This section describes the following general aspects of EPA’s management of discretionary grants: (1) types of grants awarded by EPA; (2) EPA’s competition policy and grants management plan; (3) new discretionary grant awards; and (4) amendments to discretionary grant awards. EPA generally awards three types of grants that are authorized by statutes and regulations. Formula grants. EPA awards formula grants noncompetitively to states in amounts based on formulas prescribed by law to support water infrastructure projects, among other things. For example, EPA awards formula grants from the Clean Water and Drinking Water State Revolving Funds to support water treatment facility construction and improvements to drinking water systems, such as pipelines and drinking water filtration plants. Categorical grants. EPA generally awards categorical grants—which it also refers to as continuing environmental program grants— noncompetitively, mostly to states and Indian tribes to operate environmental programs that they are authorized by statute to implement. For example, under the Clean Water Act, states and tribes can establish and operate programs for the prevention and control of surface water and groundwater pollution. EPA determines the amount each grantee receives for a categorical grant on the basis of agency- developed formulas or program-specific factors. Discretionary grants. EPA awards discretionary grants— competitively or noncompetitively—to eligible applicants for specific projects, with program and regional offices selecting grantees and determining dollar amounts. Also, for some discretionary grants, EPA negotiates work plans, which include estimated time frames and dollar amounts for activities under the grant. EPA awards these grants for a variety of activities, such as environmental research, training, providing education programs, and cleaning up brownfields. The respective grant programs under each program and regional office generally have varied focuses. According to OGD officials, EPA has historically held roughly 100 to 125 discretionary grant competitions annually. Appendix III lists EPA’s 67 active discretionary grant programs, including the program or regional office responsible for managing each one. EPA’s competition policy establishes parameters for the competition of discretionary grants. The competition policy states that it is EPA policy to promote competition to the maximum extent practicable in the award of grants. Further, it states that EPA policy requires that the competitive process be fair and impartial, that all applicants be evaluated only on the criteria stated in the grant announcement, and that no applicant receive an unfair competitive advantage. In 2002, EPA developed its first competition policy, which created OGD’s Grants Competition Advocate, who is the senior official responsible for administering and overseeing implementation of, and compliance with, the policy and issuing guidance for its implementation. EPA made substantial revisions to the policy in 2005, including by establishing detailed justifications for awarding grants noncompetitively, and has continued to periodically update and revise it, as necessary. In 2003, EPA issued its first grants management plan, which included goals such as strengthening grants oversight and promoting competition in the award of grants. The plan established a variety of performance targets, including competitively awarding at least 85 percent of new awards subject to EPA’s competition policy annually by 2005. In a 2009 update to the plan, EPA modified the target to competitively award at least 90 percent of new awards or dollars subject to the competition policy annually, and this performance measure remained in the 2016 plan update. EPA reports progress on this target annually in its agency financial report. The management of EPA discretionary grants is subject—as are all stages of the federal grants life cycle—to a range of requirements derived from a combination of Office of Management and Budget (OMB) guidance, agency regulations, and program-specific statutes. OMB is responsible for developing government-wide policies to ensure that grants are managed properly. Until recently, OMB’s policies were published as guidance in various circulars that grant-making agencies would adopt into their own regulations. In December 2013, OMB consolidated its grants management circulars into a single document, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (known as the Uniform Guidance), to streamline its guidance, promote consistency among grantees, and reduce administrative burden on nonfederal entities. In December 2014, along with EPA and other federal grant-making agencies, OMB issued a joint interim final rule implementing the Uniform Guidance for new awards made on or after December 26, 2014. Under its competition policy, EPA generally awards new discretionary grants competitively in two ways. Open competition. Open competitions are available to all potentially eligible applicants identified in the Catalog of Federal Domestic Assistance (CFDA) description for a particular grant program. According to the competition policy, open competition is EPA’s preferred method of competition and is required when the estimated total amount of awards under a competition—regardless of the amount of any individual awards—exceeds $100,000, unless the grant is an exception to or an exemption from competition (discussed below). Simplified competition. Simplified competitions are available to a subset of the potentially eligible applicants identified in the CFDA description, as long as EPA determines that they are capable and qualified to successfully perform the project. Simplified competition may only be used when the CFDA description indicates that EPA may limit eligibility to compete to a number or subset of eligible applicants. The competition policy states that, when the estimated total amount expected to be awarded does not exceed $100,000, open competition is preferred, but simplified competition is permitted. According to the competition policy, simplified competition is intended to reduce administrative costs, promote efficiency in competitions, and minimize burdens for program and regional offices and applicants in conducting and competing for grants for which a limited amount of funding is available. Under its competition policy, EPA may award new discretionary grants noncompetitively as exceptions to competition under any one of the following circumstances: when an award is $25,000 or less; when a program or regional office demonstrates that there is only one responsible source that has the capability to successfully perform a project because of such reasons as possessing proprietary data or unique or specialized equipment or facilities; when an award cannot be delayed because of unusual and compelling urgency or the interests of national security; when an award is to fund an unsolicited proposal that is unique or innovative, has been independently originated and developed by the applicant, was prepared without government direction or involvement, and does not resemble the substance of a pending or contemplated competitive grant; or when EPA determines that competition is not in the public interest. Many EPA grant programs are exempt from competition and, thus, are not subject to the competition policy. Exemptions from competition are made for the following groups of grant programs, which include some discretionary grants: grants to states, interstate agencies, local agencies, Indian tribes, intertribal consortia, and other eligible grantees under a variety of programs, including the Leaking Underground Storage Tank Trust Fund Cooperative Agreements, Oil Spill Trust Fund grants, and awards under any program that has a statutory or regulatory allotment or allocation funding formula; other programs available by statute, appropriation act, or regulation only to Indian tribes and intertribal consortia; grants required or authorized by law, executive order, or international agreement to be made to an identified grantee(s) in order to perform a specific project, and congressional earmarks to an identified grantee(s) to the extent consistent with any applicable executive orders and any other government-wide laws or guidance relating to earmarks; Senior Environmental Employment Program Cooperative grants to foreign governments and to United Nations agencies and similar international organizations for international environmental activities; and other programs if approved by the Assistant Administrator for the Office of Administration and Resources Management. Appendix III provides information on the EPA discretionary grant programs that have an exemption from competition. EPA’s competition policy describes provisions for making amendments to discretionary grants depending in part on whether the grant was disbursed over time and also whether it was subject to the competition policy. EPA generally makes four types of amendments to discretionary grants. No-cost amendments. No-cost amendments are for time extensions or to authorize spending unexpended funds on additional activities within the scope of the original grant. No-cost amendments do not provide additional dollars and are not required to be awarded competitively. Incremental amendments. Incremental amendments are for funding a grant over time, instead of funding the grant in a one-time lump sum. Incremental amendments are not required to be awarded competitively, as long as the work is within the scope of the original grant. Incremental amendments can only be funded up to the approved amount of the original grant, which may or may not have been awarded competitively. Supplemental amendments. Supplemental amendments are for additional dollars for unanticipated cost increases or for added work to grants awarded competitively or as exceptions to competition. Supplemental amendments for unanticipated cost increases are not required to be awarded competitively if they do not involve added work. Supplemental amendments for added work up to $25,000 (in the aggregate per grant) are not required to be awarded competitively if the work is within the scope of the original grant. Supplemental amendments for added work exceeding $25,000 (in the aggregate per grant) must be awarded competitively, unless the program or regional office demonstrates that the work is within scope of the original grant and only the grantee can perform it in a cost-effective manner. Amendments to exempt awards. Amendments to exempt awards are for any amendment to a grant awarded under an exemption from competition. While amendments to exempt awards may serve purposes similar to those of incremental and supplemental amendments, they constitute a separate category of amendments. Like the original award, amendments to exempt awards are not subject to the competition policy. EPA manages competition for its discretionary grants through a process established by its competition policy and implemented by its program and regional offices, which fund activities related to their own programmatic focuses.