AGREEMENT-OPERATE A CENTRAL HOUSING ASSISTANCE SERVICE-COORDINATEOPEN HOUSING ACTIVITIES WITHIN THE CITY OF CLEARWATER
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C~~Y OF CLEARWATER
Interdepartment Correspondence Sheet
TO: Lucille Williams - City Clerk
FROM: Joseph R. McFate - Community Development
coordinato~~
COPIES:
SUBJECT: Community Service Foundation - Agreement form for Central Housing
DATE: December 22, 1980
Please find attached original copy of the Agreement Form for operating and
coordinating housing by the Community Service Foundation.
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AGREEvtENT !DR PUBLIC SERVICES RJNDED
UNDER TI-IE CLEARWATER COtvNUNITI DEVEWPMENT
BLOCK GRANT PROGRAM
PART I
This Agreement is entered into this ;t./}-cl day of ~,
19~, by the CITI OF CLEARWATER, FLORIDA, a political subdivision of the
State of Florida, hereinafter referred to as the "CITI", and
COMMUNITY SERVICE FOUNDATION
hereinafter
referred to as the "pUBLIC SERVICE AGENCY (PSA), II a nonprofit corporation
organized and existing under the laws of Florida, having its principal office
atLll South Garden Avenue, Clearwater, Florida
, and consists of
Part I and Appendices
WHEREAS, the City has agreed with the United States Department of
Housing and Urban Development to conduct a Corronunity Development Program,
hereinafter referred to as the "PROGlWf," with federal financial assistance
under Title I of the Housing and Conununi ty Development Act of 1974, as
amended, hereinafter called the "Acr'; and
WHEREAS, the Corronunity Development Department, hereinafter called
the "DEPAR1MENT," ,.,ill act in behalf of the City in conducting the program;
and
WHEREAS, the COMMUNITY SERVICE FOUNDATION
proposes to operate a Central Housing
Assistance Service and coordinate open housing activities within the
City of Clearwater, Florida,
hereinafter referred to as the "PROJECf," and desires federal financial
assistance through the City to effect this proposal; and
l~REAS, the City finds that the PROJECf proposed by
the Community Service Foundation
is meritorious and
fulfills the purpose and policies of the ACf:
THEREFORE, the parties agree as follows:
,::IVED
DEe 22 1911
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1.
Services Perfonned: The PSA shall, in a satisfactory and
proper manner as determined by the DEPARTMENT, conduct the PROJECf
outlined in the attached Narrative and Budget as Appendix A and identified
as follows:
Central Housing Assistance
(Name of Project)
Al - A2
(Page Numbers - Narratlve)
Not to exceed $15,000.00
(Total Cost)
A3 - A4
(Page Numbers - Budget)
2. Term and Clarification of Agreement: The PSA shall perform
the servlces outlined in the Narrative during the term of this AGREEMEl\JT,
commencing on
October 1, 1980
and terminating on September 30, 1981
unless this AGREEMENT is otherwise earlier cancelled as hereinafter provided,
or tmless extended by written addendum to this AGREEMENT. The DEPARTMENT
may issue written or oral instructions to clarify any details or provisions
of this AGREEMENT. Such instructions must be wi thin the intent of the work
set forth in this AGREEMENT and may not be of such nature to affect cost or
period of performance.
3. Agreement Administration: The City representative with the
PSA as regards to the conduct of services under this contract is
Joseph R. McFate, Community Development Coordintor
or his designee. The
PSA's services shall be carried out tmder the supervision of
Charles Mann, Director
4. Use of Ftmds:
(a) The PSA shall use the funds to support the PROJECf serving
residents of the City, particularly in Neighborhood Target Areas
as defined in Appendix B.
(b) The PSA shall not exceed its budgeted amount and shall use the
funds in accordance with the Budget-Expenses to be paid by
Community Development funds included in Appendix A of this
AGREEMENT.
(c) The PSA shall only obligate PROJECf ftmds for costs incurred for
the delivery of services specified in Appendix A and subject to the
provisions of Paragraph 18 of this AGREFJ.1EN1'.
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(d) The PSA shall not obligate PROJECT funds when the PROJECT has
been suspended or terminated pursuant to Paragraph 17 of this
AGREEMENT. The PSA may reswne PROJECT operation, including
obligation of foods, upon receipt of written permission by the
DEPARTMENT that it may proceed.
(e) The PSA shall refund to the City any payment or portions of
payments which the DEPARThtENT determines were not properly due to
the PSA rmder the terms of this AGREFNENT.
S. Financial Hanagement:
(a) The PSA shall comply with the provisions of ~ffi Circular A-l02,
,...hich is attached as Appendix C and with the provisions of OMB
Circular A-122, attached as Appendix H. Unless otherwise required by
Federal law, the PSA shall allow the City to audit the PSA's financial
operation including compliance with certain provisions of Federal law
and regulation.
(b) The PSA shall provide in writing the name or names and title(s)
of all persons responsible for the receipt, custody, and disbursement
of program ftmds.
(c) All PSA financial records relating to this PROJECT are subject to
review by the City.
6. Contracts: All subcontracts to this AGREFMENT must be approved
by the City.
7. Purchasing: The PSA shall purchase all constunables, capital
equipment, and services by purchase order or by written contract and in
conformity with Of.ffi Circular A-I02, Procurement Standards, as set forth in
Appendix C. Accountability of PSA for PROJECT property and equipment
costing $50.00 or more with a life expectancy of one year or more shall be
in accordance with the requirements of the City relating to nonexpendable
City property.
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8. Method of Payment:
(a) The City agrees to make payment on budgeted costs allowable as
stated in Appendix A under Budget - Expenses to be paid by
Community Development Funds under Federal/HUD, State, and City
guidelines on a reimbursement basis.
(b) The PSA shall make requests for payment as directed by the
DEPAR~ffiNT as detailed in Appendix D.
(c) No advance payments shall be made to PSA for services rendered.
(d) Within 20 days after receipt of each invoice and other
supporting documentation, the City shall make payment thereon.
(e) All costs, and invoices for requests for payment shall be
supported by properly executed payrolls, time records, invoices,
contracts, or vouchers, or other official documentation evidencing
in proper detail the nature and propriety of the charges. All checks,
payrolls, invoices, contracts, vouchers, orders or other accounting
documents pertaining in whole or in part to the AGREEMENT shall be
clearly identified and readily accessible.
(f) Within thirty (30) days after completion of all services to be
performed by it, PSA shall render a final and complete statement to
the City of all charges for eligible costs not previously invoiced.
The City shall not be responsible for payment of any charges, claims
or demands of PSA not received within said thirty (30) day period;
however, such time may be extended in the City's discretion not to
exceed a period of ninety (90) days, provided the delay in its
submission is not occasioned by any fault or negligence of PSA.
9. Property Management:
(a) The City shall retain custody upon tennination of this AGREEvfENT
of any and all property purchased with Community Development funds.
"Property" as used in this paragraph shall mean nonexpendable,
tangible property valued at $50.00 or more with a life expectancy of
one year or more.
(b) The PSA shall retain custody of property acquired with federal
funds so long as the property is used for the purposes described in
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Project Narrative, Appendix A of this AGREEMENT.
When the property no longer is used for the purposes so stated, the
City shall assume custody of the property upon written notice to
the PSA.
(c) Upon purchase and receipt of any property, the PSA shall submit
to the DEPAR~ffiNT a Property Receiving Report.
(d) The PSA shall submit a report to the DEPARDffiNf if property is
returned to the vendor. The report shall list the items returned,
description, serial number, and quantity.
(e) The PSA shall report lost or stolen property irrunediately to
the DEPARTMENT. Stolen property must also be reported to the local
law enforcement agency and a police report shall be forwarded to
the DEPARTMENT.
(f) Thirty (30) days prior to the end of the grant year, or
immediately upon termination of this AGREEMENT by either party,
the PSA shall submit in a Property Report a physical inventory of
all property purchased with CorrIDumity Development ftmds. The
report shall also contain a verification of the existence and current
use of the property and, if applicable, the continued need for the
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property.
(g) No real or personal property or custody thereof purchased
wi th Corrummi ty Development ft.mds shall be disposed of, transferred,
assigned, loaned by PSA without prior written consent of the City.
10. FlIDding Confidential: Nothing in this AGREEMENT shall be
construed to pennit invasion of the privacy of individuals who are served by
the PROJECf, nor shall this AGREEMENT be construed to require the PSA to
publish or release infonnation to third parties which would invade the privacy
of such individuals. Infonnation obtained by the DEPAR1MENT as required by
this AGREBvtENT shall not be used or disclosed in such a ,,,ay as to invade
individual privacy and client relationships, lIDless Florida law pertaining to
public records requires disclosure of said infonnation.
11. Subsequent Changes: The PSA shall obtain approval by written
addendum to this AGREEMENT prior to any of the following changes:
(a) Substantial changes in the PROJECf work plan
(b) Changes desired in any budget line item
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12. Evaluation:
(a) The PSA hereby agrees to participate fully with the guidance
and assistance of the DEPAR~ffiNT in the implementation and
maintenance of an evaluation system whereby the PROJECT may be
continually monitored. Full participation in an evaluation system
shall include, but not be limited to, periodic submission of client
data reports which will be used by the DF.PARThffiNT for inclusion in
the Annual Grantee Perfonnance Report, annual monitoring visits by
the DEPARTIvffiNT for confonnance with this AGREB1ENT, incorporated
standards and requirements, and a detennination whether PSA has a
continuing capacity to carry out block grant assisted activities in
a timely manner. The DEPAR1MENT agrees to share with PSA such data
and reports derived therefrom. The PSA agrees to comply with
evaluation and infonnation requirements issued by the DEPARThffiNT.
(b) The PSA shall submit a quarterly program activity report
outlining activities undertaken with grant funds and including
client data on individuals served within the designated service area
as stipulated in this AGREEf'.'IENT.
(c) The PSA shall submit a final report within thirty (30) days
after the end of the contract period. The final report requires a
summary discussion regarding PROJECT effectiveness and should
include but is not limited to service delivery problems encountered,
and recoITDllendations. This final report shall consolidate reporting
of all PROJECT participants.
13. Accounting System: The PSA shall establish and maintain on an
accrual basis an accounting system in accordance with Federal ~fumagement
Circular CFMC) A-l02 Standards of Grantee Financial ~~nagement Systems, as
set forth in Appendix C of this AGREEMENT, and in accordance with generally
accepted accounting principles and standards. Prior to disbursement of
flll1ds pursuant to this AGREEMENT, PSA and City shall review PSA' s internal
control, accoLUlting, and report systems. PSA agrees to modify or correct
said systems in accordance with the City's requirements subsequent to said
review to accomplish the purpose of this section.
14. Maintenance of Records:
Ca) PSA shall maintain such records and accoLUlts including property,
personnel and financial records as are deemed necessary by the City to
assure a proper accoLUlting for all PRQJECT fLUlds.
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These records will be made available for audit, inspection or
copying purposes at any time during nonnal business hours and as
often as the City, HUD, and/or representatives of the Comptroller
General of the United States, or other federal agency, may deem
necessary. There shall be made available to the City, HOD,
representatives of the Comptroller General of the United States or
other federal agency, for examination, all of these records with
respect to all matters covered by this AGREEMENT; and PSA will permit
same to be examined and excerpts or transcriptions made or
duplicated from such records, and audits made of all contracts,
invoices, materials, records of personnel, and of employment and
other data relating to all matters covered by this AGREfl~. The
City's right of inspection and audit shall pertain likewise with
reference to any audits made by any other agency, whether local,
state or federal. PSA likewise shall retain all records and
supporting documentation applicable to this AG~ffiNT for such period
as required by applicable lrovs and regulations and may thereafter be
destroyed only with the prior written approval of the City. All
records shall be available for inspection as aforesaid, for compliance
with applicable laws and regulations.
(b) The PSA agrees to retain all records pertaining to the PROJECT
for such period as required by applicable laws and regulations and
may thereafter be destroyed only with the prior written approval of
the City, as related to this AGREEMENT or extension of the AGREEMENT.
Such records shall include financial records, audits, supporting
documents, statistical reports and client files.
(c) PSA agrees to comply with such additional requirements as to
maintenance of records as the City may request in writing. In the
event that the PSA cannot continue to be responsible for maintenance
of the records, then the City shall be so notified in order to take
custody of the records. The City may at any time on written notice
to the PSA, take custody of any and all records established under this
AGREBffiNf.
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15. Hold Hannless: The PSA shall hold and save the City, its
officers, agents and employees hannless from liability of any nature or
kind, including costs and expenses, for or on account of any suits or
damages of any character whatsoever resulting from injuries or damages
sustained by any persons or property resulting in whole or in part from
the negligent performance or omission of any employee, agent or
representative of the PSA.
16. Assignability: The PSA shall not assign any interest in this
AGRE~ffiNT without the prior written consent of the City.
17. Suspension or Tennination: The City may suspend, withhold,
or tenninate payment of the PROJECT in whole or in part for cause. Cause
shall include the following:
(a) Ineffective or improper use of PROJECT funds.
(b) Failure to comply with either the terms and conditions of
this AGREEMENT or the PROJECT set forth in Appendix A of this
AGREEMENT
(c) Refusal to accept conditions imposed by HUD
(d) Submittal to the DEPARTMENT of reports which are incorrect or
incomplete in any material respect
(e) If the carrying out of this AGREa~~ is rendered impossible or
infeasible for any reason including changes in federal law or the
unavailabili ty of Corrnmmi ty Development Block Grant :f1.mds from HUD
\vhich are necessary for continuation of the program.
If the City suspends payment, it shall advise the PSA and specify, m
writing, the actions that must be taken as a condition precedent to the
resumption of payments and specify a reasonable date for compliance.
18. Delivery of Services:
(a) The PSA and the City hereby agree to use their best efforts to
ensure that the services under this AGRE~ffiNT are provided at such
times and in such places as will best meet the needs of City
residents with priority to those residents who reside in the target
area(s) set forth by Appendix B of this A~~.
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(b) The PSA shall make every effort to assure that a minimum of
two-thirds of those persons receiving the public service under
this AGREBffiNT are low- and moderate-income.
19. Discrimination Prohibition: No person 'vith responsibilities
In the operation of the PROJECT will discriminate with respect to anY
PROJECT participant because of race, color, national origin, or sex. Nor
shall any participant be excluded from participation in, be denied of, or
be subjected to discrimination under any program or activity funded in
whole or in part with Community Development funds because of race, color,
national origin or sex, as set forth in Appendix G, Other Program
Requirements. (CFR 570.601).
20. Assurances:
(a) The PSA will establish safeguards to prohibit employees from
using their positions for a purpose that is or gives the appearance
of being motivated by a desire for private gain for themselves or
others, particularly those with whom they have family, business or
other identifiable ties.
Cb) Prior to requesting any continued PROJECT funding beyond the
term covered by this AGREB~ or for new public services not
covered by this AGREEMENT, the PSA shall provide evidence of having
applied or inquired in writing to other local, state and federal
agencies which conduct a program or programs most likely to meet the
needs for which Community Development funds are being considered.
Cc) The PSA will not as a result of receiving funding for the
PROJECT reduce its support for other similar services already being
provided by PSA in the identified target area or in other areas,
and will, in fact, affirmatively seek additional assistance and
support from other sources for increasing services where needs demand
such increase.
Cd) The PSA shall not use Block Grant funds for publicity or
propaganda purposes designed to support or defeat legislation
pending before federal, state, or local governments.
21. Employment Opportunities for Businesses and Lower Income Persons:
The PSA shall comply with the requirements of Section 3 of the Housing and
Urban Development Act of 1968 (12 USC l701u) in the provision of training,
employment and business opportunities, as amended, and the l~ regulations
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issued pursuant thereto at 24 CFR Part 135, attached hereto as Appendix E.
22. Equal Employment: The PSA will comply with Equal Employment
Opportunities Exeuctive Order 11246, as amended, attached hereto as
Appendix F.
23. Compliance With Other Federal Regulations: TIle PSA shall comply
with applicable federal law and regulations, including but not limited to;
National Environmental Policy Act of 1969;
Flood Disaster Protection Act of 1973 (PL 93-234);
I~ Lead-Based Paint Poisoning Prevention Act, 24 CFR Part 34;
Clean Air Act, as amended, 42 use 1857, et seq.;
Historic Preservation Requirements of Public Law 89-656;
Archeological and Historic Preservation Act of 1974;
F~ecutive Order 11593;
Architectural Barriers Act of 1968;
Hatch Act;
Federal Water Pollution Control Act, as amended, 33 USC 1251, et seq.;
Federal Labor Standards Provision and the Davis-Bacon Act;
The Civil Rights Act of 1964;
National Flood Insurance Program.
24. Ti tIes and Headings: Titles and headings are utilized for
convenience of reference only and shall not affect the provisions of the
AGREEMENT or interpretation thereof.
IN WITNESS l~REOF, the parties hereto have caused this AGRE~ffiNT,
Part I and Appendices, to be exeucted on the day and year first above written.
as to PSA:
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COMMUNITY SERVICES FOUNDATION
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APPENDIX A
COMMUNITY SERVICE FOUNDATION
NARRATIVE
Community Service Foundation will provide services to the following groups with
priority as listed below:
PRIORITY GROUP I'*:
a. Families or persons displaced from housing due to code compliance
activities.
b. Families or persons forced to relocate due to rezoning, demolition, or
other property changes.
c. Displacement for other reasons.
d. Community Development Target Area residents.
'* Applies to families and persons residing within the Clearwater CDBG Program
jurisdiction.
PRIORITY GROUP II:
a. Other low- and moderate-income families and individuals.
b. Rousing Authorities.
c. Emergency housing providers.
d. Other community organizations (churches, hospitals, police departments,
etc.).
e. Other social service agencies.
Community Service Foundation will provide the following services to the above
mentioned priority groups:
OVERALL SERVICES:
a. The provision of a central housing coordination service that is able to
assist those low- to moderate-income families and persons needing
housing to find and occupy available affordable decent, safe, and
sanitary housing as expeditiously as possible.
b. The promotion of broader access to housing opportunities for low- to
moderate income households through the provision of information,
outreach activities, and services.
c. The promotion of open housing through the development of working
relationships with local realtors and Fair Housing Agencies and
preparation and dissimination of training and informational materials
pertaining to fair and open housing.
SPECIFIC SERVICES:
a. Maintain an inventory and explanation of all active housing programs in
Pinellas County developed to assist low- to-moderate income hOUSQholds.
b. Act as a referral clearinghouse and coordination point for clients
seeking housing services.
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COMMUNITY SERVICE 4 DAn ON
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CENTRAl.. HOUSING ASSISTA.1\jCE AND REFER!':AL BUDGET
BUDGET FOR 1980/81
I. PERSONNEL
A. Interagency Coordinator
Fringe 1/4 of '80 @ 9.63
3/4 of '81 @ 10.15
Tot~l per~or.nel and fringe
II. OTHER
III.
A. Administration overhead @ 6%
B. Telephone
C. Printing & Dup1icatinb
D. lostage
E. Office Suppli~s
F. Tr~nsportation (vehicle)
G. Mileage
Total Other
CONTINGENCY REVOLVING FUND
GRAND TOTAL
$9,225
$222
702
$ 900
425
30e
200
450
300
1,000
1,276
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92!+
$lC,i4S1
3,)7::>
1, 276
$15,000
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PERSONNEL
A. Inter-Agency Coordinator
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.
This person, under supervl.sl.on, would act as 1L:11son between those persons
requesting housing from the Central Housing Assl.stance Service probrac and other
existing housing services.
The coordinator would screen and identify applicants (or qualification tor 312
loan programs, subsidize'] urban home owners program, private selle:-::;, and other
s:leltcr owners. After establishing. possible el1gl.bl.lity for on~ or the eXl.sting
prograJ,r.s, the coordinator \vould es tablish contact ,,;ith the proper program and
assist as needed in helping the applicant to meet eligibill.ty requirements.
The coordinator's duties would also include identification of possible homes
that coulci qualify under existing Housing Authority moderate r.ehabl.ll.tatl.on pro-
brams. The coordinator could. also assist in identifying possible rent.:ll units
that could be included a5 a ~~rt of the Housing t.utllO~:ity Section ti lJrot:rau:.
II. CONTINGENCY REVOLV1NG FUND
Thl.s h:dGet item is included to meet anticipated needs thc.t will occ.....r in plac-
ing low to moderate income persons and families in rental or purchased housinb.
RENTAL UNITS
In lll~ny nmtal situations a number of charges are assessee rentors before they
are allowc<1 to movcinto a rer.,tal unit. Such items as first and lc.st monch's
rentt damage deposit and ut1l1tydeposits. In many cases low to moderate income
fa.'llilies do not have the reso',Jrces to pay these costs thereby making itim-
possible to occupy the unit. Landlords have agreed to refund security deposits
to the C.H.A.S. if tenants do not complete repayment of advance.d deposits.
HOME OWNERSHIP
Eli;;,iLlehouse OM:1CrS whO otherwise may qualify for housing loans o!' mortgages
!....,~y not have sutt1cl.ent resources such as a down payment, survey costs, tee tor
cn';.ht reportt or otller related expenses to purChaSl.ng a house. Tne Contl.ngency
Revolvi.ng Fund could be used to assist persons to meet necessary expenses in
tilE purCl1ase of a home.
.In caretully revl.ewed rental and home owner cases, a limited negot1ated amount
of tunGS can be made available to tenants or purchasers to help them get 1nto
rental units or defray some costs in the purchase process. Tne tenant or tne
purcnaser would repay the advanced amount on a scheduled repayment baSl.S over
a pi,;,riod of time.
l3ybe1.nb aoleto utilLze a revolving Cont1ngency Fund in placing tenants, a
nUwber of persons and families could be housed or become home o~~ers that
ordinarily would be excluded from some housing.
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COMMUNITY DEVELOPMENT BLOCK GRANTS
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OFFICE OF MANAGEMENT AND
BUDGET
(Clrcul&f No. A-I02Revtsed.]
UNIFORM ADMINISTRATIVE REQUIRE-
MENTS FOR GRANTS.IN,AID TO STATE
AND LOCAL GOVERNMENTS
AUGUST 24, 1977.
1. PtLrpose. This Circula.r promulp,tes
st.s.nd.a.rds for establishing cons1sten:y
and un1!onnity among Federal agencies
In the admlnistra.tioIl of grants to State,
local, 'and federally recognized IndlUl
tribal go....ernments. Also included in the
Circular a.re stAndards to insure the con-
sistent implementatlon of sections 202.
203, U1d 204 of the Integrove.!nenta1 Co-
opera.tlon Act of 1968 (82 Stat. 1101>.
2. Su.persessi.on.. The President by Ex-
ecutive Order 11717 tra.nsferred the func--
tlons covered by OMB Ctrcular No. .'\-102
dated October 19. 1971. from the Ofli~
of Management and Budget to the Gen-
eral Services Administration. OMB Cir-
cular No. A-102 W80S revised U1d Isst~ed 80S
Federal Ma.na.gement C1rt:ular 74-7 dated
September 13, 1974. On ~ember 31.
1975, the President supe~ed this order
by Exe:utlve Order 11893 and transferred
the functions covered by this Circular
back to the Ofli~ of Ma.nagement and
Budget. FMC 74-7 Is revised and reissued
under its o!':ig1naJ desl,gnation of OMB
Circular No. A-I02.
3. Su.mmary 01 signiftcant changes.
The revised CIrcular co:J.ta.in.s ch3.nges
that bring it Into general agreement with
the more recent Circular A-110 which
covers grants to universities. hosplta.ls,
and nonprofit org:mizatlons.
The more s~1fica.nt chs.nges include:
(a) An amendment to the basic Cir-
cular to make if clear that the provisions
of 'the a.ttachments shall be a.ppUed to
subgrantees e..~cept where they a.re spe-
c1fica.lly excluded,
(b) A prov1slon ths.t Federal agencies
may a.ccept the bonding policies and re-
quirements of the gra,ntee for construc-
tion contracts over $100,000 provided
that the Go,'ernment's interest Is ade-
quately protected.
(c) A revision to the criterion for the
va.luation of donated real and per.;onal
properly to proYide that the ...-aIue of
such property sha.l1 be based on !a1r
market yalue. The original C'.rcu.!.a.r pro-
\ided tha.t property should be based on
the cost of the property less depre:la.-
t'.on or fair market ,-aIue. whichever 'W'8.S
less.
(d) A pro\1slon t.."l.a.t grantee audits
should be made in a.ccordance with gen-
erally accepted aud,iting standards,
including Standards for Audit of
Govemment.:ll Organiza.tlons. Prog7ams,
Activities and F'J.ncti ons , published by
t..'1e Ge..'1e:al ACCOW1 ting Oflice.
(e) A p;:oY'!s!on to require Federal
:l.st'ncies to pay o:nthin 30 dayS :l.f~r the
receipt of bS:'-:g when the reimburse-
::1ent :r.ethoo 15 ::.sed.
(f) A r~....;-?~o:c to the cMt.e~on for is-
sua.nceof a Jette: o~ creCit from S:50,OOO
to $1:0.000.
(S) Delet:C'n of ~e :-equIre!nents for
~'"1"2."': t.eoes ~-O ''):,)~1.:.n prio: ~;:>p:o\.3.ls for
OMB CIRCULAR A-102
budget revisions to grants under $100,-
000. .
(h) Provision that tltle to real prop-
erty funded partly or wholly by the Fed-
eral Government shall vest in the recip-
ient,
(i) A revision to the criteria governing
when a grantee may keep nonexpendable
property without reimbursement to the
Federal Government when It Is no longer
needed for any Federal program.
4. BackgrotLnd. The standards in-
cluded in the attachments to this Cir-
cular replace the multitude of varying
and oftentimes conft.1cting requirements
In the same subject matter which have
been burdensome to the state and local
governments. Inherent in this stand-
ardization process is the concept of plac-
ing greater reliance on state and local
governments. In addition, the Intergov-
ernmental Cooperation Act of 1968 W80S
passed, in part, for the purposes of; (a)
Achieving the fullest cooperation and
coordination of actlvitles among levels of
government: (b) improving the admin-
Istratlon of grants-in-aid to the States;
and (c) establishing coordinated inter-
governmental pollcy and administration
of Federal assistance program. This Act
provided certain basic policies pertaining
to administrative reqUirements to be im-
posed upon the states as a condition to
receiving Federal grants. The imple-
zrep.ting lnstructlons of these policies
were l.n.ltlally Issued In Circular A-96.
These instructions are modiiied herein in
the interest of achieVing further con-
sistency in Implementing that Act,
5. Applicable provisions 01 the Inter-
gcmern~ntaZ Cooperation Act 01 1968.
Federal s.gencies shall continue to fol-
low the pro\1slons of the Act, quoted
below:
!>:PoSIT OF OIUNTS-IN-Am
Sec. 202. No gr&nt.-ln-&Ic1 to & StAu sh&U
be required by FedenJ Ia.w or &d!I'.!l11str&-
t1ve regul&tlon to be c1eposl tec1 In & sepu&te
baok &CCOunt &part from other funds &dmin-
I4tued by the Stau. All Feder&! gra...'1.~-ln-
&1c1 tunds tn.&de &v&U&ble to the StateS so&11
be properly a.ccounud tor &S FedenJ funds
lc. the aa:ount5 ot the State, In esch c&Se
the State &4:e:l.cy oonC<!rned shan renc1er reg-
Ulsr &utheotlc&te<I reports to the a.pproprt-
&te h<1er&l &gency covering the status ..nd
the &ppncatlon ot the tund3. the aa.bl11 t1es
and obl!g&t\on.s on h1lJJd. &nd such other
fa.cts e.s m&y be requlred by salc1 Feder&1
ageIlcy. The hl!ll.c1 ot the Feder&1 &4:eocy &nc1
the CompUOller o..ner&! ot the U~~ States
or &ny ot their duly a.u~hor!zed rep~ot-
&tlves 5b&ll ha.ve a.ccess tor the purpose ot
&udlt &nd ex&m1n&t1on to any books. docu-
ments. p&pers. &nd reeord.s th&t are ?ertl-
cent to the gn1I:It-In-&lc1 received by ~he
States.
ScKED1:n.ING or F!:DElI.At. TltANSn:RS TO -:HE
, STATZS
Se<:. 203. He-a.ds or Federal departments &:ld
~e:J.c:l~s re-5ponsib:e (0:- ad:nlr.!s-:.e!'~r.g ~::t-
1::.,.ld ?rogram.s sh&!1 schec;\'-lle tne transfer
or c:':'&~t.!.:l-a.id r'.J:lds cor:.s~s:en: ...1t~ p:o..
g:-s.;" p:.:r~ 9o:1d appllca.ble Treasurj reg-
'''':':3.:'~o~. ~ &.S :.0 m~::.;:nt=e ~~e ~~:::::1e e:3pS~!'1g
be:'''iIO"ee::l :'~e t:-:l~:e:" or such ~~nds ~:om
~=e C'::l~~d S~~s "!'!'e~"~.lCY 2.:-:.d :~e c~sburse..
z::.ent t~!':"e-o: ~v a. S:a.:.e. ..'b.e~~er 6UC~ d:.s-
c'....l.!'Soe::1e::1t occ-...:."n ;::,:"~or ~o or sU~5eq'..:e::.~ :0
s:.:.:=. ::""3.~:e: o~ ~'..::-.cs. '):" s'...:~e~-..;e:::' :.0 ~L:C~
jj/>/E/Vi)I.)( I, L 1/
09: 1541
HOR RF-136
4-23-79
tr&nsfer ,of tunds. (Sic) St&US eeL: :lot ~
helc1 lloc.:ount&ble tor Interest e,--::ed on
gr&nt-ln-alc1 funds, pendIng their, C::sbur.;e-
ment tor program purposes.
ELICt1lLE STAT!: ."COlCY
sec. 204. NotWlthst&nc1log &ny ot:::er Fed-
er&1 l&w ".-hlch provides th&t a. sU:.;:e Sta.te
a.gency or multImember boarc1 or w=lsslon
must be est.&bllshed or c1eslgn&ted to &dmln.
Isur or supervise the &dmlnlstr&tlc>~ of any
gr&nt-In-a.Ic1 progr&m, the head of s..::!.Y Fed-
er&1 dep&rtment or &4:ency ac1m~!surl.ng
such progn.m may, upon request or :~e Gov-
ernor or other ,~pproprlate execut1-;e or !eg-
Isl&tlve a.uthorlty of the st&U nG'o~slble
tor determinIng or revIsing the ~:;30nlz&-
tlon&1 structure ot State go'l'ernme~~. wSolve
the single StSou a.gency or mult:'='ember
bo&rc1 or wmmlsslon provision u;:-on ade-
qu&Ul showing th&t such provision j:rl!vents
the esta.bllshme:1t of the most efl'ec::.,.e 80:1<1
emclent organ!za.tlon&1 a.crll.ngcmeIl:.s wlthln
the Stau government anc1 apprc.e other
State &dmlnlstratlve structure or &r:'ange-
men ts: Prov/c!ec!, Th&t the head of t:::e Fec1-
er&1 dep&rtment or a.gency determ~es t..'1a.t
the obJectlves of the Fec1er&1 st3tu:.e ~"thor-
Izlng the gr&nt-In-aldprogr&m will not be
end&ngered by the use ot such ot:::er State
structure or &rrangemen ts.
Some of the above provisions ~~u1re
implementing iustructlons and l'1ey are
pro\ided in several of the atts.::-::nent.s
to this Circular which deal ~ith t:'le spe-
cl..'ic subject matter.
6. Applicability and scope. The stand-
ards promulgated by this C1rcu!:.r apply
to a.ll Federal agencles respon.s:'::>le for
administering programs that involve
grants to State and local gove:7l:nents
and federally recognized Ind~ tribal
govenun.mts. However, a..gencies 21'e ell-
couraged to apply the stande.rG.s to loan
and loan guarantee programs to the ex-
tent pra.ctlcable. U the ena.bling legtsla-
tlon far a sp<-"Clfic grant progr-...::1 pre-
sc!':ibes pollcies or requirements l'1a.t dU-
fer from the standa.rds provided :-.erein,
the pro\1sions of the enabling leg-i..sla.tion
shall govern. Except where they aI'e spe-
ciftcally excluded, the prov1.s10!',..; of l'1e
attachments of this Circular shal: be ap-
pl1ed ,to su~s.ntces perfor:IL.=..& sub-
sta:l.tl.ve work W1de:- g:-ants l':3.t are
passed through or n.warded b~' ::-:.e pli-
ma.ry grantee if such s-u;;.,......an:e-es are
States, local governments or fo-:erilly
recognized Indian trib3J gove= ~:1ts 3.S
defuled in par~raph 7.
7. Deflniticms. For L'1e purposes of ~h:.s
Cl.rcular:
(a) The term "gT'3.nt" or "~::lt-L"l-
aid" means :noney, 01' p:-o;>er::;- :n !ie'.l
or money. paid 01' fw-nis!1ed by :':-:e Fee-
eral Government to a StJ.t.e. !:-:a1. 01'
federally recognized Indian tr.::-.:.l gov-
er!'_'!lent W1der progra:r-.5 t::at ;-:-::l\-::e
financial assistance through g:-:l.'1t or
contractual arrangements. ~e te:-::l Goes
not include technical a.ssis~a:1:e pro-
gra.'1'lS whlch pro\1de ser"-~ces ~..; :C'J.d of
mor.ey or other assistal'lce in ~':e :or:n.
of ge:'aer-cJ :e.;e-:1ue s:-:J.~...ng, ~0"3...::...S. :Ja:1
gunr~"ntees. iI1.SU~ce. or. c:"~_~~:!:~
wh.ic:" a.~ e:1 '= e:!:'C ::: t() 2....~c: J.e.."':"::..-...:.5 ~e:ec
u::.c.er P:-Gc'J:-e:::-:e~t :3.~.s z;,...:.d :-::.;;....:~3..
lions.
(b) The :",":n "State" ::1e:u'-S :':1:- of
the seye::ll St;:,te-s of the Cr..i:e-:: S::!.tes,
the Dist:-:ct of .co!u.rnbh. tl'.e C':'::::::on-
?;'e:l::"'1 of p.~e::<J Rico, :>I".j' ~e::-. :,):j' or
"""b:lS"ed 'Jy 7nE 8t:R::At.: os :"AT:O:"....L AF!"AIRS, r:-;c" W,",,5,"::;'::;;C:-;. D,C. ~('J37
C -I
23
, .
.,
..:
'1
09:1542
P05-:-..!$Slon ot the United States, or any
s.ge::cy or instrumentality of a State ex-
clw:',e of State institutions of higher
eduC2.tlon a.nd hOspitals.
(c) The term "local governmen't"
,me:l.::.S a. .local unit of government In-
cluc:..'lgspedtl.cally a county. municipal-
ity, city. town, township, local pUblic a.u-
tho~~y. school district. special district.
lntrastate cUstr1ct, councU of govern-
men:.;, sponsor group representative or-
gan:zatlon Ca.s deflned in 7 CPR 620.2.
40 FR 12472. March 19. 1975) and other
regiv!:~l or interstate government entity.
or a.:lY agency or Instrumentality of a
loca:. government exclusive of instltu-
tlor...s at higher education 3.lld hospitals.
(d) The term "federally recognized
Indun tribal government" means the
governing body or a governmental agen-
cy 0: any Indian tribe. band. nation. or
othe: organized groUp er community (In-
clueing any Native village as detined, In
Sect:'JI1 3 ot the Alaska Native ClaJms
Sett2=entAct. 85 Stat. 688) certifl.ed by
the Secretary of the Interior as eligible
for t.'le special programs and services
pro~-:c:ed by him through the Bureau of
Indl:;;n Ai!al~.
8. Attachments. The standards pro-
mul,,:J.ted by this Circular are set forth
in t..":e attacrunents, which are:
Attsc"""eot A-Casb. depositories.
-Attac::..meot B--Bondlng lLl1d~ lnsurlUlce.
Att.Y-~ec.t C-Retec.tton and custodial re-
qn::...:o.ents tor records.
Att&.:::.=oento--W&!ver at "single" Btate
~~=':7 requlremeots.
Atta.:~:nent E-Prognmlncome.
Atta..:::'.:nent F'-~tchlng sb.are.
Atta.c=-=en t G--.Standa.rds tor grantee dnan-
clal ::lans.gement systems.
Atta.:~entE:~F'ln&nclal reporttllg requlre-
me:.':.!.
Atta.c=-=Oent I-Mon.ltorl;cg and reporting
prc-~ performance.
Atta.:~entJ-Grallt payment requlre-
me:.':.!.
Attac=-=.ec.t K-Budget rev13lon procedures.
Atta..:::'.:nec.t ~r&ntcloseout procedures.
Att.a.c::':::ent ~r-StaD.d!Lt'd torms- (or apply-
1.%:; ::r F-ederal ass!stance.
Att&=-=ent N-Property mac.agement
sta.:.~rd.!.
At"..a.-:::':::en~ O--Pr~uremeD.t stands-rd.!.
9. Requests lor ezceptions. The Office
Mar...;ement and Budget may grant ex-
cept:~trom the requirements of this
Clrc:::"r -;r;hen permlsstble under e:e.sting-
lawz. =::J,;;"e~'e:, in the Interest of keeping
unitc:'::llt:; to t..'le maximum extent. devi-
atlo:::-; ~rom t..'le reqUirements ot this Cir-
cular -;;ill be permltte<1 only in excep-
t1on::.! c a.ses. .
10. S=ce,tions lor certain recipient:.
Not";;';~"'..standing the provisions of para-
graph 9 1! an applicant/recipient has a.
l1lsto:-:; ot poor performance, is not finan-
cially stable, or Its management system
does =':Jt meet the standards prescribed
in the Circular. Federal ~encies may
impose additional requirements as
needed provided that such applicant/
reclp:~=.t Is notL"Ied in writing as to:
(a) 71hy the addItional standards are
beln<; ~P05ed;
(b) nat cor.-ectiye a.ctlon :s neeaed.
Co;:::-s ot such notifications shall be
sent ':oJ, the O~ce of Mana...ement and
Bud;;e: and ot.":er agencie.-> fundInl tha.~
I
~
HOUSING & DEVELOPMENT REPORTER
recipient at the same time the reclplEint
Is notified.
11. Responsibilities. Agencies respon-
s1ble tor administering programs that in-
volve grants to State and local govern-
ments sha.ll Issue the appropriate
regulations necessary to implement the
provisions of thJs Circular. All portions
of such regulations that involve recot'd-
keeplng and/or reportmg requirements
subject to the provisions of the Federal
Reports Act and OMB Circular A-40
must be submitted to OMB for clearance
before being used. Upon request all reg-
ulations and instructions implementing
this Circular shall be furnished to the
Oalce of Management and Budget. Agen-
cies shall also designate an official to
serve as the agency representative on
m:attets relating to the implementation
of this Circular. U the name and title
were previously transmitted. notifl.cation
to the Oalceof Management and Budget
Is required only when there Is a change
in the designated representative.
12. Inquiries. Further information
concerning this Circular ma.y be obtained
by contacting the Financial Management
,Branch, Budget Review Division, Office
of Management and BUdget, Washing-
ton, D.C. 20503. telephone 395-4773.
BEIlT LANCE.
Director.
ATTACHMENT A--CmCtl'LAR No. A-I02
CASH DEPOSITORIES
1. This attachme'n' s,ets fort.'l stand-
ards governing the use of ba.nk.s and
other Institutions as depositories of funds
advanced under grants.
2. Except for situations descMbed in
pa.ra.graphs 3. 4. and 5, no grantor agency
shall :
(a.) Require physical segregation of
cash depositor1es for funds which are
provided to a grantee.
(b) ESta.bl1sh any eltglbuity require-
ments for cash depositories for funds
~..tiich are provided to a grantee.
3. A separate bank account shall be
required when applicable Ietter-ot~credit
agreements provide that drawdowns will
be made when the grantee.s checks are
presented to the bank lor payment.
4. Any moneys advanced to a gran tee
which are subject to the control or regu-
lation of t.!le United States or any ot Its
oalcers. agents or employees (public
moneys a.s defined in Treasur,; Ctrcular
No. 175. as amended) must be deP<l5ite<:1
in a. banlc with Federal Deposit Insur-
ance Corporation (POrC) insurance cov-
erage and the balance exceeding the
FDrc coverage must be collaterally se-
cured.
5. Consistent with the national goal
ot expa.n.d1ng the OPpOrtunities tor mi-
norit',; business entefl>rlses, gra.'ltees and
SlJbgrantees shall be encouraged to use
minority bank.s (a bank ';l7ruch Is owned
at least 50 percent. by minority groU;l
members). A list of minority owned
ba.nks can be obtained :~om :he Oelce 0{
Minonty Business Entefl>rise. Depart-
ment ot Commerce. Wash in g"..on. DC.
20230.
ATTACHMENT P--CIRCU'LAR No. A-I02
BONDING AND INSURANCE
1. This a.ttachment sets forth bonding
and insurance requirements for grants.
No other bonding and insurance require-
ments shall be Imposed other than those
normally required by the grantee.
2. Except as otherwise required by law.
a grant that requ!,res the contracting (or
subcontracting) for construction or ta-
cility improvements shall prOVide tor the
grantee to follow its own requirements
relating to bid gUarantees, performance
bonds. and payment bonds unless the
construction contract or subcontra.ct ex~
ceeds $100.000. For those contracts or
subcontracts exceeding $100.000, the Fed-
eral ~ency may a.ccept the bonding
policy and requirements of the grantee
provided the Federal agency has made
a determination that the Government's
interest is adequateiy protected. II such
a determina.tion has not been made, the
minimum requirements shall be as fol-
lows:
(a) A bid guarantee Irom each bidder
equit,alent to five percent 01 the bid price.
The "bid guarantee" sha.ll consist ot a
firm commitment such as a. bid bond,
certified check. or other negotiable in-
strument accompanying a bid as assur-
ance that the bidder will. upOn a.ccept-
ance of his bid. execute such contractual
documents as may be required within
the time specifl.ed,
(b) A perlormance bond on the part
oj the contractor Jor 100 percent oj the
contract price. A "performance bond" Is
one executed in connection with a con-
tract to secure fulfillment of all the con-
tractor's obligations under such cont.ract.
(c) A payment bond on the part 01
the contractor lor 100 percent 01 the
contract price. A "payment bond" Is one
executed in connection with a contract
to assure pa.yment as required by Ia.w ot
all persons supplying labor and mate-
rial in the execution ot the work pro-
vided tor in the contract.
3. Where the Federal Government
guarantees or Insures the repayment ot
money borrowed by the grantee. t.'le Fed-
eral agency. as its dlsc.etion. may re-
Quire adequate bonding and insu!':lIlce if
the bonding and Insurance requirements
of the grantee are not dee=ned :J.deq'l:J.t.e
to protect the interest of the FeCe:-:l.1
Government.
4. Where bonds are required in the
situations de.scribeli above, the bond.o;
shall be obtained from companieS hold-
Ing certificates at authority as a.ccept-
able sureties (31 CPR 2:l3).
ATTACHXEliT C-c'IRCULAR ~o, A-I02
UTENTION AND CUSTODIAL REQlTlRE:'>fEN'TS
FOR RECORDS
1. TI11s attachment sets forth reoJrd
retention requirements for grant.;. Fed-
eral grantor agenc.es shall not impose
any record retention requirements upon
grantees othe: th:J.n ~hose desc~i:xd
belo';l,'.
2. Financial records, sup;ortinS' docu-
ments. statistical ~ecorc.s. and :J.U ot::er
records pert:"'"1ent to a g::i.nt s.'ull ~ :e-
Publi,l:<'J to,. THE !JL'RLAL' OF :-IATIOS.\L ,....FF....iRS. I:--;C. W-\Sill'.;,:;--;-O'\, ~C :0037
c-2.-
2~
I
COMMUNITY DE VE LOPMENT BLOCK GRANT S
','
tainedfor a. period of three years" with
the follo';l.ing qualifications:
a. If any litigation, claim or audit is
started before the expiration of the 3-
year period, the records shall be retained
until all litigations. claims. or audit
findings involving the records have been
resolved.
b. Records for nonexpenda.ble prop-
erty acquired with Federal funds sha.ll
be, retained for 3 years a.fter Its final
dispOSition.
c. \Vhe:1 records are transferred to or
maintained by the Federal sponsoring
agency, the 3-year retention requirement
is not applicable ta the grantee.
3, The retention period starts from the
date of the submission of the final ex-
penditure report or, for grants that are
renewed annually, from the da.te of the
submission of the annual financial status
report.
4. Grantees should be authorized by
the Federal gran tar agency, if they so
desire. to substitute microfilm copies in
lieu of original records.
5, The Federal grantor agency shall
request trllnsfer of certain records to its
custody from grantees ';I.'hen tt deter-
mines that t,he records pos~s long-term
retention value. However. in order to
a ~'oid duplicate recordkeeping, a Federal
gTantar agency may make arrangements
with gr::mtees to retain any records that
are continuously needed for joint use.
6, The head of the Federal grantor
agency and the Comptroller General of
the .united States, or any of their duly
authorized representatives. shall have
access to any pertinent books, docu-
ments, papers. and records of grantees
and subgrantees to make audits, exami-
nations. excerpts and transcripts.
7. Unless otherwise reqUired by law. no
Federal grantor age:lcy shall place re-
strictions on grantees that ';I.'i1llimit pub-
lic access to the records of grantees that
are pertinent to a. grant except when
the agency can demonstrate that such
rccords must be kept confidential and
would have been excepted from disclo-
sure pursuant to the Freedom of Infor-'
mation Act (5 U,SC, 55:!) i! t.'1e records
had belonged to the grantor agency.
AT1',~cm.~!::-;T D-CIRCULAR No. A-I02
WAIVER OF "SI:-iCLE" STATE ACENCT
REQUI,REMnn'S
1. Requests to Federal gT'3ntor ~encies
from the Governors. or other duly con-
stituted Sl..).te authorities. for waiver of
the "stngle" State agency requirements
in accordance Il;ith section ::04 of the
Intergovernmental Cooperation Act of
1968 should be given expeditious han-
dling and. ~\'henever possible. an a.flirma-
tiyeres;xmse should be made to such re-
quests.
2. W'hen it is necessary to refuse 3. re-
quest for ~-aj;'er of the "single" State
~,gency requirements under section 204,
tl'1e Fedtral grantor :J.~ency !1andling
5~lC:J. request ~'il1 so acyi.se t~e O~':e of
~ranage::1.:::t ~,::d B;.;d;;et pr.or to in-
forming the St..'1:e t.hat U:e request can-
::0: :;e gr:l.l: :ed, Such :J.d\'ice ~hou!d indi-
C~ te the re:1~cns for ~~c de:'lial of. the
:-t~qL:est.
3. Future legislative proposals embrac-
ing grant-in-aid programs should avoid
inclusion of proposals for "single" State
agencies in the absence of compelling
reasons to do otherwise. In addition.
existing "single" State agency require-
ments in present grant-in-a.id programs
should be reviewed and legislative pro-
posals should be developed. for the re-
moval of these restrictive provisions.
ATTACHMENT E-CIRCtTLAR No. A-I02
l'ROCR.Qot INCOM1!:
1. Federal grantor agencies shall apply
the standards set forth in this Attach-
ment in requiring grantees to account
for program income related to projects
financed in whole or in part with Federal
grant funds. Program income means
gross income earned by t.'1egrantee from
grant-supported activities. Such earn-
ings exclude interest earned on advances
and may include, but will not be limited
to. income from service fees, sale of com-
modities, usage or rent.al fees, and royal-
ties on patents and copyrights.
2. Interest earned on advances of Fed-
eral funds sha.ll be remii.ted to the Fed-
eral agency except for Lnterest earned
on advances to States or instrumentali-
ties of a State as provided by the Inter-
governmental Cooperation Act of 1968
(Pub. L. 90-577) and advances made to
tribal organizations pursuant to section
102. 103. or lOll of the Indian Self Deter-
mination Act (Pub. L. 93-638).
J. Proceeds from the sale of real and
personal property, either prOVided by
the Federal Government or purchased In
whole or in part with Federal funcl.s,
shall be handled in accordance with At-
tachment N to this Circular pertaining
to Property ~{anagement.
4. Unless the gr:lnt agrement provides
otherwise, grantees shall have no obliga-
tion to the Federal Government with
respect to royalties received as a result of
copyrights or patents produced under the
grant or other agreement. (See para-
graph 7, Attachment N.l
5. All other program income earned
during the grant period shall be retained
by the grantee and, in accordance with
the grant agreement. shall be:
(a.) Added to fundS committed to the
project by the gnntor and grantee and
, be used to further eligible program ob-
jectives.
(b) Used to finance the non-Federal
share of the project ..hen appro~'ed by
the Federal Sponsoring agency; or
(c) Deducted from the total project
costs for the purpose of determining the
net costs on which the Federal share of
costs will be based.
6. Federal grantor agencies shall re-
quire the grantees to record the receipt
and expenditure of revenues (such as
taxes. special assessments, levies. fines,
'etc.) as a part of gTant project tr:msac-
tions when SUdl rcvcn'.les are spec~''ically
earmarked for a grant proiect In accord-
ance .nth grant agree::1c::ts.
AT":',~Cll!aST P--C:llC'C""~ Xo. A-I02
~"7CR:"'iC SHARE
1. 'n"t:.s Att3.c~:ne::t ~c~..s fort.h crite:-i3.
and pr()o~~d:;res for the :>..:':c',l,:l~ui:y or
~
09:1543
HDR RF-161
-4-7-30
cash and in-kind contributions mace by
grantees. subgrant.ees or third part:es in
satisfying cost sharing and matchir:~ re-
quirements of Federal grantor age.:::les.
2. The following definitions apply for
the purpose of this Attachment:
(a) I'ro;ect costs. Project costs a.-e all
allowable costs 'as set forth 10 FeCeral
Management Circular No. 74-4 Incurred
by a. grantee a.nd the value of L'1e 10-
kind contribution made by the gI""_'1tee
or third parties In accomplishing the
objectives of the grant during the proJ-
ect or program period.
(b) Cost sh.aring and match.ing. In
general. cost sharL'lg and matching rep-
resents that portion of project cost.s not
borne by the Federal Government, Us-
ally. a minimum percentage for m:o..:.::h-
ing share is prescribed by progra.rr: leg-
Islation, and matching share reG'~ire-
ments are inclUded in the grant a07ee-
ments.
ic) Cash. contributi.ons. Cash cc::trt-
butions represent the grantee's cash out-
lay. including the outlay of money con-
tributed to the grantee by other ;:'~bjjc
agencies and 'institutions. and private
organizations and individuals. Whe:: au-
thorized by Federal legislation, Fe::eral
funds received from other grants m2.Y be
considered as grantees' cash contribu-
tions.
(d) In-kind contributions. In-:.:ind
contributions represent the yalue of
noncash contributions pro~ided by the
grantee. and non-Federal parties. Only
when authorized b~'Federal legis!::..tion
may property purchased 'With Fe-ieral
fWlds be considered as the grantee's in-
kind contributions. In-kind cont::bu-
tions may be in the form of charges for
real propert,' and nonexpendable per-
sonal property and the value of .-oods
and ser/ices directly benefiting and
speCifically identii'l:J.ble t<> the project or
program.
3. General guidelines for comp'~:L.,g
cost sharing or matching are as foL:n's:
(a) Cost shar_'1g or ;na~ch:r.g ,::are
may consist of:
(1) Charges incuITed by t..'1e gT:.:::ee
as project costs. (Not all charges r~~uire
cash outlays dur.ng '_"-:e gr:lnt peri:,: by
the grantee; examples arE! depreci3.tion
and use charges for bulldLI'lgs and t~'.lip-
menU
(2) Project costs ftnanced WIth cssh
contributed or donated t..o the gr:>..r.:-Ee ~y
ot.her non-Federal public agencies and
institutions. a::d private or;;:lr.iz:..::or.s
and individuals.
(3) Project ,:osts represented by se;-;-
ices :lnd re3.l or personal property, 2 r '~se
thereof, dona:.ed by ":~er pub;ic ao;e::::es
a.nd ~nst1tut:ons. 3.~.d p~\"ate 1)r'5::_-.:':3..
tions a.nd individuals.
(b) .~jl :on~:b'.:t:::ns. b~t..'1 c:!.Sh 2....-.d
in-:d_"1d. shall be ac~ept,ed 2-S ;:1:-: c~ ~"1e
g:-::..:::e'?'s ::'.J.:(':--.::-:z .5';:a:-c ',;'::c:'. ~''':2::' ':J::-
t:~butions meet all of the ~011J";t,.:....-:;; ~:::i-
t.e ria:
i 1) Are \'e:::18.':Jlc ::::::1 '.:-.e b::-:.~-:~.S
rec0r:i.s;
l2) .\:e !"'.ot :"''1c:'J.ced 3...S C'::: :~:'::,'_~":':':"'.s
for J.:1Y 0:::.e: ~e'::::;-'.:::;<:,,;.s;.<ec. ;::0-
p;::lm;
P~=ll'h"d b, THL in RI '-l' 01 ',-T:I)''-l '-II ';i"S, J'C, \\\"iil't; i()' D l. l1)~
[.-3
'I
,,,
. '
09:1544
(3) Are necessa.ry and rea.soca.ble lor
prop".:a.nd etncient a.ccompllshment ol
project objectives;
(~) .m types at chDZ'lres that wouId
be al!owab1e under FMC 7~
(5) Are not psJ.d by the F-ederal Gov-
ernment under anotbera.s.s1stance agree...
ment ~ess author1zed under the other
agree::e.nt and the laWlS and regu1at1ona
It Is &UbJect to.
(~ .m provided lor In the approved
bUdget when requJred by the Federal
agency: .and
(7) C<lDtorm to other Drovf&ai:Ia of
thls A:'"..achment.
4.. Values lor grantee In-Idnd contr1-
butiClD.S will be established at the it'&ll.
tee's e....:~al cost In accorc1ance wiUlPMC
74-4,
5. SpecU!cprocedures ter the grantees
In establl.sh1ng the Value at 1n-k1Dd.CO.tl-
tnbuti~I13 lrom non-Federal ~..
ties lU"e set lorth below:
(a)' ValU4tt07l 01' Oolallteer s~.
Volun:.eer services D:lBJ be lurnished by
Protes.;looal and techn.lcal pel'SOlUlel,
consu1~ta. and other sk1I1ed and un-
sldlled labor. Volunteered service may be
counted sa cost sharmi or matching l!
the se:-rtce Is an IDtegral and neces.sary
part,o{ a.n approved 'program"
-(1) .'WtQ for oolunteer ierrrlcu. Rates
lor vol'-lIltee1'3 should be consistent w1th
those ;aJd lor sJmJla.r work In other ac.
tJv1Ues ot the State or loca.1 g-orert1ment..
In ~lDstances, In wb1ch the required
skill.5 &i'e not tound In the grantee orp._
~-c,a" r&~ should be coD.$tent. w1th
thoea ;:aid' lor sJ..m.J1ar work'ln the labor
~ 1n1rhJc.h the rn.ntee competes
lor ~ kmd of aervices 1Dvol.ved.
(2) VolunUers employed by oth.r::r
orgc:-~. When an employer other
i.ban t.lla grantee turnishes the servtces ot
an employee, these services &ha.ll be
vall:Cd at the employee's regular rata ot
pe.y (e::clusJ.ve at lr1nge bene.t1 t" and
oVil-"7:esd cost) prov1ded these se.rv1ces
are ID the sa.me skill lor. wh1ch the em-
pioye,e le normally pa!(1,
(b) Valuatfon 01 don4ted e...~lI!J.
J)eT3O:'"..:.l ~. DoQateQ ~1e
pe:w~ property Includes 8Ucli Items u
e::r.>"~le equJpment., omce roppl.!e:s,
~:m'Y supplies. or workshOp a.tld
cls.ssrocm supplies. Values M&eSsed to 8%-
pendA ': ~ e personal property Included 10
the =~ or makb,.lng &I:l.an should be
~le and should not e:s:ceed the
leJr I::.3.l'xet Value ol the p~--erty at the
tlme c ~ t.bedonatton.
(c> 7al:J4t!l:m of donated n.Qn~.d-
able ~sO'7l4l 'PToperty, bWldfng.s and
/.and (Jt' lIJe th.ereof.
(1) The method used lor cl:1a.rg1ng
mAtc..!:l!!:g share lor donated nonexpeod-
able persoIlal property, buJld.mgs, and
]a.od :::.ay d.11!er depending upon the pur-
pose 0{ the gnnt a.s lolloWll:
(a) II the purpooa ot the gra.ct 13 to
~ equipment. buildings, or land to
the ~t.ee or othen1.se provided a f9,CU-
lty, t.t.~ total valueo! the donated prop.-
erty :::'..3y. be cla1med 9.S a matching share.
(b) II t..'le P\l.rP06ea! th& grant l.s to
su;>?O.~ actlvlUe<I t..I:Ia~ requlre L'1e use or
equ.!~~~t, bulldin~, Of' land 00 a ,t.e..m-
po~ or Part-t1lne b&S1s,depreclatloa
II
~
HOUSING & DEVELOPMENT REPORTER
or use charies lor equIpment a.nd build-
ings may be made. The !ull vahle ol
equ1pment or other capital asseta and
lair rental charges for land lll&Y ~ ms.de
provided that the grantor agency ha.3
approved the charges. .
(2) The value of donated property will
be determined In accordance w1th the
usual accounting pollcles of the grantee
w1th the lollowing quallJicatJoos':
(a) UmtJ. and buildingl. The n.lue of
dcmated land and buildings mAY not ex-
Ceed its lair market value, at the tune of
donatJon to,the grantee sa esta.bUsed 'OY
an Independent appr&lser (e.g., certJ1ied
real property appraiser or GSA repre-
sentatJves> and certlJied by a responsI-
ble official ol the grantee.
(b) None%1JendabZe persO'7l4l 11T011ertv.
The Value ot dOIUl.ted nonexpendable
persanal prOperf;yahall not exceed the
l&.1r market value of equipment and
property of the same age and condition
at the time ol donation.
(c) Use 01 ,",ace. The value ot donated
space shall not exceed, the lair rental
Value at comparable space as established
by an' Independent appral.sal ol compar~
able space and laciUtles In a. Privately
owned building In the same locality.
(d) LocJned ell11ipoment. The value ot
loaned equlpment' shall not exceed Ita
fair rental vallie.
f, The lOIlowtng requirements perta.Jn
to, the ca.ntee's supportJng recordS lor
1n-k1nd COOtribUtioIlS lrom non-Federal
third part.!e:1.,
(aJ Volunteer services mwst be docu-
mented and. to the extent leasible. sup..
ported by tbe same methods- used by the
grantee lor Its employees.
(b) Tbe buts lor determ1J::l.lnr the
valuation lor personal serv1.ces. mAter1.al.
equIpment, bWldlngs, a.nd 1am1 must be
docume.nted,
A'l"r.lc:K1RN'r u-.-cncm.,ul. No. A-IO:l
ftAlfl)UJlS PO. CIt..UlTn rm.urCUL XolB.lCZ-
~ STSTZKS
1. nus Attachment prescribes .st.a.nd-
an1.s lor tmanc1a1 ;na.nagement Q'St.ema
of grant-supported &.ctJvtt1es of State, lo-
cal, &Del ledera11,y zoecognJzed Indian t:1-
ba1 governments. Federal a-rantor a.gen-
e1es sha11 not 1m;lOSe a.dd1t!0:l&1 stand-
ards on grantee:! unless specUica.l17 pro_
vided lor In oU1er Attac~ents to this
C1rcu!ar; However. gra.ctor l4e.neles a~
encouraged to ma.ke suggest:ons a.z::c1 as-
~Ist ,the it'&ll tees ID es tcl>lis.Il.tD g or Im-
provf!l.g tmancial m.a.nagement syste:ns
when such asaI.stance la needed or re-
quested.
Z. Oran~ Ilnane!al ma.n~ement sys-
tems shall proVide lor:
(a) Accurate. current, iUld complete
c1Isclocure ol the financial resuIts o! each
rrant program In accorda.nce with re-
porCna requirements set lorth In At-
tar.h,.,...,t H to thl.s C1:rclllar. When a
Federal grantor agency requires report-
Ing on a.n accrual b&.sls, the grantee sh~
not be required to establish an accn.al
a.ceountlng system but 3l-03ll develop suc.'1
a.c:::rual, data. an it.:! reports on tlle 0e3~
oC an &:lll.lysl3 ol the documenta.t.:oa 00.
land.
(b) Records that Identify adequately
the source and appllcattoa ol lWlds lor
grant-supported activities. These records
$a11 cont.a.ln information perta.l.n.lng to
Federal a.wards and authorizations, obli-
gations, WlobUgated balances, assets. 11-
ab1l1ties, outlays, and locome.
(c) E1Iective control, over and s.c-
countabWty lor all fund.!. property, and
other assets. Orantees shall adequately
saleguard a11such assets a.nd shall assure
that they a.re wed solely lor authorized
purposes.
(d) Compe.rtson of actual outla.ys with
budgeted amounts lor each grant. Also,
relation ol' financial lntorm.a.tlon with
pertormance. or productiv1ty data., in-
cluding the productJoa or unlt cost ID-
lormation whenever a.ppropria.te and re-
quired by the gI'B..D.tor a.gency.
(e) Procedures to mlniml2e the tJme
elapsing betw~n the transter ol lunds
lrom the U.s. Treasury a.nd the dis-
bursement by the grantee. whenever
fUnds are advanced by the Federa.1 O1:lv-
ernment. When 'adva.nces a.re made by
a letter-at-credit method. the grantee
sh&ll make drawdOWIU fr~m the U.S.
Treasury as close as possible to the time
ol maldng Ule dl.so\lr3ements. Advances
made by Primary recipient orpn1za.tions
(those which receive payments \ dl.recUy
lrom the Federal Government) to sec-
ondary recipients sha.l1 coolorm sub-
stantially to the same standards ol tJm-
1ng a.z:r;l amount as apply to advances by
Federal agencles to Pr1ms.ry recipient
organlza tlona.
([) Procedures lOt" detert!lln1ng res.-
soIUl.bleness. aIlowabillt7 a.n.d a.l1ocabill-
'ty ol costs ID accordance w1th the pro-
visIons ot Federal Maangement Circular
7~.
(g) Accountlng records that are sup-
POrted by source documentation.
(h) [Delered]
<l> A systematic method to &SS1ll'\..
timely a.nd appropriate resolution ol
audlt tmdlngs and rev-ommendattcns.
3. Pr1.m&ry grantees sh.a.ll require sub-
gran~ to adopt the standards ID para-
graph 2. above, except for the require-
ment ID subparagraph 2(50), regardln~
reporting forms and frequencIes pre-
serib~ In Atta.c.hment H to this C1rclll..r.
ArTACH~ H-cx.'lCUt..:.!! No, A-l02
FnfA"'CIAL IEPOlTINC ll%Quntnn:::TS
1. Th1s Att.P.chment prescribes uniform
reportiD g procedures for gI"30 tees to:
summarize expend 1 tux es made a.n d Feo:i-
era1 funds unexpended lor each 3.W arJ ,
report ~.he stat~ of Federa.1 cash ad-
vanced, request adva.nces and rel.:::::1bl.lr.;c-
ment when the letter-<l:-cred1t llIethod
is Dot ~: aad prcmulgat.es standard
forms Incident therew. Grsntees wheo
obtalnlng financial Informatioa required
by Federal agencies lrom subgrant.ces
are not required k) use the Corms coa-
taJ:n ed 10 this .-\ tta.chme.n t.
2. The lollowing defiIllt!oos apply for
purposes of th.1.s Att.:J.chmeot:
(a) Accrued e--;!er..ditu:-e.;. ^~rued
expenditures are the char&es incurred by
th e gran tee d ur'.n g a g1 ,en peri od re -
Quiring the :->rovlslon o( funds (or: (l)
goods and other tangible property re-
celvffi; (2). ser-.1ce:; ;>erfor.-::t'd by em-
Pwc.I:<"J h) TlIE lJl R l\l 01\ ,\ TIO\,\ 1. -\11\ i 1\:; I \C, \l, .\SIII "cro". UC :')Ij} j
c-Lj
10
':;
r'
I
COMMUNITY DEVELOPl\-1ENT BLOCK GRANTS
l>loyees. ~ntractors, sUbgrantees, and
other payees; and (3) other amounts be-
com1Dg owed under programs for whJch
00 current services or performance Is re-
quired such as aIlI1uit1e:i, lD..1ll'Snce
claims, and other benefit payments.
(b) Accrued income. Accrued Income
Is the sum ot (1) esrn.Ings during a
given period trom 11> services performed
by the grantee; and (ll> goods and ~ther
tangible property del1vered to purchas-
ers; and (2) amounts becoming owed to
the gTantce for which no current serv-
Ices or performance is required by the
grantee.
(c) FedeTOJ !U7f.d.., au.thorized. ~eral
funds authorized are the tot.a.l amount of
Fel:Ieral funds obUgated by the Fel:Ieral
Government for use by tb,egrantee. ThJs
amount may Include any autborized
carryover of unobligated fU.:lds lrom
prior fiscal year.; when permitted by law
or agency regulation.
(d} In-kiT14 contribution!, In"klnd
contributions are defined In Attachment
Pto this Circular.
(e) ObligatioN. Obligations are the
amounts of orders pls.ced, contracts and
grants awarded. services received, aDd
s1m1lar transactions dur1ng a given pe-
riod that will require payment by the
grantee dur1ng the same or a future
period.
(!) Ou.tlavs. OUtlays or expenditures
represent charges made to the projector
progr:un. They may be reported on'a
cash or ~crual bllsis. For reports pre-
pare<:! on, a cash basis, outiays are the
sum of actual cash disbursements for
dir1!ct charges for goods s.nd serYices, the
amount of indirect elq)eDSe charged, the
value ot 1n-ldnd contributions appUed,
and the amount of c8.sh advacces and
payments made to subgrantees. For re-
ports prepared 'on an accruaJ be.s1s. out-
lays are the sum of sc.tual Ctlsh dJsburse-
ment:! for d1rect charges lor goods and
serv:loes. the amount of 1ndlrect expense
IDcurred. the ,alue of 1n-ldnd contribu-
:;ions applied, and the net Increase (or
decrease) In the amounts o~-ed by tbe
gni:1tee for goods and other property re-
ceived, for serv:lces performed by em-
ploY~, contractors. sutgnmtees and
other payees and o~her amoU"lts becom-
1n~ owed under programs for which no
current services or Performance &ore re-
qu1recl such sa . annuities. Insurance
claims. and oth~ benetit payme,ta.
(g) Program fnc~. Program 1ncome
is dedned In Attachment E of t~ Ctt-
cuJar. It may be reported 1)0 a cash or
lU:Crual basts. whichever Is used for re-
portlng outlays.
(h) Unobligated OO1ance. The unobll-
gated balance Is the portIon ot the funds
author1zedby the Federal agency that
has not been obllgated by the grantee anI'
Is deterinlned by deducting. the cumula-
tive Obligations from." the cumulative
!unds ~uthorized..
(1) UnliQuidated obliQations. For' re-
ports prepared on a ca.sh basts, unliqui-
dated obUgationS re;lresent the amount
of obligations Incurred by the grantee
that h&s not been paid. For repor...s pre-
P&ored on an accrued expenditure basis.
they represent the amount of obl.lgatlons
Incurred by the grantee for which an
outlai has not been recorded.
3. Only the follOwing forms w1D be
authorized for obtalning dnanclal in-
formation from grantees,
(a) F'inancial Stctus Report (Exhibit
1>' (1) Each Federal agency shall re~
quire grantees to use the standardb.ed
F1nanclal Status Report t.:> report the
status of funds fer all non construction
projects or progra.~. The Federal agen-
cies may. howe,er, have the option ot
not requiring the F1z:.anciAl Status Re-
port when the Request for Advance 01'
Reimbursement (paragraph 4(a)) or
Report ot Federal Cash Transactions
(paragraph 3 (b)) is determined to pro-
vide adequate infor:natlon to meet their
needs, except that. a fl.n.al F1n&ncial
Status ,Report shall be required at the
cQ[T!pletio;"l, of the project when theRe-
quest for Advance or Re1m~ment
form is used only for advances.
(2) The Federal agency sha.ll pre-
senCe whether' the report shall be on a
ca.s.h or accrual ba.sis. 'If the Fed era.!
agency requires accruallntormatica and
the grantee.s accounting records are not
I
09: 1545
IIDR RF-161
4-7-80
norma.!ly kept on the accrual basis. the
grantee shall not be required to convert
its accounting system, but shall develop
such accruaJ informatica through an
ant.lysis ot the documentation on hand.
(3) The Federal agency shall deter-
mine the frequency ot the Fln.anc1aJ
Status Report tor each project or pro-
gram COnsidering the size and complex-
ity of the particular project or progr.\lD.
Howev~. the report shall not !.Ie reqt;1red
more frequently than quarterly or less
frequently than annually except a..s pro-
vided In subparagraph 3 (a) (1) above. A
final report shall be required at the com-
pletion of the grant.
(4) Federal agencies shaH require
grantees to 5'Jbmlt the Financial StatUs
Report (original and no more tha.n two
copies) no later tha.o. 30 d~s after the
end ot eadl spec1.tied reporti.r:lg period
for quarterly and semi-annual reports,
and 90 days for annual a.nd final reports.
Extensfons to reporting due da.tes may
be granted upon request of the recipi-
ent.
(b) Report 01 Federal Cash Transac-
tion.! (EIhil1it Z>' (1) When funds are
advanced to grantees through letterS of
credit or wtth direct Treasury checks,
the Federal agencies shall require each
E;!"antee to submit s. Report of FederaJ
Cash Transactions. The Fel:Ieral agencies
shall use this report to a.ssis t th em In
monitoring advances to grantee.~ and to
obtaJn disbursement Information for
each agreemen~ [rom the grantee.
Grantees under the Regional Dlsbun;-
lng Otnce (RDQ) system shall not be
required to submit a Report of Federal
.Cash Trs.nsactlons. For these grantees
Federal age.ocJes shall Use lnIon:n.a.Uon
conteJned In the Request [or Payment to
monltor grcmtee cash baJances and to
get disbursement In!ormatlon..
(2) Fel:Ieral agencies may ~u1re
t oreca.s ts of Fel:I e.rnI cash req uir e men ts
in the "Rema.rks" sectIon of the report.
(3) When Practlcal and demled nec-
essary, the Fe;::1eral agencies may re,qu1re
grantees to report In the "Remarks" sec-
t!on the l!.lIlount of excc..<,s ca.,h ac',3.Dces
P-,::-::- ._'''; -:. rHt-. dL'f{f -;L' S: '. \.:' (_,'.-\L " .:...;i.J.S, ".C. \\ -\.< i!_'l~ -,:;~. :..; !.~ .t\~7
c-~:
11
"J
,,'
09: 1546
In the hands of subgrantees and to p.ro-
vide short narrative explanations of ac-
tions taken by the grs.ntees to reduce
the excess ba.ls.nces.
(.) Grantees shall be required to sub-
mit not more than the orlg1naf and two
copies of the Report at Fede~l Cash
Trao.sact1onsl5 work1ng days folloViing
the end of ,each qU'B.rter. The Federal
agencies may require a - monthly report
from thosegrantecs receiving advances
~talIng $1 m1llion or more per year.
(5) Federal agencIes may waive the
requ1rementfor submJssion of the Report
at Pederal ca.m 'I'rELnsaetions when
mont.~ advances do not exceed $10,000
per grantee, provided that such advanceS
are, monitored through other forms con-
tained lD this Att.&Cfunent, or if. In the
FOOeral agency's opln1on. the grantee's
accountJng controls are adequa.te to mJn-
Im1ze excessive l"eaenu advances.
.. Except as noted below. only the fol-
lowing formswtll be authorized for
grant.ees In requesting adva.nces and re,.
1mbur.sem.ents.
(a) Request far Adt7<1nce or Reim-
bursement (Exhibit Jl. (1) Each Federal
agency sha.1l adopt the Request for Ad-
va.cce or Reimbursement as a standard-
Ized form for a.1l nODconstruction pro-
grams when letters-ot-cred1t or prede-
termined adV'B.nce methods &re not used.
FOOenll agencies. however, have the op-
tion of us1ng this fonD for construction
programs In lieu ol the OUtlay Report
and Request for Reimbursement for Con-
,)
I
HOUSING & DEVELOPl'vIENT REPORTER
struction Programs (subpn.regra.ph 4
(b)) .
(2) Grantees shall be authorized to
submit I'equests lor advances and reim-
bursements at least monthly when let-
ters-of-cred1t are not used. Fede~ agen-
cies shsJl not requirt" the submission of
more ths.n the or1g1nal and two caples
of the Request for Advs.nce or Reim-
bursement.
(b) Outla.v,report a.nd r~quest far re-
imbursement f(n' ccm.stroctfan progra.ms
(E.J:hibit 4). (1) Each Federal age.-lcy
sha.1l adopt theOutla.y Report, and Re-
quest- for Reimbursement .for Construc-
tion Programs as the .itandard1zed for-
mat to be u.c;ed for requesting relmbul"Se-
ment for construction programs. TIle
Federal agencies may; however, have the
option of substltutlng the Request for
Advance or Reimbursement Form (sub-
paragraph 4(a)) when t,he Federal agen-
cies determ1ne that It provides a,dequate
lDionnation to mect the!r needs.
(2) Grantees sha.1l be auth01"lzed to
submit requestS for re1mbUl3ement at
least monthly when lette..-s-o! -credit are
not used- Fede""l agencies shall not re-
quire more tha.n the ong'.nal and two
caples of the Outlay ~rt and Request
for Reimbursement for Construction
Programs.
5, When tne Federal agencies need ad-
dltIonal1nformatlon In uslng these fomu
.or more !~ent reports; the following
shall be observed:
(a) When addltlor..a.l lr.!onne.tlon Is
needed to complj" with legislative re-
quirements, Federal agencies shall Issue
instructions to require grantees to sub-
mit such In!..Ormatlon tmder the "Re-
marks" section of the reports.
(b) When a Federal agency has de-
termined that a gra.ntee's 'accounting
system does not meet the standards for
t1nanclal management contained In At-
ta.chment G to this C1rcular. - additional
pertinent lnforma.tlon to further monitor
grants a.nd ot1ler agreements may be
obta.1ned upon written notice to ij],e
grantee untU such time as the system Is
brought up to stand:l.rd.
(c) TIle Federal agency, In obtalnlng
In!ormatlon as In para.graphs a and b
above. must comply with reports clear-
ance requirements of the Ofll.ce oC Man-
agement and BUdget CIrcular No. .-\-40,
as revised.
6. Federal e~encies have the option ol
shading out any line Item on any report
tha.t Is unnecessary for declslon-ma.klng
purposes.
7. Federal agencies should accept the
ldenticalln!orma.tion Crom the grantees
In machine usable format or computer
printouts 1n lieu of prescribed formats.
8. Federal age::l.c!es ma.y provide com-
puter outputs to grantees when it will
expedite or contribute to the accurn.cy
of reporting.
9. TIle standard Iurms can be obtained
from the General Services Adminlstrs.-
tlon.
P\J~-II,',J ~\ TilL lllR.l\l' 01 \;,-\TlO\\L -\11, -\IR\, 1\(' \\\,111\;,; [,)\ Dr: :,. ,
12
c -I,..
"
,;
1 I
COMMUNITY DEVELOPMENT BLOCK GRANTS
A:rTACHME~ I-CIllCtl'1.AIl No. A-I0:!
MONI'rOIlDl'G AN'\) U:>OIlTING or PIlOGRAM
PEIlJ'OIl14AN~
1. This Attachment sets forth the pro-
cedures for monitorinr and repor:tl.ng
program performance. under Federal
gra.nts. These procedures are' designed.
to place greater rellan~e on grantees to
ma.nage the day-to-day operations of the
grant-supported activities:
2, Grantees sha.ll constantly monj,tor
the performance tinder grant-supported
activities to assure that time schedules
are being met, projected work unit.:! by
time periods are being accomplished,
and other performance goals are being
achieved. This. review shall be made' for
each program, function, or a.ctlvlty of
each grant as set forth in the approved
grant appllcation or awa.rd document.
3. Grantees shall submit a perform-
ance repoft far each grant which briefly
presents the following for each program,
function, or activity. Involved as pre-
scrl~ by the Federal agency:
(a) A comparlson of actual accom-
plishments to the goals established for
the period. Where the output of grant
programs can be readily qua.ntifled, such
quantitative data should be related to
cost data for computation of unit costs.
(b) Reasons why establlshed goals
were not met.
(c) Other pertinent Information In-
cluding, when approprlate, analysis and,
explanp.tion of cost overrunS or high unit
costs.
4. Except as provided In e. and b below,
and In subparagraph" 3a(l). of Attach-
ment H, gra.ntc-4}S'shall submit the ~er-
formance or technical reports to Federal
agencies and the Fl.nanclal Status Re-
ports covering the same ~errod In the
frequency establtshed by ,Attachment H
crt this Circular and, where approprlate,
s. Mal technical or performa.nce report
a.fter completion of the project on e.
date specltled by the Federal agency. The
Federal agency sha.ll,prescrlbe.the .fre-
quency with which the performance re-
ports will be submitted with the request
for advance \>1' reimbursement when
that form Is used In lieu at the Fina.nclal
Status Report. Except as provided for
In paragraph 5 below, performance re-
ports 'shall' not be required more fre-
quently than quarterly or less frequently
than annually. Federal agencies may
waive the requl~:nent for grantees to
subm1t p;:!rlo~an.ce reports with the
fins.n<:1al reports under the following
clr'C'Ums tances:
(a) When the gnnt.ee Is requL-ed to
submit a pertormance report with a con-
tlnuatlon or rene'Wal a.ppllcs.tion.
(b) When the Federal agency deter-
mines that on-site technical Inspections
and certltled completion data wW be
sumclent to e;;'aluate construction proj-
ec-ts.
(cl When t11e :~eral a.;ency requests
annual financial repor+..s on a fiscal year
basis but It Is necessary to get annual
pro;;ress reports on a. c:!..!er:c3.:',j'ear basis.
5.Be~~o t.'1e req:li.-ed p.e:tor::nance
re;-ortL."li' da.tes, ever:ts :ns.y occur ~hicl1
ha...e slg'niflcant Impact. upon t..'le proj-
ect or program. In sue!) cas~, the
grantee sha.ll1n!orm the grantor agency
u soon as the following type.s.-of condi-
tions become known:'
(a) Problems, deIays, or 94verse can-
dltionswhIch will matertally, affect the
&.'::Jl'lty to attain prog-ra,m objectIves; pre-'
vent the 'meeting of time schedules and
lOals, or preclude the. att9Jnm!'nt of
projec1l work units by established. time
periOds. 1'h13 dtscIosure shall be accom-
panied by a statement of the action tak-
en, or contemplated, nnd any FedeI'Bl
assistance needed to resolve the situa-
tion.
Jb) Favorable developments or events
which ena.ble meeting time schedules
and goals. sooner than -anticipated or
producing more worlt units than orlg-
mally projected. '
6. U any performance review conduct-
ed by the grantee dIscloses the need for
change In the budget estimates Inac-
cordarice with the criteria. estabIlshed In
Attachment K to. thlsPC1rcular, the
grantee sha.ll submit a. request for bUdget
rev1s1on. '
7. The gra~tor agency shall ma.ke site
visits a.s frequently as pt'S.CtlC3.ble to:
~a) Review program. accomplishments
and management control systems..
(b) Provide such technical assistance
as may be required.
8. Federal agencIes shall subml t pro-
posed technical and performa.nce reports
to the Oalce of Management and Budget
for approval In accordance with the re-
port clearance requirements of OMB CIr-
cular No. A-40 as revlseC.
ATTACH!alrl' J-CIIlCtrLAR No. A-I02
CRANT P"'Y~~"T IlEQUIIlE:!Il:'EN'T8
1. This Attachment establishes required
methods at maklog payments to grantees.
These methods will minimize the time
elapsing between the disbursement by a
grantee and the trar.sfer of funds from
the United States Treasury 'to the
grantee, ",;hether such disbursement oc-
curs prior to or subsequent to the transfer
of funds.
2. ClnLnt payments are made to
granteeS through a letter of credit, an
advance by Treasury check, or a re1m..-
bursement by Treasury check. The fol-
10"ing deftnltlol".s a.pply for the purpose
of this Attachment:
(&) Letter 01 credtt. A letter of credit
Is an Ill.Strument cert1!1ed. by an author-
Ized ot!lc!al of a grantor agency which.
author'.zes a grantee to draw funds
oeeded for Immediate disbursement In
accordance with the provisions of Treas-
ury Circular No. 1075.
(b) A.dr;ance by Treasury check. An
advance by Treasury check is a payment
made by a Treasury checlt to a grantee
upoo'lts request before cash outlays a.re
made by the recipient or through the we
of predetermJned payment schedules
before pa}meots are made by the grantee.
(c) Re'imb-.l.r!ement by Treasu.ry check.
A reimbursement by ~es..sury check 13 a.
pa:;meht :nade to a a.antee .".it.~ a
Treasury check upon request for re:.::n-
bu:-sement from t.'1e grantee.
09:15.f7
HDR RF-136
4-23-79
3. Except for construction gr~:..s for
which optional paymentm~thods s.:e au-
thor1zed,the' letter-of -credit L.ndlng
method shall be used by grantor agen-
cies where all of the follOWing co::.:Jtlons
exist;
(a) vrhen there Is or will be a. con-
tinuing relationship between a ...-a-ntee
and a Federal grantor agency for a.t least
a 12-month period and the total e.=1ount
of advances to be received wlth::1 that
period. from the grantor agency Is $120,-
000 or more.
(b) When the g-rantee has esta.:::l1shed
or demonstrated, to the I:1"B.ntor r.=.e Will-
Ingness and ability to establish ~roce-
dures that wUl mii1imlze the tlJpe e!a.ps-
ing between the transfer of fun:s and
their disbursement by the grantee.
(c) When the gt"antee's ftnanCla1rr..an-
agement system meets the standz..-ds for
fund control and accountabl11er p(e-
scrlbed In Attachment 'G to thJs C:rcl1-
Ia.r, . "Standards for Grantee FU:.mc1al
~fanagem~nt Systems."
4. The method of advancing fu::ds by
Treasury c?!eck shall be used, :n &.::ord-
ance with the provisions or Tre3.sury
Circular No. 1075" when the ~tee
meets a.ll of the requirements s~ltled
In paragraph 3 a.bove exc~pt tho.se :""1 3.a.
5. The reimburscment by 'I';-e:l.Sury
checlt method shall be 'the pre:erred
method when the grantee dOeS not meet
the requIrements specifled In elt~er or
both of pe.ragraphs 3,b. and 3.c. Th.1s
method may also be used when the ma-
Jor portion of the progrim Is a.:com-
plLshed through private market financing
or Federal loans, and when the F~eral
grant assistance constitutes a. m1no~ por-
tion of the progra.m. \V11en the :eim-
bursement method 13 used the F-e-deral
a.gencles sha.ll make payment ;;ithin
thirty days a..!ter receipt of the billing
unless the .billing Is Improper.
6. When the letter-ot-credlt ;;~oce-
dure Is used. the grantee shall be !..ssued
one consolldated letter-of-credit ",hen-
ever possible to cover anticipated cash
needs for all grants awarded by the Fed-
era.l agency. Like?1se. to the exten: pos-
sible, when the advance by Tre--..sury
check method Is, used. advances ~'-ould
be consolldated (pooled) tor all Pnts
made by t.'1e Federal agency to t.'1e
gra.n tee.
7. Unless otherl'1.se required b-r law,
grantor agencies shall not withho!::. ;:oay-
ments fol' proper charges made by State
and local governments at a.llY tune dur-
Ing the grant period unless (af a g-:-...r.t.ee
has tailed to com;>ly v.1th the prc-,.-.am
obJectives, grant a.ward conditlo!'-S, or
Federal reporting requlrem.ents, O~ Ib)
the g:-antee Is Indebted to tIle C~it.ed
State" and collection of the I.r~e':-:.ed-
nes.s v.1l1 not impair a.cco~l:shr::..e::. t of
the ob~ectlves of a.riy gra.nt ~
sponsored by the United States. C~der
such condl t10D.S, the gran tor- :nay. -.:;>on
reasol".able notice, lnfor:n the ~...."'ltee
that pa}me.!lts W'1J! ::ot be made !c~ oou-
g-s.tlons L.'1CcrTed 3.!ter a s~~eC 3t.e
~"'ltil tr.e condltlons are cor.e<:l.e1:1 c: :be"
:r.deb:.edness to the Federal ,;o';er -=:e.'lt
!.s Uquid3ted.
PC~'~:,';cj h T:IE =l,-E.\l 'JF ,-,\fiO".l.,l :..Fr.,IR.S, i'-C, \\,\S,i;\'GTO", DC ::'037
'/0
c-]
Ca) The rev1s1on resultS from changes 3. All Federal grantor agencies shs..ll
In the scope 'or the objective or the proJ - establish grant closeout procedures which
ect or program. include the following requirements:
CD) Tbe revision IDcres.ses the budg- (a) Upon request, the Federa.l grantor
eted amounts or Federal funds needed agency shs..ll make prompt payments to
to compkte the project. . a grantee for allowable reimbursable
Y. When a'1mUltor ~ency awards a. costs under the grant being c10sed out.
grant which prOvides support toe both . (b) The grantee shs..ll tmmed1a.tely re-
construction' and nonconstructton work, fund to the grantor agency any balance
th1t grantor agency may reqUire the ot lmobUga,ted . (unencumbered) cas..'1
.iT8Jltee to request prior &ppr'oval from advanced to the it'antee that is not au-
the grantor agency I:letore makJDg any thor1zed to be retained by the grantee for
.fund or budget fran&ters between the two we on other grants. '
types of work supported. ' ,(c) The lm\ntorli.gency s.ha.ll obtaJn
8. For both conStruction and ,non~ trom the grantee within 90 days atter
construction - grants, grantor agencies the dateot completion ot the grant s..ll
shall require State and loc.a.1 govern- fu1anc1a.1, performa.c~, and other reports
ments to notlly the grantor' &g,enCy required u a condition of the grant..
.promptJy whenever the .amount ofPed- The agency may grant extensions when
eral authorized funds 1& expected to ex- requ.ested by the grn,ntee. '
.eeed the needs at the grantee by more (d) When author',zed by the gra.nt the
than. $5,000 or 5 percent ot the Federal gra.ntor agency shall m.Ue a settlement
grant. whichever is greater. This not1f1- tor an:( upward or downward adjust-
catton will not be required when appl!ca- ments tor any upward or downward
tlons for adclJtional tunding are submit- adjustments to the Federal share ot costs
ted tor continuing grants. . after these reports are receIved,
9. When requesting approval for bud. (e)'l'he grantee shall a~count tor a.ny
let revisions, gran~ sh&U use the property a.cquired With grant funds or
.mdget forms, which were used in the received from the Government in 'a.c-
grant application. However. grantees cordanu with the provisions ot 1\tt.a.ch-
ma.y request by letter th.e approval re- .ment N to thls Ctrcula.l'.
qu1r~ by the, provisiOns at Federal ,(f) In the event 3. final audit has not
Management Circular 74-4. been performed prior to the closeout of
10. Within 30 days from the date of the grant. the gt'a.'1'tor agency shaJ..l re-
receipt ot the request tor budlfl!t re'.1. tain the right to recover an' appropriate
sloDS. grantor agencies sha:ll review the amount a.!.ter fully conslderL'1g the re-
request. and notl!y the grantee whetoer commendations on d1saJ..lowed cOGIs re-
or not the budget revisIons have been ap- sulting from the flnal a.udit. .
proved. U the revision ls still under con- 4. All Federal grantor agencies shall
sideration at the end ot 30 da.ys. the provlde proCedures to' be followed when
grantor shan 1ntorm the grantee in writ-a. grantee hu tailed to comply with t..'le
ing as to when the grantee may expect grant award stlpul.a.tioDS, standardS, or
the declsion. conditions. When that occurs, the grant-
1\TTACH~i:NT L--CDtCl1l.AR No. A-I02 or agency may, on rec.sonable notice to
the grantee, suspend-the il'lUlt. and with-
GIlANT CLOSE01l't' PROCZDt7RES hold further payments, or prohibIt the
1. Th.I.s Atta..chmentpres:ribes unl!orm grantee from incurring additional obll-
cioseout procedures for grantees. gatlons of grant f\llldS, pending cOrrec-
2. The fci11ow1rigdefihitlons sh311 apply tive a.ction by the. grantee or a decision
for the PUZ1lOSe of !JUs Atta.chment: to terminate In a.ccordance .with pa.m-
~a) Grant clOlleout. The closeout or a graph 5.a. The gra.ntor a.gency shall a.llow
lfl'1Ult ls the process by which a Federal all necessary and proper costs Which the
i"r8.lltor agency detennines t.'1s.t all a.p- gr:!.ntee could not reasonably avoid dur-
plic.a.ble administrat1ve a.c:tions and all Ing the period of swpension provided
requiredwork ot the gTant have been that they meet the provI.sions of Federal
completed by .the grantee a.nd the Management Clrculsr No. 74-4.
rnntor. - S. Subject to the pro\-'.s'.ons of para-
(b) Dcte ot completion. The da.te whe.'1 graph 5 of the ba.s!c Circul:lr, ot v.'hlch
a11 work under a grant 1$ comple....ed or this Attachment is a. part, all Federal
the date in the iT'lUlt award document. granter agencies s.":.3.U provide for the
or any supplement ,or a.mencine."lt there- systema.t1c settlement of termInated
to., on which Federal assistance ends. grants including the tOllowing:
(c)' Term.i7U1ticn. The termJnation ot (a) Terminctio-n lor cause. The grant-
a gra.ct meiU1S the cancellation ot Fe<1- or agency may ter;:ni.'1ate any grant in
era! ass1stanu, in whole or in part, under whole. or In part. at any t'.me !:l-e!ore the
a grant at any time prior to the date ot date ot completion. whenever It 1$ de-
cOtnpleUon
(d.)Suspensioft. The suspension of il tennlned ~t the grantee has fa11ed to
irant f;1I an actJon, b,.- a 'Federal grantor comply wIth the cor:ditlons ot the grant,
agency which ~mpor&ri]y suspends Fed- The grantor agency s..'ls.11prompUy DO illy
eral s.ssistanu under the grant penclJng the g-rantee in writing ot the detertriina.--
eorreetJve a.ct1on by the r.-a.ntee cr ?end- t10n and the .rea.soru for t..'1e te..~tlon,
lng a-decision to termJ.n.a.te t..'1e grant together wIth the ~ectlve dste. Pay-
by the grantor agency.
(e) Disal1~ OOSU. D1s.a.l.1owed~..s :nents made to grar:t.ees or ~Q~'er.es bi
ue 1bose charges to a. iI'1LIlt which the tee it'antor agencj~ u.'1der grants te:-m1-
crsntor lL3'ency or Its. ~pre:se.nt&t'.ve de- nated for cause shsll be In accord with
termine:s to be unalloW1l.ble. (See Federal t.be legal r16bLs and llabuit.:es ot t.'1e
M.an.ager:nent C'1rculA: No. 70{...-4.) par~es.
THE BlRUU OF SATIO:--;AL AFFAIRS, 'Sc.. W-\SHlSGTOS. DC :'JOji
... ~J
r ,'If
09: 1548
8. Attachment H of this Circular. "Pi-
nf..ncial Reporting," ProVides tor the pro-
cedUres and formS-for requesting ad-
vances or reimbursements.
ATTACHMENT K---cmCl1l.AR ~o. A-I02
IUDGET lU:VISION PROCJ:DUIlES
1. This Attachment sets forth critena
and procedure.s to be followed by Federal
grantor agencies in requJririg grantees to
report deviations trom grant bUdgets and
to request approvals tor bUdget revisions.
2. The grant bUdget as used in this
Attachment means the approved finan-
cial plan "for bOth the Federal arid non-
Federal shares to carry out the p~
ot the it'ant. This plan is the dnanclaJ
expression of the project or program u
approved during the grant application
and award process. It should be related
to performance for progrlLlIl evaluatioli
purpo.ses whenever appropriate and re-
quired by the grantor agency.
3'. FQr nonconstructlon grants, grant-
ees shall request prior approvals
promptI.Y from~tor 'agencies when
therlt is res.son to bel1eve that a revision
will be necessary tor the following rea-
sons:
(a) <'hanges III the scope or the. 0b-
jective of the grant-supported project or
program.
(b) The need for addItional Federal
funding.
(cl The revisions Involve the transfer
of amounts bUdgeted for indirect costs
to absorb increa.sp.s in direc t 006ts l! ap.-
proval is required by the Pederal agency.
<d) The revisions pertain to the addi-
tion at items reqUiring approval In ac-
cordance with the prOvisions of Federal
~ana.gement Circular '74-4.
(e) RecIpients plan to transfer fundS
allotted for training allowances (direct
payments to trainees) to other cate-
gories. o( ~xpense.
4. FOr nonconstructlon, grants the Fed-
eralB,6c:lCY may also, at Its option, re-
strict transfers of funds lLIIlong direct
cost catc..ories for awardS in which the
Federal s..'1are exceeds $100,000 when the
cumulative amount of such transfers ex-
ceeds or:.s expected to exceed five pe:-cent
of the t.:>tal bud;:et. The same criteria
shall ap;lly to the cumulati....e amount of
transfe:-s lLIIlong progT3.JT1.S. functions.
and act:'.ities when bUdgeted separately
for an a':l.-ard; except that the Federal
agency shall permit no transfer that
would C'3.:.:se any Federal appropriation.
or, part thereof. to be used for purlJQ6es
other tha:l those intended.
5. AJ..l other changes to ,oonconstruc-
tion gnnt budgets, except tor the
changes described In paragraph 7. do not
requite aPproval., These c.l:1a.nges include
la) the use"Ot gra.ntee funds in further-
ance'ot program. objecUves om and
above t.t:e it'antee minimum share in-
cluded in the appro\'ed grant budget. and
(b), the transfer o,f amounts DUdgeted
for direct costs to absorb a.uthortzed In-
creases in lnd1rect COGts.
S. FQr construction grants, grantees
Iha.llreq~est prior a.pprovals promptly
from it'~t.or agencIes for bUdget revl-
dons ....~e.."I.e....er:
Publl,ild o~
I
I
HOUSING & DEVELOPlvIENT REPORTER
30
c-~
'.:'
. .
I
)
COMMUNITY DEVELOPMENT BLOCK GRANTS
-,,'
b, Termination lor convenlence. TIle
grantor agency or grantee m'll.ytermioAte
grants In whole, or In part, when both
parties agree that the continuation of the'
project would not produce beneficla.A- re-
sults commens1,1rate wtth the further ex-
pendi ture 'ot ,funds, 'n1etwo parties shall
agree upon the tenn1Da.tJon CQnditlona,
Including the elfec'Uve date and. In the ,
case of partial terminations, tne portion
-to be ,terminated. 'n1e gnn tee shall not
Incur new obllgaUons for the terminated
portion a.tter the elfectlve date, and sha.ll
ca.n<:el as m.a.ny out.sta.nding obligations
as possible. 'n1e Federal agency shall al-
low full credit to the grantee tor the
Federal share o! the noncancelable obll-
gatlons, properly Incurred by the grantee
prior to tennl.natlon.
ArrAcmaNT M-Cnc17L.Ul No. A-I02
S'lANDAJUl roam roR AP1'1. TDIG roR
nDEKAL ASSIS'l'ANCZ
1. '1'hja Attachment. promulgates
standard tonns to be used by state. local.
and, tederall7 recognized Indian tribal
govermnenta In applying for a.ll Federal
grants except th06e Federal formula
grant programs which do DOt require
grantees to apply tor Federal tunds on a.
project basis. When a.pplying for Joint.
funded jJTOjects see OMS C1reuIar No.
A-lll. 'n1e use of the standard torms by
grantees In obta1n1ng necessary informa-
tion from subgrantees III optional.
2. 'n1e standard torms and their pur-
poses ale brlet1y described In the follow-
Ing pars.grapba:
,. (a) Preapl'lication Jor Federal Asrilt-
ance (E%h.ibit 1). Pree.ppllcation. for
Federal ~Ists.nce 1su.sed to: (1) Es-
tabl1.!h commun1ce,tion between the Fed-
eral grantor' 8.i'ency and the applicant:
(2) determine the altpllcant's ellg1bWt:Y:
(3) determlne how well the project can
compete With sim1lar appllcatlons from
others; and (4) el1mJna.te any propo&&ls
which have little or no cbaJ:lce for Fed-
eral funding betore appllcanta Incur sig-
nit1cant, expenditures tor preparing an
appllcatioIl. Preappllcat10n torms sh&1l
be required for all construction. land ac-
quisltionnand land development proj-
ects or protmJ,mS tor wbJch the need for
Federa.l tundlng exceeds $100.000. 'n1e
Federal grantor agency may requ1r'e the
use at 'the preappUca.tlon form tor ot."ler
types at grant programs or far tho6e tor
which the Federal fund request l.s tor
$100,000 or less. In addition. Federal
agenclu sh.a.ll establl.sh procedures al-
10W1ng State and local government a.p-
pllcants to submit. 11 they so desire, the
preappUcat10n form when mandatory re-
quirements tor preappllcatlon do not
exist..
(bl Notice 01 Revie'lD Action (Ez/l.ibit
Zl. The p\1l1X)Se of the Notice of Review
Action Is to inform the s.ppllcant ot the
results of L"le review of the prea.ppl1ca--
tlon forms whJeh ~..ere submitted to Fed.-
e~ 6T'3-l1tor agencies, The Fedel"3l
.rantor agency shall send a notIce to L"le
applica.nt o;;-;thin 45 days of the r-e<:elpt
of the ;:::-ea.ppllcatlon form, When L"le :-e-
..iew ca.'mot be ma..ce o;:;it:-J..'l .;5 da.J's. L"le
app!'!ci!...'1t shall :,e informed. 'oy Jette:- 3.S
to w!':en the re..1ew .....11 be completed.
09: 1549
HDR RF-136
4"'23-79
(el Federal Ass!3tance ApplicatIon Jor
Ncmcon.structt.on. ProgralN (Ezhibit 3l,
'n1e Federal Assistance ApplicatIon tor
Nonconstruetlon Progra.m.s form Is de-
signed to accommodate seveta.l prcgra.m.s
and shall be uSed by thea.pplicant for a.ll
actions covered by thl.s Attachment ex-
cept where the major PIll'POSt' at the
grant involves construction. land ac-
qul.sltlon. or development or single-pur-
pose and one-time grant s.ppllcations for
less than $10000 which do not require
cleartnghouse a.pproval, an envircom8O-
tal1mpact statement, or the relocs.tion of
persons, businesses, or tarms.
, (d) Federal Assistance Application lor
Construction ProgramJ (Ezhibtt4l. The
Federal Assistance Appllcation for Con-
struction Programs torm shaJ.I be used
for a.ll grants where the msJor purpose
of the program Involves construction.
land a.equisltlon. and land development,
except when the Applleatlon for Federal
A.ss1sta.nce-Short Form (pa.ra.gn,ph 2e)
Is used.
(e) AppUcation lor Federal AsS'!..st-
ance-ShoTt Form (Ezhibtt SJ. 'n1e Ap-
plication for Federal As3l.stance-Short
Form shall be used tor all grants tor
single-purpose e..nd one-time g-raot a.p-
pUcations tor less than $10.000 not re-
qu1r1ng clesr1nghouse approval, an 80-
viromnentalLmpact statement, or the re-
location of persons, businesses. or fa.rm.s.
Federal grantor agencies may, at their
discretion. authorize the usa of this torm
for applJcs.tions forla.rger amounts.
3. For all fornu described, berein a.ll
requ'7ts by gn.ntees fQr changes, con-
tinua.lons, a.nd supplementaLs to ap-'
proved grants shall be submItted on the
same torm as the orig1n.a1 applicatJon.
For these purpo.ses, only the required
P8.6es of the torms should b submitted.
f. FederaJ agencies may spec1!y and
descr1be t."le programs, tunctloo.s. or ac-
tivities which will be used to p1&n. budg-
et, and evaluate the wpri: under the
grant programs.
5. When additional 1010rmatJon l.s
n~ed to comply with leg-'.slative re-
quirements or to meet specific progrs,m
needs Federal ~encies must comply wtth
t.'le reports clearance requirements ot
Omce a..nd Ma.na.gement BUdget Clrculs.r
No. A-40 as revised.
6. Additional assuran<:e3 shall not be
added to the star.ds.rd assurances con-
tained In the Clrcular unless spec1t1ca.lly
required by law.
7. Federal agencies have the optJon of
shading out any line Item on any form
that Is unnecessary tel' dec!slonmaldng
purposes or for meeting the requirements
of other cIrculars or laws except for t~e
Standard Form 424. nus form should
not be altered. It an Item l.s not ap?llca-
ble. WTite or o',erpr.nt "=--A" l:::1 the space
provided for each Item.
8. Grantees shs.ll submit the orlst.::lal
and two copIes of the appI!catlon.
9. Federal vant<Jr ~""enc!es are at::"~or-
--ized to reproduce these fonns. The forms
ror reproduction p'l.-;::o,;es can be ob-
tained from the O=:ce of ~fanage:r.e:Jt
and Bud"et. T:--.e St..:i...'1card Fo.-:n 42.; can
'oe obtaL:,ed. [:-om tl':.e (J,ene:-al services
Adm1Iili! tratlon.
c.-9
P,~':lS"cd t-y TilE ,ll'REAL' Of' SAT!0'\L ,...FF.\iRS "c. '.\...S:i:'-G,O'.;, D,( :~IJ3i
)1
"
"
~
09: 1550
Arr,'cH!aNT N-CIRC'C'I~\Jt No. A-102
PROPo'TY MAN.>.GEMi:llT' STANDARDS
1., ThJ.; Attachment prescribes un1torm
standa:ds governing the utilization, and
disposition of property furnished by the
Fedenl Government or acquired In
whole or in 'part with Federal funds or
whose cost WllS charged to 3. proJect sup-
ported by a. Federal grant. Federal
gTantor agencies shall require grantees
to obse~ve these standards under gra.'lts
from the Federal Govemment and .shall
not Impose additional requirements un-
lesS specifically required by Federal law.
The gr:~ntees shall be authorized to use
their Ollffi property management stand-
ards ax:d procedures as long as the pro-
visions of this Attachment are Included.
2. The followmg definitions apply for
the purpose of this Attachment:
(a) Realpr01lerty. Real ,property
means land, inclUding land Improve-
me'nts, st~ctures and appurtenances
thereto. excluding movable 'machinery
and equipment.
(b) Personal property. Personal prop-
erty of any kind p.xcept rp.al property. It
may be tangible-having phYSical exlst-
ance, or intangible-havmg no physical
existence, such' as patents, inventions,
and copyrights.
(c) ,Vonerpendable personcl property.
Nonexpendable personal property means
tangible personal property having a use-
ful IUe of more than one year and an
acquislt~on ,cost of $300 or more per unit.
A gTante~ may use .Its own definition of
nonexpe:1dable personal property pro-
vided th"t such definition would at least
include !II tangible personal property ~
defined :l.bove.
(d) E:pendable personal propertv. Ex-
pendable personal property refers to all
tangible personl\l property other than
nonexpe:-::dable property.
(e) E:cess propert;;. Excess property
means property under Ole control of any
Feder:J.I ~ency which, as determined by
the head thereof, is no longer required
for its r'.~ or discharge of its responsl-
bWtle3.
(f) A.c::uisition cost 01 purcha.sed non-
erp,mdcJle personal propm;;. Acqul-
s1Uon cost of an Item of purchased nee-
expend~'::e personal property means the
neeinvo:::e unit price of the property in-
cluding :.':.e cost of modifications. attach-
ments, a.ccessories, or 'auxiliar-.r appara-
tus necessary to make the property usa-
ble for :..':.epurpose for which It was
acquired. Ot.'1er charges such as the cost
.of Installatton, transportation, taxes,
duty. or protective In-tr:w.slt insurance,
shall be included or excluded from the
unit acc:'~isitlon cost In aceordance with
the gra::tee's regular accounting prac-
tices.
(g) E=empt propt!1't;;. KI:empt property
means t.a.ogible persona.! property ac-
quired in ...hole or in part with Federal
funds. a:.d title to which is vested in the
. redplent W'it.'1.out further obligation to
the F~e:-a.l Govemmene except as pro-
vided I.nsubparagraph 6a.below. Such
uncond~~=nal vesting of title will be pur-
suant eo u:t Fedel"1llleg1.slatlon !.hat pro-
I
I
HOUSING & DEVELOPMENT REPORTER
vldes the Federal sponsoring agency with
adequate authority. .
3. Real properl;;. Each Fe.iera.! gTant-
or agency shall prescribe requirements
Cor g:riU1tees concerning the use and dis-
po.sition oC real property Cunded partly
or wholly by the Federal Government.
Unless otherwise, provided by statute.
such requirements, as a mJ.nimum. shall
conta.1n the tollowir,g:
(a) Title to real property shall vest in
the recipient SUbject to the condition
that the grantee shall use the real prop-
erty Cor the authorized purpose --Df the
original grant as long as needed.
(b) The grantee shall obtain approva.l
by the grantor agency Cor the use of the
real property in other projects when
the gTantee determines that the pcoperty
Is no longer needed for the original grant
purposes, Use In other projects shall be
limited. to those under other Federal
gran,t programs, or programs that have
purposes consIstent with those author-
Ized for support by the gTantor.
(c) When the real property Is no long-
er needed as provided in a. and b a.bove,
the gTantee shall re<tuest d1sp06ltlon !n-
structlons from the Federal agency or its
successor. Federal' agency. The Federal
agency shall observe the follOWing rules
In the disposition instructions:
(l)The grantee may be permitted 19
retain title a.fter it compensates the Fed-
eral Government in an amQW'l.t computed
by applying the Federal percentage of
participation in the cost of tne original
project to the fair market value of the
property.
. (2) The grantee may be directed to
sell the property under guidellnes pro-
vided by the Federal agency and pay the
Federal Go\'emment. an amount com-
puted by applying the' Federal percent-
age of participation In the cost of the
original project td the proceeds from ~Ie
(arter deducting actual and reasonable
se1llng and t\."(-up expenses. It any. from
the sales proceeds). When the gran tee Is
a.uthorized or required to sell the prop-
ert:,., proper sales procedures shall be es-
tablished that pro\1de for competition to
the extent pracUca.ble and result In the
hi6hest poss:ble return.
(3) The gTa.ntee may be directed to
transfer tttle eo the pro~!'tY to the Fed-
eral Government provided !hat In such
cases' the grantee shall be entitl~ to
compensation computed' by applying the
grantee's percentage of participation In
the cost of the program or project t.o the
current fair market value oC the prop-
erty.
4. Fedt!1'alZll OlD1led nonexpenCatle
perso7UJ.l prO';)Ct;;. Title to federallY
owned property remains vested In the
Federal Gove:-nment. Recipients shall
submit annuallr an inventory listing of
federally owned property In their custody
to the Federal agency. tnlon completion
of the agreement or when the propercy
Is no longer needed; the gra.n tee s.'1a.l1
report the property t.o t.'1.e Federa.l ageocy
.for furt..'ler ageocy utillza~on.
l! the Federal agency has no furt.'1.er
need ~or ~he propertY. It shall be declared
exces.s and reported to ~e General Serv-
Ices Ad.miIl1.stratloll. Appropriate dispo-
sition Instructions will be Issued to the
recipient a.!ter completion of the F-ederal
agency review.
S. Exempt prO"Pt!1't;;. Wnen statutory
authonty exist., title to nonexpenda.ble
personal property acquired with project
funds shall be ve~ted in the recipient
upon acquisition unless It Is determined
that to do so Is not in the furtherance
of the obJect.:ves of the Federal spons01'-
ing agency. When title is vested in the
recipient the recipient ~hall have nO
othe,r obllga.tion or accountability to the
Federal Gove,rnment for its use or dis-
position except as prOvided in 6a below.
6. Other none:rpendable pr01lert;;.
When oth~r nonexpendable tangible
property Is acquired by a grantee v..lth
project funds title shall not be taken
by the Federal Government but shall
vest in the gTan~ subject to the follow-
ing conditloIlS:
(a) Right to tran.sler title. For Items
of nonexpendable personal property
having a unit acquisiUon coot of $1.000
or more, the Federal.al;;ellcy may reserve
the right to transfer the tltl~ to the
Federal Government or to a. tl-..irdpa.rty
n&.lI1ed bi the Federal Government when
such third party Is otherwise eligible
under ex1stin~ statutes. Such reserva-
tion shall be subject to t.'1e foliowing
standards :
(1) The property shall be appropri-
ately Ident1f1ed In the gTant or other-
wise made mo'ilOIl to the gTantee In
writing.
(2) The, Federal a.gency shall issue
disposition instructions within 120 cal-
endar da.ys after the end of the FeC.eral
support or the project for which it was
acquired. l! the Federal.agency fails to
Issue disposition Instructions within the
120 ca.!endar-day period, thegTantee
shall apply the standards of subparo.-
graph Sib) and Sic) as appropriate.
(3) When the Federal agency exer-
cises its right to take title, the personal
property shall be subject to the provi-
sions for federally-owned nonexPe~d2.ble
property discussed In paragraph 4,
above.
(4) When title is tra..n.s~erred either
to the Federal Government or to a third
party. the provisiOns of subpara.gra;>h
6(c) (2) (b) should' be followed.
(bl Use 01 otht!1' tangible ncne=;i'e7WJ,-
able ;JT"opert'j lor tOh:!;h the grantee lies
title.
(1) The grantee shall use t.'le proper-
ty In the project or pro~am lor ';l..h~c.'1
it was acquired as long ~ needed,
whether or not the project or prograrr.
conti.'iues to be supported by F\!den.1
fund.3. When no ~::m6er needed for the
original project or pro~am, the grantee
shall use the property in connection wlth
its other federally sponsored activities,
In the following order of priority:
(a) Activities spons~red by :,.'le same
Federal agency.
(b) Activities sponsored by other Fed-
eral agencies.
(2) Shard lLSe, Duri:1g tr.e ti:r.e :.':... t
none:'l::>e~dable :>ersonal propcr:y :..s he;d
for use on :.he project or pro~..:T1 lor
whlch It WJ.S acqwred. the ~an tee s.":a.ll
Pub!:",c-! " THE BlREAL: or :--;ATiO:--;\L ,-\rFAiil.S, I:--;C. W-\SIiISGTOS. DC ::;.):~
~'l
,).:.
L -/0
'" COr...1MUNITY DEVELlpMENT FLOCK GR..ANTS
make It ava.1lable for Ube on othCl' pro'.
ects or P I'Oitl'a.ms1! such other use 'will
not I.nterlere w1th the work aD. the pro'-
ect or p!"Ogl"Il.D1 for w hJch the prot)Crty
was or1g1wU.ly 8.C(lu1red. Flnt pre!.erence
roisuchother. use shall be given to other
pro'ects or pro~ams s;>9nsored by the,
Federal agency that financed the-prop-
erty. second preference shall be given
to project.s or programs sponOsred by
other Federal l\.6encles. It the property
Is' owned by the Federal Government,
use on o~er'actlv1Ues not sponsored by
the Federal GQvernment shall be per-
missible If l>uthor17ed by the Federal
a.gency. . User charges should be con-
sIdered If appropnate.
(C) Dj.spositfon 01 other ncnerpend-
able p1'opertll. \Vhen the gra.n~, no
longer needs the property as provided
In 6b. above,' the property ma.y be used
for other activities I.n aeu>rda..nce w1th
the follow1ng standards:
, ur NonexpendaiJle property with a
unit acquisition cost of leSs than $1,000.
nle - gr-iuitee - may use !.he property for
other activ1ties without reimbursement
to the Pederal GQvernment or sell the
property and retain the proceeds.
(2) Nonexpendable personal i'roperty
with a unlt acquisition cost of $1,000 or
more. The gT'lUltee may retal..n the prop..
erty for other uses provIded that com-
pensation is madt! to the orl.g1nal Federal
a.ge.!'lCY or .itS successor. The amount. of
compen.-,'atlon sha.ll be computed by ap..
ph'lng' the percenl.a.ge of Federal par-
tlclpatron l..nt.'1e east of the ong1.nal
proj ect or program to. the current fair
market value of the property. It the
grantee he.s no need for the property and
the property has further use ,'alue. the
grantee shall request dispOSition Ir.sb'uc-.
tlons from the orlginal grantor agency.
The Federal agency shlLll determine
whether the property can be ~ to
meetU:ie agency's requirements. It no
requirement eldst.s w~thln that 'agency,
the aval1abUlty of the property shall
be reported, In accorcia..nce with the
guidelines of the Federal Property
Mal'lagement Regulations (~), to
the Geoe~l 3en1ces Administrat!on by
the F'ederal agency ta determine' whether
a -requirement ror the property exist.s 10
other Federal agencies. The Fede:-aJ.
a,ency shlLll 15sue Instructions to the
grl,ntee no lAter t.."1.Sn 120 days after
the grantee, request lUld the foUow1ng
procedures ShaU govern:
(a) It so Insb'ucted' or. If disposition
In.strudlC'!'ls are not l..sst1ed within 120
cale.odar days after the gTantee's' re-
QUest, the. gT'B.ntee shlLll sell the prop..
erty s..,d reimburse the Federal 9.iCncy
an amount computed by applylng to the
Sales proceeds the ;>ercenl.a.ge of FedeI'llI
participation In the cost o! the orlginal
project or program. Ho-;;-e~'er, . the
grantee shall be permitted to deduct
a.nd retB.1n from L'le Federal share $100
or ten;lercent or the ;lr~~...s, -;;-hlch-
e~'er Is r.e..'l.ter, (or the &T"l.n!.ee's sell-
!.nO' and hs.ndlini' expenses.
(b) It ~e gnntee is il'-,,~.Jcted to
s...'1!pt.'le prc;'Crty el.sewne:-e the ~ntee
s~1.ll be re-'~'nbu~ by the k'1e~tlng
:1:~era1 ~enc1 ~th an ~.c:1ount wt-.Jch
is computed by n.ppiying the percentage
of t1iegrl1.ntee partlclpa.tlon In the cost
of ,the original gnDt pro'ector prolrram
toth.e current fair macket value of t."le
property,' plus any reasonable shipping
or l..nterim sto~e costs incurred,
'(c) Ut:ne-sl"antee IS Instructed to
otherwise dispose of the property, t..'le
gTantee shB.u be Ie1mburSed by the Fed-
eI'lll, a;;cncy for such cost.s Incurred In
It.s disposition.
(d) Property manace;nent standards
lor ncncxpcndable propCTtv. The g:ant-
ee's property management standnrds for
nonexpendable personal property shall
Include the f(.'lowing procedural requlre-
men13:
-, (ii-Property records she.ll be maln-
tB.L,ed accurately and shall IJlclude:
(3,) A descnptlon of the property.
'(b) Ma.nufacturer's serial number,
model' number, Federai stock number.
national stock number, or other 1dent~-
cation number.
(c) Sou.ce of the property including
grant or other agreement number.
(d) Whetl:1er tlUe vests in the grantee
or the Federal G<lvernment..
(e) Acquisition date (or date received.
It the property ",..e.s furnished by the
Federal Government) and cost,
(n Percentage (at the end of the
budget year) of FedeI'llI participation I.n
the cost of the projector program for
..which the property was a.cquired. (Not
applica.ble to 'property furnished by the
Federal GQvemment.)
(g) Location, use, and condition of
the property lUld the date I.he In!orma-
tlon wa.s reported.
(h) Unit acquisltlon coot.
(j) '01tlma.te dispositism data, lJlc!ud-
lng date of disposal and saJes price or
the method used to determine current
fair market've..lue where a grantee com-
pensates the ~era.l agency. for It.s ~ha.re.
(2) Property own~ by the F'ederal
GQvernment must. be marked to indi-
cate Federal ownership.
(3) A physical Inventory of, property
shall be taken-and t.'le results ~oncl1ed
with the property records at least once
every two yea.rs. Any differences between
quantities determined by the physbu
inspection and tho:;e shown In the ac-
counting recon;!s shalll>e Investiga~ to
determine tfie Cs.uses of t.'1e dlr.-er~nce.
The grantee sh8.ll, In connection with the
Inventory, ver1!y the e:dstence. current
utilization, and continued ne-."d for the
property,
a) A control system shlLll be In etrect
to l:l.Sure adequ::.te safegt:aI"ds ta prevent
loss, da.m~e, or theft of the property.
Al:J.J loss, dame..ge, or theft of nonex-
penda.hle property shall be Investigated
and fully docu=1ented; 1! the property
was owned by the Federa.i GQ;'ernment.
the grantee shall promptly notify the
Fe-1~~ ~e!"lcy.
(5) .A..c~ua.te C":3u-.tcnance ?foccdures
shall be lmp:c;:nC:'lted tQ ~:l.'ep t..'1e prop-
e~:" ~, gC'\Od conG..: ~:oc.
(6) \'/here the gn;,:-.~ 15 2.~lh0rized
or required tQ sell the prop-:rty. pro;;-er
seJes p!"X,:<lcrc:s shall be esl..:l.Ol~"1~
~;hic...'1 >>0~d ;::J"..~'::e for co:-::~~~tion ~
,
09: 1551
IlDR RF-161
4-;-80
the C':ttent p~d1cable nn.d resul~ 1.0 the
h1c;hest possible return.
7. EIpen.dable personal p1'opcr:~. TIt1e
to expccdr..ble ,p!)rsonal Pl'~rt:j shall
vest 10 the.grantee upon !U:Qu!s.w~. It
there Is a rc::;ldual IJlventory o! wch
property exceeding $1,000 10 t..otall!.i:gI"e-
j;ll.ta fair' markct value. upoo t.e..7ll1na-
tlon or completion 0{ the gran.t llI'l.d It
the property is not needed for a.nfot11er
federally ~pOn.sored pro'ect orprcvarn.
the grant.ce shl'..ll ret.a.in tbe property for
use on nonfcderally sponsored activities,
or sell It, but must I.n either ca..<:e, com-
pe::lSs,t.e the F'C<1eral Governmcn~ for Its
share. The amount of compensatio!l E:hall
be computed in the ssroe Il'lAJ::.."ler a.$
nonexpenda.hle p~rwORJ pro~rty.
8. Intan{l1ble "p1'op~tll,
(a) Inventions and pat.entJ". I! any
pr~ produces pntent.:lble lte!nS.
patent right.s, processes: or i:lY~tlons,
in the course of work sponsor'ed by the
Federal GQ\.crnment: such !set ~,all be
promptly ane! fUlly reported to llie Fed-
eral agency. Unless there Is a prior s.gree-
ment bet-;;-een the grantee and tbe FP.d-
e.."'8.1 s.gency on disposition of such items,
the Federal agency shall de~ermine
...hether prot.ectloIJ. on the IJlvenUon or
d1scovery shall be sop,ght. The ?"edera.i
a.gency will also Jeterm,l.ne hoW t..'1e rle:ht.s
in the invention ordi.scovery, \.n::.ludlng
n!;;ht.s under any patent Issued thereon,
sh all be e.ll oc r\ t.ed ~I1d o.d.rrJnis t.o":. ted IJl
order to pro!..cct the public interest con-
sistent with "Government Patent ?olicy"
(President's Memorandum for Re--.-ds Of
Sxecutive Department.s ?nd A<;encies,
August 23, 1971, and statement of Gov-
. ernment Pa.tent Policy e.s printed In 36
FR 10889).
(b) CO';J~'Tights.' Except e.s ot.'1er:\'15e
pro~1ded in the tertns Uld cond:~ons ot
t..''le B.,,"T'eement the author or th~ ..'!).,!1tee
ore:a.n1zatlon is free to copyright p..ny
0001-'-5, pUbllcatJons, or oLl1er rop,Mbht-
able ma.terials developed IJl the co;,u-se of
or under a Federal agreement. but the
Fede:-al agency sha.ll reserve a MpJtr-
free nonexclusIve and lrrevocab1e r.;;:ht
to reproduce, publish. or other..-:se Hse,
a.nd to authorize ot.'lers to use, :be ..;oric
for Gvvemment purposes.
9. Euess ';Jersonal p,op<:rtv, ~e:1
title to excess pro~rty is Ve.3l<;-d in ;.",.nt-
ees such property shall be ~..ccour.:ed for
QJ1d clsposc-d of In ~<:(')!"dance wit..'1 paI'll-
~p~ 6(c)2.nd 6(d) of L'115 8.tt.'1.C..':~e-nt.
P'.;~Ls:-.f:d ':J'I THE 3L~R=:AU OF :{,.;:-:C~~.~.!..- Af:=-..;:RS. ISC., '';''_~:::-:I~~GTO~. J C. :.::.037
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.Feder~1 Register / Vo!. 44. No. 159 I Wednesday, August 15, 1979 I Notices
OFFICE OF MANAGEMENT AND
BUDGET
[Circular No. A-l02, Re'i:sed; Transmittal
Memorandum No.1 I
Standards Governing Slale and Local
Grantee Procurement, Attachment 0
of OMB Circular A-102
Aug;;;l 1. 1979.
To heads of Executive Departments
<.Ind Establishments
1. Purpose: This Memorandum
transi":'l:ts an amendment (revised
Attachment 0) to Office of ~lanagement
and Budget (O~'IB) Circular A-I02.
2. Background: This notice, pursuant
to the authority of Pub. L. 93-400, the
Office of Federal Procurement Policy
Act and the Intergovernmental
Coooeration Act. amends Attachment 0
to O\1B Circular A-I02 issued
September 12, 19i7. Federal Register,
Vol. 42. No. 176. page 45828. The
proposed revision was circulated to
Sta te and local interest groups in
accordance with Circular A-85
procedures and Executive Order 12044
and to affected Federal agencies and
cont:1ctor organizations. The propoS'ed
revision was published in the Federal
Register December 6.1978, Vol. 43. NO',
235. page 57201, and '1 public hearing
was held January 16. 1979. No regulatory
analysis is required in accordance with
, Executive Order 12044. The amendment
(1) reaffirms the maximum relianc~ on
Sta te and local government grantres
manJilement of their own procurement:
(21 dirprt~ \lrantor a!i!enci"~ tn rescind
nlln.',",nt,"lrmllH.1 !U'f""QI",,,q nf c"""pnl
n!!er.cv sub(lrrlinate re\lUlallV.... "nt'
1""1'< 'MO ,~~"~M,....r,f additionai
rpf)'l'rem~r,t~; (Jj creales a gr",.._e
r:pr:;iic.1t!Jn orc.ram to reduce the
gra I. :~e ::J:5el~Cles uuru~nsorrte pre-
d",;-J review ofir.dhidual
procJ;e'Tl~nts; (4) adds provisions to
reJt:.:e the possibility of fraud a:1d
\r"d~~'~; a,~d (S) exp:tnds CC'ieragc
'adJ;c,s:ng 'sma!l. mino,ity, wOf"!en and
!abo, surplus contracting. The
a'Tlcc:d'Tlent. it is 1nlicipated. wi:! reduce
adm:,,;st.ati\'c cost. paperwork 3:1d
othe: such factors which contributed to
inef:ic.iency, waste and delay in
im(e:nentir.g assistaOlce programs.
3, Acticn: Remove the old Attachment
o frc,m the Circular and insert the new
Attachment. G,a:1tor 3S(lncie3 sha!1
heSi:: immediately to amend
non:odorming subordinate regula tions.
4. Summery of Chl1J:;;es: Section 1.
Prohi::.ts ~ranfor agencies from '1dJir~g
add:~;:::ndl requirements or suburdinate
reg~!at:ons, This attachment strik~s a
balance betwP"n agencies' stewardship
rOle ana Lilt: policy oi !JI"..Ulg We
maximum reliance on grantees to
conduct their own affairs. To avoid
confusion. areas not covered by this
prohibition are enumerated~
Section 2. Spells out the
responsibilities that properly belong to
the grantor or the grantee. To avoid
burdensome detaile:d reviews of
grantees' discretionary actions the
substitution of grantors' judgment is
prohibited. unless it is primarily a
Federal question.
Section 3. Grantor agencies are
encouraged to provide technical
assistance to grantees rather than
require submission for review.
Section 4. Proposes that grantor
agencies conduct grantee procurement
system reviews and that when a grantee
procurement system meets the
standards of this attachment it may be
certified by the grantor agencies, thus
reducing individual pre-award contract
reviews by that agency or other
agencies making grants. Both grantees
and grantors expressed their concern
about keeping the quality of the
certification reviews constant. A
paragraph was added to make reviews
adhere to OFPP standards.
Section 5. Limits grantor agencies'
authority to review protests. This is
properly the responsibility of the
grantee.
Section 6, Limits grantor pre-award
review of grantee procurements to non-
comp~titive and brand name
procurements. and procurements by
grantees who do not meet Attachment 0
standards.
Section 7. Expands the code of
conduct from merely prohibitiOlg the
acceptance of gifts and gratuities to
prohibiting t~e participation in the
award of c('r.~rJcts to firms in which the
employee has SOlr.e financial interest.
Section 9. Expands the section
requiring affirmstive steps to ensure
minority and small busiOless
participa tio:1 in contr:1cting under
Federal gT3nt progr3n:s. and encourages
the placement of contracts in lat:or
surplus areas and with women business
enterprises.
Section 11. Explains when it is
appropriate to use one of the follo\, ing
four methods a of procurement, srr.a1!
purchase. competitive sealed bids.
competitive negotiation3. and
noncompetitive negotiations, and
recognizes price competition need not
be used for AlE contracts.
Section 12. Prohibits the use of a
percentage of construction cost method
of contracting. requires eIther a cost or
price analysis of a!1 procurement. and
c-/l..
states costs will be allowed if consistent
with Federal cost principles.
Section HG. E.,<pands contract
provisiun on inventions tu cover
copyrights and rights in data.
Section 141, Add's provision requiril'.g
compliance with State Energy
Conservation Plans.
5. Effective Date: This revision i~
effective October 1, 1979. Grantees may
comply with this amendment
immediately where they do not conflict
with grantor agency regulatioqs. Grar.tor
agencies may implcment this
amendment immediately or allow
grantee agencies to implen:cnt.
6. For Further information Contact:
Mr. Jack Nadal. Assistant for
Intergovernmental Affairs, Office of
Federal Procurement Policy, Telephone
202-395-6166.
James T. Mclot)re. Jr..
Director.
Procurement Standards
1. Applicability.
a. This Attachment establishes
standards and guidelines for the
procurement of supplies, equipment.
construction. and services for Federal
assistance programs. These standards
are furnished to p.nsure that such
materials and services are obtained
efficiently and economically and in
compliance with the provisions of
applicable Federalla wand Executive
orders.
b. No additionctl procu,ement
requirements or subordinate regulations
shall be imposed upon grantee~ by
Executive agencies unless specificlllly
required by Feccrallaw or Executi';e
orders or authorized by the
Administrator for Fcderal Procure'Tlent
Policy. This prohibition is not Jpp!ic:ible
to payment conditior.s iss'Jer:! in
accoruancc witn Treasury Circ[\',l. 10:-5.
indi'. idu:ll g;'antee requirements
pursuant to scction 10 of the basic
circular or the provisions of this or ot:-:,!r
o~m circulars,
c. Prov:s'or.s of current subcr,Lr,,j te
require'Tlent> not conforming to this
attac::r::ent s::a!l be ~esr.i:1ded bv
grantor agencies unless appruve"j 0;' t~.o:
Office of FederJI Procurement PoLcy
(OFPP).
2. Crc:1tee/C,anlor Rc>[;O.1S:'~i/i!,'
a. These standard~ nn ,;,., -oli".'o"ho
gran!ce of ~n\' ~nntr:1rtl1i11
resor:r'1C....,;I...aq llf,r1pr Irs ccr~.........tc;. the:
gr<:;M!"" I~ --,,,,,,,,,o;;"le. in accorudr.ce
With good acml:1lstrative pr3r:tice Jnu
sound bus;OIess judgment. for the
3ettlement of all cor.tnctual and
ac.:rll:1ist:Jti';e ISSL;CS a:-:s.r:g awl of
procurenJents cr.tered iOlto in SU~?0:t of
a grant. Thes~ inc:u..:~ tH:t Me not
'leI
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Federal Register / Vol. -l4, i':o. 159 ; Wcdncsd<iy, August ~5, 1979 / r\oticcs
lirr.itcd to: source evaluation, protests,
disputes. and claims. E.xecutivc ui:encies
shall not substitute their judgment for
that of the grantee unless the matter is
primarily a Federal concern. Violutions
of 1& ware to be rderred to the local,
State, or Federal authority having proper
jurisdiction.
b. Grautees shall use their own
procurement procedures which reflect
applicable State and local laws and
regulations, provided that procurements
for Federal Assistance Programs
conform to the standards set forth in this
a ttachment and applicable Federal law.
3. Grantee PrOCurement lmpra,'ement.
Executive agencies awarding Federal
grants or other assistance which require
or allow for procurement b)' the
recipients are encouraged to assist
recipients in improving their
prucurement capabilities by providing
them with technical assistance, training,
publications, and other aid.
4. Procurement System Re,'jews.
a. Executive agencies are encouraged
to perform reviews of their grantees'
procurement systems if a continuing
relationship with the grantee is
ai1ticipated or a substantial amount of
the Federal assistance is to be used for
procurement and review of individual
contracts is anticipated. The purpose of
the rl;!view shall be to determine: (1)
whether a grantee's procurement system
meets the standards prescribed by this
Attachment or other criteria acceptable
to the OFPP, such as provisions of the
model procurement code for State and
local government and (2J whether the
grantee's procurement system should be
certified by the reviewing agency. Such
a review will also give an agency an
opportunity to gi':e technical assistance
to a grantee to remedy its procurement
system if it does nut fully campI)'. In
addition, such a review may provide a
basis for deciding whe~hcr the grantee's
contracts and re!a ted procurement
documents should be subject 10 the
gran!or's prior approval. as pro\ ided by
S~ction 6.
b, In concucting procure~ent s\'stem
reviews. grantor agencies will e\aluate
a grantee's procurement system in terms
of whether it cO;:-';JEes with the
standards prescr:bed by this
Attachment and re;Jresents a fair,
efficient and effective procurement
s\'stem. To the maximum extent
feasible. re\-iewers will rely upon State
or local evaluaticns and analvses
pc:-formed by J~e:-lc:es 0r o;--g~niz:1 ~iong
indepe~de:1t of ~~,e gra:'1tce contracting
a:~i\"ity.
C. \\'nc:1 a 'FeJc:-al g:-2ntor agency
CC:T:,;,tctes a ~rocU;"r;r:;2::t re\"ic\.\', it shall
furnish a report to the ,grantee, with a
copy to OFPP.
d. All agencies should'normally rely
upon the resultant findings or
certification for a period of 24 months
before another review is performed.
e_ Re\'iews shall be conducted in
accordance with standards and
guidelines approved or issued by OFPP.
f. The reviews authorized by Section 6
arc waived if a grantee's procurement
sy~tem is certified.
5. P,-otest Procedures.
Grantor agenc:!!s may develop an
administrative procedure to handle
complaints or protests regarding gr;:mtee
contractor selection actions. The
procedure shall be limited as follows:
a. No protest sh,,1l be accepted by the
grantor agency until all administra tive
remedies at the grantee level have been
exhausted.
b. Review is limited to:
(i) Violations of Federal law or
regulations. Violations of Slale or local
la w shall be under the jurisdiction of
State or local authorities.
(ii) Violations of grantee's protest
procedures or failure to review a
complaint or protest.
6. Grantor Rel'iew of Proposed
. Contracts.
Federal grantor pre-award review and
approval of the grantee's proposed
contracts and related procurement
doc'.lments. such as requests for
proposals and invitations fM hirls. is
pt:'lllICtea onlY uncer L'1e foilowlng
circumstances:
a. The procurement is e_,<:pected to
excecci "'illY") and is to be awarded
with.,... rn....,"fltion or on\v one bid or
oller lS received In rcspon;e to
solicita tion.
b. The procurerncr.t expected to
exceed ,,~n non ~"'''ciiil.:s a "br~nd nilme"
product: or
c. T~e g~'a~t~e's ;r'ocu:oement
proced~Jres or operation fads to CO:TI;J!Y
\\'ith one or ;:'lore 5ign~f:::ant aSrCC~3 of
this Attac::r.:e:nl. The gr;;ntor agency
s~a!l nc~ify ~he grar.tee :.;1 \\-:-:~:::g. \vith a
cory of stlch n~tification to ~he OFPP.
7. C~("'e of C(}r'!d~.ct.
Grantees shall r.:air-:tain a ',qitten
COGe or standarcs of conc~:Jct \','~ich
shall go\'ern the pe:formance of their
off:cers. e;:-,ploYECS or agents enga6ed in
the award a..d administration of
contracts sqported by Federal L,;ncs.
~o em;J!oyee. off1cer or ~6e:1t of the
grantee shall participate in selec:ion. or
in the award or admir::strat'on of a .
cont:act 5\.:;:;>0::::: :y Fece!"al :~i":ds :: a
cOiitlict of ~rl~e::c,;t. fez! or i:i;J~are:ll.
\v0~:d ':Ie :::'.;c!',ed. S;;c:: a .:::",:::i:t
'.\'c:.::d a::se '.\'~e:1:
a. r--:e e;:".;;loyee. or:;cer ::- Q,s::r.t;
C -13
-171375
b, Anv r.lemuerof his j"m:cdiate
family; .
c. lIis or her partner; or
d. An organization wl.ich employs, or
is about to employ. any of the ;;Jove.
has a financial or other interl:st in ',he
firm selected for award.
The grantee's officers. em}l\-Jyces or
agents shall neither solicit nor accept
gratuities, favors or anything of
monetary value from contractors.
potential ccntractors. or parties to
sub agreements.
Grantees may set minimum rde3
where the financial intr.rest is not
substantial or the gift is an unsolicited
item of nominal intrinsic value.
To the extend permitted by State or
local law or regulations. such stanJards
of conduct shall provide for pencd lies,
sanctions. or other disciplinary iJ clions
for violations of such stanchrds by the
grantee's officers. empluyees, Dr agents.
or by contractors or their agen ts.
, 8. ProcurcmC'r:t Procedures.
The grantee shall establish
procurement procedurcs which pro\ ide
that proposed procurement actions shal)
be reviewed by g:antee cfficials to
avoid the purchase of unnecessary or
duplicative items. Consideration should
be given to consolidation or breaking
out to obtain a <:lore economical
purchase. \Vhere appropriate, an
analysis shall be made of lease versus
purchase alternatives, and ;In:: nlner
appro;Jriale analysis to delerr,ir:e which
apprcach I\culd be the most
economical. To foster greater r~O:lcmy
and efficic:1cy g:-antecs R:-e rnc;:'!,::-;1~0d
to enter into State a:d !ucal
intergo\,ernmental ~g:-ecmerts for
procurement or use of cor:-:mon :"cuJs
and services.
9, Cant,-cctlf':;: IV,"r:1 S:;~n'! c:,;f
,'.finori!\' Firn~s, t:'c1::C!1'S .'1:,;;:-"-,,
E::t['....prise a::d L:::,or S~;""':-}/:...:~; . 1, -."0
F:_-,,'["5.
a. It is r.atior.dl pclicy to ~'''''2rd J ::l!r
s:-:are of contr;Jcts tu S~311 ,1:1: ~::-,: -::v
~.~~~ e;~:;\:'; ~~~~~:; ~~,~/:-ei ;f~~:~~:'c~' ~-~
3:.C :'":~li1o:-itv bL!sir.c;ses ;H~ _;~:::1''::~
\';h~:1 ;:'l1s::;iblc 3S ~O'J.:r:~S cf, S'~;Jr> ;:5.
eqL.:.~:-:lent. C(;r.S~!"Ut.:t:c~ Jr.c SCi\"::C-5.
,\ffirrr.a!ivc ste::os s!"l211 :;:cLl~e '~2
following: .
(1) Inc!~cjr.g q~(l!;f1eG s.-:-:.}:~ 3r:c:
m::1ority busincs.~cs 0:1 sv:j:-i~3~:Cr. ~:~'s
(Z) :-\ssu::ng that 5r7:2i! 2r'.C ;::.r: ~:.~'.'
b~sinesses are soiici~ed 's~e~.c\'t::- ._;'"
arc pctc;.t:al sources.
(:J \\.~c::: e~:)~o:7.;::.]::\" :e:ls;':.;j~.
G:\'ll!::1g totel rrq:..::;r~r;~s ..:(1) ~~.]:~c:
~ ,1 S k 3 .~:- L1:": ~:1 t; ~; e S SO ,15 ! J ~ ". :-~:: t
~;~;:,~~:~~~~:~~ail d:.J .-:-.l:-:C~:::. ~~s.,~cs;;
~~ '~
.
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478i6
Federal Register / Vol. 44, No. 159 / Wednesday, August 15, 1979 / Notices
rot) Where the requ:rement permits.
establishing delivery schedules which
will encourage participation by small
and minority business.
(5) Using the services and assistance
oJ the Small Business Administration.
the Office of Minority Business
Enterprise oCthe Department of
Commerce and the Community Services
Administration as required.
(6) If any subcontracts are to be let,
requiring the prime contractor to take
the affirmative steps in 1 through 5
above.
b. Grantees shall take similar
appropriate affirmative action in support
of women's business enterprises.
c. Grantees are encouraged to procure
goods and services from labor surplus
areas.
d. Grantor agencies may impose
additional regulations and requirements
in the foregoing areas only to the extent
specifically mandated by statute or
presidential direction.
10. Selection Procedures.
a. All procurement transactions,
regardless of whether by sealed bids or
by negotiation and without regard to
dollar value, shall be conducted in a
manner that provides maximum open
and free competition consistent with this
a Ilachmen t. Procure men t p roc ed ures
shall not restrict or eliminate
competition. E.'(amples of what is
considered to be restrictive of
competition include, but are not limited
to: (1) placing unreasonable
requirements on firms in order for them
to qualify to do business, (2)
noncompetitive practices between firms
(3) organizational conflicts of interest,
and (4) unnecessary experience and
bondi:,g requirements.
b. The grantee shall have written
selec~;on procedures which shall
provid~. as a minimum, the following
procesural requirements:
(1) Solicitations of offers. whether by
compe'itivesealed bids or competitive
negot'a tion. shall:
(aJ :::corporate a clear and accurate
desc:';:!ion oJ the technical
require:nents fur the material, produci.
or service to be procured. Such
description shall not. in competitive
procurements. contain features which
unduly restrict competition. The
description may include a statement of
the qualitative nature of the material.
product or ser..ice to be procured, and
when r.ecessary, shall set forth those
minilT.l,;:n essential characteristics and
standards to .....hich it must conform if it
is to satisfy its interlded use. Detailed
pro<.!l,;ct specifications should be
avoided if at all possible. When it is
impra ::t'cal or uneconomical to make a
clear and accurate description of the
technical requirements, a "brand name
or equal" description may be used as a
means to define the performance or
other salient requirements of a
procurement. The specific features of the
named brand which must be mel by
offerors shall be clearly stated.
(b) clearly set forth all requirements
which offerors must fulfill and all other
factors 10 be used in evaluating bids or
proposals.
(2) Awards shall be made only to
responsible contractors that possess the
potential ability to perform successfully
under the terms and conditions of a
proposed procurement. Consideration
shall be given to such mailers as
contractor integrity, compliance with
public policy, record of past
performance, and financial and
technical resources.
11. Method of Procurement.
Procurement under grants shall be
made by one of the following methods,
as described herein:, a) small purchase
procedures; b) competitive sealed bids
(formal advertising); c) competitive
negotiation; d) noncompetitive
negotiation.
a. Small purchase procedures are
those relatively simple and informal
procurement methods that are sound
and appropriate for a procurement of
services, supplies or other property,
costing in the aggregate not more than
510.000. Grantees shall comply with
State or local small purchase dollar
limits under 510.000. If small purchase
procedures are used for a procurement
under a grant. price or rate quotations
shall be obtained from an adequate
number of qualified sources.
b. In competitive sealed bi~s (formal
advertising), sealed bids are publicly
solicited and a firm-fixed-lJrice contract
(lump sum or unit price) is awarded to
the responsible bidder whose bid,
conforming with all the material ter:ns
and conditions of the invitation for bids,
is lowest in pr:ce.
(1) In order for formal advertising to
be feasible, appropriate conditions must
be present, :ncluding, as a minimum, the
following:
(a) A complete. adequate and realistic
specification or purchase description is
available.
(b) Two or more responsible suppliers
are willing and able to compete
effectively for the grantee's business.
(c) The p~oc;,;rement lends itself to a
firm. fixed-price contract. and se!ec:iorl
of the success:'I,;! bidder can
appropriately be made principally on
the basis of price.
c. - It.j
(2) Ifformal advertising is used for a
procurement under a grant. the flJllowing
requirements shall apply:
(a) A sufficient time prior to the date
set for opening of bids, bids shall be
solicited from an adequate number of
known suppliers. In addition, the
invitation shall be publicly advertised.
(b) The invitation for bids, including
specifications and pertinent
attachments, shall dearly define the
items or services needed in order for the
bidders to properly respond to the
invitation.
(c) All bids shall be opened publicly
at the time and place stated in the
invitation for bids.
(d) A firm-fixed-price contract award
shall be made by written notice to that
responsible bidder whose bid,
conforming to the invitation for bids, is
lowest. Where specified in the bidding
documents, factors such as discounts.
transportation costs and life cycle costs
shall be considered in determining
which bid is lowest. Payment discounts
may only be used to determine low bid
when prior experience of the Grantee
indicates that such discounts are
generally taken.
(e) Any or all bids may be rejected
when there are sound documented
business reasons in the best interest of
the program.
c. In competitive negotiatIon,
proposals are requested from a number
of sources and the Request for Proposal
is publicized, negotia tions are normally
conducted with more than one of the
sources submitting offers, and either a
fixed-price or cost-reimbursable type
contract is awarded, as appropriate.
Competitive negotiation may be used if
conditions are not appropriate for the
use of formal advertising. If competitive
negotia tion is used for a procurement
under a grant, the following
requirements shall apply:
(1) Proposals shall be solicited from
an adequate number of qualified SOU:C2S
to permit reasonable competition
consis~ent with the nature and
requirements of the procurement. The
Req;,;est for Poposals shall be publiciZed
and reasonable requests by other
sources to compete shall be honored to
the maximum extent practicable,
(2) The request for proposal shail
identify all significant evalua lion
factors, induding price or cost whe:e
required and :'1eir relative importance.
(3) The grantee shall provide
mechanisms :or technic,d eva!t.:atic:-: d
the ;rcposd.!S iece:ved. Jt.:!ermir:..l~:cns
of responsible offerors for the purpose of
written or oral discussions, and
selection for contract aWdrd.
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':7877
(4) Award may be made to the
responsible offeror whose proposal will
be most adavantageous to the procuring
party, price and other factors
considered. Unsuccessful offerors
should be notified promptly.
(5) Grantees may utilize competitive
negotiation procedures for procurement
of Architectural/Engineering
professional services, whereby
competitors' qualifications are
evaluated and the most qualified
competitor is selected. subject to
npgotiation of fair and reasonable
compensation.
d. ~oncompetitive negotiation is
procurement through soliciation of a
proposal from only one source. or after
solicitation of a number of sources,
competition is determined inadequate.
Noncompetitive negotiation may be
used when the award of a contract is
infeasible under small purchase,
competitive bidding (formal advertising)
or competitive negotiation procedures.
Circumstances under which a contract
may be awarded by noncompetitive
negotiation are limited to the following:
(1) The item is available only from a
single source;
(2) Public exigency or emcrgency
when the ur.gcncy for the requircmenl
will not permit a delay incident to
competitive soliciation;
(3) The Federal grantor agency
authorizes noncompetitive negotation:
or
(4) After solicitation of a number of
sources. competition is determined
inadequate.
e. Additional innovative procurement
methods mav be used bv Grantees with
the approvai of the Gra~tor Agency. A
copy of such approval shall be sent to
OFPP.
12. Contract Pricing.
The cost plus a percentage of cost and
percentage of construction cost method
of contracting shall not be used.
Grantees shall perform some form of
cost or price analysis in connection with
every procurer.'lent action including
contract modifications. Costs or prices
based on estir.'lated costs for contracts
under grants shall be allowed only to
the extent that costs incurred or cost
estimates included in negotiated prices
are consiste::t with Federal cost
principles. '
13. Grantee Piccurement Records.
Grantees shall maintain records
sufficient to deta'il the significant history
of a p~ocuremen:' T::ese records s~all
ircbc!!. but are not necessarilv li:-:-.ited
to. informat;on e:-~:r:e~t ~o ~he
fo!lowing: ratio ale for the r;".et~od oi
proc'J.;e~cr.t. Sf~ ::c:'iun of cor.tr3ct :ype.
contractor selection or rejection. and the
basis for the cost or price.
14. Contract Provisions.
In addition to provisions defining a
sound and complete procurement
contract. any recipient of Federal granl
funds shall include the following
contract provisions or conditions in all
procurement contracts and subcontracts
as required by the provision. Federal
Law or the Grantor Agency.
a. Contracts other than small
purchases shall col'ltain provisions or
conditions which will allow for
administrative. contractual. or legal
remedies in instances where contractors
violate or breach contract terms, and
provide for such sanctions and penalties
as may be appropriate.
b. All contracts in excess of $10.000
shall contain suitable provisions for
termination by the grantee including the
manner by which it will be effected and
the basis for settlement. In addition,
such contracts shall describe conditions
under which the contract may be
terminated for default as well as
conditions where the contract may be
terminated because of circumstances
beyond the control of the contractor.
c. All contracts awarded in excess of
510.000 by grantees and their
contractors or subgrantees shall contain
a provision requiring compiiance with
Executive Order 11246, entitled "Equal
Employment Opportunity," as amended
by Executiv'e Order 11375, and as
supplemented in Department of Labor
regulations (41 CFR Part 60).
d. All contracts and subgrants for
construction or repair shall include a
provision for compliance with the
Copeland "Anti.Kickback" Act (18 LJSC
874) as supplemented in Department of
Labor regulations (29 CFR. Part 3). This
Act provides that each contractor or
subgrantee shall be prohibited from
inducing. by any means. any person
employed in the construction.
completion. or repair of public work. to
give up any part of the compensation to
which he is otherwise entj!led. The
grantee sha:! ,eport all suspected or
reported viulations to the grantor
agency.
e. \V~en required by the Federal grant
program legislation. all construction
contracts in excess of 52.oeO awarded
by grantees and subgrantees shall
include a provisicn for compliance with
the Davis.Bacon Act (40 USC 276a to a-
7) as supplemented by Department of
L::.':lor regulations [::9 CFR Part 5)_ L'ncer
t~is ;\c~ ~c:-:t:actors shal: be rec'J;red to
pay \\'a~es to lu~ore~s ar.d ~ech~:::..:s at
,1 :-a:e ~J! :ess :~,-~r: :~e ~;r.i~'..::r: \\'3ges
s;:ec:~ed :~ 3 \.\.a~e ~e~~r:-:1ina!ion !'":':3ce
':cy t':e Secreta.-y;i L~bor, I:: -"..:J:t:on.
c - / <:,.....
contractors shall be required to pay
wages not less often than once a II eek.
The grantee shall place a copy of t;,e
current prevailing wage determination
issued by the Department of Labor L'1
each solicitation and the award of a
contract shall be conditioned upon the
acceptanc;e of the wage determination.
The grantee shall report all suspected or
reported violations to the grantor
agency.
f. \"/here applicable, all contracts
awarded by grantees and subgrantees in
excess of 52,000 for construction
contracts and in excess of 52,500 far
other contracts which involve the
employment of mechanics or laborers
shall include a provision for comp1'ance
with sections 103 and 107 of the
Contract Work Hours and Safety
Standards Act (40 USC 327-330) as
supplemented by Department of Labor
regulations (29 CFR. Part 5). Under
section 103 of the Act, each contr;;ctor
shall be required to compute the \"eges
of every mechanic and laborer on ~'e
basis of a standard work day of 8 ~.ours
and a standard work week of 40 hours.
Work in excess of the standard wc::day
or workweek is permissible provided
that the worker is compensated at a rate
of not less than 11/2 times the basic i'a te
of pay for all hours worked in excess of
8 hours in any calendar day or 40 burs
in the work week. Section 107 of the Act
is applicable to construction work and
provides that no laborer or mec~anjc
shall be required to work in
surroundings or under working
conditions which are unsanitarj.
hazardous. or dangerous to his health
and safety as determined under
construction. safety and health'
standards promulgated by the SeGetary
of Labor. These requirements do ;lOt
apply to the purchases of suppUes or
materials or articles ordinariI\' a\'ai:ab!e
on the open market. or contra'cts for
transporta tion or transmission of _
inte!!:gence.
g. The contract shiill include ~ot;ce Df
g~antor agency require;nents a:1d
regulations pertaini::3 to .-epD~' -:; c~::
patent rights under any ccntract
invoh'ing res!!arch. ::e\'elo::-:-_er.tal.
experimental or demons :.~ ticn work
with respect to anv disco\e:v or
invention \\'~:c!-t a~:se5 0:-:5 ~~" 2:,,::ed
in the course of or u::der such ':Jnt~2ct,
and of grantor agency require;nents end
:eg'.;!ations per~aj;-:ir.2!C C'J:\:-::~~S 3:-:0
rights in data. - '. ~
, h. :\11 :1egotia~ed ccr:!:-ac~s ~2.\.ce;:t
~.~cse a\'.'a:-ded by smal~ i:"'j~:;J5eS
:::-ccc~~;"es) a\....d:::t:>d b\' ':~,:~'::'-:s S:"'3!l
:::c:t.;;,:e ;;rc';;3io:-',:D ~he ~:':e(: ~:-:3~ :.~e
t~a;~e:~~ ~er i,:~e;:;!g:f\~rL~'~:~~? :~e
-,
COrvl1-.1UNITY DEVE!OP!\lENT BLOCK GRANTS
States. or any of their duly authorized
representatives. shall hJve access to
any books, documents. papers, and
records of the cor:tractor which are
directly pertinent to that specific
contract, for the purpose of making
audit, examination, excerpts. and
transcriptions.
Grantees shall require contractors to
maintain all required records for three
y~ars after grantees make final
payments and all other pending matters
are closed.
i. Contracts, subcontracts, and
subgrants of amounts in excess of
5100,000 shall contain a provision which
requires compliance with all applicable
standards, orders, or requirements
issued undcr Section 306 of the,Clean
Air Act (42 U.S.C. 18Si(h)), Section 508
of the Clean Water Act (33 U,S.C. 1368),
Executive Order 11738. and
Envir~mmental Protection agency
regulations (40 CFR Part 15 ), which
prohibit the use under non,exempl
Federal contracts. grants or loans of
facilities included on the EPA List of
Violating Facilities. The provision shall
require reporting of violations to the
grantor age:Jcy and 10 the U.S.E.P.A.
Assistant Administrator for
Enforcement (EN-329).
j. Contracts shall recognize mandatory
Sl3n?ards and policiesrela ting to energy
effiCiency which are contained in the
State energy conservation plan issued in
compliance with the Energy Policy and
Conservation Act (p.L 9-1-163).
Grantor Agencies are permitted to
requirech;lnges, remedies. changed
conditions, access and record retention
and suspension of work clauses
approved by the' Office of Fedcral
Procurement Policy.
15. Contract .4dminist,-ation.
Grantecs shaJlmaintain a contract
administration system insuring that
contractors perform in aCt;ordance with
the terms. conditions. and specifications
of Iheir con tracts or purchase orders.
jF1l O'X.. '~:.5:DJ n.d 8-,....,9: 8.'5 Iml
BILLJ..C; CODE 311o-il ,...
Attachment P-Audit Requirements
rRcpl aces Paragraph 2h. Ai:ta.:hment G]
1. This Atlachmenl establishes audit
requirements for State and local
governments. and Indian tribal
governments that receive Federal
assistance. It provides for independent
audits of financial operations, including
compliance with certain provisions of
Federal law and regulation. The
requirements are established to insue
that audits are made on an organization-
wide basis, fa ther than on a grant-by-
grant basis. Such audits are to
determine whether (a) financial
operations are conducted properly, (b)
the financial statements are presented
fairly, (c) the organization has complied
with laws and regulations afiecting the
expenditure of Federal funds, (d)
internal procedures have been
established to meet the objectives of
federally assisted programs, and (el
financial rcports to the Federal
Government contain accurate and
reliable information. Except where
specifically required by law, no
additional requirements for audit will be
imposed unless approved by the Office
of ~lanagement and Budget.
2. Definitions: "Cognizant agency"
means the Federal agency that is
assigned audit responsibility for a
particular recipient organization by the
Office of Management and Budget.
"Recipient oq;an:zation" means a
Srate department, a local government.
an Indian tribal government, or a
subdivision of such entities, that
recei\'es Federal assistance. It does nol
include State and local institutions of
higher education or hospitals, which are
covered by Circular A-110,
3. State and local governments and
Indian tribal govenments shall use their
own procedures to arrange for
independent ;iuclit.s. and to prescribe JtlJ~
scope of audits, provided that the audits
comply with the requirements set forth
below. \Vhere contracts are awarded for
audit services, the contracts shall
include a reference to th!s :\~~2c~~ent.
4. The provisions of this At:ac~r:lent
do :;c: limit the, autho~ity of Fed:ral
ag:!:1c:es to ~a>:e at;Clts cf :e~;~lent
cr~3;;:;.:~~ic~s. HOl'.'evec. if ince;::encenl
audits ar.anged for!::y rec:;::,,~ls ;i,eet
!~e :-1?~U~12r;:C:1tS p:esc::.:ed be!c\..., all
I
09: 1555
IIDR RF-161
4-7-80
Fedcral at;encies shall rely on them. and
any additional audit work shall build
upon the work already done. ' :.
~. Audits shall be made in accotOance
with the General Accounting Office
Standards for Audit of Covernment.al
Ol'8anizations. Programs, Activities 8-
Functions. the Guidelines for Financial
and Compliance Audits of Federally
Assisted Programs. any compliance
supplements approved by OMB.and
generally accepted auditing standards
established by the American Institule of
Certified Public Accountants,
6. Audits will include, at a minimum.
an examination of the systems of
Internal control. systems established to
ensure compliance \'lith laws and
regulations affecting the expenditUi2 of
Federal funds, financial transactions
and accounts, and financial staternenls
and reports of recipient organiza lions,
These examinations are to detercine
whether:
a. There is effective control over and
proper accounting for revenues,
expenditures, assets, and lia bilities.
b. The financial statements are
presented fairly in accordance with
generally accepted accounting
principles.
c. The Federal financial reports
(including Financial Status Reports,
Cash Reports, and claims for advances
and reimbursements) contain accurate
end reliable financfal data; and are
presented in accordance with the terms
of applicable agreements, and in
accordance with Attachment H of L1is
Circular,
d. Federal funds are beir.g expe:1ced
in accordance with the terms of
applicable agreements and those
provisions of Fede~a1!aw or re~Jla~:ons
that could have a material effect on the
financial statements or on L'le.awc.:cs
tested.
7. In order to accomplish the pur;oses
set forth above, a representative m:::ober
of charges to Federal awards s~i!!l!::e
tested. The test shall be representative
of (1) the universe of Federal awards .
re,ceived. and (2) all cost categories that
materially affect the award. T:1e test is
to determine whether the charses:
a. Are necessary and reasonable ::Jr
the proper admi:1istratic:J of the
pro.&E.arn~
b. Conform to any 1:~jt.::.ticr.s or
exclusions in the award. '
c. Wcre given cO,~siste::; accc'J~::r.g
trealr7l~nt an? applied un:::Jrm!y to. :::;:h
federallY ?sslsted ~r.d ol~er e:::\':::::9 of
the ~ccipient.
d. V/e!'e :':2t of ~;'~::c.~:.::e c~e~ :9.
e, Did not inc!:.Jde costs ;:rcpe y
cha~::ab1e to c:her fec~:,3::Y 2~S 5:ed
;->rosrams.
c-/I.o
5';" E.... \J OF :-;.... 710:-; A L ...?F ,.... IRS. ;:-;C ..;;-'.~:-: j~;r:. Tp:'o'. D, C, ::;'),37
17
?"'::::c~,,,d ~y
*...~ .,'
09:1556
f. Were properly recorded (i.e., correcl
amount, date) and supported by source
documen ta lion.
g. Were approved in adv_ance. if
subject to prior approvalln accordance
with Cimllar 74-4.
h. Were incurred in accordance with
competitive purchasing procedures, if
covered by Atlachment 0 of this
Circular.
I, Were allocated equitably to
benefilingactivities, irtcluding non.
Federal actlvilies,
8. Audits usually will be made
an.:-:ually, but not less frequently than
every two years.
9. If the auditor becomes aware of
irregularities!n the recipienl
organization, the auditor shall promptly
notify the cognizant agency and
recipient management officials above
the level of involvement. Irregularities
include such matters as conflicts of
inlerest, falsification of records or
reports, and misappropriation of funds
or other assets.
10. The audit report shall include:
a. Financial statemenls. including
footnotes, of the recipient organization,
b. The auditors' comments on the
finarlcial sta.tements which should:
(1) Identi.fy the statements examined,
and the period covered.
(2) Identify the various prcgrams
uncer which the organization received
Federal funds, and the amount of the
awards received.
(3) State that the audit was done in
accc:dancewith the standards in
paragraph 5.
(';) Express an opinion as to whether
the 8..nancial statements are fairly
presenle9 in accordance with generally
acce;lled accounl1ng principles. If an
unc;_alified opinion cannot be
exp:essed, state the nature of the
qua:ification.
c. The auditors' comments on
cor.::liance and internal control which
shc~:d:
I
HOUSING & DEVELtPMENT REPORTER
(1) Include comments on weaknesses
in and noncompliance with the lIystems
of inlernal control, separalely
identifying matet1al weaknesses.
(2) Identify the nature and impact of
any noted instances of noncompliance
with the lerms of agreemenls and those
provisions of Federal law or regulations
thaI could. have a material effect on the
rmancial statements andreporls,
(3) Co~tain an expression of positive
assurance with respect to compliance
with requirements for lesled items, and
negative assurance for untested items.
d. Comments on the accuracy and
completeness of financial reports and
claims for advances or reimbursement
to Federal agenc::ies,
L Comments on corrective action
taken or planned b~ th2 recipient
11, Work papers and reports ahall be
retained for a mi.rtimum of three years
from the date of the aiidit report unless
the auditor is notified in writing by the
cognizar.t agency of the need to extend
the retention period. The audil
workpaperslhall be made available
upon request to the cognizant agency or
its designees s:nd the General
Accounting Office or ita designees.
12. The Office of Managemenl and
Budget will work with Federal agencies
and State and local governments to
assure thaI recipient audits are made in
accordance with the standards set forth
In paragraph 5.
13. The Office of Management and
Budge.t will designate cognizant
agencies for major recipienl
organizations.
14. The cognizant agency shall have
the following responsibilities:
a. Obtain or make quality assessment
reviews of the work of non-Federal
audil organizations, and provide the
results to other interested audil
,agerlQ,es._OI-a nOI1~Feder'!l audit
organization is responsible for audits of
recipients that have different cognizant
audit agencies, a single quality
assessment re\'iew should be arrar:ged.)
b. Assure that aU audit reports of
rec'pients that affect federally assisted
programs are received, reviewed. and
distributed to appropriate Federal audit
officials. These officials will be
responsible for distributing audit reports
to their program officials.
c. Whenever significant inadequacies
in an audit are disclosed, the recipienl
organization will be advised and the
auditor will be caUed upon 10 take
corrective action. If corrective action is
not taken, the cognizant agency shall
notify the recipient organization and
Federal awarding agencies of the facts
and its recommendation. Major
inadequacies or repetiti~ substandard
performance of independent auditors
shall be referred to appropriate
professional bodies.
d. Assure that satisfactory aodit
coverage is provided in a timely manner
and in accordance with the provisions of
this attachment.
e. Provide lechn;cal advice-and act as
a liaison between Federal agencies:
independent auditors, and recipient
organiza tions.
f, Mainlain a folIowup syslem on audit
findings and investigative matters to
assure that audit findings are resdved.
g, Inform other affected audit agencies
of irregularities uncovered. The audil
agencies, in turn, shall inform aU
appropriate officials in their agencies.
State or local government law
enfOrcement and prosecuting authorities
shall also be informed of irregularities
within their jurisdiction.
15. Recipients shall require
subrecipienta that are State and k>cal
governments or Indian tribal
governments to adopt the requiremenl>
in paragraph 1. through 11. above. The
recipient shall ensure that the
subrecipient audit reports are received
as required, and shall submit the reports
to the cognizant agency. The cognizant
agency ,vill have the responsibility for
these reports described in peragraph 14,
P-"olis:-.oi ':ly THE: 8t.:~=:Al: OF :-;AT,O:-;A.i... "'FFAi~S. r~c.. ',l"ASi-!!~;G,O~;. D,C. :0037
l.. - /7
IS
~ _. ~ t ".--:
.1
I
APPE~IX D
METHOD OF PAYMENT
2T. PETERSBURG ECONOMIC DEVELOPMENT CORPORATION
All payments shall be on a reimbursement basis only.
All requests for reimbursement shall be su?ported by proper invoices,
payrolls, checks, receipts and other documentation as requested.
Any program income shall be submitted to the CITY through the
DEPARTMENT at least quarterly. Fees collected, if anv, shall be reported
but are not to be construed as program income.
Requests for reimbursement shall not be reduced by any nro~ram income
received.
Payments will be made to St. Petersburg Economic Development Cornoration.
J-1
'. ."'"
"
. 'II I~
I
I
IU.l.X J:.
SECTION 3 CL~uS~
A, The wor~, to be perfor::",ed under this ccnt=act is on 9>. 9roj~ct assisted unde=
a program providing direct Federal financial assistancef.::om the Depart;;"\ent
of Housing and Urban Development and is subj~ct to the re~ui=ements of Sec-
tion 3 of the Housing and Urban Developr.:ent Ac";: of 1968, as a;';lended, 12 U,S.C.
170u. Section 3 requires that to the greatest extent feasible opportuni~ies
for training and employment be given lower income resider-,ts of the project
area and contracts for work in connection '"i th the proj ect be awarded to
business concerns which are located in or o~ned in 5ubsean~ial part by persons
residing in the area of the project.
B. The parties to this contract will cornolv with the provisions of said Section 3
and the regulations issued pursuant thereto by the Secreearj of Housing and U=b~~
Develop:nent set forth in 24 CFR, and all applicable rules ~~d orders of c.he
Department issued thereunder prior to the execution oi c.his contract, The
parties to this contract certify and agree that they a::e under no cont't"ilctual
or other disability which would prevent them from complying 'tlith these re-
quirements.
C. The contractor will send to each labor organization or representative of workers
with which he has a collective bargaining agreement or other contract or under-
standing, if any, a notice advising the said labor organization of workers'
representative of his commitments under this Section 3 Clause ~nd shall post
copies of the notice in conspicuous places available to employees and appli-
c~~ts for employment or training.
D, The contractor will include this Section 3 Clause in every subcontract for
work in connection ',."ith the project and will, at the direction of the applicar.~
for or ~ecipient of Federal financial assistance, take appropriate action ;ur-
suant to the subcontract upon a finding that the subco~~ractor is in violation
of regulaeions issued by the Secretary of nousing and ~rban Jevelop~ent, 2~
CFR, The =cntractor will not suh=ontract wiL~ any subcontractor where it has
notice or knowledge that the latter has been found in violation of regulations
~~der 24 CF~, and will not let any subcontract unless the s~contractor has
first provided it with a preli~narf statement of ability to comply with the
require~ents of these regUlations.
E. Cor.:pliance with the provisions of Section 3, the regulations see forth in
24 CFR, and all applicable rules and orders of the Depar~:nent issued thereunder
prior co the execution of the contract, shall be a coniiti~r. of the =~~er~:
financial assistance provided to the projecc., b~nding ~;on ~he applicant or
recipi~nt for such assistance, its successors, an~ assi~.s. railure to :~~:~~:
these req,~ircments shall subject the a?pli::ant or: recipient, its conerilcto.c'S
and s~::o:1~::-ac-=.o=s, i'ts suc:::es~ors, an:i assi.g::s t~ t~ose s2.~J:~io:'.s si=t2ci:ie.:. :;''l
the g=a:"".~ or loan ag:.-ee~er.t O~ con~=act ~~=ot:g~ '""h.:.(::~ ="ec.~::3..l a: sista:1::2, .:.s
pruvide~, and to such sanctions as are s?~~~f~ec by 2~ C:~ 13S,
E-l
1'. ,"~
I
,
t'PENDIX F
NOTICE OF REQUIP~~~T FOR .~FIR}~TIVE ACTION
TO ENSURE EQUAL E!.PLO,{>!.E~,T OPPORTUNITY'
(EXECUTIVE ORDER 11246)
1. ~e Offeror I s or Bidder 's attention is called to the "Equal Opportu.'1i ty
Clause" and the "Standard Federal Ec;:ual E~ployment OPt:lortunity Construc-
tion Contract' Specifications" set fort.~ herein.
2. The goals and timetables for mi~ority and female participation, expressed
in percentage terms for t.~e Contractor's aggregat~ worxforce in each
trade on all construction'work in ~~e covered area, are as follows:
A. Goals for Female Utilization, All 'i:'rades:
AREA COvC:RE::l
Goals for Women apply nationwide,
GOALS AND TIZ.lETABUS
Timetable
Goals
(perce::':.)
From Apr. 1, 1978 until Mar. 31, 1979. ". 3,1
From Apr. 1, 1979 u."1til Har. 31, 1980. ,. . 5,1
From Apr. 1, 1980 until Mar. 31, 1981.... 6.9
B. Goals for Minoritv Utiliza<=ion:
TAlo1PA-ST. PETERSBU'RG, F!..A., ARE.'\
Area covered: Hillsborough, Pasco, and ?inellas
Counties, Fla.
Goals and Ti=.etables1
Trade
Goal
(perce:'! ,:)
.:\"11. . . . . . . . . . . . . . . . . . , . . , . . , .
17.9
IFor t.~e life of the project.
These goals are applicable to all ~~e Concractcr's ccns~uctio:'l work
(whe~~er or not it is Feder~l or federally assisted) per~c~ed in t.~e
covered area.
The Con t.=actor I s compliance ,...i t..~ t.."".e ::xecuti'/e Order al".c. ~"'e regula tiCr'.3
in 41 CFR ?art 60-4 shall be ~ased en i':3 i~?lementa':ic~ of the Equal
OP?or~~~ity Clause, speci=i= af=i~~~~ve a=ticn cbl~S~~i=~s =ecui=ec by
F-l
....
'.,i
1
\
IU'I:'J:;tlUl.X r'
the specifications set forth in 41 CPR 60-4.3 (a) i and its efforts to meet
~~e goals established for the geographical area where ~~e contract
resulting from this solicitation is 1:0 be performed, The hours of minority
and female employment and training must be substantia.lly uniform throughout
the leng~~ of the contract, and in each trade, and the contracto~ shall
make a good faith effort to employ min::Jrities and women evenly on each of
its projects. The transfer of minority or female employees or trainees
from Contractor to Contractor or from project to project for the sole
purpose of meeting the Contractor's goals shall be a violation of the
contract, ~~e Executive Order and the regulations in 41 CPR Part 60-4,
Compliance with the goals will be measured against the total work hours
performed.
3. The Contractor shall provide written notification to ~~e Director of the
Office of Federal Contract Compliance Progr~.s within 10 working days of
award of any construction subcontract in excess of $10,000 at any tier
for construction work ~~der the con~act resultir.g from ~~is solicitation.
The notification shall list the na."l'.e, address and telephone number of t:'1.e
subcontractor; employer identificat.ion nu:nber; estimat:ed dollar amount of
the subcontract; estL~ated starting and completion dates of ~~e subcontrac~;
and the geographical area in which the contract is to be performed.
4. As used in this Notice, and in the contract resultir.g from this solicitation,
the "covered area" is Pinellas COI.l."'l.tj, Florida.
60-4.3 .(a)
EQUAL OPPOR~NITY CLAUSE
During ~~e performance .of ~~is cont=ac~, the contractor agrees as follows:
L The contractor will not discri::linate against any employee or applicant.
for employment because of race, color, religion, sex, or national origin.
The contractor will take affirmative action to ensure that applicants are
employed, and that employees are treated during employment wi~~out regard
to, their race , color, religion, sex, or national origin. Such action shall
include, but not be limited to the following: Employment, upgrading,
demotion, or transfer; recruitment or recrui~~ent advertising; layoff or
termination, rates of pay or o~~er forms of compensation; and selection
for training, including apprenticeship, The contractor agrees to post
in conspicuous places, available to ~~ployees and applicantS for ~.ploy-
ment, notices to be provided setting forth t...'1e provisions of~'1is non-
discrimination clause,
2. The CO:'l.t.:'actor will, in all solic:..tations 0= cJ.a.vart':'S2.Den~s for e!i\?lc,:'e~s
placed by or on behalf of the contractor, statQ that all cuali:ied
applicants I..ill receive consideration for er.'\?loy::-.e:-. t ....i :"'':::Jut res-arC. -~
race, color, religion, sex, or national orig~n,
3. The contracto= will send to each la~or ~nion or re?resentative of ~or~ers
wi~~ "",'hich he has a collec~i.,e ba~~ai:1~~g ag=ee~.e::~ or o~~er ccnt..=ac~ 0:'-
l..:...."1c.e=s ~anding I a notice to be p=cvi=.ec. advising t::e 5ai:: labo= 'J.nion ~:"
wo=kers' representatives of the cor.t=ac~cr'5 ccr.~i~~e~ts ~r.cer L~is
section, and shall pc~t copies o~ ~~a ~otice in ccnspicuc~s pl'aces a':ail-
able to employees ar.=- applica:1ts -~- ~"'i",:?l:J'.:'7:',ef'.t.
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APPENDIX F
4. The contractor will comply with all provisions of Executive Oreer 11246
of September 24, 1965, and of the rules, regulations, and relevant orecrs
of the Secretary of Labor,
5. The contractor will furnish all information and reports required by
Executive Oraerl1246 of SepteIt'her 24, 1965, and by rules, regulations,
and oreers of the Secretary of Labor, or pursuant thereto, and 'Nill permit
accesS to his books, records, and accOl:.."'I1:5 by the u.dministering agency
and ~~e Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
,6. In ~~e event of the contractor's non-compliance wi~~ the nondiscrimination
clauses of ~~is contract or with any of ~~e said rul:s, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and ~~e contractor may be declared ineligible for fur~~er
Goverr~ent contracts or federally assisted construction contracts in
accordance with procedures au~~orized in ~xecutive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as o~~erwise provided by law,
7, The contractor will include the portion of the sentence L~ediately
pr~c,)d.i.nCJ p.lr..l.Cjraph (1) ,\lId thp. provi':\on:; o[ p"raCJr,1ph~ (ll through (7)
in UVf~:::Y 5ubcontrCl.ct or purch;.l~e orch:!." l:.nll::;~ l':<l:tnptl'd. by rulnll, rc.<Jul~-
tions, or orders of the Secretary or i...~(Jr is~ued pur:;ud.nt to section
20'i ()f f.xecutivR Order 112'\6 of September 24, 1965, so that such provisions
will be binding upon cadI :;Ul.H,';UIIl.Lill:i," 1'1 vnll,1fl'. '\'11<1 ","tr:\r.tar wl.ll
take such action with res?ect to any s~cont:act or purchase order as
~~e administering agency may direct as a. me~ns of enforcing such provisions,
including sanctions for non-compliance: p~ovided, however, That in the
event a contractor becomes involved in, or is threatened with, litigation
wiu~ a subcontractor or vendor as a result of such direction by the
administering agency, ~~e contractor ~ay request ~~e united States to enter
into such litigation to protect the interests of ~~e united States,
STANDARD !'EDERAL EQUAL EmlLOYH~T OPPOR':1JNITY CONSTRUCTION CONTRACT
SPECI;ICATIONS (EXECUTIVE ORDER 11246)
1. As used in ~~ese specifications:
a. "Covered area" means ~~e geographical area desc::-ibed in the solie::" ::'30-
tlon f::-om which u~is cont=act ::-esulted.
b. "Di::-ector" means Direc1:or, Office of Federal Contract Co:::pliance
Programs, United States Depar~ent of ~abor, or any person to whot:'!
~~e Director delegates authority.
c, "E:nployer ieentification number" j.,e3.:'.S ::.r.e Fede::-al Social Sec'.lJ::ity
nur.~er used on ~~e Employer'S Quarterly Federal Tax Return, U. S.
Treasuzy Depart..-nent =o~ 941,
d. "~\ir.ority" includes:
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APPENDIX F
(1) Black (all persons having origins in any of ~'e Black
African racial groups not of Hispanic origin) ;
(2) Hispanic (all persons of Mexican, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or
origin, regardless of race);
(3) Asian and Pacific Islander (all persons having origins
in any of the original peoples of the Far East, Southeast
Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alaskan ~ative (all persons having
origins in any of ~~e original peoples of Nor~ America and
maintaining identifiable tribal affiliations through member-
ship and participation or coc~ur.ity identification) ,
2. Whenever the Contractor, or any Subcontractor at any tier, subc~ntracts
a portion of the work involving any construction ~ade, it shall
physically include in each subcontract in excess of $10,000 the provi-
sions of these specifications and the Notice which contains ~~e ap-
plicable goals for minority and female participation and which is set
for~~ in the solicitations from which ~~is contract resulted,
3. If the Contractor is participating (pursuant to 41 C;R 60-4.5) in a
Hometown Plan approved by ~~e u. S, Depar~~ent of Labor in the covered
area either individually or through an association, its affi~tive.action
obligations on all work in the Plan area (including goals and timetables)
shall be in accordance wi~~ ~~at'Plan for those trades which have unions
participating in the Plan. Contractors must be able to d~~onstrate their
participation in and co~pliance wi~~ ~~e provisions of any such Hometown
Plan. Each Contractor or Subcontractor participating in an approved Plan
is individually required to comply wi~~ its obligations under the EEO
clause, and to make a good fai~~ effort to achieve each goal ~,der ~~e
Plan in each trade in which it has employees, The overall good faith
performance by other Contractors or Subcontractors toward a goal in an
approved Plan does not excuse any covered Con~ractor's or Subcontractor's
failu:e to take good faith efforts to achieve ~~e Plan goals and time-
table.
4. The Contractor shall i~?l~~ent the speci=ic affi~ative action standar=s
provided in paragraphs 7a through p of ~~ese specifications. The goals
set for~~ in the solicit~~ion free whic~ ~~is contr~c~ r~s~lted are
expressed as percentages of t~e total hours of e~plv:~ent and training
of minority and feeale utili=a~ion che Contrac~or sho~l~reasonably be
able to achieve in each =onst=uc~ion trade in which it has e~ployees ~..
~~e covered area. The Contractor is expected to ~ake s~stantially
unifo~ progress toward i~ goals in eac~ craft duri~g ~~e period
specified,
5, Nei~~er ~~e provisions of any collective bargaining agree~ent, nor ~\e
failure by a ~,ion with who~ the Contrac~or ~as a col:ec~ive bargaining
agree~ent, to refer either minorities or wo~en shal: exc~se the Contr~c-
tor's obligations under ~ese specifications, Exe=~=i~e Cr~~r 11246, or
the regulations ?rc~ulgated p~rs~~nt the=eto.
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6. In order for the nonworking training hours of apprentices and trainees
to be counted in meeting the goals, such apprentices and trainees must
be employed by the Contractor during the training period, and ~~e
Contractor must have made a commitment to employ the apprentices and
trainees at the completion of their training, subject to the availabil-
ity of employment opportunities. Trainees mU3t be trained pursuant to
training programs approved by the U. S. Department of Labor.
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APPENDIX F
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7. The Contractor shall take specific affirmative actions to ensure equal
employment opportunity. The evaluation of the Contractor's compliance
with ~~ese specifications shall be based upon its effort to achieve
QaXimum results from its actions. The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as ~~e following:
a. Ensure and maintain a working en'riro:1IDent f=ee of harrassment,
intimidation, and coercion at all sites, and in all facilities at
which the Contractor's employees are assigned to work. The
Contractor, where possible, will assign ~JO or more women to each
construction project. The Contractor shall specifically ensure ~~at
all foremen, superintendents, and other on-site superJisory personnel
are aware of and carry out the Contractor's obligation to ~aintain
such a working enviro~~ent, with specific attention to minority or
female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of mi~ority ar.d f~ale
~ec~u.itment sources, provide written notific.3.tion to r:\inority and
female recruitment sources and to co~~u~icy org~~iza~ions when ~~e
Contractor or its ~.ions have emploi~ent oP9ortunities available,
and m~intain'a record of the organizations' responses.
c. Maintain a current ~ile of the names, addresses and telephone
n~~ers of each minority and fema~e off-~~e-street a~?licant and
minority or female referral from a union, a recruitment source or
communi~/ organization and of what action was taken wi~~ respect
to each such indi'-ridual. If such individual was sent to the union
hiring hall for referral and was not referred back to the Contractor
by ~~e union or, if referred, not employ~d by the Contractor, ~~is
shall be documented in ~~e fiie wi~~ ~~e reason therefor, along wi~~
whatever additional actions ~~e Contractor I:\ay have taken,
d. p=ovide immediate '..ri tten notification to the Director when t..":.e
union or unions wit..~ which the Cont=ac~or has a collective
bargaining agreeI:\ent has not referred to t..,e Contractor a minoricy
person or woman sent by ~~e Cont=ac~orr O~ when t..,~ Cor.t=actor has
o~~er info~Ation t..,at the union re:erral process has i~?eded t..~e
Contractor's efforts to meet its cbligations,
e. Develop on-the-job training opportunities and/or participate in
training programs for the area which eX?ressly incl~de minorities
and ....omen, inclt.:c.ing upgrading prcgra.-:-.s anc. app~el".ti:eshi.? anc
t=ainee progra~ relevant to t..,e Contractor's e~plol~ent needs.
especially those prog~aI:\S fur-ded or approved by ~'e Jepar~~ent 0:
Labor. The Cont=actor shall provide ~o~ce of these orocra.~ to
the sources compiled under 7b abo'fe.
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Disser.'i.nate t...~e Co~~=act.or' 5 ::=:O ;oliC9! =y ?:"C.,t::.l.:'.S :",~o::.ce c: ~';.e
policy to ~~ions a~d t=aini~g ~=oS=~s a~d re~~est:~g ~~ei~ COc?~=a-
~ion ~~ as~is~i~g ~'e c~r.trac~or.i~ ~e~ti~g its ~~o o~ligations; by
:.~clu:::.l.:1g :..t :":1 ar:.'l ?ol~=:r ~ar:.'...:a...:... a~c. col~e'.:-::..."~ ~,a=:;:..i:1.i.::g 'a,gre~rr.e~.-;; =~.
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APPENDIX F
publicizing it i:1 the company ne.....spaper, annual report, etc.; by
spec,j,fic review of the policy with all management personnel and
with all minority and female employees at least once a year; and
by posting the company EEO policy on bulletin boards accessible
to all employees at each location where const~uction work is
performed.
g. Review, at least annl.:ally, tl'le company I s EEO policy and affir:nati ve
action obligations under these specifications with all employees
having any responsibility for hir:.ng, assigr'-'':lent, layoff, termina-
tion or other employment decisions including specific review of
these items with onsite supervisory personnel such as Superintendents,
General Foremen, etc., prior to the initiation of const=uction work
at any job site. A writte:1 reco== shall be made and maintained
identifying ~~a time and place of these ~eetings, persons at~ending,
subject matter discussed, and disposition of the subject matter.
h. Disseminate the Cont=acto~'s EEO policy externally by including
it in any advertising in the news media, specifically including
minority and female news media, and providing written notification
to and discussing the Contractor's EEO' ~olicy wi~~ o~~er Contrac-
tors and Subcont~actors with whom the Contractor does or antici-
pates doing business,
i. Direct its recruitment efforts, coth oral and '....rit~en, to minority,
female and community organizations, to schools wi~~ ~inorityand
female students and to minority and female recrui~~ent and training
organizations serving the Contrac~or's recrui~ent area and employ-
ment n~eds. Not later ~~an one month p=ior to the date for ~~e
acceptance of applications for apprenticeship or other t~aining
by any recruitment source, the Contractor shall send written
notification to organizations such as ~~e above describing the
openings, screening procedures, and tests to be used in the selection
process.
j. Encourage present mi~ority and female enployees to recruit other
minority persons and wonen and, where reasonable, provide after
school, s~~er and vacation em~loyment to minority and female youth
bot.h on the site and i:1 other areas of a Conttactor's''''orkforce.
k. validate all test.s and other selection requiremencs ~here there
is an obligation to do so under 41 C=~ ?art 50-3.
1. Conduct, at least annually, an invento~i and evaluation at least of
of all minority and fe~ale personnel :or pro~ocional op~ortunities
and encourage these employees to seek or to prepare for, ~~rough
appropriate training, etc., such op~ortunities
m. Ensure ~~at seniority pr~ctices, jo~ classificacions, work assign-
ments and other personnel practices, co not hav~ a di5=ri~inatorl
effect by continual:y ~onitoring ~ll ?ers~nnel ~nd e~?loj~ent
relat:d act:ivities to ensu=a t.."':.a: t:-.e :::::- ~ol.:.::y ~:-:~ :.::~ :::_:".-:=::..::~:;=f5
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APPENDIX F
obligations under these specifications a~e being carried out.
n. Ensure that all facilities and company activities are non-
segrated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure
privacy between ~~e sexes.
o. Document and maintain a record of all solici~ations of offers
for subcontracts from minority and female construction
contractors and suppliers. including circulation of solicitations
to r.~nority and female contractor associations a~d other business
associations.
p. Conduct a review, at least annually, of all supe!:'visors' adherence
to and performance under the Contractor's EEO policies and
affirmative action obligations.
8. Contractors are encouraged to participate in volunta~ associations
which assist in fulfilling one or more of t~ei!:' affirnative action
obligations (7a through p). The efforts of a contractor association,
joint contractor-union, contractor-co~~unity, or o~~er similar group
of which ~~e contractor is a member and participant, may be asserted
as fulfilling anyone or more of its obligations under 7a through p
of these Specifications provided that ~~e contractor actively partic-
ipates in the group. makes every effort to assure ~~~t the group has
a positive impact on the employment of ~inorities and women in ~~e
industry, ensures ~~at the concrete benefits of b~e program are
reflected in the"Contractor's minority and fenale workforce par~c-
ipation, ~~es a good faith effort to ~eet its individual goals and
timetables, and can provide access '::0 coc~T.entation which demonstrates
~~e effectiveness of actions taken on behalf of the Cont=actor. The
obligation to comply, however, is the Contractor's and failure of such
a group to fulfill an obligation shall not be a defense for the
Contractor's noncompliance.
9. A single goal for minorities and a sepa:ate single goal for women have
been established. The Contractor, however, is req'..li.::-ed to provide
equal e..t:\ployment opportunity and to take affi=:-native action fa::: all
mir.ori ty groups, both male and female, and all 'Nomen, both minori ty
and non-minority. Consequently, the Contractor ~~y be in violation
of the Executive Order if a particula~ gro~? is em~loyed in a substan-
tially disparate manner (for exa~pl=, even ~~oug~ t~e :ontractor has
achieved its goals for women generally, ~':e Cont.::-ac,::o: may be in
violation of ~~e Executive Order if a specific minority g!:'oup of wo~en
is ur.derutilized).
10_ The Contractor shall not use ~~e goals a~d ,::i~etables or affi~ative
action standards to discrimi~ate agai~s~ a~y ?e:sc~ beca~se of race,
color, religion, sex, or national origin.
11. The Cont:::actor shall not ente: into any S'~cont=ac':: wi~~ any ?e~son
or fir.n debarred from Goverr-...7.ent ccnt=?.C<;:3 D~=s~an':: to ::xecutive
Orde~ 112":'0,
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Al:'J:'J:;NDIX F
12. The Contractor shall carry out such sanctions and penalties for
violation of these specifications and of the Equal Opportunity Clause,
including suspension, te~nation and cancellation of existing sub-
contracts as may be imposed or ordered pursuant to Executive Order
ll2~6, as amended, and its implementing regulations, by the Office
of Federal Contract Compliance Programs, Any Contracto~ who fails
to carry out such sanctions and penalties shall be in violation of
these specifications and Executive Order 11246, as amended.
13. The Contractor, in fulfilling its obligations under ~~ese specificatio~s,
shall implement specific affirmative action steps, at least as exten-
sive as those standards prescribed in paragraph 7 of ~~ese specifica-
tions, so as to achieve maxim~ results froe its efforts to ensu~e
equal employment opportunity. If the Contractor fails to comply with
~~e requirements of the Executive Order, the implementing regulations,
or these specifications, ~~e Director shall proceed in accordance with
41 CFR 60-4.8.
14. The Contractor shall designate a responsible official to monitor all
employment related activity to ensure that the company EEO policy is
being carried out, to submit reports relating to the provisions hereof
as may be required by ~~e Government and to keep records. Records
shall at least include for each employee ~~e name, address, telephone
numbers, construction trade, union affiliation if any, employee
identificatiQn number when assigned, social security number, race,
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer),
dates of changes in status, hours worked per week in the indicated
trade, rate of pay, and locations at which ~~e work was performed.
Records shall be maintained in an easily understa~dable and retrievable
form; however, to the degree th3.t exis'Cir:g ::-eco::-c.sl satisfy this
requir~~ent, contractors shall not be required to maintain separate
records.
15. Nothing herein provided shall be const~ed as a l~itation upon ~~e
application of other laws which establish different standards of
compliance or upon the application of requirements for the hiring of
local or other area residents (e,g., those under ~~e Public Works
Employment Act of 1977 and the Community Development Bleck Granr
Program).
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EXHIBIT "e"
fi 570.601 Nondiscrimination.
(i) Discrimination prohibited. _ Sec-
tion 109 of-tlie Housing and ~ommunit:r
Development Act of 1974 reqwres that'no
person in the United states shall on the
ground of, race, color, national origin or
sex, be' exc!udP.d from pa.rtlcipatlon 1n,
be denied the benefits of, or be subjected
to d1scr1mInatto]l under, any progra.m or
actI....1ty funded 1n whole or In part wIth
CQIn~u!l:LtL deve~p'ment ,funds .!D~e
a.vailable pursuant to thiS Part. FOr pur-
poses of this section "program or l!.ctiv-
Ity" Is defined as any function conduct-
ed by an Identifiable admln1stra.t1ve unit.
of the.. recipient, or by any unit of gov-
ernment or private contractor - reeelviile
commun1ty development funds or loans
from the recipIent. "Funded tf1 wbole or
'In part with community development
funds" me9..DS that _community develop-'
ment funds 1n a.ny amount In the fonn
of grants or proceeds from HOO guar-
anteed loans have been transferre<Ib:r
the recIpIent to Il-n Identi1i.able adm1n-
IstraUve un1t ar..ddlsbursed l.ri a program
~Lactl~t~ '
(b) Specific discriminatory aeti.orU
prohibited and corrective acti0n8. (1) A
recipIent may not, under any program or
a.ct1vity to whIcb the regulatIons ot tlrls
pa.r. mas apply, directly or thrQugk eon-
tradual or otl1er arrangements, on ~e
E'round of race, color; nat:on9.l origIn, or
~x:
(1) Deny any faclllLies, servL:e-s, ftl1Jln-
cfal aId or other benefits provIded under
tJi.e pro'gram or actlvlty,
(U) ,ProvIde any fn.cilitl('~. scrviceJl, fI-
nauc!a.I ald or other benefits whicfi are
dl1'ferent, pr Are provided In 8. ditrerent
form from that provided to others under
the program or activity.
__ (lU)Subject to segregated or separate
treatment in any f:1.l:lIIty in., or In aD)'
matter or process related to receipt o!
any servlce or benefi.t ,under the pro-
gram or activity.
'(Iv) Restrict 10 an;, W"B.y ~cess to, Ol"
1n the enjoyment of any advantage or
privilege enjoyed by othcrs ~ connec-
tion With-facilities. servIces.. fi~ncla.l aid-
9r -otl1er benefils under the program -or
activity,
(v) Treat lfYi indivIdual ditrerently
from -others in del.ermi.n.1ng whether the
tndJvlduaJ satisfies any admission, enroll-
ment, eligibility, membership, or other
'requirement or condition which indJvid-
uab must meet In -order to be provided'
any facilities, ~ervlces or other benefit
pl'ovlded under tl1eprogra01 or activIty.
(0,1) DeI"'S nn opportunity toO partici-
pate In a procram or a.ctivi(y ~ an em-
ployee. -
- (2) A recipient may not utilize cri-
teria or melliods of administration
v..hlch have the er.-~t of subjecting In-
divldu:l.Is to dtscrL'TIin:lticn on the b2.si.3
of 7'a-Ce, color,"oational or-gin, c. ~ex. or
h:lve the cITed of de:c:l.tL.g or sub.s'..:l.n-
tially l;np;:jring u.cco:npli~hm('nt of the
ob;e-ctives of the Pf'O',;r:un or ?-cU',1ty
..1L~ respect to inc.!vlc-.::!..!s of a p:l.rticuJar
race, color. !::l.tlor.s.1 origin, or sex.
(3) A recIpient, In determinIng the
sIte or location of housing or facilities
provided In whole or In p:l.rt v.1th funds
under this part, may not, make selec-
tions of such sIte or 10c.:ltion'wh.lch bave
the effect of excluding Indlvidu?.1s. from,
denying" them the bel1t'fl t.s or, or sub-'
.-Jecting them to dl.scrimlna.tl<?n on -the
ground of race, color, national origin. or
sex; or which rove the :;:nu-pose or €:frect
or ddeatIng or substant.!::1.lly 1mPI'Jri:lg.
the "accomplishment of the objectives or
the Act and of this sectIon.
. -(4) en In::u:lmL'1.!5krtng !l. progrnm or
a.ctlvIty funded in ..hole or In p:u-t with
oomrnunJty ceveloplrient' block :;rant-
funds rct;ardlng which the recljJlent h:u-
pre'\liously dl5crlmilh~d n.t::un.st persons
00' the - ground of rn.ce. color, n:J.~lonal
oriein 'or~, the reclpicnt must bke
at'l5.rmatlvc n.ctlori t~ overco:ne the eITc'C!;s
oJ zlor dJ5Criml~:on.
: (11) E.'\'en 10 UIU nt..sc;nre of such prior
'dlscrimln:ltlon. B. r<'i!plt:nt In n.am~ill.s-
-1ering a pro~rnm or nct!\1t.r fund~ l..a
..hol~ or In pnrl .it~ DOI!:m=.!ty <!e-
vel<r.'ment block !;"l.lnt rund~ should tnke
~U;oacfj= ~-.:",:c..:"Co:nc lhe ef1e'cti.
,,[ condItIons v.'l1lcb "i<'ould othe.-v..1se re-
.!!ult in llmJtln.g ;:>:J.rtlclpA.tlon by per~ons
or a particular T1\.Ce, color, nat:onnl oT~l:ln
or :;ex. "'-'here pre\10us discrlrnlnaton<
p~tlce.or U-"3.ge tends, on the 8"!ound
or r~, color, nA.tlona1 origin or sex, to
exclude L.,dh1dua16 from pnrtlc!l?:l Uon
In. to cf(ny them the beneflls "r, or to
'subJect L"lOIn ~l-o dl.scrlminntion under-
any prognun or acthity to which th1s
pa~ Rpplles, the recipient h:1S an obliga-
tion to take rca~nable action to remove
or overcome the con.oec;uences oC_ the
prior dlscrimJnatory practice or usage,
and to accomplish the purpose of the
Ac.~
(jm A recipient shall not be prohibIted
by thi;,; part from taldng any ~tlon elilt1-
ble under Subpart C to ameliorate an im-=
balance In services or facUit1es prOVided
to any gf>ol;TIlphlc area or specL4c. ;;;roup
or persons 'v.1thin lls jurisdiction, where
the purpose of such :l,=t:ion Is to ovcrcome
p~or <'liscriininatory practice or usage. _
(5) Notwlth.st:lnding :?_!1ythIn~ to the'
contrary In this _ .section. nothing con-:
tamed herein shall be con~...Lled to pro-
hIbit any H'cipient fro!J1 malnta~ni!1g or
constructing separate living facilitIes or
rest rocmfacili1iesfor the diferent sexf's.
Furthermore, selectivity on the basis of
sex.is IKlt prohibited ;;'~en mst1tuEoiia~
or custocllat senices c;ln proper-Is be per-
formed only by a memter ot t..'1e same
sex as Ll)e recI;::ients ot the servlces.
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'Tuesday , '
July 8, 1980
':~ ~-:,;.; ." i'.
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~_I. -....~;~-;,.~.~)
.,.t",:
Part III
Office of
Management. and
~udget .
Circular A-122, "Cost Principles for
Nonprofit Organizations'~
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Federal ~egildr /- Vol. 45. No. 132 l:'~uesday, July 8, too / Notices ,\ ...~
,.' 46023
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Response, The cosl principles are
designed to cover moat silualions; .
however, there are always exceptions
that must be considered on a case-by-
case basis. The Circular conlains a
provision for Federal agencies 10 request
exceptions,
Comment. Several respondents ' ..: '
questioned why interest is not an ,." -
allowable cost, since it is an ordinary
and necessary cost of doing business.-
Response. It has been a longstanding
prJlicy nol to recognize interest as a cosL
However. this policy has recently been
revisp.d for Slate and localgovemments.
in Circular 74-4, with respect to the cost
of office space, The revision provides
that "renlal" rates for publicly owned
buildings may be based on actual costs.
including depreciation. interest.
operation and mainlenace costs. and
other allowable costs, Thill revision was
under consideration for some time, It
was studied extensively by OMB, the
General Accounting Office and others.
and considerable analysis went into its
formulation. Suggestions for exlending it
to nonprofit organizations would have 10
be examined with equal care, This has
not yet been done. and we were,
reluclant to further delay issuance of '.
this Circular. -
Comment, Several respondents
questioned why public information cosls
wllre not allowable as an indirect cost.
Response. Public information costa
are often direct services to an
organization's olher pr-ograms, They are
allowable, however. as a direct charge
when they are within the scope of work
of a particular agreemenL .
Comment. One respondent suggested
that smaller granlees be excluded from
complying wilh the Circular.
Response. Similar rules for the 50
selected items of cost would be needed
regardless of the size of the grantee. To
the extent possible. the Circular
provides simplified methods for smaller
grantees. ' '
Comment. One respondenl said the
requirements of the Cosl Accounling ..'
Standards Board should be applied to
cover contracts with nonprofit
organiza tions.
Respunse. It is unlikely that the type
of grantees covered by this Circular
would have contracts large enough to be
covered by the CASH. In the event that
they do, however, the regulations of the
CASD would apply,
Comment. One respondent said the
allocation of indirect cosl to donaled
sarvices would pose a tremendous
difiiculty to the organization. The
organization relies on a corps of
approximately a,ooo committee members
to carry out obligations in response 10
Government requesls, There is no
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employer relationship in the ,
arrangements for lhia assislance. nor are
there committee members normally
reimbursed for such services, Further, it
was pointed oul the committee mt:muers
spend many thousands of hours outside
the organizalion's premises conducting
research: : '"
Response. It would appear that this
type of conunittee arrangement would
not be considered in the determination
of the organization's indirect cosl rale
provided that Federal agreemen:s do not
bear an unreasonable share of indirect
cost. However, the cognizant agency
will be responsible for evaluating the
allocation of indirect cost where there
are committee-type arrangements on a
c8se-by-case bllSis.
Comment. One respondent suggested
that wherever possible lhe language in
the Federal Procurement Regulatiuns be
used for nonprofit organizations.
Response, The language in the Federal
. Procurement Regulations was
designated primarily for commercial
firms. and is not necessarily well suited
to nonprofit organizations. At the
suggestion of the General Accounting
Office, the nonprofit cost principlell
were written to conform as closely as
possible 10 those of educational
institutions 'Circular .-\-21), and Stale
and local governments (Circular 74-4).
Jolm J. Lordaa.
Chief. Financial Management Branch.
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[Circular No. A-l221
June 27. 1980 ,t:7~~"'-.
To The Heads of Executive
Departments and Establishmenls
Subject: Cost principles for nonprofit
organizations. ' .>,
, 1, Purpose.,This Circular establishes ..
principles for determining cosls of
grants, contraeta and other agreemenls
with nonprofit organizations. It does not
apply to colleges and universities which
are covered by Circular-A-21: Slale,
local, and federally recognized Indian
tribal governments which are covered
by Circular 74-4: or hospitals, The
principles are designed to-provide that
lhe Federal Government bear its fair
share of costs excepl where restricted or
prohibiled by law. The principles do nol
attempl to prescribe the exlenl of cost
sharing or matching on grants. contracls,
or other agreements. However, such c,ost
sharing or malching shall not be '
accomplished through arbitrary
Iimitalions on individual cost element.
by Federal agencies. ,Provision for profit
or other increment above COil is outside
the scope of this Circular,
2. Supersession. This Circular
supersedes cosl principles issued by
.
H-2
individual agencies for nonprofil -,' -; '.
organization, "", - . .
3, Applicability. a. These principles
shall be used by all Federal agencie.s in
delermining the costs of work performed
by nonprofit organizations under grants,
cooperative agreemenls, cost- ,
reimbursemenl contracts, and other" . ..,.'
conlracls in which costs are used in .
pricing. adJJlinistration. or seltlement. - .:
All of these instroments are hereafter
referred to as awards. The principles do .
not apply to awards Wlder which an
organization is not required to, account.
10 the Government for actual costs -
incurred, .
b. All cost reimbursement subaward,.,.-
(subgrants. subcontracts, etc.) are
subject to lhose Federal cosl principles
applicable to lhe particular organization
concerned, Thus, if a subaward is to a
nonprofit organization. this Circular
shall apply; if a subaward is to a
commercial organization, the cost
principles applicable 10 commercial
concerns shall apply; if a subaward is to
a college or university. Circular A-21
shall apply; if a subaward is to a State.
local. or federally recognized indian
tribal government, Circular 74-4 shall
apply.
4. Definitions, a. "Nonprofit
organization" mean& any corporation,
trusl, association. cooperative, or other
organization which (1) ia operated
primarily for scientific. educational.
service. charitable, or similar purposes
in the public inlerest; (2) is not
organized primarily for profil; and (3)
. uses its net proceeds to maintain.
improve, and I or expand ita operations.
For this purpose, the term "nonprofit
. organization" excludes (i) colleges and
universities: (il) hospitals; (Hi) Slate.
local. and federally recognized Indian
tribal govemmems; and (iv) those
nonprofit organizations which are
excluded from coverage of this Circulal" - .
in accordance with paragrl!Qh 5 balow.
b. "Prior approval" me8iis securing
the awarding agency's permission in
advance 10 incur cost for those ilems
that are designated as requiring prior
approval by the Circular. Generally this
permission will be in writing. Where an
item of cost requiring prior apP1;Oval is
specified in the budgel of an award.
approval of the budget constitutes
approval of that cost.
5. Exclusiun of some nonprofit
organizations. Some nonprofit -
organizations. because of their size and
nature of operations. can be considered
10 be similar to commercial concerns for
purpose of appiicability of cosl
principles. Such nonprofil organizations
shall operate under Federal cost
principles applicable to commercial
concerns. A listing of these
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46025.
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B. Direct Coslll
1. Direct costs are tbose that can be
identified specifically with a particular final
cost objective: i.e.. Ii particular award.
project, service. or other direct activity of an
organization. However, a cost ma~not be
assigned to all award as a direct cost if any
other cost incurred for the same purpose, in
like circumstance, has been allocated to an
award as an indirect cost. Cost identified
specifically with awards are direct cost of the
awards and ara to beassillned directly
thereto. Cost identifhld specifically with other
final cost objectives of the organization are
direct costs of thosa cost objectives and are
not to be, assigned to other a wards directly or
Indlrl!ctly,
2. Any direct cost of a minor amount may
be treated as an indirect cost of or reasons of
practicality where the account treatment for
such cost is consistently applied to all final
cost objectives.
3. The cost of certain activities are. not
allowable aacharges to Federal awards (see,
for example. fund raising costs In paragraph
21 of Attachment B}. However, even though
these costs are Wlallowable for purposes of
computin~ charges to Pederal awards. they
nonetheless must be treated as direct cost for
purposes of detennining indirect cost rates
and be allocated their share of tbe
or:;anization's indirect costs if they represent
activities whicb (It include the salaries of
persunnel, (2) occupy space. and (3) benefit
from the organization's indirect COllts,
~. The coslll of activitie1l performed
primarily as a service to members, clients. Dr'
thil general public when significant and
necessary to the organization's mission must
be treated as direct costs when or not
allowable and be allocatechnequitable
share of indirect costs. Some examples of
these types of activities include:
a. Maintenance of membership rolls;
subscriptions. pubUcatioru, and related
functions.
b. Providing services and infonnatiolf to
members, legilllative or administrative
bodies. or the public. ,
c. Promotion. lobbying. and other forms of
public relationa.
d. Meetings and conferences except thoslt
held toeonduct the geoeraladmlnistration of-
the organization.
3. Maintenacne.protection. and investment'
of special funds not used in operation of the
organization.
f. Auministration of group benefits on
behelf of members of clients including life
and ho~pital insurance. annuity or retirement
plans, fmancial aid. ete.
C. Indirect CosL
1. Inuirect costs are those tbat hdve-beeo.
incurred for common or joint objectives and
C~IRr.ot be readily, identified with a particular
fin..j cost obj~ctive. Direct cosl of minor
a:nounts may be treated as indirect costs
t:nd;:r the conditions described in psragraph
B.2. above. After direct costs have been
determined and assi8ned directly to awards
or other work as appropriate. indired costs
are those remaining to be allocated to-
benefiting cost objectives. A cost may not be
allocated to an award III an indirect cost il
any other ccst incurred for the same purpose.
..
in like circumstances. has been al8igned ,to
aD award as a direct costo.-.." "", .",
2, Deeause of the diverse-characteristics
and accounting practices oE nonprofit
organizations. it is not possible to specify the
types of cost which may be classified as
Indirect costin aU situation-However, typical
eXIlDlples of Indirect COlt for many nonprofi~
organizations may include depreciation or
use allawanc8s on bv.ildings.and equipment."
thlt costa of operating-and lIlaintaining
" facilities, and geoeral administration and
general expenses, such as"the salaries and
exp'snses of executive Officeflk personnel
admini~tration.. and accoWltUJs;.
D. Allocauoltof Irrdirect Cosl.ond
Determination of Irrdirecl Cost Rates.
1. General_
a. Whtlre a nonprofit organization haa only
one major function. or wbere all its major
functions benefit from ita indirect costa to
approximately the lNUI1ll degree. the
allocation of indirect coslll anclthe
computation of an indirect coat rate may be
accomplisbed through simplified allocation
procedures' as described in paragraph Z
below. '
b. Where aD orgllnization hu aeveralmajor
function. wbich benefit fromita.iDdirect costa
In varying degrees. allocation of indirect
costs may require tba accumulation of iUch
costs into separate cost groupings which then
are allocated individually to benefiting
functiol1& by. Dleans of a bllse which best
measures the relative degree otbentlfil. The,
indirect COlIts allocated to each function lire-
then diatributed to individual awards and
other activilies: included in that dllDctiOD, by
means of an indirect coat ratels~
Co Tbe dtttermination of what constilutes an
organization!, major function.. will depend 011.
its purpose in being: the types-ot services it
renders to the public, its clients. and ita
members: and tba amoWlt of effort it deyotM
to such activities aa fWld raisinJ,. publi~
information and membership.activities.
d. Specific meth0d8 for allooatiDg indirect
costs- aad computing lDdirect. coat rates along
witb the conditions Wlder wh.icla each method-
should be used are dellcribediaparagrapbs 2
through 5 below. ," "''.Il;'
e., The base period for the allocation of
indIrect costs I. the period lD which auch
costs. are incurred ud accumulaled for
a11ocation wowcxk performed Ia that period.
The base period normlllly should coincide
with tbe orgaoizalion's f18C81 tear. but in any
" evn!, shall bot so seleclBd as laavoid
"inequities in the allocatioo of the costs.
2. SimpJJfilld aJJoculio,. melbod. .
a. Where an OrganiZlition'S. major functions
benefit from it. indirect coste ta
approximately the same degre. the allocation
of indirect costs mot)' be accomplished by (i)
separating the organization's total costs for
the base period as either direclor indizect.
and (ii) dividing the total allowable indirect
costs (net of applicable credits) by an
equitabllf distribution biise. Tharesult of tbi&
process is an indirect COil rate which is lWad
to d.ilIltiuute Indirect costs to individual
awards. The rate should be expresStld as the
pen:enlage wbich the totlll amount of
allowable indiret;l costs bears. to the base
seiectecL This. method should. alas. be used
H-4
where an organizatioll bas only one. major, ,"
function encompassing a number oC ,,' ".
individual prolects or activities. and may be..
u'sed where the level of Federal awards to "an
organization is relatively small.
b. both the direct costa and the indirect
costs shall exclude capital exp"nditures and
,unallowitbllt coslS. Howllver. unaliowa,ble
costs which r"'present activities Ulusl be
included in the direct coal.J uadet the
conditions described iD. paragrapn B.3. abo.ve.
e. The distribution base may be total dizect
costs (ucluding capital expenditures. and
other distorting itema. such u major:
&Ubcontr-dcts or subgnwta). direct salariea.
and wages, or adulr base which reaulu in 1IQ
equi table distribution.. The dUltibutioo base
shall generally exclude participant supod
costs as defined in p.uagraph ~ of
Attachment B-
el. Except where a special rllte(s} i.&
required in accordanca with p.vagrapa 0.5
below, the inclirect COlIt.ra~de"'eloped.under
the above principle& is applicable lG all.. , ,..
,award. at the orsanizatioo. U a special
rate{s~ is required, approprUitll modiiicationa
shail be made iit order todeve1op the. special "
rate(s).
3. MuJtipl1l aJ1OCtJuon base mathud..
a. Where an organizatioo:. indirect coste.
benefiL illl major functiona 10 varying degrees,
such COlts sball be acculJ\lIl11tad into sepdrale
cost groupings. Each grouping sha.ll then be
allocated individually to benefiting functiona,
by means oC a base which best maaaures the
relative benefits.,
b. The groupinSll shaU ba established so aa
ta permit the allocatiun oC each. grouping 01\
the basis of benafits ptoviddd to tha. majDl'
fWlctions. Eaeh grouping should ~&tituta. a
pool oC expenses that are of lik.e characltor in "
tarma oC the functiona they henefil aod in. .
teml& of the lI11ocationbaaewhich best,
measurs the relative"benefilsprovidd, to each,
function. The number of s.eparate groupings ;
should be held withlD practical Umita. taking "
into consideration the materiality of the - -
amounts lDvolved" and !be desJge oC precision
desired. " ' " ,
e. Actual conditions mualb6takan into. -,-1
account in selecting tbe base to be used in.. :;
allocating the expenstts in each grouping 10.:" "
benefiting functioos.,When BI\ allocation caIL-
be made by assigmnent of . cost groupi.ag ,.,..~
directly to the fWletion, benefited. the
allocation shal~ be made in that mlllUler. "
When the expenses in a ~ouping are II1OC'8
general, in natare. the allocation should be
made through the usa of a selected basa
which produces results. that are equitable to
both the Government and tha o.!lanizatioa.ln-
general. any cost element or coal re:liled
factor asSQC.iated with the or3anizaliOll's
work is potentially adaptable for ulle ai.aIl
allocation ba~ provided (i) it can readily be
e)(presaed in teroa of dollars or oth;u-
quantilativll measures (tolal dir~ct CGOI$.
direct salarie& end walles. st.aff hour. applied..
square feel used. hoU(8. of u.sag.a.. uumbu oC
documents proceslecl.populetioa sarved. and
the like) and (ii) iL is coounon to tb~
benefiting [unctions during tha ba;;.e period.
d. Excepl where a special indirecl cuat
rate(s) is required In accordaDca with
paragraph 0.5. below. the Up81atll groupings
of inJirect COlli. allocated to Itach maiOI'
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Federal liegist" I Vol. 45. No, 132 }' .Tuesday. July 8. JdO I Notices,
46021'
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8. Contributions
9. D"preci"tlorr and Dse allowances
II). Donations- '
11. Employee morale, health and welfar& ,-" '..
cost:r and credit..
t~. EnlertainmentcolltS"
1J. Equipment aud other capital expendituree "
14. Flnes and penalties '
15. Frioge benllfil~
18, Id!e facilities and idle cap~cily
17. tndp,pendent rellearcl1 snd development'
(reserved)
18. la..urance and indemnification
19, Interest, fund raisil\lj. aod inveslment
management cosls
ZO. Labor relationa co.t:!
21.1.osses on other awsrd.
22. ~'ldinlanance lInd repair cosls
23. M<lteriab and ;mpplies
24. Mcltllings, conferences
2:j, Memb",nohips. suuacriptions. aDd
professional activity cosls
26. Org..nization cosb
Z7, Overtime. e:l.lrs-pay shift. and mulrisnifl
pnllIliums '
23. P:lge charges in professional journals
Z'J. Participant 3Upport cosls
,m. P:!I!:!nt cosls
:11, Pension plan.
3!. Plant security COlltS'
33. Preaward costs
34. Proressionslllecvice costs
:IS. Profits .:lnd losses on disposition of
d.epreciable property or other capital
esse!s
3d. Public infonnation service costs'
31. PubllC;Jtion and printing costs
38. Rearral'.gement and alteration costs
39. Reconvenion costs
40. Recruiting costs
41. Relocation costs
-'0 Rental cost..
43. Royaltie8 and other COlIts for use or
patents and Copyrights
4'1. Severancepll1
45. Specialized service facilities'
46.. Taxes
41. Terminallon cost.
4a Training and education CDSb-.
49, Transportation costs
5{). Tra vel costs'
[Circular No..A-122]
Atlacllmentlf.
Sel~ed ltema of CIMlt
ParagrapM 1 through SO provide principles
to be applied in establishing the allowability
o[ certain items of cost. These principles
apply whether a cost is treated as direct or
indirect, Failure to mention a partil;ular item
or cost is not intended to imply that it is
unallowable; rather determination as to
aHl)wability in each case should be-bailed on
the treatment or principles provided for
similar or related items of cosL
1. Advertising cosls.
a. Advectilling costs milan the costs of
media service8 and associated- costs. Media
advertising includes msgnines. newspapen.
radio snd telelrision programs. direct mail.
ellhibit3, and the like.
b, The only advertising costs allowablear&
those which are solely for (i) the recruitment
of penonnel when considered in conjunctioo
witb all other recruitment costs, U se~ rOl'th..
^
"
in parllKrapn 40; (ii) the pl"OCDl'8me11t of goods
IInd services; (iii} the diapoul of surplu~.
materidls acquired in the performance of the
award ellcept when organi2alioo.i are
reimbursed for dispollala lit apredlltermined
amount in accocJanca with:.Attachmenl N of
OMB CIrcular A-llO; or (iv) apecific
requirements. of the award......
2. Bod debt3. BlId debts.. incladin~ losses
(whlllher actual or estimatedl arising from
uncollactibla accouots and other clailJl8..
related collection ('.oal... lInd related legal
castel, are. un"Uowllbla.. ',v-; ,'.
3. Bid and proposal costs.. (reserved)
4, Bonding C08ts.
a, Donuing costs arise whentb~.'
Covernment requires 3SliUralU:&agalnal
financial lollS to itsali or othen by rea.iOO o[
tha act or default of the organization. Thay
arise also in instancell where: th&OI"!lanizalion
requirus similar aaaUl'ltnce. lncluded are "uch
bonds as bid. perfonnllnca. paymenL
advance payment, i.niringemeot;agd fidelity
bonds.
b, Costs of bondiog requinld pursuant to
the terms of the award are altow.b1e.
c, Costs of bonding required by th~
organiz.allon in the general conduct of its
operations are a\lowabl" to the- extent that
such bonding is io acconlliaoe with sound
buslnl!Slf practice and the rat_ aDd premium..
are reasonable under-the citcllmstances..
5. Communicotion costs. Costa incurred iOt
tlllephone serrices..llJCal aDd longdbtance
telephone calls. telegrams, radIDg[!IJ1Ilt.,
postage: 8Jld the like. al'8 allowable.
6. Compensation fot' persOrloJ 8t1rvices..
a. Definition.. ComlM'nss lion.for personal
services Includes all conlpenjation pdid
CUlTf!ntly or acaued by t:tl! organization for'
services-of employees rendel'ed during the
period 01 the award- (except as otherwise
provided in P!ltagrapn g. below~ It includes..
but is not limited to. salaries. wages.
director's- and executive committee member's
fees, incentive awanb. fringe-benefits. .
pension plan cosla, aUowaoce.fOl'. oft-sile
pay. incentiYe par. location allowances.
hardahip paY'~and cost of livingdilIerentials.
b. Allowabi/ity. ~cepl ..,otherwise'
specjfically provided ia this paragraph the
costs of such compenNtion al'tallowable to
the ex lent that
(1) Total compensation toLndividual
employees is. reasonable for the services
rendered and conforms to the established
, policy oC the organiz&tion consistently
applied to both Government and o~
Covernment activities; and
(2) Charges to awards whetheJ' treated as
direct or Indirect cosls are determined anu
supported as required in thi. paragraph..
Co Reasonab/BneD.
(1) When theorganiutioo is predominantly
engaged in activities other thaa those
sponsored by the Government, compensation
for elllployees on Government-sponsored
work will be considered reasonable to the
extent that ilis consistent with lbaL paid for
similar work in the organization's other
activities.
(Z} When the organization is. predominanlly
engaged in Covernment-sponsored &ctivities
and in cases where the kind of employees
required fur the Government activities are
not found in th~organwliOD'a olber
H-6
activllies. compenaatio~ [or elOploy_ Oft ' , ,. t
Covemmtlnt-sponsored work will be.- .
con;;idereu reasoncsble \0 th.,. extent that It Is , "
cumparable to that paid for similar work in. '
the labor markets in which the.orgllolution .
compeltl5 for the kind of employees involveu_'
d. Special cOQ.Jideratioafl in dutermilling.'
aJlowability. Certain conditions require.
special consideration andpo8Sibla,limitaliOll&',
in delermining costs underPederal awards. "
where amollnts or type:l-ofcomp8nsalwn. ., ,-'
appea' unce8Sonabllt~ AmunS- sucb cuoditioml> '
a~e the [allowing:.
(1) Compensation to members of OOIIprofit-.;
organizations, trustees, dUectors. lissociates.
ofl1cers. or thil immediate faaillie.. thereof...
Determination should be made that such
compensation is re..sonable for the actual.
personal services renc.l"red ralber tnan. 8.
di~lribulion p[ earning:l in ,lI'Xcesa of costs. ,-
(2) Any change in an organization'.
compen:!alion policy resulting in a
substantiiil increase in the organizalion's.
level of compensation. particularly when II ,
was COnCl\CTent with all ill4:J"llase In the rallo
of Governm..nt <lWllrdS to other IlcUlrities oC '
the organization or any-change in the
treatment of allowabilityol spe<:ific types of
compensation dUe! to changes in Government
policy.
e. Unallowable costs. Costs which al'8'
unallowable unde!' other pKragraphs afthi.
Attachmilnt shall not be allowable under thm
paragraph solely on the bilsis that they-
constitute personal compensatiOll.
f. Fringe benefits.
(1) Fringe benefits in the Corm of regular'
compensation paid to employeea during
perilXls of authorized absences from the job;
such as vacation leave, sick leave, military
leave. and thlt like, are allowable prolrided
such coats are absorbed by all ol'ganiution
activities in proportion to the relative amount.
of time or effort actually devoted to each.
(2) Fringe benefits. in the fonn of employer -
contributiuns or expenallS lor social aecurity~
employee insurance, workmen's .' '. .
compensation insurance. pension pllUl. costa',
(see paragraph 3- below). and the like. are
aJlowfl ble provided such benefil1 are granted' '
in aCCDrdance with established written'
organization policies, Such benents whether ,.
trealed a8 indirect costs or as direct costs.
shall be.distributed to particular. awards and
other activities in a manner consistent with,
the paltern of benefits accruing to the
individuals or group oC employe!!swhose
salaries and wages are chargeable to such
awards and other actilrilies. -
(3)(a)'Prolrisiona for a reserve unde!: a seif..
insurance program foe uaemploY;IIlmt
compensation or workmeo's compO!nsation
are allowable to the exlent that the
provisions repre~ent rea$Onaule estimates o[
the liabilities for such COlDpeDllat~on, and the
types of coverage, extent of covtlra;le.and
rates and premiumll would bav!! ~en
allowable had i.l1sucance bilen purchuSc!d to
CQvertn" risks. How!!vet. provi&.ions for leU.
insured iiauiHties which do not become.
payable [or more than one year after the
provision is made ~haJl not exceed tha.
presant viilue of Ine Uabillty_
(b) Where an organization follows a
consistent pol!;y of expenaing actual
payments to. or 0& beball of. 8f.l1ployeetl 01,._. ,C"
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Federal Regi:
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methods onc~ used shall not be changed
unle~8 approved in advance by the cognizant
Federal allency. When the depreciation
method is introduced for application to assets
previously subject to a use allowance. the .
combination of use allowances and
depreciation applicable to such assets must
1I0t exceed the total acquisition cost of the
assets. Whellthe depreciation method Is ulied
for buildings, a building's shell may be
segregated from each building component
(e.g.. plumbing system. heating, and air
condi~ioDinllsystem. etc.) and each item
depreciated over its estimated useful liCe: or
the entire building (i.e., the shell and ~ll .
components) may be treated as a singh:l asset
and depreciated over a single useCullife,
f. When the depreciation me thud is used
for a particular class of auets. no
depreciation may be allowed on any such
assets that, um.ler parasrapb a. above, wou.ld
be viewed as Cu.lly depreciated. However. a
reasonable use allowance may be negotiated
for such assets if wllJTanted aftdr taking into
consideration the amount of depreciation
previously chal1led to the Government, the
estimated useful liCe remaining at time of
negotiation, the effect of any increued
maintenance charges or decreased efficiency
due to age, and any other factors pertinent to
the utilization of tbe asset for the purpose
contemplated.
g. Charg..s for use allowances or
, depreciation must be supported by adequate
property records and physical inventories
must be taken atleut once every two years
(a statistical sampling buis is acceptable) to
ensure that assets exiolt anti are usable and
needed. When the depreciation method is
followed. adequate depreciation records
indicating the amount of depreciation taken
each period must also be maintained.
10. Donations
a. Services received,
(1) Donated or volunteer services may be
furnished to an organization by professional
Dnd technical personnel, consu.llants. and
other skilled and unskilled labor, The value
of these services is not reimbursable either a.
a direct or indirect coaL ·
(2) The value of donated services utilized
in the performance of a direct cost activity
shall be considered in the determination of
the'organization's indirect cost rate(s) and,
accordingly. shall be allocated a
proportionate share of epplicable indirect
costs when the following circumstances exist:
(a) The aggregate value of the services is
material:
(bj The services are supported by a
significant amount of the indirect costs
incurred by the organization;
(c) The direct cost activity ia not pursued
primarily for the benefit of the Federal
Government.
(3) In those instances where there is no
basis for determining the fair market value of
the services rendered. the recipient and the
cOi!nizant agency shall negotiate an
appropriate allocation of indirect cost to the
services.
(4) Where donated services directly benefit
a proj~ct supported by an award, the indirect
costs allocateu to the ,services will be
considered as a part of the total costs oC the
project. Such indirect costs may be
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I Vol. 45. No, 132 ITuesday, July 8.
reimbursed under the award or used to meet
cost sharing or matching requirements.
(5) The value of tha donated services may
be used to meet cost sharing or matching
requirements under conditions described in
Attachment E. O!\.IB Circular No. A-Uo.
Where donated services are'lreatedas
indirect costs. indirect cost rates will
separate thIS value of the donlltions so thdt
.. reimbursemlSnt will not be made.
(6) Fair market value of donated services
shall bd computed as follows:
(a) Rales for vulwIleer :Jervices. Rates for
volunteers shall be consistent with those
regular rates paid for similar work in other
activities of the organization. In cases whera
the 'kinds of skills involved are not found in
the other activities of the organization, the
rates used shall be consistent with those paid
for similar work in the labor market in which
the organization competes for such skills,
(b) Services dona led by other
organizatiuns. When an employer donates
the services of an employee, thelle services
shall be valued at the employee's regu.lar rate
of pay (exclusive of fringe benefits and
indirect costs) provided the services ere in
the same skill for which the employee is
normally paid. If the services are not ,in the
same skill for which the employee is normally
paid, fair market value shall be computed in
accordan!;e with subparagraph (a) above,
b. Goods and space.
(1) Donated goods; i.e.. expendable
personal property/supplies. and donated use
of space may be furnished to an organization.
The value of the goods and space is not
reimbursable either as a direct or indirect
cost.
(2) The value of the donations may be used
to meet cost sharing or matching share
requirements under the conditions described
in Allachment E. OMB Circu.lar No. A-llo.
The value of the donations shall tie
detennined in accordance with Attachment
Eo Where donations are treated as indirect
costs. indirect cost rates will separate the
value of the donations ao that reimbursement
will not be made.
11. Employee morale. heallb. and welfare.
costs and credits. Tbe costs of house
publications, health or first-aid clinics, and/
or infirmaries, recreational ectivities,
, employees' counseling services. and other
expenses incurred in accordance with the
organization's established practice or custom
for the improvement of working conditions,
employer-employee relations, employee
morale, and employee performance are
allowable. Such costs will be equitably
apportioned to all activities of the
organization. Income generated from any of
these activities will be credited to the cost
thereof unless such income has been
irrevocably set over to employee welfare
organizations.
12. EIltertainment costs. Costs of
amusement, diversion, social activities.
ceremonials, and costs relating therelo, such
as meals, lodging, rentals, transportation. and
gratuities are unallowable (but see
paragraphs 11 and 25).
13. Equipment and other capital
expenditures.
a. As used in this paragraph. the following
terms have the meanings set forth below:
H-8
'0 I Notices.
46029
(1) "Equipment" means an arllcle of
nonexpendable tangible personal property
having a useful liCe of more than two years
and an acquisition cost of $500 or more per
unit. An organization may use its own
definition provided that it at least includes all
nonexpendable tangible personal property as
deCined herein.
(2) "Acquj~ilion cosl" means the net
invui!;e unit price of an item of equipment,
Including the cost of any modifications,
attachments, accessorie~, or uuxiliary
apparatus necessary to make it usable for the
purpose for which it is acquired. Ancillary
charges. such liS taxes, duty, protective in-
transit insurance. freight, and installation
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular written accounting
practices.
(3) "Special purpose equipment" means
equipment which is usable only for rellearch,
medical. scientific. or technical activities.
Examples oC special purpose equipment
include microscopes, x-ray machines, surgical
instruments, ond spectrometers,
(4) "Generlll purpose equipment" means
equipment which is usable (or other than
research. medical, scientific, or technical
activities. whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples of
general purpose equipment include office
equipment Hnd furnishings, air condllioning
equipment. reproduction and printing
equipment, motor vehicles, and automatic
data processing equipment.
b. (1) Capital expenditures for general
purpose equipment are unallowable as a
direct cost except with the prior approval oC
the awarding agency.
(2) Capital expenditures for special purpose
equipment are allowabla as direct costs
provided that items with a unit cost of $1000
or more have the prior approval oC the
awarding agenc:!,
c.Capital expenditures for land or ~
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agency.
d. Capital expenditures for Improvements
to land, buildings, or equipment which
materially increase their value or useful JiCa
are unallowable as a direct cost except with
the prior approval of the award inS agency,
e. Equipment and other capital
expenditures are unallowable as indirect
costs. However, see paragraph 9 for
allowability of use allowances O/'
depreciation on buildinss, capital
Improvements. and equipment. Also, see
paragraph 42 for allowability of rental costs
for land, buildinss, and equipment.
1-1. Fines and penalties. Costs of fines and
penalties resulting from viola tions of. or
failure of the organization to comply with
Federal. State, and local laws and resulations
are unallowable except when incurred 8S a
result of compliance with specific provisions
of an award or instructions in writing from
the awarding agency.
15. Fringe benefits. See para&raph 6. f.
16. Idle facilities and idle capacity.
a. As ulIed in this paragraph the following
terms have the meanings set forth below:
(1) "Facilities" means land and buildings or
any portioD thereof, equipment individually
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Federal Relter I Vol. 45, No, 132,.i~fr'sday. July bJ1980 I Notices,
46031 "
with establishment or reorganization of an
organization, nre unallowablll except with
priur approval of theawardin8 u8ency.
27. Ol'ertime. extro-poy shift. and
l11uJtishlft premiums.. Premiums for overtime.
extra'pay shifts, and multishift work lire
nUowalJlll ouly with thll prior approval of the
llwanling ajancy except:
a. When neceslIaryto cope with
emergencies, such as those resulting from
a..;cidents, nalural dJsasters, breakdownll of
equipment, or oCl:asional operational
. bottlenecks of a sporadic natuce.
b. When employees are pet'fonnin8 inuirect
functions such as 3llminislration.
maintenance, or accounting.
c. In the performance of tesls. laboratory
proceduces. or other similar operations which
. <lre continuous in nature and cantiUC
reasonably be interrupted or otherwise
contpletp.d.
d. When luwer overall cosl to the
Government will result.
29, Pase charge~ in proft!ssional journals.
Page ch.t.rges fur professional joumal
publications are allowable as a necesslIry
pari of ~earch co.ts. where:
a. The research papel'll report work
supported by the Government: and
b. The charges are levied Impartially on all
research papers published by the journlll.
whether or not by Govemment.sponsored
aulhors.
29. Participatlt suppart costs. Participant
support costs are direct costs Cor items such
as stipends or subiistence allowances, travel
allowances. nnd registrallon fees paid to or
on behalf of pilrticipants or trainees (but not
employees) in connection with meelings,
conferences. symposia. or training projects.
These costs are allowable with the prior
approval of Ihe awarding agency.
30. Patent costs.
a. Cosls of(iJ preparing d1sclosuces,
reports. and other docwnents required by the
award and of searching the art to the extend
necessary to maka such disclosures. (Ii)
preparing documents and any other patent
costs in connection with the filln8 and
prosecution of a United states patent
application where title or royalty.free license
is required by the Govemment to be .
conveyed to the Government, and (iii) general
counieling services relating to patent and
copyright matten, such as advice on patent
and copyright laws. regulations. clauses. and
en1ployee agreements are ..Ilowable (but Bee
parairaph 34J.
b. Cost of preparin8 disclosures, reports,
and other documents and of searching the art
10 the extent necessary to make disclosures,
ifnol required [,y the award, are
unallowable. Costs in connection with (i)
filil1g and prosecuting any foreisn patent
application, or (ii) ;;my United 51'!tes patenl
application, where the award does not
require conveyinlllille or a royalty-free
license 10 the Government, are unallowable
(also see paragr:Jph 43).
31. Pension pluns. See paragr:Jph 6. g.
32, Plant security costs. Necessary
expenses incurred to coniply with
Gvvernment security requirements or for
Lu;ilities protection, including wases,
uniforms, llnJ equipmenl of personnel are
lI11owabJe.
:l3. PreawlJrd costs, Preawatd 'cosls Bre
those incurred prior 10 the effective dale of
the aw'arcl directly pursuant to the
negotiation and in anticipation of the a ward
wherl< such costs is neCllSsary 10 comply with
the i'roposed delivery schedule or period of
performance. Such cosls are allowable onl1
to the extent that :hey would have bee!!
allowabla if incurred after the dale of the
award !tnd only with thO! written approval of
tJ1e aWlIJ'ding agency..<; .c.
34. profe.9sional s8rvice coSts. '
a. Costs of professional and consultant
services rendered by persona who are
members of a'particular profesaion or pOS5e:!08
a special skill, and who ere not officers or
employees of the orgawZdlion. are allowable,
subject to b, c, and d, or this jlluagraph whim
reasonable in relation to the services
rendered and when not contingent upon
recovery of the cosls from the GovernmenL
b. In determing the allowability of costs in
a partic1,tlar calle. no sin~e factor or any
special combination of factors i3 necessarily
delerminative. However, the folJowil18
factors are relevant: , ,.
(1) The natuce and scope' olthe servicil
rendered in relation to the &<<Vice requirt:d.
(2) The necessity of contracting for the
service, considering the organization's
ca pi! bilily in the particular area.
(3) The past patlem of such costs,
particularly in the years prio~to Government
awards. '. '.,
(4) The impact of Govemment awards on
the organization's business (I.e.. what new
problems have atisen).
(5) Whether the pruportion of Govemml<llt
worK 10 the organization's total business is
slIch as to influence the organization in favor
of incurrin8 the cost, particularly where the
services rendered are not of a continuing
nature and have litlle ralationship to work
undar Government granls and contracts,
(6) Whether the service can be performed
more economically by direct employment
rather than contracting.~-, ,_'
(7) The qualifications of the individual or
concern rendering' the service and the
customary fees charged, espedally on non-
Government awards. :....'..,.
(8) Adequacy of the contractual agreemeat
for the service (e.g., dl!9cription of the service.
. estimate of time required. rate -of,'
compensation. and termination provisions).
c. In addition to the factors in paragraph b
above, retainer fees to the allowable must be
supported by evidence of bona fide services
available or rendered.' .
d. Cost of legal. accounting. and consulting
services, and relaled costs incurred in
connection with defense uf antitrust suil.:l.
and the prflsecution of claims againllt the
Govemenent, are unallowable. Costs of legal.
accounlir.g and consulting services, and
related costs, incurred in connection with
patent infringement Ii ligR lion. or:;lanizalion
anu reorganization, are unallowable unless
otherwise provided for in the award (but see
paragraph 47e).
35. Profits and losses on dispositiofl of
depreciable property or ather capital assets.
a. (1) Gains and losses on sale, retirement.
- or other disposition of depreciable properly
shull be ineluded in the year in which they
occur as Gredits or charge!lto cosl grouping(s)
H-IO
in which the deprt:ciation applicable to such
property was included. The amount of the
gain or lu~s 10 be included as a credit or
charge to Ihe appropriate cost grouping(s)
shall b.. the difference between the amount
realized on the property and the
llm!Hpr<!cialed basis of the properly. "
(2) Ciiins and losses nn the disposition of
depreciaule property shall not be recognized
as a separate credit or charge under the "
following conditions" " '.
(a) The gain or loss i3 processed through a
depreciatiun reserve account amI is reflectl<d
in the depreciation allowable under" .--:
paragraph 9. "
(bJ The property is given in exchanlle u
part of the purchall8 price of a similar item
and the gain or loss ill taken inlo account in
determining the depreciation Cost ballis of the
new ileTlL
(c) A 1011:1 results from the Cailuce to .
maintain penni:lllibla iosucance. except as
otherwise provided in para81'apn "!8.a.(3),
(d) Compensation for the use of the
property was provided t1u:ough use
allowances in lieu of depreciation in
accordance with paragraph 9,
(e) Gains and losses arising from mass or
extraordinary sales, retiremenls, or other
dispositions shall be considered on a case-
by-cllse basis.
b. Gains or losses of any nature arising
(:om the sale or exchange of property other
than the property covered in paragraph a.
above shall be excluded in computing award
co~ts. ,
36. Public information service costs. .
a. Public information service costs include
the cost associated wIth pamphll!t9. news
releases, and olher forms of information
services. Such costs are normally incurred to:
(1) Inform or instruct individuals. groups, or
the general public.
(2) Inlerestlndividuals or groups in
participatinr.,jn a service program of the
organization.
(3) Disseminale the results of sponsored
and nonsponsored activities,
b. Public information service costs ara
allowable as direct costs with the prior
approval of the awarding agency. Such cosls
are unallowable as indirect costs.
37. Publication and printing costs.
a. Publication costs include the costs of
printing (including the processes of
composition, plate-making, press work,
bindin8. and the ead products produced by'
such processes I, distribution, promotion.
mailing, and general handling.
b. U these CO!!ts are not identifiable with a
particular cost objective, they should ba
allocated as indirect costs to all benefiting
acth.itie~ of the urganization.
c. Publication and printing costs are
unallowable as direct costs except with the
prior approval of the awarding agency.
d. The cost of page charges in joumals is .
addre5~ed paragraph 28.
38. Reurronflement and altero!iotl costs.
Costs ino::urreJ for ordinary or normal
rearran~ementllnd alteration of facilities are
allOWable. Special arrangement and
alteration cosl~ incurred specifically for the
project are allowable with the prior approval
of the awarding agency.
39. Reconvt1rsion cO.'ts. Costs incurred in
the re~loralion or rehabilitation of tha
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Federal R I jler-I Vol. 45, No. 13Z I Tuesday, Jul} 11980 I Notices
46033
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computers and wind tunnels, are allowable
prov.ided the charges for the sl!rvices medt
the condi lions of either b. or c. of this
paragraph and. in addition. take into account .
ilny items of income or Federal financing that
qualify as applicable credits under paragraph
A.5. of Allachmp.nt A.
b. The costs or slIch services, wh.m
material. must be charged directly to
applicable awards bastld on actual usage of
the services on the basis of a schedule of
rales or established methodology that (i) does
not discriminate against federally supported
activities of the organizatinn. including usage
by the organization for internal purposes, and
(ii) is designed to recover only the aggregale
costs of the services. The costs of each
service shall consist nonnally of both its
direct COllts and its allocable share of all
indirect costs. Advance agreements pursuant
to paragraph A.6. of Allachmenl A are
particularly important in this situation,
c. Where the cO,sls incurred for a service
are not material. they may be allocated as
indirect cosls.
46. Taxes,'
a. In general. taxes which the organization
is required to ,pay and which are paid or
accrued in accordance .with generally
accepted accounting principles, and
payments made to local governments in lieu
of taxes which Bre commensurale with the
localgovemment services received are
'. allowable, except for (i) taxes from which
exemptions are available to the organization
dirlldly or which are available to the
organization based on an exemption afforded
the Government and in the latler case when
the awarding agency makes available the
necessary exemption certificates, (ii) special
assessments on land which l'llpresent capilal
improvements, and (iii; Federal income taxes,
,b. Any refund of hlXCtS, and any payment 10
the organization of intel'llst thereon, which
were allowed as award coats, will be
crediled either as a cost reduction or cash
refund. as approprlale, to the Government.
47. Termination casts. Termination of
awards generally give rise to the incurrence
oCcosts, or the need for special trealment of
costs, which would not have arisen had the
award not been tenninated. Cost principles
covering these items are set forth below.
They are to be used in conjunction with the
othl!r provisions of this Circular in
termination situations.
a. Common items. The cost of items ,
reasonably usable on the organization's other
work shall not be allowable unless the
organization submits evidence that it would
nut relain such items at cost wi:hout
sustaining a los5. In deciding whetht!r such
items arp. reasunably usable on other work of
the organization, the awarding agency should
consider the organization's plans and orders
for current and 9chllduled activily.
Contemporaneous purchases of common
items by the organization shall be regarded
liS evidence Ihal such items are reasonably
usable on the organizalion's other work, Any
acceptance of common it~ms as allocable to
the terminated portion of the award shall be
I\mitl!d tu the extent that the quantities of
such items on hand, in transit, and on order
are in excess of the reasonable quantitative
requirements of other work.
b. Costs cantinuiJIg after termination. If in
a pal.ticular case. despite all reasonable
efforts by the organi~tion, certain costs
cannot be discontinued inunediately after the
effective dale of termination. such costs are
generally allowlible within the limitalions set
forth in this Circular. except thai any such
costs~ontinuin~ after termination due 10 the
negligent at willful failure of the organizatiun
to disconlinue such costs shall be
unallowable.
c. Loss of u.geful value, Loss of use Cui value
of special tooling. machinery and equipment
which was not charged to the award as a
capilalexpenditure is generally allowable if:
(1) Such special tooling. machinery. or
equipment is not reasonably capable of use in
the other work of the organization.
(2) The Interest of the Government is
protected by transfer of title or by other
means deemed appropriate by the awarding
agency;
d. Renta/cosls. Rental costs under
unexpired leases are generally allowable
where clearly shown to have been
reasonably necessary for the perfonnance of
the terminaled award less the residual value
of such leases. if (i) the amount of such rental
claimlld does not exceed the reasonable use
value of the properly leased for the period of
the award and such further period as m"y be
Masonable. and (ii) the organization makes
aU reasonable efforts to terminate. aSlIign,
settle. or otherwille reduce the cost of such
lease. There also may be included Ihe cosl of
alterations of such leased property. provided
such alterations were necessary for the
performance of the award, and of reasonllble
resloration required by the provisions of the
lease,
e. Settlement expenses. Sftt1lement
expenses including the following are
generally allowable:
(1) Accounting. legal, cleriCal, and similar
cosls reasonably necessary for.
(a) The-preparation and presentation to
awarding agency of settlement claims and
supporting data with respect to the
tenninated portion of the award. unIess the
tenninl1tion is for derault. (See paragraph 4.a.
of AttachmentL, OMB Circular NO. A-llO;
and -
(b) The tenninatlon and settlement of
subaward.s. '
(2) Reasonable costs for the storage.
tran>lportation. protection. and disposition of
property provided by the Government or
acquired or produced for the awan:!: except
when grantees are reimbursed for disposals
at a predetermined amounl in accordance
with AUlIchment N of OMB Circular A-I1o.
(3) Indirect costs related to salaries and
W8:-les incurred as settlement expenses in
subparagrallhll (1) and (2) of this paragraph.
Nonnally, such indirect cosu shall be limited
to frinRe benefils. occupancy cost. aDd
immediate supervision.
f. Claims under slIbawards. Claims under
subawaros. including the allocable portion of
claims which are conunon to the award, and
to other work of the organization are"
generally allowable. An appropriate share of
the organization's indirect expense may be
allocatp.d to the amount of settlements with
subcontractor/subgrantees; provided that the
amounl allocated is otherwise consistent
H-12
with tall basic guidelines contained in
Atlachment A. The indirect expense so
allocated shall exclude the same amI similar ""
costs claimed directly or indirectly as
settlement expenses,
4& TruiJUng and education cos18.
a. Costs of preparation and maintenance of
a proHl'am of instruction including but not
Iimiltld to on-thl!-job, claSllroom, and
apprenticeship training. designed to increase
the vocational effectivenesa oC employees.
including training malerials, textbooks.
_ sa larie,s ur wages of trainees (el(cluding
overtime compen.ialion which might arise
therefrom). aud (i) salariea of the dUector of
training and staff when the training program
is conducted by the organization; or Iii)
tuition unu fees when the training ill in an
institution not operated by tha organization.
are allowable.
b. Cosla of part-time education. at an
undergraduate or postgraduate college level,
including that provided at the ol-ganization's
own facilities, are allowlible only when the
course or degree pursued ia relative to the
field in which the employee ia now wOI'king
or may reasonably be expected to work. Ulld
are limi~ed to:
(1) Training materials.
,(2) Tel(tbooks.
(3) Fees charges by the educational
institution.
(4) Tuition charged by the educational
institution. or in lieu of tuition. inslnictors'
salaries and the related share or indirect
Cosls of the educational institution to tha
exhml Ihal the sum thereof is not in excess of
the tuition which would have ben pdid 10 the
participaliog educational institution.
(5). Salaries and rp.lated costs of inslnictors
who are employees of the organirzation.
(6) Straight-lime compeoaati9n of each
employee for time spent attending classes
during working hours not in excess of 156
hours per year and only to the extent that
circumstances do not permit the operation of
classes or attendance at claHea after regular
working hours; otherwise such c:ompellJlatioD
is unallowable.
c. Costs oftuition, fees, lniining malerials,
and textbooks (but DOt 8ubsistence. salary. or
any other emoluments) in connection with
full-time education. including that provided at
the organiza tion' a own facili ties, a I a
postgraduate (but not undergraduate) college
level, are allowable only when the course or
degree pursued is related to the field in which
the employee is now working or may
reasonably be el(pected 10 work. and only
where the costa receive'the prior lIpproval of
the awarding agency. Such costs are Iimiteu
to the custs attributable to a total period not
to exceed one school year for each employee
so trained. In unusual casas the period may
be extended.
d. COSIS of allendance of up to 16 weeks
per employee per year at specialized
programs specifically designed to enhance
Ihe efCei:tivenes8 of executives or m"na:;<ers
or to prepare employees for such positions
are allowable. Such costs include enrollment
fees, training materials, textbooks and
related chllrges. employees' 8alaries.
sub>tistence, and travel. Costs allowl\ble
under this paragraph do not include those for
courses thai are part of a ~riented