization or individual, FALD should be consulted to determine which provisions of this chapter 

apply. 

B. Authority

Construction activity is allowable only when program legislation includes specific authority for 

construction and/or when the DOC operating unit specifically authorizes construction activity.

C. Scope of Chapter

1. Construction. This chapter applies to an award in which the primary purpose of the project or 

program is construction, such as the construction of new buildings, completion of shell space in existing 

buildings, renovation or rehabilitation of existing buildings, and construction or development of real 

property infrastructure improvements (e.g., site preparation, utilities, streets, curbs, sidewalks, parking 

lots, other streetscaping improvements, etc.). 

2. Construction vs. Alterations. An award is generally considered a construction award when the 

primary purpose of the DOC financial assistance is to support construction activities, as defined in this 

chapter. In contrast, alteration activities incidental to the primary purpose of an award is generally not 

considered to constitute a construction award under this chapter. For example, if the primary purpose 

of an award is to allow a recipient to conduct educational or business seminars, the renovation of an 

educational exhibit or staging area would not be considered construction under this chapter.

D. Policy

1. Grant Recipients as Trustees and the Federal Interest in Grant-Acquired Property. Property that 

is acquired or improved, in whole or in part, with Federal assistance is held in trust by the recipient for 

the purpose(s) for which the award was made and for the estimated useful life of the project, during 

which period the DOC operating unit retains an undivided equitable reversionary interest in the 

property (the Federal Interest). Under the United States Constitution (Article I, Section 8, Clause 1), 

Congress has the power to appropriate Federal funds. Incident to this power is the right “to further 

broad policy objectives by conditioning receipt of those Federal moneys upon compliance by the 

recipient with Federal statutory and administrative directives.” South Dakota v. Dole, 483 U.S. 203, 207, 

quoting Fullilove v. Klutznick, 448 U.S. 448, 474 (1980). See also Article IV, Section 3, Clause 2, regarding 

Congress' power to make rules regarding property of the United States. The requirement that property 

purchased or improved with Federal funds continue to be used for the original statutory purpose for 
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which it was acquired is embodied in the Uniform Guidance at 2 CFR §§ 200.310 (Insurance coverage) -

.316 (Property Standards).

The U.S. Government Accountability Office explains the “Federal Interest” concept in Principles of 

Federal Appropriations Law, 3d Ed., Vol. II, Ch. 10, Pt. D (2006):

[A] grantee holds grant funds, and property purchased with those funds, in the capacity of a trustee. 

For example, in Joliet-Will, 847 F.2d at 432 [In re Joliet-Will County Community Action Agency, 847 

F.2d 430 (7th Cir.1988)], the court held that the grantee was essentially “a trustee, custodian, or 

other intermediary, who . . . is merely an agent for the disbursal of funds belonging to another,” and 

that the grantee's ‘ownership’ was nominal, like that of a trustee. The trust concept finds support in 

an early Supreme Court decision, Stearns v. Minnesota, 179 U.S. 223 (1900), a land grant case in 

which the Court discussed the grant in trust terms.

Accordingly, the recipient holds grant funds and DOC-financed property in trust to serve the purpose of 

the operating unit’s program for which the Financial Assistance Award was made. The recipient's 

obligation to the Federal Government continues for the estimated useful life of the project, as 

determined by the operating unit. If it is determined that a recipient is failing to meet this obligation, 

the operating unit may assert its equitable reversionary interest in the project. However, the operating 

unit’s non-assertion of its interest does not constitute a waiver thereof.

2. Eminent Domain. In making a discretionary award for a construction project, the operating unit 

will consider the policy on eminent domain set out in Executive Order 13406, (Protecting the Property 

Rights of the American People, June 28, 2006). As appropriate, the terms and conditions of the award 

will include appropriate provisions to ensure that the recipient agrees:

a. Not to use any power of eminent domain available to the recipient (including the 

commencement of eminent domain proceedings) for use in connection with the project for the 

purpose of advancing the economic interests of private parties;

b. Not to accept title to land, easements, or other interest in land acquired by the use of any 

power of eminent domain for use in connection with the project for such purposes; and 

c. Any use of the power of eminent domain to acquire land, easements or interests in land, 

whether by the recipient or any other entity that has the power of eminent domain, in connection 

with the project without prior written consent of the operating unit constitutes an unauthorized 

activity and/or use of funds under the award, and subjects the recipient to appropriate enforcement 

action by the Grants Officer, including but not limited to the disallowance of award costs and the 

termination of an award.

E. General Requirements

The following sections of this chapter contain requirements that are applicable to construction 

awards that originate in all Department operating units. The Appendices contain requirements specific 

to NOAA and EDA construction awards.

1. Recipient Responsibilities.
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a. The recipient is responsible for complying with all Federal laws and regulations, 

Departmental policies, Executive Orders, and Office of Management and Budget (OMB) Circulars 

that are referenced in the Terms and Conditions, each as may be amended. These may include 

environmental requirements, applicable Federal cost principles and administrative, audit, 

programmatic, financial, and property management requirements. The recipient is responsible for 

supervising the design, bidding, construction, and operation of construction projects in compliance 

with the terms and conditions of an award, including requirements incorporated by reference into 

an award. 

b. The operating unit will assist the recipient by providing information and guidance on the 

Federal requirements for each award, such as the information contained in this chapter, the 

references and forms listed in the Appendix (Section I), and direct guidance and assistance provided 

by operating unit project managers. 

c. The Financial Assistance Award. The recipient should pay particular attention to the 

following portions of the Financial Assistance Award:

(1) The scope and description of the project as set forth in the award documents;

(2) All Federal requirements specifically listed or incorporated into the award that describe 

applicable Federal administrative requirements. These publications provide critical information on 

procurement, record-keeping, and cost principles, as well as other important administrative issues. 

Reprints of critical documents are available as indicated in the Appendix (Section I);

(3) The specific standard terms and conditions of the Financial Assistance Award applicable to 

the construction project; and

(4) Any specific award conditions, which may contain conditions that must be satisfied prior to 

advertisement for bids, start of construction, disbursement of grant funds, or other critical events, 

as well as conditions that extend for the duration of the estimated useful life of the project. 

Failure of a recipient to satisfy the terms and condition of an award may result in appropriate 

enforcement action by the Grants Officer, including but not limited to the disallowance of costs, 

or suspension or termination of the award and recovery of federal funds. In addition, such 

failure may have a negative impact on the recipient’s ability to receive future funding from the 

Department. Special attention should be paid to the project development time schedule, which 

may only be extended as a result of a written request from the recipient for an amendment to 

the award and a corresponding written approval from the operating unit. The disbursement of 

grant funds for project activities (not including award closeout activities) is not permitted when 

a project has exceeded the time schedule unless the operating unit has given written approval 

for a time schedule extension. 

2. Operating Unit’s Responsibilities. 

a. Pre-award Requirements. In preparing documentation for a financial assistance award for a 

construction project, the Program Officer should be familiar with the following requirements:
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(1) Forms. Unless the operating unit uses other OMB-approved forms for construction,

operating units shall use Form SF-424 (Application for Federal Assistance), Form SF-424C (Budget 

Information – Construction Programs), and Form SF-424D, (Assurances – Construction Programs), 

when the primary purpose of a project or program is construction or real property development.

(2) Construction Terms. For EDA construction awards, the below terms in subparagraphs (2)(a) 

– (h) or substantively similar terms shall be included in all awards. For construction awards of other 

DOC operating units, the below terms in subparagraphs (2)(a) – (h) or substantively similar terms 

shall also be required, except that the Grants Officer may provide an alternative means of providing 

public notice of the Federal Interest under subparagraph 2(b) below or, as warranted by the 

circumstances of a particular award, may forego the filing of a public notice of the Federal Interest

but this does not alter the trust relationship by which the recipient holds title (see 2 CFR § 200.316 

(Property trust relationship)). In this connection, requiring a recipient to provide public notice of the 

Federal Interest in DOC construction projects is a highly encouraged practice and should be required 

by the operating unit Grants Officer whenever feasible considering the totality of circumstances 

surrounding a specific construction project or group of similarly situated construction projects. 

(a) Maintenance. The recipient agrees that, for the estimated useful life of the facility funded 

with this award, the project will be properly and efficiently administered, operated, and maintained 

for the purpose authorized by this award and in accordance with the terms, conditions, 

requirements, and provisions of the award. If the [operating unit] determines at any time during the 

estimated useful life of the project, that the project and any project property is not being properly 

and efficiently administered, operated, and maintained, the [operating unit] shall have the right to 

terminate this award for cause and pursue any other remedies allowed by law. See 2 CFR § 200.311 

(Real property).

(b) Notice of Federal Interest. The recipient shall execute a covenant, property management 

agreement, mortgage or other statement of the Federal Interest in real property acquired or 

improved, in whole or in part, under a DOC financial assistance award, acceptable in form and 

substance to the operating unit, which must be placed of record in accordance with local law, with 

continuances (for fixture filings) and amendments filed as appropriate. The recipient must provide 

the operating unit with a written statement from a licensed attorney in the jurisdiction where the 

property is located certifying that the covenant, mortgage or other statement of the Federal Interest 

has been properly executed and duly recorded, as required under the award and in accordance with 

local law. The attorney’s statement, along with a copy of the instrument reflecting the recordation 

of the Federal Interest, shall be returned to the Grants Officer. The recipient may not dispose of, 

modify the use of, or change the terms of the real property title, or other interest in the project site 

and facilities without permission and instructions from the operating unit. No funds under this 

award shall be released until the recipient has complied with this provision, unless other 

arrangements satisfactory to the operating unit are made.

(c) Compliance. The recipient shall comply, and must require each subrecipient or contractor, 

including lower tier subrecipients or subcontractors, to comply with all applicable Federal, state, and 

local laws and regulations.
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(d) Energy Efficiency. The recipient shall apply, where feasible, sustainable, and energy 

efficient, design principles for the purpose of reducing pollution and energy costs and optimizing 

lifecycle costs associated with the construction.

(e) Signs. The recipient is responsible for constructing, erecting, and maintaining in good 

condition throughout the construction period a sign(s) satisfactory to the operating unit that 

identifies the project and indicates that the project is federally funded. The operating unit also may 

require that the recipient maintain a permanent plaque or sign at the project site with the same or 

similar information.

(f) Land, Easements, and Rights of Way. The recipient must disclose all pre-existing or 

contemplated encumbrances to the operating unit as they pertain to real property that will be 

acquired or contributed by a recipient or subrecipient pursuant to a DOC construction award. The 

operating unit will not accept any encumbrance that interferes with the construction, intended use, 

operation, or maintenance of, or the Federal Interest in, the project during its estimated useful life. 

Unless otherwise provided for in the award, prior to grant of the award and commencement of 

construction, or when requested by the operating unit, the recipient must furnish evidence, 

satisfactory in form and substance to the operating unit, that title to real property is vested in the 

recipient, and that it has obtained any rights-of-way, easements, State and local government 

permits, long-term leases, or other property interests. FALD should be consulted to the extent that 

a Grants Officer or Operating Unit has questions relative to a recipient’s title interest in project 

property, whether a recipient has secured the requisite licenses, permits or other property interests 

for a project, or with respect to the nature and impact of any pre-existing or competing 

encumbrances to project property.

(g) Relocation Assistance. The provisions of the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970, as amended, (Pub. L. No. 91-646; 42 U.S.C. § 4601 et seq.), 

are applicable to each recipient of assistance from an operating unit. This Act provides assistance to 

persons, businesses, or farm operations affected by the acquisition, rehabilitation or demolition of 

real property acquired for a project financed wholly or in part with Federal assistance funds. It also 

requires compliance with specific guidelines pertaining to reimbursable costs incidental to such land 

acquisition. 

(h) Tribal Employment Rights Ordinances. In accordance with Departmental policy, all 

operating units must recognize Tribal Employment Rights Ordinances (TEROs), which may provide 

for preferences in contracting and employment, in connection with its financial assistance awards. 

Tribal ordinances requiring preference in contracting, hiring, and firing and the payment of a TERO 

fee are allowable provisions under Federal awards and should be incorporated by the operating unit 

under its grants and contracts with American Indian and Alaska Native tribal governments. The 

payment of the TERO fee, which supports the tribal employment rights office to administer the 

preferences, should generally be allowable as an expense that is “necessary and reasonable for 

proper and efficient performance and administration” of an award, as provided under the applicable 

cost principles set out in 2 CFR Part 200, Subpart E.

b. Post-award Requirements. The Grants Officer, in consultation with the Federal Program 

Officer, should ensure that construction awards contain appropriate post-award terms and 

conditions to help ensure the successful completion of the project by the recipient, as well as the 
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protection and maximization of the DOC investment in the recipient’s project. In this connection, 

below is a non-exhaustive list of post-award requirements for a Grants Officer and for Federal 

Program Officer to consider in developing appropriate terms and conditions for a construction 

award. 

(1) Recipient Documentation. At a minimum, the recipient’s records must fully disclose: (a) all 

project expenditures, (b) procurement actions, (c) compliance with the Terms and Conditions of the 

Financial Assistance Award, and (d) contractor compliance with applicable Federal requirements, 

and (e) such other records as identified in 2 C.F.R § 200.333 (Retention Requirements for Records), 

or in the terms and conditions of an award. 

The operating unit needs to review documentation submitted by the recipient, ensure that all 

such documentation is complete, accurate and complies with all applicable award requirements, 

and, in consultation with the Grants Officer, ensure that any necessary or appropriate follow-up 

actions are taken. 

(2) Reporting of Project Progress. Progress reports shall be due from the recipient on a regular 

basis and shall, at minimum, contain the following information: 

(a) A comparison of actual accomplishments to the schedule established in the award;

(b) Reasons for delays in those cases where the schedule approved by the operating unit was 

not met;

(c) Any change to the purpose, nature, location, bona-fide need, neighborhood served, size, 

funding, or cost of the project;

(d) All change orders issued up to the date of the report and not previously reported to the 

operating unit; and

(e) Other pertinent information including, when appropriate, an analysis and explanation of the 

cost overruns or high unit costs.

In addition, between the required reporting dates, events may occur, such as problems, delays, 

or adverse conditions, that will materially affect the ability of the recipient to attain program 

objectives, prevent time schedules and goals from being met, or preclude the attainment of project 

work units by established time periods. The recipient shall be required to inform the operating unit 

as soon as possible of any event which has or that is expected to have a material impact on the 

project, including any favorable developments that enable the recipient to meet time schedules and 

goals sooner than anticipated or produce more work than originally projected. The recipient must 

notify the operating unit of such events in the most expeditious way possible and then, if the 

original notification was not in writing, provide the operating unit with written notification, including 

a statement of the event or issue, a statement of the course of action contemplated to resolve the 

matter, and any Federal assistance needed to resolve the situation. The operating unit will review 

and respond appropriately to documentation disclosing these events. 
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(3) Pre-Construction Documentation. The operating unit reviews documentation regarding the 

following:

(a) Environmental Compliance. The operating unit must ensure that environmental project 

reviews are conducted in accordance with the requirements of the National Environmental Policy 

Act of 1969, as amended (Pub. L. No. 91-190; 42 U.S.C. § 4321 et seq., as implemented under 40 CFR

chapter V) (NEPA), when the award activities remain subject to Federal authority and control, and all 

other Federal environmental statutes, regulations and Executive Orders, as listed in the Terms and 

Conditions to the award. These authorities include the implementing regulations of NEPA, which 

require the operating units to provide public notice of the availability of project-specific 

environmental documents, such as environmental impact statements, environmental assessments, 

findings of no significant impact, and records of decision, as specified in 40 CFR § 1506.6(b).

(b) Civil Rights Compliance. Discrimination by a grant recipient is prohibited in accordance with 

the following authorities:

(i) Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000d et seq.) and the 

Department’s implementing regulations at 15 C.F.R Part 8;

(ii) 42 U.S.C. § 3123 and 42 U.S.C. § 6709 (for EDA recipients), and the Department’s 

implementing regulations at 15 CFR §§ 8.7-8.15;

(iii) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794) and the 

Department’s implementing regulations at 15 CFR Part 8b. For purposes of complying with the 

accessibility standards set forth in 15 CFR § 8b.18(c), non-federal entities must adhere to the 

regulations, published by the U.S. Department of Justice, implementing Title II of the Americans with 

Disabilities Act (ADA) (28 CFR Part 35; 75 FR 56164, as amended by 76 FR 13285) and Title III of the 

ADA (28 CFR Part 36; 75 FR 56164, as amended by 76 FR 13286). The revised regulations adopted 

new enforceable accessibility standards called the “2010 ADA Standards for Accessible Design” 

(2010 Standards), which replace and supersede the former Uniform Federal Accessibility Standards 

for new construction and alteration projects. See also Section K.01.a.4. of the DOC Financial 

Assistance Standard Terms and Conditions (December 26, 2014) and Chapter 15.C.3. of this Manual;

(iv) The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.) and the 

Department’s implementing regulations at 15 CFR Part 20; 

(v) The Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) prohibiting 

discrimination on the basis of disability under programs, activities, and services provided or made 

available by State and local governments or instrumentalities or agencies thereto, as well as public 

or private entities that provide public transportation; and

(vi) Other non-discrimination Federal statutes, regulations, and Executive Orders, as applicable.

(4) Project Management Conference. Shortly after approval of the award, the operating unit 

may contact the recipient to arrange a project management conference. The purpose of the project 

management conference is to explain to the recipient its post-approval responsibilities for 

administration of the award, including its responsibilities with respect to the Terms and Conditions 
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of the award and applicable Federal requirements. Whenever practical, the project management 

conference should be held where appropriate operating unit regional office personnel will be 

available. The recipient’s authorized representative, architect/engineer, attorney, and possibly the 

recipient’s financial representative should attend.

(5) Architect/Engineer Agreement. 

(a) The recipient’s architect/engineer agreement shall provide for all services required by the 

recipient for the design and engineering phases of the project. Appropriate standards, guidance, or 

forms developed by professional organizations, such as the American Consulting Engineers Council 

(ACEC), American Society of Civil Engineers (ASCE), National Society of Professional Engineers 

(NSPE), and/or the American Institute of Architects (AIA) may be used where the recipient does not 

have standard procurement documents.

(b) The recipient must select the architect/engineer in accordance with the procurement 

standards set forth in 2 CFR §§ 200.317 (Procurements by states) through 200.326 

(Contract provisions). The “cost-plus-percentage-of-cost” and “percentage-of-cost” methods of 

contracting are specifically prohibited. See 2 CFR § 200.323(d).

(c) The architect/engineer agreement shall cover all services necessary for the successful 

execution of the project, including consultations, surveys, soil investigations, supervision, travel, “asbuilt” or record drawings, arrow diagram (CPM/PERT) where applicable, and incidental costs. 

Regardless of who furnishes the construction inspector, the architect/engineer shall be held 

responsible for making sufficient visits to the project site to determine if the work is proceeding in 

accordance with the approved plans and specifications.

(d) All architect/engineer contracts awarded by the recipient shall include a provision to the 

effect that the recipient, the operating unit, the Comptroller General of the United States, the 

Inspector General of the Department of Commerce (OIG), or any of their duly authorized 

representatives, shall have access to any paper or electronic documents, books, correspondence, 

and records of the architect/engineer that are pertinent to the award in order to verify the 

recipient’s compliance with award requirements. See also 2 CFR § 200.336, (Contract provisions) for 

a listing of the required provisions for contracts awarded by recipients pursuant to a DOC financial 

assistance award (including construction awards). 

(6) Early Construction Starts. In order for project costs to be eligible for reimbursement by the 

operating unit, the operating unit must determine that all contracts necessary for design and 

construction of the project facilities have been awarded in compliance with the Terms and 

Conditions of the award. If construction commences prior to the operating unit’s determination, 

the recipient proceeds at its own risk and at the risk of not being reimbursed by DOC for such 

activities, unless and until the operating unit’s review and concurrence. 

(7) Requirements during construction.

(a) At a minimum, during construction, the recipient is responsible for:

(i) Ensuring project completion in accordance with approved plans and specifications;
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(ii) Monitoring project progress and reporting progress to the operating unit;

(iii) Providing for required construction permits and adequate construction inspection;

(iv) Promptly paying costs incurred for the project purposes, including appropriate bonding 

costs and insurance premiums;

(v) Monitoring contractors’ compliance with Federal, State, and local requirements; and

(vi) Constructing and maintaining in good condition throughout the construction period, of a 

sign or signs, at the project site in a conspicuous place indicating that the Federal Government is 

participating in the project. 

(8) Scheduling Inspection for Final Acceptance. The recipient will schedule a final inspection 

when all construction has been completed, the architect/engineer has conducted a final inspection, 

and any deficiencies have been corrected. Representatives of the recipient, the architect/engineer, 

and the contractor(s) will make the final inspection. The operating unit must be given advance 

notice of the final inspection so that a representative of the operating unit may participate.

(9) Change Orders. 

(a) The recipient shall submit all contract change orders for review and for approval by the 

operating unit even if the operating unit is not participating in any costs associated with the change 

or if the contract price is to be reduced. Necessary supporting statements, estimates, specifications, 

and plans should be attached. Absent express legal authority, the operating unit may not approve 

change orders that change the purpose and intent (the scope) of the project. Change orders that 

minimally or incidentally increase the cost of the project, but do not change the project scope, may 

be approved by the operating unit, provided that either:

(i) The recipient has agreed in writing to fund the additional cost, in which case all work to 

effect the change order will be an ineligible project cost and no federal funds will be used to pay for 

it; or

(ii) There are sufficient funds remaining in the project budget to cover the change order 

without jeopardizing the completion of the project.

(b) Unit prices are often used as a basis on which to make a contract award. In addition, they 

may be used for establishing actual costs where actual quantities differ from estimated quantities. 

Variations will normally require a change order to the contract whether or not a change in unit price 

is involved. Any increase in quantity that will result in an overall project cost overrun will require a 

change order to the contract. Any change to a unit price shown in the contract documents will 

require a change order to the contract. A change order may also be required at project completion 

to establish final quantities for unit price contracts. 

(10) Specific Requirements for Contractors and Subcontractors. The recipient is responsible for 

ensuring that it includes applicable DOC compliance provisions, as contained in the Terms and 
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Conditions of the award, including the contract provisions required by 2 CFR§ 200.326 (Contract 

provisions), in all contracts let by the recipient under a DOC construction award. The recipient is 

also responsible for ensuring that, in turn, each contractor under a DOC construction awards 

includes the applicable DOC compliance provisions in all subcontracts awarded under the prime 

contract. Additionally, the recipient must ensure that each contractor and subcontractor agrees to 

comply with all applicable Federal, state, and local requirements pertaining to the project.

(11) Services Performed by the Recipient’s Own Forces.

(a) The recipient may have a portion or all of the design, construction, inspection, legal services, 

or other work or services in connection with the project performed by personnel who are employed 

by the recipient either full-time or part-time (“in-house” or “force account” construction). If the 

recipient elects to use force account labor, the operating unit will furnish specific guidance to the 

recipient that must be followed for the cost for such work to be eligible for reimbursement from the 

operating unit.

(b) The operating unit must review and approve the recipient’s plan if this method is to be 

elected by the recipient.

(c) Due to the difficulty in monitoring in-house construction and the limited staff available to 

Operating Units to perform the monitoring, in-house construction is strongly discouraged. 

Generally, the in-house method of construction may only be approved if:

(i) The recipient has a special skill required for the construction (e.g., construction of unique 

Indian structure); or

(ii) Substantial cost savings can be demonstrated; or

(iii) The Operating Unit Engineer/Construction Manager or Project Officer is satisfied that the 

recipient has made all reasonable efforts to obtain a contractor, but has failed to do so because of 

uncontrollable factors (such as the remoteness of the site combined with a small contract or an 

overabundance of construction work in the project area); or

(iv) It has been determined by the Operating Unit that special circumstances require its use to 

successfully complete the project.

(12) Contracting Standards.

(a) In General.

(i) States. When procuring property and services under a Federal award, a State must follow 

the same policies and procedures it uses for procurements from its non-Federal funds. A State must 

comply with 2 CFR § 200.322 (Procurement of recovered materials) and ensure that every purchase 

order or other contract includes any clauses required by 2 CFR § 200.326 (Contract provisions). See

2 CFR § 200.317 (Procurements by states).
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(ii) Other Non-Federal Entities. All other non-Federal entities, including subrecipients of a 

State, must follow 2 CFR §§200.318 (General procurement standards) through 200.326 (Contract 

provisions), which are outlined below. 

(b) General Procurement Standards. The recipient shall adhere to the procurement standards 

contained in 2 CFR § 200.318 (General procurement standards). In particular, the recipient shall 

make awards only to responsible contractors that possess the ability to perform successfully under 

the terms and conditions of a proposed procurement. Additionally, the recipient must maintain a 

written code of conduct, which shall govern the actions individuals, such as any officer, employee or 

member of the board of directors or other governing board of the recipient, including any other 

parties that advise, approve, recommend or otherwise participate in the business decisions of the 

recipient, such as agents, advisors, consultants, attorneys, accountants or shareholders. This also 

includes immediate family, significant others, partners, and other persons directly connected to 

such persons by law or through a business arrangement.

(c) Competition. All procurement transactions must be conducted in a manner providing full

and open competition consistent with the standards of 2 CFR § 200.319 (Competition). The nonFederal entity must conduct procurements in a manner that prohibits the use of statutorily or 

administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or 

proposals, except in those cases where applicable Federal statutes expressly mandate or encourage 

geographic preference. The non-Federal entity must have written procedures for procurement 

transactions. The non-Federal entity must ensure that all prequalified lists of persons, firms, or 

products which are used in acquiring goods and services are current and include enough qualified 

sources to ensure maximum open and free competition. Also, the non-Federal entity must not 

preclude potential bidders from qualifying during the solicitation period. 

(d) Methods of Procurement. A non-federal entity must adhere to the methods of 

procurement set forth in 2 CFR § 200.320 (Methods of procurement to be followed). The recipient

shall maintain records sufficient to detail the history of each procurement transaction related to the 

project. These records will include but are not necessarily limited to the rationale for the method of 

procurement, selection of contract type, contractor selection or rejection, and the basis for 

determining the contract price. See 2 CFR § 200.333 (Retention requirements for records). 

(e) Contracting with Small and Minority Businesses, Women's Business Enterprises, and Labor 

Surplus Area Firms. As set forth in 2 CFR § 200.321 (Contracting with small and minority businesses, 

women's business enterprises, and labor surplus area firms), non-federal entities must take all 

necessary affirmative steps to assure that minority businesses, women's business enterprises, and 

labor surplus area firms are used when possible. See also the Terms and Conditions of the Award. 

(f) Procurement of Recovered Materials. In accordance with 2 CFR § 200.322 (Procurement of 

recovered materials), a recipient that is a state agency or agency of a political subdivision of a state 

and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by 

the Resource Conservation and Recovery Act (42 U.S.C. § 6962). The requirements of Section 6002 

include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) 

at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable, 

consistent with maintaining a satisfactory level of competition, where the purchase price of the item 

exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded 
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$10,000; procuring solid waste management services in a manner that maximizes energy and 

resource recovery; and establishing an affirmative procurement program for procurement of 

recovered materials identified in the EPA guidelines.

(g) Contract Cost and Price. A recipient must adhere to the cost and contract pricing 

requirements set forth in 2 CFR § 200.323 (Contract cost and price). In particular, a recipient must 

perform a cost or price analysis in connection with every procurement action in excess of the 

Simplified Acquisition Threshold (currently $150,000), including contract modifications.

(h) Bonding Requirements. For construction or facility improvement contracts or subcontracts 

exceeding the Simplified Acquisition Threshold (currently $150,000), the bonding requirements set 

forth in 2 CFR § 200.325 (Bonding requirements) shall apply.

(i) Required Contract Provisions. A recipient, including a State, must ensure that contracts and 

subcontracts awarded pursuant to a DOC financial assistance award contain the applicable 

provisions described in 2 CFR § 200.326 (Contract provisions) and in Appendix II to Part 200 

(Contract Provisions for non-Federal Entity Contracts Under Federal Awards).

(j) Wage rate requirements. For construction projects administered by EDA or as otherwise 

required by applicable program or appropriation legislation, wage rates paid for labor must not be 

less than the prevailing area wages, as determined by the U.S. Secretary of Labor and embodied in 

the construction contract pursuant to the requirements of the Davis-Bacon Act, as amended 

(40 U.S.C. § 276a et seq.).

(13) Review of Plans and Specifications. 

(a) Review Prior to Advertising. When required by the operating unit, the recipient must submit 

plans, specifications, and certain related documents for review and concurrence prior to advertising 

for bids. This review is to ensure compliance with the Terms and Conditions of the award and does 

not attest to the accuracy or completeness of design, dimensions, details, proper selection of 

materials, or compliance with required codes or ordinances, which responsibility rests with the 

recipient. See also 2 CFR § 200.324(a), which specifies that the recipient must provide technical 

specifications on proposed procurements where the Federal awarding agency believes such review 

is needed to ensure that the item or service specified is the one being proposed for acquisition. 

(b) Review Prior to Award. As provided in 2 CFR § 200.324(b), the operating unit may also 

review proposed contracts and related procurement documents prior to award if: 

(i) The procurement is expected to exceed the simplified acquisition threshold fixed at 

41 U.S.C. 403(11) (currently set at $150,000), and is to be awarded without competition or only one 

bid or offer is received in response to a solicitation; 

(ii) The procurement is more than the simplified acquisition threshold and is to be awarded to 

other than the apparent low bidder under a sealed bid procurement;

(iii) The proposed contract modification changes the scope of the contract or increases the 

contract amount by more than the simplified acquisition threshold;
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(iv) The recipient’s procurement procedures and operations fail to comply with the 

procurement standards set out in the award, or

(v) The procurement, which is expected to exceed the simplified acquisition threshold, specifies 

a “brand name” product.

Until the operating unit has reviewed recipient’s proposed contracts and related procurement 

documents and determined they comply with the Terms and Conditions, the recipient will proceed 

at its own risk regarding the eligibility of any costs incurred. 

(14) Alternate Construction Procurement Methods. If permitted by the terms and conditions of 

an award, a Recipient may use alternate construction procurement methods to the traditional 

design/bid/build procedures (including lump sum or unit price-type construction contracts). If an 

alternate method is used, the recipient shall submit to the operating unit for approval a construction 

services procurement plan. In this situation, the recipient must secure a design professional to 

oversee the process.

(15) Protest Procedures. In accordance with 2 CFR § 200.218(k), the recipient is responsible, 

without recourse to DOC, in accordance with good administrative practice and sound business 

judgment, for the settlement and satisfaction of all contractual and administrative issues arising out 

of a recipient’s procurement under a DOC financial assistance award. These issues include, but are 

not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the 

non-Federal entity of any contractual responsibilities under its contracts. The Federal awarding 

agency will not substitute its judgment for that of the non-Federal entity unless the matter is 

primarily a Federal concern. Violations of law will be referred to the local, state, or Federal authority 

having proper jurisdiction.

F. Disbursement of Grant Funds and Financial Administration

Unless the award provides that payments will be made using the Department of Treasury’s 

Automated Standard Application for Payment (ASAP) system or other automated payment system, after 

the initial disbursement has been made, the recipient may request interim disbursements by submitting 

Form SF-270 (Request For Advance Or Reimbursement) or Form SF-271 (Outlay Report And Request For 

Reimbursement For Construction Programs) as required for reimbursing the operating unit’s share of 

eligible project costs. When project construction is complete, the final inspection has been completed, 

and the recipient has accepted the project from the contractor, the recipient can begin the closeout 

process by submitting the following documentation for review and approval to the respective operating 

unit:

1. A request for final disbursement on an executed Form SF-270 or SF-271;

2. A certificate of substantial completion, final acceptance report, or similar documentation; and

3. Other documentation as may be required by the operating unit or other Federal authority.
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G. Award Amendments

In most instances, proposed modifications must be accomplished only through a formal amendment 

to the award. Types of amendments may include:

1. Time Schedule (No Cost) Extensions. The recipient is responsible for compliance with the 

project development time schedule deadlines contained in the Financial Assistance Award. As soon as 

the recipient becomes aware that it will not be possible to meet the time schedule, it immediately 

should contact the operating unit to request a time extension. A time extension (no cost) must 

ordinarily be submitted to the Federal project officer at least 30 days prior to the end date of the award. 

A budget of the remaining funds should be included in the time extension request. The operating unit 

may inform the recipient that grant disbursements cannot be made while the recipient is not in 

compliance with the time schedule. The recipient’s notice to the operating unit should contain the 

following information (as applicable to the subject award): 

a. An explanation of the recipient’s inability to complete work by the specified date (e.g., a 

lengthy period of unusual weather delayed the contractor’s ability to excavate the site; major reengineering required in order to obtain Federal or state approvals; unplanned environmental 

mitigation required).

b. A statement that no other changes to the project are contemplated; 

c. A budget for the remaining funds;

d. A statement, supported by documentation where appropriate, demonstrating there is still a 

bona fide need for the project; and

e. A statement that no further delay is reasonably anticipated and that the project can be 

completed within the revised time schedule.

2. Budget Revisions and Changes to Program Plans. The recipient shall notify the operating unit 

and request prior approval of any proposed deviations from budget and program plans in accordance 

with 2 CFR § 200.308 (Revisions of budgets and program plans) and the Terms and Conditions of the 

Award. 

3. Additional Funding. In accepting an award from an operating unit, the recipient normally agrees 

to fund any overrun(s). Additional funding for an approved project is subject to prior approval from the 

Grants Officer. To be considered for approval, additional funding requests must compete with other 

applications for program funding. If an overrun occurs as a result of the construction contract bid 

opening, before the operating unit will accept a formal request for additional funds, it will be necessary 

for the recipient to furnish the following documentation to the operating unit:

a. A written statement from the recipient’s architect/engineer giving reasons for the 

architect/engineer’s professional opinion that redesign of the project within the approved scope or 

using new or additional deductive alternates cannot reasonably be expected to reduce the cost to 

within the available funds; and
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b. A written statement from the administrative head of the recipient’s organization justifying 

why the recipient cannot furnish the additional funds required, why non-Federal sources of funds 

cannot be secured, and, for EDA projects, certifying that the recipient’s effective taxing and/or 

borrowing capacity have or has been exhausted. 

The operating unit’s acceptance of a request for additional funding does not indicate approval. Any 

further action by the recipient pending the operating unit’s review of the request is at the recipient’s 

risk and at the risk of not being reimbursed by DOC, unless and until the request is approved by the 

Grants Officer.

4. Enforcement and Termination.

a. Enforcement. 

(1) If a recipient materially fails to comply with any Term or Condition of the award, whether 

stated in a Federal statute, regulation, assurance, application for Federal financial assistance, or 

notice of award, the operating unit may pursue all available rights and remedies available to it, 

including those set out in 2 CFR § 200.338 (Remedies for noncompliance).

(2) Costs resulting from obligations incurred by the recipient after notice by the operating unit 

of suspension or termination of the award are not allowable unless the operating unit expressly 

authorizes them in the notice of suspension or intent to terminate, or subsequently. Other costs 

incurred by the recipient during suspension or after termination that are necessary and not 

reasonably avoidable are allowable if:

(a) The costs result from obligations that were properly incurred by the recipient before the 

effective date of the suspension or termination, are not in anticipation of it, and in the case of 

termination, are non-cancellable; and

(b) The costs would be allowable if the award was not suspended or expired normally at the 

end of the funding period in which the termination takes effect.

(3) The remedies for noncompliance identified in 2 CFR § 200.338 (Remedies for 

noncompliance), including suspension and termination, do not preclude the recipient from being 

subject to debarment and suspension under Executive Orders 12549 and 12689 and the Department 

of Commerce’s implementing regulations at 2 CFR Part 1326 (Non-Procurement Debarment and 

Suspension).

b. Termination. 

(1) Terminations for a non-federal entity’s material failure to comply with the terms of the 

award must be in accordance with 2 CFR §§ 200.339 (Termination), 200.340(b) and (c) and 200.341

(Opportunities to object, hearings and appeals), as applicable.

(2) Terminations with the consent of the non-Federal entity (also known as terminations by 

mutual agreement) must comply with 2 CFR § 200.339 (Termination).
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Note that “termination for cause” as articulated at 2 CFR § 200.339(a)(2) is a new concept in the 

Uniform Guidance. In accordance with guidance provided by OMB, an agency’s authority to 

terminate for cause is relatively circumscribed. OMB explains as follows in the preamble to the 

Uniform Guidance:

Commenters suggested that language should be added to allow for Federal agency termination 

for cause, because situations often arise beyond the Federal agency’s or non-Federal entity’s control 

which may require awards to be terminated. This language would prove useful in situations like 

those encountered during implementation of the Recovery Act or Sequestration, where 

congressional mandates encouraged expedited performance, or changes to appropriated amounts 

require modifications to programs. See 78 Fed. Reg. 78589, 78599 (Dec. 26, 2013).

Based on the above OMB guidance, a Federal awarding agency should only terminate for cause 

when required by a circumstance beyond the agency’s control, such as a Congressional mandate. 

Because termination for cause as used in the Uniform Guidance is a new concept, operating units 

and Grants Officer should contact FALD as soon as possible when termination for cause under 2 CFR

§ 200.339(a)(2) is being considered.

H. Post-Construction Requirements

1. Audit Requirements.

a. Certain recipients are subject to the audit requirements contained in Subpart F of 2 CFR Part 

200 (Audit Requirements) – referred to in this Grants Manual as the Single Audit Requirements. The 

Single Audit Requirements are issued pursuant to the Single Audit Act of 1984 (Pub. L. No. 98-502), 

as amended by the Single Audit Act Amendments of 1996 (Pub. L. No. 104-156; 31 U.S.C. §§ 7501-

7507) and require that recipients that are nonprofit organizations, government agencies, Indian 

tribes, and educational institutions expending Federal awards of $750,000 or more during the 

recipient’s fiscal year conduct an audit in accordance with the requirements of Subpart F of 2 CFR 

Part 200. If the recipient does not have a current audit performed in accordance with the Single 

Audit Requirements, the operating unit shall advise the recipient of the need for submitting the 

required audit and may also take appropriate enforcement action in accordance with 2 CFR §

200.338 (Remedies for noncompliance). 

b. For profit and other organizations not subject to the Single Audit Requirements shall be 

subject to the audit requirements set forth in Section F.01.b. of the DOC Financial Assistance 

Standard Terms and Conditions (December 2014), unless a different audit requirement is imposed 

through specific award condition(s). 

c. The operating unit or the OIG may conduct audits of awards. The recipient will be notified in 

advance if it is selected for an audit. The recipient must permit the operating unit, the Comptroller 

General of the United States, the OIG, or any of their duly authorized representatives, access to any 

paper or electronic documents, books, correspondence, and any records (that are pertinent to a 

specific award to verify the recipient’s compliance with the Terms and Conditions of an award. See

2 CFR § 200.336 (Access to records). 

2. Property Management.
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a. Section E.2.a(2)(a) of this chapter provides that all DOC construction awards include a term 

requiring that the recipient to agree that, for the estimated useful life of the facility funded with the 

award, the project will be properly and efficiently administered, operated and maintained, for the 

purpose authorized by the award and in accordance with the Terms and Conditions of the award. 

b. Estimated Useful Life. Unless the operating unit determines otherwise, the following ranges 

of estimated useful lives are considered reasonable for the listed assets:

(1) New buildings, 20 – 40 years. 

(2) Rehabilitation or outfitting of existing buildings, 15 – 20 years.

(3) Improvements other than buildings, 15 – 20 years. 

The estimated useful life should be determined from the date of acquisition, date of certificate 

of occupancy for building or improvement, filing of the notice of federal interest, or other 

appropriate date as provided in the terms and conditions of an award FALD should be consulted to 

the extent that a Grants Officer or Operating Unit has questions concerning the date upon which the 

estimated useful life in a specific project or asset should commence. 

c. Notice of Federal Interest. Section E.2.a.(2)(b) of this chapter provides that certain DOC 

construction awards include a term requiring the recipient to file or record a covenant, mortgage, or 

other statement of the operating unit’s interest in the property (the “Federal Interest”), acceptable 

in form and substance to the operating unit, that must be placed of record in accordance with local 

law, with continuances re-filed as appropriate (for fixture filings). The Federal Interest notice 

provides public notice of that interest and helps to ensure compliance with matters such as the 

purpose, scope, and use of a project; it should be reflected by a recorded notice in appropriate form 

and substance (e.g., a mortgage, covenant, or other statement) setting forth the operating unit’s 

interest in real property or other improvements in the case of a project involving the acquisition, 

construction, or improvement of real property and/or buildings, signed by an authorized official of 

the recipient. It should specify the estimated useful life of the property and should include but not 

be limited to the use requirements applicable to the property and the procedure for disposition of 

the property when it is no longer needed for the originally-authorized purpose. The notice of the 

DOC operating unit’s interest must be recorded or filed in the real property records of the 

jurisdiction in which the real property is located, in accordance with applicable law. In view of the 

complexities and varying requirements for perfecting interests in real property from jurisdiction to 

jurisdiction, the DOC requires a written statement from a licensed attorney in the jurisdiction where 

the property is located, certifying that the Federal Interest has been protected as required under the 

award and in accordance with this general policy. A copy of the recorded lien, statement, or other 

recordable instrument must be attached to the attorney’s certification.

When the recipient’s executed certification and attached documentation is received by the 

operating unit, the operating may want to consider consulting with other legal counsel within the 

DOC (for example, FALD or EDA’s Office of Chief Counsel) who have experience in dealing with real 

property construction grants, for assurance that the certification and attached documentation 

reasonably appear to adequately protect the Federal Interest.
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d. Type of Federal Interest. Operating units should consider the nature of the recipient and the 

asset and the potential risk of loss to the government when determining the type of instrument that 

the recipient should be required to execute and record reflecting the Federal Interest therein. State 

or local law may prescribe the form, means and location of filing or recording an appropriate notice. 

Operating units are encouraged to consult with FALD counsel concerning the form and content of 

recipient documentation and public filings.

3. Closeout Procedures.

a. After construction is complete and the project is closed out financially, the recipient has an 

ongoing responsibility to properly operate and maintain the project for its estimated useful life in 

accordance with its original purpose. The recipient also must comply with all applicable 

requirements including but not limited to ongoing compliance with Federal statutes, regulations, 

and Executive Orders prohibiting discrimination; applicable Federal laws prohibiting inherently 

religious activity; applicable environmental law and performance measures; and maintaining records 

to document such compliance which shall be made available for inspection by the operating unit or 

other government officials as required. When project construction and final inspection have been 

completed, and the recipient has accepted the project from the contractor, the recipient may begin 

the closeout process in accordance with 2 CFR § 200.343 (Closeout) and the Terms and Conditions of 

the Award. The recipient should furnish the following to the operating unit:

(1) Confirmation of compliance with all Terms and Conditions of the Award, including all 

specific award conditions;

(2) All required financial and progress reports;

(3) A properly completed Form SF-429, including applicable attachments and supporting 

documentation; 

(4) Confirmation of appropriate insurance coverage for aboveground facilities in accordance 

with 2 CFR § 200.310 (Insurance coverage) and the Terms and Conditions of the Award;

(5) Confirmation that all changes to the project have been brought to the attention of the 

operating unit and approved as necessary by the Grants Officer;

(6) Confirmation that provisions have been made for the retention of records pertaining to the 

award in accordance with the 2 CFR § 200.333 (Retention requirements for records) and the Terms 

and Conditions of the Award;

(7) A copy of the executed Certificate of Final Completion, Certificate of Occupancy, or similar 

documentation;

(8) Confirmation that as-built drawings have been received from the contractor or the 

architect/engineer;
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(9) Confirmation that a copy of the recipient’s currently valid audit under the Single Audit 

Requirements has been submitted to the Federal Audit Clearinghouse and, if required, furnished to 

the operating unit. If an audit under the Single Audit Requirements is required, but not available, the 

recipient must submit a plan to secure the required audit to the operating unit. The recipient must 

advise the operating unit if an audit under the Single Audit Requirements is not required. If the 

recipient is not subject to the Single Audit Requirements, the operating unit must confirm the 

recipient has submitted all required project-specific audits;

(10) Confirmation that no Davis-Bacon (if applicable) or local labor employment violations exist;

(11) Notification of any change, lien, mortgage, or other encumbrance relating to the ownership 

of the project;

(12) Notification of any unresolved contract/contractor disputes;

(13) Execution and recordation of a lien, mortgage, or covenant of purpose, use, and ownership 

in favor of the operating unit, if this is required under the Terms and Conditions of the award and 

has not already been accomplished; and

(14) Confirmation that the recipient will maintain project facilities for the estimated useful life 

of the facility as determined by the operating unit, during which period the recipient may not 

alienate its ownership or change the use and purpose of the assisted facility without prior written 

approval of the Grants Officer; 

b. Within 90 calendar days of project completion (which may be extended by the Grants 

Officer upon written request by the recipient), the recipient shall submit all financial, performance, 

and other reports as required by 2 CFR § 200.343 (Closeout) and by the Terms and Conditions of the 

Award. 

c. Unless the operating unit authorizes an extension, the recipient shall liquidate all obligations 

incurred under the award no later than 90 calendar days after the acceptance of the project from 

the contractor or before the end of the funding period, whichever occurs earlier, as specified in 2 

CFR § 200.343 (Closeout) and in the Terms and Conditions of the Award.

d. At the Grants Officer discretion, the following documentation should accompany the 

recipient’s final disbursement request when submitted to the operating unit, unless such 

documentation has been previously furnished, as applicable:

(1) Copies of all executed contracts, subcontracts (if claimed separate from the prime contract), 

contract change orders, vouchers, canceled checks, and other evidence of costs incurred necessary 

to substantiate the costs claimed on the operating unit award;

(2) A copy of the recipient’s currently valid audit performed in accordance with the Single Audit 

Requirements, if such an audit is required, and if the operating unit requires submission of the audit; 

(3) Payroll forms, if any of the cost claimed is for work performed by the recipient’s in-house 

work forces (“force account”);
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(4) Title opinions, legal descriptions, bills of sale, title records, etc., for any land cost being 

claimed; and 

(5) Specifics of any administrative costs being claimed.

e. In accordance with 2 CFR § 200.344 (Post-closeout adjustments and continuing 

responsibilities), the closeout of an award does not affect any of the following:

(1) The right of the operating unit to disallow costs and recover funds on the basis of a later 

audit or other project review;

(2) The obligation of the recipient to return any funds due as a result of later corrections or 

other transactions; 

(3) Property management, property disposition, and records retention requirements; and 

(4) Audit requirements set forth in 2 CFR Part 200, Subpart F, and in the Terms and Conditions 

of the Award.
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Appendix A: Applicable Regulations, OMB Circulars and Agency-specific Guidance

The following regulations, OMB Circulars, and forms are available from public libraries and may also be 

accessed at the following internet websites:

• OMB (www.whitehouse.gov/omb/), or

• The Government Printing Office Access site of the National Archives and Records Administration 

(www.gpoaccess.gov/cfr/index.html).

See also DOC ST&Cs and Chapter 2 of this manual for discussion of additional requirements, including, 

but not limited to: 

• National Environmental Policy Act of 1969, as amended (Pub. L. No. 91-190; 42 U.S.C. § 4321 et 

seq., as implemented under 40 CFR Chapter V) (NEPA);

• Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000d et seq.) and the 

Department’s implementing regulations at 15 C.F.R Part 8;

• 42 U.S.C. § 3123 and 42 U.S.C. § 6709 (for EDA recipients), and the Department’s implementing 

regulations at 15 CFR §§ 8.7-8.15;

• Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794) and the 

Department’s implementing regulations at 15 CFR Part 8b;

• The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.) and the Department’s 

implementing regulations at 15 CFR Part 20; 

• The Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) prohibiting discrimination 

on the basis of disability under programs, activities, and services provided or made available by 

State and local governments or instrumentalities or agencies thereto, as well as public or private 

entities that provide public transportation; 

• 2 CFR Part 1326 (Non-Procurement Debarment and Suspension);

• 15 CFR Part 11 (Uniform Relocation Assistance and Real Property Acquisition for Federal and 

Federally-Assisted Programs);

• 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements 

for Federal Awards, including the “Property Standards” set forth in 2 CFR §§ 200.310 (Insurance 

coverage) – 200.316 (Property trust relationship));

• 36 CFR Part 800 (Protection of Historic Properties);

• 48 CFR Part 31 (Contract Cost Principles and Procedures);

• OMB Standard Form 424C (Budget Information – Construction Programs);

• OMB Standard Form 424D (Assurances – Construction Programs) which references laws and 

regulations that may apply to particular awards;

• OMB Standard Form SF 428 (Tangible Personal Property Report) including Attachments A 

through C;

• OMB Standard Form SF 429 (Real Property Status Report) including Attachments A through C; 

and 

• Davis Bacon Wage Rates, available at http://www.wdol.gov/.
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1. The following is available from EDA:

• Public Works and Economic Development Act of 1965, as amended (42 U.S.C. § 3121 et seq.) 

(PWEDA)

• EDA regulations set forth at 13 CFR Parts 300 through 315

• EDA Standard Terms and Conditions for Construction project

• The Summary of EDA Construction Standards (with Exhibits)

• For the most current and up-to-date versions of the following Exhibits, contact EDA’s –

Office of the Chief Counsel

HCHB, Room 72023

(202) 482-4687

skong@eda.gov, jroberson@eda.gov, or rgamble@eda.gov: 

(a) Exhibit A – Sample Mortgage Cover Letter

(b) Exhibit B – Sample Mortgage

(c) Exhibit C – Sample Covenant Cover Letter

(d) Exhibit D – Sample Covenant

2. The following are available from NOAA. 

• NOAA(Construction) Grants Policy Directive 

• NOAA Grants Standard Operating Procedures – Construction Grants
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17. GUIDELINES FOR THE PREPARATION OF PUBLIC NOTICES ANNOUNCING THE 

AVAILABILITY OF FINANCIAL ASSISTANCE: NOTICE OF FUNDING OPPORTUNITY 

(NOFO) AND FEDERAL REGISTER NOTICES

A. Background

1. 2 CFR § 200.203 (Notices of funding opportunities) and Appendix 1 to 2 CFR Part 200 (Full text of 

notice of funding opportunity) contain the current requirements for NOFOs. 

2. It is the policy of the Department that:

a. All NOFOs will conform to the formats set forth in the guidance mentioned above and

summarized below.

b. All NOFOs are required to be cleared in accordance with established internal clearance 

procedures as well as applicable external clearance procedures (i.e. OMB clearance as required).

c. All NOFOs will be posted on the OMB-designated governmentwide Web site for finding and 

applying for Federal financial assistance; the current site is http://www.grants.gov/.

d. All amendments to NOFOs must undergo the same clearance protocol as the original NOFO.

[Note: any changes to a competition’s substantive application requirements, including but not 

limited to eligibility requirements, required forms, change of dates, and the evaluation criteria, 

requires an amendment to the NOFO. Bureaus may not change information concerning a 

competition’s substantive application requirements in a Frequently Asked Question (FAQ) 

document without also amending the NOFO.

Questions pertaining to whether a NOFO amendment is required should be addressed to the 

DOC Grants Management Division and/or the Grants Officer responsible for the subject financial 

assistance program, in consultation with the Federal Assistance Law Division (FALD).] 

e. Publication of Supplementary Materials. Bureaus often produce webinars, FAQ documents, 

and other supplementary materials to provide additional guidance to potential financial assistance 

applicants, during the time a NOFO is open for applications. Supplementary materials, including 

FAQs or other informal clarifications external to the NOFO itself, should not be published while the 

competition is in process without first consulting the Grants Officer and FALD. This applies to any 

materials related to the competition that the relevant bureau decides to make public via webinars, 

program web pages, printed handouts, or any other vehicle.

f. Further, for any supplementary materials published while a NOFO is open to applications, 

the issuing bureau must:

(1) Require that the supplementary materials be accompanied by a disclaimer stating that the 

NOFO is the official competition document – nothing in the supplementary materials are 

intended to conflict with or supersede the NOFO in any way; and
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(2) Resolve any perceived conflicts by reference to the NOFO.

g. Should an operating unit determine that it will also publish a notice in the Federal Register,

only the minimum information legally required under the Administrative Procedure Act (5 U.S.C. §§ 

551-559) will be published, as described in Sections C. and D., below.

B. Format of NOFO

The format has two parts, the first part provides summary information (see 2 CFR § 200.203, Notices 

of funding opportunities) and the second part includes the full text of the announcement (see Appendix 

1 to 2 CFR Part 200).

1. Summary Information. 

a. The following information must be displayed prominently, in the sequential order provided, 

and in a location preceding the full text of the announcement:

(1) Federal Awarding Agency Name(s) [Required]. Include the name of the Department, the 

operating unit and the specific office(s) within the unit (e.g., bureau, directorate, division, or 

institute) that are involved in the funding opportunity.

(2) Funding Opportunity Title [Required]. If there is a program name (within the broader title) 

that is different from the Funding Opportunity Title, include that name here.

(3) Announcement Type [Required]. Indicate whether this is the initial announcement of this 

funding opportunity or a modification of a previously announced opportunity. If it modifies a 

previous announcement, provide the date of that announcement and identify the portions that are 

being modified. A modification does not need to include all of the sections of the full 

announcement text, only those sections being amended.

(4) Funding Opportunity Number [Required, if applicable]. An operating unit may assign unique 

numbers to, for example, identify specific competitions or programs. If a number is assigned, 

include it. If it modifies a previous announcement, provide the number of that announcement. 

(5) Catalog of Federal Domestic Assistance (CFDA) Number(s) [Required]. The program name 

identified in the CFDA may be given along with the CFDA number. CFDA numbers often include 

more than one program. Each program within a CFDA number must include additional numbers 

assigned only to that program, so that it can be distinguished from other programs listed under the 

same CFDA number.

(6) Key Dates [Required]. Include key dates that potential applicants need to know. Key dates 

include due dates for applications or Executive Order 12372 submissions, as well as any letters of 

intent or pre-applications. For any announcement issued before a program's application materials 

are available, this section must also include the date on which those materials will be released.

b. Optional, Additional Summary Content. Following the required overview information 

described above, the operating unit may present other information. Present any optional overview 
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information in a sequential order that parallels the organization of the full text of the 

announcement. Examples of overview information that could help potential applicants decide 

whether to read the full announcement are: a concise description of the funding opportunity, the 

total amount to be awarded, the anticipated amounts and/or numbers of individual awards, the 

types of instruments that may be awarded, who is eligible to apply, whether cost sharing is required, 

and any limitations on the numbers of applications that each applicant may submit. Other 

information that could later help applicants more readily find what they need (e.g., where one can 

get application materials) may also be included.

2. Full Text of Announcement.

The full text of the announcement is organized in sections. The format indicates immediately 

following the title of each section whether that section is required in every announcement or is optional. 

The format is designed so that similar types of information will appear in the same sections in 

announcements of different Federal funding opportunities. Toward that end, there is text in each of the 

format's sections to describe the types of information to be included in that section of an actual 

announcement. If an operating unit intends to include information on a subject that the format does 

not specifically discuss, address that subject in whatever section(s) is most appropriate. For example, if 

an operating unit chooses to address performance goals in the announcement, it might do so in the 

funding opportunity description, the application content, and/or the reporting requirements. Similarly, 

when this format calls for a type of information to be in one particular section, an operating unit 

intending to address that subject in other sections must use cross-references between the sections 

(there must be hyperlinks for cross-references in any electronic versions of the announcement). The 

sections required in the full text of the announcement are described below.

a. Program Description [Required]. This section may be as long as needed to adequately 

communicate to potential applicants the areas or projects for which funding may be provided. It 

describes the operating unit's funding priorities (on a broader level than those which are to be used 

as selection factors and described in paragraph e., below) or the technical or focus areas in which 

the operating unit intends to provide assistance. As appropriate, it may include any program history 

(e.g., whether this is a new program or a new or changed area of program emphasis). This section 

may communicate indicators of successful projects (e.g., if the program encourages collaborative 

efforts) and may include examples of projects that have been funded previously. This section may 

include other information the operating unit deems necessary, and must at a minimum include 

citations for authorizing statutes and regulations for the funding opportunity.

b. Federal Award Information [Required]. This section must include sufficient information to 

help an applicant make an informed decision about whether to submit an application. Relevant 

information must include, to the extent available, the total estimated amount of funding that the

operating unit expects to award through the announcement; the anticipated number of awards; the 

expected amounts of individual awards (which may be a range); the amount of funding per award, 

on average, experienced in previous years; and the anticipated start dates and periods of 

performance for new awards. This section also must address whether applications for renewal or 

supplementation of existing projects are eligible to compete with applications for new awards. In 

addition, it must indicate whether multi-year applications are being sought. This section also must 

indicate the type(s) of assistance instrument (i.e., grant, cooperative agreement, and/or other 

instrument) that may be awarded if applications are successful. If cooperative agreements may be 
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awarded, this section must describe the “substantial involvement” that the operating unit expects 

to have. It must also be stated if procurement contracts may be awarded.

c. Eligibility Information [Required]. This section addresses considerations or factors that 

make an applicant or application eligible or ineligible for consideration. This includes the eligibility 

of particular types of applicant organizations, any factors affecting the eligibility of the principal 

investigator or project director, and any criteria that make particular projects ineligible. It must be 

clear whether an applicant's failure to meet an eligibility criterion by the time of an application 

deadline will result in the operating unit returning the application without review or, even though 

an application may be reviewed, will preclude the operating unit from making an award. Key 

elements to be addressed are:

(1) Eligible Applicants [Required]. Announcements must clearly identify the types of entities 

that are eligible to apply. If there are no restrictions on eligibility, this section may simply indicate 

that all potential applicants are eligible. If there are restrictions on eligibility, it is important to be 

clear about the specific types of entities that are eligible, not just the types that are ineligible. An 

operating unit may not eliminate organizations that are eligible under the statute, or restrict 

competition to certain applicants, without justification. For example, if the program is limited to 

non-profit organizations subject to Section 501(c)(3) of the tax code, the announcement must say 

so. Similarly, it is better to state explicitly that Native American tribal organizations are eligible than 

to assume that they can unambiguously infer that from a statement that non-profit or local 

government organizations may apply. Eligibility also can be expressed by exception, (e.g., open to 

all types of domestic applicants other than individuals). This section should refer to any portion of 

Section d. (below) specifying documentation that must be submitted to support an eligibility 

determination (e.g., proof of 501(c)(3) status as determined by the Internal Revenue Service or an 

authorizing tribal resolution). To the extent that any funding restriction in Section D.6 could affect 

the eligibility of an applicant or project, the announcement must either restate that restriction in 

this section or provide a cross-reference to its description in Section d.6. See also 68 FR 5814.

(2) Cost Sharing or Matching [Required]. Announcements must state whether there is required 

cost sharing, matching, or cost participation without which an application would be ineligible (if cost 

sharing is not required, the announcement must explicitly say so). Required cost sharing may be a 

certain percentage or amount, or may be in the form of contributions of specified items or activities 

(e.g., provision of equipment). It is important that the announcement be clear about any 

restrictions on the types of cost (e.g., in-kind contributions) that are acceptable as cost sharing. Cost 

sharing as an eligibility criterion includes requirements based in statute or regulation; see 2 CFR § 

200.306 (Cost sharing or matching) for more information. This section must refer to the appropriate 

portion(s) of Section d. stating any pre-award requirements for submission of letters or other 

documentation to verify commitments to meet cost-sharing requirements if an award is made. If

cost sharing is encouraged, this paragraph must include a cross reference to the evaluation criteria 

or selection factor which will be used for assessment. 

(3) Other [Required, if applicable]. If there are other eligibility criteria (i.e., criteria that have 

the effect of making an application or project ineligible for award, whether referred to as 

“responsiveness” criteria, “go-no go” criteria, “threshold” criteria, or in other ways), the 

announcement must clearly state them and include a reference to the regulation or requirement 

that describes the restriction. For example, if entities that have been found to be in violation of a 
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particular Federal statute are ineligible, it is important to say so. In this section the operating unit 

also must state any limit on the number of applications an applicant may submit under the 

announcement and make clear whether the limitation is on the submitting organization, individual 

investigator/program director, or both. Also use this section to address any eligibility criteria for 

beneficiaries or for program participants other than award recipients.

d. Application and Submission Information. 

(1) Address to Request Application Package [Required]. Inform potential applicants how to 

obtain all required application forms, kits, or other materials needed to apply (if this announcement 

contains everything they need, this section need only say so) and provide an Internet address where 

they can access the materials. With respect to electronic methods for providing information about 

funding opportunities or accepting applicants' submissions of information, each operating unit is 

responsible for compliance with Section 508 of the Rehabilitation Act of 1973, as amended by the 

Workforce Investment Act of 1998. Since high-speed Internet access is not yet universally available 

for downloading documents, program offices should also identify a way for potential applicants to 

request paper copies of materials, such as a U.S. Postal Service mailing address, telephone or fax 

number, Telephone Device for the Deaf (TDD) or Text Telephone (TTY) number, and/or Federal 

Information Relay Service (FIRS) number.

(2) Content and Form of Application Submission [Required]. This section must identify the 

required content of an application and the forms or formats that an applicant must use to submit it. 

If any requirements are stated elsewhere because they are general requirements that apply to 

multiple programs or funding opportunities, this section may refer to where those requirements

may be found. This section also must address any preliminary submissions that the operating unit 

requires or encourages, either to facilitate its own planning or to provide potential applicants with 

feedback to help them decide whether to submit a full proposal. This section must either include 

required forms or formats as part of this announcement or state where the applicant may obtain 

them.

This section must specifically address content and form or format requirements for:

(a) Pre-applications, letters of intent, or white papers that the operating unit requires or 

encourages (see Section d.3), including any limitations on the number of pages or other formatting 

requirements similar to those for full applications.

(b) The application as a whole. For hard copy submissions, that could include any limitations on 

the number of pages, font size and typeface, margins, paper size, number of copies, and sequence 

or assembly requirements. If electronic submission is permitted or required, that could include

special requirements for formatting or signatures. With respect to electronic methods for providing 

information about funding opportunities or accepting applicants' submissions of information, each 

operating unit is responsible for compliance with Section 508 of the Rehabilitation Act of 1973, as 

amended by the Workforce Investment Act of 1998.

(c) Component pieces of the application (e.g., if all copies of the application must bear original 

signatures on the face page or the program narrative may not exceed 10 pages). This includes any 
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pieces that may be submitted separately by third parties (e.g., references or letters confirming 

commitments from third parties that will be contributing a portion of any required cost sharing).

(d) Information that applicants must submit when requested by the operating unit, after 

notification of intent to make and award but prior to making an award. This could include evidence 

of compliance with human subjects requirements or information the operating unit needs to comply 

with the National Environmental Policy Act (NEPA). 

(3) Unique Entity Identifier and System for Award Management (SAM) [Required]. The 

announcement must state clearly that each applicant (unless the applicant is an individual or Federal 

awarding agency that is excepted from those requirements under 2 CFR § 25.110(b) or (c), or has an 

exception approved by the operating unit under 2 CFR § 25.110(d)) is required to: 

(i) Be registered in SAM before submitting its application; 

(ii) Provide a valid unique entity identifier in its application; and 

(iii) Continue to maintain an active SAM registration with current information at all times during 

which it has an active Federal award or an application under consideration by the operating unit or 

another Federal agency. 

It also must state that the operating unit may not make an award to an applicant until the 

applicant has complied with all applicable unique entity identifier and SAM requirements and, if an 

applicant has not fully complied with the requirements by the time the operating unit is ready to 

make an award, the operating unit may determine that the applicant is not qualified to receive an 

award and use that determination as a basis for making an award to another applicant.

(4) Submission Dates and Times [Required]. The announcement must identify due dates and 

times for all submissions. This includes not only the full applications but also any preliminary 

submissions (e.g., letters of intent, white papers, or pre-applications). It also includes any other 

submissions of information before award that are separate from the full application. If the funding 

opportunity is a general announcement that is open for a period of time with no specific due dates 

for applications, this section must say so. Note that the information on dates that is included in this 

section also must appear with other overview information in a location preceding the full text of the 

announcement (see Section B.1. of this chapter).

For each type of submission addressed, indicate whether the submission is encouraged or 

required and, if required, any deadline date for submission (or dates, if the operating unit plans 

more than one cycle of application submission, review, and award under the announcement). The 

announcement must state (or provide a reference to another document that states):

(a) Any deadline in terms of a date and local time. Due dates should not fall on a Saturday, 

Sunday, or Federal holiday. 

(b) What the deadline means. Specify the date and time by which the operating unit must 

receive the application or the date by which the application must be postmarked, or something else; 
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in addition, specify how that deadline depends, if at all, on the submission method (e.g., mail, 

electronic, or personal/courier delivery).

(c) The effect of missing a deadline. Whether late applications are neither reviewed nor 

considered or, if waivers of deadlines are permitted, describe the basis for making such waivers.

(d) How the receiving Federal office determines whether an application or pre-application has 

been submitted before the deadline. This includes the form of acceptable proof of mailing or 

system-generated documentation of receipt date and time.

(e) This section also may indicate where, when, and in what form the applicant will receive an 

acknowledgment of receipt. 

Consider displaying the submission date and time information in ways that will be easy to 

understand and use. It can be difficult to extract all needed information from narrative paragraphs, 

even when they are well written. A tabular form for providing a summary of the information may 

help applicants for some programs and give them what effectively could be a checklist to verify the 

completeness of their application package before submission. 

(5) Intergovernmental Review [Required, if applicable]. State if the funding opportunity is 

subject to Executive Order (EO) 12372 (Intergovernmental Review of Federal Programs). In alerting 

applicants that they must contact their State's Single Point of Contact (SPOC) to find out about and 

comply with the State's process under EO 12372, an operating unit may wish to inform them that 

the names and addresses of the SPOCs are listed in the Office of Management and Budget's home 

page at: https://www.whitehouse.gov/wp-content/uploads/2017/11/Intergovernmental_-Review-

_SPOC_01_2018_OFFM.pdf.

(6) Funding Restrictions [Required]. The funding opportunity announcement must include 

information on funding restrictions in order to allow an applicant to develop an application and

budget consistent with program requirements and DOC policy. Examples are whether construction 

is an allowable activity, if there are any limitations on direct costs such as foreign travel or 

equipment purchases, if there are any limits on indirect costs (or facilities and administrative costs)

and if awards will not allow reimbursement of pre-award costs. The applicant must be advised that 

it is DOC policy that DOC funds may not be used to pay for management fees in excess of costs or 

profits, unless statutorily authorized. 

[Note: Per Chapter 9 of this Manual, requests for fee or profit by recipients of any type should be 

referred to FALD for review.] 

(7) Other Submission Requirements [Required]. This section must address any other 

submission requirements not included in the other paragraphs of this section. This might include 

the format of submission, i.e., paper or electronic, for each type of required submission. Applicants 

must not be required to submit in more than one format and this section must indicate whether 

they may choose whether to submit applications in hard copy or electronically, may submit only in 

hard copy, or may submit only electronically. This section also must indicate where applications 

(and any pre-applications) must be submitted if sent by postal mail, electronic means, or handdelivery. For postal mail submission, this must include the name of an office, official, individual or 
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function (e.g., application receipt center) and a complete mailing address, including room number or 

courier reception point. For electronic submission, this must include the URL (Grants.gov) or e-mail 

address; whether a password(s) is required; whether particular software or other electronic 

capabilities are required; what to do in the event of system problems and a point of contact that will 

be available in the event the applicant experiences technical difficulties. With respect to electronic 

methods for providing information about funding opportunities or accepting applicants' submissions 

of information, each operating unit is responsible for compliance with Section 508 of the 

Rehabilitation Act of 1973, as amended by the Workforce Investment Act of 1998.

e. Application Review Information.

(1) Criteria [Required]. This section must address the criteria that the operating unit will use to 

evaluate applications. This includes the merit and other review criteria that evaluators will use to 

judge applications, including any statutory, regulatory, or other preferences (e.g., minority status or 

Native American tribal preferences) that will be applied in the review process. These criteria are 

distinct from eligibility criteria that are addressed before an application is accepted for review and 

any program policy or other selection factors that are applied during the selection process, after the 

review process is completed. The intent is to give applicants visibility into the evaluation process so 

that they can make informed decisions when preparing their applications and so that the process is 

as fair and equitable as possible. The announcement must clearly describe all criteria, including any 

sub-criteria. If criteria or sub-criteria vary in importance, the announcement must specify the 

relative percentages, weights, or other means used to distinguish among them. For statutory, 

regulatory, or other preferences, the announcement must provide a detailed explanation of those 

preferences with an explicit indication of their effect (e.g., whether they result in additional points 

being assigned). If an applicant’s proposed cost sharing will be considered in the review process (as 

opposed to being an eligibility criterion described in Section c.(2)), the announcement must 

specifically address how it will be considered (e.g., to assign a certain number of additional points to 

applicants who offer cost sharing, or to break ties among applications with equivalent scores after 

evaluation against all other factors). If cost sharing will not be considered in the evaluation, the 

announcement must say so, so that there is no ambiguity for potential applicants. Vague 

statements that cost sharing is encouraged, without clarification as to what that means, are 

unhelpful to applicants so the announcement must explain how it will be addressed in the 

evaluation process. It also is important that the announcement be clear about any restrictions on 

the types of cost (e.g., in-kind contributions) that are acceptable as cost sharing.

(2) Review and Selection Process [Required]. This section may vary in the level of detail 

provided. The announcement must list any selection factors (program policy or other factors or 

elements), other than merit evaluation criteria, that the selecting official may use in selecting 

applications for award (e.g., availability of funding, geographical dispersion, program balance, 

funding priorities, or diversity). This section should also indicate who is responsible for evaluation 

against the merit criteria (e.g., peers external to the operating unit or Federal operating unit 

personnel) and/or who makes the final selections for award. If there is a multi-phase review process 

(e.g., an external panel providing assessments to internal operating unit personnel who make final 

recommendations to the selecting official), the announcement should describe each of the phases

and it also must include the number of people on an evaluation panel (minimum of 3). The 

announcement may describe how the panel operates, the way reviewers are selected, reviewer 

qualifications, and the way that conflicts of interest are avoided. In addition, include if applicants 
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are permitted to nominate suggested reviewers of their applications or suggest those they feel may 

be inappropriate due to a conflict of interest.

If the operating unit anticipates that the total Federal share of any award issued under the 

applicable NOFO will be greater than the simplified acquisition threshold, over the period of 

performance (see 2 CFR § 200.88 (Simplified acquisition threshold)), this section must also inform 

applicants:

(a) That the operating unit, prior to making an award with a total amount of Federal share 

greater than the simplified acquisition threshold, is required to review and consider any information 

about the applicant that is in the designated integrity and performance system accessible through 

SAM (currently FAPIIS);

(b) That an applicant, at its option, may review information in the designated integrity and 

performance systems accessible through SAM and comment on any information about itself that an 

awarding agency previously entered and is currently in the designated integrity and performance 

system accessible through SAM;

(c) That the operating unit will consider any comments by the applicant, in addition to the other 

information in the designated integrity and performance system, in making a judgment about the 

applicant's integrity, business ethics, and record of performance under Federal awards when 

completing the review of risk posed by applicants as described in 2 CFR §200.205 (Federal awarding 

agency review of risk posed by applicants).

(3) Anticipated Announcement and Award Dates [Optional]. This section is intended to provide 

applicants with information they can use for planning purposes. If there is a single application 

deadline followed by the simultaneous review of all applications, the operating unit must include in 

this section information about the anticipated dates for announcing or notifying successful and 

unsuccessful applicants and for having awards in place. If applications are received and evaluated 

on a “rolling” basis at different times during an extended period, it is appropriate to give applicants 

an estimate of the time needed to process an application and notify the applicant of the operating 

unit's decision.

f. Federal Award Administration Information

(1) Federal Award Notices [Required]. This section must address what a successful applicant 

can expect to receive following selection. If the operating unit’s practice is to provide a separate 

notice stating that an application has been selected before it actually makes the Federal award, this 

section must indicate that the separate notice is not an authorization to begin performance. This 

section should also indicate that the notice of award signed by the grants officer (or equivalent) is 

the authorizing document, and whether it is provided through postal mail or by electronic means 

and to whom. It also may address the timing, form, and content of notifications the operating unit 

will provide to unsuccessful applicants. The award documents must incorporate the NOFO into the 

award. 

(2) Administrative and National Policy Requirements [Required]. This section must identify the 

usual administrative and national policy requirements an operating unit's awards may include. The 
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Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative 

Agreements, published in the Federal Register notice, contains this information; include a reference 

to the most current version of the Department’s notice. Providing this information allows a 

potential applicant to identify any requirements with which it might have difficulty complying if its 

application is successful. In those cases, early notification about the requirements allows the

potential applicant to decide not to apply or to take needed actions before award. For the same 

reason, this section should inform potential applicants about special requirements that could apply 

to particular awards after the review of applications and other information, based on the particular 

circumstances of the effort to be supported (e.g., if human subjects were to be involved or if some 

situations may justify special terms on intellectual property, data sharing or security requirements).

(3) Reporting [Required]. This section must include general information about the type (e.g., 

financial or performance), frequency (minimum and maximum), and means of submission (paper or 

electronic) of post-award reporting requirements. Highlight any special reporting requirements for 

awards under this funding opportunity that differ (e.g., by report type, frequency, form/format, or 

circumstances for use) from what the operating unit's awards usually require. Performance reports 

or special data requests may require Paperwork Reduction Act approval.

If the Federal share of any award may include more than $500,000 over the period of 

performance, this section must inform potential applicants about the post award reporting 

requirements for recipients with more than $10 million in Federal-wide funding, as reflected in 

Appendix XII to 2 CFR Part 200 —Award Term and Condition for Recipient Integrity and Performance 

Matters.

g. Federal Awarding Agency Contact(s) [Required]. Provide potential applicants a point(s) of 

contact for answering questions or helping with problems while the funding opportunity is open. 

The intent of this requirement is to be as helpful as possible to potential applicants, so consider 

approaches such as giving:

(1) Points of contact who may be reached in multiple ways (e.g., by telephone, fax, and/or email, as well as regular/express mail).

(2) A fax or e-mail address that multiple people access, so that someone will respond even if 

others are unexpectedly absent during critical periods.

(3) Different contacts for distinct kinds of help (e.g., one for questions of programmatic content 

and a second for administrative questions).

h. Other Information [Required]. This section must include items (1) and (2) below and may 

include any additional information, items (3) – (5) for example, that will assist a potential applicant:

(1) [Required] Alert applicants to the need to identify proprietary information and inform them 

about the way the operating unit will handle it. The following language shall be included in all 

NOFOs: 

The applicant acknowledges and understands that information and data contained in 

applications for financial assistance, as well as information and data contained in financial, 
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performance and other reports submitted by applicants, may be used by the Department of 

Commerce in conducting reviews and evaluations of its financial assistance programs. For this 

purpose, applicant information and data may be accessed, reviewed and evaluated by 

Department of Commerce employees, other Federal employees, and also by Federal agents and 

contractors, and/or by non-Federal personnel, all of whom enter into appropriate conflict of 

interest and confidentiality agreements covering the use of such information. As may be 

provided in the terms and conditions of a specific financial assistance award, applicants are 

expected to support program reviews and evaluations by submitting required financial and 

performance information and data in an accurate and timely manner, and by cooperating with 

Department of Commerce and external program evaluators. In accordance with 2 C.F.R. § 

200.303(e), applicants are reminded that they must take reasonable measures to safeguard 

protected personally identifiable information and other confidential or sensitive personal or 

business information created or obtained in connection with a Department of Commerce 

financial assistance award.

In addition, Department of Commerce regulations implementing the Freedom of Information 

Act (FOIA), 5 U.S.C. Sec. 552, are found at 15 C.F.R. Part 4, Public Information. These regulations 

set forth rules for the Department regarding making requested materials, information, and 

records publicly available under the FOIA. Applications submitted in response to this Notice of 

Funding Opportunity may be subject to requests for release under the Act. In the event that an 

application contains information or data that the applicant deems to be confidential commercial 

information that should be exempt from disclosure under FOIA, that information should be 

identified, bracketed, and marked as Privileged, Confidential, Commercial or Financial 

Information. In accordance with 15 CFR § 4.9, the Department of Commerce will protect from 

disclosure confidential business information contained in financial assistance applications and 

other documentation provided by applicants to the extent permitted by law.

(2) [Required] Include certain routine notices to applicants (e.g., that the Government is not 

obligated to make any award as a result of the announcement or that only grants officers can bind 

the Government to the expenditure of funds).

(3) [Optional] Indicate whether this is a new program or a one-time initiative.

(4) [Optional] Mention related programs or other upcoming or ongoing operating unit funding 

opportunities for similar activities.

(5) [Optional] Include Internet addresses for operating unit Web sites that may be useful to an 

applicant in understanding the program (NOTE: make certain that any Internet sites are current and 

accessible). With respect to electronic methods for providing information about funding 

opportunities or accepting applicants' submissions of information, each operating unit is responsible 

for compliance with Section 508 of the Rehabilitation Act of 1973, as amended by the Workforce 

Investment Act of 1998.
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C. Publication in the Federal Register

Grants.gov is the current OMB-designated governmentwide Web site for posting, finding and 

applying for Federal financial assistance. In a 29 November, 2010 memorandum, AGC/L&R, after 

consultation with FALD, determined that Notices of Funding Availability (NOFAs) and other similar 

notices soliciting proposals for grants and cooperative agreements need only be forwarded to AGC/L&R 

when funding is to exceed $100 million or if the announcement is for a new grant program. Operating 

units are no longer required to publish NOFAs in the Federal Register unless required by statute or 

regulation. Operating units may want to seek legal counsel from AGC/L&R or FALD regarding the 

decision not to publish a notice in the Federal Register. Should an operating unit determine that it will 

also publish a notice in the Federal Register, Department policy is that the operating unit will publish 

only the minimum information legally required under the Administrative Procedure Act (5 U.S.C. §§ 551-

559), which includes the following information contained in the notice of funding opportunity:

1. Summary description of the program;

2. Deadline dates;

3. Addresses for submission of applications;

4. Information contacts (including electronic access);

5. Amount of funding available;

6. Statutory authority;

7. CFDA number;

8. Eligibility requirements, including any cost sharing or matching requirements;

9. Intergovernmental Review requirements;

10. Evaluation criteria used by the merit reviewers; 

11. Selection procedures, including funding priorities/selection factors/policy factors to be applied 

by the selecting official; and

12. Administrative and National Policy Requirements. See paragraph E.2.g.(9), below, for specific 

language. 

To the extent any of the above have been codified or otherwise published in the Federal Register a 

cross reference to the appropriate CFR or Federal Register publication may be substituted.

D. Federal Register Format Requirements

Federal Register notices must be drafted in accordance with the guidelines delineated in the Federal 

Register Document Drafting Handbook, which includes the submission requirements. In accordance 

with the handbook, notices must be organized as follows:
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1. Heading. The headings must identify the billing code, issuing agency, the CFR title, docket 

number, regulation identification number (RIN) (if applicable) and subject matter of the document and 

must be presented in the following format:

a. Agency is always the Department of Commerce.

b. Subagency (if necessary) identifies the operating unit which is issuing the notice.

c. Docket number.

d. RIN (if applicable).

e. Subject heading describes the content of the notice in a concise statement.

The following is an example of how the headings must appear in the notice:

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

[Docket No. ______]

RIN ________

Financial Assistance for Oyster Disease Research

2. Preamble. The preamble is the main focus of the notice and shall follow the Subject Heading. It 

arranges the content of the document into a uniform format by providing information on “who, what, 

where, when, and why.” This allows the reader to review the document and assess its main points, 

determine whether it is of interest, and decide whether to respond to the notice. The preamble should

be organized in the following format with the captions typed in all capital letters:

a. AGENCY. Identifies the operating unit issuing the document. The caption usually repeats 

the name of the operating unit as carried in the document's headings. When a subagency and 

operating unit name appear together, the subagency name is carried first and the agency name is 

represented by its commonly used acronym or other shortened expression (for example, Economic 

Development Administration, DOC). This caption may, in addition, identify a smaller organizational 

unit within the operating unit (for example, National Marine Fisheries Service, NOAA).

b. ACTION. Identifies the document category. This section must not be used to summarize the 

document. In this instance, the document category is a “Notice.”

c. SUMMARY. Briefly describes in plain English what action is being taken, why the action is 

necessary, and the intended effect of the action. Any extensive discussion or details belongs under 

the SUPPLEMENTARY INFORMATION section.

d. DATES. Contains any pertinent dates that the reader may need to know such as the closing 

dates for submission of preapplications (if applicable) and applications, anticipated number of days 

required to process applications, and date when awards are expected to be made. To provide the 

public reasonable notice and an opportunity to apply, the Federal awarding agency must generally 
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make all funding opportunities available for application for at least 60 calendar days. See 2 CFR § 

200.203 (Notices of funding opportunities).

[Note: Because the publication date of the notice will not be known until it is submitted to the 

Office of Federal Register, inserting specific calendar dates is discouraged; rather, allow the Office of 

Federal Register to calculate the dates by including the following where dates must appear in the 

notice: {Insert (number of days, but no less than 60) after the date of publication in the Federal 

Register}.]

e. ADDRESSES. Contains pertinent address(es) for the reader such as where to write to obtain 

an application package, where to send an application, or where to send correspondence for any 

other purpose.

f. FOR FURTHER INFORMATION CONTACT. Contains the name and telephone number of a 

person within the operating unit who can answer questions about the notice.

g. SUPPLEMENTARY INFORMATION. Contains detailed narrative information about the notice. 

Remember, as is illustrated in item (9), below, to the extent any of the following items have been 

codified or otherwise published in the Federal Register a cross reference to the appropriate CFR or 

Federal Register publication may be substituted. At a minimum, the following items must be 

included in this section:

(1) Authority. The statutory authority, EO, or any other legal authority that authorizes the 

program to provide financial assistance.

(2) Catalog of Federal Domestic Assistance (CFDA). The CFDA number(s) and program title(s).

(3) Program Description. A concise description of the goals and objectives of the program. The 

description must explain why Federal assistance is being provided, the intended beneficiaries of 

funded projects, and expected project results/ achievements.

(4) Funding Availability. The amount of funds available, expected amount of individual awards, 

and the purposes for which funds may be spent. If the publication of the notice precedes the 

passage of the appropriate fiscal year funding legislation, the announcement must state an 

approximate amount and that funds will be contingent upon availability of funding.

(5) Eligibility Criteria. An explicit description of who is eligible to apply (e.g., States, universities, 

non-profit organizations, for-profit organizations, individuals, etc.), including any limitations 

imposed by the funding operating unit. Include here whether any cost sharing or matching is 

required to receive an award.

(6) Evaluation Criteria. The evaluation criteria that will be used in evaluating and selecting 

applications for discretionary funding consideration must be delineated. The criteria must be as 

specific as possible and the relative weight of each criterion must be given. If each criterion is of 

equal weight, the notice must so state. The criteria must provide an adequate basis for a review 

panel to review an applicant's capabilities and assess its likelihood of successfully performing under 

the award. Evaluation criteria must address such areas as adequacy of project plans, potential 
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contribution to program objectives, key personnel qualifications, capabilities of the applicant 

organization, proposed costs, etc.

(7) Selection Procedures. Describe the process and procedures by which recommended 

applications will be selected. If the operating unit plans to select projects based upon funding 

priorities/selection factors/policy factors, those must be stated and an explanation must be 

provided as to how they will be applied to select projects out of the rank order established under 

the merit evaluations. 

(8) Intergovernmental Review. [Insert applicable statement below]

(a) Applications under this program are subject to Executive Order (EO) 12372

(Intergovernmental Review of Federal Programs).

(b) Applications under this program are not subject to Executive Order (EO) 12372

(Intergovernmental Review of Federal Programs).

[Note: The Office of Legislative and Intergovernmental Affairs (OLIA) has the responsibility for 

implementing EO 12372.]

(9) Administrative and National Policy Requirements. This section must read as follows: 

“Department of Commerce Pre-Award Notifications for Grants and Cooperative Agreements, which 

are contained in the Federal Register Notice of 26 December 2014 (79 FR 78390), are applicable to 

this solicitation.”

(10) Administrative Procedure Act and Regulatory Flexibility Act. Prior notice and comment 

are not required under 5 U.S.C. Section 553, or any other law, for rules relating to public property, 

loans, grants, benefits or contracts (5 U.S.C. Section 553(a)). Because prior notice and an 

opportunity for public comment are not required pursuant to 5 U.S.C. Section 553 or any other law, 

the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. et seq.) are inapplicable. 

Therefore, a regulatory flexibility analysis is not required and has not been prepared.

(11) The Supplementary Information must also address EO 13132 (Federalism) and EO 12866 

(Regulatory Planning and Review).

(12) Information Collection. Notwithstanding any other provisions of law, no person is 

required to respond to, nor shall any person be subject to a penalty for failure to comply with a 

collection of information, subject to the requirements of the Paperwork Reduction Act, unless that 

collection displays a current valid OMB control number.

3. Signature. The signature of the person authorized to sign a notice submitted for publication in 

the Federal Register must be placed at the end of the document. The signature must be handwritten in 

ink, and the name and title of the person signing must be typed directly beneath the signature.
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E. Coordination and Clearance

1. Operating units are responsible for obtaining clearances of proposed NOFOs before they are 

posted. Those NOFOs with funding that exceeds $100 million and announcements for new grant 

programs will be forwarded by FALD to AGC/L&R so that AGC/L&R may coordinate the review and 

clearance of those announcements with OMB. FALD is the final Departmental clearance authority. 

Proposed NOFOs must be cleared by the Grants Officer, or designate, and the Grants Officer or 

designate’s clearance and/or comments must be provided to FALD before FALD will clear a NOFO. 

2. Operating units are responsible for processing and coordinating the clearance of all Federal 

Register notices. Operating units must distribute all notices to OAM, the Electronic Government Team 

within the Office of Information Technology Policy and Planning, AGC/L&R, and FALD for comment 

and/or clearance. Once all comments have been reconciled, and clearances received from OAM and the 

Electronic Government Team, operating units must submit the notice to FALD for final Departmental 

clearance. Once FALD provides its clearance, the operating unit must upload the notice into the 

Department’s Regulatory Tracking System (RTS), which is the primary tracking system for all notices and 

regulations. AGC/L&R will approve the notice submitted through RTS and issue a docket number, which 

authorizes publication in the Federal Register. After issuance of the docket number by AGC/L&R, the 

operating unit is responsible for submitting the notice to the Office of the Federal Register for 

publication and to Congress and the General Accounting Office (GAO), as required by 5 U.S.C. 801 et seq. 
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18. MULTI-YEAR FUNDING PROCEDURES

A. General

This chapter prescribes policies for incrementally funding multi-year awards when full funding of the 

complete project period is not available at the beginning of the project period. Multi-year funding 

allows Federal funds for a multi-year award to be provided in increments or by allotment, usually on an 

annual basis. 

B. Multi-Year Awards

Multi-year awards are awards which have a project period of more than 12 months of activity. 

Multi-year awards are partially funded when the awards are approved, and are subsequently funded in 

increments. The Department encourages long-range program planning for the award and 

administration of financial assistance actions. One mechanism for facilitating this goal is funding 

through multi-year awards. This particularly pertains to awards that support research projects that may 

span several years. One of the purposes of multi-year awards is to reduce the administrative burden on 

both the applicant and the operating unit. For example, with proper planning, one application can 

suffice for the entire multi-year award period. It is the Department’s policy that the period of activity of 

multi-year awards should not exceed five years. Grants Officers should establish additional internal 

policies for consistent selection and approval of programs and awards that may be funded under these 

multi-year funding procedures. 

C. Multi-Year Funding Principles

1. Reliability and Predictability. Multi-year funding may be considered for programs or long-term 

awards where funding for the subsequent year(s) is anticipated but not provided at the time the award 

is approved and where the estimated budget for future funding periods can be forecast with some 

degree of reliability. These procedures should not be used for programs or long-term awards where the 

funding allocation may substantially change (either increase or decrease) from initial projections. Multiyear funding is provided by adding allotments of funds, usually on an annual basis, to extend the funding 

period within the previously approved project period. 

2. Competition. Recipients of multi-year awards should be selected after full and open 

competition. However, projects under multi-year funding awards do not re-compete each year even 

though the awards may be funded annually. At the outset the Grants Officer would approve the award 

for a project period of more than one year (typically three to five years), and continuation amendments 

to add funding and extend the funding period (or add funding periods if time limited funds) are later 

approved with less administrative processing by the recipient, the Program Office, and the Grants Office. 

This feature – competing only once for a multi-year period of support – permits the grantee and the 

operating unit to more reliably plan for future years. The allotment of funding on an annual basis 

preserves the ability of the operating unit to discontinue support at points during the project period if 

funding is unavailable or the government's interest otherwise requires it.

3. Request for Applications. Program Offices must clearly identify in their NOFO when multi-year 

funding is available under the program. The NOFO must clearly state that funding for each year's 

activity is contingent upon the availability of funds, satisfactory performance, and is at the sole 

discretion of the agency. The NOFO should solicit applications covering the entire multi-year period and 

must identify the amount currently available as well as the amounts projected to be available in the 

future. Instructions for applying for a multi-year award must be contained in the NOFO. 
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4. Exceptions. Not all programs or awards are good candidates for multi-year funding. Grants 

Officers must exercise good judgment in determining when to approve multi-year awards. Multi-year 

funding is not appropriate and a fully funded award must be used in the following circumstances:

a. The project is exclusively for construction, alterations or renovations, or acquisition of 

property; 

b. At the time of award, the total period of DOC support for the project is planned to be less 

than 24 months. Agencies may apply multi-year procedures to incremental funding for time periods 

less than a year only if warranted due to program requirements and funding availability. 

5. Duration of Awards. The initial funding period and subsequent continuation amendments 

extending the funding period should usually be for 12 months but the initial funding period may vary 

from 12 months in order to provide for the continuation of the funding period at an advantageous date, 

such as the end of the grantee's fiscal year or to coincide with phases of the project contained in the 

proposal and budget. The applicant has more flexibility in carrying over funds throughout the entire 

project period when no-year appropriations are used to fund the award. 

6. Amendments. The commitment to obligate the amount of available funding for subsequent 

funding periods with continuation amendments shall be clearly conditioned upon the availability of 

funds, satisfactory progress by the grantee and the Program Office’s determination that continued 

funding is in the best interest of the government.

a. An amendment to obligate prospective funding available shall be made on Form CD-451

(Amendment to Financial Assistance Award) prior to the expiration of each funding period. The 

Grants Officer shall execute the amendment after recommendation by the Program Officer that the 

performance under the current funding period is satisfactory and funds are available. The Program 

Officer should submit to the Grants Officer any continuation application with budget revisions, if 

applicable. A documented recommendation and certification of funding availability should be 

submitted at least 30 days prior to the expiration of the funding period. 

b. The recipient should submit an amended application to the Program Officer for review and 

recommendation to the Grants Officer for approval before the end of the current funding period if 

the upcoming funding period will have a change in the scope of work or an increase in the funding 

level from that which was last approved. Otherwise, there is generally no requirement for the 

recipient to submit subsequent full applications under a multi-year project period. 

c. Unobligated balances will automatically be carried over upon the continuation of the 

funding period. For unobligated balances, the SF-425 (Federal Financial Report) will be used as the 

basis for determining if there is any unobligated balance to be carried over at the end of the current 

funding period.

d. It is important to distinguish clearly between (1) stopping support of a project by not 

continuing the funding period with continuation amendments, and (2) termination of a grant. A 

grant gives the recipient legal authority to expend the funds awarded. The Department must give 

recipients due process prior to terminating a grant for violation of its terms. Except where required 

by statute, recipients have no right to a formal appeal process when a continuation is denied 

because neither the grant approval nor extension of a funding period or project period gives the 

recipient any legal entitlement to receive additional funds. Awards with multi-year funding will 

generally be funded in allotments adding to or continuing the funding period. The new award 

document (Form CD-450) initially obligates only the first allotment of funds.
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D. Preparation of New Award

Following are instructions for the preparation of Form CD-450 (Financial Assistance Award) and 

specific award conditions for awards with multi-year funding.

1. The CD-450 for a multi-year award should be prepared as reflected in the guidelines and 

procedures and described below:

a. The total amount of funding shown in the upper right-hand corner of the Form CD-450 

should reflect the amount, both Federal and non-Federal that is currently available for obligation. 

For example, a multi-year award with a total three (3) year budget of $3,900,000 (three equal 

annual increments of $1,000,000 as the Federal share of cost and $300,000 as the recipient share of 

cost) will show the portion of Federal funding that is currently available for obligation ($1,000,000) 

and at least the corresponding portion of the non-Federal amount. 

b. The project period should reflect the entire multi-year period during which Federal 

sponsorship begins and ends. 

c. In order to make it clear that future support is anticipated, the following shall be included in 

the specific award conditions:

The project period and budget(s) incorporated into this award cover a ____-year period for a total 

amount of $__________ in Federal funds. However, Federal funding available at this time is limited 

to $______________ for this funding period. Receipt of any prospective funding is contingent upon 

the availability of funds from Congress, satisfactory performance, continued relevance to program 

objectives and will be at the sole discretion of the Department of Commerce. The Department of 

Commerce is not liable for any obligations, expenditures, or commitments which involve any amount 

in excess of the Federal amount presently available. The recipient will be responsible for any and all 

termination costs it may incur should prospective funding not become available. No legal liability 

will exist or result on the part of the Federal Government for payment of any portion of the 

remaining funds which have not been made available under the award. Notifications affecting 

funding or notice of non-availability of additional funding for prospective years will be made only by 

the Grants Officer. The amendment to obligate prospective funding available shall be made on Form 

CD-451 (Amendment to Financial Assistance Award) if at all possible prior to the expiration of each 

year's activities. 

The project period for this action is _________ through ___________.

The funding period for this action is __________ through __________. [generally first year]

The funding period for this action may be extended through _________. 

[NOTE: Funds are available for obligation from the beginning of the award through the end of the 

funding period. With each year’s amendment to add funds, the funding period is EXTENDED from 

the date of award, so that by the last year of the award, for example, the 5-year project period 

equals the 5-year funding period.]

2. An itemized budget must be incorporated into the award which includes the Federal and 

non-Federal share of funding that is currently available.

E. Preparation of Amendment(s)

Following are instructions for the preparation of amendments for awards with multi-year funding.
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1. As prospective funding becomes available for extended funding periods, the Grants Officer shall 

notify the recipient by using the Form CD-451 (Amendment to Financial Assistance Award) of the 

obligation of prospective funding. This should be done prior to the expiration of the current approved 

funding period. 

2. The Form CD-451 should be prepared as follows:

a. The amendment provides $_________ in Federal funds for the continued funding of this 

multi-year award for a total of $________. The amount to be entered into the "Previous Estimated 

Cost" column should be the aggregate amount that has been obligated under the award. The 

amount to be entered into the "Add" column is the amount which is being obligated with this 

action. In addition, the following terms shall be included in the specific award conditions:

This amendment provides $ _________in Federal funding for the continued funding of this multi-year 

award for a total of $ ___________. Any commitments, obligations, or expenditures in excess of 

that amount of Federal funds will be made at the recipient’s risk. The funding period for this 

amendment is extended through (date). Future funding is contingent upon the availability of funds, 

satisfactory performance on the current and/or previous award, continued relevance to program 

objectives, and is at the sole discretion of the Department of Commerce.

b. Work to be performed with this funding should correspond to that identified in the original 

application and proposal, with any approved revisions. The original application, proposal, and any 

approved revisions will be incorporated into the award by reference in this amendment. 

3. If the work to be performed with the prospective funding does not correspond to that identified 

in the original application, along with the proposal and any approved revisions, the recipient should 

submit a request for approval of any revisions to the last approved budget and work to be performed. 

This request should be submitted to the Program Officer for approval by the Grants Officer. It should be 

noted that any revision to the work to be performed should not change the basic scope of work 

originally approved. Changes to the approved scope of work must be incorporated into an award by the 

Grants Officer in a formal amendment.

4. In the event that funding does not become available or the determination is made not to 

provide additional funding for prospective year's activities, the Grants Officer shall notify the recipient in 

writing prior to the expiration of the current funding period.

5. While the Department reserves the right not to provide all or a portion of a prospective year’s 

funding, every effort should be made to minimize changes to the originally approved funding levels. 

a. If funding levels increase over the amount stipulated in the specific award condition(s), the 

recipient must submit a supplemental application for the amount of the increase along with a new

budget and required certifications. [Caution: A significant increase in funding may lead to an 

unauthorized change in the scope of work.]

b. If funding levels are significantly decreased, the recipient must submit a request for budget 

revision to the Program Officer. [Caution: A significant decrease in funding could lead to an 

unauthorized change in the scope of work.] The Program Officer will review the request and make 

written notification to the Grants Officer who will notify the recipient of the Department’s approval 

or disapproval. If the Grants Officer approves the revised (decreased) budget, the Form CD-451 

shall be issued.