RES 2004-0817 - Amendment to agmt with Omaha Small Business Network Inc for technical assistance activities and capital improvements to OSBN facilities d ,
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City of Omaha • Robert C.Peters
Mike Fahey,Mayor Director
June 29, 2004
Honorable President
and Members of the City Council,
The attached Resolution approves an Amendment to the Agreement approved June 17, 2003 with
the Omaha Small Business Network, Inc. (OSBN), a Nebraska Nonprofit Corporation, 2505
North 24th Street, Omaha, NE 68110.
This Amendment accomplishes the following:
•
1) extends the term of the Agreement to May 31, 2005;
2) provides additional funding in the amount of $250,000 in Community Development
Block Grant (CDBG) funds for capital improvements to OSBN facilities and technical
assistance activities; and,
3) clarifies the CDBG national objective met by each eligible activity and the reporting •
requirements for each activity.
•
All other provisions of the Agreement remain in effect as previously approved.
•
The small business programs operated by the Omaha Small Business Network are part of the '
City's economic development strategy contained in the Consolidated Submission for Community
Planning and Development Programs (Consolidated Plan). Funds remaining under the original
Agreement in the amount of$27,551.25 are payable from the FY 2003 Community Development
Block Grant Program and additional funds in the amount of$250,000.00 shall be payable from
the FY 2004 Community Development Block Grant Program, Fund No. 12186, Organization
129131.
Honorable President
and Members of the City Council
Page -2-
The Contractor has on file a current Annual Contract Compliance Report Form (CC-1). The
Contract Compliance Ordinance requires that the Human Relations Director, at his discretion
conduct a pre-award review of the employment practices of a contractor with a City contract of
$200,000 or more. As is City policy, the Human Relations Director will continue to review the
Contractor to ensure compliance with the Contract Compliance Ordinance prior to the
expenditure of City program funds.
Your favorable consideration of this Resolution is respectfully requested.
Sincerely, Referred to City Council for Consideration:
72/1 ,/ • dff"(
Robert C. Peters ret Date Mayor's Office Date
Planning Director �/
Approved as to Funding: Approved:
Carol A. Ebdon Date ail Kinsey Tasiorikwrit.
ps L Date
Finance Director � jr,v7 Human Relations Director
P:\PLN2\2151 sap.doc
_ _ J
AMENDMENT TO AN
AGREEMENT
THIS AMENDMENT amends an AGREEMENT entered into by and between the City of
Omaha and the Omaha Small Business Network Administration, Inc., a Nebraska non-profit
Corporation, 2505 North 24th Street, Omaha, Nebraska 68110 (sometimes hereinafter referred to
as "OSBN")based on terms, conditions and provisions as set forth below.
RECITALS:
WHEREAS, the City of Omaha (hereinafter referred to as "the City") is a municipal
corporation located in Douglas County, Nebraska, and is organized and existing under the laws
of the State of Nebraska, and is authorized and empowered to exercise all powers conferred by
the State constitution, laws, Home Rule Charter of the City of Omaha, 1956, as amended, and
local ordinances, including but not limited to, the power to contract; and,
WHEREAS, the City of Omaha has applied for and received Community Development
Block Grant (hereinafter referred to as "CDBG") Funds under Title I of the Housing and
Community Development Act of 1974, as amended, for the development of viable urban
communities by providing decent housing, a suitable environment, and creating and expanding
economic development opportunities, principally for the purpose of benefiting low- and
moderate-income persons; and,
WHEREAS, the Omaha Small Business Network, Inc. (OSBN) small business program
that includes a business incubator, business development training and a seed capital loan
program was awarded $219,030.00 from FY 2000 CDBG funds and $100,000.00 from FY 2003
CDBG funds in an Agreement approved on June 17, 2003 by Resolution No. 791; and,
WHEREAS that Agreement with OSBN expires on May 31, 2004 with an extension to
June 30, 2004 approved by the Director and has a balance of$27,551.25 encumbered for capital
improvements to the OSBN facility; and,
WHEREAS, additional funds are required for capital improvements and to continue the
small business program at OSBN; and,
WHEREAS, these activities are part of the plan for the Neighborhood Revitalization
Strategy Areas defined in the Agreement; and,
WHEREAS, the City's FY 2004 Consolidated Submission for Community Planning and
Development Programs (hereinafter referred to as "Consolidated Plan"), outlining priorities,
programs and funding allocations for the 2004 program year, approved on November 4, 2003 by
Resolution No. 1328, allocated $250,000.00 in CDBG funds to OSBN for a small business
program and capital improvements to OSBN facilities; and,
WHEREAS, the Omaha Office of the U. S. Department of Housing and Urban
Development has requested clarification of the national objective met by each eligible activity in
this Agreement and the reporting requirements for each activity; and
WHEREAS, OSBN is organized to help improve the economic base in distressed areas in
North and South Omaha by providing technical assistance, business development training,
business incubator services, and gap financing for small businesses; and,
WHEREAS, it is in the best interest of the City and the residents thereof that the City
Amend the Agreement with OSBN approved on June 17, 2003 by Resolution No. 791 to extend
the term of the Agreement to May 31, 2005, to provide additional CDBG funding in an amount
not to exceed $250,000.00 for a small business program and capital improvements to OSBN
facilities and to clarify the national objective and reporting requirements for eligible activities
under this Agreement.
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NOW, THEREFORE, IN CONSIDERATION OF THESE MUTUAL COVENANTS,
the parties do hereby agree to the following Amendments marked in the Agreement by
underlining. All other provisions of the Agreement remain in effect as originally approved.
The following terms shall have the following meanings for all purposes in this
Agreement:
1.01 "City" shall mean-the City of Omaha, a Nebraska Municipal Corporation.
1.02 "Contractor" shall mean - the Omaha Small Business Network, a Nebraska non-
profit Corporation, (OSBN), 2505 North 24th Street, Omaha, Nebraska 68110 (see
Exhibit "A").
1.02.1 "OSBN" shall mean the Omaha Small Business Network.
1.03 "Director" shall mean- the Planning Director of the City of Omaha.
1.04 "Recipient" shall mean - the City of Omaha.
1.05 "HUD" shall mean- the U.S. Department of Housing and Urban Development.
1.06 "CDBG Grant Funds" shall mean - that portion of the Community Development
Block Grant Program funds awarded to the City, subject to and conditioned upon
actual receipt of same by the City of Omaha, as may be available to grant during
the FY 2000 and FY 2003 program years for the use specified herein in an
amount not to exceed $319,030.00 (comprised of $219,030.00 in carryover FY
2000 funds and $100,000.00 FY 2003 funds) payable from the CDBG Economic
Development Program, Fund No. 12186, Organization No. 129131, subject to the
terms, conditions and requirements of said Grant Fund Agreement.
1.06.1 "Additional CDBG Grant Funds" shall mean - that portion of the
Community Development Block Grant Program funds awarded to the
City, subject to and conditioned upon actual receipt of same by the City of
Omaha, as may be available to grant during the FY 2004 program years
for the use specified herein in an amount not to exceed $250,000.00 in FY
2004 funds payable from the CDBG Economic Development Program,
Fund No. 12186, Organization No. 129131, subject to the terms,
conditions and requirements of said Grant Fund Agreement.
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1.07 "Grant" shall mean - Community Development Block Grant funds made subject
to terms, conditions and provisions of this Grant Agreement. The grant amount of
$319,030.00 shall be unsecured. OSBN shall perform Project responsibilities as
outlined in Section 2.01 herein during the term of this Agreement. In the event of
default, gross negligence or other substantial non-compliance, the amount of the
Grant shall be due and payable from OSBN upon notice from the City.
1.07.1 "Additional Grant" shall mean - Community Development Block Grant
funds made subject to terms, conditions and provisions of this Grant
Amendment. The additional grant amount of $250,000.00 shall be
unsecured. OSBN shall perform Project responsibilities as outlined in
Section 2.01 herein during the term of this Agreement. In the event of
default, gross negligence or other substantial non-compliance, the amount
of the Grant shall be due and payable from OSBN upon notice from the
City.
1.08 "Small Business Program" or "Project" shall mean — a program administered by
OSBN that provides small business training, incubator services, technical
assistance and economic development loans to businesses for the purpose of
creating or retaining jobs that are available to, or held by, low- and moderate-
income persons.
1.08.1 "BTC" shall mean - the Business and Technology Center (Incubator)
located at 2505 North 24th Street, Omaha, Nebraska 68110.
1.08.2 "SCF" shall mean — seed capital loan program funds used for the
purpose of providing economic development loans to businesses in order
to create or retain jobs that are available to, or held by, low- and
moderate-income persons.
1.08.3 "Murray Complex" shall mean — the storefront buildings located at
2510, 2516, 2520 and 2522 North 24th Street, Omaha, Nebraska 68110.
1.08.4 "Capital Improvements" shall mean —improvements applied to the BTC
building located at 2505 North 24th Street and the Murray Complex of
buildings located at 2510, 2516, 2520 and 2522 N. 24th Street.
1.09 "Project Completion" shall mean - (1) the date all funds have been received by the
Contractor, and allocated to the Project, (2) the date all CDBG funds have been
disbursed and (3) the date goals listed in Section 2.02 herein have been
satisfactorily completed.
1.10 "Project Close Out" shall mean - the dates all project CDBG funds have been
disbursed, the date all job creation/retention goals have been satisfied and City
has completed HUD close out procedures (24 C.F.R. 570.509 and OMB Circular
A-110 Subpart A(g)) (Exhibit "B").
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1.11 "Neighborhood Revitalization Strategy Areas" shall mean — those areas
designated according to CPD Notice 96-01 of the CDBG Program that require
partnerships to stimulate reinvestment in human and economic capital and
coordinated strategies to address their needs. These areas are primarily
residential, economically distressed areas. See Exhibit"C" for area boundaries.
1.12 "Low- and Moderate-Income Person" shall mean - a person whose annual
household income does not exceed 80 percent of the median income for the
Omaha NE-IA Metropolitan Statistical Area as determined and updated by HUD.
Attached as Exhibit "D" is the current Median Family Income Chart.
1.13 "Client" shall mean — a qualified for-profit business entity participating in
technical assistance, training, BTC services, or SCF programs.
1.14 "Program Income" shall mean - the gross income generated from the use of
CDBG funds. When such income is generated by an activity that is only partially
assisted with CDBG funds, the income shall be prorated to reflect the percentage
of CDBG funds used. Fees collected from the operation of Small Business
Program activities are exempt. Program income is further defined in Exhibit "F"
attached hereto and incorporated herein by this reference as though fully set forth.
SECTION 2. PROJECT RESPONSIBILITIES OF CONTRACTOR.
2.01 Overall Project Performance. The Contractor shall use the Grant for the
administration of the Small Business Program, subsidy for training costs and
capital improvements.
2.02 Scope of Work and Proposed Goals. Using FY 2000 and FY 2003 and FY 2004
Grant funds, OSBN will provide its best efforts to accomplish the following
goals:
2.02.1 Properly and effectively administer the Small Business Program.
2.02.1.1 Maintain the fiscal integrity of the Small Business Program,
which includes all financial and narrative reports required by
the City in Section 5 herein and all financial and narrative
reports required by the U.S. Department of Housing and Urban
Development.
2.02.2 Construct capital improvements to the BTC building and the Murray
Complex substantially as described in the Capital Improvement Listing
attached hereto as Exhibit "J" and as approved by the Director. OSBN
shall commence construction by July 1, 2003 and shall complete the
capital improvements by May 31, 200'1 2005. The Planning Director may
extend the term of this construction period, but in no event shall the date
extend beyond December 31, 2004 2005.
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2.02.2.1 OSBN shall contract for necessary professional services for the
preparation of design and construction documents, contract
bidding and construction supervision necessary for the capital
improvements in accordance with procurement requirements of
OMB Circular A-110 attached hereto as Exhibit "B".
2.02.2.2 OSBN shall submit to the Director for his review and prior
approval, all working drawings, plans and specifications
necessary or incidental to these capital improvements. OSBN
shall not commence any work hereunder until such time as it
has received a written notice to proceed as issued by the
Director, which approval shall not be unreasonably withheld.
2.02.2.3 OSBN shall ensure that all work performed and the
construction as completed is in compliance with all state,
federal and local laws, ordinances, regulations and codes and
City of Omaha Property Rehabilitation Standards. The
Director shall assist OSBN in the same manner the Director
provides technical assistance to other contractors, during the
construction phase, to ensure compliance with such
requirements.
2.02.2 OSBN shall make best efforts to provide business development training to
SS 176 low- and moderate-income persons by conducting few eight 6-
week Business Development Classes and by providing other group
training seminars and/or individual technical assistance consultation
sessions. CDBG job requirements may be met by aggregating jobs created
or retained by all businesses receiving technical assistance (24 C.F.R.
570.208 (a)(4)(vi)(c)).
2.02.3 For clarification, the eligible activities carried out by OSBN meet the
national objectives listed below with associated reporting requirements.
The activity previously identified as Seed Capital Fund (SCF) Loan
Servicing provides on-going technical assistance to SCF loan clients and is
therefore now more correctly included as a Technical Assistance Activity.
2.02.3.1 Technical Assistance Activities: Business development
training classes, other group training seminars and/or
individual technical assistance consultation sessions including
consultation with BTC incubator clients and seed capital loan
clients and prorated audit. Located in Neighborhood
Revitalization Strategy Area:
National Objective—Low/Moderate Area (Business);
Reporting Requirements — Program Reports 5.03.1 and
Participant Report 5.03.2.
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2.02.3.2 Capital Improvements. Improvements to the BTC incubator
facility and to the Murray complex of buildings are now
identified as two separate activities.
Improvements to BTC incubator facility at 2505 North 24th
Street and prorated audit. Located in Neighborhood
Revitalization Strategy Area:
National Objective—Low/Moderate Area (Business);
Reporting Requirements — Program Reports 5.03.1 and
Participant Report 5.03.2.
Improvements to Murray Complex of storefront buildings
located at 2510, 2516, 2520 and 2522 North 24th Street and
prorated audit. Located in Neighborhood Revitalization
Strategy Area:
National Objective—Low/Moderate Area (Business);
Reporting Requirements — Program Reports 5.03.1 and
Participant Report 5.03.2.
2.02 Project Budget. The budget for the project shall not exceed $319,030.00 in
CDBG funds (comprised of $219,030.00 in carryover FY 2000 funds and
$100,000.00 FY 2003 funds) and an additional $250,000.00 in FY 2004 CDBG
funds for a total Project Budget of$569,030.00.
2.04 Eligible Use of Funds. The Contractor does hereby certify, contract and agree
that any and all funding obtained or made available hereunder shall be used solely
and exclusively for the purposes described herein. Any changes in the below
budget line items shall require prior written approval of the Director.
2.0.4.1
CDBG Grant Eligible Uses Amount
Capital Improvements $255,230.00
Technical Assistance Program 44,000.00
SCF Loan Servicing 19,800.00
TOTAL $319,030.00
2.04.2
ADDITIONAL CDBG GRANT Eligible Uses Amount
BTC Capital Improvements $131,418.75
Murray Complex Capital Improvements 52,840.25
Technical Assistance Program 65,741.00
TOTAL $250,000.00
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The SCF Loan Servicing line item is combined with the Technical Assistance
Activities line item in accordance with Section 2.02.3 which combined these two
activities. Prorated audit costs are included in each eligible use and shall not
exceed a total of$7,380.00. (See Amended Exhibit J.)
2.05 Term of the Agreement. This Agreement shall start effective January 1, 2003 and
the terms of this Agreement shall be completed as of May 31, 200'1 2005. The
Planning Director may extend the term of this Agreement, but in no event shall
the date extend beyond December 31, 2004 2005.
2.06 Seed Capital Loan Fund Repayments. The Contractor shall submit a monthly
payment to the City of all CDBG SCF principal and interest loan repayments and
collections received.
SECTION 3. CONDITIONS FOR RECEIPT OF CITY FINANCING.
3.01 Documents Required by City. In no event shall the City assume any obligation to
make any or all of the above-referenced funding available, nor shall the City incur
any liability hereunder, unless and until the Contractor has submitted for and
received the prior approval of the Director of all of the documents listed below.
3.01.1 Minority/Women Owned Business Enterprise Plan. Contractor shall
submit to the Director for his review and approval a minority and
women business participation plan that discusses economic
development and employment opportunities. These plans shall ensure
that the Contractor and its subcontractors will make their best efforts to
ensure that construction services, contracts and employment
opportunities are affirmatively marketed to women and members of
minority groups.
3.01.2 Eligible Contractors. Contractor hereby certifies that it is not currently,
and never has been, debarred or disqualified from participation in
Federally-funded projects. In addition, Contractor shall obtain a
certificate from each contractor or subcontractor to be used on this
Project to the effect that each contractor or subcontractor has not been
debarred or disqualified by HUD (24 C.F.R. Part 5 and 24 C.F.R.
570.609). The Director shall approve all contractors and subcontractors
prior to being hired by the Contractor.
SECTION 4. RESPONSIBILITIES OF THE CONTRACTOR.
4.01 Terms and Conditions. The Contractor shall abide by all terms and conditions of
this Agreement.
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4.02 Breach of Agreement. If through breach of this Agreement the Contractor fails to
abide by all terms and conditions as described herein, all CDBG funds previously
provided to the Contractor through fulfillment of this Agreement shall promptly
be returned to the City.
4.03 Ineligible Costs. The Contractor shall be responsible for payment of any Project
costs that exceed those specified in this Agreement.
4.03.1 Eligible Costs. The Contractor shall not request disbursement of funds
under this Agreement until the funds are needed for payment of
eligible costs.
SECTION 5. GENERAL ADMINISTRATIVE REQUIREMENTS OF CONTRACTOR.
Contractor agrees to comply with the following requirements:
5.01 Financial Management.
5.01.1 Accounting Standards. The Contractor agrees to comply with OMB
Circular A-110 and agrees to adhere to the accounting principles and
procedures required therein, utilize adequate internal controls, and
maintain necessary source documentation for all costs incurred.
(Exhibit "C", attached hereto and incorporated herein as though fully
set forth).
5.01.2 Cost Principals. The Contractor shall comply with the requirements
and the standards of OMB Circular No. A-122, "Cost Principles for the
Nonprofit Organizations" (Exhibit "G"), and with the requirements of
OMB Circular A-110 (Exhibit "B"). Both Exhibits are attached hereto
and incorporated herein as though fully set forth.
5.01.2.1 Any deficiencies noted in audit reports must be fully
cleared by the Contractor within 30 days after receipt of
audit by the Contractor. Failure of the Contractor to
comply with the above audit requirements will constitute a
violation of this Agreement and may result in the
withholding of future payments and may constitute a
default subject to default remedies referenced herein in
Section 9.
5.02 Documentation and Record-Keeping. All Contractor records with respect to any
matters covered in this Agreement shall be made available to the City, its
designees or the Federal Government, at any time during normal business hours,
as often as the City deems necessary, to audit, examine, and make excerpts or
transcripts of all relevant data. Any contract entered into by the contractor with
any subcontractors shall include this Section to ensure said access.
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5.03 Reports. The Contractor shall submit to the City the following reports in
accordance with 24 C.F.R. 570.506 within the submission timelines as specified.
5.03.1 Program Reports. The Contractor shall provide reports to the Director
describing Small Business Program accomplishments and any
significant problems and/or delays on this project. Reports will be
submitted monthly regardless of whether a pay request is made. The
program reports are required until such time as all funds have been
expended and the City issues the final payment to the Contractor.
5.03.1.1 Documentation. Program reports to be submitted to the
City are attached hereto as Exhibit "H". Additional
information required shall include:
a. Number, type, dollar amount of SCF loans outstanding,
status of all SCF loans and any follow-up actions
required, including all actions required to collect on all
SCF loans and investments made; and,
b. Number of Business Development Classes and other
seminars conducted and respective participants; and,
c. Number of SCF borrowers and BTC tenants requesting
technical assistance; and,
d. Other technical assistance sessions provided including
total assistance hours; and,
e. Number of total FTE jobs created/retained from SCF
loans and BTC tenants including total number of low-
and moderate-income positions; and,
f. OSBN financial statements including profit and loss,
balance sheet, cash flow, loan repayments and
delinquency/collection report regarding SCF loans and
BTC tenants.
5.03.2 Participant Report (Exhibit "H"). For each participant in the OSBN
Small Business Program, the Contractor shall report and retain the following
records for five (5) years after the expiration of this Agreement as specified in
Section 2.05 of this Agreement. For this Agreement, records shall be retained
until May 31, 2-0-09 2010. In the event the term of the Agreement would be
extended, the record retention period would be extended for the additional time.
5.03.2.1 Documentation. Contractor shall be permitted to document
job creation/retention by completing the fully disclosed
information listed below and/or through abbreviated
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documentation for qualified participants in Neighborhood
Revitalization Strategy Areas:
5.03.2.1.1 name(s) of employee(s)
5.03.2.1.2 home address/business address
5.03.2.1.3 actual household income and calculated as a
percent of Median Family Income (MFI) as
deteiiiuned by HUD, asset/income
verification forms used in determining MFI
(Exhibit "D")
5.03.2.1.4 household size
5.03.2.1.5 job title/number of FTE jobs created or
retained/job start date
5.03.2.1.6 gender of head of household member
5.03.2.1.7 race/ethnicity of head of household
5.03.2.2 Neighborhood Revitalization Strategy Areas. Each
participant receiving technical assistance from Contractor
or its subcontractors shall be presumed low-and-moderate
if either the participant or its business is located in one of
the Neighborhood Revitalization Strategy Areas designated
in "Exhibit C".
5.04 Financial Status Reports. Contractor shall submit financial status reports (OMB
Circular A-110) with pay requests. These reports shall be submitted monthly
regardless of whether a pay request is made. Attached as Exhibit "I", and
incorporated herein by this reference as though fully set forth, is a sample
financial status report.
5.05 Record Retention. The Contractor and its subcontractors shall maintain such
records and accounts, including property, personnel and financial records, as are
deemed necessary by the City to assure a proper accounting for all expenses. The
Comptroller General of the United States, or any of their duly authorized
representatives, or any duly authorized representatives of the City, as approved by
the Director, shall have access to any books, documents, papers, records and
accounts of the Contractor, or its subcontractors which are directly pertinent to
this Project for the purpose of making audit, examination, excerpts and
transcriptions. Such records and accounts shall be retained for five (5) years after
expiration of the Agreement, or May 31, 2009 2010. In the event the term of the
Agreement would be extended, the record retention period would be extended for
the additional time.
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5.06 Personnel and Participant Conditions.
5.06.1 Contract Compliance Clause.
5.06.1.1 Section 10-192 of the Omaha Municipal Code, Equal
Employment Opportunity Clause. The Contractor and its
subcontractors shall not discriminate against any employee or
applicant for employment because of race, religion, color,
sex, age, national origin, familial or handicap status. As used
herein, the word "treated" shall mean and include, without
limitation, the following: recruited, whether by advertising
or by other means; compensated; selected for training,
including apprenticeship; promoted; upgraded; demoted;
downgraded; transferred; laid off; and terminated. The
Contractor and its subcontractors agree to and shall post in
conspicuous places, available to employees and applicants
for employment, notices to be provided by the contracting
officers setting forth the provisions of this nondiscrimination
clause.
5.06.1.2 The Contractor and/or its subcontractors shall, in all
solicitations or advertisements for employees placed by or on
behalf of the contractor, state that all qualified applicants will
receive consideration for employment without regard to race,
religion, color, sex, age, national origin, familial or handicap
status.
5.06.1.3 The Contractor and/or its subcontractors shall send to each
representative of workers with which he has a collective
bargaining agreement or other contract or understanding a
notice advising the labor union or workers' representative of
the contractor's commitments under the equal employment
opportunity clause of the city and shall post copies of the
notice in conspicuous places available to employees and
applicants for employment.
5.06.1.4 The Contractor and/or its subcontractors shall furnish to the
Human Relations Director all federal forms containing the
information and reports required by the federal government
for federal contracts under federal rules and regulations,
including the information required by sections 10-192 to 10-
194, inclusive, of the Omaha Municipal Code and shall
permit reasonable access to his records. Records accessible
to the Human Relations Director shall be those which related
to paragraphs 5.06.1.1 through 5.06.1.7 of this subsection and
only after reasonable notice is given the contractor. The
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purpose of this provision is to provide for investigation to
ascertain compliance with the program provided herein.
5.06.1.5 The Contractor and/or its subcontractors shall take such
actions with respect to any subcontractor as the City may
direct as a means of enforcing the provisions of paragraphs
5.06.1.1 through 5.06.1.7 herein, including penalties and
sanctions for noncompliance; however, in the event the
contractor becomes involved in or is threatened with
litigation as the result of such directions by the City, the City
will enter into such litigation as is necessary to protect the
interests of the City and to effectuate the provisions of this
division, and, in the case of contracts receiving federal
assistance, the contractor or the City may request the United
States to enter into such litigation to protect the interests of
the United States.
5.06.1.6 The Contractor shall file and shall cause his subcontractors, if
any, to file compliance reports with the Contractor in the
same form and to the extent as required by the federal
government for federal contracts under federal rules and
regulations. Such compliance reports shall be filed with the
City's Human Relations Director. Compliance reports filed
at such times as directed shall contain information as to the
employment practices, policies, programs and statistics of the
Contractor, contractor and his subcontractors.
5.06.1.7 The Contractor shall include the provisions of paragraphs
5.06.1.1 through 5.06.1.7 of this section, "Equal Employment
Opportunity Clause," and Section 10-193 in every contract,
subcontract or purchase order so that such provisions will be
binding upon each subcontractor or vendor. (Code 1980,
Section 10-192; Ord. No. 35344, Section 1, 9-26-00).
5.06.2 Protected and Disadvantaged Business Enterprises Program (Omaha
Municipal Code, Section 10-200.) Contractor shall make every good-
faith effort to procure services or supplies with protected and
disadvantaged business enterprises as defined in Exhibit "K" attached
hereto and incorporated herein as though fully set forth. The City of
Omaha has established a Protected Business Enterprise/Disadvantaged
Business Enterprise goal of 10% of the dollar amount of this contract.
The Contractor shall make every good-faith effort to meet said goal.
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5.06.3 Employment Insurance and Bonding. The Contractor shall purchase a
blanket fidelity bond covering all employees, at a minimum, in an
amount equal to cash advances from the City. The Contractor shall
comply with bonding and insurance requirements of OMB Circular A-
110, Bonding and Insurance (Exhibit "B").
5.06.4 Workers' Compensation. The Contractor and/or its subcontractors shall
provide Workers' Compensation Insurance coverage for all employees
involved in the performance in this Agreement.
5.06.5 Section 3 - Employment of Low-Income Persons (Section 3 of HUD Act
of 68, as amended, 1 U.S.C. 1701u). The Contractor shall make its best
efforts to comply with Section 3. The purpose of Section 3 is to ensure
that employment and other economic opportunities generated by HUD
assistance or HUD-assisted projects covered by Section 3 shall, to the
greatest extent feasible, be directed to low and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
5.06.6 Conflict of Interest. The Contractor agrees to abide by the provisions of
24 C.F.R. 570.611 with respect to conflicts of interest, and covenants
that it presently has financial interest and shall not acquire any financial
interest, direct or indirect, which would conflict in any manner or degree
with the performance of services required under this Agreement. The
Contractor further covenants that in the performance of this Agreement
no person having such a financial interest shall be employed or retained
by the Contractor hereunder. These conflict of interest provisions apply
to any person who is an employee, agent, consultant, officer or elected
official or appointed official of the City or any designated public
agencies or subrecipients which are receiving funds under the CDBG
entitlement program.
SECTION 6. CONTRACTOR'S COMPLIANCE WITH OTHER FEDERAL REGULATIONS.
6.01. Environmental Review. The Contractor, if applicable, agrees to comply with the
following regulations insofar as they apply to the performance of this Agreement:
6.01.1 Clean Air Act, 42, U.S.C., 1857, et seq.
6.01.2 Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et
seq., as amended 1318 relating to inspection, monitoring entry, reports
and information as well as other requirements specified in Section 114
and Section 308, and all regulations and guidelines issued thereunder.
6.01.3 Environmental Protection Agency (EPA) regulations pursuant to 40
C.F.R. Part 50, as amended.
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6.01.4 National Environmental Policy Act of 1969.
6.01.5 HUD Environmental Review Procedures (24 C.F.R. Part 58).
6.01.6 Flood Disaster Protection Act of 1973 (24 U.S.C. 4106 and P.L. 2234) in
regard to the sale, lease or other transfer of land acquired, cleared or
improved under the terms of the Agreement as it may apply to
provisions of this Agreement.
6.01.7 Historic Preservation requirements set forth in the National Historic
Preservation Act of 1966, as amended (16 U.S.C. 470) and the
procedures set forth in 36 C.F.R., Part 800, Advisory Council on
Historic Preservation Procedures for Protection of Historic Properties,
insofar as they apply to the performance of this Agreement. In general,
this requires concurrence from the State Historic Preservation Office for
all rehabilitation and demolition of historic properties that are forty-five
years old or older or that are included on a Federal, State or local historic
property list.
6.02 Uniform Relocation Act. The Contractor shall comply with the applicable
regulations of the Uniform Relocation Act of 1970, as amended (URA) (42
U.S.C. 4601-4655), or Section 104 (d) of the Housing and Community
Development Act of 1974, as amended (Section 104 (d)), which require relocation
assistance be provided to resident owners, tenants, businesses and other occupants
that are displaced as a result of a federally-assisted project. In the event that the
Contractor or its agent displaces any tenant-occupant of the property, it shall
immediately notify the City in writing of the circumstances surrounding said
displacement.
6.03 Davis-Bacon Labor Standards. Contractor agrees to comply with the
requirements of the Secretary of Labor in accordance with the Davis-Bacon Act
as amended (40 U.S.C. 276(A)-7), the provisions of Contract Work Hours, the
Safety Standards Act, the Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40
U.S.C. 276 (c) and all other applicable federal, state and local laws and
regulations pertaining to labor standards insofar as those acts apply to the
performance of this Agreement. In the event Davis Bacon wage rates are
triggered on any individual property in the Project, Contractor shall comply with
and ensure that all bid documents, contracts, and subcontracts contain the HUD
4010 Federal Labor Standards provisions and applicable Department of Labor
Wage Determination. In addition, Contractor shall certify that no contractor is
ineligible for federally assisted work. The wage determination may be modified
to keep it current. All actions modifying a general wage determination apply
unless notice of such action is published less than 10 days before the contract
award for the CDBG- assisted Capital Improvements in the Project. The wage
determination is required to be updated in the event construction has not
commenced within ninety (90) days for the date of the contract award to its
Subrecipients. To obtain Capital Improvements Project payments, the pay
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requests and supporting documents must be forwarded to the City Rehabilitation
Inspector assigned to the Capital Improvements Project. This request shall
include an AIA Document G702 or comparable document for the entire Capital
Improvements Project. This pay request process is required for release of any
funds involved with the Capital Improvements Project including leveraged funds
from sources other than CDBG funds.
6.04 Property Standards (24 C.F.R. 92.251). The Contractor or its subcontractor shall
ensure that all work performed for Projects funded with CDBG funds shall meet
all state, federal and local laws, ordinances, regulations and codes, including but
not limited to, Section 8 Housing Quality Standards for Existing Homes (HQS) as
established by HUD,the City's Local Property Standards.
6.05 Section 504. Contractor and its Subrecipients shall comply with Section 504 of
the Rehabilitation Act of 1973 (29 U.S.C. 706) which requires that alterations to
existing, non-housing facilities shall, to the maximum extent feasible, be made to
be readily accessible to and usable by individuals with handicaps.
SECTION 7. RESPONSIBILITIES OF THE CITY.
7.01 Performance Monitoring. The City will monitor the performance standards of the
Contractor as stated herein. Substandard performance as determined by the City
will constitute non-compliance with this Agreement. If action to correct such
substandard performance is not taken by the Contractor within a reasonable
period of time after being notified by the City, contract suspension or termination
procedures may be initiated.
7.02 Payments. It is expressly agreed and understood that the total amount to be paid
by the City under this Agreement shall not exceed $319,030.00 in CDBG funds
and $250,000 in additional CDBG funds for a total of$569,030.00. The payment
of these funds is subject to and conditioned upon actual receipt by the City of the
same. Should adequate funding not be available to the City, the City shall notify
the Contractor as soon as reasonably possible and the Agreement will be
terminated.
7.02.1 Obligation for Payment. In no event shall the City become obligated to
make any payments for any work performed, materials furnished,
expense incurred, or any other expenditure of any kind whatsoever,
unless same is expressly included in this Agreement, nor shall the City
incur any liability hereunder, unless and until the Contractor has timely
and fully complied with its duties and obligations hereunder. No
payments shall be made for any administrative service incurred the
Director deems to be:
7.02.2.1 Unacceptable or substandard; or,
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7.02.2.2 Not in accordance with this Agreement or related contracts as
approved for this Project.
7.03 Progress Payments. Progress payments and final payment, as may be authorized
by the Director or his designated representative, are subject to:
7.03.1 Receipt of requisite financial status reports, and participant and program
reports.
7.04 Technical Assistance. The Director shall assist the Contractor in the same manner
the Director provides technical assistance to other contractors to ensure
compliance with this Agreement.
SECTION 8. MUTUAL AGREEMENTS BETWEEN CITY AND CONTRACTOR.
8.01 Release of Information Laws. The Contractor specifically hereby states, agrees
and certifies that it is familiar with the limited purpose set forth in the Federal
Laws, Rules and Regulations, and in the laws of the State of Nebraska, for which
personal information requested may be used and that the information received
will be used solely for those limited purposes and not to harass, degrade or
humiliate any person. The information released shall be used for the limited
purposes stated, and the Contractor further agrees to indemnify and hold harmless
the City of Omaha for any liability arising out the improper use by the Contractor
of information provided.
8.02 Applicable Laws. Parties to this Agreement shall conform with all existing and
applicable City ordinances, resolutions, state laws, federal laws, and all existing
and applicable rules and regulations. Nebraska law will govern the term and the
performance under this Agreement.
8.03 Interest of the City. Pursuant to Section 8.05 of the Home Rule Charter, no
elected official or any officer or employee of the City shall have a financial
interest, direct or indirect, in any City agreement. Any violation of this section
with the knowledge of the person or corporation contracting with the City shall
render the Agreement voidable by the Mayor or Council.
8.04 Independent Contractor. Nothing contained in this Agreement is intended to, or
shall be construed in any manner, as creating or establishing the relationship of
employer/employee between the parties. The Contractor shall at all times remain
an independent contractor with respect to the services to be performed under this
Agreement. The City shall be exempt from payment of all Unemployment
Compensation, FICA, retirement, life and/or medical insurance and Worker's
Compensation Insurance as the Contractor is an Independent Contractor.
8.05 Captions. Captions used in this Agreement are for convenience and are not used
in the construction of this Agreement.
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8.06 Merger. This Agreement shall not be merged into any other oral or written
agreement, lease or deed of any type.
8.07 Modification. This Agreement and any related documents securing the financing
contain the entire agreement of the parties. No representations were made or
relied upon by either party other than those that are expressly set forth herein. No
agent, employee, or other representative of either party is empowered to alter any
of the terms herein unless done in writing and signed by an authorized officer of
the respective parties, pursuant to Section 10-142 of the Omaha Municipal Code.
8.08 Assignment. The Contractor may not assign its rights or obligations under this
Agreement without the express prior written consent of the City.
8.09 Strict Compliance. All provisions of this Agreement and each and every
document that shall be attached shall be strictly complied with as written, and no
substitution or change shall be made upon written direction from authorized
representatives of the parties.
8.10 Termination. This Agreement may be suspended or terminated in accordance
with 24 C.F.R. 85.43, Enforcement or C.F.R. 85.44, Termination for Convenience
(Exhibit "E", attached hereto and incorporated herein by this reference as though
fully set forth). Upon termination of this Agreement, all funds and interest in any
account hereunder shall become the property of the City and shall be returned to
the City.
8.11 Indemnification. The Contractor shall indemnify and hold the City haiiiiless from
and against: (1) any and all claims arising from contracts between the Contractor
and third parties made to effectuate the purposes of this Agreement; and, (2) any
and all claims, liabilities or damages arising from the preparation or presentation
of any of the work covered by this Agreement.
8.12 Unenforceable Provisions. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be in effect to
the extent of such prohibition or enforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.
8.13 Disclosure of Lobbying. The Contractor shall certify and disclose, to the best of
its knowledge and belief, that:
8.13.1 No Federal appropriated funds have been paid or will be paid, by or on
behalf of the Contractor, to any person for influencing or attempting to
influence an officer or employee of Congress, or an employee of a
Member of Congress in connection with the awarding of any Federal
contract, the making of any Federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension,
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continuation, renewal, amendment or modification of any Federal
contract, grant, loan, or cooperative agreement.
8.13.2 If any funds other than Federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer of
employee of Congress, or an employee of a Member of Congress in
connection with this Federal contract, grant, loan, or cooperative
agreement, the Contractor shall complete and submit standard Form-
LLL, "Disclosure Form to Report Lobbying", in accordance with its
instructions.
8.13.3 The language of this certification be included in the award documents
for all subawards at all tiers, (including subcontracts, subgrants, and
contracts under grants, loans, and cooperative agreements) and that all
subrecipients shall certify and disclose accordingly.
8.14 Notices. The City and the Contractor hereby expressly agree that for purposes of
notice, including legal service or process, during the term of this Agreement, and
for the period of any applicable statute of limitations thereafter, the following
named individuals shall be authorized representatives of the parties:
1) City:
City of Omaha
Planning Department
Planning Director
1819 Famam Street, Room 1111
Omaha,Nebraska 68183
2) Contractor:
Omaha Small Business Network,
A Nebraska Non-profit Corporation
Rendell Gines, Executive Director
2505 N. 24th Street
Omaha, Nebraska 68110
In the event the authorized representative changes during the term of this
Agreement, prior written notice will be given to the respective party at the address
noted above.
8.15 Applicability. This Agreement shall be binding upon the parties hereto.
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SECTION 9. DEFAULT PROVISIONS.
9.01 Remedies. If, through any cause, the Contractor shall fail to fulfill in a timely and
proper manner any obligations under this Agreement, or violate any of the
covenants, representations or agreements hereof, the City may upon written notice
terminate this Agreement or such parts thereof as to this Agreement, and may
require repayment of Grant, in part or in full, for any damages caused to the City
by reasons of such default and termination.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated below:
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ATTEST: ` - CITY OF OMAHA:
-�� a--% 7// '
CITE'CLERK OF THE CITY OF OMAHA MAYOR OF THE CITY OMAHA
WITNES'S:- OMAHA SMALL BUSINESS NETWORK,
Inc., a Nebraska Non-profit Corporation
By:
R dell Gines, ive Director
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Date Date
APP D AS TO FO
AS ISTANT CITY ATTORNEY Date
P:\Pln5\13290maf.doc
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SCHEDULE OF EXHIBITS
Agreement
Exhibit Location Description
A 1.02 Article of Incorporation, Bylaws, Corporate
Resolution, Board Members
B 1.10, 2.02.2.1, OMB Circular A-110
5.01.1, 5.01.2, 5.04,
and 5.06.3
C 1.11 and 5.03.2.2 Neighborhood Revitalization Strategy Areas
D 1.12 and 2.01.1 Median Family Income Chart
E 8.10 Termination- C.F.R. 85.43 - 85.44
F 1.14 Definition- Program Income
G 5.01.2 OMB Circular A-122
H 5.03.1.1 and 5.03.2 Participant Report
I 5.04 Financial Status Report
J 2.02.2 Capital Improvement Listing
Amended J Amended Capital Improvement Listing
K 5.06.2 Protected and Disadvantaged Business
Enterprise Program
L 6.03 Davis-Bacon Labor Standards Provisions and
Department of Labor Wage Determination
ATTACHMENTS:
1 City of Omaha Definition of Income
2 Equal Opportunity Clause
3 Section 3 Clause
4 Minority and Women Business Enterprise Plan
P:\PLN2\2153sap.doc
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UCL 1 ,wv • J1r3lt. Ur '
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3ECflETA\ ; OFFI E ¶ S‘3 FTC
Received a-id file for record'_°_?'-
ARTICLES OF INCORPORATION and recori: ea: to n roll No. ._ _,
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epp. r
OMAHA SMALL BUSINESS NETWORK, INC.- III IefI
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ARTICLE I
NAME
The name of the Corporation is Omaha Small Business
Network , Inc .
ARTICLE II
DURATION
The period of the Corporation 's existence is perpetual .
ARTICLE III
The Corporation is organized exclusively for charitable
purposes . These purposes are :
A. To aid in generating new jobs for a distressed area
of Omaha by aiding the formation and growth of small busi-
nesses in that area;
B. To transact any and all lawful business for which
nonprofit corporations may be incorporated under the laws of
the State of Nebraska, to the extent that such business may
be conducted by organizations that qualify as exempt organ-
izations under section 501 (c) (3 ) of the Internal Revenue Code
of 1954, or the corresponding provision of any future federal
revenue law; hereinafter referred to as the 'Code ; and
C. To do everything necessary, proper, advisable and
convenient for the accomplishment of the purposes set forth
Exhibit "A"
above, and to do all other things incidental thereto or
connected therewith which are not forbidden by the laws of
the State of Nebraska or by these Articles of Incorporation.
ARTICLE IV
POWERS
The Corporation shall' have and exercise all powers and
rights conferred upon nonprofit corporations by the Nebraska
Nonprofit Corporation Act and any enlargement of such powers
conferred by subsequent legislative acts . • In addition, the
Corporation shall have and exercise all powers and rights not
otherwise denied nonprofit corporations by the laws of the
State of Nebraska which are necessary, proper, advisable or
convenient for the accomplishment of the purposes set forth
above in Article III . Notwithstanding 'any other provisions
of these Articles, the Corporation shall not carry on any
other activities not permitted to be carried on by (a) a
corporation that qualifies as an exempt organization under
section 501 (c) (3) of- the Code or (b) a corporation, contri-
butions to which are deductible under section 170 (c) (2) of
the Code.
In addition to the foregoing:
1 . The Corporation shall distribute its income for
each taxable year at such time and in such manner as not to
become subject to the tax on undistributed income 'imposed by
section 4942 of the Code .
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2 . The Corporation shall not engage in any act of
self-dealing as defined in section 4941 (d ) of the Code.
3 . The Corporation shall not retain any excess busi-.
ness holdings as defined in section 4943 (c) of the Code .
4 . The Corporation shall not make any investments in
such manner as to subject 'it to tax under section 4944 of the
Code.
5 . The Corporation shall not make any taxable expend-
itures as defined in section 4945 (d) of the Code .
'ARTICLE V
BYLAWS TO REGULATE INTERNAL AFFAIRS
The Bylaws of the Corporation shall regulate the inter-
nal affairs of the Corporation, except any provisions here-
1
inafter set forth for the distribution of assets on dissolu-
tion or final liquidation.
ARTICLE VI
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DISTRIBUTION OF ASSETS ON
DISSOLUTION OR FINAL LIQUIDATION -
The Corporation is irrevocably dedicated to and operated
exclusively for the purposes above stated, and no part of the
net income of the Corporation shall be distributed or inure
to the benefit of any private individual; provided, however,
that the Corporation may pay reasonable compensation for
services rendered and make payments and distributions which
further the purposes set forth in Article III. Upon disso-
i
lution of the Corporation, the Board of Directors shall,
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'.i after paying or making provisions for the payment of all
liabilities of the Corporation, dispose of all of the assets
of the Corporation exclusively for the purposes of the Corpo-
ration in such manner as shall at that time qualify under
section 501 (c ) (3 ) of the Code, or to such organization or
organizations as shall at . that time qualify as an exempt
organization or organizations under section 501 (c) (3) of the
Code, or to the federal government, or to a state or local
government, for a public purpose, as the Board of Directors
shall determine .
ARTICLE VII
NO POWER TO INFLUENCE LEGISLATION
The Corporation shall not participate in any political
campaign for or against any candidate for public office or
devote a substantial part of its activities to influencing
legislation.
ARTICLE VIII
REGISTERED OFFICE AND REGISTERED AGENT
The street address of the initial registered office of
the Corporation is 1819 Farnam Street, Omaha, Nebraska 68102
and the name of its registered agent at such address is
1
James R. Thele .
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ARTICLE IX
INITIAL BOARD OF DIRECTORS
The number of directors constituting the initial Board
of Directors shall be four (4 ) and the names and street
addresses of the persons who are to serve as the initial
directors are as follows:
John Cochran E. A. Crouchley
1919 Douglas Street 1314 Douglas Street
Omaha, NE 68102 Omaha, NE 68102
Donald Sievers Thomas Peschio
17th and Farnam 1016 Douglas
Omaha, NE 68102 Omaha, NE 68102
ARTICLE X
REMOVAL OF DIRECTORS
At any meeting of the Board of Directors, any one or
more of the directors may be removed from the Board of Direc-
tors with or without cause by a vote of the majority of the
directors, and a successor may be elected in the manner
specified in the Bylaws . Any director whose removal has been
proposed shall be given an opportunity to be heard at the
meeting.
ARTICLE XI
NO MEMBERS -
The Corporation shall have no members .
ARTICLE XII
NAME AND ADDRESS OF INCORPORATORS '
The names and addresses of the Incorporators are:
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• G"ice:�l/i__I
James R. Thele
} 1919 Douglas Street John Cochran
Omaha, NE 68102 ' 1919 Douglas Street •
Omaha, NE 68102
Dated this 18th day of November , 1983.
J mes R. Thele, Incorporator
John Cochran, Incorporator
v
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BYLAWS
OF
OMAHA SMALL BUSINESS NETWORK,INC.
ARTICLE I •
OFFICES
The principal office of the Corporation in the State of Nebraska shall be located in the City
of Omaha, County of within or without the State of Nebraska as the Board of Directors may
determine or as the affairs of the Corporation may require from time to time.
The Corporation shall have and continuously maintain in the State of Nebraska a registered.
agent whose office is identical with such registered office,as required by the Nebraska Non-Profit
Corporation Act. The registered office may be, but need not be, identical with the principal office
in the.State of Nebraska, and the address of the registered office may be changed from time to time
by the Board of Directors.
ARTICLE II
NO MEMBERS
The Corporation shall have no members.
ARTICLE III
BOARD OF DIRECTORS
. - Section I. General Powers. The business and affairs of the Corporation shall be managed
under the direction of a Board of Directors. The original members of the Board of Directors shall
be those individuals as designated in the Articles of Incorporation dated November 18, 1983,whose
terms shall be as set forth therein. Directors need not be residents of the State of Nebraska. The
Board of Directors shall have full power to act on behalf of the Corporation as permitted by the
statutes of the State of Nebraska, the Articles of Incorporation and these Bylaws, as shall be
amended from time to time.
Section 2. Composition of the Board of Directors. The Board of Directors shall be
composed of such persons as may be elected by the Board of Directors.
• Section 3. Number.Tenure and Oualification.The Board should not exceed 14 members.
They shall serve no more than a consecutive terms or until his or her successors shall have been
elected or quaked:provided,however,that the Directors shall hold office for the term as specified
in the Articles of Incorporation. The membership of the Board of Directors shall be;divided into
classes so that the term of approximately one-half of each of the Board shall expire each year. At
each annual meeting of the Board of Directors, one class shall be elected to serve on the Board of
Directors for a term of 3 years from the date of the annual meeting or until the respective successors.
shall be elected.
Section 4. Regular Meetings. The OSBN Board of Directors shall hold a minimum of 10
meetings per year. The September meeting shall be the annual meeting of the Board of Directors.
The Board of Directors may provide by resolution the time and place,either within or without the
State of Nebraska for the holding of additional regular meetings of the Board without other notice
than such resolution.
Section 5. Special Meetings. Regular meetings of the Board of Directors may be called by
or at the request of the Chairman or any two Directors. The person or persons authorized to call
special meetings of the Board may fix any place, either within or without the State of Nebraska, as
the place for holding any special meeting of the Board called by them.
Section.6. Notice. Notice stating the date,place and hour of any regular or special meeting
of the Board of Directors shall be given at least ten days previously thereto by written notice
delivered personally or sent by mail or telegram to each Director at his address as shown by the
records of the Corporation. If mailed,such notice shall be deemed to be delivered when deposited
in the United States mail in a sealed envelope so addressed,with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered
to the telegraph company. Any Director may waive notice of any meeting. The attendance of a
Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director
attends a meeting for the express purpose of objecting to the transaction of any business because the
meeting is not Iawfully called or convened. Neither the business to be transacted at, nor the purpose
of,any regular or special meeting of the Board need be specified in the notice or waiver of notice
of such meeting, unless specifically required by law or by these Bylaws.
Section 7. Quorum. One-third of the Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board.
Section 8. Manner of Acting. The act of a majority of the Directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors,unless the act of a greater
number is required by law or by these bylaws.
Section 9. Compensation. Directors, as such, shall not receive any stated salaries for their
services,but by resolution of the Board of Directors a fixed sum and expenses of attendance,if any,
may be allowed for attendance at each regular or special meeting of the Board;but nothing herein
contained shall be construed to preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section .10. Vacancies. Any vacancy occurring in the Board of Directors and any
directorship to'be filled by reason of an increase in the number of Directors,shall be filled by the
Board of Directors. A Director elected to fill a vacancy shall be elected.for the unexpired term of,
his predecessor in office.
Section 11. Informal Action by Directors. Any action required by law to be taken at a
meeting of Directors, or any action which may be taken at a meeting of Directors, may be taken
without a meeting if a consent in writing,setting forth the action so taken, shall be signed by all of
the Directors.
Section 12. Attendance at Meetings by Directors. All Directors shall attend at least two-
thirds of the regular meetings held during a calendar year. Attendance at the meetings of any
committees upon which a Director serves shall be credited to the Director's total number of regular
meetings. Any Director who fails to attend at least two-thirds of the regular meetings during a
calendar year(with credit for all committee meetings attended during a calendar year) shall be
•
subject to removal from the Board of Directors by the Chairman of the Board.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the Corporation shall be a Chairman, Chairman-elect,
a Treasurer, a Secretary and an Executive Director. The Board of Directors may elect or appoint
such other officers, including one or more Assistant Secretaries and one or more Assistant
Treasurers, as it shall deem desirable, such officers to have the authority and perform the duties
prescribed from time to time by the Board of Directors. Any two or more offices may be held by
the same person,except the offices of Chairman and Secretary and except the offices of Chairman
and Chairman-elect.
Section 2. Election and Term of Office. The officers of the Corporation shall be elected
annually by the Board of Directors at the regular September meeting of the Board of Directors. If
the election of officers shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. New offices may be created and filled at any meeting of the
Board of Directors. Each officer shall hold office until his successor shall have been duly elected
and shall have qualified.
Section 3. Removal. Any officer elected or appointed by the Board of Directors may be
removed by the Board of Directors whenever in its judgement the best interest of the Corporation
would be served thereby,but such removal shall be without prejudice to the contract rights,if any,
of the officer so removed.
Section 4. Vacancies. A va
cancy in any office because of death, resignation, removal,
disqualification or otherwise may be filled by the Board of Directors for the unexpired portion of the
term.
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Section 5. Chairman. The Chairman shall be the principal executive officer of the
Corporation and shall in general supervise and control all of the business and affairs of the
Corporation. He shall preside at all meetings of the Board of Directors. He may sign, with the
Secretary or any other proper officer of the Corporation authorized by the Board of Directors, any
deeds,mortgages,bonds, contracts or other instruments which the Board of Directors has authorized
to be executed,except in cases where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws or statue to some other officer or agent of the
Corporation; and in general he shall perform all duties as may be prescribed by the Board of
Directors from time to time.
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Section 6. Chairman-Elect. In the absence of the Chairman-or in the event of his inability
or refusal to act, the Chairman-Elect (or in the event there be more than one Chairman-Elect,
Chairman-Elect in the order of their election) shall perform the duties of the Chairman, and when
so acting, shall have the powers of and be subject to all the restrictions upon the Chairman. Any
Chairman-Elect shall perform such other duties as from time to time may be assigned to him by the
Chairman or by the Board of Directors.
Section 7. Treasurer. If required by the Board of Directors, the Treasurer shall give a bond
for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of
Directors shall determine. He shall have charge and custody of and be responsible for all funds and
securities of the Corporation; receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the name of the
Corporation in such banks,trust companies or other depositories as shall be selected in accordance
with the provisions of Article VII of these Bylaws;and in general perform all the duties incident to
the office of Treasurer and such other duties as from time to time may be assigned to him by the
Chairman or by the Board of Directors.
Section 8. Secretary.The Secretary shall cause the minutes of the meetings of the Board of
Directors to be kept in one or more books provided for that purpose; see that all notices are duly
given in accordance with the provisions of these Bylaws as required by law; be custodian of the
corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed
to all documents, the execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with the provisions of these Bylaws; and in general perform all duties
incident to the office of Secretary and such other duties as from time to time may be assigned to him
by the Chairman of the Board of Directors.
Section 9. Assistant Treasurers and Assistant Secretaries. If required by the Board of
Directors,the assistant Treasurers shall give bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of directors shall determine. The Assistant Treasurers and
Assistant Secretaries, in general shall perform such duties as shall be assigned to them by the
Treasurer or the Secretary or by the Chairman or the Board of Directors.
ARTICLE V
COMMITTEES
Section 1. Committees of Directors. The Board of Directors, by resolution adopted by a
majority of the Directors in office, may designate and appoint one or more committees, each of
which shall consist of two or more Directors, which committees, to the extent provided in said
resolution,shall have and exercise the authority of the Board of Directors in the management of the
Corporation; provided, however, that no such committee shall have the authority of the Board of
Directors in reference to amending, altering or repealing the Bylaws; electing, appointing or
removing any member of any such committee or any Director or officer of the Corporation;
amending the Articles of Incorporation; adopting a plan or merger or adopting a plan of
consolidation with another corporation; authorizing the sale,lease, exchange or mortgage of all or
substantially all of the property and assets of the Corporation;authorizing the voluntary dissolution
of the Corporation or revoking proceedings therefor,adopting a plan for the distribution of the assets
of the Corporation;or amending,altering or repealing any resolution of the Board of Directors which
by its terms provides that it shall not be amended, altered or repealed by such committee. The
designation and appointment of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any individual Director of any responsibility
imposed upon it or him by law.
Section 2. Other Committees. Other committees not having and exercising the authority of
the Board of Directors in the management of the Corporation may be designated by a resolution
adopted by a majority of the Directors present at a meeting at which a quorum is present. Except
as otherwise provided in such resolution,members of each such committee shall be directors of the
Corporation,and the Chairman of the Corporation shall appoint the members thereof. Any member
thereof may be removed by the person or persons authorized to appoint such member whenever in
their judgment the best interests of the Corporation shall be served by such removal.
Section 3. Term of Office. Each member of a committee shall continue as such until the
next annual meeting of the Corporation and until his successor is appointed,unless the committee
shall be sooner terminated,or unless such member be removed from such committee,or unless such
member shall cease to qualify as a member thereof.
Section 4. Chairman. The Chairman of each such committee shall be a Director and shall
be appointed chairman by the person or persons authorized to appoint the members thereof.
Section 5. Vacancies. Vacancies in the membership of any committee may be filled by
appointments made in the same manner as provided in the case of the original appointments.
Section 6. Ouorum. Unless otherwise provided in the resolution of the Board of Directors
designating a committee, a majority of the whole committee shall constitute a quorum and the act
of a majority of the members present at a meeting at which a quorum is present shall be the act of
the committee.
•
•
Section 7. Rules_ Each committee may adopt rules for its own government not inconsistent
with these Bylaws or with rules adopted by the Board of Directors.
•
ARTICLE VI
CONTRACTS. CHECKS, DEPOSITS, FUNDS AND FUND RAISING
Section 1. Contracts. The Board of Directors may authorize any officer or officers,
agent or agents of the Corporation,in addition to the officers so authorized by these Bylaws, to enter
into any contract or execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific instances.
Section 2. Checks_Drafts.Etc. All checks, drafts or orders for the payment of money,notes
or other evidences of indebtedness issued in the name of the Corporation shall be signed by such
officer or officers,agent or agents of the Corporation and in such manner as shall from time to time
be determined by resolution of the Board of Directors. In the absence of such determination by the
Board of Directors,such instruments shall be signed by the Treasurer or an Assistant Treasurer and
countersigned by the Chairman or a Chairman Elect of the Corporation.
Section 3. Deposits. All funds of the Corporation shall be deposited from time to time to
the credit of the Corporation in such banks, trust companies or other depositories as the Board of
Directors may select.
Section 4. Gifts. The Board of Directors may accept on behalf of the Corporation any
contribution, gift, bequest or devise for the general purposes or for any special purpose of the
Corporation.
Section 5. Loans. No loans shall be contracted on behalf of the Corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to specific instances.
I
Section b. Proxies with Respect to Securities of Other Corporations. Unless otherwise
provided by resolution adopted by the Board of Directors,the Chairman or a Chairman Elect may
from time to time appoint an attorney or attorneys,or an agent or agents,to exercise in the name and
on behalf of the Corporation may have as the holder of stock or other securities in any corporation
to vote or to consent with respect to such stock or other securities; and the Chairman or any
Chairman Elect may instruct the person or persons so appointed as to the manner of exercising such
powers and rights and the Chairman or any Chairman Elect may execute or cause to be executed in
- the name and on behalf of the Corporation and under its corporate seal,or otherwise,all such written
proxies,power of attorney or other written instruments as he may deem necessary in order that the
Corporation may exercise such powers and rights. .
ARTICLE VII
BOOKS,RECORDS AND ACCOUNTS
The Corporation shall keep correct and complete books and records of accounts and shall
also keep minutes of the proceedings of its Board of Directors and committees having any of the
authority of the Board of Directors,and shall keep at the registered or principal office a record giving, ..
the names and addresses of the directors. All books and records of the Corporation may
be inspected by any director, or his agent or attorney, and by the general public, for any proper
purpose at any reasonable time. The books of account shall be audited annually as of the end of its
fiscal year by independent certified public accountants retained by the Corporation at its expense.
A copy of such audit report shall be furnished to all members of the Board of Directors not later than
sixty days after the close of the preceding fiscal year. The accounts of the Corporation shall be kept
in accordance with procedures outlined in" ,"as the same may be amended from time
to time, subject to applicable law and standards.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be from January 1 to December 31.
ARTICLE IX
BUDGET AND FINANCIAL OPERATION
The financial operation of the Corporation shall be conducted in accordance with a budget
to be submitted by the Chairman to the Board of Directors for their approval.
ARTICLE X
INDEMNIFICATION
Section 1. Indemnification of Officers. Directors.Employees and Agents Against Damages
for Actions Other Than Actions by or in the Right of the Corporation. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or
•investigative,other than an action by or in the right of the Corporation,by reason of the fact that he
is or was a Director,officer,employee or agent of the Corporation,or is or was serving at the request
of the Corporation as a Director, officer, employee or agent of the Corporation,partnership,joint
venture,trust or other enterprise, against expenses, including attorneys' fees,judgments,fines and
amounts paid in settlement actually and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he reasonably believed to be or in not
opposed to the best interests of the Corporation, and, with respect to any criminal action or
proceeding,had no reasonable cause to believe his conduct was unlawful. The termination of any .
action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in
the best interest of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Indemnification of Officers. Directors. Employees and Agents for Actions by or
in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed action or suit by or in
the rights of the Corporation to procure a judgment in its favor by reason of the fact that he is or was
a Director,officer or employee or agent of the Corporation,or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation, partnership,joint
venture,trust or other enterprise,against expenses, including attomey's fees,actually and reasonably
incurred by him in connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any claim,issue or matter
as to which such person shall have been adjudged to be liable or negligence or misconduct in the
performance of his duty to the Corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that despite that adjudication of liability
but in view of all circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 3. Indemnification Against Expenses and Attorneys' Fees. To the extent that a
Director,officer, employee or agent of a corporation has been successful on the merits or otherwise
} in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article X,or in
defense of any claim, issue or matter therein,he shall be indemnified against expenses, including
attorneys' fees,actually and reasonably incurred by him in connection therewith.
Section 4. Determination of Right to Indemnification. Any indemnification under section
1 and 2 of this Article X, unless ordered by a court, shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the Director, officer,
employee or agent is proper in the circumstances because he has met the-applicable standard of
conduct set forth in Sections 1 and 2 of this Article X. Such determination shall be made by the
Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to
such action,suit or proceeding,or if such a quorum is not obtainable,or,even if obtainable a quorum
of disinterested Directors so directs, by independent legal counsel in a written opinion.
Section 5. Indemnification Against Expenses and Attorneys'Fees Prior to Final Disposition
of an Action. Expenses incurred in defending a civil or criminal action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action, suit or proceeding as
authorized in the manner provided in Section 4 of this Article X upon receipt of an undertaking by
or on behalf of the Director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in
this Article X.
- .
. Section 6. Indemnification Provided by This Article Not Exclusive. The indemnification
provided by this Article X shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any agreement, vote of disinterested Directors or otherwise,both
as to action in his official capacity and as to action in another capacity while holding such office,and
shall continue as to a person who has ceased to be a Director,officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a person.
Section 7. Power of Corporation to Maintain Insurance on Behalf of Directors. Officers,
Employees and Agents. The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a Director,officer,employee or agent of the Corporation,against
any liability asserted against him and incurred by him in any such capacity or arising out of his status
as such, whether or not the Corporation would have the power to indemnify him against such
liability under the provisions of this Article X.
ARTICLE XI
STAFF AND VOLUNTEERS
The Corporation shall employ a qualified Executive Director and such other staff as shall be
appropriate to carry out the purposes of the Corporation. Staff members may not be voting members
of the Board of Directors or any other policymaking body of the Corporation.The Board of Directors
shall adopt written personnel policies and staff responsibilities for the Corporation. The Board of
Directors shall annually review the performance of all staff personnel. The Corporation shall create,
organize,train, supervise and utilize the services of volunteers to carry out its purposes whenever
possible.
ARTICLE XII
• WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of the Nebraska Non-
Profit Corporation Act or under he provisions of the Article of Incorporation or the Bylaws of the
Corporation, a waiver thereof in writing signed by the person entitled to such notice,whether
before or after the time stated therein shall be deemed equivalent to the giving of such notice.
ARTICLE XIII
SEAL
The Board of Directors shall provide a corporate seal which shall be circular in form and
shall have inscribed thereon the name of the Corporation,the state of incorporation and the words
"Corporate Seal."
ARTICLE XIY
•$ AMENDMENTS
These Bylaws may be altered, amended or repealed at any regular meeting of the Board of
Directors, without notice, or at any special meeting of the Board ofDirectors if the notice of such
meeting contained a statement of the substance of the proposed amendment
Dated thistLu..day of�� l
119
•
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•
OmahaSmaII Business Nenworf Inc Bylaws-10
OSBN
Bridging the Gap Between
Survival and Independence
Omaha Small Business Network,Inc.
May 18, 2004
Mr. Ken Johnson
City of Omaha Planning Department
Omaha/Douglas Civic Center
1819 Farnam Street, Suite 1111
Omaha,NE 68183
Dear Mr. Johnson,
This letter is to inform you that at the annual meeting of the Board of Directors of the
Omaha Small Business Network, Inc. held on Tuesday, May 18, 2004, Mr. Rendell Gines
was appointed Executive Director of our organization. As the Executive Director, we
give him the authority to sign and accept the contract with the City of Omaha for 2004.
Please address all questions and implementation questions concerning this contract to Mr.
Gines. Thank you for your continued support and assistance to the Omaha Small
Business Network, Inc.
Sin er ly,
Carl Patterson
Vice-President
Omaha Small Business Network, Inc.
2505 North 24th Street 3 Omaha, Nebraska 68110 n Phone (402) 453-5336 n FAX (402) 451-2876
OSBN BOARD OF DIRECTORS 2004
PRESIDENT DIRECTOR
Angela Knowles Jackie Barfield
University of NE Med Center Attorney
Omaha, NE 68198 7701 Pacific Street Ste 220
991-4192 6359 North 107t" Court
arknowles@unmc.edu Omaha, NE 68114
926-4428
Barfieldlaw(c aol.com
VICE-PRESIDENT DIRECTOR
Kenneth Lyons John Hamler, Retired
1st National Bank 11530 Sahler Street
9903 Broadmoor Rd Omaha, NE 68164
Omaha, NE 68114 493-6355
633-3549
kenlyons(c�fnni.corn DIRECTOR
Carl Patterson
1724 N. 162 Street
SECRETARY Omaha, NE 68118
Keisha R. Turner Phone: 493-6778
5012 North 64th Street crpatt a@j'uno.com
Omaha, NE 68104
571-7014
keretu@hotmail.corn
DIRECTOR
TREASURER Jo Ellen Ross-Jay
John Butler Alegent Health
Qwest Dex, Inc. 7126 North 50t" Avenue
3325 Redick Avenue Omaha, NE 68152
Omaha, NE 68112 932-1271
384-3893, fax: 451-2988, c: 660-0742 ilay(aalegent.com
john.butler(a�dexmedia.com
DIRECTOR
Lonnie Michael, Info USA
1020 East First Street
Papillion, NE 68046
930-3500, fax: 331-0176, c: 319-7228
Lonnie.michael@infousa.com
Exhibit "B"
CIRCULAR NO.A-110
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher
Education,Hospitals,and Other Non-Profit Organizations
1. Purpose. This Circular sets forth standards for obtaining consistency and uniformity among
Federal agencies in the administration of grants to and agreements with institutions of higher
education, hospitals, and other non-profit organizations.
2. Authority. Circular A-110 is issued under the authority of 31 USC 503 (the Chief Financial
Officers Act), 31 USC 1111, 41 USC 405 (the Office of Federal Procurement Policy Act),
Reorganization Plan No. 2 of 1970, and EO 11541 ("Prescribing the Duties of the Office of
Management and Budget and the Domestic Policy Council in the Executive Office of the
President").
3. Policy. Except as provided herein, the standards set forth in this Circular are applicable to all
Federal agencies. If any statute specifically prescribes policies or specific requirements that
differ from the standards provided herein,the provisions of the statute shall govern.
The provisions of the sections of this Circular shall be applied by Federal agencies to recipients. Recipients
shall apply the provisions of this Circular to sub-recipients performing substantive work under grants and
agreements that are passed through or awarded by the primary recipient, if such sub-recipients are organizations
described in Paragraph 1.
This Circular does not apply to grants, contracts, or other agreements between the Federal
Government and units of State or local governments covered by OMB Circular A-102, "Grants
and Cooperative Agreements with State and Local Governments", and the Federal agencies'
grants management common rule which standardized and codified the administrative
requirements Federal agencies impose on State and local grantees. In addition, sub-awards and
contracts to State or local governments are not covered by this Circular. However, this Circular
applies to sub-awards made by State and local governments to organizations covered by this
Circular. Federal agencies may apply the provisions of this Circular to commercial
organizations, foreign governments, organizations under the jurisdiction of foreign governments,
and international organizations.
4. Definitions. Definitions of key terms used in this Circular are contained in Section .2 in
the Attachment.
5. Required Action. The specific requirements and responsibilities of Federal agencies and
institutions of higher education, hospitals, and other non-profit organizations are set forth in
this Circular. Federal agencies responsible for awarding and administering grants to and
other agreements with organizations described in Paragraph 1 shall adopt the language in the
Circular unless different provisions are required by Federal statute or are approved by OMB.
6. OMB Responsibilities. OMB will review agency regulations and implementation of this
Circular, and will provide interpretations of policy requirements and assistance to insure
effective and efficient implementation. Any exceptions will be subject to approval by OMB,
as indicated in Section .4 in the Attachment. Exceptions will only be made in particular
cases where adequate justification is presented.
7. Information Contact. Further information concerning this Circular may be obtained by
contacting the Office of Federal Financial Management, Office of Management and Budget,
Washington, DC 20503, telephone (202) 395-3993.
8. Termination Review Date. This Circular will have a policy review three years from date of
issuance.
9. Effective Date. The standards set forth in this Circular which affect Federal agencies will be
effective 30 days after publication of the final revision in the Federal Register. Those
standards which Federal agencies impose on grantees will be adopted by agencies in codified
regulations within six months after publication in the Federal Register. Earlier
implementation is encouraged.
Attachment
Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Non-Profit Organizations
SUBPART A-GENERAL
Sec.
1 Purpose.
.2 Definitions.
.3 Effect on other issuances.
.4 Deviations. •
.5 Sub-awards.
SUBPART B-PRE-AWARD REQUIREMENTS
.10 Purpose.
.11 Pre-award policies.
.12 Forms for applying for Federal assistance.
.13 Debarment and suspension.
.14 Special award conditions.
_.15 Metric system of measurement.
.16 Resource Conservation and Recovery Act.
_.17 Certifications and representations.
SUBPART C-POST-AWARD REQUIREMENTS
Financial and Program Management
.20 Purpose of financial and program management.
.21 Standards for financial management systems.
.22 Payment.
.23 Cost sharing or matching.
.24 Program income.
.25 Revision of budget and program plans.
.26 Non-Federal audits.
.27 Allowable costs.
.28 Period of availability of funds.
.29 Conditional exemptions.
Property Standards
.30 Purpose of property standards.
.31 Insurance coverage.
.32 Real property.
_.33 Federally-owned and exempt property.
.34 Equipment.
_.35 Supplies and other expendable property.
_.36 Intangible property.
.37 Property trust relationship.
Procurement Standards
.40 Purpose of procurement standards.
.41 Recipient responsibilities.
.42 Codes of conduct.
.43 Competition.
.44 Procurement procedures.
_.45 Cost and price analysis.
.46 Procurement records.
.47 Contract administration.
.48 Contract provisions. •
Reports and Records
.50 Purpose of reports and records.
.51 Monitoring and reporting program performance.
.52 Financial reporting.
_.53 Retention and access requirements for records.
Termination and Enforcement
_.60 Purpose of termination and enforcement.
.61 Termination.
.62 Enforcement.
SUBPART D-AFTER-THE-AWARD REQUIREMENTS
_.70 Purpose.
.71 Closeout procedures.
.72 Subsequent adjustments and continuing responsibilities.
.73 Collection of amounts due.
APPENDIX A-CONTRACT PROVISIONS
* * * * *
SUBPART A-General
.1 Purpose. This Circular establishes uniform administrative requirements for Federal grants
and agreements awarded to institutions of higher education, hospitals, and other non-
profit organizations. Federal awarding agencies shall not impose additional or
inconsistent requirements, except as provided in Sections .4, and .14 or unless
specifically required by Federal statute or executive order. Non-profit'organizations that
implement Federal programs for the States are also subject to State requirements.
.2 Definitions.
(a) Accrued expenditures means the charges incurred by the recipient during a given
period requiring the provision of funds for:
(I) goods and other tangible property received;
(2) services performed by employees, contractors, sub-recipients, and other payees;
and,
(3) other amounts becoming owed under programs for which no current services or
performance is required.
(b) Accrued income means the sum of:
(i) earnings during a given period from
(i) services performed by the recipient, and
(ii) goods and other tangible property delivered to purchasers, and
(2) amounts becoming owed to the recipient for which no current services or performance is required
by the recipient.
(c) Acquisition cost of equipment means the net invoice price of the equipment,
including the cost of modifications, attachments, accessories, or auxiliary apparatus
necessary to make the property usable for the purpose for which it was acquired.
Other charges, such as the cost of installation, transportation, taxes, duty or protective
in-transit insurance, shall be included or excluded from the unit acquisition cost in
accordance with the recipient's regular accounting practices.
(d) Advance means a payment made by Treasury check or other appropriate payment
mechanism to a recipient upon its request either before outlays are made by the
recipient or through the use of predetermined payment schedules.
(e) Award means financial assistance that provides support or stimulation to accomplish
a public purpose. Awards include grants and other agreements in the form of money
or property in lieu of money, by the Federal Government to an eligible recipient. The
term does not include: technical assistance, which provides services instead of
money; other assistance in the form of loans, loan guarantees, interest subsidies, or
insurance; direct payments of any kind to individuals; and, contracts which are
required to be entered into and administered under procurement laws and regulations.
(f) Cash contributions means the recipient's cash outlay, including the outlay of money
contributed to the recipient by third parties.
(g) Closeout means the process by which a Federal awarding agency determines that all
applicable administrative actions and all required work of the award have been
completed by the recipient and Federal awarding agency.
(h) Contract means a procurement contract under an award or sub-award, and a
procurement subcontract under a recipient's or sub-recipient's contract.
(i) Cost sharing or matching means that portion of project or program costs not borne
by the Federal Government.
(j) Date of completion means the date on which all work under an award is completed
or the date on the award document, or any supplement or amendment thereto, on
which Federal sponsorship ends.
(k) Disallowed costs means those charges to an award that the Federal awarding agency
determines to be unallowable, in accordance with the applicable Federal cost
principles or other terms and conditions contained in the award.
(1) Equipment means tangible non-expendable personal property including exempt
property charged directly to the award having a useful life of more than one year and
an acquisition cost of $5000 or more per unit. However, consistent with recipient
policy, lower limits may be established.
(m)Excess property means property under the control of any Federal awarding agency
that, as determined by the head thereof, is no longer required for its needs or the
discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in whole or in part with
Federal funds, where the Federal awarding agency has statutory authority to vest title
in the recipient without further obligation to the Federal Government. An example of
exempt property authority is contained in the Federal Grant and Cooperative
Agreement Act (31 USC 6306), for property acquired under an award to conduct
basic or applied research by a non-profit institution of higher education or non-profit
organization whose principal purpose is conducting scientific research.
(o) Federal awarding agency means the Federal agency that provides an award to the
recipient.
(p) Federal funds authorized means the total amount of Federal funds obligated by the
Federal Government for use by the recipient. This amount may include any
authorized carryover of unobligated funds from prior funding periods when permitted
by agency regulations or agency implementing instructions.
(q) Federal share of real property, equipment, or supplies means that percentage of
the property's acquisition costs and any improvement expenditures paid with Federal
funds.
(r) Funding period means the period of time when Federal funding is available for
obligation by the recipient.
(s) Intangible property and debt instruments means, but is not limited to, trademarks,
copyrights, patents and patent applications and such property as loans,notes and other
debt instruments, lease agreements, stock and other instruments of property
ownership, whether considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and grants awarded,
services received and similar transactions during a given period that require payment
by the recipient during the same or a future period.
(u) Outlays or expenditures mean charges made to the project or program. They may
be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays
are the sum of cash disbursements for direct charges for goods and services, the
amount of indirect expense charged, the value of third party in-kind contributions
applied and the amount of cash advances and payments made to sub-recipients. For
reports prepared on an accrual basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense incurred, the
value of in-kind contributions applied, and the net increase (or decrease) in the
amounts owed by the recipient for goods and other property received, for services
performed by employees, contractors, sub-recipients and other payees and other
amounts becoming owed under programs for which no current services or
performance are required.
(v) Personal property means property of any kind except real property. It may be
tangible, having physical existence, or intangible, having no physical existence, such
as copyrights, patents, or securities.
(w)Prior approval means written approval by an authorized official evidencing prior
consent.
(x) Program income means gross income earned by the recipient that is directly
generated by a supported activity or earned as a result of the award (see exclusions in
Paragraphs .24 (e) and (h)). Program income includes, but is not limited to,
income from fees for services performed, the use or rental of real or personal property
acquired under Federally-funded projects, the sale of commodities or items fabricated
under an award, license fees and royalties on patents and copyrights, and interest on
loans made with award funds. Interest earned on advances of Federal funds is not
program income. Except as otherwise provided in Federal awarding agency
regulations or the terms and conditions of the award, program income does not
include the receipt of principal on loans, rebates, credits, discounts, etc., or interest
earned on any of them.
(y) Project costs means all allowable costs, as set forth in the applicable Federal cost
principles, incurred by a recipient and the value of the contributions made by third
parties in accomplishing the objectives of the award during the project period.
(z) Project period means• the period established in the award document during which
Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property, equipment, intangible
property and debt instruments.
(bb) Real property means land, including land improvements, structures and
appurtenances thereto, but excludes movable machinery and equipment.
(cc) Recipient means an organization receiving financial assistance directly from
Federal awarding agencies to carry out a project or program. The term includes
public and private institutions of higher education, public and private hospitals, and
other quasi-public and private non-profit organizations such as, but not limited to,
community action agencies, research institutes, educational associations, and health
centers. The term may include commercial organizations, foreign or international
organizations (such as agencies of the United Nations) which are recipients, sub-
recipients, or contractors or subcontractors of recipients or sub-recipients at the
discretion of the Federal awarding agency. The term does not include government-
owned contractor-operated facilities or research centers providing continued support
for mission-oriented, large-scale programs that are government-owned or controlled,
or are designated as federally-funded research and development centers.
(dd) Research and development means all research activities, both basic and applied,
and all development activities that are supported at universities, colleges, and other
non-profit institutions. "Research" is defined as a systematic study directed toward
fuller scientific knowledge or understanding of the subject studied. "Development" is
the systematic use of knowledge and understanding gained from research directed
toward the production of useful materials, devices, systems, or methods, including
design and development of prototypes and processes. The term research also includes
activities involving the training of individuals in research techniques where such
activities utilize the same facilities as other research and development activities and
where such activities are not included in the instruction function.
(ee) Small awards means a grant or cooperative agreement not exceeding the small
purchase threshold fixed at 41 USC 403(11) (currently$25,000).
(ff)Sub-award means an award of financial assistance in the form of money, or property
in lieu of money, made under an award by a recipient to an eligible sub-recipient or
by a sub-recipient to a lower tier sub-recipient. The term includes financial assistance
when provided by any legal agreement, even if the agreement is called a contract, but
does not include procurement of goods and services nor does it include any form of
assistance which is excluded from the definition of"award" in Paragraph(e).
(gg) Sub-recipient means the legal entity to which a sub-award is made and which is
accountable to the recipient for the use of the funds provided. The term may include
foreign or international organizations (such as agencies of the United Nations) at the
discretion of the Federal awarding agency.
(hh)Supplies means all personal property excluding equipment, intangible property, and debt instruments
as defined in this section, and inventions of a contractor conceived or first actually reduced to practice
in the performance of work under a funding agreement ("subject inventions"), as defined in 37 CFR
part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Finns Under
Government Grants, Contracts, and Cooperative Agreements".
(ii) Suspension means an action by a Federal awarding agency that temporarily
withdraws Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by the Federal awarding
agency. Suspension of an award is a separate action from suspension under Federal
agency regulations implementing EO's 12549 and 12689, "Debarment and
Suspension".
(jj) Termination means the cancellation of Federal sponsorship, in whole or in part,
under an agreement at any time prior to the date of completion.
(kk) Third party in-kind contributions means the value of non-cash contributions
provided by non-Federal third parties. Third party in-kind contributions may be in
the form of real property, equipment, supplies and other expendable property, and the
value of goods and services directly benefiting and specifically identifiable to the
project or program.
(11) Unliquidated obligations, for financial reports prepared on a cash basis, means the
amount of obligations incurred by the recipient that have not been paid. For reports
prepared on an accrued expenditure basis, they represent the amount of obligations
incurred by the recipient for which an outlay has not been recorded.
(mm) Unobligated balance means the portion of the funds authorized by the Federal
awarding agency that has not been obligated by the recipient and is determined by
deducting the cumulative obligations from the cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between the amount awarded
and the amount, which could have been awarded under the recipient's approved
negotiated indirect cost rate.
(oo) Working capital advance means a procedure, where by funds are advanced to
the recipient to cover its estimated disbursement needs for a given initial period.
.3 Effect on other issuances. For awards subject to this Circular, all administrative
requirements of codified program regulations, program manuals, handbooks and other
non-regulatory materials: which are inconsistent with the requirements of this Circular
shall be superseded, except to the extent they are required by statute, or authorized in
accordance with the deviations provision in Section_.4.
_.4 Deviations. The Office of Management and Budget (OMB) may grant exceptions for
classes of grants or recipients subject to the requirements of this Circular when
exceptions are not prohibited by statute. However, in the interest of maximum
uniformity, exceptions from the requirements of this Circular shall be permitted only in
unusual circumstances. Federal awarding agencies may apply more restrictive
requirements to a class of recipients when approved by OMB, Federal awarding agencies
may apply less restrictive requirements when awarding small awards, except for those
requirements, which are statutory. Exceptions on a case-by-case basis may also be made
by Federal awarding agencies.
.5 Sub-awards. Unless sections of this Circular specifically exclude sub-recipients from
coverage, the provisions of this Circular shall be applied to sub-recipients performing
work under awards if such sub-recipients are institutions of higher education, hospitals or
other non-profit organizations. State and local government sub-recipients are subject to
the provisions of regulations implementing the grants management common rule,
"Uniform Administrative Requirements for Grants and Cooperative Agreements to State
and Local Governments", published at 53 FR 8034 (3/11/88).
SUBPART B-Pre-Award Requirements
_.10 Purpose. Sections_.11 through .17 prescribes forms and instructions and other pre-award matters to
be used in applying for Federal awards.
.11 Pre-award policies.
a) Use of Grants and Cooperative Agreements, and Contracts. In each instance, the Federal awarding
agency shall decide on the appropriate 'award instrument (i.e., grant, cooperative agreement, or
contract). The Federal Grant and Cooperative Agreement Act (31 USC 6301-08) governs the use of
grants, cooperative agreements and contracts. A grant or cooperative agreement shall be used only
when the principal purpose of a transaction is to accomplish a public purpose of support or stimulation
• authorized by Federal statute. The statutory criterion for choosing between grants and cooperative
agreements is that for the latter,"substantial involvement is expected between the executive agency and
the State, local government, or other recipient when carrying out the activity contemplated in the
agreement". Contracts shall be used when the principal purpose is acquisition of property or services
for the direct benefit or use of the Federal Government.
(b) Public Notice and Priority Setting. Federal awarding agencies shall notify the public of its intended
funding priorities for discretionary grant programs, unless funding priorities are established by Federal
statute.
.12 Forms for applying for Federal assistance.
(a) Federal awarding agencies shall comply with the applicable report clearance requirements of 5 CFR
part 1320, "Controlling Papenvork Burdens on the Public", with regard to all forms used by the
Federal awarding agency in place of or as a supplement to the Standard Form 424(SF-424)series.
(b) Applicants shall use the SF-424 series or those forms and instructions prescribed by
the Federal awarding agency.
(c) For Federal programs covered by EO 12372, "Intergovernmental Review of Federal
Programs", the applicant shall complete the appropriate sections of the SF-424
(Application for Federal Assistance) indicating whether the application was subject to
review by the State Single Point of Contact (SPOC). The name and address of the
SPOC for a particular State can be obtained from the Federal awarding agency or the
Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant
whether the program for which application is made has been selected by that State for
review.
(d) Federal awarding agencies that do not use the SF-424 form should indicate whether
the application is subject to review by the State under EO 12372.
.13 Debarment and suspension. Federal awarding agencies and recipients shall comply with
the non-procurement debarment and suspension common rule implementing EO's 12549
and 12689, "Debarment and Suspension". This common rule restricts sub-awards and
contracts with certain parties that are debarred, suspended or otherwise excluded from or
ineligible for participation in Federal assistance programs or activities.
.14 Special award conditions. If an applicant or recipient:
(a) has a history of poor performance,
(b) is not financially stable,
(c) has a management system that does not meet the standards prescribed in this Circular,
(d) has not conformed to the terms and conditions of a previous award, or
(e) is not otherwise responsible.
Federal awarding agencies may impose additional requirements as needed, provided that
such applicant or recipient is notified in writing as to: the nature of the additional
requirements, the reason why the additional requirements are being imposed, the nature
of the corrective action needed, the time allowed for completing the corrective actions,
and the method for requesting reconsideration of the additional requirements imposed.
Any special conditions shall be promptly removed once the conditions that prompted
them have been corrected.
.15 Metric system of measurement. The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act(15 USC 205)declares that the metric system is the preferred measurement system for
U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates in consultation
with the Secretary of Commerce, when the metric system of measurement will be used in the agency's
procurements, grants, and other business-related activities. Metric implementation may take longer where
the use of the system is initially impractical or likely to cause significant inefficiencies in the
accomplishment of Federally-funded activities. Federal awarding agencies shall follow the provisions of
EO 12770, "Metric Usage in Federal Government Programs".
.16 Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-580 codified at 42 USC
6962). Under the Act, any State agency or agency of a political subdivision of a State
which is using appropriated Federal funds must comply with Section 6002. Section 6002
requires that preference be given in procurement programs to the purchase of specific
products containing recycled materials identified in guidelines developed by the
Environmental Protection Agency (EPA) (40 CFR parts 247-254). Accordingly, State
and local institutions of higher education, hospitals, and non-profit organizations that
receive direct Federal awards or other Federal funds shall give preference in their
procurement programs funded with Federal funds to the purchase of recycled products
pursuant to the EPA guidelines.
_.17 Certifications and representations. Unless prohibited by statute or codified regulation, each Federal
awarding agency is authorized and encouraged to allow recipients to submit certifications and
representations required by statute, executive order,or regulation on an annual basis, if the recipients have
ongoing and continuing relationships with the agency. Annual certifications and representations shall be
signed by responsible officials with the authority to ensure recipients' compliance with the pertinent
requirements.
SUBPART C - Post-Award Requirements
Financial and Program Management
_.20 Purpose of financial and program management. Sections .21 through .28 prescribe standards for
financial management systems, methods for making payments and rules for: satisfying cost sharing and
matching requirements, accounting for program income, budget revision approvals, making audits,
determining allowability of cost,and establishing fund availability.
_.21 Standards for financial management systems.
(a) Federal awarding agencies shall require recipients to relate financial data to
performance data and develop unit cost information whenever practical.
(b) Recipients' financial management systems shall provide for the following.
(1) Accurate, current and complete disclosure of the financial results of each Federally-sponsored
project or program in accordance with the reporting requirements set forth in Section .52. If a
Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its
records on other than an accrual basis, the recipient shall not be required to establish an accrual
accounting system. These recipients may develop such accrual data for its reports on the basis of
an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of funds for
Federally-sponsored activities. These records shall contain information pertaining
to Federal awards, authorizations, obligations, unobligated balances, assets,
outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets.
Recipients shall adequately safeguard all such assets and assure they are used
solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever
appropriate, financial information should be related to performance and unit cost
data.
(5) Written procedures to minimize the time elapsing between the transfer of funds to
the recipient from the U.S. Treasury and the issuance or redemption of checks,
warrants or payments by other means for program purposes by the recipient. To
the extent that the provisions of the Cash Management Improvement Act (CMIA)
(Pub. L. 101-453) govern, payment methods of State agencies, instrumentalities,
and fiscal agents shall be consistent with CMIA Treasury-State Agreements or the
CMIA default procedures codified at 31 CFR part 205, "Withdrawal of Cash from
the Treasury for Advances under Federal Grant and Other Programs".
(6) Written procedures for determining the reasonableness, allocability and
allowability of costs in accordance with the provisions of the applicable Federal
cost principles and the terms and conditions of the award.
(7) Accounting records including cost accounting records that are supported by
source documentation.
(c) Where the Federal Government guarantees or insures the repayment of money
borrowed by the recipient, the Federal awarding agency, at its discretion, may require
adequate bonding and insurance if the bonding and insurance requirements of the
recipient are not deemed adequate to protect the interest of the Federal Government.
(d) The Federal awarding agency may require adequate fidelity bond coverage where the
recipient lacks sufficient coverage to protect the Federal Government's interest.
(e) Where bonds are required in the situations described above, the bonds shall be
obtained from companies holding certificates of authority as acceptable sureties, as
prescribed in 31 CFR part 223, "Surety Companies Doing Business with the United
States".
_.22 Payment.
(a) Payment methods shall minimize the time elapsing between the transfer of funds from
the United States Treasury and the issuance or redemption of checks, warrants, or
payment by other means by the recipients. Payment methods of State agencies or
instrumentalities shall be consistent with Treasury-State CMIA agreements or default
procedures codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or demonstrate the
willingness to maintain:
(1) written procedures that minimize the time elapsing between the transfer of funds
and disbursement by the recipient, and
(2) financial management systems that meet the standards for fund control and
accountability as established in Section _.21. Cash advances to a recipient
organization shall be limited to the minimum amounts needed and be timed to be
in accordance with the actual, immediate cash requirements of the recipient
organization in carrying out the purpose of the approved program or project. The
timing and amount of cash advances shall be as close as is administratively
feasible to the actual disbursements by the recipient organization for direct
program or project costs and the proportionate share of any allowable indirect
costs.
(c) Whenever possible, advances shall be consolidated to cover anticipated cash needs
for all awards made by the Federal awarding agency to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury check and
electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances and
reimbursements at least monthly when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted on SF-270,
"Request for Advance or Reimbursement", or other forms as may be authorized by
OMB. This form is not to be used when Treasury check advance payments are made
to the recipient automatically through the use of a predetermined payment schedule or
if precluded by special Federal awarding agency instructions for electronic funds
transfer.
(e) Reimbursement is the preferred method when the requirements in Paragraph (b)
cannot be met. Federal awarding agencies may also use this method on any
construction agreement, or if the major portion of the construction project is
accomplished through private market financing or Federal loans, and the Federal
assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, the Federal awarding agency shall make payment within
30 days after receipt of the billing, unless the billing is improper.
(2) Recipients shall be authorized to submit request for reimbursement at least
monthly when electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and the Federal awarding
agency has determined that reimbursement is not feasible because the recipient lacks
sufficient working capital, the Federal awarding agency may provide cash on a
working capital advance basis. Under this procedure, the Federal awarding agency
shall advance cash to the recipient to cover its estimated disbursement needs for an
initial period generally geared to the awardee's disbursing cycle. Thereafter, the
Federal awarding agency shall reimburse the recipient for its actual cash
disbursements. The working capital advance method of payment shall not be used for
recipients unwilling or unable to provide timely advances to their sub-recipient to
meet the sub-recipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds available from repayments to
and interest earned on a revolving fund, program income, rebates, refunds, contract
settlements, audit recoveries and interest earned on such funds before requesting
additional cash payments.
(h) Unless otherwise required by statute, Federal awarding agencies shall not withhold
payments for proper charges made by recipients at any time during the project period
unless (1) or(2) apply.
(1) A recipient has failed to comply with the project objectives, the terms and
conditions of the award, or Federal reporting requirements.
(2) The recipient or sub-recipient is delinquent in a debt to the United States as
defined in OMB Circular A-129, "Managing Federal Credit Programs". Under
such conditions, the Federal awarding agency may, upon reasonable notice,
inform the recipient that payments shall not be made for obligations incurred after
a specified date until the conditions are corrected or the indebtedness to the
Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as depositories of funds
advanced under awards are as follows.
(1) Except for situations described in Paragraph (i)(2), Federal awarding agencies
shall not require separate depository accounts for funds provided to a recipient or
establish any eligibility requirements for depositories for funds provided to a
recipient. However, recipients must be able to account for the receipt, obligation
and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in insured accounts
whenever possible.
(j) Consistent with the national goal of expanding the opportunities for women-owned
and minority-owned business enterprises, recipients shall be encouraged to use
women- owned and minority-owned banks(a bank which is owned at least 50 percent
by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest bearing accounts,
unless (1), (2)or(3) apply.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to
earn interest in excess of$250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so high that it
would not be feasible within the expected Federal and non-Federal cash resources.
(1) For those entities where CMIA and its implementing regulations do not apply,
interest earned on Federal advances deposited in interest bearing accounts shall be
remitted annually to Department of Health and Human Services, Payment
Management System, Rockville, MD 20852. Interest amounts up to $250 per year
may be retained by the recipient for administrative expense. State universities and
hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to
CMIA uses its own funds to pay pre-award costs for discretionary awards without
prior written approval from the Federal awarding agency, it waives its right to recover
the interest under CMIA.
(m)Except as noted elsewhere in this Circular, only the following forms shall be
authorized for the recipients in requesting advances and reimbursements. Federal
agencies shall not require more than an original and two copies of these fonns.
(1) SF-270, Request for Advance or Reimbursement. Each Federal awarding agency
shall adopt the SF-270 as a standard form for all non-construction programs when
electronic funds transfer or predetermined advance methods are not used. Federal
awarding agencies, however, have the option of using this form for construction
programs in lieu of the SF-271, "Outlay Report and Request for Reimbursement
for Construction Programs".
(2) SF-271, Outlay Report and Request for Reimbursement for Construction Programs. Each Federal
awarding agency shall adopt the SF-271 as the standard form to be used for requesting
reimbursement for construction programs. However, a Federal awarding agency may substitute
the SF-270 when the Federal awarding agency determines that it provides adequate information to
meet Federal needs.
23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, shall be accepted as part of
the recipient's cost sharing or matching when such contributions meet all of the
following criteria.
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other Federally-assisted project or
program.
(3) Are necessary and reasonable for proper and efficient accomplishment of project
or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award, except where
authorized by Federal statute to be used for cost sharing or matching.
(6) Are provided for in the approved budget when required by the Federal awarding
agency.
(7) Conform to other provisions of this Circular, as applicable.
(b) Unrecovered indirect costs may be included as part of cost sharing or matching only
with the prior approval of the Federal awarding agency.
(c) Values for recipient contributions of services and property shall be established in
accordance with the applicable cost principles. If a Federal awarding agency
authorizes recipients to donate buildings or land for construction/facilities acquisition
projects or long-term use, the value of the donated property for cost sharing or
matching shall be the lesser of(l) or(2).
(1) The certified value of the remaining life of the property recorded in the recipient's accounting
records at the time of donation.
(2) The current fair market value. However, when there is sufficient justification, the Federal
awarding agency may approve the use of the current fair market value of the donated property,
even if it exceeds the certified value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical personnel, consultants, •
and other skilled and unskilled labor may be counted as cost sharing or matching if
the service is an integral and necessary part of an approved project or program. Rates
for volunteer services shall be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required skills are not found
in the recipient organization, rates shall be consistent with those paid for similar work
in the labor market in which the recipient competes for the kind of services involved.
In either case, paid fringe benefits that are reasonable, allowable, and allocable may
be included in the valuation.
(e) When an employer other than the recipient furnishes the services of an employee,
these services shall be valued at the employee's regular rate of pay(plus an amount of
fringe benefits that are reasonable, allowable, and allocable, but exclusive of
overhead costs), provided these services are in the same skill for which the employee
is normally paid.
(f) Donated supplies may include such items as expendable equipment, office supplies,
laboratory supplies or workshop and classroom supplies. Value assessed to donated
supplies included in the cost sharing or matching share shall be reasonable and shall
not exceed the fair market value of the property at the time of the donation.
(g) The method used for determining cost sharing or matching for donated equipment,
buildings and land for which title passes to the recipient may differ according to the
purpose of the award, if(1) or(2) apply.
(1) If the purpose of the award is to assist the recipient in the acquisition of
equipment, buildings or land, the total value of the donated property may be
claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities which require the use of
equipment, buildings or land, normally only depreciation or use charges for
equipment and buildings may be made. However, the full value of equipment or
other capital assets and fair rental charges for land may be allowed, provided that
the Federal awarding agency has approved the charges.
(h) The value of donated property shall be determined in accordance with the usual
accounting policies of the recipient, with the following qualifications.
(1) The value of donated land and buildings shall not exceed its fair market value at
the time of donation to the recipient as established by an independent appraiser
(e.g., certified real property appraiser or General Services Administration
representative) and certified by a responsible official of the recipient.
(2) The value of donated equipment shall not exceed the fair market value of
equipment of the same age and condition at the time of donation.
(3) The value of donated space shall not exceed the fair rental value of comparable
space as established by an independent appraisal of comparable space and
facilities in a privately-owned building in the same locality_
(4) The value of loaned equipment shall not exceed its fair rental value.
(5) The following requirements pertain to the recipient's supporting records for in-
kind contributions from third parties.
(i) Volunteer services shall be documented and, to the extent feasible, supported
by the same methods used by the recipient for its own employees.
(ii) The basis for determining the valuation for personal service, material,
equipment, buildings and land shall be documented.
.24 Program income.
(a) Federal awarding agencies shall apply the standards set forth in this section in
requiring recipient organizations to account for program income related to projects
financed in whole or in part with Federal funds.
(b) Except as provided in Paragraph(h)below,program income earned during the project period shall be
retained by the recipient and, in accordance with Federal awarding agency regulations or the terms and
conditions of the award,shall be used in one or more of the ways listed in the following.
(1) Added to funds committed to the project by the Federal awarding agency and recipient and used to
further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in determining the net
allowable costs on which the Federal share of costs is based.
(c). When an agency authorizes the disposition of program income as described in Paragraphs (b)(1) or
(b)(2), program income in excess of any limits stipulated shall be used in accordance with Paragraph
(b)(3).
(d) In the event that the Federal awarding agency does not specify in its regulations or the
terms and conditions of the award how program income is to be used, Paragraph
(b)(3). shall apply automatically to all projects or programs except research. For
awards that support research, Paragraph (b)(1) shall apply automatically unless the
awarding agency indicates in the terms and conditions another alternative on the
award or the recipient is subject to special award conditions, as indicated in Section
.14.
(e) Unless Federal awarding agency regulations or the terms and conditions of the award
provide otherwise, recipients shall have no obligation to the Federal Government
regarding program income earned after the end of the project period.
(f) If authorized by Federal awarding agency regulations or the terms and conditions of
the award, costs incident to the generation of program income may be deducted from
gross income to determine program income, provided these costs have not been
charged to the award.
(g) Proceeds from the sale of property shall be handled in accordance with the
requirements of the Property Standards (See Sections .30 through .37).
(h) Unless Federal awarding agency regulations or the terms and condition of the award
provide otherwise, recipients shall have no obligation to the Federal Government with
respect to program income earned from license fees and royalties for copyrighted
material, patents, patent applications, trademarks, and inventions produced under an
award. However, Patent and Trademark Amendments (35 USC 18) apply to
inventions made under an experimental, developmental, or research award.
.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or program as approved
during the award process. It may include either the Federal and non-Federal share, or
only the Federal share, depending upon Federal awarding agency requirements. It
shall be related to performance for program evaluation purposes whenever
appropriate.
(b) Recipients are required to report deviations from budget and program plans, and
request prior approvals for budget and program plan revisions, in accordance with
this section.
(c) For non-construction awards, recipients shall request prior approvals from Federal
awarding agencies for one or more of the following program or budget related
reasons.
(1) Change in the scope or the objective of the project or program (even if there is no associated
budget revision,requiring prior written approval).
(2) Change in a key person specified in the application or award document.
(3) The absence for more than three months, or a 25 percent reduction in time
devoted to the project,by the approved project director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb increases.in direct
costs, or vice versa, if approval is required by the Federal awarding agency.
(6) The inclusion, unless waived by the Federal awarding agency, of costs that
require prior approval in accordance with OMB Circular A-21, "Cost. Principles
for Educational Institutions", OMB Circular A-122, "Cost Principles for Non-
Profit Organizations" or 45 CFR part 74 Appendix E, "Principles for
Determining Costs Applicable to Research and Development under Grants and
Contracts with Hospitals", or 48 CFR part 31, "Contract Cost Principles and
Procedures", as applicable.
(7) The transfer of funds allotted for training allowances (direct payment to trainees)
to other categories of expense.
(8) Unless described in the application and funded in the approved awards, the sub-award,transfer or
contracting out of any work under an award. This provision does not apply to the purchase of
supplies,material, equipment or general support services.
(d) No other prior approval requirements for specific items may be imposed unless a
deviation has been approved by OMB.
(e) Except for requirements listed in Paragraphs (c)(1) and (c)(4) of this section, Federal
awarding agencies are authorized, at their option, to waive cost-related and
administrative prior written approvals required by this Circular and OMB Circulars
A-21 and A-122. Such waivers may include authorizing recipients to do any one or
more of the following.
(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior
approval of the Federal awarding agency. All pre-award costs are incurred at the recipient's risk
(i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason
the recipient does not receive an award or if the award is less than anticipated and inadequate to
cover such costs).
(2) Initiate a one-time extension of the expiration date of the award of up to 12
months unless one or more of the following conditions apply. For one-time
extensions, the recipient must notify the Federal awarding agency in writing with
the supporting reasons and revised expiration date at least 10 days before the
expiration date specified in the award. This one-time extension may not be
exercised merely for the purpose of using unobligated balances.
(i) The terms and conditions of award prohibit the extension.
(ii) The extension requires additional Federal funds.
(iii)The extension involves any change in the approved objectives or scope of the
project.
(3) Carry forward unobligated balances to subsequent funding periods.
(4) For awards that support research, unless the Federal awarding agency provides
otherwise in the award or in the agency's regulations, the prior approval
requirements described in Paragraph (e) are automatically waived (i.e., recipients
need not obtain such prior approvals) unless one of the conditions included in
Paragraph (e)(2) applies.
(f) The Federal awarding agency may, at its option, restrict the transfer of funds among
direct cost categories or programs, functions and activities for awards in which the
Federal share of the project exceeds $100,000 and the cumulative amount of such
transfers exceeds or is expected to exceed 10 percent of the total budget as last
approved by the Federal awarding agency. No Federal awarding agency shall permit
a transfer that would cause any Federal appropriation or part thereof to be used for
purposes other than those consistent with the original intent of the appropriation.
(g) All other changes to non-construction budgets, except for the changes described in
Paragraph(j), do not require prior approval.
(h) For construction awards, recipients shall request prior written approval promptly from
Federal awarding agencies for budget revisions whenever(1), (2) or(3) apply.
(1) The revision results from changes in the scope or the objective of the project or program.
(2) The need arises for additional Federal funds to complete the project.
(3) A revision is desired which involves specific costs for which prior written
approval requirements may be imposed consistent with applicable OMB cost
principles listed in Section .27.
(i) No other prior approval requirements for specific items may be imposed, unless a
deviation has been approved by OMB.
(j) When a Federal awarding agency makes an award that provides support for both
construction and non-construction work, the Federal awarding agency may require
the recipient to request prior approval from the Federal awarding agency before
making any fund or budget transfers between the two types of work supported.
(k) For both construction and non-construction awards, Federal awarding agencies shall
require recipients to notify the Federal awarding agency in writing promptly
whenever the amount of Federal authorized funds is expected to exceed the needs of
the recipient for the project period by more than $5000 or five percent of the Federal
award, whichever is greater. This notification shall not be required if an application
for additional funding is submitted for a continuation award.
(1) When requesting approval for budget revisions, recipients shall use the budget forms
that were used in the application unless the Federal awarding agency indicates a letter
of request suffices.
(m)Within 30 calendar days from the date of receipt of the request for budget revisions,
Federal awarding agencies shall review the request and notify the recipient whether
the budget revisions have been approved. If the revision is still under consideration at
the end of 30 calendar days, the Federal awarding agency shall inform the recipient in
writing of the date when the recipient may expect the decision.
.26 Non-Federal audits.
(a) Recipients and sub-recipients that are institutions of higher education or other non-
profit organizations (including hospitals) shall be subject to the audit requirements
contained in the Single Audit Act Amendments of 1996 (31 USC 7501-7507) and
revised OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit
Organizations".
(b) State and local governments shall be subject to the audit requirements contained in
the Single Audit Act Amendments of 1996 (31 USC 7501-7507) and revised OMB
Circular A-133, "Audits of States, Local Governments, and Non-Profit
Organizations".
(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular A-
133 shall be subject to the audit requirements of the Federal awarding agencies.
(d) Commercial organizations shall be subject to the audit requirements of the Federal
awarding agency or the prime recipient as incorporated into the award document.
.27 Allowable costs. For each kind of recipient, there is a set of Federal principles for
determining allowable costs. Allowability of costs shall be determined in accordance
with the cost principles applicable to the entity incurring the costs. Thus, allowability of
costs incurred by State, local or federally-recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87, "Cost Principles
for State, Local, and Indian Tribal Governments". The allowability of costs incurred by
non-profit organizations is determined in accordance with the provisions of OMB
Circular A-122, "Cost Principles for Non-Profit Organizations". The allowability of
costs incurred by institutions of higher education is determined in accordance with the
provisions of OMB Circular A-21, "Cost Principles for Educational Institutions". The
allowability of costs incurred by hospitals is determined in accordance with the
provisions of Appendix E of 45 CFR part 74, "Principles for Determining Costs
Applicable to Research and Development Under Grants and Contracts with Hospitals".
The allowability of costs incurred by commercial organizations and those non-profit
organizations listed in Attachment C to Circular A-122 is determined in accordance with
the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.
jl
.28 Period of availability of funds. Where a funding period is specified, a recipient may
charge to the grant only allowable costs resulting from obligations incurred during the
funding period and any pre-award costs authorized by the Federal awarding agency.
.29 Conditional exemptions.
(a) OMB authorizes conditional exemption from OMB administrative requirements and
cost principles circulars for certain Federal programs with statutorily-authorized
consolidated planning and consolidated administrative funding, that are identified by
a Federal agency and approved by the head of the Executive department or
establishment. A Federal agency shall consult with OMB during its consideration of
whether to grant such an exemption.
(b) To promote efficiency in State and local program administration, when Federal non-
entitlement programs with common purposes have specific statutorily-authorized
consolidated planning and consolidated administrative funding and where most of the
State agency's resources come from non-Federal sources, Federal agencies may
exempt these covered State-administered, non-entitlement grant programs from
certain OMB grants management requirements. The exemptions would be from all
but the allocability of costs provisions of OMB Circulars A-87 (Attachment A,
subsection C.3), "Cost Principles for State, Local, and Indian Tribal Governments",
A-21 (Section C, subpart 4), "Cost Principles for Educational Institutions", and A-
122 (Attachment A, subsection A.4), "Cost Principles for Non-Profit Organizations",
and from all of the administrative requirements provisions of OMB Circular A-110,
"Uniform Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals, and Other Non-Profit Organizations", and the
agencies' grants management common rule.
(c) When a Federal agency provides this flexibility, as a prerequisite to a State's
exercising this option, a State must adopt its own written fiscal and administrative
requirements for expending and accounting for all funds, which are consistent with
the provisions of OMB Circular A-87, and extend such policies to all sub-recipients.
These fiscal and administrative requirements must be sufficiently specific to ensure
that: funds are used in compliance with all applicable Federal statutory and regulatory
provisions, costs are reasonable and necessary for operating these programs, and
funds are not be used for general expenses required to carry out other responsibilities
of a State or its sub-recipients.
Property Standards
_.30 Purpose of property standards. Sections .31 through .37 set forth uniform standards governing
management and disposition of property furnished by the Federal Government whose cost was charged to a
project supported by a Federal award. Federal awarding agencies shall require recipients to observe these
standards under awards and shall not impose additional requirements, unless specifically required by
Federal statute. The recipient may use its own property management standards and procedures provided it
observes the provisions of Sections_.31 through_.37.
.31 Insurance coverage. Recipients shall, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal funds as provided to
property owned by the recipient. Federally-owned property need not be insured unless
required by the terms and conditions of the award.
.32 Real property. Each Federal awarding agency shall prescribe requirements for recipients
concerning the use and disposition of real property acquired in whole or in part under
awards. Unless otherwise provided by statute, such requirements, at a minimum, shall
contain the following.
(a) Title to real property shall vest in the recipient subject to the condition that the
recipient shall use the real property for the authorized purpose of the project as long
as it is needed and shall not encumber the property without approval of the Federal
awarding agency.
(b) The recipient shall obtain written approval by the Federal awarding agency for the
use of real property in other Federally-sponsored projects when the recipient
determines that the property is no Ionger needed for the purpose of the original
project. Use in other projects shall be limited to those under Federally-sponsored
projects (i.e., awards) or programs that have purposes consistent with those
authorized for support by the Federal awarding agency.
(c) When the real property is no longer needed as provided in Paragraphs (a) and (b), the
recipient shall request disposition instructions from the Federal awarding agency or
its successor Federal awarding agency. The Federal awarding agency shall observe
one or more of the following disposition instructions.
(1) The recipient may be permitted to retain title without further obligation to the Federal Government
after it compensates the Federal Government for that percentage of the current fair market value of
the property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under guidelines provided by
the Federal awarding agency and pay the Federal Government for that percentage
of the current fair market value of the property attributable to the Federal
participation in the project (after deducting actual and reasonable selling and fix-
up expenses, if any, from the sales proceeds). When the recipient is authorized or
required to sell the property, proper sales procedures shall be established that
provide for competition to the extent practicable and result in the highest possible
return.
(3) The recipient may be directed to transfer title to the property to the Federal
Government or to an eligible third party provided that, in such cases, the recipient
shall be entitled to compensation for its attributable percentage of the current fair
market value of the property.
.33 Federally-owned and exempt property.
(a) Federally-owned property.
(1) Title to Federally-owned property remains vested in the Federal Government.
Recipients shall submit annually an inventory listing of Federally-owned property
in their custody to the Federal awarding agency. Upon completion of the award
or when the property is no longer needed, the recipient shall report the property to
the Federal awarding agency for further Federal agency utilization.
(2) If the Federal awarding agency has no further need for the property, it shall be
declared excess and reported to the General Services Administration, unless the
Federal awarding agency has statutory authority to dispose of the property by
alternative methods (e.g., the authority provided by the Federal Technology
Transfer Act (15 USE 3710 (I)) to donate research equipment to educational and
non-profit organizations in accordance with ED 12821, "Improving Mathematics
and Science Education in Support of the National Education Goals".) Appropriate
instructions shall be issued to the recipient by the Federal awarding agency.
(b) Exempt property. When statutory authority exists, the Federal awarding agency has
the option to vest title to property acquired with Federal funds in the recipient without
further obligation to the Federal Government and under conditions the Federal
awarding agency considers appropriate. Such property is "exempt property". Should
a Federal awarding agency not establish conditions, title to exempt property upon
acquisition shall vest in the recipient without further obligation to the Federal
Government.
.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds shall vest in the
recipient, subject to conditions of this section.
(b) The recipient shall not use equipment acquired with Federal funds to provide services to non-
Federal outside organizations for a fee that is less than private companies charge for equivalent
services, unless specifically authorized by Federal statute, for as long as the Federal Government
retains an interest in the equipment.
(c) The recipient shall use the equipment in the project or program for which it was acquired as long
as needed, whether or not the project or program continues to be supported by Federal funds and
shall not encumber the property without approval of the Federal awarding agency. When no
longer needed for the original project or program, the recipient shall use the equipment in
connection with its other federally-sponsored activities, in the following order of priority:
•
(i) activities sponsored by the Federal awarding agency which funded the original
project, then
(ii) activities sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project or program for which it was acquired, the
recipient shall make it available for use on other projects or programs if such other use will not
interfere with the work on the project or program for which the equipment was originally acquired.
First preference for such other use shall be given to other projects or programs sponsored by the
Federal awarding agency that financed the equipment;second preference shall be given to projects
or programs sponsored by other Federal awarding agencies. If the equipment is owned by the
Federal Government, use on other activities not sponsored by the Federal Government shall be
permissible if authorized by the Federal awarding agency. User charges shall be treated as
program income.
(e) When acquiring replacement equipment, the recipient may use the equipment to
be replaced as trade-in or sell the equipment and use the proceeds to offset the
costs of the replacement equipment subject to the approval of the Federal
awarding agency.
(f) The recipient's property management standards for equipment acquired with
Federal funds and Federally-owned equipment shall include all of the following.
(1) Equipment records shall be maintained accurately and shall include the
following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock number,
national stock number, or other identification number.
(iii)Source of the equipment, including the award number.
(iv)Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was furnished by the
Federal Government) and cost.
(vi)Information from which one can calculate the percentage of Federal
participation in the cost of the equipment (not applicable to equipment
furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix)Ultimate disposition data, including date of disposal and sales price or the
method used to determine current fair market value where a recipient
compensates the Federal awarding agency for its share.
(2) Equipment owned by the Federal Government shall be identified to indicate
Federal ownership.
(3) A physical inventory of equipment shall be taken and the results reconciled
with the equipment records at least once every two years. Any differences
between quantities determined by the physical inspection and those shown in
the accounting records shall be investigated to determine the causes of the
difference. The recipient shall, in connection with the inventory, verify the
existence, current utilization, and continued need for the equipment.
(4) A control system shall be in effect to insure adequate safeguards to prevent
loss, damage, or theft of the equipment. Any loss, damage, or theft of
equipment shall be investigated and fully documented; if the equipment was
owned by the Federal Government, the recipient shall promptly notify the
Federal awarding agency.
(5) Adequate maintenance procedures shall be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized or required to sell the equipment, proper
sales procedures shall be established which provide for competition to the
extent practicable and result in the highest possible return.
(g) When the recipient no longer needs the equipment, the equipment may be used for other activities
in accordance with the following standards. For equipment with a current per unit fair market
value of $5000 or more, the recipient may retain the equipment for other uses provided that
compensation is made to the original Federal awarding agency or its successor. The amount of
compensation shall be computed by applying the percentage of Federal participation in the cost of
the original project or program to the current fair market value of the equipment. If the recipient
has no need for the equipment, the recipient shall request disposition instructions from the Federal
awarding agency. The Federal awarding agency shall determine whether the equipment can be
used to meet the agency's requirements. If no requirement exists within that agency, the
availability of the equipment shall be reported to the General Services Administration by the
Federal awarding agency to determine whether a requirement for the equipment exists in other
Federal agencies. The Federal awarding agency shall issue instructions to the recipient no later
than 120 calendar days after the recipient's request and the following procedures shall govern.
(1) If so instructed or if disposition instructions are not issued within 120 calendar
days after the recipient's request, the recipient shall sell the equipment and
reimburse the Federal awarding agency an amount computed by applying to
the sales proceeds the percentage of Federal participation in the cost of the
original project or program. However, the recipient shall be permitted to
deduct and retain from the Federal share $500 or ten percent of the proceeds,
whichever is less, for the recipient's selling and handling expenses.
(2) If the recipient is instructed to ship the equipment elsewhere, the recipient
shall be reimbursed by the Federal Government by an amount which is
computed by applying the percentage of the recipient's participation in the
cost of the original project or program to the current fair market value of the
equipment, plus any reasonable shipping or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the equipment, the
recipient shall be reimbursed by the Federal awarding agency for such costs
incurred in its disposition.
(4) The Federal awarding agency may reserve the right to transfer the title to the
Federal Government or to a third party named by the Federal Government
when such third party is otherwise eligible under existing statutes. Such
transfer shall be subject to the following standards.
(i) The equipment shall be appropriately identified in the award or otherwise
made known to the recipient in writing.
(ii) The Federal awarding agency shall issue disposition instructions within
120 calendar days after receipt of a final inventory. The final inventory
shall list all equipment acquired with grant funds and Federally-owned
equipment. If the Federal awarding agency fails to issue disposition
instructions within the 120-calendar day period, the recipient shall apply
the standards of this section, as appropriate.
(iii)When the Federal awarding agency exercises its right to take title, the
equipment shall be subject to the provisions for Federally-owned
equipment.
_.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest in the recipient upon
acquisition. If there is a residual inventory of unused supplies exceeding $5000 in
total aggregate value upon termination or completion of the project or program and
the supplies are not needed for any other Federally-sponsored project or program, the
recipient shall retain the supplies for use on non-Federal sponsored activities or sell
them, but shall, in either case, compensate the Federal Government for its share. The
amount of compensation shall be computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds to provide services to
non-Federal outside organizations for a fee that is less than private companies charge
for equivalent services, unless specifically authorized by Federal statute as long as the
Federal Government retains an interest in the supplies.
.36 Intangible property.
(a) The recipient may copyright any work that is subject to copyright and was developed,
or for which ownership was purchased, under an award. The Federal awarding
agency(ies) reserve a royalty-free, nonexclusive and irrevocable right to reproduce,
publish, or otherwise use the work for Federal purposes, and to authorize others to do
so.
(b) Recipients are subject to applicable regulations governing patents and inventions,
including government-wide regulations issued by the Department of Commerce at 37
CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small
Business Firms Under Government Grants, Contracts and Cooperative Agreements".
(c) The Federal Government has the right to:
(1) obtain, reproduce, publish or otherwise use the data first produced under an
award; and
(2) authorize others to receive, reproduce, publish, or otherwise use such data for
Federal purposes.
(d) (1) In addition, in response to a Freedom of Information Act (FOIA) request for
research data relating to published research findings produced under an award that
were used by the Federal Government in developing an agency action that has the
force and effect of law, the Federal awarding agency shall request, and the
recipient shall provide, within a reasonable time, the research data so that they can
be made available to the public through the procedures established under the
FOIA. If the Federal awarding agency obtains the research data solely in
response to a FOIA request, the agency may charge the requester a reasonable fee
equaling the full incremental cost of obtaining the research data. This fee should
reflect costs incurred by the.agency, the recipient, and applicable sub-recipients.
This fee is in addition to any fees the agency may assess under the FOIA (5 USC
552(a)(4)(A)).
(2) The following definitions apply for purposes of Paragraph(d) of this section:
(i) Research data is defined as the recorded factual material commonly accepted
in the scientific community as necessary to validate research findings, but not
any of the following: preliminary analyses, drafts of scientific papers, plans
for future research, peer reviews, or communications with colleagues. This
"recorded" material excludes physical objects (e.g., laboratory samples).
Research data also do not include:
(A)Trade secrets, commercial information, materials necessary to be held
confidential by a researcher until they are published, or similar
information which is protected under law; and
(B)Personnel and medical information and similar information the disclosure
of which would constitute a clearly unwarranted invasion of personal
privacy, such as information that could be used to identify a particular
person in a research study.
(ii) Published is defined as either when:
(A)Research findings are published in a peer-reviewed scientific or technical
journal; or
(B)A Federal agency publicly and officially cites the research findings in
support of an agency action that has the force and effect of law.
(iii)Used by the Federal Government in developing an agency action that has the
force and effect of law is defined as when an,agency publicly and officially
cites the research findings in support of an agency action that has the force
and effect of law.
(e) Title to intangible.property and debt instruments acquired under an award or sub-
award vests.upon acquisition in the recipient. The recipient shall use that property for
the originally-authorized purpose, and the recipient shall not encumber the property
without approval of the Federal awarding agency. When no longer needed for the
originally authorized purpose, disposition of the intangible property shall occur in
accordance with the provisions of Paragraph .34(g).
.37 Property trust relationship. Real property, equipment, intangible property and debt
instruments that are acquired or improved with Federal funds shall be held in trust by the
recipient as trustee for the beneficiaries of the project or program under which the
property was acquired or improved. Agencies may require recipients to record liens or
other appropriate notices of record to indicate that personal or real property has been
acquired or improved with Federal funds and that use and disposition conditions apply to
the property.
Procurement Standards
.40 Purpose of procurement standards. Sections .41 through .48 set forth standards
for use by recipients in establishing procedures for the procurement of supplies and other
expendable property, equipment, real property and other services with Federal funds.
These standards are furnished to ensure that such materials and services are obtained in
an effective manner and in compliance with the provisions of applicable Federal statutes
and executive orders. No additional procurement standards or requirements shall be
imposed by the Federal awarding agencies upon recipients, unless specifically required
by Federal statute or executive order or approved by OMB.
.41 Recipient responsibilities. The standards contained in this section do not relieve the
recipient of the contractual responsibilities arising under its contract(s). The recipient is
the responsible authority, without recourse to the Federal awarding agency, regarding the
settlement and satisfaction of all contractual and administrative issues arising out of
procurements entered into in support of an award or other agreement. This includes
disputes, claims, protests of award, source evaluation or other matters of a contractual
nature. Matters concerning violation of statute are to be referred to such Federal, State or
local authority, as may have proper jurisdiction.
.42 Codes of conduct. The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration of contracts.
No employee, officer, or agent shall participate in the selection, award, or administration
of a contract supported by Federal funds if a real or apparent conflict of interest would be
involved. Such a conflict would arise when the employee, officer, or agent, any member
of his or her immediate family, his or her partner, or an organization which employs or is
about to employ any of the parties indicated herein, has a financial or other interest in the
firm selected for an award. The officers, employees, and agents of the recipient shall
neither solicit nor accept gratuities, favors, or anything of monetary value from
contractors, or parties to sub-agreements. However, recipients may set standards for
situations in which the financial interest is not substantial or the gift is an unsolicited item
of nominal value. The standards of conduct shall provide for disciplinary actions to be
applied for violations of such standards by officers, employees, or agents of the recipient.
.43 Competition. All procurement transactions shall be conducted in a manner to provide, to
the maximum extent practical, open and free competition. The recipient shall be alert to
organizational conflicts of interest as well as noncompetitive practices among contractors
that may restrict or eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive advantage, contractors
that develop or draft specifications, requirements, statements of work, invitations for bids
and/or requests for proposals shall be excluded from competing for such procurements.
Awards shall be made to the bidder or offeror whose bid or offer is responsive to the
solicitation and is most advantageous to the recipient, price, quality and other factors
considered. Solicitations shall clearly set forth all requirements that the bidder or offeror
shall fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids
or offers may be rejected when it is in the recipient's interest to do so.
.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures. These procedures shall
provide for, at a minimum, that (1), (2) and(3) apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase alternatives to
determine which would be the most economical and practical procurement for the
Federal Government.
(3) Solicitations for goods and services provide for all of the following.
(i) A clear and accurate description of the technical requirements for the material,
product or service is to be procured. In competitive procurements, such a
description shall not contain features, which unduly restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all other factors are to
be used in evaluating bids or proposals.
(iii)A description, whenever practicable, of technical requirements in terms of
functions to be performed or performance required, including the range of
acceptable characteristics or minimum acceptable standards.
(iv)The specific features of"brand name or equal" descriptions that bidders are
required to meet when such items are included in the solicitation.
(v) The acceptance, to the extent practicable and economically feasible, of
products and services dimensioned in the metric system of measurement.
(vi)Preference, to the extent practicable and economically feasible, for products
and services that conserve natural resources and protect the environment and
are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small businesses, minority-
owned firms, and women's business enterprises, whenever possible. Recipients of
Federal awards shall take all of the following steps to further this goal.
(1) Ensure that small businesses, minority-owned firms,and women's business enterprises are used to
the fullest extent practicable.
(2) Make information on forthcoming opportunities available and arrange time
frames for purchases and contracts to encourage and facilitate participation by
small businesses,minority-owned firms, and women's business enterprises.
(3) Consider in the contract process whether firms competing for larger contracts
intend to subcontract with small businesses, minority-owned firms, and women's
business enterprises. •
(4) Encourage contracting with consortiums of small businesses, minority-owned
firms and women's business enterprises when a contract is too large for one of
these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small
Business Administration and the Department of Commerce's Minority Business
Development Agency in the solicitation and utilization of small businesses,
minority- owned firms and women's business enterprises.
(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable
contracts, purchase orders, and incentive contracts) shall be determined by the
recipient but shall be appropriate for the particular procurement and for promoting the
best interest of the program or project involved. The "cost-plus-a-percentage-of-cost"
or "percentage of construction cost" methods of contracting shall not be used.
(d) Contracts shall be made only with responsible contractors who possess the potential
ability to perform successfully under the terms and conditions of the proposed
procurement. Consideration shall be given to such matters as contractor integrity,
record of past performance, financial and technical resources or accessibility to other
necessary resources. In certain circumstances, contracts with certain parties are
restricted by agencies' implementation of EO's 12549 and 12689, "Debarment and
Suspension".
(e) Recipients shall, on request, make available for the Federal awarding agency, pre-
award review and procurement documents, such as request for proposals or
invitations for bids, independent cost estimates, etc., when any of the following
conditions apply.
(1) A recipient's procurement procedures or operation fails to comply with the
procurement standards in the Federal awarding agency's implementation of this
Circular.
(2) The procurement is expected to exceed the small purchase threshold fixed at 41.
USC 403 (11) (currently $25,000) and is to be awarded without competition or
only one bid or offer is received in response to a solicitation.
(3) The procurement, which is expected to exceed the small purchase threshold,
specifies a "brand name" product.
(4) The proposed award over the small purchase threshold is to be awarded to other
than the apparent low bidder under a sealed bid procurement.
(5) A proposed contract modification changes the scope of a contract or increases the contract amount
by more than the amount of the small purchase threshold.
.45 Cost and price analysis. Some form of cost or price analysis shall be made and
documented in the procurement files in connection with every procurement action. Price
analysis may be accomplished in various ways, including the comparison of price
quotations submitted, market prices and similar indicia, together with discounts. Cost
analysis is the review and evaluation of each element of cost to determine reasonableness,
allocability and allowability.
.46 Procurement records. Procurement records and files for purchases in excess of the small
purchase threshold shall include the following at a minimum:
(a) basis for contractor selection,
(b) justification for lack of competition when competitive bids or offers are not obtained,
and
(c) basis for award cost or price.
.47 Contract administration. A system for contract administration shall be maintained to
ensure contractor conformance with the terms, conditions and specifications of the
contract and to ensure adequate and timely follow up of all purchases. Recipients shall
evaluate contractor performance and document, as appropriate, whether contractors have
met the terms, conditions and specifications of the contract.
.48 Contract provisions. The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all contracts. The following
provisions shall also be applied to subcontracts.
(a) Contracts in excess of the small purchase threshold shall contain contractual
provisions or conditions that allow for administrative, contractual, or legal remedies
in instances in which a contractor violates or breaches the contract terms, and provide
for such remedial actions as may be appropriate.
(b) All contracts in excess of the small purchase threshold shall contain suitable
provisions for termination by the recipient, including the manner by which
termination shall 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) Except as otherwise required by statute, an award that requires the contracting (or
subcontracting) for construction or facility improvements shall provide for the
recipient to follow its own requirements relating to bid guarantees, performance
bonds, and payment bonds unless the construction contract or subcontract exceeds
$100,000. For those contracts or subcontracts exceeding $100,000, the Federal
awarding agency may accept the bonding policy and requirements of the recipient,
provided the Federal awarding agency has made a determination that the Federal
Government's interest is adequately protected. If such a determination has not been
made, the minimum requirements shall be as follows.
(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The "bid guarantee"
shall consist of a firm commitment such as a bid bond, certified check, or other negotiable
instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid,
execute such contractual documents as may be required within the time specified.
(2) A performance bond on the part of the contractor for 100 percent of the contract
price. A "performance bond" is one executed in connection with a contract to
secure fulfillment of all the contractor's obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of the contract price.
A "payment bond" is one executed in connection with a contract to assure
payment as required by statute of all persons supplying labor and material in the
execution of the work provided for in the contract.
(4) Where bonds are required in the situations described herein, the bonds shall be
obtained from companies holding certificates of authority as acceptable sureties
pursuant to 31 CFR part 223, "Surety Companies Doing Business with the United
States".
(d) All negotiated contracts (except those for less than the small purchase threshold)
awarded by recipients shall include a provision to the effect that the recipient, the
Federal awarding agency, the Comptroller General of the United States, or any of
their duly authorized representatives, shall have access to any books, documents,
papers and records of the contractor which are directly pertinent to a specific program
for the purpose of making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by recipients and their contractors
shall contain the procurement provisions of Appendix A to this Circular, as
applicable.
Reports and Records
.50 Purpose of reports and records. Sections _.51 through .53 set forth the procedures
for monitoring and reporting on the recipient's financial and program performance and
the necessary standard reporting forms. They also set forth record retention requirements.
.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring each project, program, sub-
award, function or activity supported by the award. Recipients shall monitor sub-
awards to ensure sub-recipients have met the audit requirements as delineated in
Section .26.
(b) The Federal awarding agency shall prescribe the frequency with which the performance reports shall
be submitted. Except as provided in Paragraph .51(f), performance reports shall not be required
more frequently than quarterly or, less frequently than annually. Annual reports shall be due 90
calendar days after the grant year; quarterly or semi-annual reports shall be due 30 days after the
reporting period. The Federal awarding agency may require annual reports before the anniversary
dates of multiple year awards in lieu of these requirements. The final performance reports are due 90
calendar days after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance report shall not be required after completion of the
project.
(d) When required, performance reports shall generally contain, for each award, brief information on each
of the following.
(1) A comparison of actual accomplishments with the goals and objectives
established for the period, the findings of the investigator, or both. Whenever
appropriate and the output of programs or projects can be readily quantified, such
quantitative data should be related to cost data for computation of unit costs.
(2) Reasons why established goals were not met,if appropriate.
(3) Other pertinent information including, when appropriate, analysis and explanation
of cost overruns or high unit costs.
(e) Recipients shall not be required to submit more than the original and two copies of
performance reports.
(f) Recipients shall immediately notify the Federal-awarding agency of developments
that have a significant impact on the award-supported activities. Also, notification
shall be given in the case of problems, delays, or adverse conditions, which materially
impair the ability to meet the objectives of the award. This notification shall include
a statement of the action taken or contemplated, and any assistance needed to resolve
the situation.
(g) Federal awarding agencies may make site visits, as needed.
(h) Federal awarding agencies shall comply with clearance requirements of 5 CFR part
1320 when requesting performance data from recipients.
.52 Financial reporting.
(a) The following forms or such other forms as may be approved by OMB are authorized
for obtaining financial information from recipients.
(1) SF-269 or SF-269A,Financial Status Report.
(i) Each Federal awarding agency shall require recipients to use the SF-269 or
SF-269A to report the status of funds for all non-construction projects or
programs. A Federal awarding agency may, however, have the option of not
requiring the SF-269 or SF-269A when the SF-270, Request for Advance or
Reimbursement, or SF-272, Report of Federal Cash Transactions, is
determined to provide adequate information to meet its needs, except that a
final SF-269 or SF-269A shall be required at the completion of the project
when the SF-270 is used only for advances.
(ii) The Federal awarding agency shall prescribe whether the report shall be on a
cash or accrual basis. If the Federal awarding agency requires accrual
information and the recipient's accounting records are not normally kept on
the accrual basis, the recipient shall not be required to convert its accounting
system, but shall develop such accrual information through best estimates
based on an analysis of the documentation on hand.
(iii)The Federal awarding agency shall determine the frequency of the Financial
Status Report for each project or program, considering the size and
complexity of the particular project or program. However, the report shall not
be required more frequently than quarterly or less frequently than annually. A
final report shall be required at the completion of the agreement.
(iv)The Federal awarding agency shall require recipients to submit the SF-269 or
SF-269A (an original and no more than two copies) no later than 30 days after
the end of each specified reporting period for quarterly and semi-annual
reports, and 90 calendar days for annual and final reports. Extensions of
reporting due dates may be approved by the Federal awarding agency upon
request of the recipient.
(2) SF-272,Report of Federal Cash Transactions.
(i) When funds are advanced to recipients the Federal awarding agency shall
require each recipient to submit the SF-272 and, when necessary, its
continuation sheet, SF-272a. The Federal awarding agency shall use this
report to monitor cash advanced to recipients and to obtain disbursement
information for each agreement with the recipients.
(ii) Federal awarding agencies may require forecasts of Federal cash requirements
in the "Remarks" section of the report.
(iii)When practical and deemed necessary, Federal awarding agencies may require
recipients to report in the "Remarks" section the amount of cash advances
received in excess of three days. Recipients shall provide short narrative
explanations of actions taken to reduce the excess balances.
(iv)Recipients shall be required to submit not more than the original and two
copies of the SF-272 15 calendar days following the end of each quarter. The
Federal awarding agencies may require a monthly report from those recipients
receiving advances totaling $1 million or more per year.
(v) Federal awarding agencies may waive the requirement for submission of the
SF-272 for any one of the following reasons: (1) When monthly advances do
not exceed $25,000 per recipient, provided that such advances are monitored
through other forms contained in this section; (2) If, in the Federal awarding
agency's opinion, the recipient's accounting controls are adequate to minimize
excessive Federal advances; or, (3) When the electronic payment mechanisms
provide adequate data.
(b) When the Federal awarding agency needs additional information or more frequent
reports, the following shall be observed.
(1) When additional information is needed to comply with legislative requirements, Federal-awarding
agencies shall issue instructions to require recipients to submit such information under the
"Remarks" section of the reports.
(2) When a Federal awarding agency determines that a recipient's accounting system
does not meet the standards in Section_.21, additional pertinent information to
further monitor awards may be obtained upon written notice to the recipient until
such time as the system is brought up to standard. The Federal-awarding agency,
in obtaining this information, shall comply with report clearance requirements of
5 CFR part 1320.
(3) Federal awarding agencies are encouraged to shade out any line item on any
report if not necessary.
•
(4) Federal awarding agencies may accept the identical information from the
recipients in machine-readable format or computer printouts or electronic outputs
in lieu of prescribed formats.
(5) Federal awarding agencies may provide computer or electronic outputs to recipients when such
expedites or contributes to the accuracy of reporting.
.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and access to records for
awards to recipients. Federal awarding agencies shall not impose any other record
retention or access requirements upon recipients.
(b) Financial records, supporting documents, statistical records, and all other records
pertinent to an award shall be retained for a period of three years from the date of
submission of the final expenditure report or, for awards that are renewed quarterly or
annually, from the date of the submission of the quarterly or annual financial report,
as authorized by the Federal awarding agency. The only exceptions are the
following.
(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records
shall be retained until all litigation, claims or audit findings involving the records have been
resolved and final action taken.
(2).Records for real property and equipment acquired with Federal funds shall be
retained for 3 years after final disposition.
(3) When records are transferred to or maintained by the Federal awarding agency,
the 3-year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in Paragraph
_.53(g).
(c) Copies of original records may be substituted for the original records if authorized by
the Federal awarding agency.
(d) The Federal awarding agency shall request transfer of certain records to its custody
from recipients when it determines that the records possess long term retention value.
However, in order to avoid duplicate record keeping, a Federal awarding agency may
make arrangements for recipients to retain any records that are continuously needed
for joint use.
(e) The Federal awarding agency, the Inspector General, Comptroller General of the
United States, or any of their duly authorized representatives, have the right of timely
and unrestricted access to any books, documents, papers, or other records of
recipients that are pertinent to the awards, in order to make audits, examinations,
excerpts, transcripts and copies'of such documents. This right also includes timely
and reasonable access to a recipient's personnel for the purpose of interview and
discussion related to such documents. The rights of access in this paragraph are not
limited to the required retention period, but shall last as long as records are retained.
(f) Unless required by statute, no Federal awarding agency shall place restrictions on
recipients that limit public access to the records of recipients that are pertinent to an
award, except when the Federal awarding agency can demonstrate that such records
shall be kept confidential and would have been exempted from disclosure pursuant to
the Freedom of Information Act (5 USC 552) if the records had belonged to the
Federal awarding agency.
(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1) and (g)(2)
apply to the following types of documents, and their supporting records: indirect cost
rate computations or proposals, cost allocation plans, and any similar accounting
computations of the rate at which a particular group of costs is chargeable (such as
computer usage charge-back rates or composite fringe benefit rates).
(1) If submitted for negotiation. If the recipient submits to the Federal awarding agency or the sub-
recipient submits to the recipient the proposal, plan, or other computation to form the basis for
negotiation of the rate, then the 3-year retention period for its supporting records starts on the date
of such submission.
(2) If not submitted for negotiation. If the recipient is not required to submit to the
Federal awarding agency or the sub-recipient is not required to submit to the
recipient the proposal, plan, or other computation for negotiation purposes, then
the 3-year retention period for the proposal, plan, or other computation and its
supporting records starts at the end of the fiscal year (or other accounting period)
covered by the proposal, plan, or other computation.
Termination and Enforcement
.60 Purpose of termination and enforcement. Sections .61 and _.62 set forth uniform
suspension, termination and enforcement procedures.
.61 Termination.
(a) Awards may be terminated in whole or in part only if(1), (2) or (3) apply.
(1) By the Federal awarding agency, if a recipient materially fails to comply with the terms and
conditions of an award.
(2) By the Federal awarding agency with the consent of the recipient, in which case the two parties
shall agree upon the termination conditions, including the effective date and, in the case of partial
termination,the portion to be terminated.
(3) By the recipient upon sending to the Federal awarding agency written notification
setting forth the reasons for such termination, the.effective date, and, in the case
of partial termination, the portion to be terminated. However, if the Federal
awarding agency determines in the case of partial termination that the reduced or
modified portion of the grant will not accomplish the purposes for which the grant
was made, it may terminate the grant in its entirety under either Paragraphs (a)(1)
or(2).
(b) If costs are allowed under an award, the responsibilities of the recipient referred to in
Paragraph .71(a), including those for property management as,applicable, shall be
considered in the termination of the award, and provision shall be made for
continuing responsibilities of the recipient after termination, as appropriate.
.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to comply with the terms
and conditions of an award, whether stated in a Federal statute, regulation, assurance,
application, or notice of award, the Federal awarding agency may, in addition to
imposing any of the special conditions outlined in Section .14, take one or more
of the following actions, as appropriate in the circumstances.
(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient or more
severe enforcement action by the Federal awarding agency.
(2) Disallow (that is, deny both use of funds and any applicable matching credit for)
all or part of the cost of the activity or action not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, the awarding agency shall
provide the recipient an opportunity for hearing, appeal, or other administrative
proceeding to which the recipient is entitled under any statute or regulation applicable
to the action involved.
(c) Effects of suspension and termination. Costs of a recipient resulting from obligations
incurred by the recipient during a suspension or after termination of an award are not
allowable unless the awarding agency expressly authorizes them in the notice of
suspension or termination or subsequently. Other recipient costs during suspension or
after termination, which are necessary and not reasonably avoidable are allowable if
(1) and (2) apply.
(1) The costs result from obligations, which were properly incurred by the recipient before the
effective date of suspension or termination, are not in anticipation of it, and in the case of a
termination,are non-cancellable.
(2) The costs would be allowable if the award were not suspended or expired
normally at the end of the funding period in which the termination takes effect.
(d) Relationship to debarment and suspension. The enforcement remedies identified in
this section, including suspension and termination, do not preclude a recipient from
being subject to debarment and suspension under EO's 12549 and 12689 and the
Federal awarding agency implementing regulations (see Section .13).
SUBPART D-After-the-Award Requirements
.70 Purpose. Sections .71 through .73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.
71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after the date of completion of the
award, all financial, performance, and other reports as required by the terms and
conditions of the award. The Federal awarding agency may approve extensions when
requested by the recipient.
(b) Unless the Federal awarding agency authorizes an extension, a recipient shall
liquidate all obligations incurred under the award not later than 90 calendar days after
the funding period or the date of completion as specified in the terms and conditions
of the award or in agency implementing instructions.
(c) The Federal awarding agency shall make prompt payments to a recipient for
allowable reimbursable costs under the award being closed out.
(d) The recipient shall promptly refund any balances of unobligated cash that the Federal
awarding agency has advanced or paid and that is not authorized to be retained by the
recipient for use in other projects. OMB Circular A-129 governs unreturned amounts
that become delinquent debts.
(e) When authorized by the terms and conditions of the award, the Federal awarding
agency shall make a settlement for any upward or downward adjustments to the
Federal share of costs after closeout reports are received.
(f) The recipient shall account for any real and personal property acquired with Federal
funds or received from the Federal Government in accordance with Sections .31
through .37.
(g) In the event a final audit has not been performed prior to the closeout of an award, the
Federal awarding agency shall retain the right to recover an appropriate amount after
fully considering the recommendations on disallowed costs resulting from the final
audit.
.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following.
(1) The right of the Federal awarding agency to disallow costs and recover funds on
the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a result of later refunds,
corrections, or other transactions.
(3) Audit requirements in Section .26.
(4) Property management requirements in Sections .31 through .37.
(5) Records retention as required in Section .53.
(b) After closeout of an award, a relationship created under an award may be modified or ended in whole
or in part with the consent of the Federal awarding agency and the recipient, provided the
responsibilities of the recipient referred to in Paragraph _.73(a), including those for property
management as applicable, are considered and provisions made for continuing responsibilities of the
recipient, as appropriate.
.73 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be
entitled under the terms and conditions of the award constitute a debt to the Federal Government. If
not paid within a reasonable period after the demand for payment, the Federal awarding agency may
reduce the debt by(1),(2)or(3).
(1) Making an administrative offset against other requests for reimbursements.
(2) Withholding advance payments otherwise due to the recipient.
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, the Federal awarding agency shall charge interest on an overdue
debt in accordance with 4 CFR Chapter II, "Federal Claims Collection Standards".
Appendix A
Contract Provisions
All contracts, awarded by a recipient including small purchases, shall contain the following
provisions as applicable:
1. Equal Employment Opportunity - All contracts shall contain a provision requiring
compliance with E.O. 11246, "Equal Employment Opportunity", as amended by EO. 11375,
"Amending Executive Order 11246 Relating to Equal Employment Opportunity", and as
supplemented by regulations at 41 CFR part 60, "Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor".
2. Copeland "Anti-Kickback" Act (18 USC 874 and 40 USC 276c) - All contracts and sub-
grants in excess of$2000 for construction or repair awarded by recipients and sub-recipients
shall include a provision for compliance with the Copeland "Anti-Kickback" Act (18 USC
874), as supplemented by Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or
Grants from the United States"). The Act provides that each contractor or sub-recipient 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 entitled. The recipient shall report all suspected or reported violations to the
Federal awardingagency.
3. Davis-Bacon Act, as amended (40 USC 276a to a-7) - When required by Federal program
legislation, all construction contracts awarded by the recipients and sub-recipients of more
than $2000 shall include a provision for compliance with the Davis-Bacon Act (40 USC 276a
to a-7) and as supplemented by Department of Labor regulations (29 CFR part 5, "Labor
Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted
Construction"). Under this Act, contractors shall be required to pay wages to laborers and
mechanics at a rate not less than the minimum wages specified in a wage determination made
by the Secretary of Labor. In addition, contractors shall be required to pay wages not less
than once a week. The recipient shall place a copy of the current prevailing wage
determination issued by the Department of Labor in each solicitation and the award of a
contract shall be conditioned upon the acceptance of the wage determination. The recipient
shall report all suspected or reported violations to the Federal awarding agency.
4. Contract Work Hours and Safety Standards 'Act (40 USC 327-333) - Where applicable,
all contracts awarded by recipients in excess of $2000 for construction contracts and in
excess of $2500 for other contracts that involve the employment of mechanics or laborers
shall include a provision for compliance with Sections 102 and 107 of the Contract Work
Hours and Safety Standards Act (40 USC 327-333), as supplemented by Department of
Labor regulations (29 CFR part 5). Under Section 102 of the Act, each contractor shall be
required to compute the wages of every mechanic and laborer on the basis of a standard
work-week of 40 hours. Work in excess of the standard work week is permissible provided
that the worker is compensated at a rate of not less than 1 1/2 times the basic rate of pay for all
hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to
construction work and provides that no laborer or mechanic shall be required to work in
surroundings or under working conditions which are unsanitary, hazardous or dangerous.
These requirements do not apply to the purchases of supplies or materials or articles
ordinarily available on the open market,, or contracts for transportation or transmission of
intelligence.
5. Rights to Inventions Made Under a Contract or Agreement - Contracts or agreements for
the performance of experimental, developmental, or research work shall provide for the
rights of the Federal Government and the recipient in any resulting invention in accordance
with 37 CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small
Business Firms Under Government Grants, Contracts and Cooperative Agreements", and
any implementing regulations issued by the awarding agency.
6. Clean Air Act (42 USC 7401 et seq.) and the Federal Water Pollution Control Act (33
USC 1251 et seq.), as amended - Contracts and sub-grants of amounts in excess of$100,000
shall contain a provision that requires the recipient to agree to comply with all applicable
standards, orders or regulations issued pursuant to the Clean Air Act (42 USC 7401 et seq.)
and the Federal Water Pollution Control Act as amended (33 USC 1251 et seq.). Violations
shall be reported to the Federal awarding agency and the Regional Office of the
Environmental Protection Agency(EPA).
7. Byrd Anti-Lobbying Amendment (31 USC 1352) - Contractors who apply or bid for an
award of$100,000 or more shall file the required certification. Each tier certifies to the tier
above that it will not and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or employee of any agency,
a member of Congress, officer or employee of Congress, or an employee of a member of
Congress in connection with obtaining any Federal contract, grant or any other award
covered by 31 USC 1352. Each tier shall also disclose any lobbying with non-Federal funds
that takes place in connection with obtaining any Federal award. Such disclosures are
forwarded from tier to tier up to the recipient.
8. Debarment and Suspension (EO's 12549 and 12689) - No contract shall be made to parties
listed on the General Services Administration's List of Parties Excluded from Federal
Procurement or Non-procurement Programs in accordance with EO's 12549 and 12689,
"Debarment and Suspension". This list contains the names of parties debarred, suspended, or
otherwise excluded by agencies, and contractors declared ineligible under statutory or
regulatory authority other than EO 12549. Contractors with awards that exceed the small
purchase threshold shall provide the required certification regarding its exclusion status and
that of its principal employees.
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24 CFR 85.43 ENFORCEMENT
(a) Remedies for non-compliance. If a grantee or sub-grantee material.,
any term of an award, whether stated in a Federal statute or regulation, an assurance, in a
State plan or application, a notice of award, or elsewhere, the awarding agency may take one
or more of the following actions, as appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the deficiency by the grantee
or sub-grantee or more severe enforcement action by the awarding agency,
(2) Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of
the activity or action not in compliance,
(3) Wholly or partly suspend or terminate the current award for the grantee's or sub-
grantee's program,
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the
grantee or sub-grantee an opportunity for such hearing, appeal or other administrative
proceeding to which the grantee or sub-grantee is entitled under any statute or regulation
applicable to the action involved.
(c) Effects of suspension and termination. Costs of grantee or sub-grantee resulting from
obligations incurred by the grantee or sub-grantee during a suspension or after termination of
an award are not allowable unless the awarding agency expressly authorizes them in the
notice of suspension or termination or subsequently. Other grantee or sub-grantee costs
during suspension or after termination which are necessary and not reasonably avoidable are
allowable if:
(1) The costs result from obligations which were properly incurred by the grantee or sub-
grantee before the effective date of suspension or termination, are not in anticipation of it,
and, in the case of a termination, are non-cancellable, and,
(2) The costs would be allowable if the award were not suspended or expired normally at the
end of the funding period in which the termination takes effect.
(d) Relationship to Debarment and Suspension. The enforcement remedies identified in this
section, including suspension and termination, do not preclude grantee or sub-grantee
from being subject to "Debarment and Suspension"under BO 12549 (see § 85.35).
24 CFR 85.44 TERMINATION FOR CONVENIENCE
Except as provided in § 85.43 awards may be terminated in whole or in part only as follows:
(a) By the awarding agency with the consent of the grantee or sub-grantee in which case the
two parties shall agree upon the termination conditions, including the effective date and
in the case of partial termination, the portion to be terminated, or
(b) By the grantee or sub-grantee upon written notification to the awarding agency, setting
forth the reasons for such termination, the effective date, and in the case of partial
termination, the portion to be terminated. However, if, in the case of a partial
termination, the awarding agency determines that the remaining portion of the award will
not accomplish the purposes for which the award was made, the awarding agency may
terminate the award in its entirety under either § 85.43 or Paragraph (a) of this section.
Exhibit "F"
'Community Development Block Grant Program
Entitlement Grant Regulations
uGfJ 1.Cut IJCL 1JUU
"Program income" means gross income received by the Recipient or a
Subrecipient directly generated from the use of CDBG funds. When such income
is generated by an activity that is only partially assisted with CDBG funds,
the income shall be prorated to reflect the percentage of CDBG funds used.
(1) Program income includes, but is not limited to the following:
(i) Proceeds from the disposition by sale or long term lease of real
property purchased or improved with CDBG funds ;
(ii) Proceeds from the disposition of equipment purchased with CDBG
funds ;
(iii) Gross income from the use or rental of real or personal property
acquired by the Recipient or. a Subrecipient with CDBG funds, less
the costs incidental to the generation of such income ;
(iv) Gross income from the use or rental of real property owned by the
Recipient or a Subrecipient that was constructed or improved with
CDBG funds, less the costs ' incidental to the generation of• such
income;
•
(v) Payments of principal and interest on loans made using CDBG funds;
(vi) Proceeds from the sale of loans made with CDBG funds;
(vii) Proceeds from the sale of obligations secured by loans made with
CDBG funds; •
(viii) Interest earned on funds held in a revolving fund account;
(ix) Interest earned on program income pending disposition of such
income; and,
(x) Funds collected through special assessments made against
properties owned and occupied by households not of low and
• moderate income, where such assessments are used to recover all
or part of the CDBG portion of a public improvement.
(2) Program income does not include interest earned (except for interest
described in § 570.513) on cash advances from the U.S. Treasury. Such
• interest shall be remitted to HUD for transmittal to the U. S. Treasury
and will not be reallocated under section 106(c) or (d) of the Act .
Examples of other receipts that are not considered program income are
proceeds from fundraising activities carried out by Subrecipients
receiving CDBG assistance; funds collected through special assessments
used to recover the non-CDBG portion of a public improvement ; and
proceeds from the disposition of real property acquired or improved with
CDBG funds when such disposition occurs after the applicable time period
specified in § 570.503(b)(8) for Subrecipient-controlled property or §
570.305 for Recipient-controlled property.
Exhibit "G"
OMB Circular A-122 http://w
OFFICE OF MANAGEMENT AND BUDGET
Cost Principles for Non-Profit Organizations
AGENCY: Office of Management and Budget
ACTION: Final revision of OMB Circular A-122, "Cost Principles for Non-Profit Organizations"
SUMMARY: The Office of Management and Budget(OMB)revises OMB Circular A-122 by amending
the definition for equipment;requiring the breakout of indirect costs into two categories(facilities and
administration)for certain non-profit organizations;modifying the multiple allocation basis;and,clarifying
the treatment of certain cost items.
DATES:The revision is effective on June 1, 1998.
FOR FURTHER INFORMATION CONTACT:Federal agencies should contact Gilbert Tran,Office of
Federal Financial Management, Office of Management and Budget, (202)395-3993. Non-Federal
organizations should contact the organization's Federal cognizant agency.
SUPPLEMENTARY INFORMATION:
A. Background
On October 6, 1995;the Office of Management and Budget(OMB)issued a final revision to OMB
Circular A-122,"Cost Principles for Non-Profit Organizations,"in the Federal Register(60 FR 52516)
regarding interest allowability.The revision was made in a continuing effort to increase consistency across
OMB's cost principles circulars A-122,A-21, "Cost Principles for Educational Institutions,"and A-87,
"Cost Principles for State,Local and Indian Tribal Governments." To further the goals of consistency,
OMB proposed on the same date(60 FR 52522)to revise the definition of equipment,to clarify the
treatment of certain types of costs,to modify the multiple allocation base method for computing indirect
cost rate(s),and to place an upper-limit on payments of administrative expenses for certain non-profit
organizations.
With this final revision,Circular A-122 consists of the Circular as issued in 1980(45 FR 46022;July 8,
1980),as amended in 1984(49 FR 18260;April 27, 1984), in 1987(52 FR 19788;May 27, 1987),in 1995
(60 FR 52516;October 6, 1995),in 1997(62 FR 45934; August 29, 1997), and in this notice. A
recompilation of the entire Circular A-122,with all its amendments,accompanies the notice and is
available in electronic form on the OMB Home Page at http://www.whitehouse.gov/OMB.
B. Current Revisions
Circular A-122 is revised in this notice to:
•
1. Amend the definition of equipment by increasing the capitalization threshold to the lesser amount used
for financial statement purposes or$5,000(see paragraph 15).
2. Require major non-profit organizations(those receiving more than$10 million in direct Federal funding)
to report indirect cost rates by two major component categories: facilities and administration(see paragraph
D,Attachment A).
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3. Modify the multiple allocation base method(MAB)to be consistent with OMB Circular A-21 (see
paragraph D.3).However,major non-profit organizations are not required to use the multiple allocation
base method.MAB remains one of the three available methodologies for computing indirect costs.
4. Clarify the treatment of the following cost items to provide consistency across OMB's cost principles
circulars(A-21 and A-8i)and the Federal Acquisition Regulations, where applicable:
• Alcoholic beverages
• Advertising and public relations costs
• Organization-furnished automobiles
• Defense and prosecution of criminal and civil proceedings,claims, appeals and patent infringements
• Housing and living expenses
• Insurance
• Memberships
• Selling or marketing of goods and services
• Severance pay for foreign nationals
OMB is not implementing the proposed restrictions on trustees'travel expenses at non-profit organizations.•
In line with this decision, and to further consistency between cost circulars,OMB will be amending
Circular A-21 to allow trustees'travel expenses.
OMB defers considering an upper-limit on payment of administrative expenses until better data on indirect
costs at non-profit organizations are collected.
C. Comments and Responses
OMB received about 185 comments from non-profit organizations,Federal agencies,professional
organizations and accounting firms.A summary of comments and OMB's responses are included in this
notice. Several comments resulted in modifications to OMB's original proposal.
The comments and OMB's responses are summarized by section as follow.
Equipment Definition
Comment: Clarification is needed on the treatment of depreciation of those assets which had costs between
the old$500 threshold and the new$5,000.
Response:In order to clarify the accounting for the undepreciated portion of any equipment costs as a
result of a change in capitalization levels,paragraph 15 has been added to explain that the undepreciated
amount may be recovered by continuing to claim otherwise allowable use allowances or depreciation on
the equipment, or by amortizing the amount to be written off over a period of years as negotiated with the
Federal cognizant agency.
Comment: Clarification is needed on whether equipment under the$5,000 threshold, as established by the
non-profit organizations'policy, requires Federal approval prior to acquisition.
Response: Equipment under the$5,000 threshold, as established by the non-profit organization's policy,
can be directly charged to sponsored agreements(subparagraph 15.b)without prior Federal approval.
Comment: Current subparagraph 13.b requires prior approval for special purpose equipment,as direct
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costs,with a unit cost of$1,000 or more.This requirement is not consistent with the higher threshold of
$5,000 allowed in the proposed revision.This requirement should be revised to be consistent with the
proposed revision.
Response:OMB agrees.The Circular is revised to require prior Federal approval only for special purpose
equipment with a unit cost of$5,000 or more.
Unallowable Cost Items
These ten revised cost items are already unallowable under OMB Circulars A-21, "Cost Principles for
Educational Institutions,"and A-87, "Cost Principles for State, Local and Indian Tribal Governments,"
and/or the Federal Acquisition Regulations. OMB addressed the issue of trustees'travel in response to the
comments received. For the other items,consistency across Federal cost regulations was a more significant
issue than most of the commenters'concerns. Comments related to specific cost items are presented below,
followed by OMB's responses.
Advertising and Public Relations Costs
Comment: Current paragraph 37,Public information service costs, should be combined with the
"Advertising"paragraph to be consistent with other OMB cost principles in Circulars A-21 and A-87.
Response: The commenter is correct.The treatment of public information service costs is now addressed in
revised paragraph 1,Advertising and public relations costs. Current paragraph 37 is deleted.
Comment: Clarify the types of activities that are allowable as public relations costs. Public relations costs
are required under sponsored as legitimate programoutreach,thateq p
to carry out certain functions, such gi
programs and contracts should be allowable.
Response: The Circular is revised to clarify that certain public relations costs for the purpose of
communicating specific activities related to the sponsored programs to the public or the press are allowable
costs.When they are necessary for program outreach effort as required by sponsored programs,public
relations costs are allowable. Costs of advertising and public relations incurred solely to promote the
organization are unallowable.
Comment:Clarify whether advertising media costs such as radio and television are allowable.
Response:As long as the public relations costs are specifically required by the sponsored programs or are
related to the promotion of sponsored programs,any reasonable advertising media,including magazines,
newspapers,radio,television,direct mail,exhibits, and the like,can be used and its costs are allowable.
See paragraph l.a.
Comment: Community relation costs should be allowable as part.of program outreach effort for Federal
sponsored programs.
Response: Community relations are defined in subparagraph 1.b as"those activities dedicated to maintain
the image of the organization or promoting understanding and favorable relations with the community or
public at large or any segment of the public." Costs related to community relations are allowable when the
costs are required or necessary to the performance of the sponsored programs.
Organization-furnished automobiles for personal use
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Comment: For security and economic reasons,non-profit organizations often furnish automobiles and
housing for its personnel working on Federal projects(e.g., overseas projects sponsored by the U.S.
Agency for International Development or the U.S. State Department). These costs should be allowable as
direct costs.
Response: The Circular is revised to allow these costs when they are necessary to perform the Federal
projects,particularly the overseas sponsored projects with prior approval by the Federal awarding agency.
These costs are allowable only as direct costs to the Federal projects, and not as fringe benefit or indirect
costs.
•
Comment: The Circular should specify which types of automobiles are allowable or unallowable(e.g., cars,
vans,trucks and buses).
Response: The types of automobiles are irrelevant for the purpose of determining the allowability of
automobile costs. Rather,the determinant factors should be whether the automobile costs are reasonable
and necessary for the performance of the Federal projects and authorized by the Federal awarding agency.
Defense and prosecution of criminal and civil proceedings,claims,appeals and patent infringements
Comment: Current paragraph 35.d,Professional service costs,should be combined with new paragraph 10.
Response: OMB agrees. Current paragraph 35.d is deleted.Professional service costs related to defense of
antitrust suits,prosecution of claims against the Federal Government and patent infringement litigation are
discussed in new paragraph 10. Professional service costs incurred for organization and reorganization are
discussed in paragraph 31,Organization costs.
Comment: Clarification is needed as to when legal costs related to claims,appeals or proceeding become
unallowable. Commenters noted that Federal agencies are inconsistent in the determination of the
allowability of legal costs as one agency would allow legal costs up to the point where the case goes out of
the Federal agency appeal process and to the courts,whereas other agencies would only allow legal costs
through the first phase of appeals within the Federal agency.
Response: The policy makes unallowable legal and related costs for either defending against claims made
by the Federal Government or prosecuting claims against the Government. As such,once a final
management decision letter is issued by the agency(for example,a disallowance letter), all legal and
related costs are unallowable from that point forward. Unallowable costs would include claims and
defenses pursued through agencies'formal appeal procedures such as administrative law judges and agency
appeal boards. Note that legal and related costs may be allowable if the non-profit organization's position is
sustained by the administrative appeal process or an agreement is reached between the organization and the
Federal Government(see subparagraghs 10.b, 10.c, 10.d and 10.e). This revision is consistent with the
language contained in OMB Circular A-21, "Cost Principles for Educational Institutions."
Comment: Some commenters objected to the proposed 80 percent limitation on reimbursement when the
institution is found innocent.
Response: The proposed revision was retained because it provides consistency with procurement contracts.
This limitation is based on the statutory language of Public Law 100-700,Major Fraud Act of 1988,
November 19, 1988(41 U.S.C.,256(k)(5)),which only allows recovery of 80 percent of the legal costs.
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Comment: Legal expenses to defend against lawsuits brought by a foreign government for violation of that
country's law should be allowable.
Response:The Circular is revised in subparagraph 10.d to authorize Federal agencies to allow legal
expenses to defend against lawsuits brought by a foreign government for violation of its law when such
costs were necessary or were direct results of the performance of Federal sponsored programs. The same
authorizations apply for legal costs for defense against lawsuits brought by state or local governments.
Comment: Legal fees to defend against lawsuits filed by former employees for termination or by
subrecipients should be allowable.
Response: Legal fees incurred in defense of lawsuits not brought by a Federal, State, local or foreign
government, except when the suits are brought by former employees under Section 2 of the Major Fraud
Act of 1988 (Pub. L. 100-700),are allowable.
Housing and living expenses
Comment:For security and economic reasons,non-profit organizations often furnish automobiles and
housing for its personnel working on overseas Federal projects(e.g.,overseas projects sponsored by the
U.S.Agency for International Development).These costs should be allowable as direct costs.
Response: As previously noted(in the discussion of automobiles),the Circular is revised to allow these
costs when they are necessary to perform the Federal projects and when they are approved by the Federal
awarding agency. These costs are allowable only as direct costs to the Federal projects, and not as fringe
benefit or indirect costs.
Insurance •
Comment: General and casualty liability insurance costs for organization's directors and administrators
should be allowable.
Response: General and casualty liability insurance costs for organization's directors and administrators are
allowable,subject to limitations, as described in subparagraph 22.a.(2). New subparagraph 22.a.(2).f,
•
Insurance against defects,prohibits the reimbursement of costs against Federally sponsored awards for
product(or services) liability insurance costs.
Comment:Medical liability insurance costs for participants in Federal training programs should be
allowable.
Response:Medical liability insurance costs associated with participants in Federal training programs are
allowable to Federal programs as direct costs.
Comment: Malpractice insurance costs for physicians should be direct charged to Federal programs while
malpractice insurance costs for nurses or laboratory assistants,which are immaterial in most cases, should
be charged as indirect costs.
Response: Subparagraph B.2 of Attachment A provides that when a direct cost is of minor amounts,it may
be treated as an indirect cost for reasons of practicality and efficiency,provided that the accounting
treatment for such cost is consistently applied to all final cost objectives.Therefore,when malpractice
insurance costs for nurses or lab technicians are immaterial in relation to its effect on the overall indirect
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cost rates of the organization, they may be treated as indirect costs.
Memberships
Comment: Membership costs in civic and community organizations should be allowable.
Response: Membership costs are allowable for business and professional organizations.The Circular is
further revised to allow membership costs in civic and community organizations when associations with
these organizations are essential to the performance of the Federal programs (as an outreach function).
These membership costs must be approved by the Federal cognizant agency.
Comment:Costs of membership in organizations that lobby should be unallowable.
Response:Paragraph 25 of the Circular disallows lobbying costs. Membership dues to lobbying
organizations are therefore unallowable. The unallowable portion of membership dues is determined by the
percentage of lobbying activities versus other allowable activities of the lobbying organization.
Selling or Marketing of Goods and Services.
Comment: Clarification is needed for what types of activities are considered to be the selling or marketing
of goods and services.
Response: Selling or marketing of goods and services generally include an organization's efforts to market
the organization's products or services such as through advertising,organizational image enhancement,
market planning and direct selling. Direct selling efforts are those acts or actions used to induce particular
customers to purchase particular products or services of the organization. The allowability provisions for
advertising costs are described in paragraph 1.
Comment: The guidelines for selling or marketing of goods and services should be consistent with those in -
FAR 31.205.38(c)(1).
Response: FAR 31.205.38(c)(1)allows direct selling costs at commercial contractors if they are reasonable
in amount.By contrast to the commercial contract context, direct selling costs are generally not considered
to be necessary costs for the performance of Federal sponsored programs by non-profit organizations. In
those cases where they are essential for certain Federal sponsored programs,these costs can be charged as
direct costs to the Federal sponsored programs if they are approved by the Federal awarding agency.
Comment: Given that the Bayh-Dole Act encouraged technology transfer, selling or marketing costs of
goods or services should be allowable costs. At the minimum,these costs should be allowable as direct
costs to the Federal projects.
Response: The Circular is revised to allow selling or marketing costs as direct costs to some Federal
sponsored programs when approved by the Federal awarding agency.
Severance Pay
Comment: Early retirement benefits should be allowable costs.
Response: Early retirement benefit costs are allowable costs, subject to limitations, and are discussed in
subparagraph 6.f, Fringe Benefits, along with other forms of fringe benefits. Paragraph 49, Severance Pay,
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deals only with severance policy, i.e., dismissal; and the reimbursement of its costs.
Comment: Guidelines for costs of severance pay to foreign nationals in excess of customary or prevailing
practices should be consistent with section 2151 of the Federal Acquisition Streamlining Act of 1994
(FASA).
Response: OMB agrees.The Circular is revised to be consistent with FASA guidelines for severance pay to
foreign nationals in excess of customary or prevailing practices. As a result, the Federal awarding agency
may allow these costs when they are necessary for the performance of the Federal sponsored programs.
Trustees' Travel
•
Comment: Several commenters opposed the proposal to disallow trustees'travel costs citing the difficulty
of retaining or obtaining members to serve voluntarily on the Board of Trustees(or Directors)of a
non-profit organization,if Board members have to pay for their own travel expenses to attend Board
meetings. The commenters added that since serving on a non-profit organization's Board is often not as
prestigious and desirable as serving on a University's Board(where trustees'travel costs are unallowable
under Circular A-21),non-reimbursement of the travel costs would inhibit the recruitment of Board
members.
Response: OMB concurs that disallowing the reimbursement of trustees'travel costs could inhibit the
recruitment of qualified Board members(particularly at smaller non-profit organizations),thereby
hampering the operations of a non-profit organization. OMB also recognizes that trustees'travel costs are
reasonable and necessary business costs. As a result,trustees'travel costs remain allowable.
Comment: Trustees'travel costs should be allowable if they are reasonable. Some suggested tests for
reasonableness of trustees'travel costs are: limit number of allowed trips per year,restriction of trips to
organization's principal place of business or reasonable surroundings,distinction between scheduled Board
meetings and emergency Board meetings, and disallowance of first-class airfare travels.
Response: All costs charged to Federal projects must satisfy a reasonableness test.Although some of the
suggested reasonableness tests appear to be good,OMB does not believe it is necessary at this time to
impose specific restrictions on trustees'travel expenses. The reasonableness of a particular travel expense
remains at the judgement of Federal negotiators.
Comment:At Head Start organizations,some Trustee members are first sent for training in the operations
of a Head Start program. These travel costs related to training should be allowable.
Response:Travel costs related to training and education are allowable, subject to limitations, and are
addressed in paragraph 53 of the Circular,Training and education costs.
Comment:At Head Start organizations,there often are several advisory boards in addition to the Board of
Trustees(or Directors).These advisory boards are involved in day-to-day operations of the organizations
and often incur travel costs. Are these costs subject to the same restrictions as trustees'travel?
Response:Travel costs for members of advisory groups are allowable, subject to the limitations in
paragraph 55,Travel costs.
Multiple Allocation Basis (MAB)
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Comment:The multiple allocation method for calculating indirect costs rates is much more complicated
and burdensome than the simplified method and it will cost non-profit organizations much more to prepare
the indirect cost proposal. Several commenters recommended the flexibility of using one of the three
different allocation methods as they are currently described in the Circular. The multiple allocation basis
(MAB)should remain an optional allocation methodology rather than a required methodology for certain
organizations.
Response: The use of MAB for major non-profit organizations promotes consistency in the calculation and
the reporting of indirect costs. It would facilitate the accumulation of indirect cost data by cost components
(i.e.,facilities and administration)and provide comparable rates between major research non-profit
organizations and universities. However, OMB recognizes that a conversion to MA13 may require some
substantial changes in the organization's accounting system and that MAB is not practical for
single-function organizations. Therefore, the Circular continues to allow non-profit organizations to use
any of the current three allocation methodologies.
Comment: Several commenters suggested raising the threshold for the requirement to$25 million in direct
Federal funding. Several commenters also suggested an exemption from this requirement for
single-function organizations regardless of Federal funding levels.
Response: The Circular is revised to allow the use of the current three allocation methodologies for all
non-profit organizations. For organizations that receive more than$10 million in direct Federal funding,a
breakout of indirect costs into two components, facilities and administration, is required regardless of the
selected allocation methodology.
Comment: The allocation methodology for general administration under MAB on the basis of modified
total direct costs conflicts with the required methodology under Cost Accounting Standard(CAS)410
applicable to contracts using the salaries and wages basis. One commenter suggested that a fully
CAS-covered non-profit organization be exempted from the MAB requirement.
•
Response:MAB is not a requirement for non-profit organizations and remains one of the three available
methodologies in the Circular for computing indirect costs.In addition,CAS-covered non-profit
organizations should continue to follow CAS with respect to the measurement, assignment and allocation
of costs.
Comment: The revision should clarify that the modified total direct cost base should only include the first
$25,000 of a subcontract regardless of the period during which the project is started(consistent with OMB
Circular A-21).
Response: The modified total direct cost base,described in subparagraph D.3.f of the Circular,includes the
first$25,000 of each subgrant or subcontract regardless of the period covered by the subgrant or
subcontract. Subgrant or subcontract costs above$25,000 shall be,excluded from the modified total direct
cost base.For example, for a$300,000 subgrant that lasts three years,only the first$25,000 incurred on the
award should be included in the modified total direct cost base.
Administrative Cap of 26 percent •
Comment: Most commenters strongly opposed the 26 percent administrative cap stating that such
limitation on cost reimbursement is arbitrary, capricious, and unnecessary. Some argued that a cap would
be financially disastrous to non-profit organizations because they receive most of their funding from
Federal sources(unlike universities). A detailed analysis is urged to determine the average administrative
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costs applicable to non-profit organizations,if an administrative cap is to be implemented at non-profit
organizations.
Response:Based on the comments against the implementation of an administrative cap at non-profit
organizations, OMB defers the consideration of establishing any administrative cap until better data on
indirect costs at non-profit organizations can be collected. If OMB believes that an administrative cap
should be implemented, it would be proposed in a subsequent notice.
Other
Comment: Attachment C of the Circular should be updated since a few listed organizations no longer exist.
Response: OMB agrees. Attachment C is updated to delete those organizations that no longer exist or are
no longer exempted from OMB Circular A-122. •
Franklin D.Raines
Director
Attachments A,B and C of Circular A-122 are revised as follows:
A.Attachment A
1. Add subparagraph 3 to paragraph C("Indirect Costs").
3. Indirect costs shall be classified within two broad categories: "Facilities" and"Administration."
"Facilities"is defined as depreciation and use allowances on buildings,equipment and capital
improvement,interest on debt associated with certain buildings,equipment and capital improvements, and
operations and maintenance expenses. "Administration"is defined as general administration and general
expenses such as the director's office, accounting,personnel, library expenses and all other types of
expenditures not listed specifically under one of the subcategories of"Facilities"(including cross
allocations from other pools,where applicable). See indirect cost rate reporting requirements in
subparagraphs D.2.e and D.3.g.
2.Add subparagraph 2.e to paragraph D. -
e.For an organization that receives more than$10 million in Federal finding of direct costs in a fiscal year,
a breakout of the indirect cost component into two broad categories,Facilities and Administration as
defined in subparagraph C.3, is required. The rate in each case shall be stated as the percentage which the
amount of the particular indirect cost category(i.e.,Facilities or Administration)is of the distribution base
identified with that category.
3.Replace subparagraph D.3 with the following:
3.Multiple allocation base method.
a.General.Where an organization's indirect costs benefit its major functions in varying degrees,indirect
costs shall be accumulated into separate cost groupings,as described in subparagraph b. Each grouping
shall then be allocated individually to benefitting functions by means of a base which best measures the
relative benefits. The default allocation bases by cost pool are described in subparagraph c.
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b. Identification of indirect costs. Cost groupings shall be established so as to permit the allocation of each
grouping on the basis of benefits provided to the major functions. Each grouping shall constitute a pool of
expenses that are of like character in terms of functions they benefit and in terms of the allocation base
which best measures the relative benefits provided to each function. The groupings are classified within the
two broad categories: "Facilities" and"Administration,"as described in subparagraph C.3. The indirect
cost pools are defined as follows:
(1)Depreciation and use allowances. The expenses under this heading are the portion of the costs of the
organization's buildings,capital improvements to land and buildings, and equipment which are computed
in accordance with paragraph 11 of Attachment B ("Depreciation and use allowances").
•
(2)Interest. Interest on debt associated with certain buildings,equipment and capital improvements are
computed in accordance with paragraph 23 of Attachment B ("Interest, fund raising, and investment
management costs").
(3)Operation and maintenance expenses. The expenses under this heading are those that have been
incurred for the administration,operation,maintenance,preservation, and protection of the organization's
physical plant. They include expenses normally incurred for such items as:janitorial and utility services;
repairs and ordinary or normal alterations of buildings, furniture and equipment;care of grounds;
maintenance and operation of buildings and other plant facilities; security; earthquake and disaster
preparedness; environmental safety;hazardous waste disposal;property, liability and other insurance
relating to property; space and capital leasing; facility planning and management; and,central receiving.
The operation and maintenance expenses category shall also include its allocable share of fringe benefit
costs,depreciation and use allowances, and interest costs.
(4)General administration and general expenses. The expenses under this heading are those that have been
incurred for the overall general executive and administrative offices of the organization and other expenses
of a general nature which do not relate solely to any major function of the organization.This category shall
also include its allocable share of fringe benefit costs,operation and maintenance expense,depreciation
and use allowances, and interest costs. Examples of this category include central offices, such as the
director's office,the office of finance,business services,budget and planning,personnel, safety and risk
management,general counsel, management information systems, and library costs.
In developing this cost pool,special care should be exercised to ensure that costs incurred for the same
purpose in like circumstances are treated consistently as either direct or indirect costs. For example,
salaries of technical staff,project supplies,project publication,telephone toll charges, computer costs,
travel costs, and specialized services costs shall be treated as direct costs wherever identifiable to a
particular program. The salaries and wages of administrative and pooled clerical staff should normally be
treated as indirect costs. Direct charging of these costs may be appropriate where a major project or activity
explicitly requires and budgets for administrative or clerical services and other individuals involved can be
identified with the program or activity. Items such as office supplies,postage, local telephone costs,
periodicals and memberships should normally be treated as indirect costs.
c. Allocation bases. Actual conditions shall be taken into account in selecting the base to be used in
allocating the expenses in each grouping to benefitting functions. The essential consideration in selecting a
method or a base is that it is the one best suited for assigning the pool of costs to cost objectives in
accordance with benefits derived; a traceable cause and effect relationship;or logic and reason,where
neither the cause nor the effect of the relationship is determinable. When an allocation can be made by
assignment of a cost grouping directly to the function benefited, the allocation shall be made in that
manner. When the expenses in a cost grouping are more general in nature, the allocation shall be made
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through the use of a selected base which produces results that are equitable to both the Federal Government
and the organization. The distribution shall be made in accordance with the bases described herein unless it
can be demonstrated that the use of a different base would result in a more equitable allocation of the costs,
or that a more readily available base would not increase the costs charged to sponsored awards. The results
of special cost studies(such as an engineering utility study) shall not be used to determine and allocate the
indirect costs to sponsored awards.
(1)Depreciation and use allowances.Depreciation and use allowances expenses shall be allocated in the
following manner:
(a)Depreciation or use allowances on buildings used exclusively in the conduct of a single function,and on
capital improvements and equipment used in such buildings,shall be assigned to that function.
(b)Depreciation or use allowances on buildings used for more than one function,and on capital
improvements and equipment used in such buildings,shall be allocated to the individual functions
performed in each building on the basis of usable square feet of space, excluding common areas, such as
hallways,stairwells,and restrooms.
(c)Depreciation or use allowances on buildings,capital improvements and equipment related space(e.g.,
individual rooms, and laboratories)used jointly by more than one function(as determined by the users of
the space)shall be treated as follows.The cost of each jointly used unit of space shall be allocated to the
benefitting functions on the basis of:
(i)the employees and other users on a full-time equivalent(FTE)basis or salaries and wages of those
individual functions benefitting from the use of that space; or
(ii)organization-wide employee FTEs or salaries and wages applicable to the benefitting functions of the
organization.
(d)Depreciation or use allowances on certain capital improvements to land, such as paved parking areas,
fences,sidewalks,and the like,not included in the cost of buildings,shall be allocated to user categories on
a FTE basis and distributed to major functions in proportion to the salaries and wages of all employees
applicable to the functions.
(2)Interest. Interest costs shall be allocated in the same manner as the depreciation or use allowances on
the buildings, equipment and capital equipments to which the interest relates.
(3)Operation and maintenance expenses. Operation and maintenance expenses shall be allocated in the
same manner as the depreciation and use allowances.
(4)General administration and general expenses. General administration and general expenses shall be
allocated to benefitting functions based on modified total direct costs(MTDC), as described in
subparagraph D.3.f. The expenses included in this category could be grouped first according to major
functions of the organization to which they render services or provide benefits. The aggregate expenses of
each group shall then be allocated to benefitting functions based on MTDC.
d.Order of distribution.
(1)Indirect cost categories consisting of depreciation and use allowances,interest,operation and
maintenance,and general administration and general expenses shall be allocated in that order to the
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remaining indirect cost categories as well as to the major functions of the organization. Other cost
categories could be allocated in the order determined to be most appropriate by the organization. When
cross allocation of costs is made as provided in subparagraph(2),this order of allocation does not apply.
(2)Normally, an indirect cost category will be considered closed once it has been allocated to other cost
objectives,and costs shall not be subsequently allocated to it. However, a cross allocation of costs between
two or more indirect costs categories could be used if such allocation will result in a more equitable
allocation of costs. If a cross allocation is used, art appropriate modification to the composition of the
indirect cost categories is required.
e. Application of indirect cost rate or rates. Except where a special indirect cost rate(s)is required in
accordance with subparagraph D.5, the separate groupings of indirect costs allocated to each major
function shall be aggregated and treated as a common pool for that function. The costs in the common pool
shall then be distributed to individual awards included in that function by use of a single indirect cost rate.
f. Distribution basis. Indirect costs shall be distributed to applicable sponsored awards and other benefitting
activities within each major function on the basis of MTDC. MTDC consists of all salaries and wages,
fringe benefits,materials and supplies, services,travel,and subgrants and subcontracts up to the first
$25,000 of each subgrant or subcontract(regardless of the period covered by the subgrant or subcontract).
Equipment,capital expenditures,charges for patient care,rental costs and the portion in excess of$25,000
shall be excluded from MTDC.Participant support costs shall generally be excluded from MTDC. Other
items may only be excluded when the Federal cost cognizant agency determines that an exclusion is
necessary to avoid a serious inequity in the distribution of indirect costs.
g. Individual Rate Components. An indirect cost rate shall be determined for each separate indirect cost
pool developed. The rate in each case shall be stated as the percentage which the amount of the particular
indirect cost pool is of the distribution base identified with that pool. Each indirect cost rate negotiation or
determination agreement shall include development of the rate for each indirect cost pool as well as the
overall indirect cost rate.The indirect cost pools shall be classified within two broad categories: "Facilities"
and "Administration," as described in subparagraph C.3.
B. Attachment B
Revise the following cost items in Attachment B to Circular A-122 ("Selected Items of Cost").
1. Revise the Table of Contents for Attachment B to read:
I. Advertising and public relations costs
2. Alcoholic beverages
3. Bad debts
4. Bid and proposal costs(reserved)
5. Bonding costs
6. Communication costs
7. Compensation for personal services
8. Contingency provisions
9. Contributions
10. Defense and prosecution of criminal and civil proceedings,claims, appeals and patent infringement
11. Depreciation and use allowances
12. Donations
13. Employee morale,health, and welfare costs and credits
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14. Entertainment costs
15. Equipment and other capital expenditures
16. Fines and penalties
17. Fringe benefits
18. Goods or services for personal use
19.Housing and personal living expenses
20. Idle facilities and idle capacity
21. Independent research and development(reserved)
22. Insurance and indemnification
23. Interest, fund raising, and investment management costs
24. Labor relations costs
25. Lobbying costs •
26. Losses on other awards
27. Maintenance and repair costs
28. Materials and supplies
29.Meetings and conferences
30.Memberships, subscriptions, and professional activity costs
31. Organization costs
32.Overtime,extra-pay shift, and multi-shift premiums
33.Page charges in professional journals
34.Participant support costs
35.Patent costs
36.Pension plans
37.Plant security costs
38.Pre-award costs
39.Professional service costs
40.Profits and losses on disposition of depreciable property or other capital assets
41.Publication and printing costs
42. Rearrangement and alteration costs
43.Reconversion costs
44.Recruiting costs
45.Relocation costs
46.Rental costs
47.Royalties and other costs for use of patents and copyrights
48.Selling and marketing
49. Severance pay
50. Specialized service facilities
51.Taxes
52.Termination costs
53.Training and education costs
54.Transportation costs
55. Travel costs
56.Trustees •
2. Revise and retitle paragraph 1 to read:
1. Advertising and public relations costs.
a.The term advertising costs means the costs of advertising media and corollary administrative costs.
Advertising media include magazines,newspapers,radio and television programs,direct mail,exhibits,
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and the like.
b.The term public relations includes community relations and means those activities dedicated to
maintaining the image of the organization or maintaining or promoting understanding and favorable
relations with the community or public at large or any segment of the public.
c.The only allowable advertising costs are those which are solely for:
(1)The recruitment of personnel required for the performance by the organization of obligations arising
under a sponsored award,when considered in conjunction with all other recruitment costs, as set forth in
paragraph 44("Recruiting costs");
(2) The procurement of goods and services for the performance of a sponsored award;
(3) The disposal of scrap or surplus materials acquired in the performance of a sponsored award except
when organizations are reimbursed for disposal costs at a predetermined amount in accordance with OMB
Circular A-110, Sec. .34, "Equipment"; or
(4)Other specific purposes necessary to meet the requirements of the sponsored award.
d. The only allowable public relations costs are:
(I)Costs specifically required by sponsored awards; "
(2)Costs of communicating with the public and press pertaining to specific activities or accomplishments
which result from performance of sponsored awards(these costs are considered necessary as part of the
outreach effort for the sponsored awards);or
(3)Costs of conducting general liaison with news media and government public relations officers,to the
extent that such activities are limited to communication and liaison necessary to keep the public informed
on matters of public concern, such as notices of contract/grant awards,financial matters, etc.
e. Costs identified in subparagraphs c and d if incurred for more than one sponsored award or for both
sponsored work and other work of the organization,are allowable to the extent that the principles in _-.
paragraphs B ("Direct Costs")and C("Indirect Costs")of Attachment A are observed.
f. Unallowable advertising and public relations costs include the following:
(1)All advertising and public relations costs other than as specified in subparagraphs c,d,and e;
(2)Costs of meetings or other events related to fund raising or other organizational activities including:
(i) Costs of displays,demonstrations,and exhibits;
(ii)Costs of meeting rooms,hospitality suites,and other special facilities used in conjunction with shows
and other special events; and
(iii) Salaries and wages of employees or cost of services engaged in setting up and displaying exhibits,
making demonstrations, and providing briefings;
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(3)Costs of promotional items and memorabilia, including models, gifts,and souvenirs;
(4)Costs of advertising and public relations designed solely to promote the organization.
3. Renumber current paragraphs 2 through 8 as paragraphs 3 through 9,respectively.
4. Add the following new paragraph 2:
2. Alcoholic beverages. Costs of alcoholic beverages are unallowable.
5. In paragraph 7 ("Compensation for personal services"),as renumbered above in item 3, rename the
current subparagraph g("Pension costs"),as subparagraph h.Add a new subparagraph g:
g. Organization-furnished automobiles. That portion of the cost of organization-furnished automobiles
that relates to personal use by employees(including transportation to and from work)is unallowable as
fringe benefit or indirect costs regardless of whether the cost is reported as taxable income to the
employees.These costs are allowable as direct costs to sponsored award when necessary for the
performance of the sponsored award and approved by awarding agencies.
6. Renumber current paragraphs 9 through 15 as paragraphs 11 through 17,respectively.
7. Add new paragraph 10:
10. Defense and prosecution of criminal and civil proceedings,claims,appeals and patent
infringement.
a. Definitions.
(1)Conviction, as used herein, means a judgment or a conviction of a criminal offense by any court of
competent jurisdiction,whether entered upon as a verdict or a plea, including a conviction due to a plea of
nolo contendere.
(2)Costs include,but are not limited to, administrative and clerical expenses;the cost of legal services,.
whether performed by in-house or private counsel; and the costs of the services of accountants,consultants,
or others retained by the organization to assist it;costs of employees,officers and trustees,and any similar
costs incurred before,during, and after commencement of a judicial or administrative proceeding that bears
a direct relationship to the proceedings.
(3)Fraud, as used herein,means(i)acts of fraud corruption or attempts to defraud the Federal Government
or to corrupt its agents,(ii)acts that constitute a cause for debarment or suspension(as specified in agency
regulations), and(iii)acts which violate the False Claims Act, 31 U.S.C.,sections 3729-3731,or the
Anti-Kickback Act,41 U.S.C., sections 51 and 54.
(4)Penalty does not include restitution,reimbursement,or compensatory damages.
(5)Proceeding includes an investigation.
b..(1) Except as otherwise described herein,costs incurred in connection with any criminal,civil or
administrative proceeding(including filing of a false certification)commenced by the Federal Government,
or a State, local or foreign government,are not allowable if the•.proceeding: (1)relates to a violation of,or
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failure to comply with, a Federal, State, local or foreign statute or regulation by the organization(including
its agents and employees), and(2)results in any of the following dispositions:
(a) In a criminal proceeding, a conviction.
(b)In a civil or administrative proceeding involving an allegation of fraud or similar misconduct,a
determination of organizational liability.
(c)In the case of any civil or administrative proceeding,the imposition of a monetary penalty.
(d)A final decision by an appropriate Federal official to debar or suspend the organization, to rescind or
void an award,or to terminate an award for default by reason of a violation or failure to comply with a law
or regulation.
(e)A disposition by consent or compromise, if the action could have resulted in any of the dispositions
described.in(a), (b),(c)or(d).
(2)If more than one proceeding involves the same alleged misconduct,the costs of all such proceedings
shall be unallowable if any one of them results in one of the dispositions shown in subparagraph b.(1).
c. If a proceeding referred to in subparagraph b is commenced by the Federal Government and is resolved
by consent or compromise pursuant to an agreement entered into by the organization and the Federal
Government,then the costs incurred by the organization in connection with such proceedings that are
otherwise not allowable under subparagraph b may be allowed to the extent specifically provided in such
agreement.
•
d. If a proceeding referred to in subparagraph b is commenced by a State, local or foreign government,the
authorized Federal official may allow the costs incurred by the organization for such proceedings,if such
authorized official determines that the costs were incurred as a result of(1) a specific term or condition of a
federally-sponsored award, or(2)specific written direction of an authorized official of the sponsoring
agency.
e. Costs incurred in connection with proceedings described in subparagraph b,but which are not made
unallowable by that subparagraph,may be allowed by the Federal Government,but only to the extent that:
(1)The costs are reasonable in relation to the activities required to deal with the proceeding and the
underlying cause of action;
(2)Payment of the costs incurred,as allowable and allocable costs, is not prohibited by any other
provision(s)of the sponsored award;
(3)The costs are not otherwise recovered from the Federal Government or a third party,either directly as a
result of the proceeding or otherwise; and,
(4) The percentage of costs allowed does not exceed the percentage determined by an authorized Federal
official to be appropriate,considering the complexity of the litigation, generally accepted principles
governing the award of legal fees in civil actions involving the United States as a party, and such other
factors as may be appropriate. Such percentage shall not exceed 80 percent. However,if an agreement
reached under subparagraph c has explicitly considered this 80 percent limitation and permitted a higher
percentage, then the full amount of costs resulting from that agreement shall be allowable.
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f. Costs incurred by the organization in connection with the defense of suits brought by its employees or
ex-employees under section 2 of the Major Fraud Act of 1988(Pub. L. 100-700), including the cost of all
relief necessary to make such employee whole,where the organization was found liable or settled,are
unallowable.
g. Costs of legal,accounting,and consultant services, and related costs, incurred in connection with
defense against Federal Government claims or appeals, antitrust suits, or the prosecution of claims or
•
appeals against the Federal Government,are unallowable.
h. Costs of legal,accounting,and consultant services,and related costs, incurred in connection with patent
infringement litigation, are unallowable unless otherwise provided for in the sponsored awards.
i. Costs which may be unallowable under this paragraph,including directly associated costs, shall be
segregated and accounted for by the organization separately.During the pendency of any proceeding
covered by subparagraphs b and f,the Federal Government shall generally withhold payment of such costs.
However,if in the best interests of the Federal Government,the Federal Government may provide for
conditional payment upon provision of adequate security, or other adequate assurance,and agreements by
the organization to repay all unallowable costs,plus interest,if the costs are subsequently determined to be
unallowable.
8. In paragraph 15 ("Equipment and other capital expenditures"),as renumbered in item 6 above,replace
subparagraphs 15.a.(1)and 15.b.(2)to read:
15.a.(1)"Equipment" means an article of nonexpendable, tangible personal property having a useful life of
more than one year and an acquisition cost which equals or exceeds the lesser of(a)the capitalization level
established by the organization for the financial statement purposes,or(b)$5000. The unamortized portion
of any equipment written off as a result of a change in capitalization levels may be recovered by continuing
to claim the otherwise allowable use allowances or depreciation on the equipment, or by amortizing the
amount to be written off over a period of years as negotiated with the Federal cognizant agency.
15.b.(2)Capital expenditures for special purpose equipment are allowable as direct costs,provided that
items with a unit cost of$5000 or more have the prior approval of awarding agency.
9. Renumber current paragraphs 16 through 36 as paragraphs 20 through 40,respectively.
10.Add new paragraph 18:
18.Goods or services for personal use. Costs of goods or services for personal use of the organization's
employees are unallowable regardless of whether the cost is reported as taxable income to the employees.
11.Add new paragraph 19:
19.Housing and personal living expenses.
a.Costs of housing(e.g.,depreciation,maintenance,utilities,furnishings,rent, etc.),housing allowances
and personal living expenses for/of the organization's officers are unallowable as fringe benefit or indirect
costs regardless of whether the cost is reported as taxable income to the employees.These costs are
allowable as direct costs to sponsored awards when necessary for the performance of the sponsored award
and approved by awarding agencies.
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b. The term ' cers" includes current and past officers and employees.
1 -Add to paragraph 22.a.(2)("Insurance and indemnification"), as renumbered in item 9, subparagraphs
(f)and(g):
(f)Insurance against defects. Costs of insurance with respect to any costs incurred to correct defects in the
organization's materials or workmanship are unallowable.
(g)Medical liability(malpractice) insurance. Medical liability insurance is an allowable cost of Federal
research programs only to the extent that the Federal research programs involve human subjects or training
of participants in research techniques. Medical liability insurance costs shall be treated as a direct cost and
shall be assigned to individual projects based on
P J the manner in which the insurer allocates the risk to the
population covered by the insurance.
13. Revise paragraph 30,as renumbered in item 9,to read:
30. Memberships,subscriptions and professional activity costs.
a. Costs of the organization's membership in business,technical,and professional organizations are
allowable.
b. Costs of the organization's subscriptions to business,professional, and technical periodicals are
allowable..
c. Costs of meetings and conferences, when the primary purpose is the dissemination of technical
information, are allowable. This includes costs of meals, transportation, rental of facilities, and other items
incidental to such meetings or conferences.
d. Costs of membership in any civic or community organization are allowable with prior approval by
Federal cognizant agency.
e. Costs of membership in any country club or social or dining club or organization are unallowable.
14. Delete subparagraph 39.d, as renumbered in item 9.
15. Delete current paragraph 37("Public service costs").
16. Renumber current paragraphs 38 through 44 as paragraphs 41 through 47,respectively.
17. Revise paragraph 44,as renumbered in item 16,to read:
44. Recruiting costs.
a. Subject to subparagraphs b, c, and d, and provided that the size of the staff recruited and maintained is in
keeping with workload requirements,costs of"help wanted"advertising,operating costs-of an employment
office necessary to secure and maintain an adequate staff, costs-of operating an aptitude and educational
testing program,travel costs of employees while engaged in recruiting personnel,travel costs of applicants
for interviews for prospective employment,and relocation costs incurred incident to recruitment of new
employees, are allowable to the extent that such costs are incurred pursuant to a well-managed recruitment
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program. Where the organization uses employment agencies,costs that are not in excess of standard
commercial rates for such services are allowable.
b.In publications,costs of help wanted advertising that includes color, includes advertising material for
other than recruitment purposes,or is excessive in size(taking into consideration recruitment purposes for
which intended and normal organizational practices in this respect), are unallowable.
c. Costs of help wanted advertising,special emoluments, fringe benefits, and salary allowances incurred to
attract professional personnel from other organizations that do not meet the test of reasonableness or do not
conform with the established practices of the organization, are unallowable.
d. Where relocation costs incurred incident to recruitment of a new employee have been allowed either as
an allocable direct'or indirect cost, and the newly hired employee resigns for reasons within his control
within tw-elv a months after being hired, the organization will be required to refund or credit such relocation
costs to the Federal Government.
18. Renumber current paragraphs 45 through 51 as paragraphs 49 through 55,respectively.
19. Add new paragraph 48:
48. Selling and marketing.Costs of selling and marketing any products or services of the organization
(unless allowed under paragraph 1 as allowable public relations costs) are unallowable. These costs,
however,are allowable as direct costs,with prior approval by awarding agencies,when they are necessary
for the performance of Federal programs.
20. Add new subparagraphs c, d and e to paragraph 49("Severance pay"), as renumbered in item 18,as
follow:
c. Costs incurred in certain severance pay packages(commonly known as "a golden parachute"payment)
which are in an amount in excess of the normal severance pay paid by the organization to an employee
upon termination of employment and are paid to the employee contingent upon a change in management
control over,or ownership of,the organization's assets are unallowable.
•
d. Severance payments to foreign nationals employed by the organization outside the United States,to the
extent that the amount exceeds the customary or prevailing practices for the organization in the United
States are unallowable, unless they are necessary for the performance of Federal programs and approved by
awarding agencies.
e. Severance payments to foreign nationals employed by the organization outside the United States due to
the termination of the foreign national as a result of the closing of, or curtailment of activities by,the
organization in that country, are unallowable,unless they are necessary for the performance of Federal
programs and approved by awarding agencies.
21.Add new paragraph 56:
56.Trustees. Travel and subsistence costs of trustees(or directors)are allowable. The costs are subject to
restrictions regarding lodging,subsistence and air travel costs provided in paragraph 55.
C.Attachment C
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1. Delete the following organizations from Attachment C. These organizations either no longer exist or are
no longer exempted from complying with Circular A-122.
• Associated Universities,Incorporated, Washington,D.C.
•
• Associated Universities for Research and Astronomy, Tucson,Arizona
• Center for Energy and Environmental Research(CEER), (University of Puerto Rico),
Commonwealth of Puerto Rico
• Comparative Animal Research Laboratory(CARL), (University of Tennessee), Oak Ridge,
Tennessee
• Institute of Gas Technology,Chicago, Illinois
• Montana Energy Research and Development Institute, Inc.,(MERDI), Butte,Montana
• Project Management Corporation,Oak Ridge, Tennessee
• Sandia Corporation,Albuquerque,New Mexico
• Universities Corporation for Atmospheric Research,Boulder,Colorado
2. Change Argonne Universities Association, Chicago,Illinois to Argonne National Laboratory,Chicago,
Illinois.
3. Change the location of the Institute for Defense Analysis in Virginia from Arlington to Alexandria.
4. Replace Midwest Research Institute, Headquartered in Kansas City,Missouri to National Renewable
Energy Laboratory, Golden,Colorado.
D. A recompilation of the entire Circular A-122, with all its amendments, follows:
CIRCULAR NO. A-122
•
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Cost Principles for Non-Profit Organizations
1. Purpose. This Circular establishes principles for determining costs of grants,contracts and other
agreements with non-profit organizations. It does not apply to colleges and universities which are covered
by Office of Management and Budget(OMB)Circular A-21, "Cost Principles for Educational Institutions";
State, local, and federally-recognized Indian tribal governments which are covered by OMB Circular A-87,
"Cost Principles for State,Local, and Indian Tribal Governments";or hospitals. The principles are designed
to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by
law. The principles do not attempt to prescribe the extent of cost sharing or matching on grants;contracts,
or other agreements. However, such cost sharing or matching shall not be accomplished through arbitrary
limitations on individual cost elements by Federal agencies.Provision for profit or other increment above
•
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cost is outside the scope of this Circular.
2. Supersession. This Circular supersedes cost principles issued by individual agencies for non-profit
organizations.
3.Applicability.
a. These principles shall be used by all Federal agencies in determining the costs of work performed by
non-profit organizations under grants,cooperative agreements,cost reimbursement contracts, and other
contracts in which costs are used in pricing, administration, or settlement. All of these instruments are
hereafter referred to as awards. The principles do not apply to awards under which an organization is not
required to account to the Federal Government for actual costs incurred.
b. All cost reimbursement subawards(subgrants, subcontracts,etc.) are subject to those Federal cost
principles applicable to the particular organization concerned. Thus, if a subaward is to a non-profit
organization,this Circular shall apply;if a subaward is to a commercial organization,the cost principles
applicable to 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
A-87 shall apply.
4. Definitions.
a. Non-profit organization means any corporation,trust,association, cooperative,or other organization
which:
(1) is operated primarily for scientific,educational,service,charitable, or similar purposes in the public
interest;
(2)is not organized primarily for profit;and
(3)uses its net proceeds to maintain,improve, and/or expand its operations. For this purpose,the term
"non-profit organization"excludes(i)colleges and universities; (ii) hospitals;(iii)State, local,and
federally-recognized Indian tribal governments;and(iv)those non-profit organizations which are excluded
from coverage of this Circular in accordance with paragraph 5.
b.Prior approval means securing the awarding agency's permission in advance to incur cost for those
items that are designated as requiring prior approval by the Circular.Generally this permission will be in
writing. Where an item of cost requiring prior approval is specified in the budget of an award,approval of
the budget constitutes approval of that cost.
5. Exclusion of some non-profit organizations. Some non-profit organizations,because of their size and
nature of operations,can be considered to be similar to commercial concerns for purpose of applicability of
cost principles. Such non-profit organizations shall operate under Federal cost principles applicable to
commercial concerns. A listing of these organizations is contained in Attachment C. Other organizations
may be added from time to time.
6.Responsibilities. Agencies responsible for administering programs that involve awards to non-profit
organizations shall implement the provisions of this Circular.Upon request,implementing instruction shall
be furnished to OMB. Agencies shall designate a liaison official to serve as the agency representative on
matters relating to the implementation of this Circular. The name and title of such representative shall be
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furnished to OMB within 30 days of the date of this Circular.
7. Attachments. The principles and related policy guides are set forth in the following Attachments:
Attachment A-General Principles
Attachment B- Selected Items of Cost
Attachment C -Non-Profit Organizations Not Subject To This Circular
8. Requests for exceptions. OMB may grant exceptions to the requirements of this Circular when
permissible under existing law. However, in the interest of achieving maximum uniformity, exceptions will
be permitted only in highly unusual circumstances.
9. Effective Date. The provisions of this Circular are effective immediately. Implementation shall be
phased in by incorporating the provisions into new awards made after the start of the organization's next
fiscal year. For existing awards, the new principles may be applied if an organization and the cognizant
Federal agency agree. Earlier implementation,or a delay in implementation of individual provisions, is also
permitted by mutual agreement between an organization and the cognizant Federal agency.
10. Inquiries. Further information concerning this Circular may be obtained by contacting the Office of
Federal Financial Management,OMB, Washington,DC 20503,telephone(202)395-3993.
Attachments
ATTACHMENT A
Circular No. A-122
GENERAL PRINCIPLES
Table of Contents
A. Basic Considerations
. 1. Composition of total costs
2. Factors affecting allowability of costs
3. Reasonable costs
4. Allocable costs
5.Applicable credits
6. Advance understandings
7. Conditional exemptions
B. Direct Costs
C. Indirect Costs
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General
2. Simplified allocation method
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3.Multiple allocation base method
4.Direct allocation method
5. Special indirect cost rates
E.Negotiation and Approval of Indirect Cost Rates
1.Definitions
2.Negotiation and approval of rates
ATTACHMENT A
Circular No. A-122
GENERAL PRINCIPLES
A. Basic Considerations •
1. Composition of total costs.The total cost of an award is the sum of the allowable direct and allocable
indirect costs less any applicable credits.
2. Factors affecting allowability of costs.To be allowable under an award, costs must meet the following
general criteria:
a.Be reasonable for the performance of the award and be allocable thereto under these principles.
b. Conform to any limitations or exclusions set forth in these principles or in the award as to types or
amount of cost items. •
c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the organization.
d.Be accorded consistent treatment.
e. Be determined in accordance with generally accepted accounting principles(GAAP).
f.Not be included as a cost or used to meet cost sharing or matching requirements of any other
federally-financed program in either the current or a prior period.
g.Be adequately documented.
3.Reasonable costs. A cost is reasonable if,in its nature or amount,it does not exceed that which would be
incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur
the costs.The question of the reasonableness of specific costs must be scrutinized with particular care in
connection with organizations or separate divisions thereof which receive the preponderance of their
support from awards made by Federal agencies. In determining the reasonableness of a given cost,
consideration shall be given to: •
a. Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the
organization or the performance of the award.
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b.The restraints or requirements imposed by such factors as generally accepted sound business practices,
arms length bargaining,Federal and State laws and regulations, and terms and conditions of the award.
c. Whether the individuals concerned acted with prudence in the circumstances,considering their
responsibilities to the organization, its members, employees,and clients,the public at large,and the
Federal Government.
d. Significant deviations from the established practices of the organization which may unjustifiably
increase the award costs.
4.Allocable costs.
a. A cost is allocable to a particular cost objective, such as a grant,contract,project,service,or other
activity,in accordance with the relative benefits received. A cost is allocable to a Federal award if it is
treated consistently with other costs incurred for the same purpose in like circumstances and if it:
(1) Is incurred specifically for the award.
(2)Benefits both the award and other work and can be distributed in reasonable proportion to the benefits
received,or
(3)Is necessary to the overall operation of the organization, although a direct relationship to any particular
cost objective cannot be shown.
b. Any cost allocable to a particular award or other cost objective under these principles may not be shifted
to other Federal awards to overcome funding deficiencies,or to avoid restrictions imposed by law or by the
terms of the award.
5.Applicable credits.
a. The term applicable credits refers to those receipts,or reduction of expenditures which operate to offset
or reduce expense items that are allocable to awards as direct or indirect costs. Typical examples of such
transactions are: purchase discounts,rebates or allowances,recoveries or indemnities on losses,insurance
refunds, and adjustments of overpayments or erroneous charges.To the extent that such credits accruing or
received by the organization relate to allowable cost,they shall be credited to the Federal Government
either as a cost reduction or cash refund, as appropriate.
b. In some instances,the amounts received from the Federal Government to finance organizational
activities or service operations should be treated asapplicable credits. Specifically,the concept of netting
such credit items against related expenditures should be applied by the organization in determining the
rates or amounts to be charged to Federal awards for services rendered whenever the facilities or other
resources used in providing such services have been financed directly, in whole or in part,by Federal
funds.
c. For rules covering program income(i.e.,gross income earned from federally-supported activities)see
Sec. _.24 of Office of Management and Budget(OMB)Circular A-110, "Uniform Administrative
Requirements for Grants and Agreements with Institutions of Higher Education,Hospitals, and Other
Non-Profit Organizations."
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6.Advance understandings. Under any given award, the reasonableness and allocability of certain items of
costs may be difficult to determine. This is particularly true in connection with organizations that receive a
preponderance of their support from Federal agencies. In order to avoid subsequent disallowance or dispute
based on unreasonableness or nonallocability, it is often desirable to seek a written agreement with the
cognizant or awarding agency in advance of the incurrence of special or unusual costs. The absence of an
advance agreement on any element of cost will not,in itself,affect the reasonableness or allocability of that
element.
7. Conditional exemptions.
a. OMB authorizes conditional exemption from OMB administrative requirements and cost principles
circulars for certain Federal programs with statutorily-authorized consolidated planning and consolidated
administrative funding,that are identified by a Federal agency and approved by the head of the Executive
department or establishment. A Federal agency shall consult with OMB during its consideration of whether
to grant such an exemption.
b. To promote efficiency in State and local program administration,when Federal non-entitlement
programs with common purposes have specific statutorily-authorized consolidated planning and
consolidated administrative funding and where most of the State agency's resources come from non-Federal
sources,Federal agencies may exempt these covered State-administered,non-entitlement grant programs
from certain OMB grants management requirements.The exemptions would be from all but the allocability
of costs provisions of OMB Circulars A-87(Attachment A,subsection C.3), "Cost Principles for State,
Local, and Indian Tribal Governments," A-21 (Section C,subpart 4),"Cost Principles for Educational
Institutions,"and A-122 (Attachment A,subsection A.4),"Cost Principles for Non-Profit Organizations,"
and from all of the administrative requirements provisions of OMB Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with Institutions of Higher Education,Hospitals,
and Other Non-Profit Organizations," and the agencies'grants management common Me.
c. When a Federal agency provides this flexibility, as a prerequisite to a State's exercising this option,a
State must adopt its own written fiscal and administrative requirements for expending and accounting for
all funds,which are consistent with the provisions of OMB Circular A-87,and extend such policies to all
subrecipients. These fiscal and administrative requirements must be sufficiently specific to ensure that:
funds are used in compliance with all applicable Federal statutory and regulatory provisions,costs are
reasonable and necessary for operating these programs, and funds are not be used for general expenses
required to carry out other responsibilities of a State or its subrecipients.
B. Direct Costs
1.Direct costs are those that can be identified specifically with a particular final cost objective, i.e., a
particular award,project,service,or other direct activity of an organization. However, a cost may not be
assigned to an 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. Costs identified specifically with awards are direct costs
of the awards and are to be assigned directly thereto. Costs identified specifically with other final cost
objectives of the organization are direct costs of those cost objectives and are not to be assigned to other
awards directly or indirectly.
2. Any direct cost of a minor amount may be treated as an indirect cost for reasons of practicality where the
accounting treatment for such cost is consistently applied to all final cost objectives.
3. The cost of certain activities are not allowable as charges to Federal awards(see, for example,
•
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fundraising costs in paragraph 23 of Attachment B). However, even though these costs are unallowable
for purposes of computing charges to Federal awards, they nonetheless must be treated as direct costs for
purposes of determining indirect cost rates and be allocated their share of the organization's indirect costs if
they represent activities which(1)include the salaries of personnel, (2)occupy space, and(3)benefit from
the organization's indirect costs.
4. The costs of activities performed primarily as a service to members,clients, or the general public when
significant and necessary to the organization's mission must be treated as direct costs whether or not
allowable and be allocated an equitable share of indirect costs. Some examples of these types of activities
include:
a. Maintenance of membership rolls, subscriptions,publications, and related functions.
b. Providing services and information to members, legislative or administrative bodies,or the public.
c. Promotion,lobbying,and other forms of public relations.
d. Meetings and conferences except those held to conduct the general administration of the organization.
e. Maintenance,protection, and investment of special funds not used in operation of the organization.
f. Administration of group benefits on behalf of members or clients, including life and hospital insurance,
annuity or retirement plans, financial aid,etc.
C. Indirect Costs
1. Indirect costs are those that have been incurred for common or joint objectives and cannot be readily
identified with a particular final cost objective.Direct cost of minor amounts may be treated as indirect
costs under the conditions described in subparagraph B.2.After direct costs have been determined and
assigned directly to awards or other work as appropriate,indirect costs are those remaining to be allocated
to benefiting cost objectives.A cost may not be allocated to an award as an indirect cost if any other cost
incurred for the same purpose, in like circumstances,has been assigned to an award as a direct cost.
2. Because of the diverse characteristics and accounting practices of non-profit organizations,it is not
possible to specify the types of cost which may be classified as indirect cost in all situations. However,
typical examples of indirect cost for many non-profit organizations may include depreciation or use
allowances on buildings and equipment,the costs of operating and maintaining facilities, and general
administration and general expenses, such as the salaries and expenses of executive officers,personnel
administration, and accounting.
3. Indirect costs shall be classified within two broad categories: "Facilities"and"Administration."
"Facilities" is defined as depreciation and use allowances on buildings, equipment and capital
improvement, interest on debt associated with certain buildings,equipment and capital improvements,and
operations and maintenance expenses. "Administration"is defined as general administration and general
expenses such as the director's office, accounting,personnel,library expenses and all other types of
expenditures not listed specifically under one of the subcategories of"Facilities" (including cross
allocations from other pools,where applicable). See indirect cost rate reporting requirements in
subparagraphs D.2.e and D.3.g.
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
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1. General.
a. Where a non-profit organization has only one major function,or where all its major functions benefit
from its indirect costs to approximately the same degree,the allocation of indirect costs and the
computation of an indirect cost rate may be accomplished through simplified allocation procedures, as
described in subparagraph 2.
b. Where an organization has several major functions which benefit from its indirect costs in varying
degrees, allocation of indirect costs may require the accumulation of such costs into separate cost
groupings which then are allocated individually to benefiting functions by means of a base which best
measures the relative degree of benefit. The indirect costs allocated to each function are then distributed to
individual awards and other activities included in that function by means of an indirect cost rate(s).
c. The determination of what constitutes an organization's major functions will depend on its purpose in
being; the types of services it renders to the public, its clients,and its members; and the amount of effort it
devotes to such activities as fundraising,public information and membership activities.
d. Specific methods for allocating indirect costs and computing indirect cost rates along with the conditions
under which each method should be used are described in subparagraphs 2 through 5.
e. The base period for the allocation of indirect costs is the period in which such costs are incurred and
accumulated for allocation to work performed in that period. The base period normally should coincide
with the organization's fiscal year but,in any event, shall be so selected as to avoid inequities in the
allocation of the costs.
2. Simplified allocation method.
a. Where an organization's major functions benefit from its indirect costs to approximately the same
degree,the allocation of indirect costs may be accomplished by(i) separating the organization's total costs
for the base period as either direct or indirect, and(ii)dividing the total allowable indirect costs(net of
applicable credits)by an equitable distribution base.The result of this process is an indirect cost rate which
is used to distribute indirect costs to individual awards.The rate should be expressed as the percentage
which the total amount of allowable indirect costs bears to the base selected. This method should also be
used where an organization has only one major function encompassing a number of individual projects or
activities,and may be used where the level of Federal awards to an organization is relatively small.
b. Both the direct costs and the indirect costs shall exclude capital expenditures and unallowable costs.
However,unallowable costs which represent activities must be included in the direct costs under the
conditions described in subparagraph B.3.
c. The distribution base may be total direct costs(excluding capital expenditures and other distorting items,
such as major subcontracts or subgrants),direct salaries and wages,or other base which results in an
equitable distribution.The distribution base shall generally exclude participant support costs as defined in
paragraph 34 of Attachment B.
d. Except where a special rate(s)is required in accordance with subparagraph 5,the indirect cost rate
developed under the above principles is applicable to all awards at the organization. If a special rate(s)is
required, appropriate modifications shall be made in order to develop the special rate(s).
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e. For an organization that receives more than$10 million in Federal funding of direct costs in a fiscal year,
a breakout of the indirect cost component into two broad categories,Facilities and Administration as
defined in subparagraph C.3, is required. The rate in each case shall be stated as the percentage which the
amount of the particular indirect cost category(i.e.,Facilities or Administration)is of the distribution base
identified with that category.
3. Multiple allocation base method
a. General. Where an organization's indirect costs benefit its major functions in varying degrees,indirect
costs shall be accumulated into separate cost groupings, as described in subparagraph b. Each grouping
shall then be allocated individually to benefitting functions by means of a base which best measures the
relative benefits. The default allocation bases by cost pool are described in subparagraph c.
b. Identification of indirect costs. Cost groupings shall be established so as to permit the allocation of each
grouping on the basis of benefits provided to the major functions. Each grouping shall constitute a pool of
expenses that are of like character in terms of functions they benefit and in terms of the allocation base
which best measures the relative benefits provided to each function. The groupings are classified within the
two broad categories: "Facilities" and"Administration,"as described in subparagraph C.3. The indirect
cost pools are defined as follows:
(1)Depreciation and use allowances. The expenses under this heading are the portion of the costs of the
organization's buildings, capital improvements to land and buildings,and equipment which are computed
in accordance with paragraph 11 of Attachment B("Depreciation and use allowances").
(2)Interest. Interest on debt associated with certain buildings,equipment and capital improvements are
computed in accordance with paragraph 23 of Attachment B("Interest, fundraising, and investment
management costs").
(3) Operation and maintenance expenses. The expenses under this heading are those that have been
incurred for the administration, operation,maintenance,preservation,and protection of the organization's
physical plant.They include expenses normally incurred for such items as:janitorial and utility services;
repairs and ordinary or normal alterations of buildings, furniture and equipment; care of grounds;
maintenance and operation of buildings and other plant facilities; security; earthquake and disaster
preparedness;environmental safety;hazardous waste disposal;property, liability and other insurance
relating to property; space and capital leasing; facility planning and management; and,central receiving.
The operation and maintenance expenses category shall also include its allocable share of fringe benefit
costs,depreciation and use allowances,and interest costs.
(4)General administration and general expenses.The expenses under this heading are those that have been
incurred for the overall general executive and administrative offices of the organization and other expenses
of a general nature which do not relate solely to any major function of the organization. This category shall
also include its allocable share of fringe benefit costs, operation and maintenance expense,depreciation
and use allowances, and interest costs. Examples of this category include central offices,such as the
director's office, the office of finance, business services,budget and planning,personnel,safety and risk
management, general counsel,management information systems,and library costs.
In developing this cost pool, special care should be exercised to ensure that costs incurred for the same
purpose in like circumstances are treated consistently as either direct or indirect costs.For example,
salaries of technical staff, project supplies,project publication,telephone toll charges,computer costs,
travel costs, and specialized services costs shall be treated as direct costs whereveridentifiable to a
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particular program. The salaries and wages of administrative and pooled clerical staff should normally be
treated as indirect costs. Direct charging of these costs may be appropriate where a major project or activity
explicitly requires and budgets for administrative or clerical services and other individuals involved can be
identified with the program or activity. Items such as office supplies,postage, local telephone costs,
periodicals and memberships should normally be treated as indirect costs.
c. Allocation bases. Actual conditions shall be taken into account in selecting the base to be used in
allocating the expenses in each grouping to benefitting functions. The essential consideration in selecting a
method or a base is that it is the one best suited for assigning the pool of costs to cost objectives in
accordance with benefits derived; a traceable cause and effect relationship;or logic and reason,'where
neither the cause nor the effect of the relationship is determinable. When an allocation can be made by
assignment of a cost grouping directly to the function benefited,the allocation shall be made in that
manner. When the expenses in a cost grouping are more general in nature, the allocation shall be made
through the use of a selected base which produces results that are equitable to both the Federal Government
and the organization.The distribution shall be made in accordance with the bases described herein unless it
can be demonstrated that the use of a different base would result in a more equitable allocation of the costs,
or that a more readily available base would not increase the costs charged to sponsored awards.The results
of special cost studies(such as an engineering utility study)shall not be used to determine and allocate the
indirect costs to sponsored awards.
(I)Depreciation and use allowances. Depreciation and use allowances expenses shall be allocated in the
following manner:
(a)Depreciation or use allowances on buildings used exclusively in the conduct of a single function,and on
capital improvements and equipment used in such buildings,shall be assigned to that function.
(b)Depreciation or use allowances on buildings used for more than one function, and on capital
improvements and equipment used in such buildings,shall be allocated to the individual functions
performed in each building on the basis of usable square feet of space, excluding common areas, such as
hallways, stairwells,and restrooms.
(c)Depreciation or use allowances on buildings,capital improvements and equipment related space(e.g.,
individual rooms, and laboratories)used jointly by more than one function(as determined by the users of
the space)shall be treated as follows. The cost of each jointly used unit of space shall be allocated to the
benefitting functions on the basis of: •
(i)the employees and other users on a full-time equivalent(FTE)basis or salaries and wages of those
individual functions benefitting from the use of that space;or
(ii)organization-wide employee FTEs or salaries and wages applicable to the benefitting functions of the
organization.
(d)Depreciation or use allowances on certain capital improvements to land,such as paved parking areas,
fences,sidewalks,and the like,not included in the cost of buildings,shall be allocated to user categories on
a FTE basis and distributed to major functions in proportion to the salaries and wages of all employees
applicable to the functions.
(2)Interest. Interest costs shall be allocated in the same manner as the depreciation or use allowances on
the buildings, equipment and capital equipments to which the interest relates. .
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(3) Operation and maintenance expenses. Operation and maintenance expenses shall be allocated in the
same manner as the depreciation and use allowances.
(4)General administration and general expenses. General administration and general expenses shall be
allocated to benefitting functions based on modified total direct costs(MTDC), as described in
subparagraph D.3.f.The expenses included in this category could be grouped first according to major
functions of the organization to which they render services or provide benefits. The aggregate expenses of
each group shall then be allocated to benefitting functions based on MTDC.
d. Order of distribution.
(1)Indirect cost categories consisting of depreciation and use allowances, interest,operation and
maintenance, and general administration and general expenses shall be allocated in that order to the
remaining indirect cost categories as well as to the major functions of the organization. Other cost
categories could be allocated in the order determined to be most appropriate by the organization. When
cross allocation of costs is made as provided in subparagraph (2),this order of allocation does not apply.
(2) Normally,an indirect cost category will be considered closed once it has been allocated to other cost
objectives, and costs shall not be subsequently allocated to it. However, a cross allocation of costs between
two or more indirect costs categories could be used if such allocation will result in a more equitable
allocation of costs. If a cross allocation is used, an appropriate modification to the composition of the
indirect cost categories is required.
e. Application of indirect cost rate or rates.Except where a special indirect cost rate(s)is required in
accordance with subparagraph D.5,the separate groupings of indirect costs allocated to each major
function shall be aggregated and treated as a common pool for that function. The costs in the common pool
shall then be distributed to individual awards included in that function by use of a single indirect cost rate.
f. Distribution basis. Indirect costs shall be distributed to applicable sponsored awards and other benefitting
activities within each major function on the basis of MTDC. MTDC consists of all salaries and wages,
fringe benefits,materials and supplies,services,travel,and subgrants and subcontracts up to the first
$25,000 of each subgrant or subcontract(regardless of the period covered by the subgrant or subcontract).
Equipment,capital expenditures,charges for patient care,rental costs and the portion in excess of$25,000
shall be excluded from MTDC. Participant support costs shall generally be excluded from MTDC. Other
items may only be excluded when the Federal cost cognizant agency determines that an exclusion is
necessary to avoid a serious inequity in the distribution of indirect costs.
•
g. Individual Rate Components. An indirect cost rate shall be determined for each separate indirect cost
pool developed. The rate in each case shall be stated as the percentage which the amount of the particular
indirect cost pool is of the distribution base identified with that pool. Each indirect cost rate negotiation or
determination agreement shall include development of the rate for each indirect cost pool as well as the
overall indirect cost rate. The indirect cost pools shall be classified within two broad categories: "Facilities"
and"Administration," as described in subparagraph C.3.
4. Direct allocation method.
a. Some non-profit organizations treat all costs as direct costs except general administration and general
expenses. These organizations generally separate their costs into three basic categories: (i)General
administration and general expenses,(ii) fundraising, and(iii)other direct functions(including projects
performed under Federal awards). Joint costs,such as depreciation,rental costs,operation and maintenance
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of facilities,telephone expenses, and the like are prorated individually as direct costs to each category and
to each-award or other activity using a base most appropriate to the particular cost being prorated.
b. This method is acceptable, provided each joint cost is prorated using a base which accurately measures
the benefits provided to each award or other activity.The bases must be established in accordance with
reasonable criteria,and be supported by current data.This method is compatible with the Standards of
Accounting and Financial Reporting for Voluntary Health and Welfare Organizations issued jointly by the
National Health Council, Inc.,the National Assembly of Voluntary Health and Social Welfare
Organizations,and the United Way of America.
c. Under this method,indirect costs consist exclusively of general administration and general expenses. In
all other respects, the organization's indirect cost rates shall be computed in the same manner as that
described in subparagraph 2.
•
5. Special indirect cost rates. In some instances,a single indirect cost rate for all activities of an
organization or for each major function of the organization may not be appropriate,since it would not take
into account those different factors which may substantially affect the indirect costs applicable to a
particular segment of work.For this purpose,a particular segment of work may be that performed under a
single award or it may consist of work under a group of awards performed in a common environment.
These factors may include the physical location of the work,the level of administrative support required,
the nature of the facilities or other resources employed,the scientific disciplines or technical skills
involved,the organizational arrangements used,or any combination thereof. When a particular segment of
work is performed in an environment which appears to generate a significantly different level of indirect
costs,provisions should be made for a separate indirect cost pool applicable to such work. The separate
indirect cost pool should be developed during the course of the regular allocation process, and the separate
indirect cost rate resulting therefrom should be used,provided it is determined that(i)the rate differs
significantly from that which would have been obtained under subparagraphs 2,3,and 4,and(ii)the
volume of work to which the rate would apply is material.
E. Negotiation and Approval of Indirect Cost Rates
1. Definitions. As used in this section,the following terms have the meanings set forth below:
a. Cognizant agency means the Federal agency responsible for negotiating and approving'indirect cost
rates for a non-profit organization on behalf of all Federal agencies.
b. Predetermined-rate means an indirect cost rate,applicable to a specified current or future period,
usually the organization's fiscal year. The rate is based on an estimate of the costs to be incurred during the
period.A predetermined rate is not subject to adjustment.
c. Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rate,except
that the difference between the estimated costs and the actual costs of the period.covered by the rate is
carried forward as an adjustment to the rate computation of a subsequent period.
d. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual
costs of the period. A final rate is not subject to adjustment. •
e. Provisional rate or billing rate means a temporary indirect cost rate applicable to a specified period
which is used for funding,interim reimbursement, and reporting indirect costs on awards pending the
establishment of a final rate for the period.
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f. Indirect cost proposal means the documentation prepared by an organization to substantiate its claim
for the reimbursement of indirect costs. This proposal provides the basis for the review and negotiation
leading to the establishment of an organization's indirect cost rate.
g. Cost objective means a function, organizational subdivision,contract, grant, or other work unit for
which cost data are desired and for which provision is made to accumulate and measure the cost of
processes,projects,jobs and capitalized projects.
2. Negotiation and approval of rates.
•
a. Unless different arrangements are agreed to by the agencies concerned, the Federal agency with the
largest dollar value of awards with an organization will be designated as the cognizant agency for the
negotiation and approval of the indirect cost rates and, where necessary, other rates such as fringe benefit
and computer charge-out rates.Once an agency is assigned cognizance for a particular non-profit
organization,the assignment will not be changed unless there is a major long-term shift in the dollar
volume of the Federal awards to the organization. All concerned Federal agencies shall be given the
opportunity to participate in the negotiation process but,after a rate has been agreed upon,it will be
accepted by all Federal agencies. When a Federal agency has reason to believe that special operating
factors affecting its awards necessitate special indirect cost rates in accordance with subparagraph D.5,it
will,prior to the time the rates are negotiated,notify the cognizant agency.
b. A non-profit organization which has not previously established an indirect cost rate with a Federal
agency shall submit its initial indirect cost proposal immediately after the organization is advised that an
award will be made and, in no event, later than three months after the effective date of the award.
c. Organizations that have previously established indirect cost rates must submit a new indirect cost
proposal to the cognizant agency within six months after the close of each fiscal year.
d. A predetermined rate may be negotiated for use on awards where there is reasonable assurance,based on
past experience and reliable projection of the organization's costs,that the rate is not likely to exceed a rate
based on the organization's actual costs.
e. Fixed rates may be negotiated where predetermined rates are not considered appropriate.A fixed rate,
however, shall not be negotiated if(i)all or a substantial portion of the organization's awards are expected
to expire before the carry-forward adjustment can be made; (ii)the mix of Federal and non-Federal work at
the organization is too erratic to permit an equitable carry-forward adjustment; or(iii)the organization's
operations fluctuate significantly from year to year.
f. Provisional and final rates shall be negotiated where neither predetermined nor fixed rates are
appropriate.
g. The results of each negotiation shall be formalized in a written agreement between the cognizant agency
and the non-profit organization. The cognizant agency shall distribute copies of the agreement to all
concerned Federal agencies.
h. If a dispute arises in a negotiation of an indirect cost rate between the cognizant agency and the
non-profit organization,the dispute shall be resolved in accordance with the appeals procedures of the
cognizant agency.
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i. To the extent that problems are encountered among the Federal agencies in connection with the
negotiation and approval process,OMB will lend assistance as required to resolve such problems in a
timely manner.
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Table of Contents
1. Advertising and public relations costs
2. Alcoholic beverages
3. Bad debts
4. Bid and proposal costs(reserved)
5. Bonding costs
6. Communication costs
7. Compensation for personal services
8. Contingency provisions
9. Contributions
10. Defense and prosecution of criminal and civil proceedings, claims,appeals and patent infringement
11. Depreciation and use allowances
12. Donations
13.Employee morale,health, and welfare costs and credits
14. Entertainment costs
15. Equipment and other capital expenditures
16.Fines and penalties
17. Fringe benefits
18. Goods or services for personal use
19. Housing and personal living expenses
20. Idle facilities and idle capacity
21. Independent research and development(reserved)
22. Insurance and indemnification
fund raising, and investment management costs
23. Interest, g
24. Labor relations costs
25. Lobbying
26. Losses on other awards
27. Maintenance and repair costs
28. Materials and supplies
29. Meetings and conferences
30. Memberships,subscriptions,and professional activity costs
31. Organization costs
32. Overtime,extra-pay shift,and multi-shift premiums
33. Page charges in professional journals
34. Participant support costs
35. Patent costs
36. Pension plans
37.Plant security costs
38. Pre-award costs
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39. Professional service costs
40. Profits and losses on disposition of depreciable property or other capital assets
41. Publication and printing costs
42.Rearrangement and alteration costs
43. Reconversion costs
44.Recruiting costs
45. Relocation costs
46.Rental costs
47. Royalties and other costs for use of patents and copyrights
48. Selling and marketing
49. Severance pay •
50. Specialized service facilities
51. Taxes
52.Termination costs
53.Training and education costs
54.Transportation costs
55. Travel costs
56.Trustees
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Paragraphs 1 through 56 provide principles to be applied in establishing the allowability of certain items
of cost. These principles apply whether a cost is treated as direct or indirect. Failure to mention a particular:
item of cost is not intended to imply that it is unallowable; rather,determination as to allowability in each
case should be based on the treatment or principles provided for similar or related items of cost.
1.Advertising and public relations costs.
a. The term advertising costs means the costs of advertising media and corollary administrative costs.
Advertising media include magazines,newspapers,radio and television programs, direct mail, exhibits,
and the like.
b. The term public relations includes community relations and means those activities dedicated to
maintaining the image of the organization or maintaining or promoting understanding and favorable
relations with the community or public at large or any segment of the public.
c. The only allowable advertising costs are those which are solely for:
(1)The recruitment of personnel required for the performance by the organization of obligations arising
under a sponsored award,when considered in conjunction with all other recruitment costs,as set forth in
paragraph 44("Recruiting costs");
(2)The procurement of goods and services for the performance of a sponsored award;
(3)The disposal of scrap or surplus materials acquired in the performance of a sponsored award except
when organizations are reimbursed for disposal costs at a predetermined amount in accordance with OMB
Circular A-110, Sec. .34, "Equipment";or
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(4) Other specific purposes necessary to meet the requirements of the sponsored award.
d.The only allowable public relations costs are:
(1) Costs specifically required by sponsored awards;
(2) Costs of communicating with the public and press pertaining to specific activities or accomplishments
which result from performance of sponsored awards(these costs are considered necessary as part of the
outreach effort for the sponsored awards);or
(3) Costs of conducting general liaison with news media and government public relations officers,to the
extent that such activities are limited to communication and liaison necessary to keep the public informed
on matters of public concern, such as notices of contract/grant awards, financial matters,etc.
e. Costs identified in subparagraphs c and d if incurred for more than one sponsored award or for both
sponsored work and other work of the organization,are allowable to the extent that the principles in
paragraphs B("Direct Costs")and C ("Indirect Costs")of Attachment A are observed.
f.Unallowable advertising and public relations costs include the following:
(1)All advertising and public relations costs other than as specified in subparagraphs c,d,and e;
(2)Costs of meetings or other events related to fund raising or other organizational activities including:
(i) Costs of displays,demonstrations,and exhibits;
(ii)Costs of meeting rooms,hospitality suites, and other special facilities used in conjunction with shows
and other special events; and
(iii)Salaries and wages of employees or cost of services engaged in setting up and displaying exhibits,
making demonstrations,and providing briefings;
(3)Costs of promotional items and memorabilia,including models,gifts,and souvenirs;
(4)Costs of advertising and public relations designed solely to promote the organization.
2. Alcoholic beverages. Costs of alcoholic beverages are unallowable.
3. Bad debts.Bad debts, including losses(whether actual or estimated) arising from uncollectible accounts
and other claims,related collection costs,and related legal costs,are unallowable.
4. Bid and proposal costs. (reserved)
5. Bonding costs.
a.Bonding costs arise when the Federal Government requires assurance against financial loss to itself or
others by reason of the act or default of the organization.They arise also in instances where the
organization requires similar assurance. Included are such bonds as bid,performance,payment, advance
payment, infringement, and fidelity bonds.
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b. Costs of bonding required pursuant to the terms of the award are allowable.
c. Costs of bonding required by the organization in the general conduct of its operations are allowable to
the extent that such bonding is in accordance with sound business practice and the rates and premiums are
reasonable under the circumstances.
6. Communication costs. Costs incurred for telephone services, local and long distance telephone calls,
telegrams,radiograms,postage and the like are allowable.
7. Compensation for personal services.
a. Definition. Compensation for personal services includes all compensation paid currently or accrued by
the organization for services of employees rendered during the period of the award(except as otherwise
provided in subparagraph h). It includes,but is not limited to, salaries,wages,director's and executive
committee member's fees,incentive awards, fringe benefits,pension plan costs,allowances for off-site pay,
incentive pay, location allowances,hardship pay,and cost of living differentials.
b. Allowability. Except as otherwise specifically provided in this paragraph,the costs of such
•
compensation are allowable to the extent that:
(1)Total compensation to individual employees is reasonable for the services rendered and conforms to the
established policy of the organization consistently applied to both Federal and non-Federal activities; and
(2)Charges to awards whether treated as direct or indirect costs are determined and supported as required
in this paragraph.
c. Reasonableness.
(1) When the organization is predominantly engaged in activities other than those sponsored by the Federal
Government, compensation for employees on federally-sponsored work will be considered reasonable to
the extent that it is consistent with that paid for similar work in the organization's other activities.
(2)When the organization is predominantly engaged in federally-sponsored activities and in cases where
the kind of employees required for the Federal activities are not found in the organization's other activities,
compensation for employees on federally-sponsored work will be considered reasonable to the extent that it
is comparable to that paid for similar work in the labor markets in which the organization competes for the
kind of employees involved.
d.Special considerations in determining allowability. Certain conditions require special consideration
and possible limitations in determining costs under Federal awards where amounts or types of
compensation appear unreasonable. Among such conditions are the following:
(1) Compensation to members of non-profit organizations,trustees,directors, associates,officers,or the
immediate families thereof. Determination should be made that such compensation is reasonable for the
actual personal services rendered rather than a distribution of earnings in excess of costs.
(2)Any change in an organization's compensation policy resulting in a substantial increase in the
organization's level of compensation,particularly when it was concurrent with an increase in the ratio of
Federal awards to other activities of the organization or any change in the treatment of allowability of
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specific types of compensation due to changes in Federal policy.
e. Unallowable costs. Costs which are unallowable under other paragraphs of this Attachment shall not be
allowable under this paragraph solely on the basis that they constitute personal compensation.
f. Fringe benefits.
(1)Fringe benefits in the form of regular compensation paid to employees during periods of authorized
absences from the job,such as vacation leave,sick leave,military leave, and the like, are allowable,
provided such costs are absorbed by all organization activities in proportion to the relative amount of time
or effort actually devoted to each.
(2)Fringe benefits in the form of employer contributions or expenses for social security, employee
insurance,workmen's compensation insurance,pension plan costs(see subparagraph h), and the like, are
allowable,provided such benefits are granted in accordance with established written organization policies.
Such benefits whether treated as indirect costs or as direct costs,shall be distributed to particular awards
and other activities in a manner consistent with the pattern of benefits accruing to the individuals or group
of employees whose salaries and wages are chargeable to such awards and other activities.
(3) (a)Provisions for a reserve under a self-insurance program for unemployment compensation or
workers'compensation are allowable to the extent that the provisions represent reasonable estimates of the
liabilities for such compensation,and the types of coverage,extent of coverage,and rates and premiums
would have been allowable had insurance been purchased to cover the risks.However,provisions for
self-insured liabilities which do not become payable for more than one year after the provision is made
shall not exceed the present value of the liability.
(b) Where an organization follows a consistent policy of expensing actual payments to,or on behalf of,
employees or former employees for unemployment compensation or workers'compensation, such
payments are allowable in the year of payment with the prior approval of the awarding agency,provided
they are allocated to all activities of the organization.
(4)Costs of insurance on the lives of trustees,officers,or other employees holding positions of similar
responsibility are allowable only to the extent that the insurance represents additional compensation.The
costs of such insurance when the organization is named as beneficiary are unallowable.
g. Organization-furnished automobiles.That portion of the cost of organization-furnished automobiles
that relates to personal use by employees(including transportation to and from work)is unallowable as
fringe benefit or indirect costs regardless of whether the cost is reported as taxable income to the
employees.These costs are allowable as direct costs to sponsored award when necessary for the
performance of the sponsored award and approved by awarding agencies.
h. Pension plan costs.
(1)Costs of the organization's pension plan which are incurred in accordance with the established policies
of the organization are allowable,provided:
•
(a)Such policies meet the test of reasonableness;
(b)The methods of cost allocation are not discriminatory;
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(c) The cost assigned to each fiscal year is determined in accordance with generally accepted accounting
principles(GAAP),as prescribed in Accounting Principles Board Opinion No. 8 issued by the American
Institute of Certified Public Accountants; and
(d)The costs assigned to a given fiscal year are funded for all plan participants within six months after the
end of that year. However, increases to normal and past service pension costs caused by a delay in funding
the actuarial liability beyond 30 days after each quarter of the year to which such costs are assignable are
unallowable.
(2)Pension plan termination insurance premiums paid pursuant to the Employee Retirement Income
Security Act(ERISA)of 1974(Pub. L. 93-406) are allowable. Late payment charges on such premiums are
unallowable.
(3)Excise taxes on accumulated funding deficiencies and other penalties imposed under ERISA are
unallowable.
i. Incentive compensation. Incentive compensation to employees based on cost reduction,or efficient
performance, suggestion awards,safety awards, etc.,are allowable to the extent that the overall
compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement
entered into in good faith between the organization and the employees before the services were rendered,or
pursuant to an established plan followed by the organization so consistently as to imply, in effect,an
agreement to make such payment.
j. Overtime,extra-pay shift,and multi-shift premiums. See paragraph 32.
k. Severance pay. See paragraph 49.
•
1. Training and education costs. See paragraph 53.
m. Support of salaries and wages.
(1) Charges to awards for salaries and wages,whether treated as direct costs or indirect costs,will be based
on documented payrolls approved by a responsible official(s)of the organization.The distribution of
salaries and wages to awards must be supported by personnel activity reports, as prescribed in
subparagraph (2),except when a substitute system has been approved in writing by the cognizant agency.
(See subparagraph E.2 of Attachment A.)
(2)Reports reflecting the distribution of activity of each employee must be maintained for all staff
members(professionals and nonprofessionals)whose compensation is charged, in whole or in part,directly
to awards. In addition,in order to support the allocation of indirect costs,such reports must also be
maintained for other employees whose work involves two or more functions or activities if a distribution of
their compensation between such functions or activities is needed in the determination of the organization's
indirect cost rate(s) (e.g., an employee engaged part-time in indirect cost activities and part-time in a direct
function). Reports maintained by non-profit organizations to satisfy these requirements must meet the
following standards:
(a) The reports must reflect an after-the-fact determination of the actual activity of each employee.Budget
estimates(i.e., estimates determined before the services are performed)do not qualify as support for
charges to awards.
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(b)'Each report must account for the total activity for which employees are compensated and which is
required in fulfillment of their obligations to the organization.
(c)The reports must be signed by the individual employee,or by a responsible supervisory official having
first hand knowledge of the activities performed by the employee, that the distribution of activity represents
a reasonable estimate of the actual work performed by the employee during the periods covered by the
reports.
(d)The reports must be prepared at least monthly and must coincide with one or more pay periods.
(3) Charges for the salaries and wages of nonprofessional employees, in addition to the supporting
documentation described in subparagraphs(1) and(2),must also be supported by records indicating the
total number of hours worked each day maintained in conformance with Department of Labor regulations
implementing the Fair Labor Standards Act(FLSA)(29 CFR Fart 516). For this purpose,the term
"nonprofessional employee" shall have the same meaning.as"nonexempt employee,"under FLSA.
(4) Salaries and wages of employees used in meeting cost sharing or matching requirements on awards
must be supported in the same manner as salaries and wages claimed for reimbursement from awarding
agencies.
8.Contingency provisions. Contributions to a contingency reserve or any similar provision made for
events the occurrence of which cannot be foretold with certainty as to time,intensity,or with an assurance
of their happening,are unallowable.The term"contingency reserve" excludes self-insurance reserves(see
subparagraphs 7.f(3) and 22.a(2)(d);pension funds(see subparagraph 7.6); and reserves for normal
severance pay(see subparagraph 49.b(1)).
9. Contributions. Contributions and donations by the organization to others are unallowable.
10. Defense and prosecution of criminal and civil proceedings,claims,appeals and patent
infringement.
a. Definitions.
(1)Conviction, as used herein,means a judgment or a conviction of a criminal offense by any court of
competent jurisdiction,whether entered upon as a verdict or a plea,including a conviction due to a plea of
nolo contendere.
(2)Costs include,but are not limited to, administrative and clerical expenses;the cost of legal services,
whether performed by in-house or private counsel;and the costs of the services of accountants,consultants,
or others retained by the organization to assist it; costs of employees,officers and trustees,and any similar
costs incurred before,during, and after commencement of a judicial or administrative proceeding that bears
a direct relationship to the proceedings.
(3)Fraud,as used herein,means(i)acts of fraud corruption or attempts to defraud the Federal Government
or to corrupt its agents,(ii)acts that constitute a cause for debarment or suspension(as specified in agency
regulations),and(iii)acts which violate the False Claims Act, 31 U.S.C., sections 3729-3731,or the
Anti-Kickback Act,41 U.S.C.,sections 51 and 54.
(4)Penalty does not include restitution, reimbursement,or compensatory damages.
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(5)Proceeding includes an investigation.
b. (I)Except as otherwise described herein, costs incurred in connection with any criminal, civil or
administrative proceeding(including filing of a false certification)commenced by the Federal Government,
or a State, local or foreign government,are not allowable if the proceeding: (I)relates to a violation of,or
failure to comply with, a Federal, State, local or foreign statute or regulation by the organization(including
its agents and employees), and(2)results in any of the following dispositions:
(a) In a criminal proceeding,a conviction.
(b)In a civil or administrative proceeding involving an allegation of fraud or similar misconduct,a
determination of organizational liability.
(c) In the case of any civil or administrative proceeding, the imposition of a monetary penalty.
(d)A final decision by an appropriate Federal official to debar or suspend the organization,to rescind or
void an award,or to terminate an award for default by reason of a violation or failure to comply with a law
or regulation.
(e)A disposition by consent or compromise,if the action could have resulted in any of the dispositions
described in(a), (b),(c)or(d).
(2)If more than one proceeding involves the same alleged misconduct,the costs of all such proceedings
shall be unallowable if any one of them results in one of the dispositions shown in subparagraph b.(1).
c. If a proceeding referred to in subparagraph b is commenced by the Federal Government and is resolved
by consent or compromise pursuant to an agreement entered into by the organization and the Federal
Government, then the costs incurred by the organization in connection with such proceedings that are
otherwise not allowable under subparagraph b may be allowed to the extent specifically provided in such
agreement.
d. If a proceeding referred to in subparagraph b is commenced by a State, local or foreign government,
the authorized Federal official may allow the costs incurred by the organization for such proceedings,if
such authorized official determines that the costs were incurred as a result of(1)a specific term or
condition of a federally-sponsored award,or(2)specific written direction of an authorized official of the
sponsoring agency.
•
e. Costs incurred in connection with proceedings described in subparagraph b,but which are not made
unallowable by that subparagraph,may be allowed by the Federal Government,but only to the extent that:
(I)The costs are reasonable in relation to the activities required to deal with the proceeding and the
underlying cause of action;
•
(2)Payment of the costs incurred,as allowable and allocable costs, is not prohibited by any other
provision(s)of the sponsored award;
(3)The costs are not otherwise recovered from the Federal Government or a third party, either directly as a
result of the proceeding or otherwise; and,
(4) The percentage of costs allowed does not exceed the percentage determined by an authorized Federal
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official to be appropriate,considering the complexity of the litigation, generally accepted principles
governing the award of legal fees in civil actions involving the United States as a party,and such other
factors as may be appropriate. Such percentage shall not exceed 80 percent. However, if an agreement
reached under subparagraph c has explicitly considered this 80 percent limitation and permitted a higher
percentage,then the full amount of costs resulting from that agreement shall be allowable.
f. Costs incurred by the organization in connection with the defense of suits brought by its employees or
ex-employees under section 2 of the Major Fraud Act of 1988 (Pub. L. 100-700), including the cost of all
relief necessary to make such employee whole,where the organization was found liable or settled,are
unallowable.
g. Costs of legal, accounting,and consultant services, and related costs, incurred in connection with
defense against Federal Government claims or appeals, antitrust suits, or the prosecution of claims or
appeals against the Federal Government,are unallowable.
h. Costs of legal, accounting,and consultant services,and related costs,incurred in connection with patent
infringement litigation, are unallowable unless otherwise provided for in the sponsored awards.
i. Costs which may be unallowable under this paragraph,including directly associated costs, shall be
segregated and accounted for by the organization separately.During the pendency of any proceeding
covered by subparagraphs b and f,the Federal Government shall generally withhold payment of such
costs.However,if in the best interests of the Federal Government,the Federal Government may provide
for conditional payment upon provision of adequate security,or other adequate assurance,and agreements
by the organization to repay all unallowable costs,plus interest, if the costs are subsequently determined to
be unallowable.
11. Depreciation and use allowances.
a. Compensation for the use of buildings,other capital improvements,and equipment on hand may be
made through use allowances or depreciation.However,except as provided in subparagraph f,a
combination of the two methods may not be used in connection with a single class of fixed assets(e.g.,
buildings, office equipment,computer equipment, etc.).
b.The computation of use allowances or depreciation shall be based on the acquisition cost of the assets
involved.The acquisition cost of an asset donated to the organization by a third party shall be its fair
market value at the time of the donation.
• c. The computation of use allowances or depreciation will exclude:
(1)The cost of land;
(2)Any portion of the cost of buildings and equipment borne by or donated by the Federal Government
irrespective of where title was originally vested or where it presently resides; and
(3)Any portion of the cost of buildings and equipment contributed by or for the organization in satisfaction
of a statutory matching requirement.
d.Where the use allowance method is followed,the use allowance for buildings and improvement
(including land improvements, such as paved parking areas, fences,and sidewalks)will be computed at an
annual rate not exceeding two percent of acquisition cost. The use allowance for equipment will be
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computed at an annual rate not exceeding six and two-thirds percent of acquisition cost. When the use
allowance method is used for buildings,the entire building must be treated as a single asset;the building's
components(e.g.,plumbing system,heating and air conditioning, etc.)cannot be segregated from the
building's shell. The two percent limitation,however, need not be applied to equipment which is merely
attached or fastened to the building but not permanently fixed to it and which is used as furnishings or
decorations or for specialized purposes(e.g., dentist chairs and dental treatment units,counters,laboratory
benches bolted to the floor,dishwashers, carpeting,etc.). Such equipment will be considered as not being
permanently fixed to the building if it can be removed without the need for costly or extensive alterations
or repairs to the building or the equipment. Equipment that meets these criteria will be subject to the six
and two-thirds percent equipment use allowance limitation.
e. Where depreciation method is followed,the period of useful service(useful life)established in each case
for usable capital assets must take into consideration such factors as type of construction,nature of the
equipment used, technological developments in the particular program area, and the renewal and
replacement policies followed for the individual items or classes of assets involved. The method of
depreciation used to assign the cost of an asset(or group of assets)to accounting periods shall reflect the
pattern of consumption of the asset during its useful life. In the absence of clear evidence indicating that
the expected consumption of the asset will be significantly greater or lesser in the early portions of its
useful life than in the later portions, the straight-line method shall be presumed to be the appropriate
method. Depreciation methods once used shall not be changed unless approved in advance by the cognizant
Federal agency. 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 not
exceed the total acquisition cost of the assets.When the depreciation method is used for buildings,a •
building's shell may be segregated from each building component(e.g.,plumbing system,heating,and air
conditioning system, etc.) and each item depreciated over its estimated useful life; or the entire building
(i.e., the shell and all components)may be treated as a single asset and depreciated over a single useful life.
f. When the depreciation method is used for a particular class of assets,no depreciation may be allowed on
any such assets that,under subparagraph e, would be viewed as fully depreciated.However,a reasonable
use allowance maybe negotiated for such assets if warranted after taking into consideration the amount of
depreciation previously charged to the Federal Government,the estimated useful life remaining at time of
negotiation,the effect of any increased maintenance charges or decreased efficiency due to age,and any
other factors pertinent to the utilization of the asset for the purpose contemplated.
g. Charges for use allowances or depreciation must be supported by adequate property records and physical
inventories must be taken at least once every two years(a statistical sampling basis is acceptable)to ensure
that assets exist and 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.
12. Donations.
a. Services received.
(1)Donated or volunteer services may be furnished to an organization by professional and technical
personnel,consultants, and other skilled and unskilled labor. The value of these services is not
reimbursable either as a direct or indirect cost.
(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 applicable indirect costs when the following circumstances exist:
•
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(a)The aggregate value of the services is material;
(b)The services are supported by a significant amount of the indirect costs incurred by the organization;
(c)The direct cost activity is 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 cognizant agency shall negotiate an appropriate allocation of indirect cost to the
services.
(4)Where donated services directly benefit a project supported by an award,the indirect costs allocated to
the services will be considered as a part of the total costs of the project. Such indirect costs may be
reimbursed under the award or used to meet cost sharing or matching requirements.
(5)The value of the donated services may be used to meet cost sharing or matching requirements under
conditions described in Sec._.23 of Circular A-110.Where donated services are treated as indirect costs,
indirect cost rates will separate the value of the donations so that reimbursement will not be made.
(6)Fair market value of donated services shall be computed as follows:
(a)Rates for volunteer services.Rates for volunteers shall be consistent with those regular rates paid for
similar work in other activities of the organization. In cases where the kinds of skills involved are not
found in 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 donated by other organizations. When an employer donates the services of an employee,
these services shall be valued at the employee's regular rate of pay(exclusive of fringe benefits and indirect
costs),provided the services are 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
accordance with subparagraph(a).
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 Sec._.23 of Circular A-1 1 0.The value of the donations shall be determined in
accordance with Sec._.23 of Circular A-110. Where donations are treated as indirect costs,indirect cost
rates will separate the value of the donations so that reimbursement will not be made.
13. Employee morale,health,and welfare costs and credits. The costs of house publications,health or
first-aid clinics, and/or infirmaries,recreational activities,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.
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14. Entertainment costs. Costs of amusement,diversion, social activities, ceremonials,and costs relating
thereto,such as meals, lodging,rentals,transportation,and gratuities are unallowable(but see paragraphs
13 and 30).
15. Equipment and other capital expenditures.
a. As used in this paragraph, the following terms have the meanings set forth below:
(1) "Equipment"means an article of nonexpendable, tangible personal property having a useful life of more
than one year and an acquisition cost which equals or exceeds the lesser of(a)the capitalization level
established by the organization for the financial statement purposes, or(b)$5000. The unamortized portion
of any equipment written off as a result of a change in capitalization levels maybe recovered by continuing
to claim the otherwise allowable use allowances or depreciation on the equipment,or by amortizing the
amount to be written off over a period of years as negotiated with the Federal cognizant agency.
(2) Acquisition cost means the net invoice unit price of an item of equipment, including the cost of any
modifications,attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose
for which it is acquired.Ancillary charges,such as 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 research,medical, scientific,or
technical activities. Examples of special purpose equipment include microscopes, x-ray machines,surgical
instruments,and spectrometers.
(4) General purpose equipment means equipment which is usable for 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 and furnishings,air
conditioning 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 of the awarding agency.
(2)Capital expenditures for special purpose equipment are allowable as direct costs,provided that items
with a unit cost of$5000 or more have the prior approval of awarding agency.
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 life are unallowable as a direct cost except with the prior approval of the awarding agency.
e. Equipment and other capital expenditures are unallowable as indirect costs. However, see paragraph I I
for allowability of use allowances or depreciation on buildings, capital improvements, and equipment.
AIso,see paragraph 46 for allowability of rental costs for land,buildings,and equipment.
16. Fines and penalties. Costs of fines and penalties resulting from violations of,or failure of the
organization to comply with Federal, State,and local laws and regulations are unallowable except when
incurred as a result of compliance with specific provisions of an award or instructions in writing from the
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awarding agency.
17. Fringe benefits. See subparagraph 7.f.
18. Goods or services for personal use. Costs of goods or services for personal use of the organization's
employees are unallowable regardless of whether the cost is reported as taxable income to the employees.
19. Housing and personal living expenses.
a. Costs of housing(e.g.,depreciation, maintenance,utilities,furnishings,rent,etc.), housing allowances
and personal living expenses for/of the organization's officers are unallowable as fringe benefit or indirect
costs regardless of whether the cost is reported as taxable income to the employees. These costs are
allowable as direct costs to sponsored award when necessary for the performance of the sponsored award
and approved by awarding agencies.
b. The term"officers" includes current and past officers and employees.
20. Idle facilities and idle capacity.
a. As used in this paragraph,the following terms have the meanings set forth below:
(1) Facilities means land and buildings or any portion thereof,equipment individually or collectively,or
any other tangible capital asset,wherever located, and whether owned or leased by the organization.
(2) Idle facilities means completely unused facilities that are excess to the organization's current needs.
(3) Idle capacity means the unused capacity of partially used facilities. It is the difference between that
which a facility could achieve under 100 percent operating time on a one-shift basis less operating
interruptions resulting from time lost for repairs,setups,unsatisfactory materials, and other normal delays,
and the extent to which the facility was actually used to meet demands during the accounting period.A
multi-shift basis may be used if it can be shown that this amount of usage could normally be expected for
the type of facility involved.
(4) Costs of idle facilities or idle capacity means costs such as maintenance,repair,housing,rent, and
other related costs, e.g.,property taxes,insurance, and depreciation or use allowances.
b.The costs of idle facilities are unallowable except to the extent that:
(1)They are necessary to meet fluctuations in workload;or
(2)Although not necessary to meet fluctuations in workload,they were necessary when acquired and are
now idle because of changes in program requirements,efforts to achieve more economical operations,
reorganization,termination, or other causes which could not have been reasonably foreseen.Under the
exception stated in this subparagraph,costs of idle facilities are allowable for a reasonable period of time,
ordinarily not to exceed one year,depending upon the initiative taken to use, lease,or dispose of such
facilities(but see subparagraphs 48.b and d).
c. The costs of idle capacity are normal costs of doing business and are a factor in the normal fluctuations
of usage or indirect cost rates from period to period. Such costs are allowable,provided the capacity is
reasonably anticipated to be necessary or was originally reasonable and is not subject to reduction or
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elimination by subletting, renting, or sale, in accordance with sound business, economics, or security
practices. Widespread idle capacity throughout an entire facility or among a group of assets having
substantially the same function may be idle facilities.
21. Independent research and development. [Reserved]
22. Insurance and indemnification.
a. Insurance includes insurance which the organization is required to carry,or which is approved,under the
terms of the award and any other insurance which the organization maintains in connection with the
general conduct of its operations. This paragraph does not apply to insurance which represents fringe
benefits for employees(see subparagraphs 7.f and 7.h(2)).
(1)Costs of insurance required or approved, and maintained,pursuant to the award are allowable.
(2)Costs of other insurance maintained by the organization in connection with the general conduct of its
operations are allowable subject to the following limitations:
(a)Types and extent of coverage shall be in accordance with sound business practice and the rates and
premiums shall be reasonable under the circumstances.
(b)Costs allowed for business interruption or other similar insurance shall be limited to exclude coverage
of management fees.
(c) Costs of insurance or of any provisions for a reserve covering the risk of loss or damage to Federal
property are allowable only to the extent that the organization is liable for such loss or damage.
(d)Provisions for a reserve under a self-insurance program are allowable to the extent that types of
coverage,extent of coverage,rates, and premiums would have been allowed had insurance been purchased `
to cover the risks. However,provision for known or reasonably estimated self-insured liabilities,which do
not become payable for more than one year after the provision is made,shall not exceed the present value
of the liability.
(e) Costs of insurance on the lives of trustees, officers,or other employees holding positions of similar
responsibilities are allowable only to the extent that the insurance represents additional compensation(see
subparagraph 7.1(4)).The cost of such insurance when the organization is identified as the beneficiary is
unallowable.
(f) Insurance against defects. Costs of insurance with respect to any costs incurred to correct defects in the
organization's materials or workmanship are unallowable.
•
(g) Medical liability(malpractice)insurance. Medical liability insurancc is an allowable cost of Federal
research programs only to the extent that the Federal research programs involve human subjects or training
of participants in research techniques. Medical liability insurance costs shall be treated as a direct cost and
shall be assigned to individual projects based on the manner in which the insurer allocates the risk to the
population covered by the insurance.
(3)Actual losses which could have been covered by permissible insurance(through the purchase of
insurance or a self-insurance program) are unallowable unless expressly provided for in the award,except:
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(a)Costs incurred because of losses not covered under nominal deductible insurance coverage provided in
keeping with sound business practice are allowable.
(b)Minor losses not covered by insurance, such as spoilage,breakage, and disappearance of supplies,
which occur in the ordinary course of operations,are allowable.
b. Indemnification includes securing the organization against liabilities to third persons and any other loss
or damage,not compensated by insurance or otherwise. The Federal Government is obligated to indemnify
the organization only to the extent expressly provided in the award.
23. Interest, fundraising,and investment management costs.
a.Interest.
(1)Costs incurred for interest on borrowed capital or temporary use of endowment funds,however
represented,are unallowable. However, interest on debt incurred after the effective date of this revision to
acquire or replace capital assets(including renovations, alterations,equipment, land, and capital assets
acquired through capital leases),acquired after the effective date of this revision and used in support of
sponsored agreements is allowable,provided that:
(a)For facilities acquisitions(excluding renovations and alterations)costing over$10 million where the
Federal Government's reimbursement is expected to equal or exceed 40 percent of an asset's cost,the
non-profit organization prepares,prior to the acquisition or replacement of the capital asset(s),a
justification that demonstrates the need for the facility in the conduct of federally-sponsored activities.
Upon request,the needs justification must be provided to the Federal agency with cost cognizance
authority as a prerequisite to the continued allowability of interest on debt and depreciation related to the
facility.The needs justification for the acquisition of a facility should include,at a minimum, the
following:
A statement of purpose and justification for facility acquisition or replacement
A statement as to why current facilities are not adequate
A statement of planned future use of the facility
A description of the financing agreement to be arranged for the facility
A summary of the building contract with estimated cost information and statement of source and use of
funds
A schedule of planned occupancy dates
(b)For facilities costing over$500,000,the non-profit organization prepares,prior to the acquisition or
replacement of the facility, a lease/purchase analysis in accordance with the provisions of Sec._.30
through_.37 of Circular A-110,which shows that a financed purchase or capital lease is less costly to the
organization than other leasing alternatives,on a net present value basis. Discount rates used should be
equal to the non-profit organization's anticipated interest rates and should be no higher than the fair market
rate available to the non-profit organization from an unrelated("arm's length")third-party.The
lease/purchase analysis shall include a comparison of the net present value of the projected total cost
comparisons of both alternatives over the period the asset is expected to be used by the non-profit
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•
organization. The cost comparisons associated with purchasing the facility shall include the estimated
purchase price,anticipated operating and maintenance costs(including property taxes, if applicable)not
included in the debt financing, less any estimated asset salvage value at the end of the period defined
above. The cost comparison for a capital lease shall include the estimated total lease payments, any
estimated bargain purchase option,operating and maintenance costs,and taxes not included in the capital
leasing arrangement, less any estimated credits due under the lease at the end of the period defined above.
Projected operating lease costs shall be based on the anticipated cost of leasing comparable facilities at fair
market rates under rental agreements that would be renewed or reestablished over the period defined above,
and any expected maintenance costs and allowable property taxes to be borne by the non-profit
organization directly or as part of the lease arrangement.
(c)The actual interest cost claimed is predicated upon interest rates that are no higher than the fair market
rate available to the non-profit organization from an unrelated("arm's length")third party.
(d)Investment earnings, including interest income,on bond or loan principal,pending payment of the
construction or acquisition costs, are used to offset allowable interest cost. Arbitrage earnings reportable to
the Internal Revenue Service are not required to be offset against allowable interest costs.
(e)Reimbursements are limited to the least costly alternative based on the total cost analysis required under
subparagraph (b). For example,if an operating lease is determined to be less costly than purchasing
through debt financing,then reimbursement is limited to the amount determined if leasing had been used.
In all cases where a lease/purchase analysis is performed,Federal reimbursement shall be based upon the
least expensive alternative.
(f)Non-profit organizations are also subject to the following conditions:
(i)Interest on debt incurred to finance or refinance assets acquired before or reacquired after the effective
date of this Circular is not allowable.
(ii)For debt arrangements over$1 million,unless the non-profit organization makes an initial equity
•
contribution to the asset purchase of 25 percent or more,non-profit organizations shall reduce claims for
interest expense by an amount equal to imputed interest earnings on excess cash flow,which is to be
calculated as follows.Annually, non-profit organizations shall prepare a cumulative(from the inception of
the project)report of monthly cash flows that includes inflows and outflows, regardless of the funding
source. Inflows consist of depreciation expense, amortization of capitalized construction.interest,and
annual interest expense. For cash flow calculations,the annual inflow figures shall be divided by the
number of months in the year(usually 12)that the building is in service for monthly amounts. Outflows
consist of initial equity contributions,debt principal payments(less the pro rata share attributable to the
unallowable costs of land)and interest payments. Where cumulative inflows exceed cumulative outflows,
interest shall be calculated on the excess inflows for that period and be treated as a reduction to allowable
interest expense. The rate of interest to be used to compute earnings on excess cash flows shall be the three
month Treasury Bill closing rate as of the last business day of that month.
(iii)Substantial relocation of federally-sponsored activities from a facility financed by indebtedness,the
cost of which was funded in whole or part through Federal reimbursements,to another facility prior to the
expiration of a period of 20 years requires notice to the Federal cognizant agency. The extent of the
relocation, the amount of the Federal participation in the financing,and the depreciation and interest
charged to date may require negotiation and/or downward adjustments of replacement space charged to
Federal programs in the future.
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(iv)The allowable costs to acquire facilities and equipment are limited to a fair market value available to
the non-profit organization from an unrelated("arm's length")third party.
(2) For non-profit organizations subject to "full coverage"'under the Cost Accounting Standards(CAS)as
defined at 48 CFR 9903.201,the interest allowability provisions of subparagraph a do not apply. Instead,
these organizations'sponsored agreements are subject to CAS 414(48 CFR 9903.414),cost of money as an
element of the cost of facilities capital,and CAS 417(48 CFR 9903.417), cost of money as an element of
the cost of capital assets under construction.
(3)The following definitions are to be used for purposes of paragraph 23:
(a)Re-acquired assets means assets held by the non-profit organization prior to the effective date of this
revision that have again come to be held by the organization, whether through repurchase or refinancing. It
does not include assets acquired to replace older assets.
(b)Initial equity contribution means the amount or value of contributions made by non-Federal entities
for the acquisition of the asset or prior to occupancy of facilities.
(c)Asset costs means the capitalizable costs of an asset,including construction costs, acquisition costs,and
other such costs capitalized in accordance with GAAP.
b. Costs of organized fundraising,including financial campaigns,endowment drives,solicitation of gifts
and bequests,and similar expenses incurred solely to raise capital or obtain contributions are unallowable.
c. Costs of investment counsel and staff and similar expenses incurred solely to enhance income from
investments are unallowable.
d. Fundraising and investment activities shall be allocated an appropriate share of indirect costs under the
conditions described in subparagraph B.3 of Attachment A.
24. Labor relations costs. Costs incurred in maintaining satisfactory relations between the organization
and its employees, including costs of labor management committees,employee publications, and other
related activities are allowable. •
25.Lobbying.
a.Notwithstanding other provisions of this Circular,costs associated with the following activities are
unallowable:
• (1)Attempts to influence the outcomes of any Federal, State, or local election,referendum,initiative,or
similar procedure,.through in kind or cash contributions,endorsements,publicity,or similar activity; •
(2)Establishing, administering,contributing to,or paying the expenses of a political party,campaign,
political action committee,or other organization established for the purpose of influencing the outcomes of
elections;
(3)Any attempt to influence: (i)The introduction of Federal or State legislation;or(ii)the enactment or
modification of any pending Federal or State legislation through communication with any member or
employee of the Congress or State legislature(including efforts to influence State or local officials to
engage in similar lobbying activity),or with any Government official or employee in connection with a
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decision to sign or veto enrolled legislation;
(4)Any attempt to influence: (i)The introduction of Federal or State legislation;or(ii)the enactment or
modification of any pending Federal or State legislation by preparing, distributing or using publicity or
propaganda,or by urging members of the general public or any segment thereof to contribute to or
participate in any mass demonstration, march,rally, fundraising drive, lobbying campaign or letter writing
or telephone campaign; or
(5)Legislative liaison activities, including attendance at legislative sessions or committee hearings,
gathering information regarding legislation,and analyzing the effect of legislation,when such activities are
carried on in support of or in knowing preparation for an effort to engage in unallowable lobbying.
b. The followingactivities
v es are excepted from the coverage of subparagraph a:
(1)Providing a technical and factual presentation of information on a topic directly related to the
performance of a grant,contract or other agreement through hearing testimony, statements or letters to the
Congress or a State legislature,or subdivision,member,or cognizant staff member thereof, in response to a
documented request(including a Congressional Record notice requesting testimony or statements for the
record at a regularly scheduled hearing)made by the recipient member, legislative body or subdivision,or a
cognizant staff member thereof;provided such information is readily obtainable and can be readily put in
deliverable form;and further provided that costs under this section for travel, lodging or meals are
unallowable unless incurred to offer testimony at a regularly scheduled Congressional hearing pursuant to a
written request for such presentation made by the Chairman or Ranking Minority Member of the
Committee or Subcommittee conducting such hearing.
(2)Any lobbying made unallowable by subparagraph a(3)to influence State legislation in order to
directly reduce the cost, or to avoid material impairment of the organization's authority to perform the
grant,contract, or other agreement.
(3)Any activity specifically authorized by statute to be undertaken with funds from the grant,contract,or
other agreement.
c. (1) When an organization seeks reimbursement for indirect costs, total lobbying costs shall be separately
identified in the indirect cost rate proposal, and thereafter treated as other unallowable activity costs in
accordance with the procedures of subparagraph B.3 of Attachment A.
(2) Organizations shall submit,as part of the annual indirect cost rate proposal,a certification that the
requirements and standards of this paragraph have been complied with.
(3) Organizations shall maintain adequate records to demonstrate that the determination of costs as being
allowable or unallowable pursuant to paragraph 25 complies with the requirements of this Circular.
(4)Time logs,calendars, or similar records shall not be required to be created for purposes of complying
with this paragraph during any particular calendar month when:(1)the employee nas
engages es in lobbying
defined in subparagraphs(a) and(b)) 25 percent or less of the employee's compensated hours of
employment during that calendar month, and(2)within the preceding five-year period, the organization has
not materially misstated allowable or unallowable costs of any nature,including legislative lobbying costs.
When conditions (1) and (2)are met, organizations are not required to establish records to support the
allowabliliy of claimed costs in addition to records already required or maintained. Also,when conditions
(1) and(2)are met,the absence of time logs,calendars, or similar records will not serve as a basis for
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disallowing costs by contesting estimates of lobbying time spent by employees during a calendar month.
(5)Agencies shall establish procedures for resolving in advance, in consultation with OMB,any significant
questions or disagreements concerning the interpretation or application of paragraph 25. Any such
advance resolution shall be binding in any subsequent settlements, audits or investigations with respect to
that grant or contract for purposes of interpretation of this Circular;provided,however, that this shall not
be construed to prevent a contractor or grantee from contesting the lawfulness of such a determination.
26. Losses on other awards. Any excess of costs over income on any award is unallowable as a cost of
any other award. This includes,but is not limited to,the organization's contributed portion by reason of
cost sharing agreements or any under-recoveries through negotiation of lump sums for, or ceilings on,
indirect costs.
ss maintenance,repair,or upkeep of
27. Maintenance and repair costs.Costs incurred for necessaryp p p
buildings and equipment(including Federal property unless otherwise provided for) which neither add to
the permanent value of the property nor appreciably prolong its intended life,but keep it in an efficient
operating condition,are allowable. Costs incurred for improvements which add to the permanent value of
the buildings and equipment or appreciably prolong their intended life shall be treated as capital
expenditures (see paragraph 15).
28. Materials and supplies. The costs of materials and supplies necessary to carry out an award are
allowable. Such costs should be charged at their actual prices after deducting all cash discounts,trade
discounts,rebates,and allowances received by the organization. Withdrawals from general stores or
stockrooms should be charged at cost under any recognized method of pricing consistently applied.
Incoming transportation charges may be a proper part of material cost.Materials and supplies charged as a
direct cost should include only the materials and supplies actually used for the performance of the contract
or grant,and due credit should be given for any excess materials or supplies retained,or returned to
vendors.
29. Meetings and conferences.
a. Costs associated with the conduct of meetings and conferences include the cost of renting facilities,
meals, speakers' fees, and the like. But see paragraph 14,Entertainment costs, and paragraph 34,
Participant support costs.
b. To the extent that these costs are identifiable with a particular cost objective,they should be charged to
that objective(see paragraph B of Attachment A). These costs are allowable,provided that they meet the
general tests of allowability, shown in paragraph A of Attachment A to this Circular.
c. Costs of meetings and conferences held to conduct the general administration of the organization are
allowable.
30. Memberships,subscriptions,and professional activity costs.
a. Costs of the organization's membership in business,technical, and professional organizations are
allowable.
b. Costs of the organization's subscriptions to business,professional,and technical periodicals are
allowable.
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C. Costs of meetings and conferences,when the primary purpose is the dissemination of technical
information, are allowable. This includes costs of meals, transportation, rental of facilities,and other items
incidental to such meetings or conferences.
d. Costs of membership in any civic or community organization are allowable with prior approval by
Federal cognizant agency.
e. Costs of membership in any country club or social or dining club or organization are unallowable.
31. Organization costs.Expenditures,such as incorporation fees,brokers' fees, fees to promoters,
organizers or management consultants, attorneys, accountants, or investment counselors,whether or not
employees of the organization, in connection with establishment or reorganization of an organization,are
unallowable except with prior approval of the awarding agency.
32. Overtime,extra-pay shift, and multi-shift premiums. Premiums for overtime, extra-pay shifts,and
multi-shift work are allowable only with the prior approval of the awarding agency except:
a. When necessary to cope with emergencies,such as those resulting from accidents,natural disasters,
breakdowns of equipment,or occasional operational bottlenecks of a sporadic nature.
b. When employees are performing indirect functions, such as administration, maintenance,or accounting.
c. In the performance of tests, laboratory procedures, or other similar operations which are continuous in
nature and cannot reasonably be interrupted or otherwise completed.
d. When lower overall cost to the Federal Government will result.
33. Page charges in professional journals. Page charges for professional journal publications are
allowable as a necessary part of research costs, where:
a. The research papers report work supported by the Federal Government;and
b. The charges are levied impartially on all research papers published by the journal,whether or not by
federally-sponsored authors.
34. Participant support costs. Participant support costs are direct costs for items such as stipends or
subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or
trainees (but not employees)in connection with meetings,conferences,symposia, or training projects.
These costs are allowable with the prior approval of the awarding agency.
35. Patent costs.
a. Costs of(i)preparing disclosures, reports, and other documents required by the award and of searching
the art to the extent necessary to make such disclosures,(ii)preparing documents and any other patent costs
in connection with the filing and prosecution of a United States patent application where title or
royalty-free license is required by the Federal Government to be conveyed to the Federal Government,and
(iii)general counseling services relating to patent and copyright matters, such as advice on patent and
copyright laws, regulations, clauses, and employee agreements are allowable(but see paragraph 39).
b. Cost of preparing disclosures,reports, and other documents and of searching the art to the extent
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necessary to make disclosures,if not required by the award, are unallowable. Costs in connection with(i)
filing and prosecuting any foreign patent application, or(ii)any United States patent application,where the
award does not require conveying title or a royalty-free license to the Federal Government, are unallowable
(also see paragraph 47).
36.Pension plans. See subparagraph 7.h.
37. Plant security costs.Necessary expenses incurred to comply with Federal security requirements or for
facilities protection,including wages,uniforms,and equipment of personnel are allowable.
38. Pre-award costs. Pre-award costs are those incurred prior to the effective date of the award directly
pursuant to the negotiation and in anticipation of the award where such costs are necessary to comply with
the proposed delivery schedule or period of performance. Such costs are allowable only to the extent that
they would have been allowable if incurred after the date of the award and only with,the written approval
of the awarding agency.
39. Professional service costs.
a. Costs of professional and consultant services rendered by persons who are members of a particular
profession or possess a special skill,and who are not officers or employees of the organization, are
allowable, subject to subparagraphs b and c when reasonable in relation to the services rendered and
when not contingent upon recovery of the costs from the Federal Government.
b. In determining the allowability of costs in a particular case,no single factor or any special combination
of factors is necessarily determinative.However,the following factors are relevant:
(1)The nature and scope of the service rendered in relation to the service required.
(2)The necessity of contracting for the service,considering the organization's capability in the particular
area.
(3)The past pattern of such costs,particularly in the years prior to Federal awards.
(4)The impact of Federal awards on the organization's business(i.e.,what new problems have arisen).
(5)Whether the proportion of Federal work to the organization's total business is such as to influence the
organization in favor of incurring the cost,particularly where the services rendered are not of a continuing
nature and have little relationship to work under Federal grants 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,
especially on non-Federal awards.
(8)Adequacy of the contractual agreement for the service(e.g.,description of the service,estimate of time
required,rate of compensation, and termination provisions).
c. In addition to the factors in subparagraph b,retainer fees to be allowable must be supported by
evidence of bona fide services available or rendered.
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40, Profits and losses on disposition of depreciable property or other capital assets.
a. (1)Gains and losses on sale,retirement,or other disposition of depreciable property shall be included in
the year in which they occur as credits or charges to cost grouping(s)in which the depreciation applicable
to such property was included.The amount of the gain or loss to be included as a credit or charge to the
appropriate cost grouping(s)shall be the difference between the amount realized on the property and the
undepreciated basis of the property.
(2)Gains and losses on the disposition of depreciable property shall not be recognized as a separate credit
or charge under the following conditions:
(a)The gain or loss is processed through a depreciation reserve account and is reflected in the depreciation
allowable under paragraph 11.
(b)The property is given in exchange as part of the purchase price of a similar item and the gain or loss is
taken into account in determining the depreciation cost basis of the new item.
(c)A loss results from the failure to maintain permissible insurance,except as otherwise provided in
subparagraph 22.a(3).
(d)Compensation for the use of the property was provided through use allowances in lieu of depreciation
in accordance with paragraph 11.
(e) Gains and losses arising from mass or extraordinary sales,retirements,or other dispositions shall be
considered on a ease-by-case basis.
b. Gains or losses of any nature arising from the sale or exchange of property other than the property
covered in subparagraph a shall be excluded in computing award costs.
41. Publication and printing costs.
a. Publication costs include the costs of printing(including the processes of composition,plate-making,
press work,binding,and the end products produced by such processes),distribution,promotion,mailing,
and general handling.
b. If these costs are not identifiable with a particular cost objective,they should be allocated as indirect
costs to all benefiting activities of the organization.
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 journals is addressed paragraph 33.
42. Rearrangement and alteration costs. Costs incurred for ordinary or normal rearrangement and
alteration of facilities are allowable. Special arrangement and alteration costs incurred specifically for the
project are allowable with the prior approval of the awarding agency.
43. Reconversion costs. Costs incurred in the restoration or rehabilitation of the organization's facilities to
approximately the same condition existing immediately prior to commencement of Federal awards, fair
wear and tear excepted, are allowable.
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44. Recruiting costs.
a. Subject to subparagraphs b,c,and d,and provided that the size of the staff recruited and maintained is
in keeping with workload requirements, costs of"help wanted" advertising,operating costs of an
employment office necessary to secure and maintain an adequate staff,costs of operating an aptitude and
educational testing program, travel costs of employees while engaged in recruiting personnel, travel costs
of applicants for interviews for prospective employment,and relocation costs incurred incident to
recruitment of new employees,are allowable to the extent that such costs are incurred pursuant to a
well-managed recruitment program. Where the organization uses employment agencies,costs that are not
in excess of standard commercial rates for such services are allowable.
b. In publications,costs of help wanted advertising that includes color, includes advertising material for
other than recruitment purposes,or is excessive in size(taking into consideration recruitment purposes for
which intended and normal organizational practices in this respect), are unallowable.
c. Costs of help wanted advertising, special emoluments, fringe benefits,and salary allowances incurred to
attract professional personnel from other organizations that do not meet the test of reasonableness or do not
conform with the established practices of the organization,are unallowable.
d. Where relocation costs incurred incident to recruitment of a new employee have been allowed either as
an allocable direct or indirect cost,and the newly hired employee resigns for reasons within his control
within twelve months after being hired,the organization will be required to refund or credit such relocation
costs to the Federal Government.
45. Relocation costs.
a. Relocation costs are costs incident to the permanent change of duty assignment(for an indefinite period
or for a stated period of not less than 12 months)of an existing employee or upon recruitment of a new
employee. Relocation costs are allowable,subject to the limitation described in subparagraphs b,c,and
d,provided that:
(1)The move is for the benefit of the employer.
(2)Reimbursement to the employee is in accordance with an established written policy consistently
followed by the employer.
(3)The reimbursement does not exceed the employee's actual(or reasonably estimated)expenses.
b. Allowable relocation costs for current employees are limited to the following:
(1)The costs of transportation of the employee,members of his immediate family and his household,and
personal effects to the new location.
(2)The costs of finding a new home, such as advance trips by employees and spouses to locate living
quarters and temporary lodging during the transition period,up to maximum period of 30 days,including
advance trip time.
(3)Closing costs,such as brokerage, legal,and appraisal fees, incident to the disposition of the employee's
former home. These costs,together with those described in(4), are limited to 8 per cent of the sales price
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of the employee's former home.
(4)The continuing costs of ownership of the vacant former home after the settlement or lease date of the
employee's new permanent home,such as maintenance of buildings and grounds(exclusive of fixing up
expenses), utilities,taxes, and property insurance.
(5)Other necessary and reasonable expenses normally incident to relocation, such as the costs of canceling
an unexpired lease,disconnecting and reinstalling household appliances, and purchasing insurance against
loss of or damages to personal property. The cost of canceling an unexpired lease is limited to three times
the monthly rental.
c. Allowable relocation costs for new employees are limited to those described in(1) and (2)of
subparagraph b. When relocation costs incurred incident to the recruitment of new employees have been
allowed either as a direct or indirect cost and the employee resigns for reasons within his control within 12
months after hire, the organization shall refund or credit the Federal Government for its share of the cost.
However,the costs of travel to an overseas location shall be considered travel costs in accordance with
paragraph 55 and not relocation costs for the purpose of this paragraph if dependents are not permitted at
the location for any reason and the costs do not include costs of transporting household goods.
d. The following costs related to relocation are unallowable: •
(1)Fees and other costs associated with acquiring a new home. •
(2)A loss on the sale of a former home.
(3) Continuing mortgage principal and interest payments on a home being sold.
(4)Income taxes paid by an employee related to reimbursed relocation costs.
46. Rental costs.
a. Subject to the limitations described in subparagraphs b through d,rental costs are allowable to the
extent that the rates are reasonable in light of such factors as:rental costs of comparable property,if any;
market conditions in the area; alternatives available; and the type, life expectancy,condition,and value of
the property leased.
b. Rental costs under sale and leaseback arrangements are allowable only up to the amount that would be
allowed had the organization continued to own the property.
c. Rental costs under less-than-arms-length leases are allowable only up to the amount that would be
allowed had title to the property vested in the organization. For this purpose,a less-than-arms-length lease
is one under which one party to the lease agreement is able to control or substantially influence the actions
of the other. Such leases include,but are not limited to those between(i)divisions of an organization;(ii)
organizations under common control through common officers,directors,or members; and(iii)an
organization and a director, trustee,officer, or key employee of the organization or his immediate family
either directly or through corporations,trusts,or similar arrangements in which they hold a controlling
interest.
d.Rental costs under leases which are required to be treated as capital leases under GAAP, are allowable
only up to the amount that would be allowed had the organization purchased the property on the date the
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lease agreement was executed, i.e.,to the amount that minimally would pay for depreciation or use
allowances, maintenance,taxes, and insurance,Interest costs related to capitalized leases are allowable to
the extent they meet criteria in subparagraph 23.a.Unallowable costs include amounts paid for profit,
management fees, and taxes that would not have been incurred had the organization purchased the facility.
47. Royalties and other costs for use of patents and copyrights.
a. Royalties on a patent or copyright or amortization of the cost of acquiring by purchase a copyright,
patent,or rights thereto, necessary for the proper performance of the award are allowable unless:
(1)The Federal Government has a license or the right to free use of the patent or copyright.
(2)The patent or copyright has been adjudicated to be invalid,or has been administratively determined to
be invalid.
(3)The patent or copyright is considered to be unenforceable.
(4)The patent or copyright is expired.
b. Special care should be exercised in determining reasonableness where the royalties may have arrived at
as a result of less-than-arms-length bargaining,e.g.:
(1)Royalties paid to persons,including corporations,affiliated with the organization.
(2)Royalties paid to unaffiliated parties,including corporations,under an agreement entered into in
contemplation that a Federal award would be made.
(3)Royalties paid under an agreement entered into after an award is made to an organization.
c. In any case involving a patent or copyright formerly owned by the organization, the amount of royalty
allowed should not exceed the cost which would have been allowed had the organization retained title
thereto.
48. Selling and marketing. Costs of selling and marketing any products or services of the organization
(unless allowed under paragraph I as allowable public relations costs)are unallowable. These costs,
however,are allowable as direct costs, with prior approval by awarding agencies,when they are necessary
for the performance of Federal programs.
49. Severance pay.
a. Severance pay, also commonly referred to as dismissal wages,is a payment in addition to regular salaries
and wages,by organizations to workers whose employment is being terminated. Costs of severance pay are
allowable only to the extent that in each case,it is required by(i)law, (ii)employer-employee agreement,
(iii)established policy that constitutes, in effect, an implied agreement on the organization's part,or(iv)
circumstances of the particular employment.
•
b. Costs of severance payments are divided into two categories as follows:
(1)Actual normal turnover severance payments shall be allocated to all activities;or,where the
organization provides for a reserve for normal severances,such method will be acceptable if the charge to
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current operations is reasonable in light of payments actually made for normal severances over a
representative past period, and if amounts charged are allocated to all activities of the organization.
(2) Abnormal or mass severance pay is of such a conjectural nature that measurement of costs by means of
an accrual will not achieve equity to both parties. Thus, accruals for this purpose are not allowable.
However, the Federal Government recognizes its obligation to participate, to the extent of its fair share, in
any specific payment. Thus,allowability will be considered on a case-by-case basis in the event or
occurrence.
c. Costs incurred in certain severance pay packages(commonly known as "a golden parachute"payment)
which are in an amount in excess of the normal severance pay paid by the organization to an employee
upon termination of employment and are paid to the employee contingent upon a change in management
control over, or ownership of, the organization's assets are unallowable.
d. Severance payments to foreign nationals employed by the organization outside the United States,to the
extent that the amount exceeds the customary or prevailing practices for the organization in the United
States are unallowable,unless they are necessary for the performance of Federal programs and approved by
awarding agencies.
e. Severance payments to foreign nationals employed by the organization outside the United States due to
the termination of the foreign national as a result of the closing of, or curtailment of activities by,the
organization in that country, are unallowable, unless they are necessary for the performance of Federal
programs and approved by awarding agencies.
50. Specialized service facilities.
a. The costs of services provided by highly complex or specialized facilities operated by the organization,
such as electronic computers and wind tunnels, are allowable,provided the charges for the services meet
the conditions of either subparagraph b or c and, in addition, take into account any items of income or
Federal financing that qualify as applicable credits under subparagraph A.5 of Attachment A.
b. The costs of such services, when material,must be charged directly to applicable awards based on actual
usage of the services on the basis of a schedule of rates or established methodology that(i)does not
discriminate against federally-supported activities of the organization,including usage by the organization
for internal purposes, and(ii) is designed to recover only the aggregate costs of the services. The costs of
each service shall consist normally of both its direct costs and its allocable share of all indirect costs.
Advance agreements pursuant to subparagraph A.6 of Attachment A are particularly important in this
situation.
c. Where the costs incurred for a service are not material,they may be allocated as indirect costs.
51.Taxes.
a. In general, taxes which the organization is required to pay and which are paid or accrued in accordance
with GAAP,and payments made to local governments in lieu of taxes which are commensurate with the
local government services received are allowable,except for(i)taxes from which exemptions are available
to the organization directly or which are available to the organization based on an exemption afforded the
Federal Government and in the latter case when the awarding agency makes available the necessary
exemption certificates,(ii)special assessments on land which represent capital improvements,and(iii)
Federal income taxes.
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b. Any refund of taxes,and any payment to the organization of interest thereon,which were allowed as
award costs,will be credited either as a cost reduction or cash refund,as appropriate,to the Federal
Government.
52. Termination costs. Termination of awards generally give rise to the incurrence of costs, or the need for
special treatment of costs,which would not have arisen had the award not been terminated. Cost principles
covering these items are set forth below. They are to be used in conjunction with the other 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 not retain such items at cost without
sustaining a loss. In deciding whether such items are reasonably usable on other work of the organization,
the awarding agency should consider the organization's plans and orders,for current and scheduled activity.
Contemporaneous purchases of common items by the organization shall be regarded as evidence that such
items are reasonably usable on the organization's other work. Any acceptance of common items as
allocable to the terminated portion of the award shall be limited to 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 continuing after termination. If in a particular case,despite all reasonable efforts by the
organization, certain costs cannot be discontinued immediately after the effective date of termination,such
costs are generally allowable within the limitations set forth in this Circular,except that any such costs
continuing after termination due to the negligent or willful failure of the organization to discontinue such
costs shall be unallowable.
c.Loss of useful value. Loss of useful value of special tooling,machinery and equipment which was not
charged to the award as a capital expenditure 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 Federal Government is protected by transfer of title or by other means deemed
appropriate by the awarding agency;
d. Rental costs.Rental costs under unexpired leases are generally allowable where clearly shown to have
been reasonably necessary for the performance of the terminated award less the residual value of such
leases,if(i)the amount of such rental claimed does not exceed the reasonable use value of the property
leased for the period of the award and such further period as may be reasonable, and(ii)the organization
makes all reasonable efforts to terminate,assign, settle,or otherwise reduce the cost of such lease.There
also may be included the cost of alterations of such leased property,provided such alterations were
necessary for the performance of the award,and of reasonable restoration required by the provisions of the
lease.
•
e. Settlement expenses. Settlement expenses including the following are generally allowable:
(1)Accounting, legal,clerical, and similar costs reasonably necessary for:
(a)The preparation and presentation to awarding agency of settlement claims and supporting data with
respect to the terminated portion of the award, unless the termination is for default(see Sec._.61 of
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Circular A-110);and
(b)The termination and settlement of subawards.
(2)Reasonable costs for the storage,transportation,protection, and disposition of property provided by the
Federal Government or acquired or produced for the award,except when grantees or contractors are
reimbursed for disposals at a predetermined amount in accordance with Sec. .30 through_.37 of
Circular A-110.
(3)Indirect costs related to salaries and wages incurred as settlement expenses in subparagraphs(1) and
(2).Normally,such indirect costs shall be limited to fringe benefits, occupancy cost, and immediate
supervision.
f. Claims under subawards. Claims under subawards, including the allocable portion of claims which are
common to the award,and to other work of the organization are generally allowable. An appropriate share
of the organization's indirect expense may be allocated to the amount of settlements with subcontractors
and/or subgrantees,provided that the amount allocated is otherwise consistent with the basic guidelines
contained in Attachment A. The indirect expense so allocated shall exclude the same and similar costs
claimed directly or indirectly as settlement expenses.
•
53. Training and education costs.
a. Costs of
preparation and maintenance of a ro am of instruction including
�' but not limited to on-the-job,
classroom,and apprenticeship training, designed to increase the vocational effectiveness of employees,
including training materials,textbooks, salaries or wages of trainees(excluding overtime compensation
which might arise therefrom), and(i)salaries of the director of training and staff when the training program
is conducted by the organization; or(ii)tuition and fees when the training is in an institution.not operated.
by the organization,are allowable.
b. Costs of part-time education,at an undergraduate or post-graduate college level, includingthat provided
.
at the organization's own facilities,are allowable only when the course or degree pursued is relative to the
field in which the employee is now working or may reasonably be expected to work,and are limited to:
(1)Training materials.
(2) Textbooks.
(3)Fees charges by the educational institution. - •
(4)Tuition charged by the educational institution or, in lieu of tuition,instructors' related
salaries and the
share of indirect costs of the educational institution to the extent that the sum thereof is not in excess of the
tuition which would have been paid to the participating educational institution.
(5) Salaries and related costs of instructors who are employees of the organization.
(6)Straight-time compensation 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 classes after regular working hours;otherwise,such compensation is unallowable.
c. Costs of tuition, fees, training materials, and textbooks(but not subsistence,salary, or any other
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emoluments) in connection with full-time education,including that provided at the organization's own
facilities, at a post-graduate(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 expected
to work, and only where the costs receive the prior approval of the awarding agency. Such costs are limited
to the costs attributable to a total period not to exceed one school year for each employee so trained. In
unusual cases the period may be extended.
d. Costs of attendance of up to 16 weeks per employee per year at specialized programs specifically
designed to enhance the effectiveness of executives or managers or to prepare employees for such positions
are allowable. Such costs include enrollment fees, training materials, textbooks and related charges,
employees'salaries, subsistence, and travel. Costs allowable under this paragraph do not include those for
courses that are part of a degree-oriented curriculum,which are allowable only to the extent set forth in
subparagraphs b and c.
e. Maintenance expense,and normal depreciation or fair rental,on facilities owned or leased by the
organization for training purposes are allowable to the extent set forth in paragraphs 11,27,and 46.
f. Contributions or donations to educational or training institutions, including the donation of facilities or
other properties, and scholarships or fellowships,are unallowable.
•
g. Training and education costs in excess of those otherwise allowable under subparagraphs b and c may
be allowed with prior approval of the awarding agency. To be considered for approval,the organization
must demonstrate that such costs are consistently incurred pursuant to an established training and education
program,and that the course or degree pursued is relative to the field in which the employee is now
working or may reasonably be expected to work.
54.Transportation costs. Transportation costs include freight, express,cartage,and postage charges
relating either to goods purchased, in process,or delivered.These costs are allowable. When such costs can
readily be identified with the items involved,they may be directly charged as transportation costs or added
to the cost of such items(see paragraph 28). Where identification with the materials received cannot
readily be made, transportation costs may be charged to the appropriate indirect cost accounts if the
organization follows a consistent,equitable procedure in this respect.
55. Travel costs.
a. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by
employees who are in travel status on official business of the organization. Travel costs are allowable
subject to subparagraphs b through e,when they are directly attributable to specific work under an award
or are incurred in the normal course of administration of the organization.
b. Such costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs
incurred,or on a combination of the two,provided the method used results in charges consistent with those
normally allowed by the organization in its regular operations.
c. The difference in cost between first-class air accommodations and less than first-class air
accommodations is unallowable except when less than first-class air accommodations are not reasonably
available to meet necessary mission requirements, such as where less than first-class accommodations
would(i)require circuitous routing, (ii)require travel during unreasonable hours,(iii)greatly increase the
duration of the flight,(iv) result in additional costs which would offset the transportation savings,or(v)
offer accommodations which are not reasonably adequate for the medical needs of the traveler.
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d. Necessary and reasonable costs of family movements and personnel movements of a special or mass
nature are allowable,pursuant to paragraphs 44 and 45, subject to allocation on the basis of work or time
period benefited when appropriate. Advance agreements are particularly important.
e.Direct charges for foreign travel costs are allowable only when the travel has received prior approval of
the awarding agency. Each separate foreign trip must be approved. For purposes of this provision, foreign
travel is defined as any travel outside of Canada and the United States and its territories and possessions.
However,for an organization located in foreign countries, the term "foreign travel"means travel outside
that country.
56. Trustees.Travel and subsistence costs of trustees(or directors)are allowable. The costs are subject to
restrictions regarding lodging, subsistence and air travel costs provided in paragraph 55.
•
ATTACHMENT C
Circular No. A-122
NON-PROFIT ORGANIZATIONS NOT SUBJECT TO THIS CIRCULAR
Aerospace Corporation, El Segundo,California
Argonne National Laboratory, Chicago,Illinois
Atomic Casualty Commission,Washington,D.C.
Battelle Memorial Institute, Headquartered in Columbus,Ohio
Brookhaven National Laboratory,Upton,New York
Charles Stark Draper Laboratory, Incorporated,Cambridge,Massachusetts
Environmental Institute of Michigan,Ann Arbor,Michigan
Hanford Environmental Health Foundation,Richland,Washington
UT Research Institute,Chicago, Illinois
Institute for Defense Analysis,Alexandria, Virginia
Mitre Corporation,Bedford,Massachusetts
National Radiological Astronomy Observatory,Green Bank, West Virginia
National Renewable Energy Laboratory,Golden, Colorado
Oak Ridge Associated Universities, Oak Ridge,Tennessee
Rand Corporation,Santa Monica,California
Research Triangle Institute,Research Triangle Park,North Carolina
Riverside Research Institute,New York,New York
Southern Research Institute,Birmingham,Alabama
Southwest Research Institute, San Antonio,Texas •
SRI International,Menlo Park,California
Syracuse Research Corporation, Syracuse,New York
Universities Research Association,Incorporated(National Acceleration Lab),Argonne,Illinois
Non-profit insurance companies, such as Blue Cross and Blue Shield Organizations
Other non-profit organizations as negotiated with awarding agencies
BILLING CODE 3110-01
OMB Home Page I Budget Information I Legislative Information I Management Reform/GPRA I
Grants Management I Financial Management I Procurement Policy
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Information&Regulatory Policy J Special Topics
Read our Privacy Policy
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TRAINING PARTICIPANT REPORT Exhibit "H"
This employer or program has received federal funding assistance. This participation
information be tracked, however, this information will only be used for purposes relate,
Participant Name: Job Title:
Ethnicity of participant—Check one: Hispanic or Latino Not Hispanic or Latino
Race of participant—Check all that apply:
White Black or African American Asian
American Indian or Native Hawaiian or Other
Alaska Native Pacific Islander
Gender: M or F Age: Full-time or Part-time in the business? FT or PT
•
Home Address: City/ZIP
Home Phone: Other Phone: E-mail:
Business Address: County City/ZIP
1. Is your home address located within the neighborhood revitalization areas (see attached map)?
Yes No
2. Is the business located within the neighborhood revitalization areas (see attached map)?
Yes No
3. Household Income at time hired:$
4. Total number of persons in your household(including yourself):
5. If there are dependents in your family,what is the gender of the head of household?
Male Female
Business Start up or Existing? Business Start Date(Real or Estimate)
How many other employees work in the business(full time equivalents) ? FTE
Business Products/Services:
At this point, are you planning to apply for a microloan? Yes or No
Approximate Amount Use of Funds
Name of the program attended?
How did you hear about the course?
Date:
Signature of Participant
For Program Use:
Is this participant's residence or the location of the business within the neighborhood revitalization area?
Yes No If"Yes",the above participant is presumed to be low-and-moderate income.
If"No",please complete the remainder of the form.
Confirmed Household Income at time of Employment: $
Household size: Enter 100%median Household(HH)Income per Household Size:
Calculate employee's HH income as a percent of median HH income:
Does this participant's household qualify as a low/moderate income? Yes No
Date: Form Rev. 12/02
Name and Title of Responsible Administrator
FINANCIAL STATUS REPORT FORM Exhibit "I"
(Please attach AIA 0702 form and other supporting documentation for exr
Subrecipient/Contractor:
11V1.1L
Address: (Circle) ESG
SHP
Grant#: Other
Grant Period:
Reimbursement Period: Project Type: Acquisition
Circle all New Construction
that a l Rehabilitation
PROJECT TOTAL PREVIOUS CURRENT %u BUDGET
GRANT FUNDS BUDGET EXPENDITURES MONTH'S COMPLETE REMAINING
EXPENDITURES
Construction Hard Costs
Architect
Engineering —%
Legal —%
Appraisal —o/a
Audit
Developer Overhead —%
Construction Contingency
Other—.Please Specify —%
TOTALS —%
Reimbursement Requested: $
Program Income This Month $
TOTAL PAY REQUEST $
PROJECT TOTAL PREVIOUS CURRENT % BUDGET
MATCHING FUNDS BUDGET EXPENDITURES MONTH'S COMPLETE REMAINING
EXPENDITURES
Owner Cash Equity
LIHTC
Private Funds
Other o%
TOTAL MATCHING
I certify to the best of my knowledge that the above information is correct and complete and is for the
purpose set forth in the award documents. Financial records are available for audit or review.
Authorized Certifying Officer Title Date Form 3/01
Exhibit "3"
OSBN Capital Improvements
2505 North 24th Street
Install new ADA entrance at OSBN's main entrance. 15,500.00
Install new power operated hardware for existing interior door to
handicap ramp adjacent to beauty school foyer. 1,150.00
Install a new fire rated door with lite at beauty school entrance with an
ADA power assisted door operator for handicap accessibility. 2,450.00
Install handicap accessible office door hardware to tenant suites. 20,000.00
Install a new high-tech security/camera system. 20,000.00
Repaint exterior masonry walls and miscellaneous trim of building. 22,000.00
Restriping of existing parking lot and firelanes. 1,475.00
HVAC upgrades to existing building areas. 87,000.00
Limited handicap accessibility upgrades to existing public bathrooms. 1,800.00
South sidewalk replacement and concrete pavement replacement at
northwest parking area. 2,200.00
New interior hallway carpet at corridors and OSBN office staff suites. 6,200.00
Rear tree and brush removal. 1,400.00
New VCT tile at front lobby. 1,475.00
New overhead doors and automatic overhead door openers at loading
docks. 7,000.00
Complete rear grading and miscellaneous site improvements at OSBN
properties 2510,2516, 2520 and 2522 N. 24th Street. 32,089.00
Sub-Total: $221,739.00
Contingency @ 15% $33,491
Total Expenditures: $255,230
Amended Exhibit"J"
OSBN Capital Improvements Remaining
BTC - 2505 North 24th Street
HVAC upgrades to existing building areas $ 84,141.00
Required roof repairs $ 64,387.00
Improvements in entry/cafeteria area $ 2,561.00
Contingency $ 4,002.00
Audit costs $ 3,879.00
Total for 2505 N. 24th Street $164,880.00
Balance remaining in original Agreement $27,551.25
Allocation from FY 2004 funds $131,418.75
Murray Complex - Buildings
at 2510, 2516, 2520 and 2522 N. 24th Street
Miscellaneous site improvements $ 51,280.25
Audit costs $ 1,560.00
Total for Murray Complex $ 52,840.25
Allocation from FY 2004 Funds $ 52,840.25
Prorated Audit Amounts for Each Activity
BTC—2505 North 24th Street $3,879.00
Murray Complex $1,560.00
Technical Assistance $1,941.00
Total not to exceed $7,380.00
Exhibit "K"
Protected and Disadvantaged Business Enterp)
Who Qualifies as a Protected /Disadvantaged Business Entet pi nc.
The term "Protected Business Enterprises" (PBE) is defined to be a business at
least 51 percent of which is owned, controlled, and actively managed by protected
class members (Black, Hispanic, Asian, or Pacific Islander, American Indian or
Alaskan Native or Female).
The teiuui "Disadvantaged Business Enterprise" (DBE) is defined to be a small
business that has been in existence for at least one year and has annual gross
receipts of$150,000 or less. A DBE may include, but not limited to a business
owned by a Protected class, but such business must meet two or other conditions
set forth in the City of Omaha Contract Compliance Ordinance, Section 10-191,
M (1) through (5).
What are the benefits of becoming certified as a PBE/DBE?
Certification as a PBE or DBE provides greater exposure for work opportunities on
City of Omaha projects. The names of all certified PBE/DBE'S appear in the
PBE/DBE directory, which is disseminated to local government agencies,
contractors and to the public. City of Omaha contractors will use the PBE/DBE
directory as a basic resource for soliciting Minority/Women/Small Business
participation on City of Omaha Projects. The City of Omaha shall make every
good-faith effort to award City contracts and City-assisted construction contracts to
Disadvantaged Business Enterprises in amounts no less than 10% of the dollar
volume of the applicable contracts awarded by the city. Other benefits include the
authority, (but not a requirement), of the City Council to award a contract to a DBE
that is not the lowest bidder. A contract or subcontract can be awarded to a DBE if
determined by the City to be an acceptable cost higher than a competing lower bid
except for specially assessed Projects. A DBE company may be awarded the
contract over the lowest bidder as long as the cost differential does not exceed 3%.
If your business is not certified with the City of Omaha and you are
interested in becoming certified as a Protected and/or
Disadvantaged Business Enterprise please contact the Human
Relations Department at 402-444-5055. The PBE/DBE applications,
Contract Compliance Report Form CC-i and a current PBE/DBE
City of Omaha certified directory are located on the City of Omaha
website, w`vw.ci.omaha.ne.us. Click on departments. Click on Human
Relations.
PBE/DBE Doc. 12/10/02
1
UTILIZATION OF judgment, to meet such goals. If any bidder fails
PROTECTED AND/OR DISADVANTAGED to submit, with the bid, the required information
concerning PBE/DBE participation, or if, having
BUSINESS ENTERPRISES failed to meet the City of Omaha's goals or fails
to demonstrate to the City of Omaha's
satisfaction the bidder's good faith efforts to do
A. Protected and/or Disadvantaged Business Enterprise so, the City of Omaha may, in its discretion,
(PBE/DBE) Participation Contract Specifications Pursuant reject the bid.
to City of Omaha Contract Compliance Ordinance. •
3. Protected and/or Disadvantaged Business Enterprise
1. It is the policy of the City of Omaha that Protected Goals. Bidders are hereby informed that pursuant to
and/or Disadvantaged Business Enterprises shall have Sec. 10-200 and Executive Order No. F-11-02 the
the maximum practicable opportunity to participate in City of Omaha has a PBE Participation goal of no less
the City of Omaha projects. Consequently, the than 13%and a DBE participation goal of no less than
PBE/DBE requirements of Contract Compliance 10% of the dollar volume of all the contracts that it
Ordinance apply to this solicitation. In this regard, the awards. All bidders shall make every good faith effort
Contractor to whom any award of this solicitation is to meet said goals.
made shall take all necessary and reasonable steps in
accordance with this solicitation to ensure that 4. The City of Omaha shall set specific goals for all
Protected and/or Disadvantaged Business Enterprises contracts over $200,000 to assist it in meeting its
have the maximum opportunity to participate in the overall PBE/DBE goals set forth above. The City of
Contract. The Contractor shall not discriminate on the Omaha has established a PBE/DBE goal of /0 %of
basis of race, color,national origin, sex,religion, age or the dollar amount of the bid (Bid Total) for this
disability in the award or performance of any contract contract (if said contract is anticipated to be over
or subcontract resulting from or relating to this $200,000). Bidders shall make every good faith effort
solicitation. Failure to carry out the pre-award to meet said goal.
requirements of these PBE/DBE specifications will be
sufficient ground to reject the Bid. Failure of the 5. Bidders are informed that price alone does not
Contractor to carry out the requirements of the constitute an acceptable basis for rejecting PBE/DBE
PBE/DBE specifications shall constitute a material bids unless the Bidder can demonstrate that no
breach of the contract and may result in termination of reasonable price can be obtained from a PBE/DBE.
the contract. The Contractor shall use its best efforts A Bidder's failure to meet the PBE/DBE goal or to
to carry out the PBE/DBE policy consistent with show reasonable efforts to that end will, in the City of
efficient performance on the project. Omaha's discretion, constitute sufficient ground for
bid rejection. Such reasonable efforts may include,
2. Bidders are hereby informed that the City of Omaha but are not limited to, some or all of the following:
has established goals for the participation of Protected
and/or Disadvantaged Business Enterprise in all a. Attendance at the pre-bid conference,if any;
contracts that it awards. Subcontracts awarded, by the
Bidder that is successful in this solicitation, to firms b. Follow-up of initial solicitations of interest by
owned by Protected and/or Disadvantaged Business contacting PBE/DBEs to determine with certainty
Enterprises is essential to the achievement of the City whether the PBE/DBEs are interested;
of Omaha's PBE/DBE goals. Therefore, to be
considered for award, Bidders must comply with the c. Efforts made to select portions of the work
requirements of these PBE/DBE specifications. By (including where appropriate, breaking down
submitting his/her bid, each Bidder gives assurance contracts into economically feasible units)
that the contractor will meet the City of Omaha's proposed to be performed by PBE/DBEs in order
percentage goals set forth in the PBE/DBE to increase the likelihood of achieving the
specifications for participation by Protected and/or PBE/DBE goals;
Disadvantaged Business Enterprises in the
performance of any contract resulting from this d. Efforts to negotiate with PBE/DBEs for specific
solicitation or, as an alternative, that the contractor has sub-bids, including at a minimum:
made or will make good faith efforts toward meeting
the PBE/DBE goals, and will demonstrate to the City of (1) The names, addresses, type of work to be
Omaha's satisfaction that the contractor has made subcontracted, and telephone numbers of
such efforts. Bidders must submit with their bids, on PBE/DBEs that were contacted;
the form set forth in the PBE/DBE specifications, the (2) A description of the information provided to
names, respective scope of work, and the dollar values PBE/DBEs regarding the plans and
of each PBE/DBE subcontractor that the Bidder specifications for portions of the work to be
proposes for participation in the contract work. In any performed; and,
case, Exhibits "A" and "B" must be submitted with the (3) A detailed statement of the reasons why
bid. If the information so submitted indicates that the additional prospective agreements with
City of Omaha goals will not be met, the Bidder shall PBE/DBEs needed to meet the stated goals,
submit good faith efforts documentation with their bid. were not reached.
The evidence must show to the City of Omaha's
satisfaction that the bidder has in good faith made e. Advertisement in general circulation media, trade
association publications, and protected-focus
every reasonable effort, in the City of Omaha's
2
media for a reasonable period before bids are due; approve all prior substitutions in writing in
order to ensure that the substituted firms are
f. Notification, in writing, to a reasonable number of bona fide PBE/DBEs.
specific PBE/DBEs that their interest in contract work is
solicited, in sufficient time to allow the PBE/DBEs to f. In the event of the Contractor's non-
participate effectively; compliance with the Protected and/or
Disadvantaged Business Enterprise
requirements of this Contract, the City of
g. Concerning each PBE/DBE the Bidder contacted but Omaha shall impose such contract sanctions
rejected as unqualified, the reasons for the Bidder's as it may determine to be appropriate,
conclusion; including, but not limited to:
h. Efforts made to assist the PBE/DBEs contacted that (1) Rejection of the Bid
needed assistance in obtaining bonding, lines of credit, (2) Withholding of payments to the
or insurance required by the Bidder or the City of Contractor until the Contractor complies;
Omaha; and/or
(3) Cancellation, termination or suspension
i. Designation, in writing, of a liaison officer who of the Contract, in whole or in part;or
administers the Bidder's Protected and/or (4) Any other penalty set forth in the City of
Disadvantaged Business Enterprise utilization Omaha's Contract Compliance
program; Ordinance.
j. Expansion of search for PBE/DBEs to a wider 7. For the information of Bidders, Contract
geographic area than the area in which the Bidder Compliance Ordinance outlines the City of
generally seeks subcontractors if use of the customary Omaha's rules, guidelines and criteria for (a)
solicitation area does not result in meeting the goals by making determinations as to the legitimacy of
the Bidder; and, PBE/DBEs, (b) ensuring that contracts are
awarded to Bidders that meet PBE/DBE goals.
k. Utilization of services of available protected community
organizations, protected contractor's group, local, 8. The Bidder/Contractor shall cooperate with the
state, and federal minority business assistance offices, Human Relations Department in any reviews of
and other organizations that provide assistance in the the Bidder/Contractor's procedures and practices
recruitment and placement of PBE/DBEs. with respect to the Protected and/or
Disadvantaged Business Enterprise which the
6. The Bidder must comply with the following: Human Relations Department may from time to
time conduct.
• a. Prior to award of this Contract all Bidders shall
submit Exhibit "A", Protected and/or B. PBE/DBE Reporting and Record Keeping
Disadvantaged Business Disclosure Participation Requirements.
Form. Exhibit "A" must be submitted with the bid.
Bidder must also submit a copy of the written bid 1. The Contractor shall submitperiodic reports of
submitted by the PBE/DBE subcontractor to the P
Bidder or other verification in writing from the contracting with Protected and/or Disadvantaged
PBE/DBE subcontractor that said subcontractor Business Enterprises in such form and manner
has agreed to perform the subcontracting work and at such time as prescribed by the City of
identified in the bid submitted by the Bidder. Omaha (Exhibit C is currently required to be
submitted within 10 calendar days following the
b. If Bidder fails to meet the goals set forth above, end of each calendar quarter, from the start of
Good Faith Efforts Documentation must be the project).
submitted with bid.
c. Also, prior to award of this contract all Bidders 2. The Contractor and subcontractors shall permit
must submit Exhibit "B" Contractor employment access to their books, records, and accounts by
data form with the bid. the Human Relations Director or a designated
representative for purpose of investigation to
d. The Bidder and any of its subcontractors that have ascertain compliance with these specified
been designated by the Bidder as PBE and/or requirements. Such records shall be maintained
DBE must have been approved as such by the by the Contractor in a fashion that is readily
Human Relations Department prior to bid opening accessible to the City of Omaha for a minimum of 1
on the project. three years following completion of this Contract.
e. After bid opening and during contract
performance, Bidders and the Contractor, as the 3. To ensure that all obligations under any contract
case may be, are required to make every awarded as a result of this bid solicitation are
reasonable effort to replace a PBE/DBE met, the City of Omaha will conduct specific
subcontractor that is determined to be unable to reviews of the Contractor's PBE/DBE
perform successfully or is not performing involvement efforts during contract performance.
satisfactorily, with another PBE and/or DBE, prior The Contractor shall bring to the attention of the
to substituting such PBE/DBE,the Contractor shall Human Relations Director any situation in which
seek approval from the Human Relations regularly scheduled progress payments are not
Department. The City of Omaha's Human made to PBE/DBE subcontractors.
Relations Department Director or a designee, shall
3
with the above shall result in the bid being rejected by
the City of Omaha.
In submitting its bid, the Bidder is certifying that it has
contacted City of Omaha Human Relations Department
prior to bid opening regarding this project and has afforded
subcontractors participating in the PBE/DBE program the
opportunity to submit bids on this project. Failure to comply
4
• EXHIBIT "A"
PROTECTED AND/OR DISADVANTAGED BUSINESS
DISCLOSURE PARTICIPATION FORM
THIS FORM MUST BE SUBMITTED WITH THE BID
In the performance of this contract, the contractor proposes and agrees to make good faith efforts to
contract with eligible City of Omaha certified PBE and/or DBEs. Should the below listed PBE and/or DBE
subcontractor be determined to be unable to perform successfully or is not performing satisfactorily, the
Contractor shall obtain prior approval from the Human Relations Department Director or a designee, for
substitution of the below listed subcontractor with a City of Omaha certified PBE and/or DBE. In submitting
this form, the Bidder is certifying that it has contacted City of Omaha Human Relations Department prior to
bid opening regarding this project and has afforded subcontractors participating in the program the
opportunity to submit bids on this project.
Type of work and Projected
contract item or commencement
Name of PBE parts thereof to be and completion *Agreed price with
and/or DBE Address performed date of work PBE/DBEs Percentage (%)•
_
Totals
*Dollar value of each PBE/DBE agreement must be listed in the"Agreed Price"column;total in this column must
equal the PBE/DBE goals.
CERTIFICATION
The Undersigned/Contractor certifies to the City of Omaha that the utilization goals will be met either by goal achievement or
good faith effort as documented. The Undersigned/Contractor certifies that he/she has read, understands, and agrees to be bound
by PBE/DBE Participation Contract Specifications, including the accompanying Exhibits, regarding PBE/DBE, and the other •
terms and conditions of the Invitation for Bids. The undersigned further certifies that he/she is legally authorized by the Bidder
to make the statements and representations in the PBE/DBE Participation Contract Specifications and that said statements and
representations are true and correct to the best of his/her knowledge and belief. The undersigned will enter into formal
agreement(s) with Protected and/or Disadvantaged business enterprise(s) (which are otherwise deemed by the City of Omaha to
be technically responsible to perform the work) listed in the PBE/DBE Specifications at the price(s) set forth in Exhibit A
conditioned upon execution of a contract by the undersigned with the City of Omaha. The Undersigned/Contractor agrees that if
any of the PBE/DBE Specification representations are made by the bidder knowing them to be false,or if there is a failure by the
successful bidder(i.e. the Contractor)to implement the stated agreements, intentions, objectives, goals, and comments set forth
herein without prior approval of the Director of the Human Relations Department,such action shall constitute a material breach
of the contract,entitling the City of Omaha to reject the contractor's bid or to terminate the Contract for default. The right to so
terminate shall be in addition to, and not in lieu of,any other rights or remedies the City of Omaha may have for other defaults
under the Contract, under City of Omaha's Contract Compliance Ordinance or otherwise. Additionally, the
Undersigned/Contractor will be subject to the terms of any future Contract Awards.
Signature
Title Date of Signing
Firm or Corporate Name
Address Telephone Number
5
EXHIBIT "B"
CONTRACTOR EMPLOYMENT DATA
BIDDERS ARE REQUIRED TO SUBMIT THE FOLLOWING WORK FORCE DATA WITH EACH BID
(Protected Class is defined as Black. Hispanic, Asian and Pacific Islander.American Indian or Alaskan Native, Female.)
Total Employees Protected Class Males Protected Class Females
American American
Total Total Asian or Indian or Asian or Indian or
Work Protected Pacific Alaskan Pacific Alaskan
Date Force Class Black Hispanic Islander Native Black Hispanic Islander Native White
•
r a.s shown
on biri All bidders awarded a contract in the amount of$5,000 or more must comply with the Contract Compliance Ordinance
and have on file with the Human Relations Department the Contract Compliance Report (Form CC-1). This report shall be in
effect for 24 months from the date received by the Human Relations Department. Any Questions regarding the Contract
Compliance Ordinance should be directed to the Human Relations Department at(402)444-5055.
(PLEASE PRINT LEGIBLY OR TYPE)
Firm's Name:
• (Date of Signing)
Signature:
(Print Name) (Title) (Signature)
6
EXHIBIT "C"
QUARTERLY REPORT ON PROTECTED AND/OR DISADVANTAGED
BUSINESS ENTERPRISES
(This form must be submitted within 10 calendar days of the end of each calendar
quarter, from the start of the project.)
Company Name:
Project Number:
Project Name:
Total Contract Amount:
•
Calendar Quarter
Covered by this Report:
1st 3rd
_2nd _4th
Year200_
I. Protected and/or Disadvantaged Contractors
Instructions: List all Protected and/or Disadvantaged Subcontractors which have performed work since Notice to
Proceed (NTP), are currently performing work, and are contemplated to perform work during the duration of the City of
Omaha Contracts. Name and total dollars committed and paid.
Name of Protected
and/or Disadvantaged Dollars Paid During Dollars Paid Since
Business Enterprise Work Assignment Dollars Committed Quarter (NTP) to Date
7
Exhibit ►►E►►
Federal Labor Standards Provisions
U. S. Department of Housing and Urban Develc
Applicability
The Project or Program to which the construction work covered by this contract pertains is being
assisted by the United States of America and the following Federal Labor Standards Provisions are
included in this Contract pursuant to the provisions applicable to such Federal assistance.
A. 1. (i) Minimum Wages. All laborers and mechanics employed or working upon the site of the
work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the
construction or development of the project), will be paid unconditionally and not less often than once
a week, and without subsequent deduction or rebate on any account (except such payroll deductions
as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR
Part 3), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at
time of payment computed at rates not less than those contained in the wage determination of the
Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual
relationship which may be alleged to exist between the contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits under Section
1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to
such laborers or mechanics, subject to the provisions of 29 CFR 5.5(a)(1)(iv); also, regular
contributions made or costs incurred for more than a weekly period (but not less often than quarterly)
under plans, funds, or programs, which cover the particular weekly period, are deemed to be
constructively made or incurred during such weekly period.
Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the
wage determination for the classification of work actually performed, without regard to skill, except
as provided in 29 CFR Part 5.5(a)(4). Laborers or mechanics performing work in more than one
classification may be compensated at the rate specified for each classification for the time actually
worked therein: Provided, That the employer's payroll records accurately set forth the time spent in
each classification in which work is performed. The wage determination (including any additional
classification and wage rates conformed under 29 CFR Part 5.5(a)(1)(ii) and the Davis-Bacon poster
(WH-1321) shall be posted at all times by the contractor and its subcontractors at the site of the work
in a prominent and accessible place where it can be easily seen by the workers.
(ii) (a) Any class of laborers or mechanics which is not listed in the wage determination and
which is to be employed under the contract shall be classified in conformance with the wage
determination, HUD shall approve an additional classification and wage rate and fringe benefits
therefore only when the following criteria have been met:
(1) The work to be performed by the classification requested is not performed by a
classification in the wage determination; and
(2) The classification is utilized in the area by the construction industry; and
(3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable
relationship to the wage rates contained in the wage determination.
(b) If the contractor and the laborers and mechanics to be employed in the classification (if
known), or their representatives, and HUD or its designee agree on the classification and wage rate
(including the amount designated for fringe benefits where appropriate), a report of the action taken
shall be sent by HUD or its designee to the Administrator of the Wage and Hour Division,
Employment Standards Administration, U.S. Department of Labor, Washington, D.C. 20210. The
Administrator, or an authorized representative, will approve, modify, or disapprove every additionai
classification action within 30 days of receipt and so advise HUD or its designee or will notify HUD or
its designee within the 30-day period that additional time is necessary. (Approved by the Office of
Management and Budget under OMB control number 1215-0140.)
1
(c) In the event the contractor, the laborers or mechanics to be employed in the classification or
their representatives, and HUD or its designee do not agree on the proposed classification and wage
rate (including the amount designated for fringe benefits, where appropriate), HUD or its designee
shall refer the questions, including the views of all interested parties and the recommendation of
HUD or its designee, to the Administrator for determination. The Administrator, or an authorized
representative, will issue a determination within 30 days of receipt and so advise HUD or its
designee or will notify HUD or its designee within the 30-day period that additional time is necessary.
(Approved by the Office of Management and Budget under OMB Control Number 1215-0140.)
(d) The wage rate (including fringe benefits where appropriate) determined pursuant to
subparagraphs (1)(b) or (c) of this paragraph, shall be paid to all workers performing work in the
classification under this contract from the first day on which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or
mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall
either pay the benefit as stated in the wage determination or shall pay another bona fide fringe
benefit or an hourly cash equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the contractor
may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably
anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the
Secretary of Labor has found, upon the written request of the contractor, that the applicable
standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the
contractor to set aside in a separate account assets for the meeting of obligations under the plan or
program. (Approved by the Office of Management and Budget under OMB Control Number 1215-
0140.)
•
2. Withholding. HUD or its designee shall upon its own action or upon written request of an
authorized representative of the Department of Labor withhold or cause to be withheld from the
contractor under this contract or any other Federal contract with the same prime contractor, or any
other Federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is
held by the same prime contractor so much of the accrued payments or advances as may be
considered necessary to pay laborers and mechanics, including apprentices, trainees and helpers,
employed by the contractor or any subcontractor the full amount of wages required by the contract.
In the event of failure to pay any laborer or mechanic, including any apprentice, trainee or helper,
employed or working on the site of the work (or under the United States Housing Act of 1937 or
under the Housing Act of 1949 in the construction or development of the project), all or part of the
wages required by the contract. HUD or its designee may, after written notice to the contractor,
sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any
further payment, advance, or guarantee of funds until such violations have ceased. HUD or its
designee may, after written notice to the contractor, disburse such amounts withheld for and on
account of the contractor or subcontractor to the respective employees to whom they are due. The
Comptroller General shall make such disbursements in the case of direct Davis-Bacon Act contracts.
3. (i) Payrolls and basic records. Payrolls and basic records relating thereto shall be
maintained by the contractor during the course of the work preserved for a period of three years
thereafter for all laborers and mechanics working at the site of the work (or under the United States
Housing Act of 1937, or under the Housing Act of 1949, in the construction or development of the
project). Such records shall contain the name, address, and social security number of each such
worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or
costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in
Section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions
made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5
(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably
anticipated in providing benefits under a plan or program described in Section 1(b)(2)(B) of the
Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide
2
such benefits is enforceable, that the plan or program is financially responsible, and that the plan or
program has been communicated in writing to the laborers or mechanics affected, and records which
show the costs anticipated or the actual cost incurred in providing such benefits. Contractors
employing apprentices or trainees under approved programs shall maintain written evidence of the
registration of apprenticeship programs and certification of trainee programs, the registration of the
apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.
(Approved by the Office of Management of Budget under OMB Control Numbers 1215-0140 and
1215-0017.)
(ii) (a) The contractor shall submit weekly for each week in which any contract work is performed
a copy of all payrolls to HUD or its designee if the agency is a party to the contract, but if the agency
is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the
case may be, for transmission to HUD or its designee. The payrolls submitted shall set out
accurately and completely all of the information required to be maintained under 29 CFR Part
5.5(a)(3)(i). This information may be submitted in any form desired. Optional Form WH-347 is
available for this purpose and may be purchased from the Superintendent of Documents (Federal
Stock Number 029-005-00014-1), U.S. Government Printing Office, Washington, D.C. 20402. The
prime Contractor is responsible for the submission of copies of payrolls by all subcontractors.
(Approved by the Office of Management and Budget under OMB Control Number 1215-0149).
(b) Each payroll submitted shall be accompanied by a "Statement of Compliance,"signed by the
contractor or subcontractor or his or her agent who pays or supervises the payment of the persons
employed under the contract and shall certify the following:
.(1) That the payroll for the payroll period contains the information required to be maintained
under 29 CFR Part 5.5(a)(3)(i) and that such information is correct and complete;
(2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed
on the contract during the payroll period has been paid the full weekly wages earned, without rebate,
either directly or indirectly, and that no deductions have been made either directly or indirectly from
the full wages earned, other than permissible deductions as set forth in 29 CFR Part 3;
(3) That each laborer or mechanic has been paid not less than the applicable wage rates and
fringe benefits or cash equivalents for the classification of work performed, as specified in the
applicable wage determination incorporated into the contract.
(c) The weekly submission of a properly executed certification set forth on the reverse side of
Optional Form WH-347 shall satisfy the requirement for submission of the "Statement of
Compliance" required by paragraph A.3(ii)(b) of this section.
(d) The falsification of any of the above certifications may subject the contractor or subcontractor
to civil or criminal prosecution under Section 1001 of Title 18 and Section 231 of Title 31 of the
United States Code.
(iii) The contractor or subcontractor shall make the records required under paragraph A.3(i) of
this section available for inspection, copying, or transcription by authorized representatives of HUD
or its designee or the Department of Labor, and shall permit such representatives to interview
employees during working hours on the job. If the contractor or subcontractor fails to submit the
required records or to make them available, HUD or its designee may, after written notice to the
contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the
suspension of any further payment, advance, or guarantee of funds: Furthermore, failure to submit
the required records upon request or to make such records available may be grounds for debarment
action pursuant to 29 CFR Part 5.12.
3
4. (i) Apprentices and Trainees. Apprentices will be permitted to work at less than the
predetermined rate for the work they performed when they are employed pursuant to and individually
registered in a bona fide apprenticeship program registered with the U.S. Department of Labor,
Employment and Training Administration, Bureau of Apprenticeship and Training, or with a State
Apprenticeship Agency recognized by the Bureau, or if a person is employed in his or her first 90
days of probationary employment as an apprentice in such an apprenticeship program, who is not
individually registered in the program, but who has been certified by the Bureau of Apprenticeship
and Training or a State Apprenticeship Agency (where appropriate) to be eligible for probationary
employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in
any craft classification shall not be greater than the ratio permitted to the contractor as to the entire
work force under the registered program. Any worker listed on a payroll at an apprentice wage rate,
who is not registered or otherwise employed as stated above, shall be paid not less than the
applicable wage rate on the wage determination for the classification of work actually performed. In
addition, any apprentice performing work on the job site in excess of the ratio permitted under the
registered program shall be paid not less than the applicable wage rate on the wage determination
for the work actually performed. Where a contractor is performing construction on a project in a
locality other than that in which its program is registered, the ratios and wage rates (expressed in
percentages of the journeyman's hourly rate) specified in the contractor's or subcontractor's
registered program shall be observed. Every apprentice must be paid at not less than the rate
specified in the registered program for the apprentice's level of progress, expressed as a percentage
of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be
paid fringe benefits in accordance with the provisions of the apprenticeship program. If the
apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of
. fringe benefits listed on the wage determination for the applicable classification. If the Administrator
determines that a different practice prevails for the applicable apprentice classification, fringes shall
be paid in accordance with that determination. In the event the Bureau of Apprenticeship and
Training, or a State Apprenticeship Agency recognized by the Bureau, withdraws approval of an
apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than
the applicable predetermined rate for the work performed until an acceptable program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be'permitted to work at less
than the predetermined rate for the work performed unless they are employed pursuant to and
individually registered in a program which has received prior approval; evidenced by formal
certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of
trainees to journeymen on the job site shall not be greater than permitted under the plan approved
by the Employment and Training Administration. Every trainee must be paid at not less than the rate
specified in the approved program for the trainee's level of progress, expressed as a percentage of
the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid
fringe benefits in accordance with the provisions of the trainee program. If the trainee program does
not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the
wage determination unless the Administrator of the Wage and Hour Division determines that there is
an apprenticeship program associated with the corresponding journeyman wage rate on the wage
determination which provides for less than full fringe benefits for apprentices. Any employee listed
on the payroll at a trainee rate who is not registered and participating in a training plan approved by
the Employment and Training Administration shall be paid not less than the applicable wage rate on
the wage determination for the work actually performed. In addition, any trainee performing work on
the job site in excess of the ratio permitted under the registered program shall be paid not less than
the applicable wage rate on the wage determination for the work actually performed. In the event
the Employment and Training Administration withdraws approval of a training program, the
contractor will no longer be permitted to utilize trainees at less than the applicable predetermined
rate for the work performed until an acceptable program is approved.
(iii) Equal employment opportunity. The utilization of apprentices, trainees and journeymen
under this part shall be in conformity with the equal employment opportunity requirements of
Executive Order 11246, as amended, and 29 CFR Part 30.
4
5. Compliance with Copeland Act requirements. The contractor shall comply with the
requirements of 29 CFR Part 3 which are incorporated by reference in this contract.
6. Subcontracts. The contractor or subcontractor will insert in any subcontracts the clauses
contained in 29 CFR 5.5(a)(1) through (10) and such other clauses as HUD or its designee may by
appropriate instructions require, and also a clause requiring the subcontractors to include these
clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance
by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR Part 5.5
7. Contracts termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be
grounds for termination of the contract, and for debarment as a contractor and a subcontractor as
provided in 29 CFR 5.12.
8. Compliance with Davis-Bacon and Related Act Requirements. All rulings and
interpretations of the Davis-Bacon and Related Acts contained in 29 CFR Parts 1, 3, and 5 are
herein incorporated by reference in this contract.
9. Disputes concerning labor standards. Disputes arising out of the labor standards
provisions of this contract shall not be subject to the general disputes clause of this contract. Such
disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in
29 CFR Parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the
contractor (or any of its subcontractors) and HUD or its designee, the U.S. Department of Labor, or
the employees or their representatives.
10. (i) Certification of Eligibility.. By entering into this contract, the contractor certifies that
neither it (nor he or she) nor any person or firm who has an interest in the contractor's firm is a
person or firm ineligible to be awarded Government contracts by virtue of Section 3(a) of the Davis-
Bacon Act or 29 CFR 5.12(a)(1) or to be awarded HUD contracts or participate in HUD programs
pursuant to 24 CFR Part 24.
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a
Government contract by virtue of Section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) or to be
awarded HUD contracts or participate in HUD programs pursuant to 24 CFR Part 24.
(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C.
1001. Additionally, U.S. Criminal Code, Section 1010, Title 18, U.S.C.-"Federal Housing •
Administration transactions", provides in part 'Whoever, for the purpose of...influencing in any way
the action of such Administration...makes, utters or publishes any statement knowing the same to be
false...shall be fined not more than $5,000 or imprisoned not more than two years, or both."
11. Complaints, Proceedings, or Testimony by Employees. No laborer or mechanic to whom
the wage, salary, or other labor standards provisions of this Contract are applicable shall be
discharged or in any other manner discriminated against by the contractor or any subcontractor
because such employee has filed any complaint or instituted or caused to be instituted any
proceeding or has testified or is about to testify in any proceeding under or relating to the labor
standards applicable under this Contract to his employer.
B Contract Work Hours and Safety Standards Act. As used in this paragraph, the terms
"laborers"and"mechanics" include watchmen and guards.
(1) Overtime requirements. No contractor or subcontractor contracting for any part of the
contract work which may require or involve the employment of laborers or mechanics shall require or
permit any such laborer or mechanic in any workweek in which he or she is employed on such work
to work in excess of forty hours in such workweek unless such laborer or mechanic receives
compensation at a rate not less than one and one-half times the basic rate of pay for all hours
worked in excess of forty hours in such workweek.
511111
(2) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of
the clause set forth in subparagraph (1) of this paragraph, the contractor and any subcontractor
responsible therefor shall be liable for the unpaid wages. In addition, such contractor and
subcontractor shall be liable to the United States (in the case of work done under contract for the
District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such
liquidated damages shall be computed with respect to each individual laborer or mechanic, including
watchmen and guards, employed in violation of the clause set forth in subparagraph (1) of this
paragraph, in the sum of $10 for each calendar day on which such individual was required or
permitted to work in excess of the standard workweek of forty hours without payment of the overtime
wages required by the clause set forth in subparagraph (1) of this paragraph.
(3) Withholding for unpaid wages and liquidated damages. HUD or its designee shall upon
its own action or upon written request of an authorized representative of the Department of Labor
withhold or cause to be withheld, from any moneys payable on account of work performed by the
contractor or subcontractor under any such contract or any other Federal contract with the same
prime contractor or any other Federally-assisted contract subject to the Contract Work Hours and
Safety Standards Act, which is held by the same prime contractor such sums as may be determined
to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and
liquidated damages as provided in the clause set forth in subparagraph (2) of this paragraph.
(4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses
set forth in subparagraph (1) through (4) of this paragraph and also a clause requiring the
subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be
responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set
forth in subparagraphs (1) through (4) of this paragraph.
C. Health and Safety
(1) No laborer or mechanic shall be required to work in surroundings or under working conditions
which are unsanitary, hazardous, or dangerous to his health and safety as determined under
construction safety and health standards promulgated by the Secretary of Labor by regulation.
(2) The Contractor shall comply with all regulations issued by the Secretary of Labor pursuant to
Title 29 Part 1926 (formerly part 1518) and failure to comply may result in imposition of sanctions
pursuant to the Contract Work Hours and Safety Standards Act{Public Law 91-54, 83 Stat. 96).
(3) The Contractor shall include the provisions of this Article in every subcontract so that such
provisions will be binding on each subcontractor. The Contractor shall take such action with respect
to any subcontract as the Secretary of Housing and Urban Development or the Secretary of Labor
shall direct as a means of enforcing such provisions.
411
HUD 4010 (2-84)
•
YV[Ala uucwUGILt'.cuI Vtt
GENERAL DECISION NE020011 04/18/2003 NEll
Date: April 18, 2003
General Decision Number NE020011
Superseded General Decision No. NE010011
State: Nebraska
Construction Type:
BUILDING
County(ies) :
DOUGLAS
BUILDING CONSTRUCTION PROJECTS (does not include residential
construction consisting of single family homes and apartments up
to and including 4 stories)
Modification Number Publication Date
0 03/01/2002
1 03/08/2002
2 08/09/2002
3 03/21/2003
4 03/28/2003
5 04/18/2003
COUNTY(ies) :
DOUGLAS
ASBE0039B 06/01/2001
Rates Fringes
INSULATOR/ASBESTOS WORKER
Includes the application of all
insulating materials, protective
coverings, coatings and finishings
to all types of mechanical systems 23.51 8 .19
FOOTNOTE:
Work performed from a boatswain chair, staging, or scaffolding
suspended from a permanent structure, more than thirty (30) feet
above the floor or the ground: $1.00 per hour additional.
BRNE0001C 06/01/2001
Rates Fringes
BRICKLAYER 21.24 6.56
FOOTNOTE:
Work on smoke stacks, chimneys and silos 50 ft. and higher:
$2 .00 per hour additional, to be paid from the footing up.
* CARP0444A 10/01/2002
Rates Fringes
CARPENTER (form work only) 19.47 6.39
PILEDRIVER 19. 97 6.39
* ELEC0022A 06/01/2002
Rates Fringes
1 of 6 5/28/03 11:01 AM
ELECTRICIAN:
' All other work (does not include
HVAC control wiring, or any of
the low voltage work in the
next section) 25.00 9.17
* ELEC0022L 12/01/2002
Rates Fringes
ELECTRICIANS:
Sound and voice transmission,
transference systems;
television and video
systems; security systems;
communication systems that
transmit or receive
information and/or control
systems; energy
management systems; and
fire alarm systems (does
not include raceway systems
(excluding cable tray for
the purpose of the above
listed systems; Also, chases
and/or nipples (not to exceed
10 ft. ) may be installed on
open wiring systems) ; Note:
Fire alarm systems when
installed in raceways in any
new or remodel project when
other building trades are
present shall be the work
of the inside electrician)
(does not include HVAC control •
wiring) 18.10 5.44
ELEV0028A 07/01/2001
Rates Fringes
ELEVATOR MECHANIC 24 .415 7 .195 + a
FOOTNOTE:
a. Vacation Pay: 8% with 5 or more years of service, 6% for 6
months to 5 years service. Paid Holidays : New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Friday after Thanksgiving, and Christmas Day.
ENGI0571E 10/01/1999
Rates Fringes
POWER EQUIPMENT OPERATORS:
Tractor 14.25 4 .34
Forklift 16.75 4.34
Backhoe; roller dozer 18.70 4 .34
Crane; boom; mechanic 20.40 4 .34
IRON0021K 06/01/2002
Rates Fringes
IRONWORKERS, REINFORCING AND
STRUCTURAL (iricludes metal
building erection) 21.45 7.02
2 of 6 5/28/03 11:01 AM
LABO1140B 01/01/2003
Rates Fringes
CONCRETE LABORER 16.32 4 . 10
LABO1140E 01/01/2003
Rates Fringes
MASON TENDERS:
Mason tender 16.32 4. 10
Masonry laborer (loading,
unloading and cleanup on
masonry projects only) 13 .92 4.10
Forklift operator (on masonry
projects only) 17.02 4.10
PAIN0081L 06/01/2002
Rates Fringes
PAINTER (does not include drywall
finishing, or striping (parking
lots) ) 19.41 3 .77
FOOTNOTES:
All work on the exterior of a building above the third story,
whether the work is done on jacks, safety belts or with other
equipment; all swing stage work from the ground up; all work,
exterior and interior, on scaffolding forty-five (45) and above;
all work in confined spaces; lead abatement work; any and all
work considered unusually hazardous and interpreted as
endangering life or limb in case of accident, including all
hazardous portions of bridges, new and old, supports on steel
trusses pertaining to bridges, new or old, and interior of
elevator shafts; all operators of spray machines; all nozzle
operators for sandblasting and waterblasting (waterblasting more
than 2, 000 PSI) , including all side arm grinder operators engaged
in removing paint or preparing for painting: $0.60 per hour
additional.
All steel or iron work and structural steel or iron work or
pipes painted on scaffolding suspended from such steel or iron
work, or any structural steel or iron work or pipes, that in
order to be painted must be walked on or crawled upon, and any
and all work that is considered hazardous : $0.35 per hour
additional.
PAIN0109F 06/01/2000
Rates Fringes
DRYWALL FINISHER (includes E.I.F.S.
(exterior insulation finish
systems) ) 18 .47 3.66
PLAS0538A 10/01/2001
Rates Fringes
CEMENT MASON (includes the
application of epoxy; does not
include the installation of
concrete forms and rebar) 18 .95 5 .86
PLAS0538E 07/01/2001
Rates Fringes
PLASTERER 18.92 5 .91
3 of 6 5/28/03 11:01 AM
FOOTNOTES:
Work performed on a swing stage: $.50 per hour additional.
Work as a nozzleperson: $1.00 per hour additional.
PLUM0016C 06/01/2002
Rates Fringes
PLUMBER (does not include HVAC
piping) 26.32 7.35
PLUM0464B 06/01/2001
Rates Fringes
PIPEFITTER/STEAMFITTER (includes
HVAC piping and HVAC control
wiring; does not include
setting the unit, or work on
boilers) 24.29 8 .60
* SFNE0669A 04/01/2003
Rates Fringes
SPRINKLER FITTER (FIRE) 27.66 7 .60
SHEE0003B 07/01/2002
Rates Fringes
SHEET METAL WORKER (HVAC duct work
and setting the unit, only) 25.05 6.66
SUNE1006C 03/02/2000
Rates Fringes
BOILERMAKER 19.06 8.87
CARPENTER (includes acoustical
ceilings, batt and blown
insulation, and drywall hanging;
does not include concrete forms,
counter tops, overhead doors,
piledriving and soft floor) 15.05 2 .46
CARPENTER (overhead door) 11.54
CAULKER 11.14
EXTERMINATOR 14.42 2 .80
GLAZIER 12.20 1.81
LABORER 10.65
POWER EQUIPMENT OPERATORS:
Blade 15.00
Concrete pump 15 .58 .70
Loader 11.00 .04
Roller 14.19
ROOFER 11.50
SHEET METAL WORKER (does not
include any type of HVAC work,
4 of 6 5/28/03 11:01 AM
or metal building erection) 15.50
SOFT FLOOR LAYER 17.28
STRIPER (parking lots) 9.41
TILE SETTER 16.27
TRUCK DRIVERS:
Pickup 9.75 1.00
WATERPROOFER 9.80 .28
WINDOW COVER INSTALLER 10.00 1.35
TEAM0554B 01/01/2003
Rates Fringes
TRUCK DRIVERS:
Tandem dump 14.82 4 .20
WELDERS - Receive rate prescribed for craft performing operation
to which welding is incidental.
Unlisted classifications needed for work not included within
the scope of the classifications listed may be added after
award only as provided in the labor standards contract clauses
(29 CFR 5.5 (a) (1) (ii) ) .
In the listing above, the "SU" designation means that rates
listed under that identifier do not reflect collectively
bargained wage and fringe benefit rates. Other designations
indicate unions whose rates have been determined to be
prevailing.
WAGE DETERMINATION APPEALS PROCESS
1. ) Has there been an initial decision in the matter? This can
be:
* an existing published wage determination
* a survey underlying a wage determination
* a Wage and Hour Division letter setting forth a
position on a wage determination matter
* a conformance (additional classification and rate)
ruling
On survey related matters, initial contact, including requests
for summaries of surveys, should be with the Wage and Hour
Regional Office for the area in which the survey was conducted
because those Regional Offices have responsibility for the
Davis-Bacon survey program. If the response from this initial
contact is not satisfactory, then the process described in 2.)
and 3 . ) should be followed.
With regard to any other matter not yet ripe for the formal
process described here, initial contact should be with the Branch
of Construction Wage Determinations. Write to:
Branch of Construction Wage Determinations
Wage and Hour Division
U. S. Department of Labor
5 of 6 5/28/03 11:01 AM
200 Constitution Avenue, N. W.
Washington, D. C. 20210
2 . ) If the answer to the question in 1.) is yes, then an
interested party (those affected by the action) can request
review and reconsideration from the Wage and Hour Administrator
(See 29 CFR Part 1.8 and 29 CFR Part 7) . Write to:
Wage and Hour Administrator
U.S. Department of Labor
200 Constitution Avenue, N. W.
Washington, D. C. 20210
The request should be accompanied by a full statement of the
interested party's position and by any information (wage payment
data, project description, area practice material, etc. ) that the
requestor considers relevant to the issue.
3 . ) If the decision of the Administrator is not favorable, an
interested party may appeal directly to the Administrative Review
Board (formerly the Wage Appeals Board) . Write to:
Administrative Review Board
U. S. Department of Labor
200 Constitution Avenue, N. W.
Washington, D. C. 20210
4. ) All decisions by the Administrative Review Board are final.
END OF GENERAL DECISION
6 of 6
5/28/03 11:O1 AM
Attachment "1"
CITY OF OMAHA
DEFINITION OF INCOME
Annual Income Includes:
1. Wages, salaries, tips, commissions, etc.:
2. Self-employment income from owned non-farm business, including proprietorships and partnerships;
3. Farm self-employment income;
4. Interest, dividends,net rental income, or income from estates or trusts
5. Social security or railroad retirement;
6. Supplemental Security Income, Aid to Families with Dependent Children, or other public assistance
or public welfare programs;
7. Retirement, survivor or disability pensions;
8. Any other sources of income received regularly including Veterans' (VA) payments, unemployment
compensation, child support and alimony; and
9. Income from assets, as shown below:
a. amounts in savings certificates, money market funds and other investment accounts.
b. stocks, bonds, savings certificates, money market funds and other investment accounts.
c. equity in real property or other capital investments. Equity is the estimated current market value
of the asset less the unpaid balance on all loans secured by the asset and reasonable costs (such as
broker fees) that would be incurred in selling the asset. Do not include equity in principle
residence (home equity).
d. the cash value of trusts that are available to the household. •
e. IRA, Keogh and similar retirement savings accounts, even though withdrawal would result in a
penalty.
f. contributions to company retirement/pension funds that can be withdrawn without retiring or
terminating employment.
g. assets which, although owned by more than one person, allow unrestricted access by the
applicant.
h. lump sum receipts such as inheritances, capital gains, lottery winnings, insurance settlements and
other claims.
i. personal property held as an investment such as gems,jewelry, coin collections, antique cars, etc.
j. cash value of life insurance policies.
k. assets disposed of for less than fair market value during two years preceding certification or re-
certification.
10. Actual income from assets if total assets are $5,000 or less.
11. If assets are more than $5,000, the greater of(a) actual income from assets, or (b) total assets times
passbook rate.
Annual Income Does Not Include the Following Assets:
1. necessary personal property, except as noted in 9 (i).
2. interest in Indian trust lands.
3. assets that are a part of an active business or farming operation. NOTE: Rental properties are
considered personal assets held as an investment rather than business assets unless real estate is the
applicant's/tenant's main occupation.
4. assets not accessible to the family and which provide no income for the family.
5. vehicles especially equipped for the handicapped.
6. equity in owner-occupied cooperatives and manufactured homes in which the family lives.
7. equity in principle residence (home equity).
• Revised 10/8/99
Attachment "2"
Sec. 10-192. Equal employment opportunity clause.
All contracts hereafter entered into by the city shall incorporate an equal employment opportunity
clause, which shall read as follows:
During the performance of this contract, the contractor agrees as follows:
(1) The contractor shall not discriminate against any employee or applicant for employment
because of race, religion, color, sex, age, disability or national origin. The contractor shall take
affirmative action to ensure that applicants are employed and that employees are treated during
employment without regard to their race, religion, color, sex or national origin. As used herein, the
word "treated" shall mean and include, without limitation, the following: recruited, whether by
advertising or by other means; compensated; selected for training, including apprenticeship;
promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated. The contractor
agrees to and shall post in conspicuous places, available to employees and applicants for
employment, notices to be provided by the contracting officers setting forth the provisions of this
nondiscrimination clause.
(2) The contractor shall, in all solicitations or advertisements for employees placed by or on
behalf of the contractor, state that all qualified applicants will receive consideration for
employment without regard to race, religion, color, sex, or national origin, age, disability.
(3) The contractor shall send to each representative of workers with which he has a collective
bargaining agreement or other contract or understanding a notice advising the labor union or
workers' representative of the contractor's commitments under the equal employment opportunity
clause of the city and shall post copies of the notice in conspicuous places available to employees
and applicants for employment.
(4) The contractor shall furnish to the human relations director all federal forms containing the
information and reports required by the federal government for federal contracts under federal rules
and regulations, including the information required by sections 10-192 to 10-194, inclusive, and
shall permit reasonable access to his records. Records accessible to the human relations director
shall be those which are related to paragraphs (1) through (7) of this subsection and only after
reasonable notice is given the contractor. The purpose of this provision is to provide for
investigation to ascertain compliance with the program provided for herein.
(5) The contractor shall take such actions with respect to any subcontractor as the city may direct
as a means of enforcing the provisions of paragraphs (1) through (7) herein, including penalties and
sanctions for noncompliance; however, in the event the contractor becomes involved in.or is
threatened with litigation as the result of such directions by the city, the city will enter into such
litigation as is necessary to protect the interests of the city and to effectuate the provisions of this
division; and, in the case of contracts receiving federal assistance, the contractor or the city may
request the United States to enter into such litigation to protect the interests of the United States.
(6) The contractor shall file and shall cause his subcontractors, if any, to file compliance reports
with the contractor in the same form.and to the same extent as required by the federal government
for federal contracts under federal rules and regulations. Such compliance reports shall be filed
with the human relations director. Compliance reports filed at such times as directed shall contain
information as to the employment practices, policies, programs and statistics of the contractor and
his subcontractors.
(7) The contractor shall include the provisions of paragraphs (1) through (7) of this section,
"Equal employment opportunity clause," and section 10-193 in every subcontract or purchase order
so that such provisions will be binding upon each subcontractor or vendor.
(Code 1980, § 10-192; Ord. No. 35344, § 1, 9-26-00)
Attachment "3"
SECTION 3 CLAUSE
All Section 3 covered contracts shall include the following clause (referred to as the Section 3
clause):
A. The work to be performed under this contract is subject to the requirements of Section 3
of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u
(Section 3). The purpose of Section 3 is to ensure that employment and other economic
opportunities generated by HUD assistance or HUD-assisted projects covered by Section
3 shall, to the greatest extent feasible, be directed to low- and very low-income persons,
particularly persons who are recipients of HUD assistance for housing.
B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135,
which implement Section 3. As evidenced by their execution of this contract, the parties
to this contract certify that they are under no contractual or other impediment that would
prevent them from complying with the part 135 regulations.
C. The contractor agrees to send to each labor organization or representative of workers with
which the contractor has a collective bargaining agreement or other understanding, if any,
a notice advising the labor organization or workers' representative of the contractor's
commitments under this Section 3 clause, and will post copies of the notice in
conspicuous places at the work site where both employees and applicants for training and
employment positions can see the notice. The notice shall describe the Section 3
preference, shall set forth minimum number and job titles subject to hire, availability of
apprenticeship and training positions, the qualifications for each; and the name and
location of the person(s) taking applications for each of the positions; and the anticipated
date the work shall begin.
D. The contractor agrees to include this Section 3 clause in every subcontract subject to
compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as
provided in an applicable provision of the subcontract or in this Section 3 clause, upon a
finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The
contractor will no6t subcontract with any subcontractor where the contractor has notice or
knowledge that the subcontractor has been found in violation of the regulations in 24
CFR part 135.
E. The contractor will certify that any vacant employment positions, including training
positions, that are filled (1) after the contractor is selected but before the contract is
executed, and (2) with persons other than those to whom the regulations of 24 CFR part
135 require employment opportunities to be directed were not filled to circumvent the
contractor's obligations under 24 CFR part 135.
F. Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions,
termination of this contract for default, and debarment or suspension from future HUD-
assisted contracts.
G. With respect to work performed in connection with Section 3 covered Indian housing
assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450e) also applies to the work to be performed under this contract. Section
7(b) requires that to the greatest extent feasible (i) preference and opportunities for
training and employment shall be given to Indians, and (ii) preference in the award of
contracts and subcontracts shall be given to Indian organizations and Indian-owned
Economic Enterprises. Parties to this contract that are subject to the provisions of
Section 8 and Section 7(b) agree to comply with Section 3 to the maximum extent
feasible, but not in derogation of compliance with Section 87 (b).
Providing Other Economic Opportunities.
(a) General. In accordance with the findings of the Congress, as stated in Section 3,
that other economic opportunities offer an effective means of empowering low-
income persons, a recipient is encouraged to undertake efforts to provide to low-
income persons economic opportunities other than training, employment and
contract awards, in connection with Section 3 covered assistance.
(b) Other training and employment-related opportunities. Other economic opportunities
to train and employ Section 3 residents include, but need not be limited to, use of
"upward mobility", "bridge" and trainee positions to fill vacancies; and hiring
Section 3 residents in part-time positions.
(c) Other business-related economic opportunities: (1) A recipient or contractor may
provide economic opportunities to establish, stabilize or expand Section 3 business
concerns, including micro-enterprises. Such opportunities include, but are not
limited to formation of Section 3 joint ventures, financial support for affiliating with
franchise development, use of labor only contracts for building trades, purchase of
supplies and materials from housing authority resident-owned businesses, purchase
of materials and supplies from PHA resident-owned businesses and use of
procedures under 24 CFR part 963 regarding HA contracts to HA resident-owned
businesses. A recipient or contractor may employ these methods directly or may
provide incentives
s to non-Section 3 businesses to utilize such methods to provide
other economic opportunities to low-income persons. (2) A Section 3 joint venture
means an association of business concerns, one of which qualifies as a Section 3
business concern, formed by written joint venture agreement to engage in and carry
out a specific business venture for which purpose the business concerns combine
their efforts, resources and skills for joint profit, but not necessarily on a continuing
or permanent basis for conducting business generally, and for which the Section 3
business concern:
(i) Is responsible for a clearly defined portion of the work to be performed and
holds management responsibilities in the joint venture; and
(ii) Performs at least 25 percent of the work and is contractually entitled to
compensation proportionate to its work.
Attachment "4"
MINORITY BUSINESS & WOMEN BUSINESS
ENTERPRISE PLAN
emir
N441 October 2001
Atrp.
y
13-
04
1E3
FESIk%) PLANNING•OMAHA
City of Omaha City of Omaha
Mike Fahey,Mayor Planning Department
Omaha/Douglas Civic Center
1819 Farnam Street
Omaha,Nebraska 68183
PLANNING DEPARTMENT
CITY OF OMAHA
MINORITY BUSINESSWOMEN BUSINESS ENTERPRISE PLAN
INTRODUCTION
Minority and women business sectors play an important part in Omaha's overall plans for future growth,
progress, and prosperity. It is vital to the City's economic condition and well-being that minority and
women businesses expand, thrive and prosper, generating economic stability and increased job
opportunities. Towards the fulfillment and accomplishment of these important objectives, the City of
Omaha remains committed to minority and women business development.
The City of Omaha's approach to minority/women business development is embedded in its policy of non-
discrimination in the conduct of City business including the procurement of goods, materials and services,
construction and community and economic development projects. The City recognizes its obligations to
each segment of the various communities it serves. It is in recognition of these responsibilities that the
City established the City's Contract Compliance Ordinance.
The Ordinance commits the City to:
1. Require contractors and/or vendors to provide employment opportunities without regard to race,
creed, color, sex religion, or national origin;
2. Monitor contractor and vendor equal opportunity performance; and
3. Increase the total number and total dollar volume of City contracts awarded to minority-owned and
women-owned firms.
GOALS AND OBJECTIVES
The following represents a summary of the goals and objectives of the Planning Department as they relate
to minority and women-owned businesses:
1. Encourage, increase and promote business and procurement opportunities for women-owned
businesses;
2. Increase and expand the awareness and understanding regarding the concerns, obstacles, and
hindrances preventing increased MBE/WBE participation in Planning Department activities;
3. Assist MBE's/WBE's through the revitalization of business districts;
4. Assist minority and female entrepreneurs in the formation and growth of new small businesses;
and
5. Provide technical assistance to neighborhood organizations, MBE's and WBE's to increase their
participation in the Planning Department programs and activities at all levels.
SCOPE OF WORK
In order to accomplish these objectives, the Planning Department will:
1. Require that recipients of grant awards, consulting contracts, or loans to develop and provide a
MBE/WBE Utilization Plan.
2. Ensure that Requests for Proposals require the submission of MBE/WBE Utilization Plans.
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3. Ensure that the programs of the Planning Department are advertised in the appropriate new media
whose markets are targeted toward MBE/WBE.
4. Implement an outreach effort informing MBE and WBE firms and capture information on these
firms doing business with the Planning Department.
5. Implement a system to identify MBE and WBE firms and capture information on these firms doing
business with the Planning Department.
6. Require developers, corporations, partnerships and/or sole proprietors to register with the Human
Relations Department and the Purchasing Department. In addition, require these entities to:
A. Complete CC-1 (Human Relations Department)
B. Complete Bid List Registration(Finance Department, Purchasing Division
C. Complete Business Certification (Human Relations Department)
7. Require developers, corporations, partnerships and/or sole proprietors to provide registration
information on all sub-contractors.
8. Require loan agreements to include a statement that jobs created will be made available to low-to-
moderate income persons.
The following application package has been developed to assist you in complying with our request for
information on your business and all sub-contractors providing goods and/or services on projects financed
by and/or implemented through an agreement with the City of Omaha. If you have any questions or
require further assistance in completing the application package, please contact Mr. Kenneth Johnson, Sr.
at 444-5165.
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MBE/WBE FOR EMPLOYMENT
The following list of organizations is provided to assist you in identifying low-to-moderate income
persons for employment opportunities. You must make concerted efforts to hire low-to-moderate income
persons and document specific actions taken to achieve these objectives.
To help accomplish the above goals, the following agencies should be notified of initial employment
opportunities for low to moderate income persons:
Nebraska Department of Labor-Omaha Job Service Laraza Job Training
5036 Ames Avenue 4924 South 24th Street
Omaha, NE 68111 Omaha,NE 68107
Jack Meyers, Office Supervisor Sarah Crawford, Executive Director
595-3123 734-1321
Work Force Development of Greater Omaha Omaha Opportunities Industrialization Center
Blue Lion Centre 2724 North 24th Street
2421-23 North 24th Street Omaha,NE 68110
Omaha, NE 68110 Dr. Bernice Dodd, Executive Director
Maria Vazquez,Director 457-4222
444-3499
Urban League of Nebraska, Inc. Girls Incorporated of Omaha
3022-24 North 24th Street 2811 North 45th Street
Omaha, NE 68110 Omaha,NE 68104
William Thompkins, President Norma Deeb, Executive Director
453-9730 457-4676
YWCA
222 South 29th Street
Omaha, NE 68131
Peg Harriott, Executive Director
345-6555
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MBE/WBE FOR GOODS AND SERVICES
Your company must make vendors aware of your policy to support equal opportunity utilization of
minority, disabled and women-owned businesses. To accomplish this goal, you must provide a copy of
the approved MBE/WBE Participation Plan to all businesses providing goods and/or services to the
project.
Your company must provide the opportunity for Minority Business Enterprises and Women Business
Enterprises to provide goods and services through all phases of the project. A concerted effort must be
made to allow these businesses to actively compete for project contracts. This effort will include
utilization of the following resources and documentation of your actions to achieve these objectives.
Omaha Small Business Network, Inc.
2505 North 24th Street
Omaha,NE 68110
Executive Director
453-5336
Housing and Community Development Division
City Planning
1819 Farnam Street, Room 1111
Omaha, NE 68183
Kenneth E. Johnson, Sr.,Economic Development Manager
444-5165
Nebraska Department of Economic Development
Small Business (MBE/WBE/DBE)Assistance
301 Centennial Mall South
Lincoln, NE 68509-4666
Steve Williams, Business Assistance Manager
471-3778
Purchasing Department
1819 Farnam Street, Room 1003
Omaha, NE 68183
John Leming,Purchasing Agent
444-5407
Human Relations Department Reginald Young, Director(444-5050)
Contract Compliance(MBE/WBE)
1819 Farnam Street, Room 502
Omaha, NE 68183
Rita Vlademar, department Manager
444-5067
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MBE/WBE FOR GOODS AND SERVICES
Great Plains Minority Supplier Development Council
Greater Omaha Chamber of Commerce
1301 Harney Street
Omaha,NE 68102
Terrie Miller,Director
345-5000
Laraza Job Training
4923 South 24th Street
Omaha,NE 68107
Sarah Crawford, Executive Director
734-1321
United Minority Contractors Association
2221 North 24th Street
Omaha, NE 68110
Al Epps, Executive Director
341-2177
Kathleen Piper, ADD/MED
Small Business Administration
11145 Mill Valley Road
Omaha,NE 68154
221-7205
Hubert J. Carter, Jr., Deputy for Small Business
U.S. Corps of Engineers
215 North 17th Street
Omaha, NE 68102
221-4110
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City of Omaha
BUSINESS QUALIFICATION RESUME
DATE:
I. FIRM IDENTIFICATION:
COMPANY NAME
STREET ADDRESS
CITY STATE ZIP CODE
BUSINESS PHONE • HOME PHONE
MONTH&YEAR ESTABLISHED
II. OWNERSHIP OF FIRM:
IS THE FIRM OWNED AND CONTROLLED BY MEMBER OF MINORITY OR OTHER
DISADVANTAGED GROUP?: YES ❑ NO ❑ MINORITY ❑
WOMAN ❑ N/A ❑
TYPE OF OWNERSHIP: INDIVIDUAL ❑ PARTNERSHIP ❑ CORPORATION 0
IS 51% OWNED BY A MINORITY? YES ❑ NO ❑
NAME AND ADDRESS OF ALL STOCKHOLDERS AND/OR PARTNERS:
NAME, TITLE, HOME ADDRESS % OF OWNERSHIP
III. MANAGEMENT(USE SAME FORMAT FOR ADDITIONAL MANAGEMENT PERSONNEL):
NAME POSITION
EDUCATION
MANAGEMENT OR TECHNICAL TRAINING
6/22/90
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NIIMINEMINENEW
City of Omaha
CONTRACTOR INFORMATION FORM:
DATE: PROJECT ADDRESS
OWNER INFORMATION: (To be filled out by the City of Omaha)
OWNER'S NAME
OWNER'S ADDRESS
CITY/STATE/ZIP CODE
OWNER'S PHONE NUMBER
OWNER'S FEDERAL TAX IDENTIFICATION NUMBER: MINORITY INFORMATION:
The Owner meets the following criteria:
MINORITY ❑ WOMAN ❑ N/A ❑
(If the company does not have a Federal Tax Identification
Number,then provide the Owner's Social Security Number.)
GENERAL CONTRACTOR INFORMATION:
COMPANY'S NAME
COMPANY'S ADDRESS
CITY/STATE/ZIP CODE
COMPANY'S PHONE NUMBER
COMPANY'S FEDERAL TAX IDENTIFICATION NUMBER: MINORITY INFORMATION:
The Company meets the following criteria:
MINORITY ❑ WOMAN ❑ N/A ❑
CONTRACT AMOUNT:
SUBCONTRACTOR LIST:
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE# MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
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City of Omaha
SUBCONTRACTOR LIST:
(Continuation)
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
SUBCONTRACTOR TRADE FED. I.D. # TELEPHONE # MINORITY INFO.:
❑ MINORITY
❑ WOMAN
CONTRACT AMOUNT: ❑ N/A
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C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, the City of Omaha has applied for and received Community
Development Block Grant (CDBG) Funds under Title I of the Housing and Community
Development Act of 1974, as amended, for the development of viable urban communities by
providing decent housing, a suitable environment, and creating and expanding economic
development opportunities, principally for the purpose of benefiting low- and moderate-income
persons; and,
WHEREAS, the Omaha Small Business Network, Inc. (OSBN) small business
program that includes a business incubator, business development training and a seed capital
loan program was awarded $219,030.00 from FY 2000 CDBG funds and $100,000.00 from FY
2003 CDBG funds in an Agreement approved on June 17, 2003 by Resolution No. 791; and,
WHEREAS that Agreement with OSBN expires on May 31, 2004 with an extension to
June 30, 2004 approved by the Director and has a balance of $27,551.25 remaining for capital
improvements to the OSBN facilities; and,
WHEREAS, additional funds are required for capital improvements and technical
assistance activities at OSBN; and,
WHEREAS, the FY 2004 Consolidated Plan, approved by the Omaha City
Council on November 5, 2002, by Resolution No. 2509, allocated $250,000.00 in CDBG funds
to OSBN for a small business program and capital improvements to OSBN facilities; and,
WHEREAS, the Omaha Office of the U. S. Department of Housing and Urban
Development has requested clarification of the CDBG national objective met by each eligible
activity in this Agreement and the reporting requirements for each activity; and,
WHEREAS, it is in the best interest of the City and the residents thereof that the
City Amend the Agreement with OSBN approved on June 17, 2003 by Resolution No. 791 to
extend the term of the Agreement to May 31, 2005, to provide additional CDBG funding in an
amount not to exceed $250,000.00 for technical assistance activities and capital improvements to
OSBN facilities and to clarify the CDBG national objective met by each eligible activity in this
Agreement and the reporting requirements for each activity.
By
Councilmember
Adopted
City Clerk
Approved
Mayor
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c-25a CITY OF OMAHA
' LEGISLATIVE CHAMBER
Omaha,Nebraska
PAGE -2-
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF OMAHA:
THAT, as recommended by the Mayor, the attached Amendment to the
Agreement with the Omaha Small Business Network, Inc., a Nebraska Nonprofit Corporation,
2505 North 24th Street, Omaha, Nebraska 68110, approved on June 17, 2003 by Resolution No.
791, to extend the term of the Agreement to May 31, 2005, to provide additional CDBG funding
in an amount not to exceed $250,000.00 for technical assistance activities and capital
improvements to OSBN facilities and to clarify the CDBG national objective met by each
eligible activity in this Agreement and the reporting requirements for each activity is hereby
approved. Funds remaining in the original Agreement in the amount of $27,551.25 shall be
payable from FY 2003 Community Development Block Grant Program and additional funds in
the amount of $250,000.00 shall be payable from FY 2004 Community Development Block
Grant Program, Fund No. 12186, Organization 129131.
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