Over the past few years, the federal government, through the U.S. Office of Management and Budget (OMB), has significantly rewritten its guidance concerning grants and cooperative agreements (referred to as the Uniform Guidance). We have written extensively on these changes, which demonstrate substantial movement toward a more formal, contract-like approach. In light of those changes, the U.S. Department of Defense Grant and Agreement Regulations (DoDGARs) required updating. The U.S. Department of Defense (DoD) established interim implementation of OMB's guidance in December 2014. On November 7, 2016, the DoD took further steps to implement the OMB guidance. The six proposed rules seek to establish eleven new DoDGARs parts and make conforming changes to existing DoDGARs parts. The six proposed rules for comment are as follows:
- Revised Interim Implementation of Governmentwide Guidance for Grants and Cooperative Agreements;
- Format for DoD Grant and Cooperative Agreement Awards;
- Administrative Requirements Terms and Conditions for Cost-Type Awards to Nonprofit and Governmental Entities;
- National Policy Requirements: General Award Terms and Conditions;
- Definitions for DoD Grant and Agreement Regulations in Subchapters A Through F; and
- DoD Grant and Agreement Regulations.
Comments on each of these are due February 6, 2017.
Revised Interim Implementation of Government-wide Guidance for Grants and Cooperative Agreements
The first of the six proposed regulations aims to create a new part 1104 of Title 2 of the Code of Federal Regulations. This part would serve as the central hub to direct DoD Components on the portions of the DoDGARs that apply to DoD grants and cooperative agreements for various pre-award, time-of-award, and post-award purposes, pending completion of the remaining updates to the DoDGARs that are needed to fully implement the Uniform Guidance. It also proposes to remove the interim implementation of the guidance published in December 2014.
Format for DoD Grant and Cooperative Agreement Awards
The second in the series of proposed regulations seeks to create a new part 1120 of Title 2 of the Code of Federal Regulations. Through seven subparts, this proposed rule updates DoDGARs to implement the Uniform Guidance as it relates to administrative requirements, cost principles, and audit requirements. In particular, this includes establishing additional requirements for uniform content, beyond the minimum identified in the Uniform Guidance, including but not limited to that required in the award cover pages, and general and award-specific terms and conditions, as well as specifying a standard format for organizing the content of DoD Component awards to all types of entities, including entities other than those addressed in the Uniform Guidance, including for-profit entities.
Administrative Requirements Terms and Conditions for Cost-Type Awards to Nonprofit and Government Entities
The third, and longest, of the six proposed regulations establishes seven new parts to Title 2 of the Code of Federal Regulations that will collectively govern a DoD Component's construction of the administrative requirements portion of its general terms and conditions for awards. The first of the parts (part 1126) provides an overview, and the others (parts 1128, 1130, 1132, 1134, 1136, and 1138) address the organization and content of the following general terms and conditions for one segment of the administrative requirements:
- Part 1128 – Recipient Financial and Program Management;
- Part 1130 – Property Administration;
- Part 1132 – Recipient Procurement Procedures;
- Part 1134 – Financial, Programmatic, and Property Reporting;
- Part 1136 – Other Administrative Requirements; and
- Part 1138 – Requirements Related to Subawards.
Each of these proposed parts is organized into subparts and appendices. The subparts provide a prescription for the DoD Component's use of certain terms and conditions, and identify the portion(s) of the Uniform Guidance they seek to implement. The appendices then provide standard wording of general terms and conditions for the associated subpart.
Notably, this includes guidance that further explains how disclosures under the Uniform Guidance should be handled with respect to DoD grants and cooperative agreements.
National Policy Requirements: General Award Terms and Conditions
The fourth in the series of proposed regulations seeks to create a new part 1122 of Title 2 of the Code of Federal Regulations. This proposed rule seeks to establish a consistent way for DoD Components to organize the portion of their general terms and conditions covering national policy requirements in areas such as nondiscrimination, environmental protection, and live organisms. The new part also provides standard wording of terms and conditions for national policy requirements that apply generally to DoD programs and awards.
Definitions for DoD Grant and Agreement Regulations in Subchapters A Through F
The fifth of the six proposed regulations aims to create a new part 1108 of Title 2 of the Code of Federal Regulations, which serves as a central location for definitions and terms that are needed to make the DoDGARs as clear as possible for DoD awarding and administering officials, recipients, auditors, and others who may need to use them.
DoD Grant and Agreement Regulations
The final proposed regulation seeks to remove two existing DoDGARs parts and revises four others in order to update outdated references and eliminate internal inconsistencies between the portion of the DoDGARs that will remain and the new DoDGARs parts noted above.
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Although these proposed rules are not yet effective, and DoD grants and cooperative agreements remain subject to the Uniform Guidance and the interim implementing rules under DoDGARs, nonprofit recipients of DoD grants and cooperative agreements should take the time to review these extensive changes because they may include provisions that are ambiguous or impractical, which can be raised through the comment process, and/or because many of them are likely to become final in 2017 and therefore will be applicable to all organizations that receive DoD funding through grants or cooperative agreements.