Read the Rule — Regulation for Federal Financial Assistance

Compliance supplement means an authoritative source of information for auditors that identifies existing important compliance requirements that the Federal Government expects to be considered as part of an audit. Auditors use it to understand the Federal program's objectives, procedures, and compliance requirements, as well as audit objectives and suggested audit procedures for determining compliance with the relevant Federal program. Federal award date means the date when the authorized official of the Federal agency: (1) Signed (physically or digitally) the Federal award; or (2) Obligated the Federal award by alternative means consistent with the requirements of 31 U.S.C. 1501. Improper payment means a payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. The term improper payment includes: any payment to an ineligible recipient; any payment for an ineligible good or service; any duplicate payment; any payment for a good or service not received, except for those payments where authorized by law; any payment that is not authorized by law; and any payment that does not account for credit for applicable discounts. See OMB Circular A-123 Appendix C, Requirements for Payment Integrity Improvement, for additional definitions and guidance on the requirements for payment integrity. Notice of funding opportunity (NOFO) means a formal announcement of the availability of Federal funding through a financial assistance program from a Federal agency. The notice of funding opportunity provides information on the award, such as who is eligible to apply, the evaluation criteria for selecting a recipient or subrecipient, the required components of an application, and how to submit the application. The notice of funding opportunity is any electronic issuance that an agency uses to announce a funding opportunity, whether it is called a “program announcement,” “notice of funding availability,” “broad agency announcement,” “research announcement,” “solicitation,” or some other term. Personally Identifiable Information (PII) means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. Unobligated balance means the amount of funds under a Federal award that the recipient or subrecipient has not obligated. For purposes of this definition, “obligated” means funds that the recipient or subrecipient has legally committed through actions such as placing an order, awarding a contract or subaward, or otherwise incurring a liability for which payment will be due. The amount of an unobligated balance is computed by subtracting the cumulative amount of the recipient's or subrecipient's unliquidated financial obligations and expenditures under the Federal award from the cumulative amount of funds the Federal agency or pass-through entity authorized the recipient or subrecipient to obligate.

(b) * * * (3) * * * (ii) Section 200.216 (Prohibition of certain equipment, services, and systems) applies to loans and grants (see Pub. L. 115-232, Div. A, Title VIII, sec. 889, as amended); and (4) Subpart E (Cost Principles) applies to grants and cooperative agreements, but does not apply to the following: (i) Food commodities provided through grants and cooperative agreements; (ii) Agreements for loans, loan guarantees, interest subsidies, and insurance; and (iii) Federal awards to hospitals (see Appendix IX—Hospital Cost Principles). (5) * * * (i) Grants and cooperative agreements; (c) * * * (2) Cost-reimbursement contract under the FAR awarded to a non-Federal entity. When a non-Federal entity is awarded a cost-reimbursement contract under the FAR, only subpart D, §§ 200.331 through 200.333, and subparts E and F are applicable. See 48 CFR 16.301-2. (d) Governing provisions in cases of conflict— (1) Statutory conflicts. With the exception of subpart F, which is required by the Single Audit Act, Federal statutes govern in any circumstances where they conflict with the provisions of this part. For agreements with Indian Tribes, this includes the provisions of the Indian Self-Determination and Education and Assistance Act (ISDEAA), as amended (see 25 U.S.C. 5301-5423). (2) Regulatory conflicts. In the case of a Federal regulation that conflicts with the provisions of this part but that is not required by a Federal statute, once a Federal agency has issued regulations adopting the OMB regulations in this part, the following provisions of this part will govern in any circumstances where they conflict with the other regulatory provision: all sections in subpart F and § 200.340 in subpart D. See also § 200.106(a) regarding the process for issuing codified exceptions under this title. For other non-statutory conflicts involving a policy in a Federal regulation, once a Federal agency has issued regulations adopting the OMB regulations in this part, the Federal agency should apply the Government-wide policies in this part to the greatest extent permitted by law. If a Federal agency is aware of regulatory conflicts that could potentially affect activities under a Federal program or Federal award, the agency should clarify which provisions govern in funding opportunities and Federal award documents. Unless prohibited by statute, as a default presumption, a Federal agency should generally apply the government-wide policies in this part if it can do so consistent with law. Federal agencies should work to resolve any such regulatory conflicts consistent with their rulemaking authorities; applicable provisions of this part, such as §§ 200.102, 200.106, and 200.110; or both. (f) Additional program applicability. Except for §§ 200.203 and 200.216, the regulation in subpart C does not apply to the following programs:

(b) Statutory and regulatory exceptions. Except for subpart F of this part, and subject to § 200.101(d), a Federal agency may adjust requirements applicable to a class of Federal awards, recipients, or subrecipients when required by Federal statutes or regulations. Except for provisions in subpart F, when a Federal statute requires exceptions to requirements of this part for a class of Federal awards, recipients, or subrecipients, a Federal agency does not need OMB approval to allow those exceptions. See also § 200.106. (c) Federal agency exceptions. Federal agencies may allow exceptions to requirements of this part on a case-by-case basis for individual Federal awards, recipients, or subrecipients, except when the exceptions are prohibited by law or other approval is expressly required by this part. See, for example, § 200.340. Only the cognizant agency for indirect costs may authorize exceptions related to cost allocation plans or indirect cost rate proposals.

(a) Agency implementation of this part. The specific requirements and responsibilities of Federal agencies, non-Federal entities, recipients, and subrecipients are set forth in this part. Federal agencies making Federal awards to non-Federal entities must implement the language in subparts A through F of this part in codified regulations unless different provisions are required by Federal statute or are approved by OMB. (b) Agency responsibilities. Through adoption of this part in codified regulations, unless different provisions are required by Federal statute or are approved by OMB, Federal agencies are responsible for implementing: (1) The language in subparts A through F of this part; and (2) Other applicable requirements for Federal awards in parts 25, 170, 175, 180, 182, 183, and 184 of chapter I of this subtitle.

Inquiries from Federal agencies concerning this part may be directed to OMB. Inquiries from recipients or subrecipients should be addressed to the Federal agency, the cognizant agency for indirect costs, the cognizant agency for audit, or the pass-through entity, as appropriate.

(a) The Government-wide standards set forth in this part affecting the administration of Federal awards by Federal agencies become effective once implemented by Federal agencies or when any future amendment to this part becomes final. Thus, once Federal agencies have issued regulations in subtitle B of this title adopting the OMB regulations in this part, the process for future updates of regulations in subtitle B will be complete each time OMB issues a final rule amending this part. If required by Federal statute or otherwise approved by OMB, Federal agencies remain permitted to amend their regulations in subtitle B to make agency-specific additions, clarifications, or exceptions to the Government-wide policies and procedures in this part. See § 200.106(a).

All Federal financial assistance announcements, applications, and Federal award information must be in the English language and must be in terms of U.S. dollars.

Federal agencies must establish conflict of interest policies for Federal awards. A recipient or subrecipient must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity in accordance with the established Federal agency policies. A recipient or subrecipient must also disclose whether any employees who worked on an application for, or proposal in support of, a resulting Federal award, or are anticipated to work on activities under the Federal award, were employed by the awarding Federal agency during the preceding two years prior to application submission. This disclosure must be provided to agencies for informational purposes.

An applicant, recipient, or subrecipient of a Federal award must promptly disclose whenever, in connection with the Federal award (including any activities or subawards thereunder), it has credible evidence of the commission of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in title 18 of the United States Code or a violation of the Federal civil False Claims Act (31 U.S.C. 3729-3733). The disclosure must be made in writing to the Federal agency, the agency's Office of Inspector General, and pass-through entity (if applicable). Recipients and subrecipients are also required to report matters related to recipient integrity and performance in accordance with appendix XII to this part. Failure to make required disclosures can result in any of the administrative actions described in § 200.339. (See also 2 CFR part 180, 31 U.S.C. 3354, and 41 U.S.C. 2313.) Any such disclosures made to the agency's office of Inspector General must be transmitted to the United States Attorney's Office for the District of Columbia within ten days of receipt.

(a) Federal awards. The Federal agency must decide on the appropriate type of agreement for a Federal award (for example, a grant, cooperative agreement, or contract) in accordance with this regulation. See the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-6309). See § 200.332 for information applicable to pass-through entities. (b) Fixed amount awards. Fixed amount awards are not permitted unless otherwise authorized by Federal statute. The term fixed amount award means a type of grant or cooperative agreement in which the Federal agency or pass- through entity provides a specific amount of funding without regard to actual costs incurred under the Federal award. See also § 200.333 regarding fixed amount subawards, which also are not permitted.

(a) Elements of program design. The Federal agency must design a Federal program and create an Assistance Listing before announcing the Notice of Funding Opportunity. A Federal program must be designed: (1) With clear goals and objectives that: (i) Aim to achieve meaningful results; (ii) Are consistent with the public purpose of the program as authorized by law; and (iii) Align with administration policies and priorities; (b) Other considerations. Federal agencies should develop Federal programs in consultation with communities benefiting from or impacted by the program. In addition, Federal agencies should consider available data, evidence, and evaluation results from past programs and make every effort to extend eligibility requirements to all potential applicants. Federal agencies are encouraged to coordinate with other agencies during program planning and design, particularly when the goals and objectives of a program or project align with those of other agencies. (c) Limitations on authorized use of Federal program funds. Federal agencies must develop Federal programs and implement activities under those programs in a manner that ensures compliance with all applicable restrictions on the use of Federal funds, including ensuring that Federal program funds are only used for public purposes of support authorized by law. For example, Federal agencies must ensure that Federal program funds are not used to promote, subsidize, or support political activities or initiatives unrelated to authorized public purposes, such as political advocacy, lobbying, or any attempt to influence legislation, elections, or government officials. Federal programs should be developed to avoid even the appearance of supporting such prohibited activities to ensure that all activities performed under Federal awards are authorized by law. (d) Eligibility of nonprofit organizations. To the extent permitted by law, when a Federal agency determines it is necessary to restrict eligibility among different types of nonprofit organizations, the notice of funding opportunity must specify the applicable Internal Revenue Code designation for eligible nonprofit organizations (for example, 501(c)(3) organizations) and expressly state that other types of nonprofit organizations not specifically identified are ineligible (for example, 501(c)(4) organizations). When eligibility is restricted among different types of nonprofit organizations, the Federal agency is not required to list every type of ineligible organization, but should ensure that eligibility information is sufficiently clear for prospective applicants. Federal agencies should consider exercising such discretion when warranted by statute, program objectives, or risk considerations. (e) Eligibility of entities for research and development awards. (1) To the extent permitted by law, Federal awards for research and development must be made to entities that are organized under the laws of the United States, a State, or Tribal government. Federal agencies may not issue Federal awards for research and development to foreign entities except where expressly authorized by statute or where a compelling interest exists for the agency's mission, the administration's priorities, and for the United States, as determined by the agency's senior appointee. (2) When designing research and development programs, and evaluating applications, Federal agencies must apply a domestic-first framework, under which international elements may be included only if the Federal agency determines that such elements are justified, consistent with program objectives, and in the national interest of the United States. (3) Federal agencies should consider, as applicable, the following factors when determining whether an international element is warranted: (i) The extent to which the proposed international element is necessary to achieve the scientific or technical objectives of the project and is integral to the scientific rationale of the program. (ii) The extent to which the international element provides access to unique expertise, facilities, data, study populations, environmental conditions, or other resources that are not reasonably available within the United States. (iii) The likelihood that the proposed international element will enhance the scientific enterprise of the United States, including through the development of new knowledge, methodologies, technologies, or collaborative networks that can be applied domestically. (iv) The adequacy of the facilities, equipment, personnel, and administrative capacity at the international site, or of any foreign entities that would perform work, to carry out the proposed scope of work under the Federal award at a level comparable to that of a domestic recipient performing similar activities. (4) Nothing in this paragraph (e) prohibits the participation of foreign entities as subrecipients or contractors under a research and development award made to an eligible U.S. entity. (5) For the purposes of this section, international elements may include performance of activities under the Federal award outside of the United States or by a foreign entity. (f) Multi-year awards. When consistent with program objectives, and subject to restrictions in law, Federal agencies are encouraged to design Federal programs to allow for multi-year awards with budget periods longer than one year, rather than issuing separate notices of funding opportunities on an annual basis. Such Federal awards must be designed to comply with all applicable funding limitations and must not be administered in a manner that would result in a violation of the Antideficiency Act. (g) Awards for scientific research. Federal agencies that issue Federal financial assistance for scientific research must categorize those awards as basic research, applied research, and experimental development consistent with the definitions in OMB Circular A-11. This categorization must be communicated to the recipient and included in the terms and conditions of the Federal award. See § 200.211(d).

(a) In general. The Federal agency must publicly announce funding opportunities for all discretionary awards. As appropriate and consistent with authorizing law, funding opportunities may allow for open competition, limited competition, or selection on a non-competitive basis. See the definition of discretionary award in § 200.1. In developing notices of funding opportunities (NOFOs) for discretionary awards, Federal agencies must: (1) Post the NOFO on Grants.gov . A Federal agency head (or designee) may approve exceptions to this requirement when the agency determines that publicly announcing an opportunity would pose a risk to national security or is in the national interest of the United States. The Federal agency may either post the entire notice or a link to the entire notice; (2) Require applicants to apply using Grants.gov , unless a program specific exception is expressly authorized by Federal statute or approved by the Federal agency head (or designee); (3) Write the NOFO in plain language. The Federal agency must make efforts to limit the length and complexity of the NOFO and only include the information necessary for the effective communication of the program objectives. The Federal agency must not require the applicant to employ technical or legal consultants to complete an application in response to the NOFO. A NOFO should be drafted to reasonably allow for all applicants to compete and succeed against institutions that have historically received consecutive awards in prior years; (4) Follow the policy in § 200.111; and (5) Make every effort to identify all eligible applicants in the notice. (b) Pre-application technical assistance. Federal agencies may offer pre-application technical assistance or provide clarifying information for funding opportunities. However, Federal agencies must ensure these resources are made accessible and widely available to all potential applicants (for example, by posting answers to questions and requests on Grants.gov ). (c) Statement of Interest (SOI). When a Federal agency anticipates receiving a large volume of applications, or where proposals are expected to be long and complex, the agency is strongly encouraged to request a Statement of Interest (SOI) as part of the notice of funding opportunity. A SOI is a short pre-application submission, typically no more than a few pages, that allows applicants to summarize their project concept, objectives, and anticipated approach. Following submission of SOIs, the Federal agency must review SOI proposals in accordance with § 200.205 to determine which applicants will be invited to submit full proposals. When utilizing a SOI process, Federal agencies must not compare any SOI submission against a full proposal, and may only review full proposals from applicants that are invited to submit a full proposal based on their SOI. The purpose of an SOI is to reduce burden on applicants by avoiding the preparation of lengthy proposals while also assisting Federal agencies in identifying the most competitive applicants early in the process. (d) Summary information in notices of funding opportunities. The Federal agency must display the following information on Grants.gov or other system authorized by Federal statute or approved by the Federal agency head (or designee), in a location preceding the full text of the announcement: (1) Federal Agency Name; (2) Funding Opportunity Title; (3) Announcement Type (whether the funding opportunity is the initial announcement or a modification of a previously announced opportunity); (4) Funding Opportunity Number (required, if the Federal agency has assigned a number to the funding opportunity announcement); (5) Assistance Listing Number(s); (6) Funding Details. To the extent appropriate, the total amount of funding that the Federal agency expects to award, the anticipated number of awards, and the expected dollar values of individual awards, which may be a range or average; (7) Key Dates. Key dates include due dates for submitting applications or Executive Order 12372 submissions, as well as for any letters of intent or SOI submissions. For any announcement issued before a program's application materials are available, key dates also include the date on which those materials will be released; and any other additional information, as deemed applicable by the Federal agency. For opportunities that require the submission of a SOI, the Federal agency must provide a date by which it will inform selected applicants to submit a full proposal. For all opportunities, if possible, the Federal agency should provide an anticipated award date. If the notice of funding opportunity states that applications will be evaluated on a “rolling” basis (that is, at different points during a specified period of time), the Federal agency should provide an estimate of the time needed to process an application and notify the applicant of the Federal agency's decision; (8) Executive Summary. A brief description that is written in plain language and summarizes the goals and objectives of the program, the target audience, and eligible applicants. The text of the executive summary must not exceed 500 words, unless authorized by the head of the Federal agency (or their designee); and (9) Agency contact information. (e) Availability period. The Federal agency should make all funding opportunities available for application for at least 60 calendar days. However, the Federal agency may modify the availability period of an opportunity if needed. For example, extending the period may be necessary to provide technical assistance to an applicant pool that was not anticipated when the announcement was made or has less experience with applying for Federal financial assistance. The Federal agency may also determine that an availability period of less than 60 days is sufficient for a particular funding opportunity. However, no funding opportunity will be available for less than 30 calendar days unless the Federal agency determines that exigent circumstances justify this and includes this justification in the funding opportunity. (f) Full text of notices of funding opportunities. (1) The Federal agency must include the information in appendix I for every NOFO. (2) Federal agencies must write NOFOs in plain language. To the extent possible Federal agencies must streamline opportunities to make them accessible, particularly for funding opportunities that are new, or intended to reach inexperienced applicants. Federal agencies, when feasible, should strive to ensure that NOFOs are accessible to a broad range of applicants, including those that have not previously received Federal awards. OMB will periodically analyze recipients of Federal awards. Federal agencies may be required to submit a report to OMB detailing the specific recipients or types of recipients that received Federal awards from the Federal agency over a specific time period. (3) To reduce application burden, Federal agencies should consider whether programmatic or administrative requirements specific to the agency, program, or funding opportunity must be met at the time of application or as a requirement of receiving a Federal award.

(a) In general. Unless prohibited by Federal statute, the Federal agency must design and execute a merit review process of applications for all discretionary awards. See the definition of discretionary award in § 200.1. The objective of a merit review process is to select recipients most likely to be successful in delivering results based on the program objectives as outlined in § 200.202. A merit review is an objective process of evaluating Federal award applications in accordance with the written standards of the Federal agency. These standards should identify the number of people the agency requires to participate in the merit review process. The merit review process explained in this section, including the pre-issuance review described in paragraph (b) of this section, must be described or incorporated by reference in the applicable NOFO. The pre-issuance review described in paragraph (b) may form the basis of a decision not to select an applicant to receive a Federal award. See § 200.204 and appendix I to this part. The Federal agency must also periodically review its merit review process. (b) Pre-issuance review. As part of the merit review process, Federal agencies must perform pre-issuance reviews to ensure that Federal award proposals selected for funding are consistent with applicable law, Federal agency priorities, and the national interest. In doing so, Federal agencies heads must designate one or more senior appointees to conduct a pre-issuance review of all discretionary awards. As part of this pre-issuance review for discretionary awards, senior appointees (or their designee) must, as relevant and to the extent consistent with applicable law, apply the following principles when reviewing Federal award proposals: (1) Discretionary awards must, where applicable, demonstrably advance the President's policy priorities. (2) Discretionary awards must not be used to fund, promote, encourage, subsidize, or facilitate: (i) Racial preferences or other forms of racial discrimination by the recipient, including activities where race or intentional proxies for race will be used as a selection criterion for employment or program participation; (ii) Denial by the recipient of the sex binary in humans or the notion that sex is a chosen or mutable characteristic; (iii) Illegal immigration; or (iv) Any other initiatives that compromise public safety or promote anti-American values. (3) All else being equal, preference for discretionary awards should be given to institutions with lower indirect cost rates. (4) Discretionary awards should be given to a broad range of recipients. Research grants should be awarded to a mix of recipients likely to produce immediately demonstrable results and recipients with the potential for potentially longer-term, breakthrough results, in a manner consistent with the notice of funding opportunity. (5) In performing activities under Federal awards, applicants should commit to complying with administration policies, procedures, and guidance respecting Gold Standard Science. (6) Discretionary awards should include benchmarks for measuring success and progress towards relevant goals and, as relevant for awards pertaining to scientific research, a commitment to achieving Gold Standard Science. See also § 200.202(a). (7) To the extent institutional affiliation is considered in making discretionary awards, agencies should prioritize an institution's commitment to rigorous, reproducible scholarship over its historical reputation or perceived prestige. For science grants, agencies should prioritize institutions that have demonstrated success in implementing Gold Standard Science. (8) See also §§ 200.202(c) and 200.300. (c) Procedure for pre-issuance review. When conducting a pre-issuance review, senior appointees (or their designee) must not ministerially ratify or routinely defer to the recommendations of others, but must instead use their independent judgment when evaluating Federal award proposals. (d) Use of peer review. Nothing in this part must be construed to discourage or prevent the use of peer review methods to evaluate proposals for discretionary awards or otherwise inform agency decision making, provided that peer review recommendations remain advisory and are not ministerially ratified, routinely deferred to, or otherwise treated as de facto binding by senior appointees or their designees. Further, nothing in this part must be construed to create any rights to any particular level of review or consideration for any funding applicant except as consistent with applicable law. (e) Agency discretion to reissue funding opportunities. A Federal agency is not required to issue a discretionary award as a result of a NOFO if doing so would fund low-quality proposals or be inconsistent with the principles of this part. The agency may, at its discretion, repost a funding opportunity.

(b) Risk assessment —(1) In general. The Federal agency must establish and maintain policies and procedures for conducting a risk assessment to evaluate the risks posed by applicants before issuing Federal awards. This assessment helps identify risks that may affect the advancement toward or the achievement of a project's goals and objectives. Risk assessments assist Federal managers in determining appropriate resources and time to devote to project oversight and monitor recipient progress. This assessment should be conducted no earlier than 30 days before the award decision and may incorporate elements such as the quality of the application, award amount, risk associated with the program, cybersecurity, and fraud risks. If the Federal agency determines that the Federal award will be made, specific conditions that address the assessed risk may be implemented in the Federal award. The risk criteria to be evaluated must be described in the announcement of the funding opportunity described in § 200.204. (2) Items for consideration. In evaluating risks posed by applicants, the Federal agency should consider the following items: (i) Financial stability. The applicant's record of effectively managing financial risks, assets, and resources; (ii) Financial capacity. The applicant's ability to manage and oversee high-dollar awards, especially those that are in excess of awards the applicant typically implements, as determined by the Federal agency; (iii) Management systems and standards. Quality of management systems and ability to meet the management standards prescribed in this part; (iv) History of performance. The applicant's record of managing previous and current Federal awards, including compliance with reporting requirements and conformance to the terms and conditions of Federal awards. If prior performance is considered, it should be evaluated solely on the outcomes of prior work, with both positive and negative outcomes measured against the goals of the funding opportunity and given equal weight, if applicable; (v) Audit reports and findings. Reports and findings from audits performed under subpart F of this part or the reports and findings of any other available audits, if applicable; (vi) Ability to effectively implement requirements. The applicant's ability to effectively implement statutory, regulatory, or other requirements imposed on recipients of Federal awards; (vii) History of questionable practices. Based on publicly available and verifiable information, the applicant's record of: (A) Plagiarism in studies or papers published by the applicant or its staff; (B) Discredited or non-replicable studies published by the applicant or its staff; (C) Engaging in activities or initiatives that are inconsistent with Federal civil rights laws, including the equal protection principles of the U.S. Constitution and prohibitions against unlawful discrimination; or (D) Engaging in activities or initiatives that are inconsistent with religious liberty laws. (viii) Memberships and affiliations. Based on publicly available and verifiable information, the applicant's membership in or affiliation with organizations engaged in activities that violate Federal law, undermine public safety or national security, or advocate for the overthrow of the United States Government; and (ix) Foreign gift and contract reporting. As applicable, the applicant's compliance with foreign gift and contract disclosure requirements under section 117 of the Higher Education Act of 1965 (Pub. L. 89-329, as amended, codified at 20 U.S.C. 1011f). (d) Suspension and debarment compliance. The Federal agency must comply with the Government-wide suspension and debarment regulation in 2 CFR part 180 and individual Federal agency suspension and debarment requirements in title 2 of the Code of Federal Regulations. Federal agencies must also require recipients to comply with these requirements. These requirements restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving Federal awards or participating in Federal awards.

(c) Reducing administrative and regulatory burden. Federal agencies that issue Federal financial assistance must periodically review programmatic and administrative requirements specific to the agency, program, or award(s) to determine whether such requirements are unnecessary and not required by this part or applicable law. Federal agencies should update OMB annually on any such requirements that have been removed.

(a) In general. Federal agencies are responsible for ensuring that specific Federal award conditions and performance expectations for Federal awards are consistent with the program design (see §§ 200.202 and 200.301). (b) Adjustment of specific conditions. (1) To the extent permitted by law, based on consideration of the factors listed in paragraph (c) of this section, the Federal agency may: (i) Add specific conditions when a Federal award is made; and, (ii) Add or remove specific conditions throughout the period of performance. (2) The addition or removal of specific conditions for existing Federal awards based on consideration of the factors listed in paragraph (c) of this section must occur within 15 calendar days after the Federal agency's determination to adjust the conditions. Specific conditions not based on factors in paragraph (c) may be added or removed during the period of performance only with the agreement of the recipient. (c) Factors for consideration. The Federal agency or pass-through entity may adjust specific conditions in the Federal award based on an analysis of the following factors: (1) Review of OMB-designated repositories of Government-wide data (for example, SAM.gov ) or review of its risk assessment (see § 200.206); (2) The recipient's or subrecipient's history of compliance with the terms and conditions of Federal awards, including the Federal award the Federal agency is adjusting (see also § 200.339); (3) The recipient's or subrecipient's ability to meet expected performance goals as described in § 200.211; or (4) A determination of whether a recipient or subrecipient has inadequate financial capability to perform the Federal award. (d) Examples of specific conditions. Specific conditions may include the following: (1) Requiring payments as reimbursements rather than advance payments; (2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance; (3) Requiring additional or more detailed financial reports, which may include requiring information on payments to subrecipients, contractors and vendors; (4) Requiring additional project monitoring, which may include financial integrity-related site visits with the goal of improving the financial integrity of the program or recipient organization; (5) Requiring the recipient or subrecipient to obtain technical or management assistance; or (6) Establishing additional prior approvals. (e) Notification. Prior to imposing specific conditions, the Federal agency or pass-through entity must notify the recipient or subrecipient as to: (1) The nature of the specific condition(s); (2) The reason why the specific condition(s) is being imposed; (3) The nature of the action needed to remove the specific condition(s); (4) The time allowed for completing the actions; and (5) The method for requesting the Federal agency or pass-through entity to reconsider imposing a specific condition. (f) Program-level specific conditions. Notwithstanding any other provision of this section, the Federal agency may include program-level specific Federal award conditions, including any of the specific conditions described in paragraph (d) of this section, in any Federal award made under a Federal program that the Federal agency determines presents elevated programmatic risk related to program administration, program oversight, or effective monitoring of the use or expenditure of Federal funds by recipients or subrecipients. Federal agencies are responsible for ensuring that program-level specific Federal award conditions and performance expectations are consistent with the program design (see §§ 200.202 and 200.301) and applicable law. The Federal agency may remove program-level specific conditions if it determines that the Federal program no longer presents elevated programmatic risk.

(b) * * * (15) Identification of whether the Award is Research and Development (R&D) (see also § 200.202(g)); and (16) Indirect cost rate for the Federal award (including if the de minimis rate is charged per § 200.414). (c) * * * (1) * * * (v) Termination provisions. Federal agencies must inform recipients of the termination provisions in § 200.340. Except as provided in § 200.340(b), the Federal agency must always include the termination provisions set forth in § 200.340(a)(1) through (4) in each Federal award or expressly incorporate them by reference. Pursuant to § 200.340(a)(5), if applicable, the Federal agency must also inform recipients of any additional termination provisions that apply to a Federal award, including any applicable termination provisions in the Federal agency's regulations. Subject to the limitations in § 200.340(b), such additional provisions must not limit the right of the Federal agency to terminate for any of the reasons in § 200.340(a)(1) through (4).

(e) Federal agencies must not post any information that will be made publicly available in the non-public segment of the responsibility and qualification records that is covered by a disclosure exemption under the Freedom of Information Act. If a recipient asserts within seven calendar days to a Federal agency that some or all of the publicly available information is covered by a disclosure exemption under the Freedom of Information Act (5 U.S.C. 552), the Federal agency that posted the information must remove the posting within seven calendar days of receiving the assertion. Prior to reposting the releasable information, the Federal agency must resolve the issue in accordance with the agency's Freedom of Information Act procedures.

Federal agencies, recipients, and subrecipients are subject to the regulation implementing Never Contract with the Enemy in 2 CFR part 183. The regulation in 2 CFR part 183 affects covered contracts, grants, and cooperative agreements that are expected to exceed $50,000 during the period of performance, are performed outside the United States and its territories, and are in support of a contingency operation in which members of the Armed Forces are actively engaged in hostilities.

(a) Prohibition of certain telecommunications and video surveillance equipment or services. Pursuant to section 889 of Public Law 115-232, the following prohibition applies to certain telecommunications and video surveillance equipment or services. (1) General prohibition. Recipients and subrecipients are prohibited from obligating or expending loan or grant funds to: (i) Procure or obtain prohibited telecommunications equipment or services; (ii) Extend or renew a contract to procure or obtain prohibited telecommunications equipment or services; or (iii) Enter into a contract (or extend or renew a contract) to procure or obtain prohibited telecommunications equipment or services. (2) Definition of prohibited telecommunications equipment or services. As described in section 889 of Public Law 115-232, prohibited telecommunications equipment or services (referred to in the statute as “covered telecommunications equipment or services”) means any of the following: (i) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities); (ii) For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities); (iii) Telecommunications or video surveillance services provided by such entities or using such equipment; and (iv) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country, as defined in section 889 of Public Law 115-232. (3) Inclusion in definition of prohibited telecommunications equipment or services. For the purposes of this section, “covered telecommunications equipment or services” also include systems that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. (4) Certification. When the recipient or subrecipient accepts a loan or grant, it is certifying that it will comply with the prohibition on prohibited telecommunications equipment and services in this section. The recipient or subrecipient is not required to certify that funds will not be expended on prohibited telecommunications equipment or services beyond the certification provided upon accepting the loan or grant and those provided upon submitting payment requests and financial reports. (5) Additional information. For additional information, see section 889 of Public Law 115-232 and § 200.471. (b) Prohibition of procurement and operation of prohibited unmanned aircraft systems. Pursuant to section 1825 of the American Security Drone Act of 2023 (Pub. L. 118-31), on or after December 22, 2025, the following prohibition restricts the extent to which funds provided through a Federal grant or cooperative agreement, or otherwise made available, may be used by a recipient or subrecipient for procurement and operation of Federal Acquisition Security Council (FASC)-prohibited unmanned aircraft systems. This prohibition applies to all Federal awards, regardless of whether the FASC-prohibited unmanned aircraft system to be acquired or operated will process, store, or transmit Federal information. (1) Definitions. The terms “FASC-prohibited unmanned aircraft system” and “unmanned aircraft system” have the definitions provided in 48 CFR 40.201. (2) General prohibition. On or after December 22, 2025, except as provided in paragraphs (b)(3) through (6) of this section, no Federal funds awarded through a grant or cooperative agreement, or otherwise made available, may be used by a recipient or subrecipient: (i) To procure a FASC-prohibited unmanned aircraft system; or (ii) In connection with the operation of such a FASC-prohibited unmanned aircraft system. (3) Department of Homeland Security, Department of Defense, Department of State, and the Department of Justice exemptions. (i) The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under paragraph (b)(2) of this section if the procurement or operation is required in the national interest of the United States and: (A) Is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology; (B) Is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or (C) Is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official. (ii) The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General must notify OMB within five calendar days of issuing an award with exemptions to paragraph (b)(3)(i) of this section). (4) Department of Transportation exemption. The Secretary of Transportation is exempt from the restriction under paragraph (b)(2) of this section if the operation or procurement is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration's Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary's designee. (5) National Oceanic and Atmospheric Administration (NOAA) exemption. The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under paragraph (b)(2) of this section if the operation or procurement is necessary for the purpose of meeting NOAA's science or management objectives or operational mission. (6) Waivers. The head of a Federal agency may waive the prohibition under paragraph (b)(2) of this section on a case-by-case basis: (i) With the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and (ii) Upon notification to: (A) The Committee on Homeland Security and Governmental Affairs of the Senate; (B) The Committee on Oversight and Accountability in the House of Representatives; and (C) Other appropriate congressional committees of jurisdiction.

(a) General prohibition. To the maximum extent permitted by law, Federal agencies must eliminate the use of disparate-impact liability in all contexts relevant to Federal awards. Disparate-impact liability imperils the effectiveness of civil rights laws by mandating, rather than proscribing, discrimination. (b) Federal agency and pass-through entity responsibilities. To the maximum extent permitted by law, to avoid violating the Constitution and Federal civil rights laws, the Federal agency or pass-through entity must: (1) Ensure that Federal awards are administered in a way that does not promote or support the use of disparate-impact liability. This includes ensuring, unless expressly required by law, that Federal awards are not used in support of disparate-impact studies, disparate-impact litigation, or other related activities; and that Federal award activities based on the assumed risk of disparate-impact liability are not allowed; (2) Not adopt, issue, or enforce terms and conditions, guidance, or other policies and procedures related to Federal financial assistance that promote, support, or otherwise include the use of disparate-impact liability; and (3) Review terms and conditions, guidance, and other policies and procedures related to Federal financial assistance to ensure alignment with this paragraph (b). (c) Recipient and subrecipient responsibilities. To the maximum extent permitted by law, to avoid violating the Constitution and Federal civil rights laws, recipients and subrecipients must: (1) Not adopt, issue, or enforce disparate-impact liability standards in administering programs or activities supported by a Federal award; and (2) Review their policies and procedures related to Federal financial assistance to ensure alignment with this paragraph (c). (d) Exception for analysis for internal use. Nothing in this section prohibits a recipient or subrecipient from conducting statistical or demographic analysis for internal program evaluation, research, or other purposes, provided that Federal award funds are not used for conducting such analysis, and the results of such analysis are not used in connection with or applied to activities under the Federal award, such as: (1) Treating individuals unequally based on federally protected characteristics, such as race or sex, regardless of individual strengths, effort, or achievement; or (2) Adjusting activities or performance under the Federal award based on theories, or the assumed risk of, disparate-impact liability. (e) Definition of disparate-impact liability. For the purposes of this section, disparate-impact liability means a theory under which a facially neutral policy or practice (for example, a merit-based employment policy or practice) gives rise to an automatic or near-insurmountable presumption of the existence of unlawful discrimination on the basis of federally protected characteristics (such as race or sex) where there are any differences or disparities in outcomes (for example, disproportionate effects) among different races, sexes, or similar groups. Under a theory of disparate-impact liability, this presumption would apply even if there is no facially discriminatory policy or practice, there is no discriminatory intent involved, and equal opportunity is provided. Discriminatory intent is irrelevant in a disparate-impact claim. Disparate-impact liability effectively mandates consideration of federally protected characteristics, such as race or sex, and incentivizes racial balancing, contrary to principles of equal treatment and merit-based opportunity.

(a) Public entities. Public entities that are a recipient or subrecipient of Federal financial assistance must not discriminate on the basis of the viewpoint, content, or subject matter of speech—including on the basis of political, ideological, or religious affiliation or perspective—in providing services for events, meetings, or other expressive activities. This paragraph (a) includes ensuring that, on the basis of the viewpoint, content, or subject matter of speech, the recipient or subrecipient does not: (1) Deny, reduce, or otherwise modify services for events, meetings, or other expressive activities in a manner that is inconsistent with the level services or access ordinarily provided for events, meetings, or expressive activities of a similar type and size; (2) Impose additional, inconsistent, or unreasonable fees, security costs, insurance requirements, related charges, or other administrative burdens; or (3) Otherwise apply event or facility-use policies in a manner that has the purpose or effect of suppressing lawful expression of speech protected by the First Amendment. (b) Non-public entities. To ensure that Federal funds are not used in a manner inconsistent with the First Amendment, the requirements of paragraph (a) of this section also apply to non-public entities to the extent that the relevant activities are within the scope of activities funded by a Federal award. (c) Scope. (1) The prohibition in paragraph (a) of this section applies to events sponsored, hosted, or permitted by a recipient or subrecipient of Federal financial assistance on property or facilities it owns, leases, or otherwise controls. (2) For purposes of this section, the term “services” includes security, crowd management, access to facilities, and other logistical or safety support ordinarily provided by the recipient or subrecipient for events of a similar type and size.

(a) General prohibition. Except as provided in paragraph (c) of this section, Federal funds may not be obligated or expended by a recipient or subrecipient to support a bilateral or multilateral collaboration, agreement, program, or activity with a covered foreign country or covered foreign entity. (b) Scope. The prohibition in paragraph (a) of this section applies regardless of whether Federal funds are used for direct programmatic activities, research, technical assistance, travel, or indirect costs allocable to such collaborations. (c) Exceptions. A Federal agency may authorize an exception to this section when expressly authorized by Federal statute or the Federal agency head (or designee) determines that the activity does not pose a risk to national security and is in the national interest of the United States. (d) Definitions. For purposes of this section: (1) Covered foreign country means any country designated by statute, Executive order, or other Federal law as: (i) A foreign adversary; (ii) A country of particular concern; or (iii) A country subject to sanctions or restrictions relating to national security, defense, or intelligence activities. (2) Covered foreign entity means: (i) An entity owned or controlled by, or acting on behalf of, a covered foreign country; (ii) An entity identified as an “entity of particular concern” on a list maintained by a Federal agency pursuant to statute (including lists maintained under a National Defense Authorization Act or the International Emergency Economic Powers Act); or (iii) An entity affiliated with the military, intelligence, or security services of a covered foreign country.

(a) In general. The Federal agency or pass-through entity must manage and administer the Federal award to ensure that Federal funding is expended and associated programs are implemented in full accordance with the U.S. Constitution and applicable Federal statutes and regulations—including provisions protecting free speech and religious liberty, and those prohibiting discrimination—and the requirements of this part. Consistent with Federal law, this includes managing and administering the Federal award to ensure that no person otherwise eligible will be unlawfully excluded from participation in, unlawfully denied the benefits of, or otherwise subjected to unlawful discrimination in the administration of Federal programs, activities, projects, assistance, and services. The Federal agency or pass-through entity must communicate to a recipient or subrecipient all relevant requirements, including those contained in general appropriations provisions, and incorporate them directly or by reference in the terms and conditions of the Federal award and all subawards. (b) Limitations on authorized use of Federal award funds. In administering Federal awards, to the maximum extent permitted by law, the Federal agency or pass-through entity must ensure that Federal awards and subawards are not used to fund, promote, encourage, subsidize, or facilitate: (1) “Diversity, equity, and inclusion” (DEI) or “diversity, equity, inclusion, and accessibility” (DEIA) policies, principles, or practices that violate any applicable Federal anti-discrimination laws. This includes racial preferences or other forms of racial discrimination used by the recipient or subrecipient that violate any applicable Federal anti-discrimination laws, including activities where race or intentional proxies for race will be used as a selection criterion for employment or program participation. See also § 200.218; (2) Gender ideology as defined in Executive Order 14168. Gender ideology includes theories or ideologies that deny the biological reality of sex or the sex binary in humans, or endorse or advocate for the notion that sex is a chosen or mutable characteristic; or (3) The so-called “transition” of a child under 19 years of age from one sex to another, including the chemical and surgical mutilation of children. The term “chemical and surgical mutilation” has the meaning provided in Executive Order 14187. (c) Non-discrimination against faith-based organizations. Federal agencies and pass-through entities may not discriminate against or in favor of an applicant on the basis of the organization's religious character, affiliation, exercise, or lack thereof, nor on the basis of conduct that would not be considered ground to favor or disfavor a similarly situated secular organization. Faith-based organizations are eligible to apply for Federal financial assistance on the same basis as any other eligible organization. Applicants that meet all eligibility requirements may be considered for a Federal award under a notice of funding opportunity.

(a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (e) Take reasonable cybersecurity and other measures to safeguard information including personally identifiable information (PII), confidential business information, and other types of information subject to protections against disclosure under applicable law. This also includes information the Federal agency or pass-through entity designates as sensitive or other information the recipient or subrecipient considers sensitive and is consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. (f) Participate in the Department of Homeland Security's E-verify program to confirm the employment eligibility of all employees and contractors hired in or performing work in the United States under a Federal award. (1) Recipients and subrecipients must comply with all requirements of the E-verify program and applicable Federal law. (2) If a recipient or subrecipient receives a Final Nonconfirmation (FNC) notice through E-verify, the recipient or subrecipient must submit this information to the Federal agency or pass-through entity. The recipient or subrecipient must also provide the Federal agency or pass-through entity with the FNC case verification number and confirm that the recipient or subrecipient has taken appropriate actions consistent with E-Verify program requirements. Failure to provide notice or take appropriate action may result in the termination of the Federal award. (g) In carrying out the internal control requirements of this section, a non-Federal entity that is a State must, prior to the disbursement of payments made using Federal award funds subject to this part, review available data sources with relevant information to verify the eligibility of payees and prevent improper payments. Such reviews may be conducted through the Department of the Treasury's Do Not Pay (DNP) system, or through an alternative payment screening process that provides protection against improper payments. This requirement is in addition to, and does not replace, any program-specific eligibility verification or payment screening requirements applicable to a Federal award.

(a) Treasury Do Not Pay (DNP) System Review and Verification. Prior to the disbursement of any Federal payment under this part, the Federal agency must review available data sources with relevant information on the eligibility of the recipient included in the Department of the Treasury's Do Not Pay (DNP) System to verify eligibility and prevent improper payments. (c) Payment justifications for recipients and subrecipients other than States. (1) In coordination with OMB and the Department of the Treasury, each Federal agency must use an information system for payments capable of recording a brief, written justification for each payment request. Federal agencies must require payment justifications as described in this paragraph (c) as soon as information systems with this capability become available. (2) Payment requests under paragraph (d) of this section from a recipient to the Federal agency or a subrecipient to the pass-through entity must include a brief, written justification regardless of whether the payment is made in advance or to reimburse the recipient or subrecipient. The brief, written justification must include information on the activities or aspects of the Federal award that correspond to the payment request. For example, this may include project milestones, project activities, administrative activities, or other requirements that must be completed under the Federal award. (d) Payments for recipients and subrecipients other than States. For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. See § 200.302(b)(6). Except as noted in this part, the Federal agency must require recipients to use only OMB-approved, Government-wide information collections to request payment.

(a) Criteria for cost sharing funds. For all Federal awards, the Federal agency or pass-through entity must accept any cost sharing funds (including cash and third-party in-kind contributions, and also including funds committed by the recipient, subrecipient, or third parties) as part of the recipient's or subrecipient's contributions to a program when the funds: (1) Are verifiable in the recipient's or subrecipient's records; (2) Are not included as contributions for any other Federal award; (3) Are necessary and reasonable for achieving the objectives of the Federal award; (4) Are allowable under subpart E of this part; (5) Are not paid by the Federal Government under another Federal award, except where the program's Federal authorizing statute specifically provides that Federal funds made available for the program can be applied to cost sharing requirements of other Federal programs; (6) Are provided for in the approved budget when required by the Federal agency; and (7) Conform to other applicable provisions of this part. (b) Inclusion of unrecovered indirect costs. Unrecovered indirect costs, including indirect costs on cost sharing, may be included as part of cost sharing with the prior approval of the Federal agency or pass-through entity. Unrecovered indirect costs means the difference between the amount charged to the Federal award and the amount which could have been charged to the Federal award under the recipient's or subrecipient's approved indirect cost rate. (c) Valuation for contribution of services. Values for recipient or subrecipient contributions of services and property must be established in accordance with the cost principles in subpart E of this part. When a Federal agency or pass-through entity authorizes the recipient or subrecipient to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing must be the lesser of paragraph (c)(1) or (2) of this section. (1) The value of the remaining life of the property recorded in the recipient's or subrecipient's accounting records at the time of donation. (2) The current fair market value. However, when there is sufficient justification, the Federal agency or pass-through may approve using the current fair market value of the donated property, even if it exceeds the value described in paragraph (c)(1) of this section at the time of donation. (d) Volunteer services by third-parties. Volunteer services furnished by third-party professional and technical personnel, consultants, and other labor may be counted as cost sharing if the service is necessary for the program. Rates for third-party volunteer services must be consistent with those paid for similar work by the recipient or subrecipient. When the required skills are not found in the recipient's or subrecipient's workforce, rates must be consistent with those paid for similar work in the labor market where the recipient or subrecipient competes for the services involved. In either case, fringe benefits that are allowable, allocable, and reasonable may be included in the valuation. (e) Valuation for services of third-party employees. When a third-party organization furnishes the services of an employee, these services must be valued at the employee's regular rate of pay plus an amount of fringe benefits that is reasonable, necessary, allocable, and otherwise allowable, and indirect costs at either the third-party organization's approved federally-negotiated indirect cost rate or, a rate in accordance with § 200.414 provided these services employ the same skill(s) for which the employee is normally paid. Where donated services are treated as indirect costs, indirect cost rates will separate the value of the donated services so that reimbursement for the donated services will not be made. (f) Donated property from third parties. Donated property from third parties may include items such as equipment, office supplies, laboratory supplies, or workshop and classroom supplies. The assessed value of donated property included as cost sharing must not exceed the property's fair market value at the time of the donation. (g) Valuation of donated equipment, buildings, and land. The method used for determining the value of donated equipment, buildings, and land for which title passes to the recipient or subrecipient may differ according to the following: (1) If the purpose of the Federal award is to assist the recipient or subrecipient in acquiring equipment, buildings, or land, the aggregate value of the donated property may be claimed as cost sharing. (2) If the purpose of the Federal award is to support activities that require the use of equipment, buildings, or land, only depreciation charges for equipment and buildings may be made. However, the fair market value of equipment or other capital assets and fair rental charges for land may be allowed if provided in the terms and conditions of the Federal award. See § 200.420. (h) Accounting policies for donated property. The value of donated property must be determined in accordance with the accounting policies of the recipient or subrecipient with the following qualifications: (1) The value of donated land and buildings must not exceed its fair market value at the time of donation to the recipient or subrecipient as established by an independent appraiser (for example, certified real property appraiser or General Services Administration representative) and certified by a responsible official of the recipient or subrecipient as required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601-4655), except as provided in the implementing regulations at 49 CFR part 24. (2) The value of donated equipment must not exceed the fair market value at the time of donation. (3) The value of donated space must not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality. (4) The value of loaned equipment must not exceed its fair rental value. (i) Documentation and support for fair market value. The fair market value of third-party in-kind contributions must be documented and, to the extent feasible, supported by the same methods used internally by the recipient or subrecipient. (j) Voluntary committed cost sharing for research grants. Voluntary committed cost sharing is not expected under Federal research grants. The Federal agency may not use voluntary committed cost sharing as a factor during the merit review of applications or proposals for Federal research grants unless authorized by Federal statutes or agency regulations and specified in the notice of funding opportunity. Federal agencies are also discouraged from using voluntary committed cost sharing as a factor during the merit review of applications for other Federal financial assistance programs. If voluntary committed cost sharing is used for this purpose for other programs, the notice of funding opportunity must specify how an applicant's proposed cost sharing will be considered. See §§ 200.414 and 200.204 and appendix I to this part. (k) Voluntary uncommitted cost sharing for institutions of higher education. For institutions of higher education (IHE), voluntary uncommitted cost sharing should be treated differently from mandatory or voluntary committed cost sharing. Voluntary uncommitted cost sharing should not be included in the organized research base for computing the indirect cost rate or reflected in any allocation of indirect costs. Voluntary uncommitted cost sharing includes faculty-donated additional time above that agreed to as part of the award.

(a) In general. The recipient or subrecipient is encouraged to earn income to defray program costs when appropriate. Program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. See § 200.472(b). Program income must be expended prior to requesting additional Federal funds. Program income exceeding amounts specified in the Federal award may be added to or deducted from the total allowable costs in accordance with the terms and conditions of the Federal award.

(e) Limitation on other prior approval requirements. Unless specified in this part, the Federal agency must not impose additional prior approval requirements without OMB approval. See also §§ 200.102 and 200.407.

(b) In general. A State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures. Indian Tribes must use, manage, and dispose of equipment acquired under a Federal award in accordance with tribal laws and procedures. If such laws and procedures do not exist, Indian Tribes must follow the regulation in this section. Other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow paragraphs (c) through (e) of this section.

(l) Additional employment practices. (1) The procurement standards in this subpart do not prohibit recipients or subrecipients from: (i) Communicating a requirement that individuals hired or employed under the Federal award must be authorized to work in the United States under applicable Federal law; or (ii) Using Project Labor Agreements (PLAs) or other types of pre-hire collective bargaining agreements if the use of such agreements will advance the interest of the Federal Government associated with the applicable Federal financial assistance program, including consideration of practicability and cost effectiveness. (2) Federal agencies may allow recipients to use such practices if consistent with the U.S. Constitution, applicable Federal statutes and regulations, the objectives and purposes of the applicable Federal financial assistance program, and other requirements of this part. Recipients and subrecipients are also responsible for ensuring consistency with applicable law. Employment practices should be consistent with the foundational principles of recognizing merit and the ability of employees to fulfill the requirements of the contract.

There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Recipients are strongly discouraged from issuing cost-reimbursement contracts. When using cost-reimbursement contracts, the recipient must notify the awarding Federal agency of its use of this mechanism and maintain a written justification in its records. A Federal agency may, at its discretion, require prior approval of cost-reimbursement contracts in the terms and conditions of the Federal award, which may include review of the recipient's written justification.

When possible, the recipient or subrecipient should ensure that small businesses, including subcategories of small businesses enumerated in Federal statute, are considered when issuing contracts under Federal financial assistance awards.

(a) To the greatest extent practicable and consistent with law, Federal agencies must include terms and conditions in Federal awards to maximize the use of goods, products, and materials produced in the United States. If included in a Federal award, these requirements must also be included in all subawards, contracts, and purchase orders under Federal awards. (b) Federal agencies providing Federal financial assistance for infrastructure projects must implement the Buy America preferences set forth in 2 CFR part 184.

A recipient or subrecipient that is a State agency, an agency of a political subdivision of a State, or a contractor to such entity, must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. 6962. The requirements of section 6002 include procuring only items designated in the 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 $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.

(a) The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals.

(b) Reporting program performance. The Federal agency must use OMB-approved common information collections (for example, Research Performance Progress Reports) when requesting performance reporting information. The Federal agency or pass-through entity may not collect performance reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should align the due dates of performance reports and financial reports. When reporting program performance, the recipient or subrecipient must relate financial data and project or program accomplishments to the performance goals and objectives of the Federal award. Consistent with appendix A to 2 CFR part 170, the recipient must confirm that it has reported any subawards issued during the reporting period on SAM.gov. Also, the recipient or subrecipient must provide cost information to demonstrate cost-effective practices (for example, through unit cost data) when required by the terms and conditions of the Federal award. In some instances (for example, discretionary research awards), this may be limited to the requirement to submit technical performance reports. Reporting requirements must clearly indicate a standard against which the recipient's or subrecipient's performance can be measured. Reporting requirements should not solicit information from the recipient or subrecipient that is not necessary for the effective monitoring or evaluation of the Federal award. Federal agencies should consult monitoring framework documents such as the agency's Evaluation Plan to make that determination. As noted in OMB Circular A-11, Part 6, Section 280, measures of customer experience are of co-equal importance as traditional measures of financial and operational performance. (e) Scientific research performance reports. When submitting a performance report for scientific research, the recipient must identify and include the categorization provided in the terms and conditions of the award. See § 200.202(g). (f) Significant developments. When a significant development that could impact the Federal award occurs between performance reporting due dates, the recipient or subrecipient must notify the Federal agency or pass-through entity. Significant developments include events that enable meeting milestones and objectives sooner or at less cost than anticipated or that produce different beneficial results than originally planned. Significant developments also include problems, delays, or adverse conditions which will impact the recipient's or subrecipient's ability to meet milestones or the objectives of the Federal award. When significant developments occur that negatively impact the Federal award, the recipient or subrecipient must include information on their plan for corrective action and any assistance needed to resolve the situation. (g) Site visits. The Federal agency or pass-through entity may conduct in-person or virtual site visits as warranted. (h) Reviewing subrecipient reporting in SAM.gov. The Federal agency is responsible for providing oversight to ensure that recipients comply with their requirement to report subawards on SAM.gov and taking corrective action if recipients are not in compliance. See also § 200.332. (i) Performance report requirement waiver. The Federal agency may waive any performance report that is not necessary to ensure the goals and objectives of the Federal award are being achieved. The Federal agency must justify this waiver, maintain the justification in the Federal agency's records, and incorporate in the agency's risk assessment the decision to waive the requirement.

(c) Transfers to related entities. Pass-through entities may not circumvent the requirements of this section by treating payments of Federal funds to affiliates, subsidiaries, or other related entities that are separate legal persons as internal transfers not requiring a determination under this section. Such transfers of Federal funds must be evaluated under this section and treated as either subawards or contracts, as appropriate. For example, if a related entity receives payment to perform activities under the Federal award, such as carrying out a portion of the Federal award or providing goods and services, a determination is required. See also § 200.332(h).

(g) Comply with applicable requirements in 2 CFR part 170 to report subawards on SAM.gov no later than the end of the month following the month in which the subaward was issued. (h) Make subrecipient or contractor determinations under § 200.331 for all downstream entities receiving payments from the pass-through entity, including affiliates, subsidiaries, or other related organizations. Internal organizational affiliations do not exempt pass-through entities from subaward or contract classification and related compliance and reporting requirements. (i) Ensure that each subrecipient is in compliance with the terms and conditions of the subaward and does not take actions that could significantly damage the reputation of the pass-through entity, the Federal agency making the award, or the Federal Government. If a pass-through entity determines that a subrecipient has taken such actions, it must consult with the Federal agency to determine whether the subaward should be terminated under § 200.340. If the Federal agency determines that such significant reputational harm has occurred, it may either direct the pass-through entity to terminate the subaward or terminate the Federal award to the pass-through entity. (j) Verify that a subrecipient is audited as required by subpart F of this part. (k) Consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. (l) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 and in program regulations.

Fixed amount subawards are not permitted.

The recipient and subrecipient must retain all Federal award records for three years from the date of submission of their final financial report. For awards that are renewed quarterly or annually, the recipient and subrecipient must retain records for three years from the date of submission of their quarterly or annual financial report, respectively. Records to be retained include, but are not limited to, financial records, supporting documentation, and statistical records. Federal agencies or pass-through entities may not impose any other record retention requirements except for the following:

When practicable, the Federal agency or pass-through entity and the recipient or subrecipient must collect, transmit, and store Federal award information in open and machine-readable formats. A machine-readable format is a format in a standard computer language (not English text) that can be read automatically by a computer system. Upon request, the Federal agency or pass-through entity must always provide paper versions of Federal award information to and from the recipient or subrecipient. The Federal agency or pass-through entity must not require additional copies of Federal award information submitted in paper versions. The recipient or subrecipient is not required to create and retain paper copies when original records are electronic and cannot be altered. In addition, the recipient or subrecipient may substitute electronic versions of original paper records through duplication or other forms of electronic conversion, provided that the procedures are subject to periodic quality control reviews. Quality control reviews must ensure that electronic conversion procedures provide safeguards against the alteration of records and assurance that records remain in a format that is readable by a computer system. Recipients and subrecipients are strongly encouraged to utilize domestic storage capabilities for electronic records.

Federal agencies may not place restrictions on the recipient or subrecipient that limit public access to the records of the recipient or subrecipient pertaining to a Federal award, except for personally identifiable information (PII), confidential business information, or other sensitive information subject to protections against disclosure under applicable law. Federal agencies may only place such restrictions when the Federal agency can demonstrate that such records will be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (FOIA) (5 U.S.C. 552) or controlled unclassified information pursuant to Executive Order 13556 if the records had belonged to the Federal agency. The Freedom of Information Act does not apply to records that remain under the recipient's or subrecipient's control except as required by § 200.315. Unless required by Federal, State, local, or tribal law, recipients and subrecipients are not required to permit public access to their records. The recipient's or subrecipient's records provided to a Federal agency generally will be subject to FOIA and applicable exemptions.

(a) Remedies for noncompliance. The Federal agency or pass-through entity may implement specific conditions if the recipient or subrecipient fails to comply with the U.S. Constitution, Federal statutes, regulations, or terms and conditions of the Federal award. See § 200.208 for additional information on specific conditions. When the Federal agency or pass-through entity determines that noncompliance cannot be remedied by imposing specific conditions, the Federal agency or pass-through entity may take one or more of the following actions: (1) Temporarily withhold payments until the recipient or subrecipient takes corrective action. (2) Disallow costs for all or part of the activity associated with the noncompliance of the recipient or subrecipient. (3) Suspend or terminate the Federal award in part or in its entirety. (4) Initiate suspension or debarment proceedings as authorized in 2 CFR part 180 and the Federal agency's regulations, or for pass-through entities, recommend suspension or debarment proceedings be initiated by the Federal agency. (5) Withhold further Federal funds (new awards or continuation funding) for the project or program. (6) Pursue other legally available remedies. (b) Private causes of action. If applicable and consistent with law and regulation, a Federal agency, may, at its discretion, cooperate with individuals or organizations in their pursuit of private causes of action and civil remedies based on the failure of a recipient or subrecipient to comply with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of a Federal award. Consistent with § 200.318(k), this generally would not include cases related to the settlement of contractual or administrative issues arising out of a recipient's or subrecipient's procurement transactions, except as necessary to comply with law or if the matter is primarily a Federal concern. A Federal agency should only cooperate with a private cause of action if it determines that such cooperation is in the interest of the United States.

(a) Termination provisions. The Federal award may be terminated in part or its entirety as follows: (1) For noncompliance by the recipient or subrecipient. The Federal agency or pass-through entity may terminate a Federal award in part or its entirety if the recipient or subrecipient fails to comply with the terms and conditions of the Federal award, including a failure of the recipient to report subawards on SAM.gov pursuant to the award term required by 2 CFR part 170. See also §§ 200.341 and 200.342; (2) At the discretion of the Federal agency or pass-through entity. The Federal agency or pass-through entity, to the extent permitted by law, may terminate a Federal award in part or its entirety if the Federal agency or pass-through entity determines that a termination is in the interest of the Federal agency or pass-through entity, including if a Federal award does not effectuate program goals, Federal agency priorities, or the national interest as they exist at the time of the termination. See also § 200.341; (3) By mutual agreement of the parties. The Federal agency or pass-through entity may terminate a Federal award in part or its entirety with the consent of the recipient or subrecipient, in which case the two parties must agree upon the termination conditions. These conditions include the effective date of the termination and, in the case of partial termination, the portion to be terminated; or (4) Upon notification by the recipient or subrecipient. The recipient or subrecipient may terminate a Federal award in part or its entirety upon sending the Federal agency or pass-through entity a written notification of the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal agency or pass-through entity determines that the remaining portion of the Federal award will not accomplish the purposes for which the Federal award was made, the Federal agency or pass-through entity may terminate the Federal award in its entirety; or (5) Pursuant to additional terms and conditions. The Federal agency or pass-through entity, to the extent permitted by law, may terminate a Federal award in part or its entirety pursuant to any additional termination provisions included in the terms and conditions of the Federal award. (b) Requirements for termination provisions —(1) General requirements. The Federal agency or pass-through entity must clearly and unambiguously specify all termination provisions in the terms and conditions of the Federal award. To the extent permitted by law, and except as provided in paragraph (b)(2) of this section, the Federal agency and pass-through entity must ensure that all Federal awards allow termination for the reasons described in paragraphs (a)(1) through (4) of this section. For example, the Federal agency or pass-through entity may include a termination provision incorporating this section of the regulation by reference or including all of the reasons for termination in paragraphs (a)(1) through (4). In accordance with paragraph (a)(5) of this section, to the extent authorized by law, the Federal agency or pass-through entity may also include additional termination provisions not specified in this section. See also § 200.211(c)(1)(v). (2) Exceptions. Paragraph (a)(2) of this section does not apply to any Federal award in which inclusion of such a discretionary termination provision would conflict with a Federal statute. See §§ 200.101(d) and 200.102(b) regarding statutory conflicts and exceptions. The discretionary termination provision is generally applicable to discretionary awards, but not to Federal awards made under programs where legislation establishes an entitlement to the funds on the part of the recipient, such as block grants, those awarded based on a statutory formula, or disaster recovery grants. Consistent with Executive Order 14332, paragraph (a)(2) also does not apply to agreements entered into in furtherance of international trade agreements or those awarded by the Department of Commerce under title XCIX of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-283), the CHIPS Act of 2022 (Pub. L. 117-167), or division F of the Infrastructure Investment and Jobs Act (Pub. L. 117-58). If questions arise regarding applicability of paragraph (a)(2) to specific Federal programs or types of Federal awards, Federal agencies are strongly encouraged to consult with OMB. Federal agencies must seek approval from OMB prior to allowing any class exceptions for paragraph (a)(2) related to a Federal program or type of Federal award not set forth in this paragraph (b)(2). (c) Reporting requirements related to terminations for noncompliance. When the Federal agency terminates the Federal award prior to the end of the period of performance due to the recipient's material failure to comply with the terms and conditions of the Federal award, the Federal agency must report the termination in SAM.gov. A Federal agency must use the Contractor Performance Assessment Reporting System (CPARS) to enter information in SAM.gov. (1) The information required under this paragraph (c) is not to be reported in SAM.gov until the recipient has either: (i) Exhausted its opportunities to object or challenge the decision (see § 200.342); or (ii) Has not, within 30 calendar days after being notified of the termination, informed the Federal agency that it intends to appeal the decision to terminate. (2) If a Federal agency, after entering information about a termination in SAM.gov, subsequently: (i) Learns that any of that information is erroneous, the Federal agency must correct the information in the system within three business days; and (ii) Obtains an update to that information that could be helpful to other Federal agencies, the Federal agency is strongly encouraged to amend the information in the system to incorporate the update in a timely way. (3) The Federal agency must not post any information that will be made publicly available in the non-public segment of SAM.gov that is covered by a disclosure exemption under the Freedom of Information Act (FOIA). When the recipient asserts within seven calendar days to the Federal agency which posted the information that a disclosure exemption under FOIA covers some of the information made publicly available, the Federal agency that posted the information must remove the posting within seven calendar days of receiving the assertion. Before reposting the releasable information, the Federal agency must resolve the issue in accordance with the agency's FOIA procedures. (d) Closeout requirements following termination. When the Federal award is terminated in part or its entirety, the Federal agency or pass-through entity and recipient or subrecipient remain responsible for compliance with the closeout requirements in §§ 200.344 and 200.345. (e) Temporary suspension —(1) In general. The Federal agency or pass-through entity, to the extent permitted by law, may at any time issue a written order temporarily suspending a Federal award in part or its entirety if the Federal agency or pass-through entity determines that a suspension is in the interest of the Federal agency or pass-through entity. A suspension order under this provision must not exceed a period of 90 days unless the parties mutually agree to an extended period. The period of suspension will begin to run after a written order of suspension is delivered to the recipient or subrecipient. The suspension order must: (i) Direct the recipient or subrecipient to temporarily stop all or part of the activities under the Federal award; (ii) Specify the effective date, scope, and expected duration of the suspension, which may not exceed a period of 90 days unless extended by mutual agreement; and (iii) Consistent with paragraph (e)(2) of this section, direct the recipient or subrecipient to take all reasonable steps to minimize the incurrence of costs allocable to activities covered by the order during the suspension period. (2) Activities during suspension period. During the suspension period, the recipient or subrecipient must take reasonable steps to minimize the incurrence of costs allocable to activities covered by the order. See § 200.343. The Federal agency or pass-through entity may determine to cancel the suspension order before its expiration if warranted under the circumstances. The Federal agency may also proceed to terminate the Federal award in whole or in part under paragraph (a) of this section. (3) Resumption of activities following suspension period. If the suspension order is cancelled, or after the period covered by the order or any extension of the order expires, the Federal agency or pass-through entity should consider and seek to resolve any budgetary or schedule impacts resulting from the order. Consistent with law, and as appropriate and warranted under the circumstances, the Federal agency should consider making adjustments to the project schedule, project budget, or both. The recipient or subrecipient must promptly resume activities under the Federal award at the conclusion of the suspension period. (4) Inclusion of suspension provision in Federal award. The Federal agency or pass-through entity must clearly and unambiguously include the suspension provision described in this section in the terms and conditions of the Federal award. The suspension provision described in this section does not apply to any Federal award in which inclusion of such a suspension provision would conflict with a Federal statute. See §§ 200.101(d) and 200.102(b) regarding statutory conflicts and exceptions. The suspension provision is generally applicable to discretionary awards, but not to Federal awards made under programs where legislation establishes an entitlement to the funds on the part of the recipient, such as block grants, those awarded based on a statutory formula, or disaster recovery grants. If questions arise regarding applicability of the suspension provision to specific Federal programs or types of Federal awards, Federal agencies are strongly encouraged to consult with OMB. (5) Suspension for non-compliance. The suspension provision in this section does not limit the authority in § 200.339 related to a suspension for noncompliance. Consistent with law, the suspension authority in § 200.339 may apply more broadly, including under Federal programs in which the Federal agency or pass-through entity finds that the suspension provision in this section does not apply. Federal agencies must follow procedures described in § 200.342 upon initiating a remedy for noncompliance.

(a) In general. The Federal agency or pass-through entity must provide written notice of termination to the recipient or subrecipient. The written notice of termination should include the reasons for termination, the effective date, and the portion of the Federal award to be terminated, if applicable. (b) Notifications of termination for noncompliance. If the Federal award is terminated for the recipient's material failure to comply with a Federal award, for the portion of the Federal award to be terminated, which may encompass up to the entirety of the Federal award, the notification must instruct the recipient or subrecipient to stop work, make no additional financial obligations, and, to the extent authorized by law, terminate all subawards and contracts related to the terminated portion of the Federal award. Consistent with § 200.342, the notification for a termination for noncompliance must also provide the recipient with an opportunity to object and provide information challenging the action. The notification must also state the following: (1) The termination decision will be reported in SAM.gov; (2) The information will be available in SAM.gov for five years from the date of the termination and then archived; (3) Federal agencies that consider making a Federal award to the recipient during the five year period must consider this information in judging whether the recipient is qualified to receive the Federal award when the Federal share of the Federal award is expected to exceed the simplified acquisition threshold over the period of performance; and (4) The recipient may comment on any information in SAM.gov about the recipient for future consideration by Federal agencies. The recipient may submit comments in SAM.gov. (5) Federal agencies should consider the recipient's comments when determining whether the recipient is qualified for a Federal award. (c) Notifications of discretionary termination. In the case of a discretionary termination under § 200.340(a)(2), the notice must provide: (1) A brief summary of the reason or reasons for finding that termination is in the interest of the Federal agency or pass-through entity. The reason or reasons may apply to an individual award or class of awards. The Federal agency or pass-through entity is not required to provide a detailed or exhaustive analysis; (2) For the portion of the Federal award to be terminated, which may encompass up to the entirety of the Federal award, instructions to the recipient or subrecipient to stop work, make no additional financial obligations, and, to the extent authorized by law, terminate all subawards and contracts related to the terminated portion of the Federal award; and (3) An opportunity for the recipient or subrecipient to submit a written statement of termination costs, which shall constitute a complete and accurate statement of all costs, financial obligations, expenditures, claims, and other commitments the recipient or subrecipient believes are relevant to the termination. Under this paragraph (c)(3), termination costs means those costs that are reasonably related to winding down activities undertaken as a result of the Federal award. See also § 200.472(a) for cost principles applicable to termination and standard closeout costs. The notice from the Federal agency or pass-through entity must provide a reasonable time for submission of the written statement (such as 30 or 60 days, as appropriate) and explain that the Federal agency or pass-through entity will consider the written statement in reaching a final decision regarding allowable costs under §§ 200.343 and 200.344. (4) The written statement of termination costs must be sufficiently detailed to permit the Federal agency or pass-through entity to evaluate the allowability, allocability, and reasonableness of the claimed costs. The written statement must represent the recipient's or subrecipient's complete presentation of termination-related costs and claims, subject to review and resolution under §§ 200.343 and 200.344. The statement of termination costs from the recipient or subrecipient must include: (i) A written statement regarding any termination costs it believes are relevant, including costs, financial obligations, expenditures, claims, and other commitments the recipient or subrecipient made in reasonable expectation of continued funding under the Federal award; the financial or programmatic impact of terminating those commitments; and any steps the recipient or subrecipient has taken, or proposes to take, to avoid, minimize, mitigate, or otherwise reduce those impacts; (ii) Documentation in support of any termination costs the recipient or subrecipient believes are relevant; and (iii) Information regarding whether commitments are cancelable, the terms for cancelling those commitments, and any penalties or costs of cancellation. If commitments are not cancellable, the written statement should explain why the commitments were not structured to allow cancellation, and whether they could have been. (iv) A certification, signed by an authorized official of the recipient or subrecipient, stating that the written statement of termination costs is true, complete, and accurate to the best of the official's knowledge and belief, and that the costs claimed: (A) Are based on records maintained in the ordinary course of business; (B) Reflect the recipient's or subrecipient's good-faith assessment of costs reasonably incurred or committed as a result of the Federal award; and (C) Do not include costs that are unallowable, speculative, or unrelated to the termination. (d) Reporting for all terminations. Upon termination of the Federal award, the Federal agency must provide the information required by the Federal Funding Accountability and Transparency Act (FFATA) to USAspending.gov. In addition, the Federal agency must update or notify any other relevant Government-wide systems or entities of any indications of poor performance as required by 41 U.S.C. 2313 and 31 U.S.C. 3354.

The Federal agency must maintain written procedures for processing objections, hearings, and appeals related to remedies for noncompliance. Upon initiating a remedy for noncompliance (for example, disallowed costs, a corrective action plan, or termination for noncompliance), the Federal agency must provide the recipient with an opportunity to object and provide information challenging the action. The Federal agency or pass-through entity must comply with any requirements for hearings, appeals, or other administrative proceedings to which the recipient or subrecipient is entitled under any statute or regulation applicable to the action involved. The Federal agency is not required to allow for objections, hearings, and appeals related to any reasons for termination except termination for noncompliance.

(a) In general. Costs to the recipient or subrecipient resulting from financial obligations incurred by the recipient or subrecipient during a suspension or after the termination of a Federal award are not allowable unless the Federal agency or pass-through entity expressly authorizes them in the notice of suspension or termination or subsequently. However, costs during suspension or after termination are allowable if: (1) The costs result from financial obligations which were properly incurred by the recipient or subrecipient before the effective date of suspension or termination, and not in anticipation of it; and (2) The costs would be allowable if the Federal award was not suspended or expired normally at the end of the period of performance in which the termination takes effect, provided that the recipient or subrecipient takes all reasonable steps to cancel, mitigate, or otherwise reduce such financial obligations and provides documentation of those efforts to the Federal agency upon request. (b) Costs resulting from discretionary terminations. (1) This section does not expressly require the Federal agency to authorize any additional costs to the recipient or subrecipient resulting from financial obligations incurred after the termination of a Federal award. However, as appropriate and consistent with law, upon making a discretionary termination under § 200.340(a)(2), the Federal agency may consider allowing the Federal share of necessary and reasonable costs resulting from financial obligations incurred by the recipient or subrecipient after the termination of a Federal award based on information provided by the recipient in response to the notice under § 200.341(c). (2) The decision regarding whether to allow additional costs under paragraph (b)(1) of this section is left to the reasonable discretion of the Federal agency. The Federal agency may weigh payment of additional termination costs against competing policy concerns such as responsible stewardship of Federal funds, program goals, Federal agency priorities, or the national interest.

(g) The recipient or subrecipient must not earn or keep any profit resulting from Federal financial assistance unless explicitly authorized by the terms and conditions of the Federal award. See also § 200.307.

(c) Exemptions. Some nonprofit organizations, because of their size and nature of operations, can be considered to be similar to for-profit organizations in terms of the applicability of cost principles. These nonprofit organizations must operate under Federal cost principles that apply to for-profit organizations located at 48 CFR 31.2. This exemption only applies to nonprofit organizations that receive 90 percent or more of their Federal funding in the form of contracts or operate a Federally Funded Research and Development Center (FFRDC). Federal agencies and pass-through entities may not allow any exceptions to this policy under § 200.102(c) unless expressly required by Federal statute or approved by the cognizant agency for indirect costs in coordination with OMB in extraordinary circumstances.

The total cost of a Federal award is the sum of the allowable direct and indirect costs minus any applicable credits.

(g) Be adequately documented. See §§ 200.300 through 200.309 and 200.334 through 200.338.

(d) Direct cost allocation principles. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. However, when those proportions cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefited projects on any reasonable documented basis. Where the purchase of equipment or other capital asset is specifically authorized under a Federal award, the costs are assignable to the Federal award regardless of the use that may be made of the equipment or other capital asset involved, when no longer needed for the purpose for which it was originally required. See also §§ 200.310 through 200.316 and 200.439.

(l) Section 200.454 Memberships, subscriptions, and professional activity costs;

(a) In general. Except as provided in paragraph (b) of this section, advertising and public relations costs (including those related to magazines, newspapers, radio and television, direct mail, exhibits, and electronic or computer transmittals) are unallowable under Federal awards and may not be charged directly, indirectly, or through another cost allocation methodology. (b) Exceptions. The only exceptions to paragraph (a) of this section are for advertising and public relation costs specifically required by Federal statute or advertising costs which are solely for: (1) The procurement of goods and services for the performance of a Federal award; (2) The disposal of scrap or surplus materials acquired in the performance of a Federal award except when the recipient or subrecipient is reimbursed for disposal costs at a predetermined amount; or (3) Program advertising and outreach (for example, recruiting project participants) and other specific purposes necessary to meet the Federal award requirements.

Costs incurred for commencements and convocations are unallowable.

(h) Nonprofit organizations. This paragraph (h) provides policy applicable only to nonprofit organizations. For compensation to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, a determination must be made that the compensation is reasonable for the actual personal services rendered rather than a distribution of earnings above actual costs. Compensation may include director's and executive committee member's fees, incentive awards, off-site or incentive pay, location allowances, hardship pay, and cost-of-living differentials. (i) Institutions of Higher Education (IHEs). This paragraph (h) provides policy only applicable to IHEs.

(b) The costs for attending conferences are allowable only if participation in the conference is expressly approved by the Federal agency and included in the terms and conditions of the Federal award. See § 200.475.

(b) Prizes. Costs of prizes or challenges are allowable if they have a specific and direct programmatic purpose and are included in the Federal award.

(b) Costs of investment counsel and staff and similar expenses incurred to enhance income from investments are unallowable except when associated with investments covering pension, self-insurance, or other funds, which include Federal participation allowed by this part. Such costs are only allowable with the prior written approval of the Federal agency. (c) Costs related to the physical custody and control of monies and securities are allowable. Such costs are only allowable with the prior written approval of the Federal agency.

(a) For States, local governments, and Indian Tribes, the general costs of government are unallowable except as provided in § 200.475. (b) General costs of government are those costs related to the general activities of the executive, legislative, or judicial branches of government, including general activities related to public safety, public information, citizenship, enrollment, or taxation that are not related to a specific Federal award. Unallowable costs may include: (1) Salaries and expenses of the Office of the Governor of a State or the chief executive of a local government or the chief executive of an Indian Tribe; (2) Salaries and other expenses of a State legislature, tribal council, or similar local governmental body, such as a county supervisor, city council, or school board, whether incurred for purposes of legislation or executive direction; (3) Costs of the judicial branch of a government; (4) Costs of prosecutorial activities unless treated as a direct cost to a specific program if authorized by statute or regulation. However, this does not preclude the allowability of other legal activities of the Attorney General as described in § 200.435; and (5) Costs of other general types of government services normally provided to the general public, such as fire and police, unless provided as a direct cost under a program statute or regulation.

(a) Lobbying costs associated with obtaining Federal assistance awards. The costs of certain influencing activities associated with obtaining grants, cooperative agreements, contracts, or loans are unallowable. Lobbying with respect to certain grants, cooperative agreements, contracts, and loans is governed by: (1) Relevant statutes, including the provisions of 31 U.S.C. 1352; (2) Regulations, for example “New Restrictions on Lobbying,” (55 FR 6739, February 26, 1990), including the definitions; and (3) Other applicable OMB guidance. (c) * * * (1) * * * (iii) Establishing, administering, contributing to, or paying the expenses of a voter registration campaign, voter registration drive, or any similar activity, or paying the expenses of another entity engaged in such activities; (iv) Engaging in issue advocacy or public messaging that promotes or opposes a particular social, political, or public policy position unrelated to the statutory objectives or performance requirements of the Federal award, including messaging designed to influence public attitudes on matters not necessary to accomplish the purpose of the Federal award; (v) Attempting to influence the executive branch of any State government on matters unrelated to the objectives or performance requirements of the Federal award, including attempts to affect State agency policymaking, rulemaking, or administrative actions for purposes other than carrying out objectives of the Federal award;

(a) Costs of the recipient's or subrecipient's membership in professional, civic, business, and technical organizations are allowable if necessary to fulfill the award requirements. Such costs must receive prior written approval of the Federal agency. (b) Costs of the recipient's or subrecipient's subscriptions to business, professional, academic, and technical periodicals are unallowable. (c) Costs of membership in any country club or social or dining club or organization are unallowable. (d) Costs of membership in organizations whose primary purpose is lobbying or issue advocacy are unallowable. See § 200.450.

(c) The costs related to data and evaluation are allowable. Data costs include (but are not limited to) the expenditures needed to gather, acquire, store, track, manage, analyze, disaggregate, secure, share, publish, or otherwise use data to administer or improve the program, such as data systems, personnel, data dashboards, cybersecurity, and related items. Data costs may also include direct or indirect costs associated with building integrated data systems—data systems that link individual-level data from multiple State and local government agencies for purposes of management, research, and evaluation. Data costs related to integrated data systems should align with the finalized Federal grants data standards as published on Grants.gov . Evaluation costs include (but are not limited to) evidence reviews, evaluation planning and feasibility assessment, conducting evaluations, sharing evaluation results, and other personnel or materials costs related to the effective building and use of evidence and evaluation for program design, administration, or improvement.

(a) In general. Except as provided in paragraph (b) of this section, publication costs (including page charges, article processing charges (APCs), or similar fees such as open access fees for professional journal publications and other peer-reviewed publications) are unallowable under Federal awards. Printing costs (including distribution and general handling) are allowable. (b) Exceptions. The only exceptions to paragraph (a) of this section are for publication costs that are specifically required by Federal statute or approved in advance by the Federal agency on a case-by-case basis. A general requirement to make results publicly available must not be construed as authorizing publication costs. (c) Requirements. (1) Allowable publication costs included in the terms and conditions of a Federal award must meet the following requirements: (i) The publications report work supported by the Federal Government; and (ii) The charges are levied impartially on all items published by the journal, whether or not under a Federal award. (2) The recipient or subrecipient may charge the Federal award during closeout for the costs of publication or sharing of research results if the costs were not incurred during the period of performance of the Federal award. These costs must be charged to the final budget period of the award unless otherwise specified by the Federal agency.

Costs of selling and marketing any products or services of the recipient or subrecipient are unallowable unless they are expressly included in the Federal award and necessary to meet the requirements of the Federal award.

(a) * * * (5) The following settlement expenses are generally allowable:

(d) Establishing rates and amounts. In the absence of an established written policy regarding travel costs, the rates and amounts established under 5 U.S.C. 5701-11, by the Administrator of General Services, or by the President (or designee) pursuant to any provisions of such subchapter must apply to travel under Federal awards (48 CFR 31.205-46(a)).

Costs associated with elective abortions are unallowable, except as expressly authorized by Federal law.

(b) Conducting additional audits. Notwithstanding paragraph (a) of this section, a Federal agency, Inspector General, or GAO may conduct or arrange additional audits to carry out its responsibilities only under applicable Federal statutes. The provisions of this part do not authorize any non-Federal entity to constrain, in any manner, such Federal agency from carrying out or arranging for such additional audits, except that the Federal agency must plan such audits not to be duplicative of other audits of Federal awards. Prior to commencing such an audit, the Federal agency or pass-through entity must review the FAC for recent audits submitted by the non-Federal entity, and to the extent such audits meet a Federal agency or pass-through entity's needs, the Federal agency or pass-through entity must rely upon and use such audits. Any additional audits must be planned and performed in such a way as to build upon work performed, including the audit documentation, sampling, and testing already performed by other auditors.

(c) * * * (1) Submission deadline and public availability. The audit must be completed and submitted in accordance with paragraph (c)(2) or (3) of this section. Unless a different period is specified in the program-specific audit guide, the audit must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). The submission is due the next business day when the due date falls on a Saturday, Sunday, or Federal holiday. Unless restricted by Federal law or regulation, the auditee must make copies of the reporting package available for public inspection. Auditees and auditors must ensure that their respective parts of the reporting package do not include personally identifiable information (PII) and other information subject to protections against disclosure under applicable law.

(a) * * * (2) The auditee must make copies available for public inspection unless restricted by Federal statute or regulation. Auditees and auditors must ensure that their respective parts of the reporting package do not include personally identifiable information (PII) and other information subject to protections against disclosure under applicable law. (b) * * * (2) * * * (ii) The reporting package does not include personally identifiable information (PII) and other information subject to protections against disclosure under applicable law;

(c) * * * (4) Provide OMB with updates to the compliance supplement. These updates include working with OMB to ensure that the compliance supplement focuses the auditor on testing the compliance requirements most likely to cause improper payments, fraud, waste, abuse, or generate audit findings for which the Federal agency will take action in accordance with § 200.505. Prior to submitting compliance supplement drafts to OMB, Federal agencies should engage with external audit stakeholders, the Federal agency's Office of Inspector General, and the National Single Audit Coordinator (NSAC). (6) * * * (vii) Ensure the Federal agency provides OMB with updates to the compliance supplement consistent with the compliance supplement preparation guide.

(c) * * * (1) The compliance supplement provides guidance on internal controls over Federal programs.