Document ID: EPA-HQ-OMS-2020-0018-0001
Agency: epa
Document Type: Rule
Title: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Interim Final Rule with Request for Comment
Posted Date: 2020-09-30T04:00Z

[Federal Register Volume 85, Number 190 (Wednesday, September 30, 2020)]
[Rules and Regulations]
[Pages 61571-61575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16894]

 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 85, No. 190 / Wednesday, September 30, 2020 / 
Rules and Regulations  

[[Page 61571]]

ENVIRONMENTAL PROTECTION AGENCY

2 CFR Part 1500

[EPA-HQ OMS-2020-0018; 10010-32-OMS]

Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule with request for comment.

-----------------------------------------------------------------------

SUMMARY: This regulatory action revises certain provisions of 
Environmental Protection Agency (EPA) financial assistance regulations 
to provide more flexibility to recipients of Environmental Protection 
Agency (EPA) financial assistance and streamline dispute procedures for 
applicants and recipients of EPA financial assistance. The revisions to 
this rule are exempt from the notice and comment requirements of the 
Administrative Procedure Act (APA) because it is a matter relating to 
agency management concerning grants.

DATES: Effective date: This interim final rule is effective November 
12, 2020.
    Applicability date: This interim final rule applies to EPA 
financial assistance agreements awarded or amended to add funds on or 
after or disputes arising from agency decisions issued on or after 
November 12, 2020. Disputes arising from agency decisions issued prior 
to the effective date of this rule will remain subject to the 
procedures in the prior regulations.
    Comment date: Comments must be received on or before November 30, 
2020.

ADDRESSES: Submit your comments, identified by Docket ID No. OMS-2020-
0018 by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: Docket_OMS@epa.gov.
     Mail: OMS Docket, Environmental Protection Agency, 
Mailcode: 28221T, 1200 Pennsylvania Ave. NW, Washington, DC 20460.
     Hand Delivery: EPA Docket Center, WJC West, Room 3334, 
1301 Constitution Ave. NW, Washington, DC 20004. The telephone number 
for the Docket Center is 202-566-1744. For additional information about 
EPA's public docket, visit http://www.epa.gov/dockets. Such deliveries 
are only accepted during the Docket's normal hours of operation: 8:30 
a.m. to 4:30 p.m., and special arrangements should be made for 
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. OMS-2020-0018.
    EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov website is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at Docket ID No. OMS-2020-0018, 
OMS Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW, 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the OMS Docket is (202) 566-1752.

FOR FURTHER INFORMATION CONTACT: Alexandra Raver at 
raver.alexandra@epa.gov or (202) 564-5296.

SUPPLEMENTARY INFORMATION: EPA's revisions to 2 CFR part 1500 are 
summarized below.
    1. EPA will add a provision at 2 CFR 1500.1(a) clarifying that 
allowable participant support costs under 2 CFR 200.1, Participant 
support costs, may include rebates or other subsidies provided to 
program participants or program beneficiaries when authorized by the 
statutory authority for the financial assistance program. The provision 
applies to subsidies used for purchase and installation of commercially 
available, standard (``off the shelf'') pollution control equipment or 
low emission vehicles under the Diesel Emission Reduction Act program 
or other programs when the program participant rather than the 
recipient owns the equipment. Other examples of these other EPA funded 
programs specified in EPA's Interim Guidance on Participant Support 
Costs include subsidies or rebates provided to program beneficiaries to 
encourage participation in statutorily authorized programs to encourage 
environmental stewardship such as Best Management Practices under Clean 
Water Act 319 nonpoint source management programs, subsidies to promote 
adoption of source reduction practices by businesses under section 6605 
of the Pollution Prevention Act, and rebates or subsides for wood stove 
replacement under financial assistance programs authorized by the Clean 
Air Act or EPA's annual appropriation acts.
    2. EPA has added a new provision at 2 CFR 1500.3(b) stating that 
subrecipient monitoring and

[[Page 61572]]

management requirements at 2 CFR 200.331 through 200.333 do not apply 
to transactions entered into with borrowers by recipients of Clean 
Water State Revolving Fund (CWSRF) capitalization grants and Drinking 
Water State Revolving Fund (DWSRF) capitalization grants. This revision 
is consistent with the Administration's emphasis, as described in the 
President's Management Agenda, Cross-Agency Priority Goal on Results 
Oriented Accountability for Grants, on risk-based approaches to 
streamlining requirements for recipients whose performance record 
warrants burden reduction and the importance of deference to states. 
CWSRF and DWSRF programs are mature Federal grant programs with 
comprehensive program specific regulations and capitalization grants 
are administered by state agencies with well-established processes for 
managing loans and monitoring borrower compliance with loan agreements. 
This regulatory change will allow states to follow their own procedures 
rather than those mandated by 2 CFR 200.331 through 200.333. 
Requirements for reporting subaward and executive compensation in 2 CFR 
part 170 and internal controls described at 2 CFR 200.303 will continue 
to apply to CWSRF and DWSRF program grant recipients and borrowers. 
Recipients of Brownfields Revolving Loan Fund capitalization grants and 
their borrowers as well other EPA revolving loan fund (RLF) 
capitalization grant programs remain subject to 2 CFR 200.331 through 
200.333 and other applicable regulations. Eligibility for these grants 
is not necessarily limited to states.
    3. EPA has revised 2 CFR 1500.7 to provide that recipients may add 
all program income to their EPA funds for use under the purposes and 
conditions of the assistance agreement even if program income exceeds 
the amount anticipated at time of award. The revision will allow 
recipients to deduct the cost of generating program income from gross 
program income to determine net program income provided these costs 
have not been charged to any Federal award or the terms of the 
agreement do not preclude deducting the cost of generating program 
income. EPA has extended the policy of allowing recipients of RLF 
capitalization grants to draw down funds from EPA prior to using 
program income to all RLF programs except the CWSRF and DWSRF programs, 
which have their own regulations.
    4. EPA has revised 2 CFR 1500.9 to clarify the scope of the 
limitation on the allowability of costs for individual consultant fees 
on EPA assistance agreements to be consistent with the policy EPA 
announced in 69 FR 18380 (April 7, 2004). Additionally, the regulation 
specifies that borrowers under EPA assistance programs for 
capitalization of revolving loan funds are not subject to the 
limitation on consultant fee costs.
    5. EPA has revised the 2 CFR part 1500, subpart E, disputes 
procedures to exempt the following decisions from the procedures.

    a. Decisions to decline to fund non-competitive applications and 
not to award incremental or supplemental funding based on the 
availability of funds or agency priorities.
    b. Decisions on requests for reconsideration of Specific 
conditions under 2 CFR 200.208.
    c. Decisions to deny requests for no-cost extensions under 2 CFR 
200.308(e)(2), 40 CFR 35.114(b), and 40 CFR 35.514(b).
    d. Denials of requests for EPA approval of procurement through 
noncompetitive proposals under 2 CFR 200.320(c)(4).

    EPA has also eliminated reviews of Dispute Decision Official (DDO) 
decisions by the Director of the Office of Grants and Debarment or 
Regional Administrators as currently provided for in 2 CFR 1500.17 
through 1500.19. These reviews will be replaced by a procedure that 
allows applicants and recipients to petition the DDO to reconsider 
adverse dispute decisions on an expedited basis. Regional 
Administrators may act as DDOs or designate another official to be the 
DDO.
    In addition to the above described substantive revisions, EPA will 
renumber the sections in 2 CFR part 1500 to reflect the addition of a 
new Sec.  1500.1.

I. General Information

A. Affected Entities

    Entities affected by this action are those that apply for and/or 
receive Federal financial assistance (grants, cooperative agreements or 
fellowships) from EPA including but not limited to: State and local 
governments, Indian Tribes, Intertribal Consortia, Institutions of 
Higher Education, Hospitals, and other Non-profit Organizations, and 
Individuals.

II. Background

    On December 19, 2014 (79 FR 76050-76054) EPA promulgated 2 CFR part 
1500, Uniform Administrative Requirements, Cost Principles and Audit 
Requirements for Federal Awards. These regulations supplement OMB's 2 
CFR part 200 regulations covering the same subjects which were 
promulgated that same day (79 FR 75871). EPA's experience in 
administering these regulations indicates that applicants and 
recipients would benefit from clarity regarding EPA's interpretation of 
these regulations as well as additional flexibility. Further, EPA 
believes the process for disputing adverse actions the EPA takes 
against applicants or recipients could be streamlined without 
compromising fairness. The revisions to 2 CFR part 1500 that EPA is 
making on an interim final basis achieve these objectives. The rule 
will become final without further revision if no changes are warranted 
based on comments EPA receives.

III. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is not subject to Executive Order 13771 because it is 
not a ``significant regulatory action'' as defined in section 3(f) of 
Executive Order 12886.

C. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
However, the Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing regulations 2 CFR parts 200 and 1500 under the provisions of 
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned 
OMB control number 2030-0020. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

D. Regulatory Flexibility Act

    This interim final rule is not subject to the Regulatory 
Flexibility Act (RFA), which generally requires an agency to prepare a 
regulatory flexibility analysis for any rule that will have a 
significant economic impact on a substantial number of small entities. 
The RFA applies only to rules subject to notice and comment rulemaking 
requirements under the Administrative Procedure Act (APA) or any other 
statute. This rule is not subject to notice and comment requirements 
under the APA or any other statute because this rule pertains to 
grants, which the APA expressly exempts from notice and comment 
rulemaking requirements. 5 U.S.C. 553(a)(2).

[[Page 61573]]

E. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for State, local, or tribal governments or the private 
sector. The action imposes no enforceable duty on any State, local or 
tribal governments or the private sector. Therefore, this action is not 
subject to the requirements of sections 202 or 205 of the UMRA.
    This action is also not subject to the requirements of section 203 
of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. This action affects 
all applicants and recipients of EPA financial Federal assistance and 
therefore no one entity type will be impacted disproportionally or 
significantly.

F. Executive Order 13132 (Federalism)

    This action does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the National Government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action affects all applicants 
and recipients of EPA financial Federal assistance and therefore no one 
entity type will be impacted disproportionally. Thus, Executive Order 
13132 does not apply to this action.

G. Executive Order 13175

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This action 
affects all applicants and recipients of EPA financial Federal 
assistance and therefore no one entity type will be impacted 
disproportionally. Thus, Executive Order 13175 does not apply to this 
action. Consistent with the EPA Policy on Consultation and Coordination 
with Indian Tribes, the EPA consulted with tribal officials on these 
changes.

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to E.O. 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in E.O. 
12866.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355, 
May 22, 2001), because it is not a significant regulatory action under 
Executive Order 12866.

J. National Technology Transfer and Advancement Act

    This action does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA believes that it is not practicable to determine whether 
this action has disproportionately high and adverse effects on minority 
populations, low-income populations, and/or indigenous peoples, as 
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).

L. Congressional Review Act

    The Congressional Review Act (CRA), 5 U.S.C. 801 et seq., as added 
by the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. Section 808 allows the issuing agency to 
make a rule effective sooner than otherwise provided by the CRA if the 
agency makes a good cause finding that notice and public procedure is 
impracticable, unnecessary or contrary to the public interest. This 
determination must be supported by a brief statement. 5 U.S.C. 808(2). 
EPA will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to publication of 
the rule in the Federal Register. This action is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

List of Subjects in 2 CFR Part 1500

    Accounting, Grant programs, Grants administration, Loan programs, 
Reporting and recordkeeping requirements, Water pollution control, 
Water supply.

Andrew Wheeler,
Administrator.

    For the reasons set forth in the preamble, the Environmental 
Protection Agency amends 2 CFR part 1500 as follows:

PART 1500--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, 
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

0
1. The authority citation for part 1500 is revised to read as follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 136 et seq., 15 U.S.C. 2601 
et seq., 20 U.S.C. 4011 et seq., 33 U.S.C. 1251 et seq., and 1401 et 
seq., 42 U.S.C. 241, 242b, 243, 246, 300f et seq., 1857 et seq., 
6901 et seq., 7401 et seq., and 9601 et seq.; 2 CFR part 200.

Sec. Sec.  1500.17 through 1500.19  [Removed]

0
2. Remove Sec. Sec.  1500.17 through 1500.19.

Sec.  Sec.  1500.1 through 1500.16  [Redesignated as Sec. Sec.  1500.2 
through 1500.17]

0
3. Redesignate Sec. Sec.  1500.1 through 1500.16 as Sec. Sec.  1500.2 
through 1500.17.

0
4. Add subpart A to read as follows:

Subpart A--Acronyms and Definitions

Sec.  1500.1  Definitions.

    (a) Participant support costs. The Environmental Protection Agency 
(EPA) has supplemented 2 CFR 200.1, Participant support costs, to 
provide that allowable participant support costs under EPA assistance 
agreements include:
    (1) Rebates or other subsidies provided to program participants for 
purchases and installations of commercially available, standard (``off 
the shelf'') pollution control equipment or low emission vehicles under 
the Diesel Emission Reduction Act program or programs authorized by EPA 
appropriation acts and permitted by terms specified in EPA assistance 
agreements or guidance, when the program participant rather than the 
recipient owns the equipment.
    (2) Subsidies, rebates, and other payments provided to program 
beneficiaries to encourage participation in statutorily authorized 
programs to encourage environmental stewardship and enable the public 
to participate in EPA funded research, pollution abatement, and other 
projects or programs to the extent permitted by statutes and terms 
specified in EPA assistance agreements or guidance.
    (b) [Reserved]

0
5. Revise newly redesignated Sec.  1500.3 to read as follows:

Sec.  1500.3   Applicability.

    (a) Uniform administrative requirements and cost principles 
(subparts A through E of 2 CFR part 200 as supplemented by this part) 
apply to foreign public entities or foreign

[[Page 61574]]

organizations, except where EPA determines that the application of this 
part would be inconsistent with the international obligations of the 
United States or the statutes or regulations of a foreign government.
    (b) Requirements for subrecipient monitoring and management at 2 
CFR 200.331 through 200.333 do not apply to loan, loan guarantees, 
interest subsidies and principal forgiveness, purchases of insurance or 
local government debt or similar transactions with borrowers by 
recipients of Clean Water State Revolving Fund (CWSRF) capitalization 
grants and Drinking Water State Revolving Fund (DWSRF) capitalization 
grants. Requirements for reporting subaward and executive compensation 
in 2 CFR part 170 and internal controls described at 2 CFR 200.303 
continue to apply to CWSRF and DWSRF grant recipients and borrowers.

0
6. Revise newly redesignated Sec.  1500.8 to read as follows:

Sec.  1500.8   Program income.

    (a) Governmental revenues. Permit fees are governmental revenue and 
not program income. (See 2 CFR 200.307(c)).
    (b) Use of program income. The default use of program income for 
EPA awards is addition even if the amount of program income the non-
Federal entity generates exceeds the anticipated amount at time of the 
award of the assistance agreement. Unless the terms of the agreement 
provide otherwise, recipients may deduct costs incidental to the 
generation of program income from gross income to determine program 
income, provided these costs have not been charged to any Federal 
award. (See 2 CFR 200.307(b)). The program income shall be used for the 
purposes and under the conditions of the assistance agreement. (See 2 
CFR 200.307(e)(2)).
    (c) Brownfields Revolving Loan. To continue the mission of the 
Brownfields Revolving Loan fund, recipients may use EPA grant funding 
prior to using program income funds generated by the revolving loan 
fund. Recipients may also keep program income at the end of the 
assistance agreement as long as they use these funds to continue to 
operate the revolving loan fund or some other brownfield purpose as 
outlined in their respective closeout agreements.
    (d) Other revolving loan programs. Recipients of EPA funding for 
other revolving loan fund programs may use EPA grant funding prior to 
using program income funds generated by the revolving loan fund. 
Recipients may also keep program income at the end of the assistance 
agreement as long as they use these funds to continue to operate the 
revolving loan fund or some other authorized purpose as outlined in 
their closeout agreement. This paragraph (d) does not apply to EPA's 
Clean Water State Revolving Fund and Drinking Water State Revolving 
Fund programs which are subject to their own regulations.

0
7. Revise newly redesignated Sec.  1500.10 to read as follows:

Sec.  1500.10   General procurement standards.

    (a) EPA will limit its participation in the salary rate (excluding 
overhead) paid to individual consultants retained by recipients, and 
their contractors or subcontractors to the maximum daily rate for level 
4 of the Executive Schedule unless a greater amount is authorized by 
law. (These non-Federal entities may, however, pay consultants more 
than this amount with non-EPA funds.) The limitation in this paragraph 
(a) applies to consultation services of designated individuals with 
specialized skills who are paid at a daily or hourly rate. This rate 
does not include transportation and subsistence costs for travel 
performed; recipients will pay these in accordance with their normal 
travel reimbursement practices.
    (b) All contracts between recipients and subrecipients and 
individual consultants are subject to the procurement standards in 
subpart D of 2 CFR part 200. Contracts or subcontracts with multi-
employee firms for consulting services are not affected by the 
limitation in paragraph (a) of this section provided the contractor or 
subcontractor rather than the recipient or subrecipient selects, 
directs and controls individual employees providing consulting 
services.
    (c) Borrowers under EPA revolving loan fund capitalization grant 
programs are not subject to paragraphs (a) and (b) of this section.

0
8. Amend newly redesignated Sec.  1500.13 by:
0
a. Revising paragraphs (a) introductory text, (a)(1), (c) introductory 
text, and (c)(1);
0
b. Adding a semicolon at the end of paragraph (c)(2);
0
c. Removing the word ``and'' at the end of paragraph (c)(4);
0
d. Removing the period at the end of paragraph (c)(5) and adding a 
semicolon in its place; and
0
e. Adding paragraphs (c)(6) through (9).
    The revisions and additions read as follows:

Sec.  1500.13  Purpose and scope of this subpart.

    (a) This section provides the process for the resolution of pre-
award and post-award assistance agreement disputes as described in 
Sec.  1500.14, except for:
    (1) Assistance agreement competition-related disputes which are 
covered by EPA's Grant Competition Dispute Resolution Procedures; and,
* * * * *
    (c) Determinations affecting assistance agreements made under 
certain Agency decision-making processes are not subject to review 
under the procedures in this subpart or the Agency's procedures for 
resolving assistance agreement competition-related disputes. These 
determinations include, but are not limited to:
    (1) Decisions on requests for exceptions under Sec.  1500.4;
* * * * *
    (6) Decisions to decline to fund non-competitive applications or 
not to award incremental or supplemental funding based on the 
availability of funds or agency priorities;
    (7) Decisions on requests for reconsideration of specific award 
conditions under 2 CFR 200.208;
    (8) Decisions to deny requests for no-cost extensions under 2 CFR 
200.308(e)(2), 40 CFR 35.114(b), and 40 CFR 35.514(b); and
    (9) Denials of requests for EPA approval of procurement through 
noncompetitive proposals under 2 CFR 200.320(c)(4).

0
9. Amend newly redesignated Sec.  1500.14 by revising paragraphs (c) 
through (e) to read as follows:

Sec.  1500.14  Definitions.

* * * * *
    (c) Agency Decision is the agency's initial pre-award or post-award 
assistance agreement determination that may be disputed in accordance 
with this subpart. The Agency Decision is sent by the Action Official 
(AO) to the Affected Entity electronically and informs them of their 
dispute rights and identifies the Dispute Decision Official (DDO). An 
Agency Decision based on audit findings serves as EPA's Management 
decision as defined in 2 CFR part 200.1.
    (d) Dispute is a disagreement by an Affected Entity with a specific 
Agency Decision submitted to the DDO in accordance with this subpart.
    (e) Dispute Decision Official (DDO) is the designated agency 
official responsible for issuing a decision resolving a Dispute.
    (1) The DDO for a Headquarters Dispute is the Director of the 
Grants and Interagency Agreement Management Division in the Office of 
Grants and Debarment or designee. To provide for a fair and impartial 
review, the AO for the challenged Agency Decision may not serve as the 
Headquarters DDO.

[[Page 61575]]

    (2) The DDO for a Regional Assistance Agreement Dispute is the 
Regional Administrator or the official designated by the Regional 
Administrator to issue the written decision resolving the Dispute. To 
provide for a fair and impartial review, the AO for the challenged 
Agency Decision may not serve as the Regional DDO.
* * * * *

0
10. Revise newly redesignated Sec.  1500.15 to read as follows:

Sec.  1500.15  Submission of Dispute.

    An Affected Entity or its authorized representative may dispute an 
Agency Decision by electronically submitting a Dispute to the DDO 
identified in the Agency Decision. In order for the DDO to consider the 
Dispute, it must satisfy the following requirements:
    (a) Timeliness. The DDO must receive the Dispute no later than 30 
calendar days from the date the Agency Decision is electronically sent 
to the Affected Entity. The DDO will dismiss any Dispute received after 
the 30-day period unless the DDO grants an extension of time to submit 
the Dispute. The Affected Entity must submit a written request for 
extension to the DDO before the expiration of the 30-day period. The 
DDO may grant a one-time extension of up to 30 calendar days when 
justified by the situation, which may include the unusual complexity of 
the Dispute or because of exigent circumstances.
    (b) Method of submission. The Affected Entity must submit the 
Dispute electronically via email to the DDO, with a copy to the AO, 
using the email addresses specified in the Agency Decision within the 
30-day period stated in paragraph (a) of this section.
    (c) Contents of Dispute. The Dispute submitted to the DDO must 
include:
    (1) A copy of the disputed Agency Decision;
    (2) A detailed statement of the specific legal and factual grounds 
for the Dispute, including copies of any supporting documents;
    (3) The specific remedy or relief the Affected Entity seeks under 
the Dispute; and
    (4) The name and contact information, including email address, of 
the Affected Entity's designated point of contact for the Dispute.

0
11. Revise newly redesignated Sec.  1500.16 to read as follows:

Sec.  1500.16  Notice of receipt of Dispute to Affected Entity.

    Within 15 calendar days of receiving the Dispute, the DDO will 
provide the Affected Entity a written notice, sent electronically, 
acknowledging receipt of the Dispute.
    (a) Timely Disputes. If the Dispute was timely submitted, the 
notice of acknowledgement may identify any additional information or 
documentation that is required for a thorough consideration of the 
Dispute. The notice should provide no more than 30 calendar days for 
the Affected Entity to provide the requested information. If it is not 
feasible to identify such information or documentation in the notice 
the DDO may request it at a later point in time prior to issuance of 
the Dispute decision.
    (b) Untimely Disputes. If the DDO did not receive the Dispute 
within the required 30-day period, or any extension of it, the DDO will 
notify the Affected Entity that the Dispute is being dismissed as 
untimely and the Agency Decision of the AO becomes final. The dismissal 
of an untimely Dispute constitutes the final agency action. In 
appropriate circumstances, the DDO may, as a matter of discretion, 
consider an untimely Dispute if doing so would be in the interests of 
fairness and equity.

0
12. Revise newly redesignated Sec.  1500.17 to read as follows:

Sec.  1500.17  Determination of Dispute.

    (a) In determining the merits of the Dispute, the DDO will consider 
the record related to the Agency Decision, any documentation that the 
Affected Entity submits with its Dispute, any additional documentation 
submitted by the Affected Entity in response to the DDO's request under 
Sec.  1500.16(a), and any other information the DDO determines is 
relevant to the Dispute provided the DDO gives notice of that 
information to the Affected Entity. The Affected Entity may not on its 
own initiative submit any additional documents except in the support of 
a request for reconsideration under paragraph (c) of this section.
    (b) The DDO will issue the Dispute decision within 180 calendar 
days from the date the Dispute is received by the DDO unless a longer 
period is necessary based on the complexity of the legal, technical, 
and factual issues presented. The DDO will notify the Affected Entity 
if the expected decision will not be issued within the 180-day period 
and if feasible will indicate when the decision is expected to be 
issued. The DDO will issue the Dispute decision electronically and 
advise the Affected Entity of procedures for requesting 
reconsideration. The DDO's decision will constitute the final agency 
action unless the Affected Entity electronically petitions the DDO for 
reconsideration within 15 calendar days of issuance of the DDO 
Decision. The Affected Entity must include a detailed statement of the 
factual and legal grounds warranting reversal or modification of the 
DDO decision. In addition, the Affected Entity may submit additional 
documents that were not previously provided to the DDO.
    (c) If a petition for reconsideration is submitted, the DDO's will 
advise the Affected Entity within 15 calendar days of receipt of the 
petition whether the DDO Decision will be reconsidered. The DDO will 
issue this determination electronically. DDO's will only grant a 
reconsideration petition if the Affected Entity provides relevant and 
material evidence that was not available to the Affected Entity at the 
time the Dispute was submitted or to correct a clear and prejudicial 
error of fact or law. Denial of a petition for reconsideration 
constitutes final agency action and the DDO will advise the Affected 
Entity of the reasons for denying the reconsideration in writing.
    (d) If the DDO grants a reconsideration petition, the DDO will 
issue a revised DDO Decision within 30 calendar days of acceptance of 
the reconsideration petition unless a longer period is necessary based 
on the complexity of the legal, technical, and factual issues 
presented. The DDO will issue the revised DDO Decision electronically. 
The revised DDO Decision and any new material considered by the DDO in 
making the revised DDO Decision will become part of the record of the 
Dispute. The revised DDO Decision will constitute final agency action.
    (e) The DDO may consider untimely filed reconsideration petitions 
only if necessary, to correct a DDO Decision that is manifestly unfair 
and inequitable in light of relevant and material evidence that the 
Affected Entity could not have discovered during the 30-day period for 
petitioning for reconsideration. This evidence must be submitted within 
six months of the date of the DDO Decision. The DDO will advise the 
Affected Entity within 30 days of receipt of an untimely filed 
reconsideration petition whether the DDO will accept the petition. 
Denial of an untimely filed reconsideration petition constitutes final 
agency action.

[FR Doc. 2020-16894 Filed 9-29-20; 8:45 am]
BILLING CODE 6560-50-P