DoD R&D Terms and Conditions_MAR2025.pdf

DoD R&D General Terms and Conditions

MARCH 2025

Table of Contents

Table of Contents

Preamble Introduction Applicability Order of Precedence Award Acceptance English Language Plain Language Reserved Provisions Definitions Feedback on the Terms and Conditions

Part 1: Financial and Program Management

FMS Article I. Financial management system standards. (JANUARY 2021) Section A. System standard for States.:

Section B. System standards for all recipients………………………………………………………..

Section C. Internal controls

FMS Article II. Payments. (OCTOBER 2024) Section A. Awards to States. .:

Section B. Awards to institutions of higher education, nonprofit organizations, local governments, Indian tribes, and for-profit entities Section C. Electronic funds transfer and other payment procedural instructions or information

FMS Article III. Allowable costs, period of availability of funds, and fee or profit. (SEPTEMBER 2017)14 Section A. Allowable costs Section B. Clarifications concerning charges for professional journal publications Section C. Period of availability of funds. .:

Section D. Fee or profit

FMS Article IV. Revision of budget and program plans. (OCTOBER 2024) Section A. Approved budget Section B. Revisions requiring prior approval from the Grants Officer Section C. Pre-award costs Section D. Procedures

FMS Article V. Non-Federal audits. (OCTOBER 2024) Section A. Requirements for entities subject to the Single Audit Act Section B. Requirements for for-profit entities

FMS Article VI. Cost sharing or matching. (SEPTEMBER 2023) Section A. Required cost sharing or matching Section B. Allowability as cost sharing or matching.:

Section C. Allowability of unrecovered indirect costs as cost sharing or matching Section D. Allowability of program income as cost sharing or matching Section E. Valuation of services or property that you or subrecipients contribute or donate Section F. Valuation of third-party in-kind contributions

FMS Article VII. Program income. (SEPTEMBER 2017) Section A. Definition. The term “program income” as used in this award:

Section B. Encouragement to earn program income Section C. Costs of generating program income Section D. License fees and royalties Section E. Use of program income Section F. Duration of accountability for program income

Part 2: Property Administration

PROP Article I. Title to property. (OCTOBER 2024) Section A. Title to property acquired under this award Section B. Property trust relationship Section C. Federally owned property Section D. Federal interest in donated real property or equipment Section E. Federal interest in property improved under the award

PROP Article II. Property management system. (OCTOBER 2024) Section A. Insurance coverage for real property and equipment Section B. Other management system standards for a State Section C. Other management system standards for an institution of higher education, nonprofit organization, local government, Indian tribe, or for-profit entity

PROP Article III. Use and disposition of real property. (OCTOBER 2024) Section A. Use of real property Section B. Disposition of real property.:

Section C. Appraisals

PROP Article IV. Use and disposition of equipment and supplies. (OCTOBER 2024) Section A. Property subject to this article Section B. Requirements for a State’s use and disposition of equipment Section C. Use of equipment by an institution of higher education, nonprofit organization, local government, Indian tribe, or for-profit entity Section D. Disposition of equipment by an institution of higher education, nonprofit organization, local government, Indian tribe, or for-profit entity Section E. Use and disposition of supplies acquired under this award

PROP Article V. Use and disposition of federally owned property. (SEPTEMBER 2017) Section A. Use Section B. Disposition.:

PROP Article VI. Intangible property. (SEPTEMBER 2023) Section A. Assertion of copyright

Section B. Inventions developed under the award Section C. Data produced under the award Section D. Use and disposition of intangible property acquired, but not developed or produced, under the award

Part 3: Procurement

PROC Article I. Procurement standards for States. (JANUARY 2021) Section A. Use of State procurement system Section B. Procurement of recovered materials Section C. Debarment and suspension Section D. Contract provisions

PROC Article II. Procurement standards for Indian Tribes (OCTOBER 2024) Section A. Use of Tribal procurement system Section B. Debarment and suspension Section C. Contract provisions

PROC Article III. Procurement standards for institutions of higher education, nonprofit organizations, local governments, and for-profit entities. (OCTOBER 2024)

Section A. General procurement standards Section B. Competition Section C. Procurement methods Section D. Contracting with small businesses, minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms Section E. Contract cost and price Section F. Contract provisions Section G. Procurement of recovered materials Section H. Review of procurement documents. Upon our request, you must make available:

PROC Article IV. Contract provisions for recipient procurements. (OCTOBER 2024) Section A. Contract provisions for administrative requirements Section B. Contract provisions for national policy requirements

Part 4: Financial, Programmatic, and Property Reporting

REP Article I. Performance management, monitoring, and reporting. (SEPTEMBER 2023) Section A. Required reporting form, format, or data elements for interim and final performance reports Section B. Frequency, reporting periods, and due dates for interim performance reports Section C. Due date and reporting period for final performance report Section D. Extensions of due dates… Section E. Reporting significant developments Section F. Performance reporting procedures Section G. Site visits

REP Article II. Financial reporting. (OCTOBER 2024) Section A. Required reporting form, format, or data elements for interim and final financial reports.

Section B. Interim financial reports

Section C. Final financial report Section D. Extensions of due dates Section E. Where and how to submit financial reports

REP Article III. Reporting on property. (SEPTEMBER 2017) Section A. Real property Section B. Equipment and supplies Section C. Federally owned property Section D. Intangible property

REP Article IV. Reporting on subawards and executive compensation. (JANUARY 2021)

Part 5: Other Administrative Requirements

OAR Article I. Submitting and maintaining recipient information. (JANUARY 2021) Section A. System for Award Management Section B. Reporting of Performance and Integrity Information Section C. Disclosure of evidence of integrity-related issues

OAR Article II. Records retention and access. (OCTOBER 2024) Section A. Records retention period Section B. Extensions of retention period due to litigation, claim, or audit Section C. Records for program income earned after the end of the performance period Section D. Records for joint or long-term use Section E. Methods for collecting, transmitting, and storing information Section F. Access to records

OAR Article III. Remedies and termination. (MARCH 2025) Section A. Noncompliance with award terms and conditions Section B. Remedies for noncompliance Section C. Termination Section D. Effects of suspension or termination of the award on allowability of costs

OAR Article IV. Claims, disputes, and appeals. (SEPTEMBER 2023) Section A. Definitions Section B. Submission of claims Section C. Alternative dispute resolution Section D. Grants officer decisions for claims you submit Section E. Formal administrative appeals Section F. Representation Section G. Non-exclusivity of remedies Section H. Effect of Grant Appeal Authority’s decision

OAR Article V. Collection of amounts due. (OCTOBER 2024) Section A. Establishing a debt Section B. Debt delinquency and appeals Section C. Collection of amounts due

OAR Article VI. Closeout. (OCTOBER 2024) Section A. Liquidation of financial obligations Section B. Refunds of unobligated balances

Section C. Final reports Section D. Accounting for property Section E. Delinquent Final Reports and Timeframe for Closeout

OAR Article VII. Post-closeout adjustments and continuing responsibilities. (SEPTEMBER 2023) Section A. Adjustments. T Section B. Continuing responsibilities

Part 6: Subawards

SUB Article I. Distinguishing subawards and procurements. (SEPTEMBER 2017) Section A. Required recipient determination Section B. Considerations in making the determination Section C. Effect of the determination on the next-tier transaction

SUB Article II. Pre-award and time of award responsibilities. (OCTOBER 2024) Section A. Requirements for unique entity identifiers Section B. Pre-award risk assessment Section C. Subaward content Section D. Subaward and executive compensation reporting Section E. Required financial certification

SUB Article III. Informational content of subawards. (OCTOBER 2024) Section A. Informational content in general Section B. Federal award identification number and award date Section C. Amount of Federal funds obligated Section D. Total amount obligated to the subrecipient Section E. Total Amount of the Federal Award Section F. Federal awarding agency, pass-through entity, and awarding official Section G. Indirect cost rate

SUB Article IV. Financial and program management requirements for subawards. (SEPTEMBER 2023)64 Section A. Purposes of this article in relation to other articles Section B. Financial management system standards Section C. Payments Section D. Allowable costs, period of availability of funds, and fee and profit Section E. Revision of budget and program plans Section F. Non-Federal audits Section G. Cost sharing or matching requirements Section H. Program income.:

SUB Article V. Property requirements for subawards. (OCTOBER 2024) Section A. Purposes of this article in relation to other articles Section B. Title to property Section C. Property management system Section D. Use and disposition of real property Section E. Appraisals. . … Section F. Use and disposition of equipment and supplies Section F. Use and disposition of federally owned property Section G. Intangible property

Section H. Disposition of residual supplies acquired under this award

SUB Article VI. Procurement procedures to include in subawards. (SEPTEMBER 2023) Section A. Purposes of this article in relation to other articles Section B. Subaward to a State. In any subaward that you make to a State, you must include the requirements of PROC Article I and applicable sections of PROC Article III of this award Section C. Subaward to an institution of higher education, nonprofit organization, local government, Indian tribe, or for-profit entity

SUB Article VII. Financial, programmatic, and property reporting requirements for subawards.

(SEPTEMBER 2017)

Section A. Purposes of this article in relation to other articles Section B. Performance reporting Section C. Financial reporting Section D. Reporting on property

SUB Article VIII. Other administrative requirements for subawards. (OCTOBER 2024) Section A. Purposes of this article in relation to other articles Section B. Submission and maintenance of subrecipient information Section C. Records retention and access Section D. Remedies and termination Section E. Disputes, hearings, and appeals Section F. Collection of amounts due Section G. Closeout Section H. Post-closeout adjustments and continuing responsibilities

SUB Article IX. National policy requirements for subawards. (September 2021) Section A. General Section B. Nondiscrimination national policy requirements Section C. Environmental national policy requirements Section D. National policy requirements concerning live organisms Section E. Other national policy requirements

SUB Article X. Subrecipient monitoring and other post-award administration. (OCTOBER 2024) Section A. General requirement for subrecipient monitoring Section B. Subrecipient monitoring actions Section C. Remedies and subaward suspension or termination Section D. Subaward closeout

SUB Article XI. Requirements concerning subrecipients’ lower tier subawards. (SEPTEMBER 2017) ... 78 Section A. Purpose Section B. Requirements for lower tier subawards

SUB Article XII. Fixed amount subawards. (OCTOBER 2024) Section A. Limitations on use Section B. Fixed-amount subawards that do not require prior approval to institutions of higher education, nonprofit organizations, for-profit organizations, States, local governments, or Indian tribes Section C. Informational content of fixed amount subawards Section D. Terms and conditions addressing administrative requirements Section E. National policy requirements for fixed amount subawards

Section F. Subrecipient monitoring and other post-award administration Section G. Fixed-amount subawards at lower tiers

Part 7: National Policy Requirements

NP Article I. Nondiscrimination national policy requirements. (SEPTEMBER 2023) Section A. Cross-cutting nondiscrimination requirements Section B. Other nondiscrimination requirements

NP Article II. Environmental national policy requirements. (JANUARY 2021) Section A. Cross-cutting environmental requirements Section B. Other environmental requirements

NP Article III. National policy requirements concerning live organisms. (JANUARY 2021) Section A. Cross-cutting requirements concerning live organisms

Section B. Failure to comply Section C. Other requirements concerning live organisms

NP Article IV. Other national policy requirements. (September 2021) Section A. Cross-cutting requirements Section B. Additional requirements

Preamble Introduction

This award is subject to the following Department of Defense (DoD) Research and Development (R&D) General Terms and Conditions. These general terms and conditions implement Office of Management and Budget (OMB) guidance, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” published in the Code of Federal Regulations (CFR) at 2 CFR part 200 and implemented by the DoD at 2 CFR part 1104, “Interim Grants and Cooperative Agreements Implementation of Guidance in 2 CFR part 200” (79 FR 76047, December 19, 2014, as amended at 85 FR 49506, August 13, 2020).

Applicability

These general terms and conditions apply to DoD grants and cooperative agreements for R&D with institutions of higher education, nonprofit organizations, States, local governments, Indian tribes, and for-profit entities. They also apply when incorporated into DoD grants or cooperative agreements for R&D with foreign organizations or foreign public entities (as defined in 2 CFR part 1108). These general terms and conditions do not apply to DoD Grants and cooperative agreements for R&D made directly to individuals. Certain provisions within these general terms and conditions may indicate that they apply to certain types of recipients only. An example of this is FMS Article V for non-Federal audits.

Order of Precedence

Any inconsistencies in the requirements of this award will be resolved in the following order:

(1) Federal statutes

(2) Federal regulations* not otherwise referenced herein

(3) Award-specific terms and conditions

(4) General Terms and Conditions, which include this document, the DoD Component’s

Addendum to this document, and the DoD Component’s Programmatic Requirements.

Award Acceptance

The DoD Component will select which of the following methods of acceptance it requires:

(1) If you receive an award from a DoD Component that is signed by a grants officer without your entity having also signed the award, that means the award does not require your signature to indicate acceptance of the award. Rather, your acceptance of the award in such instances, including the terms and conditions, occurs when you initiate performance under this award. Therefore, if you disagree with any requirements of this award, you must contact the grants officer prior to initiating performance in order to resolve the issue.

(2) If you receive an unsigned award from a DoD Component, that means that you are required to sign the award to indicate acceptance of the award, including the terms and conditions, prior to initiating performance. The grants officer will sign the award upon receipt of your signature.

English Language

You must translate any of the award content (including attachments to it and any material incorporated into the award by reference) into another language only to the extent that your compliance with the award’s terms and conditions depends upon a significant number of your employees who are not fluent in English being able to read and comprehend that content. If you translate any award content into another language, the original award content in the English language will take precedence in the event of an inconsistency between the award requirements in the English and translated versions.

Plain Language

These general terms and conditions use plain language, with use of personal pronouns such as “you” to denote the recipient and “we” to mean the Federal Government (Government). Use of personal pronouns is a recognized means to help a reader understand to whom the language is addressed and assist in determining responsibilities.

Reserved Provisions

If the words “RESERVED – Not Applicable” are used at the section or paragraph level of an article without additional explanation, it means that this particular section or paragraph does not apply in any manner to this award. If the word “RESERVED” is used with additional explanation (in bold red colored font), it will describe whether the particular provisions either will or may be included in a DoD Component addendum to these terms and conditions.

Definitions

The definitions of terms used in the DoD R&D General Terms and Conditions are in accordance with 2 CFR part 1108 of the DoDGARs or, for terms not defined in the DoDGARs, 2 CFR 200.1. Part 8 of the general terms and conditions may use a term in relation to compliance with a national policy requirement in a statute, Executive order, or other source that defines the term differently than it is defined in 2 CFR part 1108. For purposes of that particular national policy requirement, the definition of a term provided by the source of the requirement and any regulation specifically implementing it takes precedence over the definition in 2 CFR part 1108.

Feedback on the Terms and Conditions

As you gain operating experience with these general terms and conditions, you may find areas requiring clarification or correction. Alerting us to potential issues will help us improve both these general terms and conditions and DoD’s regulatory implementation of the OMB guidance at 2 CFR part 200.

Part 1: Financial and Program Management (articles from this part are designated with “FMS” in the article title)

FMS Article I. Financial management system standards. (JANUARY 2021) Section A. System standard for States. As a State, you must expend and account for funds under this award in accordance with:

1. Applicable State laws; and

2. To the extent they comply with the requirements of Section B of this Article, your procedures for expending and accounting for your own State funds.

Section B. System standards for all recipients. Your financial management system must provide for:

1. Inclusion, in your accounts, of the following information about each DoD grant or cooperative agreement that you receive:

a. That you received the award from the Department of Defense;

b. The number and title listed in the Assistance Listing (formerly the Catalog of Federal Domestic Assistance) for the DoD program under which the award was made;

c. The DoD award number; and

d. The year (your fiscal year) in which you received the award.

2. Accurate, current, and complete disclosure of the financial results of the award needed to comply with financial and programmatic reporting requirements that are specified in REP Articles I and II of these general terms and conditions, as supplemented by any award-specific terms and conditions of this award concerning reporting requirements. If you are asked at any time under this award to report financial information on an accrual basis, you:

a. Need not establish an accrual accounting system if you maintain your records on a different basis;

and

b. May develop the accrual data based on an analysis of the data you have on hand.

3. Records that identify adequately the sources of funds for all activities funded by DoD awards, including any required cost sharing or matching, and the application of those funds. This includes funding authorizations; your financial obligations and expenditures of the funds; unobligated balances; property and other assets under the award; program income; and interest.

4. Effective control over, and accountability for, all funds, property, and other assets under this award.

You must adequately safeguard all assets and assure they are used solely for authorized purposes (see Section C of this article for additional requirements concerning internal controls).

5. Comparison of expenditures under this award for project or program purposes with amounts in the approved budget for those purposes.

6. RESERVED – Not Applicable.

7. Written procedures:

a. To implement requirements specified in FMS Article II, “Payments;”

b. For determining the allowability of costs, which for this award are determined in accordance with FMS Article III, “Allowable costs, period of availability of funds, and fee or profit,” of these general terms and conditions, as supplemented by any award-specific terms and conditions of this award that relate to allowability of costs.

Section C. Internal controls. Your system of internal controls must conform to OMB guidance in 2 CFR

200.303. With respect to paragraph (e) of 2 CFR 200.303, your internal control system must include measures to safeguard any information that Federal statute, Executive order, or regulation requires to be protected (e.g., personally identifiable or export-controlled information), whether generated under the award or provided to you and identified as being subject to protection.

FMS Article II. Payments. (OCTOBER 2024)

Section A. Awards to States. If the award-specific terms and conditions of this award do not identify it as an award subject to Subpart A of 31 CFR part 205 (Department of the Treasury regulations implementing the Cash Management Improvement Act), then this award is subject to Subpart B of that part. Consistent with Subpart B of 31 CFR part 205:

1. Payment method, timing, and amounts. You must:

a. Minimize the time between your receipt of a payment under this award and your disbursement of those funds for project or program purposes.

b. Limit the amount of each advance payment request to the minimum amount you need to meet your actual, immediate cash requirements for carrying out the project or program.

c. Submit each advance payment request approximately 10 days before you anticipate disbursing the requested amount for project or program purposes, so that your receipt of the funds will be as close in time as is administratively feasible to your actual cash outlay for direct project or program costs and the proportionate share of any allowable indirect costs.

2. Interest. Unlike awards subject to Subpart A of 31 CFR part 205, neither you nor we will incur any interest liability due to a difference in timing between your receipt of payments under this award and your disbursement of those funds for project or program purposes.

a. You are required to return all interest in excess of $500 per year to the Federal government via the Payment Management System (PMS) regardless of whether you were paid through the

PMS.

i. Instruction for returning interest can be found at https://pms.psc.gov/grant-recipients/returning-funds-interest.html.

Section B. Awards to institutions of higher education, nonprofit organizations, local governments, Indian tribes, and for-profit entities.

2. Payment method. Unless the award-specific terms and conditions of this award provide otherwise, you are authorized to request advance payments under this award. That authorization is contingent on your continuing to maintain, or demonstrating the willingness to maintain, written procedures that minimize the time elapsing between your receipt of each payment and your disbursement of the funds for project or program purposes. Note that you are not required to request advance payments and may instead, at your option, request reimbursements of funds after you disburse them for project or program purposes.

3. Amounts requested. You must:

a. Limit the amount of any advance payment request to the minimum amount needed to meet your actual, immediate cash requirements for carrying out the purpose of the approved project or program, including direct project costs and a proportionate share of any allowable indirect costs.

b. Exclude from any payment request amounts you are withholding from payments to contractors to assure satisfactory completion of the work. You may request those amounts when you make the payments to the contractors or to escrow accounts established to assure satisfactory completion of the work.

c. Exclude from any payment request amounts from any of the following sources that are available to you for project or program purposes under this award: program income, including repayments to a revolving fund; rebates; refunds; contract settlements; audit recoveries; and interest earned on any of those funds. You must disburse those funds for project or program purposes before requesting additional funds from us.

4. Timing of requests. For any advance payment you request, you should submit the request approximately 10 days before you anticipate disbursing the requested amount for project or program purposes. With time for agency processing of the request, that should result in payment as close as is administratively feasible to your actual disbursements for project or program purposes.

5. Frequency of requests. You may request payments as often as you wish unless you have been granted a waiver from requirements to receive payments by electronic funds transfer (EFT). If you https://pms.psc.gov/grant-recipients/returning-funds-interest.html https://pms.psc.gov/grant-recipients/returning-funds-interest.html have been granted a waiver from EFT requirements, the award-specific terms and conditions of this award specify the frequency with which you may submit payment requests.

6. Withholding of payments. We will withhold payments for allowable costs under the award at any time during the period of performance only if one or more of the following applies:

a. We suspend either payments or the award, or disallow otherwise allowable costs, as a remedy under OAR Article III due to your failure to comply with Federal statutes, regulations, or the terms and conditions of this award. If we suspend payments and not the award, we will release withheld payments upon your subsequent compliance. If we suspend the award, then amounts of payments are subject to adjustment in accordance with the terms and conditions of OAR Article

III.

b. You are delinquent in a debt to the United States, in which case we may, after reasonable notice, inform you that we will not make any further payments for costs you incurred after a specified date until you correct the conditions or liquidate the indebtedness to the Federal Government.

c. The award-specific terms and conditions include additional requirements that provide for withholding of payments based on conditions identified during our pre-award risk evaluation, in which case you should have been notified about the nature of those conditions and the actions needed to remove the additional requirements.

7. Depository requirements.

a. There are no eligibility requirements for depositories you use for funds you receive under this award.

b. You are not required to deposit funds you receive under this award in a depository account separate from accounts in which you deposit other funds. However, FMS Article I requires that you be able to account for the receipt, obligation, and expenditure of all funds under this award.

c. You must deposit any advance payments of funds you receive under this award in insured accounts whenever possible and, unless any of the following apply, you must deposit them in interest-bearing accounts:

i. You receive a total of less than $250,000 per year under Federal grants and cooperative agreements.

ii. You would not expect the best reasonably available interest-bearing account to earn interest in excess of $500 per year on your cash balances of advance payments under Federal grants and cooperative agreements.

iii. The best reasonably available interest-bearing account would require you to maintain an average or minimum balance higher than it would be feasible for you to do within your expected Federal and non-Federal cash balances.

iv. A foreign government or banking system precludes your use of interest-bearing accounts.

d. You may retain for administrative expenses up to $500 per year of interest that you earn in the aggregate on advance payments you receive under this award and other Federal grants and cooperative agreements. You must remit annually the rest of the interest to the Department of Health and Human Services, Payment Management System, using the procedures set forth in OMB guidance in 2 CFR 200.305 (b)(9).

Section C. Electronic funds transfer and other payment procedural instructions or information.

1. Electronic funds transfer. Unless the award-specific terms and conditions of this award provide otherwise, you will receive payments under this award by electronic funds transfer.

2. RESERVED – See Language in DoD Component addendum to these terms and conditions.

FMS Article III. Allowable costs, period of availability of funds, and fee or profit.

(SEPTEMBER 2017)

Section A. Allowable costs. This section, with the clarification provided in Section B, specifies which Federal cost principles must be used in determining the allowability of costs charged to this award, a subrecipient’s costs charged to any cost-type subaward that you make under this award, and a contractor’s costs charged to any cost-type procurement transaction into which you enter under this award. These cost principles also govern the allowable costs that you or a subrecipient of a subaward at any tier below this award may consider when establishing the amount of any fixed-amount subaward or fixed-price procurement transaction at the next lower tier. The set of cost principles to be used in each case depends on the type of entity incurring the cost under the award, subaward, or contract.

1. General case. If you, your subrecipient, or your contractor is:

a. An institution of higher education. The allowability of costs must be determined in accordance with provisions of Subpart E of OMB guidance in 2 CFR part 200 other than 2 CFR 200.400(g), supplemented by appendix III to that part.

b. A hospital. The allowability of costs must be determined in accordance with provisions of appendix IX to 2 CFR part 200, which currently specifies the cost principles in appendix IX to 45 CFR part 75 as the applicable cost principles.

c. A nonprofit organization other than a hospital or institution of higher education. The allowability of costs must be determined in accordance with provisions of Subpart E of OMB guidance in 2 CFR part 200 other than 2 CFR 200.400(g), supplemented by appendices IV and VIII to that part. In accordance with guidance in 2 CFR 200.401(c), a nonprofit organization listed in appendix VIII to 2 CFR part 200 is subject to the cost principles for for-profit entities specified in paragraph 1.e of this section.

d. A State, local government, or Indian tribe. The allowability of costs must be determined in accordance with applicable provisions of Subpart E of OMB guidance in 2 CFR part 200 other than 2 CFR 200.400(g), supplemented by appendices V through VII to that part.

e. A for-profit entity (other than a hospital) or a nonprofit organization listed in appendix VIII to 2 CFR part 200:

i. The allowability of costs must be determined in accordance with:

(A) The cost principles for commercial organizations in the Federal Acquisition Regulation (FAR) at Subpart 31.2 of 48 CFR part 31, as supplemented by provisions of the Defense Federal Acquisition Regulation Supplement (DFARS) at Subpart 231.2 of 48 CFR part 231; and

(B) For a for-profit entity, the additional provisions on allowability of audit costs, in 32 CFR 34.16(f).

ii. The indirect cost rate to use in that determination is:

(A) The for-profit entity’s federally negotiated indirect cost rate if it has one.

(B) Subject to negotiation between you and the for-profit entity if it does not have a federally negotiated indirect cost rate. The rate that you negotiate may provide for reimbursement only of costs that are allowable in accordance with the cost principles specified in paragraph A.1.e.i of this article.

2. Exception. You may use your own cost principles in determining the allowability of a contractor’s costs charged to a cost-type procurement transaction under this award—or in pricing for a fixed-price contract based on estimated costs—as long as your cost principles comply with the Federal cost principles that paragraph A.1 of this section identifies as applicable to the contractor.

Section B. Clarifications concerning charges for professional journal publications. RESERVED – Not Applicable.

Section C. Period of availability of funds. You may charge to this award only:

1. Allowable costs incurred during the period of performance specified in this award, including any subsequent amendments to it;

2. Any pre-award costs that you are authorized (by either the terms and conditions of FMS Article IV or the DoD awarding official) to incur prior to the start of the period of performance, at your own risk, for purposes of the project or program under this award; and

3. Costs of publishing in professional journals incurred after the period of performance, as permitted under 2 CFR 200.461(b)(3), if:

a. We receive the request for payment for such costs no later than the date on which REP Article II requires you to submit the final financial report to us (or, if we grant your request for an extension of the due date, that later date on which the report is due); and

b. Your reported expenditures on the final financial report include the amount you disbursed for those costs.

Section D. Fee or profit.

1. You may not receive any fee or profit under this award.

2. You may not use funds available to you under this award to pay fee or profit for an entity of any type to which you make a subaward.

3. You may pay fee or profit to an entity with which you enter into a procurement transaction to purchase goods or general support services for your use in carrying out the project or program under the award.

FMS Article IV. Revision of budget and program plans. (OCTOBER 2024)

Section A. Approved budget. The approved budget of this award:

1. Is the most recent version of the budget that you submitted, and we approved (either at the time of the initial award or a more recent amendment), to summarize planned expenditures for the project or program.

2. Includes all Federal funding that we make available to you under this award to use for project or program purposes and any cost sharing or matching that you are required to provide under this award for those same purposes.

Section B. Revisions requiring prior approval from the Grants Officer.

1. You must request Grant Officer prior approval from us for any of the following program or budget revisions in non-construction and construction activities:

a. A change in the scope or objective of the project or program under this award, even if there is no associated budget revision that requires Grants Officer prior approval.

b. A change in a key person named in the award document.

c. The approved principal investigator’s or project director’s disengagement from the project for more than three months, or a 25 percent reduction in his or her time devoted to the project.

d. The inclusion of direct costs that require prior approval in accordance with the applicable cost principles, as identified in FMS Article III.

i. The requirement for prior approval of equipment that is to be used primarily in carrying out the project or program supported by the award is waived for equipment with a unit cost of $25,000 or less.

e. RESERVED – See Language in DoD Component addendum to these terms and conditions.

f. A subaward to another entity under which it will perform a portion of the substantive project or program under the award, if it was not included in the approved budget. This does not apply to your contracts for acquisition of supplies, equipment, or general support services you need to carry out the program.

g. Any change in the cost sharing or matching you provide under the award, as included in the approved budget, for which FMS Article VI requires prior approval.

h. RESERVED – Not Applicable.

i. The need arises for additional Federal funds to complete the project or program.

2. Funding transfers between construction and non-construction activities. RESERVED - Only applicable if provided in DoD Component addendum to these terms and conditions or award specific terms and conditions.

Section C. Pre-award costs, carry forward of unobligated balances, and one-time no-cost extensions.

You are authorized, without requesting prior approval from us, to:

1. Charge to this award after you receive it pre-award costs that you incurred, at your own risk, up to 90 calendar days before the start date of the period of performance, as long as they are costs that would be allowable charges to the project or program under the terms and conditions of FMS Article III if they were incurred during the period of performance.

2. Carry forward an unobligated balance to a subsequent budget period under this award.

3. RESERVED – Only applicable if provided in DoD Component addendum to these terms and conditions.

Section D. Procedures.

1. We will review each request you submit for prior approval for a budget or program change and, within 30 calendar days of our receipt of your request, we will respond to you in writing to either:

a. Notify you whether your request is approved; or

b. Inform you that we still are considering the request, in which case we will let you know when you may expect our decision.

2. RESERVED - See Language in DoD Component addendum to these terms and conditions.

FMS Article V. Non-Federal audits. (OCTOBER 2024)

Section A. Requirements for entities subject to the Single Audit Act. You and each subrecipient under this award that is an institution of higher education, nonprofit organization, State, local government, or Indian tribe must comply with the audit requirements specified in Subpart F of 2 CFR part 200, which is the OMB implementation of the Single Audit Act, as amended (31 U.S.C. chapter 75).

Section B. Requirements for for-profit entities. If you are a for-profit entity, you are subject to the audit requirements specified in 32 CFR 34.16. Any for-profit entity that receives a subaward from you under this award is also subject to those audit requirements. The provisions of 32 CFR 34.16 will be revised to indicate that the audit requirement threshold is $1,000,000 or more of expenditures under federal awards in a year. Your subaward terms and conditions will require the subrecipient to provide the reports to you if it is willing to do so, so that you can resolve audit findings that pertain specifically to your subaward (e. g., disallowance of costs). If the for-profit entity is unwilling to agree to provide the auditor’s report to you, contact the grants officer for this award to discuss an alternative approach for carrying out audit oversight of the subaward. If the grants officer does not provide an alternative approach within 30 days of receiving your request, you may determine an approach to ensure the for-profit subrecipient’s compliance with the subaward terms and conditions, as described in OMB guidance at 2 CFR 200.501(i).

FMS Article VI. Cost sharing or matching. (SEPTEMBER 2023)

Section A. Required cost sharing or matching.

1. If any cost sharing or matching is required under this award, the total amount or percentage required is shown in the award cover pages and included in the approved budget. That cost sharing or matching includes all:

a. Cash and third-party in-kind contributions.

b. Contributions to the project or program made either by or through (if made by a third party) you and any subrecipients.

2. You must obtain Grants Officer prior approval if you wish to:

a. Change the amount or percentage of cost sharing or matching required under this award.

b. RESERVED - Only applicable if provided in DoD Component addendum to theseterms and conditions.

Section B. Allowability as cost sharing or matching. Each cash or third-party in-kind contribution toward nachislc Inserted Text Se any cost sharing or matching required under this award, whether put forward by you or a subrecipient under a subaward that you make, is allowable as cost sharing or matching if:

1. You (or the subrecipient, if it is a subrecipient contribution) maintain records from which one may verify that the contribution was made to the project or program and, if it is a third-party in-kind contribution, its value.

2. The contribution is not counted as cost sharing or matching for any other Federal award.

3. The contribution is:

a. Allowable under the cost principles applicable to you (or the subrecipient, if it is a subrecipient contribution) under FMS Article III of these terms and conditions; and

b. Allocable to the project or program and reasonable.

4. The Government does not pay for the contribution through another Federal award, unless that award is under a program that has a federal statute authorizing application of that program’s Federal funds to other Federal programs’ cost sharing or matching requirements.

5. The value of the contribution is not reimbursed by the Federal share of this award as either a direct or indirect cost.

6. The contribution conforms to the other terms and conditions of this award, including the award specific terms and conditions.

Section C. Allowability of unrecovered indirect costs as cost sharing or matching. You may use your own or a subrecipient’s unrecovered indirect costs as cost sharing or matching under this award.

1. Unrecovered indirect costs mean the difference between the amount of indirect costs charged to the award and the amount that you and any subrecipients could have charged in accordance with your respective approved indirect cost rates, whether those rates are negotiated or de minimis (as described in 2 CFR 200.414(f)).

Section D. Allowability of program income as cost sharing or matching.

1. If FMS Article VII of these general terms and conditions or the award-specific terms and conditions of this award specify that you are to use some or all of the program income you earn to meet cost-sharing or matching requirements under the award, then program income is allowable as cost sharing or matching to the extent specified in those award terms and conditions.

Section E. Valuation of services or property that you or subrecipients contribute or donate.

1. You must establish values for services or property contributed or donated toward cost sharing or matching by you or subrecipients in accordance with the provisions of this section. These contributions or donations are distinct from third-party contributions or donations to you or subrecipients, which are addressed in Section F of this article.

2. Usual valuation of services or property that you or subrecipients contribute or donate. Values established for contributions of services or property by you or a subrecipient must be the amounts allowable in accordance with the cost principles applicable to the entity making the contribution (i.e., you or the subrecipient), as identified in FMS Article III. For property, that generally is depreciation.

3. Needed approvals for, and valuation of, property that you or subrecipients donate.

a. Types of property that may be donated.

i. Buildings or land. If the purposes of this award include construction, facilities acquisition, or long-term use of real property, you may donate buildings or land to the project if you obtain Grants Officer prior approval. Donation of property to the project, as described in PROP Article I, means counting the value of the property toward cost sharing or matching, rather than charging depreciation.

ii. Other capital assets. If you obtain Grants Officer prior approval, you may donate to the project other capital assets identified in 2 CFR 200.439(b)(1) through (3).

b. Usual valuation of donated property. Unless you obtain our approval as described in paragraph E.2.c of this article, the value for the donated property must be the lesser of:

i. The value of the remaining life of the property recorded in your accounting records at the time of donation, or

ii. The current fair market value.

b. Approval needed for alternative valuation of property. If you obtain our approval as reflected in the approved budget, you may count as cost sharing or matching the current fair market value of the donated property even if it exceeds the value of the remaining life of the property recorded in your accounting records at the time of donation.

c. Federal interest in donated property. Donating buildings, land, or other property to the project, rather than charging depreciation, results in a federal interest in the property in accordance with PROP Article I of these terms and conditions.

Section F. Valuation of third-party in-kind contributions.

1. General. If a third party furnishes goods or services to you or subrecipients that are to be counted toward cost sharing or matching under this award, the entity to which the third party furnishes the goods or services (i.e., you or a subrecipient) must document the fair market value of those in-kind contributions and, to the extent feasible, support those values using the same methods the entity uses internally.

2. Valuation of third-party services. You must establish values for third-party volunteer services and services of third parties’ employees furnished to you or subrecipients as follows:

a. Volunteer services. Volunteer services furnished by third-party professional and technical personnel, consultants, and other skilled and unskilled labor must be valued in accordance with 2 CFR 200.306(e).

b. Services of third parties’ employees. When a third-party organization furnishes the services of its employees to you or a subrecipient, values for the contributions must be established in accordance with 2 CFR 200.306(f).

c. Additional requirement for donations to nonprofit organizations. For volunteer services or services of third parties’ employees furnished to a nonprofit organization:

i. OMB guidance in 2 CFR 200.434(e) also applies and may require the nonprofit organization to allocate a proportionate share of its applicable indirect costs to the donated services.

ii. The indirect costs that the nonprofit organization allocates to the donated services in that case must be considered project costs and may be either reimbursed under the award or counted toward required cost sharing or matching, but not both.

3. Valuation of third-party property. You must establish values for third-party property furnished to you or subrecipients as follows:

a. Supplies donated by third parties. When a third-party organization donates supplies (e.g., office, laboratory, workshop, or classroom supplies), the value that may be counted toward cost sharing or matching may not exceed the fair market value of the supplies at the time of donation.

i. Equipment, buildings, or land donated by third parties. The value of third-party donations of equipment, buildings, or land that may be counted toward cost sharing or matching when the third party transferred title to you or a subrecipient depends on the purpose of the award in accordance with the following:

(A) If one of the purposes of the award is to assist you or the subrecipient in the acquisition of equipment, buildings, or land, you may count the aggregate fair market value of the donated property toward cost sharing or matching.

(B) If the award’s purposes instead include only the support of activities that require the use of equipment, buildings, or land, you may only charge depreciation unless you obtain

Grants Officer prior approval to count as cost sharing or matching the fair market value of equipment or other capital assets and fair rental charges for land.

ii. The values of the donated property must be determined in accordance with the usual accounting policies of the entity to which the third party transferred title to the property, with the qualifications specified in 2 CFR 200.306(i)(1) and (2) for donated land and buildings and donated equipment, respectively.

b. Use of space donated by third parties. If a third party makes space available for use by you or a subrecipient, the value that you may count toward cost sharing or matching may not exceed the fair rental value of comparable space as established by an independent appraisal, as described in 2 CFR 200.306(i)(3).

c. Equipment loaned by third parties. If a third-party loans equipment for use by you or a subrecipient, the value that you may count toward cost sharing or matching may not exceed its fair rental value.

FMS Article VII. Program income. (SEPTEMBER 2017)

Section A. Definition. The term “program income” as used in this award:

1. Is gross income that:

a. You earn that is directly generated by a supported activity or earned as a result of this award; or

b. A subrecipient earns as a result of a subaward you make under this award.

2. Includes, but is not limited to, income earned under this award from:

a. Fees for services performed;

b. The use or rental of real or personal property acquired under any Federal award and currently administered under this award;

c. The sale of commodities…