EEB NOFO DFOP0019193 Q&A.docx

Questions and Answers

U.S. DEPARTMENT OF STATE

BUREAU OF ECONOMIC, ENERGY, AND BUSINESS AFFAIRS

Pax Silica Artificial Intelligence Assistance Project

FUNDING OPPORTUNITY #: DFOP0019193

July 17, 2026

Question #1: Can the Department clarify if the current NOFO is soliciting proposals that cover just Phase 1 of the Pax Silica Artificial Intelligence Assistance Project and the NOFO aims and objectives in Panama, or if proposals should also include Phase 2 scope and additional countries.

DOS Response: Applications should incorporate both Phase 1 and Phase 2 of the project, scoping additional Pax Silica signatories.

Question # 2: Is the envisioned funding in the NOFO for Phase 1 and for Panama, or does it include funding for Phase 2 and other countries?

DOS Response: Total available funding of $50,000,000 is for both Phase 1 and Phase 2.

Question # 3: Can DOS clarify what Pax Silica countries will be included in Phase 2, and whether DOS envisions this to require work in selected Pax Silica countries or just continued work in Panama?

DOS Response: Phase 1 will be launched as a pilot for Panama, but Panama will continue to benefit in Phase 2. Phase 2 is envisioned to include other expected beneficiaries among Pax Silica signatories and countries/economies targeted by the Department as potential partners. Applications should propose several potential Phase 2 target countries/economies and include rationales/justifications. The Department will determine final Phase 2 beneficiaries following successful implementation of Phase 1.

Question # 4: Does the Department anticipate utilizing complementary acquisition mechanisms (e.g., FAR-based contracts or commercial procurements) in parallel with this NOFO to leverage innovative capabilities from for-profit industry partners whose commercially developed technologies and delivery models may complement the no-profit, NGO activities funded under this award? If so, can the Department provide any anticipated timing or approach?

DOS Response: At this time, the Department does not have any complementary acquisition mechanisms (e.g., FAR-based contracts or commercial procurements) planned to run alongside this NOFO. However, the Department may consider such mechanisms in the future if program needs warrant it. Any future opportunities will be announced as appropriate.

July 24, 2026

Question #5: The qualification criteria stated are as follows:

Eligible Applicants: For profit organizations other than small businesses

Is there a way that either my company (small business) or as an individual I can apply for this?

DOS Response: Small businesses are eligible to apply. Please refer to the eligibility requirements in the NOFO below:

The following organizations are eligible to apply: U.S. for-profit organizations or businesses; U.S.-based non-profit/non-governmental organizations with or without 501(c) (3) status of the U.S. tax code; U.S.-based private, public, or state institutions of higher education.

Question #6: Section D references a Project Narrative template ("Please use the provided template.") and a Sample Monitoring Indicator Plan for the M&E Plan. Neither appears in the posted grants.gov attachments. Could these be provided? Relatedly, is there a required format or column specification for the Consolidated Project List?

DOS Response: There is no template document for the Project Narrative, but it must include all of the sections and information outlined in the NOFO under Section D, Subsection 7. Project Narrative. There is no required format or template for the M&E Plan or Consolidated Project List. Please follow the requirements in Section D. Application Contents and Format.

Question #7: The July 17 Q&A confirmed that applications should incorporate both Phase 1 and Phase 2. Should Phase 1 and Phase 2 be presented as a single project, or as separate projects evaluated independently within the application, and should the Detailed Line-Item Budget be structured as a single workbook with a tab per project accordingly?

DOS Response: Applications should cover both Phase 1 and Phase 2. Both Phase 1 and Phase 2 should be presented and budgeted as one project, either as separate tabs or as one tab separated by the years in which they occur in the project period of performance.

Question #8: The July 17 Q&A also indicated that applicants should propose several potential Phase 2 target economies with rationales, while the Department determines final Phase 2 beneficiaries after Phase 1. For the Country of Impact element and the budget, how should applicants allocate estimated funds across Panama and the proposed-but-not-final Phase 2 economies - for example, a defined Phase 1 (Panama) allocation with Phase 2 as a planning estimate, or specific allocations to each proposed economy?

DOS Response: Applicants should budget a defined Phase 1 allocation for Panama allocation with Phase 2 as a planning estimate.

Question #9: The NOFO requires Department approval of all sub-awardees and foreign participants. Must all proposed sub-awardees and in-country participants be identified in the application, or may some be named after award, subject to Department approval?

DOS Response: Not all potential sub-awardees need to be identified in the application. Those identified in the application will be approved when an award is issued. Additional sub-awardees may be named after award and then will be subject to Department approval at that time.

Question #10: For the Organizational Capacity and Record on Previous Awards criterion, will the organizational record and past Federal performance of proposed sub-awardees be considered alongside that of the prime applicant?

DOS Response: Applicants are required to provide the type of involvement and experience/qualifications of any partner organizations and sub-awardees in their proposal.

Question #11: The NOFO's Eligible Applicants section lists "U.S. for-profit organizations or businesses" with no size restriction, while the Grants.gov applicant-type category for this opportunity reads "For profit organizations other than small businesses." Please confirm that U.S. small businesses are eligible to apply under the Section B eligibility criteria.

DOS Response: Please see response to Question #5.

Question #12: The notice lists "for-profit organizations other than small businesses" as the applicant type. May US small businesses participate as consortium members, subrecipients, or partners on a prime's application, and would you point us to teaming interest if so?

Question #13: Are projects located in strategically significant non-signatory countries, such as Nigeria, within the scope of Pax Fund assistance, or is funding limited to Pax Silica signatory partners?

DOS Response: Activities are limited to countries and economies that are listed in Section A, Part 2 of the NOFO..

Question #14: Are national labs eligible to compete for this award and if so, would EEB be able to award funds via an Inter-Agency Agreement (IAA) rather than a Cooperative Agreement?

DOS Response: Only the following organizations are eligible to apply: U.S. for-profit organizations or businesses; U.S.-based non-profit/non-governmental organizations with or without 501(c) (3) status of the U.S. tax code; U.S.-based private, public, or state institutions of higher education. Organizations outside these categories are not eligible to apply for his opportunity. The Department intends to award only via Cooperative Agreement(s).

Question #15: Are U.S. small businesses eligible to apply directly as the lead applicant? If small businesses are not eligible as lead applicants, may they participate as consortium members, subcontractors, subrecipients, or technology partners under an eligible larger company?

Question #16: Would an AI-enabled semiconductor infrastructure and supply-chain resilience project fall within the intended scope of this funding opportunity

DOS Response: Please see Section C. Program Description of the NOFO for project background and objectives.

Question #17: For a for-profit applicant, which subparts of 2 CFR 200, 2 CFR 600, or FAR Part 31 are applicable to this award? We want to confirm the correct compliance framework and suggest that the Department consider limiting the applicable requirements scope to the NOFO's own stated restrictions (i.e., only Sub-Chapter A through D of 2 CFR 200). Given that for-profit entities already maintain GAAP-compliant audited financials, we ask whether the Department's oversight objectives can be met without the additional layering of other parts of 2 CFR 200, FAR Part 31, or 2 CFR 600 cost principles?

DOS Response: The Department does not apply Subpart E of 2 CFR § 200 to U.S. and foreign for-profit entities. For for-profit entities, 2 CFR § 200, Subparts A through D apply, except where the application of these subparts would be inconsistent with the international obligations of the United States or the statute or regulations of a foreign government; the Federal Acquisition Regulation (FAR) at 48 CFR Part 30 (2020)—Cost Accounting Standards and 48 CFR Part 31 (2019)—Contract Cost Principles and Procedures take precedence over the cost principles in 2 CFR § 200, Subpart E for Federal awards.

Question #18: Can the Department confirm that the cost principles stated in Section B.2 (per 2 CFR §200, Subpart E - Cost Principles) apply when evaluating both a for-profit recipient's cost-share contributions and all other recipient expenditures under this award?

DOS Response: The Federal Acquisition Regulation (FAR) at 48 CFR Part 30 (2020)—Cost Accounting Standards and 48 CFR Part 31 (2019)—Contract Cost Principles and Procedures takes precedence over the cost principles in 2 CFR § 200, Subpart E, for Federal awards to U.S. and foreign for-profit entities. For all other applicants, all proposed cost sharing, matching, or cost participation must comply with 2 CFR §200.306. Items that are proposed for cost share must be allowable per 2 CFR §200, Subpart E—Costs Principles.

Question #19: May an applicant initially propose using the de minimis rate with the understanding that the negotiated rate, once finalized, could be applied prospectively or through a post-award modification to more accurately reflect the organization's actual indirect cost structure?

DOS Response: The Department does not apply Subpart E of 2 CFR § 200, which established the de minimis rate, to for- profit entities. Instead, for-profit recipients who do not have a formally established overhead or General and Administrative (G&A) rate should allocate indirect costs into the appropriate direct cost categories.

Question #20: Given the Department's stated interest in rapid, milestone-driven implementation and its substantial-involvement role in this cooperative agreement, does the Department anticipate structuring this award as a fixed amount award under 2 CFR §200.201(b) — an approach that ties disbursement to the successful completion of defined milestones and measurable outcomes rather than to line-item cost reconciliation, thereby reducing administrative burden on both the recipient and the Department while accelerating delivery? Relatedly, consistent with 2 CFR §200.201(b) and 4 FAM 610–614, would the Department permit applicants to propose a fixed fee within their budget structure as a means of attracting the most capable commercial performers and ensuring sustained private-sector commitment through the pilot and its envisioned non-U.S.-Government-funded continuation?

DOS Response: This award will be a Cooperative Agreement, in which the Department of State will have substantial involvement in implementation. Applicants may propose subawards via fixed amount awards consistent with 2 CFR §200.201(b).