chapter xi—national foundation on the … chapter xi—national foundation on the arts and the...

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CHAPTER XI—NATIONAL FOUNDATION ONTHE ARTS AND THE HUMANITIES

SUBCHAPTER A—GENERAL

Part Page1100 Statement for the guidance of the public—organi-

zation, procedure and availability of information 3211105 Standards of conduct of employees ......................... 3251110 Nondiscrimination in federally assisted programs 3331115 Privacy Act regulations .......................................... 344

SUBCHAPTER B—NATIONAL ENDOWMENT FOR THE ARTS

1150 Collection of claims under the Federal Claims Col-lection Act of 1966 ................................................ 348

1151 Nondiscrimination on the basis of handicap ........... 3501152 Intergovernmental review of National Endowment

for the Arts programs and activities .................... 3581153 Enforcement of nondiscrimination on the basis of

handicap in programs or activities conducted bythe National Endowment for the Arts .................. 362

1154 Governmentwide debarment and suspension (non-procurement) and governmentwide requirementsfor drug-free workplace (grants) .......................... 368

1157 Uniform administrative requirements for grantsand cooperative agreements to state and localgovernments ......................................................... 386

1158 New restrictions on lobbying .................................. 414

SUBCHAPTER C—FEDERAL COUNCIL ON THE ARTS AND THEHUMANITIES

1160 Indemnities under the Arts and Artifacts Indem-nity Act ................................................................ 425

SUBCHAPTER D—NATIONAL ENDOWMENT FOR THE HUMANITIES

1168 New restrictions on lobbying .................................. 430

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45 CFR Ch. XI (10–1–97 Edition)

Part1169 Governmentwide debarment and suspension (non-

procurement) and governmentwide requirementsfor drug-free workplace (grants) .......................... 441

1170 Nondiscrimination on the basis of handicap in fed-erally assisted programs and activities ............... 459


1175 Enforcement of nondiscrimination on the basis ofhandicap in programs or activities conducted bythe National Endowment for the Humanities ...... 499

1176 Part-time career employment ................................. 5041177 Claims collection .................................................... 5061178 Use of penalty mail in the location and recovery of

missing children ................................................... 5091179 Salary offset ............................................................ 509

SUBCHAPTER E—INSTITUTE OF MUSEUM SERVICES

1180 Grants regulations .................................................. 5141181 Enforcement of nondiscrimination on the basis of

handicap in programs or activities conducted bythe Institute of Museum Services ........................ 535


1185 Governmentwide debarment and suspension (non-procurement) and governmentwide requirementsfor drug-free workplace (grants) .......................... 568

1186—1199 [Reserved]


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SUBCHAPTER A—GENERAL

PART 1100—STATEMENT FOR THEGUIDANCE OF THE PUBLIC—OR-GANIZATION, PROCEDURE ANDAVAILABILITY OF INFORMATION

Sec.1100.1 Definitions.1100.2 Organization.1100.3 Availability of information to the

public.1100.4 Current index.1100.5 Agency procedures for handling re-

quests for documents.1100.6 Fees.1100.7 Foundation report of actions.

AUTHORITY: 5 U.S.C. 552, as amended byPub. L. 99–570, 100 Stat. 3207.

SOURCE: 52 FR 48266, Dec. 21, 1987, unlessotherwise noted.

§ 1100.1 Definitions.(a) Agency means the National

Endownment for the Arts, the NationalEndowment for the Humanities, the In-stitute of Museum Services, or the Fed-eral Council on the Arts and the Hu-manities.

(b) Commercial use request means a re-quest by or on behalf of anyone whoseeks information for a use or purposethat furthers the commercial trade orprofit interests of the requestor (or theperson on whose behalf the request ismade.) The agency must determinedthe use to which a requestor will putthe document. Where the agency hasreasonable cause to doubt the use towhich a requestor will put the recordssought or the use is not clear from therequest, the agency may seek addi-tional clarification. The requestorfears the burden of demonstrating theuse or purpose of the information re-quested.

(c) Direct costs mens those expendi-tures which an agency actually incursin searching for and duplication docu-ments to respond to a Freedom of In-formation Act (FOIA) request. In thecase of commercial use requests, theterm shall also include expendituresfor reviewing documents.

(d) Duplication means the process ofmaking a copy of a document nec-essary to respond to a FOIA request.Such copies may be in the form of

paper, microfilm, machine readabledocuments, or other materials.

(e) Educational institution means apreschool, elementary, or secondaryschool, an institution of graduate orundergraduate higher education, an in-stitution of professional education, oran institution of vocational education,which operates a program or programsof scholarly research.

(f) Non-commercial scientific institutionmeans an institution that is not oper-ated on a ‘‘commercial use’’ basis asdefined in paragraph (b) of this sectionand which is operated solely for thepurposes of conducting scientific re-search the results of which are not in-tended to promote any particular prod-uct or industry.

(g) Representative of the news mediameans any person actively gatheringnews for an entity that is organizedand operated to publish or broadcastinformation that is about currentevents or that would be of current in-terest to the public. Freelance journal-ists may be regarded as working for anews organization if they can dem-onstrate a sound basis for expectingpublication though that organization,even though not actually employed byit.

(h) Review means the process of ex-amining a document located in re-sponse to a commercial use request todetermine whether any portion is per-mitted to be withheld. Review includesprocessing documents for disclosure,including all that is necessary to excisethem and otherwise prepare them forrelease. Review does not include timespent resolving general legal or policyissues regarding the application of ex-emptions.

(i) Search means all the time that isspent looking for material that re-sponds to a request, including page-by-page or line-by-line identification ofmaterial in documents. Searches maybe done manually or by computer usingexisiting programs.

§ 1100.2 Organization.The National Foundation on the Arts

and the Humanities was established bythe National Foundation on the Arts


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45 CFR Ch. XI (10–1–97 Edition)§ 1100.3

and the Humanities Act of 1965, 20U.S.C. 951 et seq. The Foundation iscomposed of the National Endowmentfor the Arts, the National Endowmentfor the Humanities, the Institute ofMuseum Services, and the FederalCouncil on the Arts and the Human-ities. The Institute of Museum Servicesbecame a part of the National Founda-tion on the Arts and the Humanitiespursuant to Pub. L. 97–394 (December30, 1982) and Pub. L. 98–306 (May 31,1984). Each Endowment is headed by aChairman and has an advisory nationalcouncil composed of 26 presidential ap-pointees. The Institute of MuseumServices is headed by a Director andhas a National Museum Services Boardcomposed of 15 presidential appointees.The Federal Council on the Arts andthe Humanities, comprised of Execu-tive branch officials and appointees ofthe legislative branch, is authorized tomake agreements to indemnify againstloss or damage for certain exhibitionsand advise on arts and humanities mat-ters.

§ 1100.3 Availability of information tothe public.

(a) All inquiries, or requests shouldbe addressed to the appropriate agency.Descriptive brochures of the organiza-tion, programs, and function of eachagency are available upon request. In-quiries involving work of the NationalEndowment for the Arts should be ad-dressed to the National Endowment forthe Arts, 1100 Pennsylvania Avenue,NW., Washington, DC 20506. The tele-phone number of the National Endow-ment for the Arts is (202) 682–5400. Re-quests or inquiries involving the Na-tional Endowment for the Humanitiesshould be addressed to the NationalEndowment for the Humanities, 1100Pennsylvania Avenue, NW., Washing-ton, DC 20506. The telephone number ofthe National Endowment for the Hu-manities is (202) 786–0310. Requests orinquiries involving the Institute of Mu-seum Services should be addressed tothe Institute of Museum Services, 1100Pennsylvania Avenue, NW., Washing-ton, DC 20506. The telephone number ofthe Institute of Museum Services is(202) 786–0536.

(b) The head of each agency is re-sponsible for the effective administra-

tion of the Freedom of InformationAct. The head of each agency pursuantto this responsibility hereby directsthat every effort be expended to facili-tate service to the public with respectto the obtaining of information andrecords.

(c) Requests for access to records ofthe National Endowment for the Arts,the National Endowment for the Hu-manities, or the Institute of MuseumServices may be filed by mail with theGeneral Counsel of the National En-dowment for the Arts, the DeputyChairman of the National Endowmentfor the Humanities, or the Public Af-fairs Officer of the Institute of MuseumServices, as is appropriate. Requestsfor access to records of the FederalCouncil on the Arts and the Human-ities should be directed to the atten-tion of the National Endowment forthe Humanities. All requests shouldreasonably describe the record orrecords sought. Requests submittedshould be clearly identified as beingmade pursuant to the Freedom of In-formation Act.

§ 1100.4 Current index.

Each agency shall maintain andmake available for public inspectionand copying a current index providingidentifying information for the publicas to any matter which is issued,adopted, or promulgated and which isrequired to be made available pursuantto 5 U.S.C. 552(a) (1) and (2). Publica-tion and distribution of such indiceshas been determined by the Foundationto be unnecessary and impracticable.The indices will be provided upon re-quest at a cost not to exceed the directcost of the duplication.

§ 1100.5 Agency procedures for han-dling requests for documents.

(a) Upon receiving a request for docu-ments in accordance with the rules ofthis part, the General Counsel of theNational Endowment for the Arts, Dep-uty Chairman of the National Endow-ment for the Humanities, or the PublicAffairs Officer of the Institute of Mu-seum Services, as is appropriate, shalldetermine whether or not the requestshall be granted in whole or in part.


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National Foundation on the Arts and Humanities § 1100.6

(1) The determination shall be madewithin ten (10) days (excepting Satur-days, Sundays, and legal holidays)after receipt of such request.

(2) The requestor shall be notified ofthe determination and the reasons thatsupport it. When a request is denied inwhole or in part, the requestor, will benotified of his or her rights to appealthe determination to the head of theagency.

(b)(1) Any party whose request fordocuments has been denied in whole orin part may file an appeal no later thanten (10) working days following receiptof the notification of denial. Appealsmust be addressed to the Chairman,National Endowment for the Arts,Washington, DC 20506, the Chairman,National Endowment for the Human-ities, Washington, DC 20506, or the Di-rector Institute of Museum Services,Washington, DC 20506, as is appro-priate.

(2) The head of the agency or hisdelegatee shall make a determinationwith respect to the appeal within twen-ty (20) days (excepting Saturdays, Sun-days, and legal holidays) after theagency has received the appeal, exceptas provided in paragraph (c) of this sec-tion. If, on appeal, the denial is upheldeither in whole or in part, the head ofthe agency shall notify the party sub-mitting the appeal of the judicial re-view provisions of 5 U.S.C. 552(a)(4)(B).

(c) In unusual circumstances, thetime limits prescribed to determine arequest for documents with respect toinitial actions or actions on appealmay be extended by written noticefrom the General Counsel of the Na-tional Endowment for the Arts, theDeputy Chairman of the National En-dowment for the Humanities, or thePublic Affairs Officer of the Instituteof Museum Services as is appropriate.The notice shall describe the reason forthe extension and the date on whichthe determination is expected to bemade. No notice shall specify a datethat would result in an extension ofmore than ten (10) days (excepting Sat-urdays, Sundays, and legal holidays).As is used in this paragraph, unusualcircumstances means:

(1) The need to search for and collectthe requested records from field facili-ties or other establishments that are

separate from the office processing therequest;

(2) The need to search for, collect,and appropriately examine a volumiousamount of separate and distinctrecords which are demanded in a singlerequest; or

(3) The need for consultation, whichshall be conducted with all practicablespeed, with another agency having asubstantial interest in the determina-tion of the request or among two ormore components of the agency havinga substantial subject-matter interestin the request.

§ 1100.6 Fees.(a) Categories of fees. Fees will be

charged according to the Category ofthe FOIA request.

(1) Commercial use requests. The agen-cy will assess charges to recover thefull direct cost of searching for, review-ing, and duplicating the requested doc-ument. The agency may recover thecost of searching for and reviewingrecords even if there is ultimately nodisclosure.

(2) Requests from educational and non-commercial scientific institutions. Theagency will charge for duplicationcosts. To qualify for this category therequestor must show: (i) That re-quested records are being sought underthe auspices of a qualified institutionas defined in § 1100.1 (e) or (f) of thispart; (ii) the records are not sought forcommercial use; and (iii) the recordsare being sought in furtherance ofscholarly or scientific research of theinstitution.

(3) Requests by representatives of thenews media. The agency will charge du-plication costs for the requests in thiscategory.

(4) All other requests. All other re-quests shall be charged fees which, re-cover the full reasonable cost forsearching for and duplicating the re-quested records.

(b) General fee schedule. The agencyshall use the most efficient and leastcostly method to comply with requestsfor documents made under the FOIA.The agency will charge fees to recoverall allowable direct costs incurred. Theagency may charge fees for searchingfor and reviewing requested documentseven if the documents are determined


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45 CFR Ch. XI (10–1–97 Edition)§ 1100.6

to be exempt from disclosure or cannotbe located. If search charges are likelyto exceed $25, the agency shall notifythe requestor, unless the requestor hasindicated in advance the willingness topay higher fees. The following feesshall be charged in accordance withparagraph (a) of this section.

(1) Searches—(i) Manual. The feecharged will be the salary rate(s) (i.e.,basic pay plus 16.1 percent) of the em-ployee(s) conducting the search.

(ii) Computer. The fee charged will bethe actual direct cost of providing theservice including the cost of operatingthe central processing unit for the op-erating time that is directly attributedto searching for records responsive to arequest and the operator/programmersalary apportionable to the search.

(2) Review. The fee charged will equalthe salary rate(s) (basic pay plus 16.1percent) of the employee(s) conductingthe review.

(3) Duplication. Copies of documentsphotocopied on one-side of a 81⁄2 x 11inch sheet of paper will be provided at$.10 per page. Photocopies on two sidesof a single 81⁄2 x 11 inch sheet of paperwill be provided at $.20 per page. Forduplication of other materials, thecharge will be the direct cost of dupli-cation.

(c) Restrictions on charging fees. (1) Ex-cept for documents provided in re-sponse to a commercial use request,the first 100 pages of duplication or thefirst two (2) hours of search time shallbe provided at no charge. For the pur-poses of this section, two (2) hours ofsearch time by computer entitles therequestor to two (2) hours of computeroperator salary translated into com-puter search costs. Computer searchcosts consist of operator salary pluscentral proceeding unit operating timecosts for the duration of the search.

(2) Fees shall not be charged to anyrequestor, including commercial userequestors, if the cost of collecting afee would be equal to or greater thanthe fee itself.

(d) Waiver or reduction of fees. (1) Doc-uments shall be furnished withoutcharge or at reduced charge if disclo-sure of the information is in the publicinterest because it is likely to contrib-ute significantly to public understand-ing of the operations or activities of

the government and is not primarily inthe commercial interest of the reques-tor.

(2) The following factors shall be usedto determine whether a fee will bewaived or reduced:

(i) The subject of the request. Whetherthe subject of the requested recordsconcerns ‘‘the operations or activitiesof the government’’;

(ii) The informative value of the infor-mation to be disclosed. Whether the dis-closure is ‘‘likely to contribute’’ to anunderstanding of government oper-ations or activities;

(iii) The contribution to an understand-ing of the subject by the general publiclikely to result from disclosure. Whetherdisclosure of the requested informationwill contribute to ‘‘public understand-ing’’;

(iv) The significance of the contributionto public understanding. Whether disclo-sure is likely to contribute ‘‘signifi-cantly’’ to public understanding of gov-ernment operations or activities;

(v) The existence and magnitude of acommercial interest. Whether the reques-tor has a commercial interest thatwould be furthered by the disclosure;and if so

(vi) The primary interest in disclosure.Whether the magnitude of the identi-fied commercial interest of the reques-tor is sufficiently large in comparisonwith the public interest in disclosure,that disclosure is ‘‘primarily in thecommercial interest of the requester.’’

(e) Assessment and collection of fees. (1)Interest will accrue from the date thebill is mailed if the fee is not paidwithin thirty (30) days. Interest will beassessed at the rate prescribed in 31U.S.C. 3717.

(2) If the agency reasonably believesthat a requestor(s) is making multiplerequests to avoid the assessment offees, the agency may aggregate suchrequests and charge accordingly.

(3) The agency may request an ad-vance payment of the fee if

(i) The allowable charges are likelyto exceed $250; or

(ii) The requestor has failed pre-viously to pay a fee in a timely fash-ion.

(4) When the agency requests an ad-vance payment, the time limits pre-scribed in section (a)(6) of the Freedom


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National Foundation on the Arts and Humanities § 1105.735–3

of Information Act will begin onlyafter the agency has received full pay-ment.

§ 1100.7 Foundation report of actions.On or before March 1 of each calendar

year, each member agency of the Na-tional Foundation on the Arts and theHumanities shall submit a report of itsactivities with regard to public infor-mation requests during the precedingcalendar year to the Speaker of theHouse of Representatives and to thePresident of the Senate. The reportshall include:

(a) The number of determinationsmade by each member agency of theNational Foundation on the Arts andthe Humanities not to comply with re-quests for records made to the agencyunder the provisions of this part andthe reasons for each such determina-tion;

(b) The number of appeals made bypersons under such provision, the re-sult of such appeals, and the reasonsfor the action upon each appeal thatresults in the denial of information;

(c) The names and titles or positionsof each person responsible for the de-nial of records requested under the pro-visions of this part and the number ofinstances of participation for each;

(d) The results of each proceedingconducted pursuant to 5 U.S.C.552(a)(4)(F), as amended, including a re-port of the disciplinary action takenagainst the officer of employee whowas primarily responsible for improp-erly withholding records or an expla-nation of why disciplinary action wasnot taken;

(e) A copy of every rule made by theFoundation implementing the provi-sions of the FOIA.

(f) A copy of the fee schedule and thetotal amount of fees collected by theagency for making records availableunder this section; and

(g) Such other information as indi-cates efforts to administer the provi-sions of the FOIA, as amended.

PART 1105—STANDARDS OFCONDUCT OF EMPLOYEES

Sec.1105.735–1 Purpose.1105.735–2 Scope.

1105.735–3 Definitions.1105.735–4 Statutory provisions.1105.735–5 Conflicts-of-Interest Counselor.1105.735–6 Statements of employment and fi-

nancial interests.1105.735–7 Employee conduct.1105.735–8 Presenting grievances to Con-

gress.

APPENDIX TO PART 1105—RELATED STATUTORYPROVISIONS

AUTHORITY: E.O. 11222 of May 8, 1965, 3CFR, 1965 Supp.; 5 CFR 735.104.

SOURCE: 32 FR 17663, Dec. 12, 1967, unlessotherwise noted.

§ 1105.735–1 Purpose.

While confident of the integrity andsense of responsibility of the employ-ees of the National Endowment for theArts and the National Endowment forthe Humanities, it is essential to theGovernment and to the conduct of thebusiness of the National Endowmentfor the Arts and the National Endow-ment for the Humanities that unusu-ally high standards of honesty, integ-rity, impartiality, and conduct bemaintained by employees of the En-dowments. In accordance with theseconcepts, this part sets forth policiesand procedures of the Endowmentswith respect to employee conduct, cer-tain permissible and prohibited outsideactivities, and possible conflicts-of-in-terest situations.

§ 1105.735–2 Scope.

The policies and procedures con-tained in this part apply to all employ-ees of the Endowments, except thatspecific provision is made in § 1105.735–6–(b) for the filing of Statements ofEmployment and Financial Interestsby special Government employees.

§ 1105.735–3 Definitions.

(a) Employee means an officer or em-ployee of the National Endowment forthe Arts or the National Endowmentfor the Humanities or a member of theshared staff of both Endowments. Theterm employee includes both a regularemployee (as defined in this section) anda special Government employee unless ex-pressly qualified.

(b) Regular employee means a personholding an appointment in the com-petitive or excepted service, occupying


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45 CFR Ch. XI (10–1–97 Edition)§ 1105.735–4

a position on the staff of either Endow-ment or the shared staff of both En-dowments, without regard to assignedworking schedule (that is, includingfull-time, part-time and intermittentschedules), but excluding all specialGovernment employees who have notbeen designated as regular employees bythe Chairman of either Endowment forpurposes of these regulations.

(c) Full-time employee means a regularemployee with an assigned full-timeworking schedule.

(d) Part-time employee means a regularemployee with an assigned part-time(less than 40 hours a week) work sched-ule.

(e) Intermittent employee means a regu-lar employee with an assigned intermit-tent working schedule.

(f) Shared staff and joint employeesmean employees performing servicesfor both Endowments on a shared basis.

(g) Special Government employee meansa special Government employee as definedin section 202 of title 18 of the UnitedStates Code who is employed by theNational Endowment for the Arts orthe National Endowment for the Hu-manities, or by both Endowmentsjointly.

(h) Endowment means either the Na-tional Endowment for the Arts or theNational Endowment for the Human-ities.

(i) Foundation means the NationalFoundation on the Arts and the Hu-manities.

(j) Chairman means the Chairman ofthe National Endowment for the Arts,or the Chairman of the National En-dowment for the Humanities.

(Sec. 10, 79 Stat. 852 as amended 82 Stat. 186,84 Stat. 443 (20 U.S.C. 959))

[38 FR 3511, Feb. 7, 1973]

§ 1105.735–4 Statutory provisions.Each employee is responsible for ac-

quainting himself not only with theprovisions of this part, but also withapplicable portions of each Federalstatute relating to his conduct as anemployee of the National Endowmentfor the Arts or the National Endow-ment for the Humanities and of theU.S. Government. This part will becalled to the attention of all employeesby the Administrative Officer of the

Foundation at least once a year and hewill provide a copy of the part to eachnew employee who joins either the Na-tional Endowment for the Arts or theNational Endowment for the Human-ities or becomes a member of theshared staff. (A list of pertinent stat-utes is provided in the Appendix to thispart.)

§ 1105.735–5 Conflicts-of-Interest Coun-selor.

(a) Conflicts-of-Interest Counselor. TheGeneral Counsel of the Foundation isdesignated the Conflicts-of-InterestCounselor, with responsibility for pro-viding, on request from any employee,counsel regarding conflicts-of-interestregulations and requirements, as wellas their applicability in particular sit-uations. Each employee is responsiblefor seeking the advice of the Conflicts-of-Interest Counselor whenever it ap-pears that he may be, or may become,involved in a possible conflicts-of-in-terest situation. Any supervisor mayrefer to the Conflicts-of-Interest Coun-selor any possible conflicts-of-interestsituation involving a subordinate of hiswhenever he deems such action appro-priate. In such cases, the subordinateconcerned shall be informed that thematter has been referred for consider-ation and shall be afforded the oppor-tunity to state his case. The GeneralCounsel of the Foundation is respon-sible for reviewing conflicts-of-interestmatters brought to his attention andfor attempting to work with the em-ployees concerned in resolving such sit-uations, and for offering employees anopportunity to explain any conflict orappearance of conflict. Matters whichcannot be satisfactorily resolved inthis manner will be referred to theChairman of the Endowment con-cerned, or, in the case of a share staffmember, to the Chairmen of both En-dowments, for decision and appropriateaction. Remedial action, whether dis-ciplinary or otherwise, shall be effectedin accordance with any applicable laws,Executive orders, and regulations.

(b) Disciplinary and other remedial ac-tions. When there is a final decisionthat a conflicts-of-interest situationrequires disciplinary or other remedialaction, such action shall be taken


327


promptly to end the conflict or appear-ance of conflict of interest and to carryout any appropriate disciplinary meas-ure. Any action taken, whether dis-ciplinary or otherwise, shall be effectedin accordance with applicable laws, Ex-ecutive orders, Civil Service Commis-sion regulations and the regulations inthis part. The action taken may in-volve, among other things:

(1) Divestment by the employee of hisconflicting interest;

(2) Changes in existing duties;(3) Disqualification for a particular

assignment;(4) Appropriate disciplinary action,

up to and including removal.

[32 FR 17663, Dec. 12, 1967, as amended at 33FR 494, Jan. 13, 1968]

§ 1105.735–6 Statements of employmentand financial interests.

(a) Employees other than special Gov-ernment employees—(1) General require-ment. Statements of employment andfinancial interests are required of allFederal employees occupying positionsat or above Grade 16 or the equivalent,as well as all employees occupying po-sitions which either require the exer-cise of judgment in making a Govern-ment decision, or in taking Govern-ment action with regard to:

(i) Contracting or procurement;(ii) Administering or monitoring

grants or subsidies;(iii) Regulating or auditing private or

other non-Federal enterprises;(iv) Other activities where the deci-

sion or action has an economic impacton the interest of a particular non-Fed-eral enterprise; or

require the incumbent to report inorder to avoid involvement in a pos-sible conflicts-of-interest situation andcarry out the purpose of law.

(2) Requirements of the National En-dowment for the Arts and the NationalEndowment for the Humanities. In orderto fulfill the Endowments’ obligationsunder the general Government require-ment described in paragraph (a)(1) ofthis section, it has been determinedthat a Statement of Employment andFinancial Interests must be completedand submitted in accordance with theprocedures set forth in this section byemployees occupying the following po-sitions:

(i) National Endowment for the Arts:(a) Deputy chairman.(b) All special assistants to the chair-

man and deputy chairman.(c) All program, division and office

directors.(ii) National Endowment for the Hu-

manities:(a) Deputy chairman.(b) All assistants (including special

assistants) to the chairman and deputychairman.

(c) All program and office directors(but not including the Public Informa-tion Director).

(d) All program officers classified atGS–13 and above.

(iii) Shared staff:(a) All attorneys.(b) Director and Assistant Director of

Administration.(c) All auditors classified at GS–13

and above.(d) Financial manager.(e) Administrative services officer.(f) All grants officers.(3) Inclusion and exclusion of positions.

(i) Whenever appropriate, the Chair-man of an Endowment may amendparagraph (a)(2) of this section to in-clude additional positions in his En-dowment that entail submission ofsuch statements or may exclude anypositions in his Endowment listed inparagraph (a)(2) of this section the in-clusion of which is not required by thegeneral requirement in paragraph (a)(1)of this section. Inclusion or elimi-nation of shared positions will be ac-complished by agreement of bothChairmen. Each supervisor is respon-sible for bringing to the attention ofthe appropriate Chairman (through theDeputy Chairman) any position whichthe supervisor believes should be cov-ered or excluded by this requirement.

(ii) If an employee believes that hisposition has been improperly includedamong those for which a Statement ofEmployment and Financial Interests isrequired, he may bring this matter, viathe Foundation’s grievance procedures,to the attention of the appropriateDeputy Chairman or, in the case ofshared staff, to the attention of bothDeputy Chairmen. In the event thatthe recommendation is made that theposition be included, the employee may


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appeal to the Chairman of the Endow-ment concerned, or, in the case ofshared staff, to both Chairmen, whoseruling shall be final.

(iii) Although an employee’s positionmay generally be included within theterms of paragraph (a)(1) of this sec-tion, such position may be excludedfrom the reporting requirement whenit is determined that:

(a) The duties of a position are suchthat the likelihood of the incumbent’sinvolvement in a conflicts-of-interestsituation is remote; or

(b) The duties of a position are atsuch a level of responsibility that thesubmission of a statement of employ-ment and financial interests is not nec-essary because of the degree of super-vision and review over the incumbentor the inconsequential effect on the in-tegrity of the Government.

(4) Submission of original and supple-mentary statements. Each employee cov-ered by this requirement shall com-plete the statement and submit itwithin 90 days after the effective dateof this part. Each new employee shallcomplete and submit the statementwithin 30 days after his entrance onduty or within 90 days after the effec-tive date of this part, whichever date islater. All changes in, or additions to,the information contained in each em-ployee’s original statement must be re-ported in a supplementary statementsubmitted by the employee as of June30 each year. If no changes or additionsoccur a negative report is required. Notwithstanding the filing of the annualreport required by this subparagraph,each employee shall at all times avoidacquiring a financial interest thatcould result, or taking an action thatwould result, in a violation of the con-flicts of interest provisions of section208 of title 18, U.S.C., or § 1105.735–7 ofthis part. The Administrative Office ofthe Foundation is responsible for in-forming each new, affected employee ofthe requirement for him to submit thestatement within 30 days after his en-trance on duty.

(5) Interests of employees’ relatives. Forpurposes of the statement, the inter-ests of a spouse, minor child, or anyother member of an employee’s imme-diate household who is a blood relation

of the employee, are considered to beinterests of the employee.

(6) Information not known by employ-ees. If information required to be in-cluded on the statement of employ-ment and financial interests (supple-mentary or otherwise, including hold-ings placed in trust) is not known bythe employee but is known to anotherperson, the employee shall requestsuch other person to submit the infor-mation on his behalf.

(7) Information not required. Employ-ees are not required to submit informa-tion relating to their financial inter-ests in any professional society notconducted as a business enterprise asdescribed in the next sentence, chari-table, religious, social, fraternal, rec-reational, public service, civic, politi-cal, or similar organization not con-ducted as a business enterprise. Profes-sional societies, educational institu-tions, and other nonprofit organiza-tions engaged in research, develop-ment, or related activities involvinggrants of money from, or contractswith, the Government are deemed‘‘business enterprises’’ and are requiredto be included in employees’ state-ments of employment and financial in-terests.

(8) Effect of employees’ statements onother requirements. The statements ofemployment and financial interestsand supplementary statements re-quired of employees are in addition to,and are not in substitution for, or inderogation of, any similar requirementimposed by law, regulation, or Execu-tive order. The submission of the state-ment or supplementary statement byan employee does not permit him orany other person to participate in anymatter in which his or the other per-son’s participation is prohibited bylaw, regulation, or Executive order.

(9) Confidentiality of employees’ state-ments. Each statement of employmentand financial interest and each supple-mentary statement will be held instrictest confidence. The officials des-ignated below to receive such state-ments will not allow access to, or in-formation to be disclosed from, a state-ment except to carry out a purpose ofthis part. Information will not be dis-closed from the statement except asthe Civil Service Commission or the


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appropriate Chairman (or Chairmen, inthe case of shared staff members) mayauthorize for good cause shown.

(10) Review of statements. (i) Each Dep-uty Chairman will submit his state-ment to the appropriate EndowmentChairman.

(ii) Employees of either Endowmentshall submit their statements to theDeputy Chairman of that Endowment.

(iii) Joint employees shall submittheir statements to both Deputy Chair-men.

(iv) When a statement submittedunder paragraph (b)(2) or (3) of this sec-tion indicates a conflict between theinterests of an employee and the per-formance of his services for the Gov-ernment and when the conflict or ap-pearance of conflict cannot be resolvedby the Deputy Chairman (or by bothDeputy Chairmen in the case of jointemployees), he shall report the infor-mation concerning the conflict or ap-pearance of conflict to the Chairmanthrough the General Counsel. In thecase of joint employees, informationconcerning the conflict or appearanceof conflict shall be reported to bothChairmen. The employee concernedshall be given an opportunity to ex-plain the conflict or appearance of con-flict before remedial action is initi-ated.

(b) Special Government employees. (1)Each special Government employeeshall submit a statement of employ-ment, and, unless otherwise directed, astatement of financial interests notlater than the time of his employment.It is necessary that the special Govern-ment employee report all Federal andnon-Federal employment, and, when astatement of financial interests is re-quired, those financial interests whichrelate, either directly, or indirectly, tohis Foundation responsibilities or du-ties.

(2) Each special Government em-ployee must file a supplementarystatement of employment and financialinterests whenever a significant changeoccurs, either in his employment or fi-nancial interests, in order that hisstatement may be kept current.

(3) The provisions of paragraphs (a)(5) through (9) of this section apply to

special Government employees in thesame manner as to other employees.

(Sec. 10, 79 Stat. 852, as amended at 82 Stat.186, 84 Stat. 443 (20 U.S.C. 959))

[32 FR 17663, Dec. 12, 1967, as amended at 38FR 3512, Feb. 7, 1973]

§ 1105.735–7 Employee conduct.(a) General. (1) Each Endowment as-

sumes that an employee will conducthimself in a manner that will not dis-credit or embarrass himself or the En-dowment. However, it is pointed outthat the violation of the regulations inthis part, or any criminal, infamous,dishonest, immoral, or notoriously dis-graceful conduct on the part of an em-ployee (whether in official duty statusor not), is cause for immediate discipli-nary action, up to and including re-moval.

(2) Employees shall avoid any action,whether or not specifically prohibited,which might result in or create the ap-pearance of:

(i) Using public office for privategain;

(ii) Giving preferential treatment toany person;

(iii) Impeding Government efficiencyor economy;

(iv) Losing complete independence orimpartiality;

(v) Making a Government decisionoutside official channels; or

(vi) Affecting adversely the con-fidence of the public in the integrity ofthe Government.

(b) Indebtedness. Employees are ex-pected to meet their just financial obli-gations and not to take advantage ofthe fact that their wages are not sub-ject to garnishment for private debts.Failure to meet just financial obliga-tions in a proper and timely mannermay result in disciplinary action, upto, and including, removal. For thepurpose of this section, a ‘‘just finan-cial obligation’’ means one acknowl-edged by the employee or reduced tojudgment by a court, and ‘‘in a properand timely manner’’ means in a man-ner which the agency determines doesnot, under the circumstances, reflectadversely on the Government as hisemployer. In the event of dispute be-tween an employee and an alleged cred-itor, this section does not require theEndowment concerned to determine


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the validity or amount of the disputeddebt.

(c) Payment of taxes. Employees areexpected to meet their obligations forpayment of taxes to Federal, State,and local authorities. Delinquency inpayment of Federal, State, and localtaxes is cause for disciplinary action,up to, and including, removal. Federalagencies are required to furnish Statetaxing authorities (including the Dis-trict of Columbia) with a copy of FormW–2 indicating annual earnings andFederal income tax withheld. Employ-ees are authorized to pay delinquentFederal taxes by payroll deduction:Provided, That they make satisfactoryarrangements with the Internal Reve-nue Service to liquidate their tax li-abilities in this manner. When such ar-rangements are not made, District Di-rectors of Internal Revenue have theauthority to levy upon the salaries ofFederal employees for the full amountof delinquent Federal income tax.

(d) Financial interests. Any employeemay hold financial interests and en-gage in financial transactions in thesame way as any private citizen, pro-vided that such interests or activitiesare not prohibited by law, Executiveorder, or the regulations in this part.In particular, no employee may haveany direct or indirect financial interestthat conflicts substantially or appearsto conflict substantially with his du-ties and responsibilities as an Endow-ment employee. No employee shallcarry out Endowment duties involvingany organization in which he has a di-rect or indirect financial interest. Noemployee shall engage directly or indi-rectly in any financial transaction re-sulting from, or primarily relying on,information obtained through his em-ployment, or use his employment tocoerce, or give the appearance of coerc-ing, a person, to provide financial bene-fit to himself or another.

(e) Participation in Endowment grantsby former Endowment employees. In casesnot directly coming under the prohibi-tions of 18 U.S.C. 207 (relating to ac-tivities of former Government offi-cials), the following rules shall apply:

(1) In addition to the statutory barsagainst ever dealing with the U.S. Gov-ernment in connection with a particu-lar matter in which he participated

personally and substantially while anemployee, and against dealing with theGovernment for 1 year after leaving inconnection with a matter under his of-ficial responsibility while in the Gov-ernment, a former regular employee ofan Endowment may not negotiate witheither Endowment, with a view to ob-taining support for himself or his orga-nization within 1 year after having leftthe Endowment, except with the writ-ten permission of the Chairman of theEndowment in which he had been em-ployed.

(2) A former regular employee of anEndowment may not be compensatedfrom an Endowment grant directly orindirectly within 1 year of his leavingthe Endowment, except with the writ-ten permission of the Chairman of theEndowment in which he had been em-ployed.

(3) In the case of joint employees, thewritten permission referred to in para-graphs (e)(1) and (2) of this sectionmust be given by both Chairmen.

(f) Gifts, entertainment, and favors.Employees may not solicit, or acceptdirectly or indirectly from any person,institution, corporation, or group, any-thing of economic value as a gift, gra-tuity, favor, entertainment, or loan,which might be reasonably interpretedby others as being of such a naturethat it would affect his impartiality.This is especially applicable in thoseinstances where the employee has rea-son to believe that the person, institu-tion, corporation, or group:

(1) Has, is seeking, or is likely toseek, assistance, support, or funds froman Endowment; or

(2) Conducts operations or activitieswhich are involved with, or are sup-ported by, an Endowment; or

(3) Has interests which might be sub-stantially affected by the employee’sperformance or nonperformance of du-ties; or

(4) May be attempting to affect theemployee’s official actions.

(i) An employee shall not solicit acontribution from another employeefor a gift to an official superior, makea donation as a gift to an official supe-rior, or accept a gift from an employeereceiving less pay than himself (5U.S.C. 7351). However, this paragraphdoes not prohibit a voluntary gift of


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nominal value or donation in a nomi-nal amount made on a special occasionsuch as marriage, illness, or retire-ment.

(ii) Employees are not permitted toaccept a gift, or decoration, or otherobjects from a foreign government un-less authorized by Congress as providedby the Constitution and in 5 U.S.C.7342.

(iii) Employees may accept pro-motional material of nominal intrinsicvalue such as pens, pencils, note pads,calendars, etc. Employees may, on in-frequent occasions, accept items ofnominal value such as food in the ordi-nary course of a luncheon or dinnermeeting, site visit, or professional con-ference, when the employee is properlyin attendance.

(iv) Neither this paragraph nor para-graph (g) of this section precludes anemployee from receipt of bona fide re-imbursement, unless prohibited by law,for expenses of travel and such othernecessary subsistence as is compatiblewith this part for which no Govern-ment payment or reimbursement ismade. However, this paragraph doesnot allow an employee to be reim-bursed, or payment to be made on hisbehalf, for excessive personal living ex-penses, gifts, entertainment or otherpersonal benefits, nor does it allow anemployee to be reimbursed by a personfor travel on official business underagency orders when reimbursement isproscribed by Decision B–128527 of theComptroller General dated March 7,1967.

(g) Outside employment and other activ-ity. (1) Employees shall not engage inany outside employment or other out-side activity not compatible with thefull and proper discharge of their du-ties and responsibilities. Incompatibleactivities include, but are not limitedto, acceptance of anything of monetaryvalue which may result in or create theappearance of a conflict of interest.

(2) Employees shall not engage inoutside employment which tends to im-pair their health or capacity to dis-charge acceptably their duties and re-sponsibilities.

(3) Regular employees shall not re-ceive anything of value from a privatesource as compensation for their ac-tivities as endowment employees.

(4) Employees shall not engage inteaching, lecturing, or writing which isdependent on official information ob-tained as a result of Government em-ployment, except when the informationhas been, or is being made available tothe general public, or will be madeavailable to the public on request, orwhen the Chairman or Deputy Chair-man of the Endowment concerned giveswritten authorization for the use ofnonpublic information on the basisthat the use is in the public interest.However, employees are encouraged toengage in teaching, lecturing, and writ-ing not prohibited by the regulationsin this part, by law, or by Executiveorder.

(5) Employees shall not receive any-thing of monetary value for any con-sulting, lecturing, discussion, writing,or presentation, the subject of which isdevoted to the responsibilities, pro-grams, or operations of an Endowment,or which draws on official data or ideaswhich have not become part of thebody of public information.

(6) Employees shall not serve as orga-nizers or directors of conferences, col-loquia or similar events supported bygrant or contract from an Endowment,but may otherwise participate in suchevents provided they do not receiveany compensation or economic benefitfor such participation.

(7) Employees may, however, partici-pate in the affairs of, and accept anaward for meritorious public contribu-tion or achievement given by a chari-table, religious, fraternal, educational,recreational, public service, or civic or-ganization.

(h) Advice or assistance to nonprofit orcommercial organizations. The condi-tions under which full-time employeesmay offer assistance or advice to non-profit or commercial organizations areset forth in this paragraph (h). Al-though these conditions are stated asgeneral rules, illustrative applicationsto specific situations are set forth asan aid to interpretation:

(1) General rules. While not on officialduty, an employee may provide adviceor assistance and receive compensationtherefor, to either nonprofit or com-mercial organizations: Provided, Thatsuch services are unrelated to his Gov-ernment activities and do not draw


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upon information deriving from Gov-ernment sources not publicly available.

(2) Specific examples—(i) Visiting com-mittees. Employees should not partici-pate in the deliberations of a college oruniversity visiting committee; how-ever, an employee may meet with suchgroups as an Endowment official whereit would be appropriate to attend asimilar meeting with any other com-parable group requesting his assist-ance.

(ii) [Reserved](iii) Membership and office holding in

professional societies. An employee maybe a member of a professional society,but may not serve as an officer exceptwhere the society has not received anysupport from an Endowment during thepreceding three years and the employeehas no reason to expect it to seek sup-port during the tenure of his office. Ifthe society later requests support froman Endowment, the employee shouldresign his office in the society or re-quest permission to remain in such of-fice.

(i) Misuse of information. For the pur-pose of furthering a private interest,employees shall not (except as providedin paragraph (g)(4) of this section) di-rectly or indirectly use, or allow theuse of, official information obtainedthrough, or in connection with, hisGovernment employment which hasnot been made available to the generalpublic.

(j) Compensation from endowmentawarded funds. No regular employeemay receive any compensation, eitherdirectly or indirectly, from fundsawarded to contractors or grantees byeither endowment.

(k) Use of Federal property. No em-ployee may use Federal property or fa-cilities of any kind for other than offi-cially approved activities. Every em-ployee has the responsibility to protectand conserve all Federal propertywhich has been entrusted to him.

(l) Exercise of notary powers. Employ-ees who are notaries public may notcharge or receive any compensation forperforming any notarial act duringworking hours, including the luncheonperiod.

(m) Political activity. Restrictions inthis section are applicable to employ-ees on leave, leave without pay, or fur-

lough, as well as to other regular em-ployees. Individuals whose employmentis on an intermittent basis (not occu-pying a substantial portion of theirtime) are subject to the political ac-tivities restrictions only while they arein an active duty status. The period ofactive duty status for a particular em-ployee includes the entire 24–hour pe-riod of any day of actual employment.The ‘‘Federal Personnel Manual’’ maybe consulted in the Foundation Admin-istrative Office. If an employee is indoubt about permissible activities, heshould contact the Administrative Of-fice for clarification.

(1) Employees may not use their offi-cial positions or influence for the pur-pose of interfering with an election andthey may not take an active part in po-litical management or in political cam-paigns, except as provided in para-graphs (m) (4) and (5) of this section.

(2) No employee may discriminateagainst another employee because ofhis political opinions or affiliations.

(3) An employee may not become acandidate for nomination or election toa Federal, State, county, or municipaloffice on a partisan political ticket.Nor may an employee become a can-didate as an independent when opposedby a partisan political candidate, ex-cept as provided in paragraph (m)(4) ofthis section.

(4) Certain political subdivisions inthe vicinity of Washington, D.C., aswell as other municipalities, des-ignated by the Civil Service Commis-sion, have been granted a limited ex-ception to the rules prohibiting politi-cal management or candidacy for localoffice. In such municipalities, employ-ees may become candidates as inde-pendents, even when opposed by par-tisan political candidates.

(5) In general, employees are encour-aged to be candidates for, and to hold,State, county, or municipal offices of anonpartisan nature when permitted bylaw. Employees desiring to be can-didates for, or to hold, a State or localoffice or to undertake the politicalmanagement of a candidacy for suchoffice, must secure the approval of theappropriate Endowment Chairman or,in the case of members of the sharedstaff, of both Chairmen.


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(6) Full-time employees, with theprior consent of the Chairman con-cerned, or of both Chairmen, in thecase of members of the shared staff,may hold positions under a State orlocal government on a part-time basisonly. Intermittent employees may holdfull-time or part-time State or localgovernment positions. In both cases,the above restrictions on political ac-tivity must be observed.

(n) An employee shall not partici-pate, while on Government-owned orleased property or while on duty forthe Government, in any gambling ac-tivity, such as a lottery or the sale orpurchase of numbers, etc.

(Sec. 10, 79 Stat. 852, as amended 82 Stat. 186,84 Stat. 443 (20 U.S.C. 959))

[32 FR 17663, Dec. 12, 1967, as amended at 38FR 3512, Feb. 7, 1973]

§ 1105.735–8 Presenting grievances toCongress.

Nothing in this part shall be con-strued as abridging in any way theright of employees, either individuallyor collectively, to petition Congress, orany Member thereof, or to furnish in-formation, when appropriate, to eitherHouse of Congress, or to any commit-tee or member thereof.

APPENDIX TO PART 1105—RELATEDSTATUTORY PROVISIONS

The following is a list of statutes relatedto the conduct of Government employees andconsultants. Upon request, pertinent ex-cerpts of these statutes will be made avail-able by the Administrative Office of theFoundation.

1. House Concurrent Resolution 175, 85thCongress, 2d session, 72 Stat. B12, the ‘‘Codeof Ethics for Government Service.’’

2. Chapter 11 of title 18, United StatesCode, relating to bribery, graft, and conflictsof interest, as appropriate to the employeesconcerned.

3. The prohibition against lobbying withappropriated funds (18 U.S.C. 1913).

4. The prohibitions against disloyalty andstriking (5 U.S.C. 7311, 18 U.S.C. 1918).

5. The prohibition against the employmentof a member of a Communist organization (50U.S.C. 784).

6. The prohibitions against (1) the disclo-sure of classified information (18 U.S.C. 798,50 U.S.C. 783); and (2) the disclosure of con-fidential information (18 U.S.C. 1905).

7. The provision relating to the habitualuse of intoxicants to excess (5 U.S.C. 7352).

8. The prohibition against the misuse of aGovernment vehicle (31 U.S.C. 638a. (c)).

9. The prohibition against the misuse ofthe franking privilege (18 U.S.C. 1719).

10. The prohibition against the use of de-ceit in an examination or personnel action inconnection with Government employment(18 U.S.C. 1917).

11. The prohibition against fraud or falsestatements in a Government matter (18U.S.C. 1001).

12. The prohibition against mutilating ordestroying a public record (18 U.S.C. 2071).

13. The prohibition against counterfeitingand forging transportation requests (18U.S.C. 508).

14. The prohibitions against (1) embezzle-ment of Government money or property (18U.S.C. 641); (2) failing to account for publicmoney (18 U.S.C. 643); and (3) embezzlementof the money or property of another personin the possession of an employee by reason ofhis employment (18 U.S.C. 654).

15. The prohibition against unauthorizeduse of documents relating to claims from orby the Government (18 U.S.C. 285).

16. The prohibition against proscribed po-litical activities in Subchapter III of Chapter73 of title 5, United States Code and 18 U.S.C.602, 603, 607, and 608.

17. The prohibition against an employeeacting as the agent of a foreign principal reg-istered under the Foreign Agents Registra-tion Act (18 U.S.C. 219).

[32 FR 17663, Dec. 12, 1967, as amended at 33FR 494, Jan. 13, 1968]

PART 1110—NONDISCRIMINATIONIN FEDERALLY ASSISTED PRO-GRAMS

Sec.1110.1 Purpose.1110.2 Application of part.1110.3 Discrimination prohibited.1110.4 Assurances required.1110.5 Illustrative applications.1110.6 Compliance information.1110.7 Conduct of investigations.1110.8 Procedure for effecting compliance.1110.9 Hearings.1110.10 Decisions and notices.1110.11 Judicial review.1110.12 Effect on other regulations; forms

and instructions.1110.13 Definitions.

APPENDIX A TO PART 1110—FEDERAL FINAN-CIAL ASSISTANCE TO WHICH THIS PART AP-PLIES

AUTHORITY: Sec. 602, 78 Stat. 252 and sec.10(a)(1), 79 Stat. 852.

SOURCE: 38 FR 17991, July 5, 1973, unlessotherwise noted.


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§ 1110.1 Purpose.The purpose of this part is to effec-

tuate the provisions of title VI of theCivil Rights Act of 1964 (hereafter re-ferred to as the ‘‘Act’’) to the end thatno person in the United States shall,on the ground of race, color, or na-tional origin, be excluded from partici-pation in, be denied the benefits of, orbe otherwise subjected to discrimina-tion under any program or activity re-ceiving Federal financial assistancefrom the National Endowment for theArts or the National Endowment forthe Humanities.

§ 1110.2 Application of part.This part applies to any program for

which Federal financial assistance isauthorized under a law administered bythe National Endowment for the Artsor the National Endowment for the Hu-manities including the federally as-sisted programs and activities listed inAppendix A of this part. It applies tomoney paid, property transferred, orother Federal financial assistance ex-tended under any such program afterthe effective date of the part, includingassistance pursuant to an applicationapproved prior to such date. It also ap-plies to federal financial assistance ex-tended to any such program prior tothe effective date of this part under acontract or grant where the term ofthe contract or grant continues beyondsuch date or where the assistance wasto provide real or personal propertyand the recipient or his transferee con-tinues to use or retain ownership orpossession of the property (see§ 1110.4(a)(1)). This part does not applyto (a) any Federal financial assistanceby way of insurance or guaranty con-tract, (b) any assistance to any individ-ual who is the ultimate beneficiaryunder any such program, or (c) any em-ployment practice, under any such pro-gram, of any employer, employmentagency, or labor organization, exceptto the extent described in § 1110.3. Thefact that a program or activity is notlisted in Appendix A shall not mean, iftitle VI of the Act is otherwise applica-ble, that such program is not covered.Other programs under statutes now inforce or hereinafter enacted may beadded to this list by notice published inthe FEDERAL REGISTER.

§ 1110.3 Discrimination prohibited.

(a) General. No person in the UnitedStates shall, on grounds of race, color,or national origin be excluded fromparticipation in, be denied the benefitsof, or be otherwise subjected, to dis-crimination under any program towhich this part applies.

(b) Specific discriminatory actions pro-hibited. (1) A recipient under any pro-gram to which this part applies maynot directly or through contractual orother arrangements, on the ground ofrace, color, or national origin:

(i) Deny an individual any service, fi-nancial aid, or other benefit providedunder the program;

(ii) Provide any service, financial aid,or other benefit to an individual whichis different, or is provided in a differentmanner, from that provided to othersunder the program;

(iii) Subject an individual to segrega-tion or separate treatment in any mat-ter related to his receipt of any service,financial aid, or other benefit underthe program;

(iv) Restrict an individual in any wayin the enjoyment of any advantage orprivilege enjoyed by others receivingany service, financial aid, or other ben-efit under the program;

(v) Treat an individual differentlyfrom others in determining whether hesatisfies any admission, enrollment,quota, eligibility, membership, orother requirement or condition whichindividuals must meet in order to beprovided any service, financial aid, orother benefit provided under the pro-gram;

(vi) Deny an individual an oppor-tunity to participate in the programthrough the provision of services orotherwise or afford him an opportunityto do so which is different from that af-forded others under the program (in-cluding the opportunity to participatein the program as an employee butonly to the extent set forth in para-graph (c) of this section).

(2) A recipient, in determining thetypes of services, financial aid, or otherbenefits, or facilities which will be pro-vided under any such program, or theclass of individuals to whom, or the sit-uations in which, such services, finan-cial aid, other benefits, or facilities


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will be provided under any such pro-gram, or the class of individuals to beafforded an opportunity to participatein any such program, may not directlyor through contractual or other ar-rangements, utilize criteria or methodsof administration which have the effectof subjecting individuals to discrimina-tion because of their race, color, or na-tional origin, or have the effect of de-feating or substantially impairing ac-complishment of the objectives of theprogram as respects individuals of aparticular race, color, or national ori-gin.

(3) In determining the site or loca-tion of facilities, a recipient or appli-cant may not make selections with thepurpose or effect of excluding individ-uals from, denying them the benefitsof, or subjecting them to discrimina-tion under any program to which thisregulation applies, on the grounds ofrace, color, or national origin; or withthe purpose or effect of defeating orsubstantially impairing the accom-plishment of the objectives of the Actor this regulation.

(4) As used in this section, the serv-ices, financial aid, or other benefitsprovided under a program receivingFederal financial assistance shall bedeemed to include any service, finan-cial aid, or other benefit provided in orthrough a facility provided with theaid of Federal financial assistance.

(5) The enumeration of specific formsof prohibited discrimination in thisparagraph and paragraph (c) of thissection does not limit the generality ofthe prohibition in paragraph (a) of thissection.

(6) This regulation does not prohibitthe consideration of race, color, or na-tional origin if the purpose and effectare to remove or overcome the con-sequences of practices or impedimentswhich have restricted the availabilityof, or participation in, the program oractivity receiving Federal financial as-sistance, on the grounds of race, color,or national origin. Where previous dis-criminatory practice or usage tends, onthe grounds of race, color, or nationalorigin, to exclude individuals from par-ticipation in, to deny them the benefitsof, or to subject them to discrimina-tion under any program or activity towhich this regulation applies the appli-

cant or recipient has an obligation totake reasonable action to remove orovercome the consequences of the priordiscriminatory practice or usage, andto accomplish the purposes of the Act.

(c) Employment practices. (1) Where aprimary objective of the Federal finan-cial assistance to a program to whichthis part applies is to provide employ-ment, a recipient may not directly orthrough contractual or other arrange-ments subject an individual to dis-crimination on the ground of race,color, or national origin in its employ-ment practices under such program (in-cluding recruitment or recruitment ad-vertising employment, layoff or termi-nation, upgrading, demotion, or trans-fer, rates of pay or other forms of com-pensation and use of facilities), includ-ing programs where a primary objec-tive of the Federal financial assistanceis (i) to assist such individuals throughemployment to meet expenses incidentto the commencement or continuationof their education or training or (ii) toprovide work experience which contrib-utes to the education or training ofsuch individuals or (iii) to reduce theunemployment of such individuals orto help them through employment tomeet subsistence needs.

(2) The requirements applicable toconstruction employment under anysuch program shall be those specifiedin or pursuant to Executive Order 11246or any executive order which super-sedes it.

(3) Where a primary objective of theFederal financial assistance is not toprovide employment, but discrimina-tion on the grounds of race, color, ornational origin in the employmentpractices of the recipient or other per-sons subject to the regulation tends, onthe grounds of race, color, or nationalorigin, to exclude individuals from par-ticipation in, to deny them the benefitsof, or to subject them to discrimina-tion under any program to which thisregulation applies, the provisions ofthe foregoing subparagraph of thisparagraph (c) shall apply to the em-ployment practices of the recipient orother persons subject to the regulation,to the extent necessary to assureequality of opportunity to and non-discriminatory treatment of, bene-ficiaries.


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(d) Medical emergencies. Notwith-standing the foregoing provisions ofthis section, a recipient of Federal fi-nancial assistance shall not be deemedto have failed to comply with para-graph (a) of this section if immediateprovision of a service or other benefitto an individual is necessary to preventhis death or serious impairment of hishealth and such service or other bene-fit cannot be provided except by orthrough a medical institution whichrefuses or fails to comply with para-graph (a) of this section.

§ 1110.4 Assurances required.(a) General. (1) Every application for

Federal financial assistance to carryout a program to which this part ap-plies, and every application for Federalfinancial assistance to provide a facil-ity shall, as a condition to its approvaland the extension of any Federal finan-cial assistance pursuant to the applica-tion, contain or be accompanied by anassurance that the program will beconducted or the facility operated incompliance with all requirements im-posed by or pursuant to this part. Inthe case where the Federal financialassistance is to provide or is in theform of personal property, or real prop-erty or interest therein or structuresthereon, the assurance shall obligatethe recipient, or, in the case of a subse-quent transfer, the transferee, for theperiod during which the property isused for a purpose for which the Fed-eral financial assistance is extended orfor another purpose involving the pro-vision of similar services and benefits,or for as long as the recipient retainsownership or possession of the prop-erty, whichever is longer; and anyother type or form of assistance, theassurances shall be in effect for the du-ration of the period during which Fed-eral financial assistance is extended tothe program. The responsible Endow-ment official shall specify the form ofthe foregoing assurances for each pro-gram and the extent to which like as-surances will be required of sub-grantees, contractors and subcontrac-tors, successors in interest, and otherparticipants in the program. Any suchassurance shall include provisionswhich give the United States a right toseek its judicial enforcement.

(2) In the case of real property, struc-tures or improvements thereon, or in-terests therein, which was acquiredthrough a program of Federal financialassistance, or in the case where Fed-eral financial assistance is provided inthe form of a transfer of real propertyor interest therein from the FederalGovernment, the instrument effectingor recording the transfer, shall containa covenant running with the land as-suring nondiscrimination for the periodduring which the real property is usedfor a purpose for which the Federal fi-nancial assistance is extended or foranother purpose involving the provi-sion of similar services or benefits.Where no transfer of property is in-volved, but property is improved undera program of Federal financial assist-ance, the recipients shall agree to in-clude such a covenant in any subse-quent transfer of such property. Wherethe property is obtained from the Fed-eral Government, such covenant mayalso include a condition coupled with aright to be reserved by the Endowmentto revert title to the property in theevent of a breach of the covenantwhere, in the discretion of the respon-sible Endowment official, such a condi-tion and right of reverter is appro-priate to the program under which thereal property is obtained and to the na-ture of the grant and the grantee. Inthe event a transferee of real propertyproposes to mortgage or otherwise en-cumber the real property as securityfor financing construction of new, orimprovement of existing, facilities onsuch property for the purposes forwhich the property was transferred,the Chairman of the Endowment con-cerned may agree, upon request of thetransferee and if necessary to accom-plish such financing, and upon suchconditions as he deems appropriate, toforebear the exercise of such right torevert title for so long as the lien ofsuch mortgage or other encumbranceremains effective.

(3) Transfers of surplus property aresubject to regulations issued by theAdministrator of the General ServicesAdministration. (41 CFR 101–6.2)

(b) Continuing State programs. Everyapplication by a State or a State agen-cy to carry out a program involvingcontinuing Federal financial assistance


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to which this part applies shall as acondition to its approval and the ex-tension of any Federal financial assist-ance pursuant to the application (1)contain or be accompanied by a state-ment that the program is (or, in thecase of a new program, will be) con-ducted in compliance with all require-ments imposed by or pursuant to thispart, and (2) provide or be accompaniedby provision for such methods of ad-ministration for the program as arefound by the responsible Endowmentofficial to give reasonable assurancethat the applicant and all recipients ofFederal financial assistance under suchprogram will comply with all require-ments imposed by or pursuant to thispart.

(c) Elementary and secondary schools.The requirements of paragraph (a) ofthis section with respect to any ele-mentary or secondary school or schoolsystem shall be deemed to be satisfiedif such school or school system (1) issubject to a final order of a court of theUnited States for the desegregation ofsuch school or school system, and pro-vides an assurance that it will complywith such order, including any futuremodification of such order, or (2) sub-mits a plan for the desegregation ofsuch school or school system which theresponsible official of the Departmentof Health, Education, and Welfare de-termines is adequate to accomplish thepurposes of the Act and this part with-in the earliest practicable time andprovides reasonable assurance that itwill carry out such plan. In any case ofcontinuing Federal financial assist-ance, the responsible official of the De-partment of Health, Education, andWelfare may reserve the right to rede-termine, after such period as may bespecified by him, the adequacy of theplan to accomplish the purposes of theAct and this part. In any case in whicha final order of a court of the UnitedStates for the desegregation of suchschool or school system is entered aftersubmission of such a plan, such planshall be revised to conform to suchfinal order, including any future modi-fication of such order.

(d) Assurances from institutions. (1) Inthe case of any application for Federalfinancial assistance to an institution ofhigher education (including assistance

for construction, for research, for aspecial training project, or for anyother purpose), the assurance requiredby this section shall extend to admis-sion practices and to all other prac-tices relating to the treatment of stu-dents.

(2) The assurance required with re-spect to an institution of higher edu-cation or any other institution, insofaras the assurance relates to the institu-tion’s practices with respect to admis-sion or other treatment of individualsas students, or clients of the institu-tion or to the opportunity to partici-pate in the provision of services orother benefits to such individuals, shallbe applicable to the entire institutionunless the applicant establishes, to thesatisfaction of the responsible Endow-ment official, that the institution’spractices in designated parts or pro-grams of the institution will in no wayaffect its practices in the program ofthe institution for which Federal finan-cial assistance is sought, or the bene-ficiaries of or participants in, such pro-gram. If in any such case the assist-ance sought is for the construction of afacility or part of a facility, the assur-ance shall in any event extend to theentire facility and to facilities oper-ated in connection therewith.

§ 1110.5 Illustrative applications.

The following examples will illus-trate the application of the foregoingprovisions to some of the activities forwhich Federal financial assistance isprovided by the Endowments. (In allcases the discrimination prohibited isdiscrimination on the ground of race,color, or national origin prohibited bytitle VI of the Act and this part, as acondition of the receipt of Federal fi-nancial assistance.)

(a) In a research, training, or othergrant to a university for activities tobe conducted in a graduate school, dis-crimination in the admission andtreatment of students in the graduateschool is prohibited, and the prohibi-tion extends to the entire university,unless it satisfies the responsible En-dowment official that practices withrespect to other parts or programs ofthe university will not interfere, di-rectly or indirectly, with fulfillment of


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the assurance required with respect tothe graduate school.

(b) In cases of Federal financial as-sistance to elementary or secondaryschools, discrimination by the recipi-ent school district in any of its elemen-tary or secondary schools, or by the re-cipient private institution, in the ad-mission of students, or in the treat-ment of its students in any aspect ofthe educational process, is prohibited.In this and the following illustrationthe prohibition of discrimination in thetreatment of students or other traineesincludes the prohibition of discrimina-tion among the students or trainees inthe availability or use of any aca-demic, dormitory, eating, recreational,or other facilities of the grantee orother recipient.

(c) In a training grant to a nonaca-demic institution, discrimination isprohibited in the selection of individ-uals to be trained and in their treat-ment by the grantee during their train-ing. In a research or demonstrationgrant to such an institution, discrimi-nation is prohibited with respect toany educational activity, any provisionof medical or other services and any fi-nancial aid to individuals incident tothe program.

(d) Where Federal financial assist-ance is provided to assist in the presen-tation of artistic and cultural produc-tions to the public, assurances will berequired that such productions will notbe presented before any audience whichhas been selected on a discriminatorybasis.

(e) A recipient may not take actionthat is calculated to bring about indi-rectly what this part forbids it to ac-complish directly. Thus, a State, in se-lecting projects to be supportedthrough a State agency, may not baseits selections on criteria which havethe effect of defeating or substantiallyimpairing accomplishment of the ob-jectives of the Federal financial assist-ance as respects individuals of a par-ticular race, color, or national origin.

(f) In some situations even thoughpast discriminatory practices havebeen abandoned, the consequences ofsuch practices continue to impede thefull availability of a benefit. If the ef-forts required of the applicant or recip-ient under § 1110.6(d) to provide infor-

mation as to the availability of theprogram or activity, and the rights ofbeneficiaries under this regulation,have failed to overcome these con-sequences, it will become necessary forsuch applicant or recipient to take ad-ditional steps to make the benefitsfully available to racial and national-ity groups previously subjected to dis-crimination. This action might takethe form, for example of special ar-rangements for obtaining referrals ormaking selections which will insurethat groups previously subjected to dis-crimination are adequately served.

(g) Even though an applicant or re-cipient has never used discriminatorypolicies, the services and benefits ofthe program or activity it administersmay not in fact be equally available tosome racial or nationality groups. Insuch circumstances an applicant or re-cipient may properly give special con-sideration to race, color, or nationalorigin to make the benefits of its pro-gram more widely available to suchgroups, not then being adequatelyserved. For example, where a univer-sity is not adequately serving membersof a particular racial or nationalitygroup, it may establish special recruit-ment policies to make its program bet-ter known and more readily availableto such group, and take other steps toprovide that group with more adequateservice.

§ 1110.6 Compliance information.(a) Cooperation and assistance. The re-

sponsible Endowment official shall, tothe fullest extent practicable, seek thecooperation of recipients in obtainingcompliance with this part and shallprovide assistance and guidance to re-cipients to help them comply volun-tarily with this part.

(b) Compliance reports. Each recipientshall keep such records and submit tothe responsible Endowment officialtimely, complete and accurate compli-ance reports at such times, and in suchform and containing such information,as the responsible Endowment officialmay determine to be necessary to en-able him to ascertain whether the re-cipient has complied or is complyingwith this part. In the case of any pro-gram under which a primary recipientextends Federal financial assistance to


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any other recipient, such other recipi-ent shall also submit such compliancereports to the primary recipient asmay be necessary to enable the pri-mary recipient to carry out its obliga-tions under this part.

(c) Access to sources of information.Each recipient shall permit access bythe responsible Endowment official orhis designee during normal businesshours to such of its books, records, ac-counts, and other sources of informa-tion, and its facilities as may be perti-nent to ascertain compliance with thispart. Where any information requiredof a recipient is in the exclusive posses-sion of any other agency, institution orperson and this agency, institution orperson shall fail or refuse to furnishthis information, the recipient shall socertify in its report and shall set forthwhat efforts it has made to obtain theinformation.

(d) Information to beneficiaries andparticipants. Each recipient shall makeavailable to participants, beneficiaries,and other interested persons such in-formation regarding the provisions ofthis part and its applicability to theprogram under which the recipient re-ceives Federal financial assistance, andmake such information available tothem in such manner, as the respon-sible Endowment official finds nec-essary to apprise such persons of theprotections against discrimination as-sured them by the Act and this part.

§ 1110.7 Conduct of investigations.(a) Periodic compliance reviews. The re-

sponsible Endowment official shallfrom time to time review the practicesof recipients to determine whetherthey are complying with this part.

(b) Complaints. Any person who be-lieves himself or any specific class ofindividuals to be subjected to discrimi-nation prohibited by this part may byhimself or by a representative file withthe responsible Endowment official awritten complaint. A complaint mustbe filed not later than ninety daysfrom the date of the alleged discrimi-nation, unless the time for filing is ex-tended by the responsible Endowmentofficial.

(c) Investigations. The responsible En-dowment official will make a promptinvestigation whenever a compliance

review, report, complaint, or any otherinformation indicates a possible failureto comply with this part. The inves-tigation should include, where appro-priate, a review of the pertinent prac-tices and policies of the recipient, thecircumstances under which the possiblenoncompliance with this part occurred,and other factors relevant to a deter-mination as to whether the recipienthas failed to comply with this part.

(d) Resolution of matters. (1) If an in-vestigation pursuant to paragraph (c)of this section indicates a failure tocomply with this part, the responsibleEndowment official will so inform therecipient and the matter will be re-solved by informal means wheneverpossible. If it has been determined thatthe matter cannot be resolved by infor-mal means, action will be taken as pro-vided for in § 1110.8.

(2) If an investigation does not war-rant action pursuant to paragraph(d)(1) of this section, the responsibleEndowment official will so inform therecipient and the complainant, if any,in writing.

(e) Intimidatory or retaliatory acts pro-hibited. No recipient or other personshall intimidate, threaten, coerce, ordiscriminate against any individual forthe purpose of interfering with anyright or privilege secured by section 601of the Act or this part, or because hehas made a complaint, testified, as-sisted, or participated in any mannerin an investigation, proceeding, orhearing under this part. The identity ofcomplainants shall be kept confiden-tial except to the extent necessary tocarry out the purposes of this part, in-cluding the conduct of any investiga-tion, hearing, or judicial proceedingarising thereunder.

§ 1110.8 Procedure for effecting com-pliance.

(a) General. If there appears to be afailure or threatened failure to complywith this part, and if the noncompli-ance or threatened noncompliance can-not be corrected by informal means,compliance with this part may be ef-fected by the suspension or termi-nation of or refusal to grant or to con-tinue Federal financial assistance or byany other means authorized by law.Such other means may include, but are


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not limited to, (1) a reference to theDepartment of Justice with a rec-ommendation that appropriate pro-ceedings be brought to enforce anyrights of the United States under anylaw of the United States (includingother titles of the Act), or any assur-ance or other contractual undertaking,and (2) any applicable proceeding underState or local law.

(b) Noncompliance with § 1110.4. If anapplicant fails or refuses to furnish anassurance required under § 1110.4 orotherwise fails to comply with thatsection, Federal financial assistancemay be refused in accordance with theprocedures of paragraph (c) of this sec-tion. The Endowment concerned shallnot be required to provide assistance insuch a case during the pendency of theadministrative proceedings under suchparagraph, except that such Endow-ment shall continue assistance duringthe pendency of such proceedingswhere such assistance is due and pay-able pursuant to an application there-for approved prior to the effective dateof this part.

(c) Termination of or refusal to grant orto continue Federal financial assistance.No order suspending, terminating, orrefusing to grant or continue Federalfinancial assistance shall become effec-tive until (1) the responsible Endow-ment official has advised the applicantor recipient of his failure to complyand has determined that compliancecannot be secured by voluntary means,(2) there has been an express finding onthe record, after opportunity for hear-ings, of a failure by the applicant or re-cipient to comply with a requirementimposed by or pursuant to this part, (3)the action has been approved by theChairman of the Endowment con-cerned, and (4) the expiration of 30 daysafter the Chairman has filed with theCommittee of the House and the Com-mittee of the Senate having legislativejurisdiction over the program involved,a full written report of the cir-cumstances and the grounds for suchaction. Any action to suspend or termi-nate or to refuse to grant or to con-tinue Federal financial assistance shallbe limited to the particular politicalentity, or part thereof, or other appli-cant or recipient as to whom such afinding has been made and shall be lim-

ited in its effect to the particular pro-gram, or part thereof, in which suchnoncompliance has been so found.

(d) Other means authorized by law. Noaction to effect compliance by anyother means authorized by law shall betaken until (1) the responsible Endow-ment official has determined that com-pliance cannot be secured by voluntarymeans, (2) the recipient or other personhas been notified of its failure to com-ply and of the action to be taken to ef-fect compliance, and (3) the expirationof at least 10 days from the mailing ofsuch notice to the recipient or otherperson. During this period of at least 10days, additional efforts shall be madeto persuade the recipient or other per-son to comply with this part and totake such corrective action as may beappropriate.

§ 1110.9 Hearings.(a) Opportunity for hearing. Whenever

an opportunity for a hearing is re-quired by § 1110.8(c), reasonable noticeshall be given by registered or certifiedmail, return receipt requested, to theaffected applicant or recipient. Thisnotice shall advise the applicant or re-cipient of the action proposed to betaken, the specific provision underwhich the proposed action against it isto be taken, and the matters of fact orlaw asserted as the basis for this ac-tion, and either:

(1) Fix a date not less than 20 daysafter the date of such notice withinwhich the applicant or recipient mayrequest of the responsible Endowmentofficial that the matter be scheduledfor hearing or

(2) Advise the applicant or recipientthat the matter in question has beenset down for hearing at a stated placeand time. The time and place so fixedshall be reasonable and shall be subjectto change for cause. The complainant,if any, shall be advised of the time andplace of the hearing. An applicant orrecipient may waive a hearing and sub-mit written information and argumentfor the record. The failure of an appli-cant or recipient to request a hearingunder this paragraph or to appear at ahearing for which a date has been setshall be deemed to be a waiver of theright of a hearing under section 602 ofthe Act and § 1110.8(c) of this part and


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consent to the making of a decision onthe basis of such information as isavailable.

(b) Time and place of hearing. Hear-ings shall be held at the offices of theEndowment concerned in Washington,DC, at a time fixed by the responsibleEndowment official unless he deter-mines that the convenience of the ap-plicant or recipient or of the Endow-ment requires that another place be se-lected. Hearings shall be held beforethe responsible Endowment official or,at his discretion, before a hearing ex-aminer designated in accordance withsection 11 of the Administrative Proce-dure Act.

(c) Right to counsel. In all proceedingsunder this section, the applicant or re-cipient and the Endowment shall havethe right to be represented by counsel.

(d) Procedures, evidence, and record. (1)The hearing, decision, and any admin-istrative review thereof shall be con-ducted in conformity with 5 U.S.C. 554–557 (sections 5–8 of the AdministrativeProcedure Act), and in accordance withsuch rules of procedure as are proper(and not inconsistent with this section)relating to the conduct of the hearing,giving of notices subsequent to thoseprovided for in paragraph (a) of thissection, taking of testimony, exhibits,arguments and briefs, requests for find-ings, and other related matters. Boththe Endowment and the applicant orrecipient shall be entitled to introduceall relevant evidence on the issues asstated in the notice for hearing or asdetermined by the officer conductingthe hearing at the outset of or duringthe hearing.

(2) Technical rules of evidence shallnot apply to hearings conducted pursu-ant to this part, but rules or principlesdesigned to assure production of themost credible evidence available and tosubject testimony to test by cross-ex-amination shall be applied where rea-sonably necessary by the officer con-ducting the hearing. The hearing offi-cer may exclude irrelevant, immate-rial, or unduly repetitious evidence. Alldocuments and other evidence enteredor taken for the record shall be open toexamination by the parties and oppor-tunity shall be given to refute factsand arguments advanced on either sideof the issues. A transcript shall be

made of the oral evidence except to theextent the substance thereof is stipu-lated for the record. All decisions shallbe based upon the hearing record andwritten findings shall be made.

(e) Consolidated or joint hearings. Incases in which the same or relatedfacts are asserted to constitute non-compliance with this Regulation withrespect to two or more programs towhich this part applies, or noncompli-ance with this part and the regulationsof one or more other Federal depart-ments or agencies issued under title VIof the Act, the Chairman of the Endow-ment concerned may, by agreementwith such other departments or agen-cies where applicable, provide for theconduct of consolidated or joint hear-ings and for the application to suchhearings of rules or procedures not in-consistent with this part. Final deci-sions in such cases, insofar as this reg-ulation is concerned, shall be made inaccordance with § 1110.10.

§ 1110.10 Decisions and notices.

(a) Decision by person other than theresponsible Endowment official. If thehearing is held by a hearing examinersuch hearing examiner shall eithermake an initial decision, if so author-ized, or certify the entire record in-cluding his recommended findings andproposed decision to the responsibleEndowment official for a final decision,and a copy of such initial decision orcertification shall be mailed to the ap-plicant or recipient. Where the initialdecision is made by the hearing exam-iner the applicant or recipient maywithin 30 days of the mailing of suchnotice of initial decision file with theresponsible Endowment official his ex-ceptions to the initial decision, withhis reasons therefor. In the absence ofexceptions, the responsible Endowmentofficial may on his own motion within45 days after the initial decision serveon the applicant or recipient a noticethat he will review the decision. Uponthe filing of such exceptions or of suchnotice of review the responsible Endow-ment official shall review the initialdecision and issue his own decisionthereon including the reasons therefor.In the absence of either exceptions or anotice of review the initial decision


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shall constitute the final decision ofthe responsible Endowment official.

(b) Decisions on record or review by theresponsible Endowment official. When-ever a record is certified to the respon-sible Endowment official for decisionor he reviews the decision of a hearingexaminer pursuant to paragraph (a) ofthis section, or whenever the respon-sible Endowment official conducts thehearing, the applicant or recipientshall be given reasonable opportunityto file with him briefs or other writtenstatements of its contentions, and acopy of the final decision of the respon-sible Endowment official shall be givenin writing to the applicant or recipientand to the complainant if any.

(c) Decisions on record where a hearingis waived. Whenever a hearing is waivedpursuant to § 1110.9(a) a decision shallbe made by the responsible Endowmentofficial on the record and a copy ofsuch decision shall be given in writingto the applicant or recipient, and tothe complainant, if any.

(d) Rulings required. Each decision ofa hearing officer or responsible Endow-ment official shall set forth his rulingon each finding, conclusion, or excep-tion presented, and shall identify therequirement or requirements imposedby or pursuant to this part with whichit is found that the applicant or recipi-ent has failed to comply.

(e) Approval by Chairman. Any finaldecision of a responsible Endowmentofficial (other than the Chairman)which provides for the suspension ortermination of, or the refusal to grantor continue Federal financial assist-ance, or the imposition of any othersanction available under this part orthe Act, shall promptly be transmittedto the Chairman, who may approvesuch decision, may vacate it, or remitor mitigate any sanction imposed.

(f) Content of orders. The final deci-sion may provide for suspension or ter-mination of, or refusal to grant or con-tinue Federal financial assistance, inwhole or in part, under the program in-volved, and may contain such terms,conditions, and other provisions as areconsistent with and will effectuate thepurposes of the Act and this part, in-cluding provisions designed to assurethat no Federal financial assistancewill thereafter be extended under such

program to the applicant or recipientdetermined by such decision to be indefault in its performance of an assur-ance given by it pursuant to this part,or to have otherwise failed to complywith this part, unless and until it cor-rects its noncompliance and satisfiesthe responsible Endowment officialthat it will fully comply with this part.

(g) Post termination proceedings. (1) Anapplicant or recipient adversely af-fected by an order issued under para-graph (f) of this section shall be re-stored to full eligibility to receive Fed-eral financial assistance if it satisfiesthe terms and conditions of that orderfor such eligibility or if it brings itselfinto compliance with this regulationand provides reasonable assurance thatit will fully comply with this regula-tion. (An elementary or secondaryschool or school system which is un-able to file an assurance of compliancewith § 1110.3 shall be restored to full eli-gibility to receive Federal financial as-sistance, if it files a court order or aplan for desegregation which meets therequirements of § 1110.4(c), and providesreasonable assurance that it will com-ply with this court order or plan.)

(2) Any applicant or recipient ad-versely affected by an order enteredpursuant to paragraph (f) of this sec-tion may at any time request the re-sponsible Endowment official to re-store fully its eligibility to receiveFederal financial assistance. Any suchrequest shall be supported by informa-tion showing that the applicant or re-cipient has met the requirements ofparagraph (g)(1) of this section. If theresponsible Endowment official deter-mines that those requirements havebeen satisfied, he shall restore such eli-gibility.

(3) If the responsible Endowment offi-cial denies any such request, the appli-cant or recipient may submit a requestfor a hearing in writing, specifying whyit believes such official to have been inerror. It shall thereupon be given anexpeditious hearing, with a decision onthe record, in accordance with rules ofprocedure issued by the responsible En-dowment official. The applicant or re-cipient will be restored to such eligi-bility if it proves at such a hearingthat it satisfied the requirements ofparagraph (g)(1) of this section. While


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proceedings under this paragraph arepending, the sanctions imposed by theorder issued under paragraph (f) of thissection shall remain in effect.

§ 1110.11 Judicial review.Action taken pursuant to section 602

of the Act is subject to judicial reviewas provided in section 603 of the Act.

§ 1110.12 Effect on other regulations;forms and instructions.

(a) Effects on other regulations. Noth-ing in this part shall be deemed to su-persede any of the following (includingfuture amendments thereof): (1) Execu-tive Orders 10925, 11114, and 11246, andregulations issued thereunder, or (2)Executive Order 11063 and regulationsissued thereunder or any other regula-tions or instructions insofar as suchorder, regulations, or instructions pro-hibit discrmination on the grounds ofrace, color, or national origin in anyprogram or situation to which this partis inapplicable, or prohibit discrimina-tion on any other ground.

(b) Forms and instructions. Each re-sponsible Endowment official shallissue and promptly make available tointerested persons forms and detailedinstructions and procedures for effec-tuating this part as applied to pro-grams to which this part applies andfor which he is responsible.

(c) Supervision and coordination. TheChairman of an Endowment may fromtime to time assign to other officials ofthe Endowment or to officials of otherdepartments or agencies of the Govern-ment, with the consent of such depart-ments or agencies, responsibilities inconnection with the effectuation of thepurposes of title VI of the Act and thispart, including the achievement of ef-fective coordination and maximumuniformity within the Endowment andwithin the executive branch of theGovernment in the application of titleVI and this part of similar programsand in similar situations. Any actiontaken, determination made, or require-ment imposed by an official of anotherdepartment or agency acting pursuantto an assignment of responsibilityunder this subsection shall have thesame effect as though such action hadbeen taken by the responsible officialof this agency.

§ 1110.13 Definitions.As used in this part:(a) The term Foundation means the

National Foundation for the Arts andthe Humanities, and includes the Na-tional Endowment for the Arts, the Na-tional Endowment for the Humanities,and each of their organizational units.

(b) The term Endowment means theNational Endowment for the Arts orthe National Endowment for the Hu-manities.

(c) The term Chairman means theChairman of the National Endowmentfor the Arts or the Chairman of the Na-tional Endowment for the Humanities.

(d) The term responsible Endowmentofficial with respect to any program re-ceiving Federal financial assistancemeans the Chairman of any Endow-ment or other Endowment official des-ignated by the Chairman.

(e) The term United States means theStates of the United States, the Dis-trict of Columbia, Puerto Rico, theVirgin Islands, American Samoa,Guam, Wake Island, the Canal Zone,and the territories and possessions ofthe United States, and the term Statemeans any one of the foregoing.

(f) The term Federal financial assist-ance includes (1) grants and loans ofFederal funds, (2) the grant or the do-nation of Federal property and inter-ests in property, (3) the detail of Fed-eral personnel, (4) the sale and lease of,and the permission to use (on otherthan a casual or transient basis), Fed-eral property or any interest in suchproperty without consideration or at anominal consideration, or at a consid-eration which is reduced for the pur-pose of assisting the recipient, or inrecognition of the public interest to beserved by such sale or lease to the re-cipient, and (5) any Federal agreement,arrangement, or other contract whichhas as one of its purposes the provisionof assistance.

(g) The term program includes anyprogram, project, or activity involvingthe provision of services, financial aid,or other benefits to individuals (includ-ing education or training, health, hous-ing, or other services, whether providedthrough employees of the recipient ofFederal financial assistance or pro-vided by others through contracts orother arrangements with the recipient,


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and including work opportunities andcash or loan or other assistance to in-dividuals), or for provision of facilitiesfor furnishing services, financial aid orother benefits to individuals. The serv-ice, financial aid, or other benefits pro-vided under a program receiving Fed-eral financial assistance shall bedeemed to include any services, finan-cial aid, or other benefits provided withthe aid of Federal financial assistanceor with the aid of any non-Federalfunds, property, or other resources re-quired to be expended or made avail-able for the program to meet matchingrequirements or other conditions whichmust be met in order to receive theFederal financial assistance, and to in-clude any services, financial aid, orother benefits provided in or through afacility provided with the aid of Fed-eral financial assistance or such non-Federal resources.

(h) The term facility includes all orany portion of structures, equipment,or other real or personal property orinterests therein, and the provision offacilities includes the construction, ex-pansion, renovation, remodeling, alter-ation or acquisition of facilities.

(i) The term recipient means anyState, political subdivision of anyState, or instrumentality of any Stateor political subdivision, any public orprivate agency, institution, or organi-zation, or other entity or any individ-ual, in any State, to whom Federal fi-nancial assistance is extended, directlyor through another recipient, for anyprogram, including any successor, as-sign, or transferee thereof, but suchterm does not include any ultimatebeneficiary under any such program.

(j) The term primary recipients meansany recipient which is authorized or re-quired to extend Federal financial as-sistance to another recipient for thepurposes of carrying out a program.

(k) The term applicant means onewho submits an application, request, orplan required to be approved by a re-sponsible Endowment official, or by aprimary recipient, as a condition toeligibility for Federal financial assist-ance, and the term application meanssuch an application, request, or plan.

APPENDIX A TO PART 1110—FEDERAL FI-NANCIAL ASSISTANCE TO WHICH THISPART APPLIES

1. Assistance to groups for projects andproductions in the arts.

2. Surveys, research and planning in thearts.

3. Assistance to State arts agencies forprojects and productions in the arts.

4. Support of research in the humanities.5. Support of educational programs in the

humanities, including the training of stu-dents and teachers.

6. Assistance to promote the interchangeof information in the humanities.

7. Assistance to foster public understand-ing and appreciation of the humanities.

8. Support of the publication of scholarlyworks in the humanities.

PART 1115—PRIVACY ACTREGULATIONS

Sec.1115.1 Purpose and scope.1115.2 Definitions.1115.3 Procedures for notification of exist-

ence of records pertaining to individuals.1115.4 Procedures for requests for access to

or disclosure of records pertaining to anindividual.

1115.5 Correction of records.1115.6 Disclosure of records to agencies or

persons other than the individual towhom the record pertains.

1115.7 Exemptions.

AUTHORITY: 5 U.S.C. 552a(f).

SOURCE: 40 FR 49286, Oct. 21, 1975, unlessotherwise noted.

§ 1115.1 Purpose and scope.This part sets forth the National

Foundation on the Arts and the Hu-manities’ procedures under the PrivacyAct of 1974 as required by 5 U.S.C.552a(f). Internal guidance for Founda-tion staff and other regulations imple-menting the Privacy Act are containedor will be contained in Foundation cir-culars.

§ 1115.2 Definitions.For purposes of this part:(a) Foundation means the National

Foundation on the Arts and the Hu-manities.

(b) Act means the Privacy Act of 1974(Pub. L. 93–579).

(c) Individual means a citizen of theUnited States or an alien lawfully ad-mitted for permanent residence.


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(d) Maintain, used with reference to arecord means to collect, to use, to dis-seminate, to have control over and re-sponsibility for such record.

(e) Record means any item, collectionor grouping of information about an in-dividual that is maintained by theFoundation and that is retrievable byhis or her name or an identifying par-ticular, such as a number, symbol, fin-gerprint, or photograph of the individ-ual. Information maintained by theFoundation includes, but is not limitedto, education, financial transactions,medical history, employment historyand criminal history.

(f) Routine use means, with respect tothe disclosure of a record, the use ofsuch a record for a purpose which iscompatible with the purpose for whichit was collected. The routine uses ofrecord systems maintained by theFoundation were established pursuantto notice in the FEDERAL REGISTER.

(g) System of records means a group ofany records under the control of theFoundation from which informationabout an individual is retrievable byhis or her name or by some identifyingparticular.

§ 1115.3 Procedures for notification ofexistence of records pertaining toindividuals.

(a) The systems of records, as definedin the Privacy Act of 1974, maintainedby the National Foundation on theArts and the Humanities are listed an-nually in the FEDERAL REGISTER as re-quired by that Act. Any person whowishes to know whether a system ofrecords contains a record pertaining tohim may appear in person at the Na-tional Endowment for the Arts, Room1338, 2401 E Street NW., Washington,DC 20506 or the National Endowmentfor the Humanities, Room 1000, 806 15thStreet NW., Washington, DC 20506, onwork days between the hours of 9:00a.m. and 5:30 p.m. or by writing to theOffice of the General Counsel, NationalEndowment for the Arts or NationalEndowment for the Humanities, Wash-ington, DC 20506. It is recommendedthat requests be made in writing, sincein many cases it will take several daysto ascertain whether a record exists.

(b) Requests for notification of theexistence of a record should specifi-

cally identify the system of records in-volved and should state, if the reques-tor is other than the individual towhom the record pertains, the relation-ship of the requestor to that individ-ual. (Note that requests will not behonored by the Foundation pursuant tothe Privacy Act unless made (1) by theindividual to whom the record per-tains, (2) by such individual’s parent ifthe individual is a minor, or (3) by suchindividual’s legal guardian if the indi-vidual has been declared to be incom-petent due to physical or mental inca-pacity or age by a court of competentjurisdiction).

(c) The Foundation will attempt torespond to a request as to whether arecord exists within 10 working daysfrom the time it receives the request orfrom the time any required identifica-tion is established, whichever is later.

§ 1115.4 Procedures for requests foraccess to or disclosure of recordspertaining to an individual.

(a) Any person may request review ofrecords pertaining to him by appearingat the National Endowment for theArts, Room 1338, 2401 E Street, NW.,Washington, DC 20506, or the NationalEndowment for the Humanities, Room1000, 806 15th Street, NW., Washington,DC 20506 on work days between thehours of 9:00 a.m. and 5:30 p.m. or bywriting to the Office of the GeneralCounsel, National Endowment for theArts, or National Endowment for theHumanities, Washington, DC 20506.(See paragraphs (b) and (c) of this sec-tion for identification requirements.)The request should specifically identifythe systems or records involved. TheFoundation will strive either to makethe record available within 15 workingdays of the request or to inform the re-questor of the need for additional iden-tification or the tendering of fees (asspecified in paragraph (d) of this sec-tion) within 15 working days.

(b) In the case of persons making re-quests by appearing at the Foundation,the amount of personal identificationrequired will of necessity vary with thesensitivity of the record involved. Ex-cept as indicated below, reasonableidentification such as employmentidentification cards, drivers licenses,


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and credit cards will normally be ac-cepted as sufficient evidence of iden-tity in the absence of any indicationsto the contrary. Records in the follow-ing systems of records, however, areconsidered to contain relatively sen-sitive and/or detailed personal informa-tion—

GRANT APPLICATIONS—NEA.GRANT APPLICATIONS—NEH.GRANTS TO INDIVIDUALS—NEA.GRANTS TO INDIVIDUALS AND INSTITU-

TIONS—NEH.EQUAL EMPLOYMENT OPPORTUNITY

CASE FILE—NFAH NEA/NEH.EMPLOYEE PAYROLL—NFAH.PERSONNEL RECORDS—NFAH.

Accordingly, with respect to requests forrecords in these systems the Foundation re-serves the rights to require sufficient identi-fication to identify positively the individualmaking the request. This might involve inde-pendent verification by the Foundation as byphone calls to determine whether an individ-ual has made a request, personal identifica-tion by Foundation employees who know theindividual, or such other means as are con-sidered appropriate under the circumstances.

(c) A written request will be honored onlyif it contains the following certification be-fore a duly commissioned notary public ofany state or territory (or similar official ifthe request is made outside the UnitedStates):

I,——————————(Printed name), dohereby certify that I am the individual aboutwhom the record requested in this letter per-tains or that I am within the class of personsauthorized to act on his behalf in accordancewith 5 U.S.C. 552a(h).

——————————————————Signature

——————————————————Date

In the County of——————————Stateof——————————. On this ——day of ——

——————————————————(Name of individual)

who is personally known to me, did appearbefore me and sign the above certificate.

——————————————————Signature

——————————————————Date

(s) My Commission expires ————————

However, where the record requested iscontained in any of the systems ofrecords listed in paragraph (b) of thissection, the Foundation reserves theright to require additional identifica-tion and/or to independently verify toits satisfaction, the identity of the re-questor.

(d) Charges for copies of records willbe at the rate of $0.10 per photographyof each page. Where records are notsusceptible to photo-copying, e.g.,punch cards, magnetic tapes or over-size materials, the amount charged willbe actual cost as determined on a case-by-case basis. Only one copy of eachrecord requested will be supplied. Nocharge will be made unless the chargeas computed above would exceed $3.00for each request or related series of re-quests. If a fee in excess of $25.00 wouldbe required, the requestor shall be noti-fied and the fee must be tendered be-fore the records will be copied.

§ 1115.5 Correction of records.(a) Any individual is entitled to re-

quest amendments of records pertain-ing to him pursuant to 5 U.S.C.552a(d)(2). Such a request shall be madein writing and addressed to the Officeof the General Counsel, National En-dowment for the Arts or National En-dowment for the Humanities, Washing-ton, DC 20506.

(b) The request should specify therecord and systems of records involved,and should specify the exact correctiondesired and state that the request ismade pursuant to the Privacy Act. Anedited copy of the record showing thedesired correction is desirable. Within10 working days of the receipt of aproperly addressed request (or within10 working days of the time the Gen-eral Counsel, National Endowment forthe Arts or the General Counsel, Na-tional Endowment for the Humanitiesbecomes aware that a particular com-munication not addressed as prescribedabove is a request for correction of arecord under the Privacy Act), theGeneral Counsel’s office shall acknowl-edge receipt of the request.

(c) The General Counsel’s office uponreceipt of such a request shall prompt-ly confer with the office within theFoundation responsible for the record.In the event it is felt that correction isnot warranted in whole or in part, thematter shall be brought to the atten-tion of the Deputy Chairman of the En-dowment involved. If, after review bythe Deputy Chairman of the involvedEndowment and discussion with the re-quest or, if deemed helpful, it is deter-mined that correction as requested is


347


not warranted, a letter shall be sent bythe Deputy Chairman’s office to the re-questor denying his request and/or ex-plaining what correction might bemade if agreeable to the requestor.This letter shall set forth the reasonsfor the refusal to honor the request forcorrection. It shall also inform him ofhis right to appeal this decision and in-clude a description of the appeals pro-cedure set forth in paragraph (d) of thissection.

(d) An appeal may be taken from anadverse determination under paragraph(c) of this section to the AssistantChairman/Management, National En-dowment for the Arts or the Chairman,National Endowment for the Human-ities. Such appeal must be made inwriting and should clearly indicatethat it is an appeal. The basis for theappeal should be included, and itshould be mailed to the same addressas listed in paragraph (a) of this sec-tion. A hearing at the Foundation maybe requested. Such hearing will be in-formal, and shall be before the Assist-ant Chairman/Management, NationalEndowment for the Arts, the Chair-man, National Endowment for the Hu-manities, or an appointed designee. Ifno hearing is requested, the request forappeal should include the basis for theappeal. Where no hearing is requestedthe Assistant Chairman or Chairmanbefore whom the appeal is taken shallrender his decision within thirty work-ing days after receipt of the written ap-peal at the Foundation, unless the As-sistant Chairman or Chairman beforewhom the appeal is taken, for goodcause shown, extends the 30–day periodand the appellant is advised in writingof such extension. If a hearing is re-quested, the Foundation will attemptto contact the appellant within fiveworking days and arrange a suitabletime for the hearing. In such cases thedecision of the Assistant Chairman orChairman shall be made within 30working days after the hearing unlessthe time is extended and the appellantis advised in writing of such extension.

(e) The final decision of the AssistantChairman or Chairman in an appeal

shall be in writing, and, if adverse tothe appellant, set forth the reasons forthe refusal to amend the record and ad-vise him of his right to appeal the deci-sion under 5 U.S.C. 552a(g)(1)(A). Theindividual shall also be notified that hehas the right to file with the Founda-tion a concise statement setting forththe reasons for this disagreement withthe refusal of the Foundation to amendhis record.

§ 1115.6 Disclosure of records to agen-cies or persons other than the indi-vidual to whom the record pertains.

Records subject to the Privacy Actthat are requested by any person otherthan the individual to whom they per-tain will not be made available exceptunder the following circumstances:

(a) Records required to be madeavailable by the Freedom of Informa-tion Act will be released in response toa request formulated in accordancewith Foundation regulations found at45 CFR part 1100.

(b) Records not required by the Free-dom of Information Act to be releasedmay be released, at the discretion ofthe Foundation, if the written consentof the individual to whom they pertainhas been obtained or if such releasewould be authorized under 5 U.S.C.552a(b)(1) or (3) through (11).

§ 1115.7 Exemptions.

(a) Fellowships and grants. Pursuantto 5 U.S.C. 552a(k)(5), the Foundationhereby exempts from the application ofsection 552a(d) any materials whichwould disclose the identity of ref-erences for fellowship or grant appli-cants contained in any of the Founda-tion’s systems of records.

(b) Applicants for employment. Pursu-ant to 5 U.S.C. 552a(k)(5), the Founda-tion hereby exempts from the applica-tion of 5 U.S.C. 552a(d) any materialswhich would disclose the identity ofreferences of applicants for employ-ment at the Foundation contained inthe system of records entitled ‘‘OfficialPersonnel Folders’’.


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SUBCHAPTER B—NATIONAL ENDOWMENT FOR THE ARTS

PART 1150—COLLECTION OFCLAIMS UNDER THE FEDERALCLAIMS COLLECTION ACT OF1966

Sec.1150.1 Scope.1150.2 Incorporation of joint standards by

reference.1150.3 Subdivision and joining of claims.1150.4 Referral of claims to the General

Counsel.1150.5 Accounting control.1150.6 Record retention.1150.7 Suspension or revocation of eligi-

bility.1150.8 Standards for collection of claims.1150.9 Standards for compromise of claims.1150.10 Standards for suspension or termi-

nation of collection action.1150.11 Referral to GAO or Justice Depart-

ment.

AUTHORITY: Federal Claims Collection Actof 1966.

SOURCE: 40 FR 51196, Nov. 4, 1975, unlessotherwise noted.

§ 1150.1 Scope.This subpart sets forth the regula-

tions of the National Endowment forthe Arts implementing the FederalClaims Collection Act of 1966 (the Act)in conformity with the standards joint-ly promulgated by the Attorney Gen-eral and the Comptroller General in 4CFR parts 101 through 105. The Act (a)requires the head of an agency or hisdesignee to attempt collection of allclaims of the United States for moneyor property arising out of the activitiesof the National Endowment for theArts; and (b) authorizes the head of anagency or his designee to compromisesuch claims that do not exceed $20,000exclusive of interest, or to suspend orterminate collection action where itappears that no person liable on suchclaims has the present or prospectivefinancial ability to pay any significantsum thereon or that the cost of collect-ing such claim is likely to exceed theamount of recovery.

§ 1150.2 Incorporation of joint stand-ards by reference.

All administrative actions to collectclaims arising out of the activities of

the National Endowment for the Artsshall be performed in accordance withthe applicable standards prescribed in 4CFR parts 101 through 105, which areincorporated by reference and supple-mented in this subpart.

§ 1150.3 Subdivision and joining ofclaims.

(a) A debtor’s liability arising from aparticular transaction or contractshall be considered as a single claim indetermining whether the claim is onenot exceeding $20,000 exclusive of inter-est for the purpose of compromise ortermination of collection action. Sucha claim may not be subdivided to avoidthe monetary ceiling established bythe Act.

(b) Joining of two or more singleclaims in a demand upon a particulardebtor for payment totaling more than$20,000 does not preclude compromiseor termination of collection actionwith respect to any one of such claimsthat does not exceed $20,000 exclusiveof interest.

§ 1150.4 Referral of claims to the Gen-eral Counsel.

(a) Authority of the General Counsel.The General Counsel shall exercise thepowers and perform the duties of thehead of the agency to compromise or tosuspend or terminate collection actionon all claims not exceeding $20,000 ex-clusive of interest. Claims shall be re-ferred to the General Counsel wellwithin the applicable statute of limita-tions (28 U.S.C. 2415 and 2416), but in noevent more than 2 years after theclaims accrued.

(b) Exclusions. There shall be no com-promise or terminated collection ac-tion with respect to any claim: (1) Asto which there is an indication offraud, the presentation of a false claim,or misrepresentation on the part of thedebtor or any other party having an in-terest in the claim; (2) based in wholeor in part on conduct in violation ofthe anti-trust laws; (3) based on taxstatutes; or (4) arising from an excep-tion made by the General AccountingOffice in the account of an accountableofficer. Such claims shall be promptly


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referred to the Justice Department orGAO, as appropriate.

§ 1150.5 Accounting control.

The General Counsel shall process allclaims collections through the appro-priate accounting office and report thecollection, compromise, suspension andtermination of all claims to the appro-priate accounting office for recording.

§ 1150.6 Record retention.

The file of each claim on which ad-ministrative collection action has beencompleted shall be retained by the ap-propriate office or the General Counselnot less than 1 year after the applica-ble statute of limitations has run.

§ 1150.7 Suspension or revocation ofeligibility.

(a) In the event a contractor, grant-ee, or other participant in programssponsored by the Endowment fails topay his debts to the Endowment withina reasonable time after demand, thefact shall be reported by the Grants,Audit, or other appropriate office tothe General Counsel, who shall placesuch defaulting participant’s name onthe Endowment’s list of debarred, sus-pended and ineligible contractors andgrantees and the participant will be soadvised.

(b) The failure of any surety to honorits obligations in accordance with 6U.S.C. 11 is to be reported at once tothe General Counsel who shall so ad-vise the Treasury Department. TheTreasury Department will notify theEndowment when a surety’s certificateof authority to do business with theGovernment has been revoked or for-feited.

§ 1150.8 Standards for collection ofclaims.

(a) Demand for payment. Appropriatewritten demands shall be made uponthe debtor which shall include informa-tion relating to the consequences of hisfailure to cooperate.

(b) Collection by offset. Collection byoffset will be administratively under-taken on claims which are liquidatedor certain in amount in every instancewhere this is feasible.

(c) Liquidation of collateral. When theEndowment holds security or collateralthat may be liquidated and the pro-ceeds applied on debts due it throughthe exercise of a power of sale in thesecurity instrument or a nonjudicialforeclosure, such procedures should befollowed if the debtor fails to pay hisdebt within a reasonable time after de-mand, unless the cost of disposing ofthe collateral will be disproportionateto its value or special circumstancesrequire judicial foreclosure.

(d) Collection in installments. Claimswith accrued interest should be col-lected in full or one lump sum when-ever this is possible. However, if thedebtor is financially unable to pay theindebtedness in one lump sum, pay-ment may be accepted in regular in-stallments.

(e) Interest. In the event prejudgmentinterest is not mandated by statute,contract or regulation, the interestshall be assessed at 7 percent. Prejudg-ment interest may be waived as an in-ducement to voluntary payment. Insuch cases demand letters should in-form the debtor that prejudgment in-terest will be collected if suit becomesnecessary. When a debt is paid in in-stallments and interest is collected, in-stallment payments will first be ap-plied to the payment of accrued inter-est and then to principal in accordancewith the so-called ‘‘U.S. Rule’’ unless adifferent rule is prescribed by statute,contract or regulation. Prejudgmentinterest shall not be demanded or col-lected on civil penalty and forfeitureclaims unless the statute under whichthe claim arises authorizes the collec-tion of such interest.

(f) Omission not a defense. Failure tocomply with any standard prescribed in4 CFR Chapter II or in this subpartshall not be available as a defense toany debtor.

§ 1150.9 Standards for compromise ofclaims.

(a) Compromise offer. An offer to com-promise may be accepted (1) if there isreal doubt concerning the National En-dowment for the Arts’ ability to proveits case in court for the full amountclaimed; (2) if the cost of collecting the


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45 CFR Ch. XI (10–1–97 Edition)§ 1150.10

claim does not justify the enforced col-lection of the full amount; (3) if in con-nection with statutory penalties or for-feitures established as an aid to en-forcement and to compel compliance,the National Endowment for the Arts’enforcement policy will be adequatelyserved by acceptance of the sum to beagreed upon, or (4) for other reasonsdeemed valid by the General Counsel(or his designee) and made a part of theclaim record.

(b) Documentary evidence of com-promise. No compromise of a claimshall be final or binding on the Endow-ment unless it is in writing and signedby the appropriate officer who has au-thority to compromise the claim pur-suant to this subpart.

§ 1150.10 Standards for suspension ortermination of collection action.

(a) Suspension of collection action. Col-lection action shall be suspended tem-porarily on a claim when the debtorcannot be located after diligent effortbut there is reason to believe that fu-ture collection action may be suffi-ciently productive to justify periodicreview and action on the claim, havingconsideration for its size and theamount which may be realized. Collec-tion action may be suspended tempo-rarily on a claim when the debtor ownsno substantial equity in realty and ispresently unable to make payment onthe National Endowment for the Arts’claim or effect a compromise, but hisfuture prospects justify retention ofthe claim for periodic review and ac-tion and (1) the applicable statute oflimitations has been tolled or startedanew or (2) future collection can be ef-fected by offset notwithstanding thestatute of limitations. Suspension as toa particular debtor should not defer theearly liquidation of security for thedebt.

(b) Termination of collection action.Collection action may be terminatedand the Endowment file closed for thefollowing reasons: (1) No substantialamount can be collected; (2) the debtorcannot be located; (3) the cost will ex-ceed recovery; (4) the claim is legallywithout merit; or (5) the claim cannotbe substantiated by evidence.

§ 1150.11 Referral to GAO or JusticeDepartment.

(a) Claims referred. Claims which can-not be collected, compromised, or ter-minated in accordance with 4 CFRparts 101 to 105 will be referred to theGeneral Accounting Office in accord-ance with 31 U.S.C. 71 or to the Depart-ment of Justice if the Endowment hasbeen granted an exception from refer-rals to the General Accounting Office.Also, if there is doubt as to whethercollection action should be suspendedor terminated on a claim, the claimmay be referred to the General Ac-counting Office for advice. When recov-ery of a judgment is prerequisite to im-position of administrative sanctions,the claim may be referred to the Jus-tice Department for litigation eventhough termination of collection activ-ity might otherwise be considered.

(b) Prompt referral. Such referralsshall be made as early as possible con-sistent with aggressive collection ac-tion and in any event, well within thestatute of limitations for bringing suitagainst the debtor.

PART 1151—NONDISCRIMINATIONON THE BASIS OF HANDICAP

Subpart A—General Provisions

Sec.1151.1 Purpose.1151.2 Application.1151.3 Definitions.1151.4 Notice.1151.5 Inconsistent State laws and effect of

employment opportunities.1151.6—1151.10 [Reserved]

Subpart B—Standards for Determining WhoAre Handicapped Persons

1151.11 Handicapped person.1151.12 Qualified handicapped person.1151.13—1151.15 [Reserved]

Subpart C—Discrimination Prohibited

GENERAL

1151.16 General prohibitions against dis-crimination.

1151.17 Specific discriminatory actions pro-hibited.

1151.18 Illustrative examples.1151.19—1151.20 [Reserved]

PROGRAM ACCESSIBILITY

1151.21 Discrimination prohibited.


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1151.22 Existing facilities.1151.23 New construction.1151.24 Historic Properties. [Reserved]1151.25—1151.30 [Reserved]

EMPLOYMENT

1151.31 Discrimination prohibited.1151.32 Reasonable accommodation.1151.33 Employment criteria.1151.34 Preemployment inquiries.1151.35—1151.40 [Reserved]

Subpart D—Enforcement

1151.41 Assurances required.1151.42 Self evaluation.1151.43 Adoption of grievance procedures.1151.44 Endowment enforcement and com-

pliance procedures.1151.45—1151.50 [Reserved]

AUTHORITY: 29 U.S.C. 794.

SOURCE: 44 FR 22734, Apr. 17, 1979, unlessotherwise noted.

Subpart A—General Provisions§ 1151.1 Purpose.

The purpose of this part is to imple-ment section 504 of the RehabilitationAct of 1973, which is designed to elimi-nate discrimination on the basis ofhandicap in any program or activityreceiving Federal financial assistance.

§ 1151.2 Application.This part applies to each recipient of

financial assistance from the NationalEndowment for the Arts and to eachprogram or activity that receives orbenefits from such assistance.

§ 1151.3 Definitions.As used in this part, the term:(a) The Act means the Rehabilitation

Act of 1973, Public Law 93–112, asamended by the Rehabilitation ActAmendments of 1974, (Pub. L. 93–516, 29U.S.C. 706 et seq.) and the Comprehen-sive Rehabilitation Services Amend-ments of 1978, (Pub. L. 95–602).

(b) Section 504 means section 504 ofthe Act.

(c) Endowment means the NationalEndowment for the Arts.

(d) Chairman means the Chairman,National Endowment for the Arts.

(e) Recipient means any state or itspolitical subdivision, any instrumen-tality of a state or its political subdivi-sion, any public or private agency, in-stitution, organization, or other en-

tity, or any person to which federal fi-nancial assistance is extended directlyor through another recipient, includingany successor, assignee, or transfereeof a recipient, but excluding the ulti-mate beneficiary of the assistance.

(f) Federal financial assistance meansany grant, loan, contract (other than aprocurement contract or a contract ofinsurance or guaranty), or any otherarrangement by which the Endowmentprovides or otherwise makes availableassistance in the form of:

(1) Funds;(2) Services of federal personnel; or(3) Real and personal property or any

interest in or use of such property, in-cluding:

(i) Transfers of leases of such prop-erty for less than fair market value orfor reduced consideration; and,

(ii) proceeds from a subsequent trans-fer or lease of such property if the fed-eral share of its fair market value isnot returned to the Federal Govern-ment.

(g) Facility means all or any portionof buildings, structures, equipment,roads, walks, parking lots, or otherreal or personal property or interest insuch property.

§ 1151.4 Notice.(a) A recipient shall take appropriate

initial and continuing steps to notifyparticipants, beneficiaries, applicants,and employees, including those withimpaired vision or hearing, and unionsor professional organizations holdingcollective bargaining or professionalagreements with the recipient that itdoes not discriminate on the basis ofhandicap in violation of section 504 andthis part. The notification shall state,where appropriate, that the recipientdoes not discriminate in admission oraccess to, or employment in, its pro-grams and activities. Methods of ini-tial and continuing notification mayinclude the posting of notices, publica-tion in print, audio, and visual media,placement of notices in a recipient’spublication, and distribution of otherwritten and verbal communications.

(b) If a recipient publishes or uses re-cruitment materials or publicationscontaining general information that itmakes available to participants, bene-ficiaries, applicants, or employees, it


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45 CFR Ch. XI (10–1–97 Edition)§ 1151.5

shall include in those materials or pub-lications a statement of the policy de-scribed in paragraph (a) of this section.A recipient may meet the requirementof this paragraph either by includingappropriate inserts in existing mate-rials and publications or by revisingand reprinting the materials and publi-cations.

§ 1151.5 Inconsistent State laws and ef-fect of employment opportunities.

(a) Recipients are not excused fromcomplying with this part as a result ofstate or local laws which limit the eli-gibility of handicapped persons to re-ceive services or to practice a profes-sion or occupation.

(b) The presence of limited employ-ment opportunities in a particular pro-fession does not excuse a recipientfrom complying with the regulation.For example, a music school receivingEndowment financial assistance couldnot deny admission to a qualified blindapplicant because a blind singer mayexperience more difficulty than a non-handicapped singer in finding a job.

§§ 1151.6—1151.10 [Reserved]

Subpart B—Standards for Deter-mining Who Are Handi-capped Persons

§ 1151.11 Handicapped person.(a) Handicapped person means any

person who has a physical or mentalimpairment that substantially limitsone or more major life activities, has arecord of such an impairment, or is re-garded as having such an impairment.For purposes of section 504, in connec-tion with employment, this term doesnot include any individual who is an al-coholic or drug abuser whose currentuse of alcohol or drugs prevents suchindividual from performing the dutiesof the job in question or whose employ-ment, by reason of such current alco-hol or drug abuse, would constitute adirect threat to the property or safetyof others.

(b) As used in paragraph (a) of thissection, the phrase:

(1) Physical or mental impairmentmeans:

(i) Any physiological disorder or con-dition, cosmetic disfigurement, or ana-

tomical loss affecting one or more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genito-urinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional andmental illness, and specific learningdisabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addiction and alcoholism.

(2) Major life activities means func-tions such as caring for one’s self, per-forming manual tasks, walking, seeing,hearing, speaking, breathing, learning,and working.

(3) Has a record of such an impairmentmeans has a history of, or has beenmisclassified as having, a mental orphysical impairment that substantiallylimits one or more major life activi-ties.

(4) Is regarded as having an impairmentmeans:

(i) Has a physical or mental impair-ment that does not substantially limitmajor life activities but that is treatedby a recipient as constituting such alimitation;

(ii) Has a physical or mental impair-ment that substantially limits majorlife activities only as a result of the at-titudes of others toward such impair-ment;

(iii) Has none of the impairments de-fined in paragraph (b)(1) of this sectionbut is treated by a recipient as havingsuch an impairment.

§ 1151.12 Qualified handicapped per-son.

Qualified handicapped person means:(a) With respect to employment, a

handicapped person who, with reason-able accommodation, can perform theessential functions of the job in ques-tion; and

(b) With respect to services, a handi-capped person who meets the essential


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eligibility requirements for the receiptof such services.

§§ 1151.13—1151.15 [Reserved]

Subpart C—DiscriminationProhibited

GENERAL

§ 1151.16 General prohibitions againstdiscrimination.

(a) No qualified handicapped personshall, on the basis of handicap, be ex-cluded from participation in, be deniedthe benefits of, or otherwise be sub-jected to discrimination under any pro-gram or activity which receives or ben-efits from federal financial assistance.

(b) These regulations do not prohibitthe exclusion of nonhandicapped per-sons or persons with a specific type ofhandicap from the benefits of a pro-gram limited by Federal statute or ex-ecutive order to handicapped personsor persons with a different type ofhandicap.

(c) Recipients shall take appropriatesteps to insure that no handicapped in-dividual is denied the benefits of, ex-cluded from participation in, or other-wise subjected to discrimination in anyprogram receiving or benefiting fromEndowment financial assistance be-cause of the absence of appropriateauxiliary aids for individuals with im-paired sensory, manual, or speakingskills.

(d) Recipients shall take appropriatesteps to insure that communicationswith their applicants, employees, andbeneficiaries are available to personswith impaired vision and hearing.

(e) Recipients shall administer pro-grams and activities in the most inte-grated setting appropriate to the needsof qualified handicapped persons.

§ 1151.17 Specific discriminatory ac-tions prohibited.

(a) A recipient, in providing any aid,benefit, service, or program either di-rectly or through contractual, licens-ing, or other arrangements, shall not,on the basis of handicap:

(1) Deny a qualified handicapped per-son the opportunity to participate inor benefit from the aid, benefit, pro-gram, or service;

(2) Afford a qualified handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;

(3) Provide a qualified handicappedperson with an aid, benefit, or servicethat is not as effective in affordingequal opportunity to obtain the sameresult, to gain the same benefit, or toreach the same level of achievement asthat provided to others;

(4) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons unless such action is necessaryto provide qualified handicapped per-sons with aid, benefits, or services thatare as effective as those provided toothers;

(5) Aid or perpetuate discriminationagainst a qualified handicapped personby providing significant assistance toan agency, organization, or person thatdiscriminates on the basis of handicapin providing any aid, benefit, or serviceto beneficiaries of the recipient’s pro-gram;

(6) Deny a qualified handicapped per-son the opportunity to participate as amember of planning or advisory boards;or

(7) Otherwise limit a qualified handi-capped person in the enjoyment of anyright, privilege, advantage, or oppor-tunity enjoyed by others receiving anaid, benefit, or service.

(b) Despite the existence of separateor different programs or activities pro-vided in accordance with this part, arecipient may not deny a qualifiedhandicapped person the opportunity toparticipate in such programs or activi-ties that are not separate or different.

(c) A recipient may not, directly orthrough contractual or other arrange-ments, utilize criteria or methods ofadministration:

(1) That have the effect of subjectingqualified handicapped persons to dis-crimination on the basis of handicap;

(2) That have the purpose or effect ofdefeating or substantially impairingaccomplishment of the objectives ofthe recipient’s program with respect tohandicapped persons; or


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(3) That perpetuate the discrimina-tion of another recipient if both recipi-ents are subject to common adminis-trative control or are agencies of thesame state.

(d) A recipient may not, in determin-ing the site or location of a facility,make selections:

(1) That have the effect of excludinghandicapped persons from, denyingthem the benefits of, or otherwise sub-jecting them to discrimination underany program or activity that receivesor benefits from federal financial as-sistance; or

(2) That have the purpose or effect ofdefeating or substantially impairingthe accomplishment of the objectivesof the program or activity with respectto handicapped persons.

(e) As used in this section, the aid,benefit, or service provided under aprogram or activity receiving or bene-fiting from federal financial assistanceincludes any aid, benefit, or serviceprovided in or through a facility thathas been constructed, expanded, al-tered, leased or rented, or otherwise ac-quired, in whole or in part, with federalfinancial assistance.

§ 1151.18 Illustrative examples.(a) The following examples will illus-

trate the application of the foregoingprovisions to some of the activitiesfunded by the National Endowment forthe Arts.

(1) A museum exhibition catalogue orsmall press editions supported by theEndowment may be made usable by theblind and the visually impairedthrough cassette tapes, records, discs,braille, readers and simultaneous pub-lications;

(2) A theatre performance supportedby Federal funds may be made avail-able to deaf and hearing impaired per-sons through the use of a sign languageinterpreter or by providing scripts inadvance of the performance.

(3) A performing arts organization re-ceiving Federal funds for a specific pro-gram offered in an inaccessible facilitymay arrange to provide a reasonableopportunity for that program to be of-fered to the public at large in an alter-native accessible space; e.g., a theatreoffering four different plays a season

may offer at least one performance ofeach play in an alternative accessiblespace.

(4) Recipients of federal funds shouldmake every effort to assure that theydo not support organizations or indi-viduals that discriminate;

(5) A handicapped person with experi-ence and expertise equal to qualifica-tion standards established by a plan-ning or advisory board may not be ex-cluded from participation on the boardon the basis of handicap. This does notmean that every planning or advisoryboard necessarily must include ahandicapped person.

(b) Despite the existence of permis-sible separate or different programs,e.g., periodic performances in alter-native accessible spaces, a physicallyhandicapped person who wishes to be,and can be, escorted to a seat, may notbe denied such access to an otherwiseinaccessible theatre.

(c) State arts agencies are obligatedto develop methods of administeringfederal funds so as to ensure thathandicapped persons are not subjectedto discrimination on the basis of handi-cap either by sub-grantees or by themanner in which the funds are distrib-uted.

(d) In the event Endowment funds areutilized to construct, expand, alter,lease or rent a facility, the benefits ofthe programs and activities provided inor through that facility must be con-ducted in accordance with these regu-lations, e.g., a museum receiving agrant to renovate an existing facilitymust assure that all museum programsand activities conducted in that facil-ity are accessible to handicapped per-sons.

(e) In carrying out the mandate ofsection 504 and these implementingregulations recipients should makeevery effort to administer Endowmentassisted programs and activities in asetting in which able-bodied and dis-abled persons are integrated, e.g., toursmade available to the hearing impairedshould be open to the public at largeand everyone should be permitted toenjoy the benefits of a tactile experi-ence in a museum.


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§§ 1151.19—1151.20 [Reserved]

PROGRAM ACCESSIBILITY

§ 1151.21 Discrimination prohibited.No qualified handicapped person

shall, because a recipient’s facilitiesare inaccessible to or unusable byhandicapped persons, be denied thebenefits of, be excluded from participa-tion in, or otherwise be subjected todiscrimination under any program oractivity to which this part applies.

§ 1151.22 Existing facilities.(a) A recipient shall operate each

program or activity to which this partapplies so that the program or activity,when viewed in its entirety, is readilyaccessible to and usable by handi-capped persons. This paragraph doesnot necessarily require a recipient tomake each of its existing facilities orevery part of a facility accessible toand usable by handicapped persons.

(b) A recipient may comply with therequirement of paragraph (a) of thissection through alteration of existingfacilities, the construction of new fa-cilities, or any other methods that re-sult in making its program or activityaccessible to handicapped persons. Arecipient is not required to make struc-tural changes in existing facilitieswhere other methods are effective inachieving compliance with paragraph(a) of this section. In choosing amongavailable methods for meeting the re-quirement of paragraph (a) of this sec-tion, a recipient shall give priority tothose methods that offer programs andactivities to handicapped persons inthe most integrated setting appro-priate.

(c) Time period. A recipient shall com-ply with the requirement of paragraph(a) of this section within sixty days ofthe effective date of this part exceptthat where structural changes are nec-essary to make programs or activitiesin existing facilities accessible suchchanges shall be made as soon as pos-sible but in no event later than threeyears after the effective date of thispart.

(d) Transition plan. In the eventstructural changes to facilities are nec-essary to meet the requirement ofparagraph (a) of this section, a recipi-

ent shall develop, within one year ofthe effective date of this part, a transi-tion plan setting forth the steps nec-essary to complete such changes. Theplan shall be developed with the assist-ance of interested persons, includinghandicapped persons or organizationsrepresenting handicapped persons.Upon request, the recipient shall makeavailable for public inspection a copyof the transition plan. The plan shall,at a minimum:

(1) Identify physical obstacles in therecipient’s facilities that limit the ac-cessibility of its program or activity tohandicapped persons;

(2) Describe in detail the methodsthat will be used to make the facilitiesaccessible;

(3) Specify the schedule for takingthe steps necessary to achieve full pro-gram accessibility and, if the time pe-riod of the transition plan is longerthan one year, identify steps that willbe taken during each year of the tran-sition period; and

(4) Indicate the person responsible forimplementation of the plan.

§ 1151.23 New construction.(a) Design, construction, and alteration.

New facilities shall be designed andconstructed to be readily accessible toand usable by handicapped persons. Al-terations to existing facilities shall, tothe maximum extent feasible, be de-signed and constructed to be readilyaccessible to and usable by handi-capped persons.

(b) Conformance with Uniform FederalAccessibility Standards. (1) Effective asof January 18, 1991, design, construc-tion, or alteration of buildings in con-formance with sections 3-8 of the Uni-form Federal Accessibility Standards(USAF) (appendix A to 41 CFR subpart101–19.6) shall be deemed to complywith the requirements of this sectionwith respect to those buildings. Depar-tures from particular technical andscoping requirements of UFAS by theuse of other methods are permittedwhere substantially equivalent orgreater access to and usability of thebuilding is provided.

(2) For purposes of this section, sec-tion 4.1.6(1)(g) of UFAS shall be inter-preted to exempt from the require-ments of UFAS only mechanical rooms


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45 CFR Ch. XI (10–1–97 Edition)§ 1151.24

and other spaces that, because of theirintended use, will not require acces-sibility to the public or beneficiaries orresult in the employment or residencetherein of persons with physical handi-caps.

(3) This section does not require re-cipients to make building alterationsthat have little likelihood of being ac-complished without removing or alter-ing a load-bearing structural member.

[44 FR 22734, Apr. 17, 1979, as amended at 55FR 52138, 52142, Dec. 19, 1990]

§ 1151.24 Historic Properties. [Re-served]

§§ 1151.25—1151.30 [Reserved]

EMPLOYMENT

§ 1151.31 Discrimination prohibited.(a) No qualified handicapped person

shall, on the basis of handicap, be sub-jected to discrimination in employ-ment under any program or activitythat receives or benefits from federalfinancial assistance.

(b) A recipient shall make all deci-sions concerning employment underany program or activity to which thispart applies in a manner which ensuresthat discrimination on the basis ofhandicap does not occur and may notlimit, segregate, or classify applicantsor employees in any way that ad-versely affects their opportunities orstatus because of handicap.

(c) A recipient may not participate ina contractual or other relationshipthat has the effect of subjecting quali-fied handicapped applicants or employ-ees to discrimination prohibited bythis subpart. The relationships referredto in this paragraph include relation-ships with employment and referralagencies, with labor unions, with orga-nizations providing or administeringfringe benefits to employees of the re-cipients, and with organizations pro-viding training and apprenticeship pro-grams.

(d) The prohibition against discrimi-nation in employment applies to thefollowing activities:

(1) Recruitment, advertising, and theprocessing of applications for employ-ment;

(2) Hiring, upgrading, promotion,award of tenure, demotion, transfer,

layoff, termination, right of returnfrom layoff, and rehiring;

(3) Rates of pay or any other form ofcompensation and changes in com-pensation;

(4) Job assignments, job classifica-tions, organizational structures, posi-tion descriptions, lines of progression,and seniority lists;

(5) Leaves of absences, sick leave, orany other leave;

(6) Fringe benefits available by vir-tue of employment, whether or not ad-ministered by the recipient;

(7) Selection and financial supportfor training, including apprenticeship,professional meetings, conferences, andother related activities, and selectionfor leaves of absence to pursue train-ing;

(8) Employer sponsored activities, in-cluding social or recreational pro-grams; and

(9) Any other term, condition, orprivilege of employment.

(e) A recipient’s obligation to complywith this subpart is not affected by anyinconsistent term of any collectivebargaining agreement to which it is aparty.

§ 1151.32 Reasonable accommodation.

(a) A recipient shall make reasonableaccommodation to the known physicalor mental limitations of an otherwisequalified handicapped applicant or em-ployee unless the recipient can dem-onstrate that the accommodationwould impose an undue hardship on theoperation of its program.

(b) Reasonable accommodation mayinclude:

(1) Making facilities used by employ-ees readily accessible to and usable byhandicapped persons; and

(2) Job restructuring, part-time ormodified work schedules, acquisition,or modification of equipment or de-vices, such as use of telecommuni-cation devices and amplifiers on tele-phones, the provision of readers or in-terpreters, and other similar actions.

(c) In determining pursuant to para-graph (a) of this section whether an ac-commodation would impose an unduehardship on the operation of a recipi-ent’s program, factors to be consideredinclude:


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(1) The overall size of the recipient’sprogram with respect to number of em-ployees, number and type of facilities,and size of budget;

(2) The type of the recipient’s oper-ation, including the composition andstructure of the recipient’s workforce;and

(3) The nature and cost of the accom-modation needed.

§ 1151.33 Employment criteria.(a) A recipient may not make use of

any employment test or other selectioncriterion that screens out or tends toscreen out handicapped persons or anyclass of handicapped persons unless:

(1) The test score or other selectioncriterion, as used by the recipient, isshown to be job-related for the positionin question; and

(2) Alternative job-related tests orcriteria are unavailable.

(b) A recipient shall select and ad-minister tests concerning employmentso as best to ensure that, when admin-istered to an applicant or employeewho has a handicap that impairs sen-sory, manual, or speaking skills, thetest results accurately reflect the ap-plicant’s or employee’s job skills, apti-tude, or other factors relevant to ade-quate performance of the job in ques-tion.

§ 1151.34 Preemployment inquiries.A recipient may not, except as pro-

vided below, conduct a preemploymentmedical examination, makepreemployment inquiry as to whetherthe applicant is a handicapped person,or inquire as to the nature or severityof a handicap. A recipient may, how-ever, make preemployment inquiryinto an applicant’s ability to performjob-related functions.

(a) When a recipient is taking reme-dial action to correct the effects ofpast discrimination, when a recipientis taking voluntary action to overcomethe effects of conditions that resultedin limited participation in its federallyassisted program or activity, or when arecipient is taking affirmative actionpursuant to section 504 of the Act, therecipient may invite applicants for em-ployment to indicate whether and towhat extent they are handicapped, pro-vided, that:

(1) The recipient states clearly onany written questionnaire used for thispurpose or makes clear orally if nowritten questionnaire is used that theinformation requested is intended foruse solely in connection with its reme-dial action obligations or its voluntaryor affirmative action efforts; and

(2) The recipient states clearly thatthe information is being requested on avoluntary basis, that it will be keptconfidential as provided in paragraph(c) of this section, that refusal to pro-vide it will not subject the applicant oremployee to any adverse treatment,and that it will be used only in accord-ance with this part.

(b) Nothing in this section shall pro-hibit a recipient from conditioning anoffer of employment on the results of amedical examination conducted priorto the employee’s entrance on duty,provided, that:

(1) All entering employees are sub-jected to such an examination regard-less of handicap; and

(2) The results of such an examina-tion are used only in accordance withthe requirements of this part.

(c) Information obtained in accord-ance with this section as to the medi-cal condition or history of the appli-cant shall be collected and maintainedon separate forms that shall be ac-corded confidentiality as medicalrecords, except that:

(1) Supervisors and managers may beinformed regarding restrictions on thework or duties of handicapped personsand regarding necessary accommoda-tions;

(2) First aid and safety personnelmay be informed, where appropriate, ifthe condition might require emergencytreatment; and

(3) Government officials investigat-ing compliance with the Act shall beprovided relevant information upon re-quest.

[44 FR 22734, Apr. 17, 1979; 45 FR 57129, Aug.27, 1980]

§§ 1151.35—1151.40 [Reserved]

Subpart D—Enforcement§ 1151.41 Assurances required.

(a) An applicant for federal financialassistance for a program or activity to


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45 CFR Ch. XI (10–1–97 Edition)§ 1151.42

which this part applies shall submit anassurance, on a form specified by theChairman, that the program will be op-erated in compliance with this part. Anapplicant may incorporate these assur-ances by reference in subsequent appli-cations to the Endowment.

(b) Duration of obligation. (1) In thecase of federal financial assistance ex-tended to provide personal property,the assurance will obligate the recipi-ent for the period during which it re-tains ownership or possession of theproperty.

(2) In all other cases the assurancewill obligate the recipient for the pe-riod during which federal financial as-sistance is extended.

(c) Covenants. Where property is pur-chased or improved with federal finan-cial assistance, the recipient shallagree to include in any instrumenteffecting or recording any transfer ofthe property a covenant running withthe property assuring nondiscrimina-tion for the period during which thereal property is used for a purpose forwhich the federal financial assistanceis extended or for another purpose in-volving the provision of similar serv-ices or benefits.

§ 1151.42 Self evaluation.(a) A recipient shall within six

months of the effective date of thispart:

(1) Evaluate, with the assistance ofinterested persons, including handi-capped persons or organizations rep-resenting handicapped persons, its cur-rent policies and practices and the ef-fects thereof that do not or may notmeet the requirements of this part;

(2) Modify, after consultation withinterested persons, including handi-capped persons or organizations rep-resenting handicapped persons, anypolicies and practices that do not meetthe requirements of this part; and

(3) Take, after consultation with in-terested persons, including handi-capped persons or organizations rep-resenting handicapped persons, appro-priate remedial steps to eliminate theeffects of any discrimination that re-sulted from adherence to these policiesand practices.

(4) Maintain on file, make availablefor public inspection, and provide to

the Endowment upon request, for atleast three years following completionof the self-evaluation:

(i) A list of the interested personsconsulted;

(ii) A description of areas examinedand any problems identified; and,

(iii) A description of any modifica-tions made and of any remedial stepstaken.

(5) The completed self-evaluationshould be signed by a responsible offi-cial designated to coordinate the re-cipient’s efforts in connection with thissection.

§ 1151.43 Adoption of grievance proce-dures.

A recipient may adopt an internalgrievance procedure in order to providefor the prompt and equitable resolutionof complaints alleging any action pro-hibited by this part. A responsible offi-cial should be designated to coordinatethe recipient’s efforts in connectionwith this section. Such procedures neednot be established with respect to com-plaints from applicants for employ-ment.

§ 1151.44 Endowment enforcement andcompliance procedures.

The procedural provisions applicableto title VI of the Civil Rights Act of1964 apply to this part. These proce-dures are found in §§ 1110.8 through1110.11 of part 1110 of this title.

§§ 1151.45—1151.50 [Reserved]

PART 1152—INTERGOVERNMENTALREVIEW OF NATIONAL ENDOW-MENT FOR THE ARTS PROGRAMSAND ACTIVITIES

Sec.1152.1 What is the purpose of these regula-

tions?1152.2 What definitions apply to these regu-

lations?1152.3 What programs and activities of the

Endowment are subject to these regula-tions?

1152.4 What are the Chairman’s general re-sponsibilities under the Order?

1152.5 What is the Chairman’s obligationwith respect to Federal interagency co-ordination?

1152.6 What procedures apply to the selec-tion of programs and activities underthese regulations?


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1152.7 How does the Chairman communicatewith state and local officials concerningthe Endowment’s programs and activi-ties?

1152.8 How does the Chairman providestates with an opportunity to commenton proposed federal financial assistance?

1152.9 How does the Chairman receive andrespond to comments?

1152.10 How does the Chairman make effortsto accommodate Intergovernmental con-cerns?

1152.11 What are the Chairman’s obligationsin interstate situations?

1152.12 How may a state simplify, consoli-date, or substitute federally requiredstate plans?

1152.13 May the Chairman waive any provi-sion of these regulations?

AUTHORITY: E.O. 12372, July 14, 1982 (47 FR30959), as amended April 8, 1983 (48 FR 15887);sec. 401 of the Intergovernmental Coopera-tion Act of 1968, as amended (31 U.S.C. 6506)

SOURCE: 48 FR 29352, June 24, 1983, unlessotherwise noted.

§ 1152.1 What is the purpose of theseregulations?

(a) The regulations in this part im-plement Executive Order 12372, ‘‘Inter-governmental Review of Federal Pro-grams,’’ issued July 14, 1982 and amend-ed on April 8, 1983. These regulationsalso implement applicable provisions ofsection 401 of the IntergovernmentalCooperation Act of 1968.

(b) these regulations are intended tofoster an intergovernmental partner-ship and a strengthened Federalism byrelying on state processes and on state,areawide, regional and local coordina-tion for review of proposed Federal fi-nancial assistance and direct Federaldevelopment.

(c) These regulations are intended toimprove the internal management ofthe Endowment, and are not intendedto create any right or benefit enforce-able at law by a party against the En-dowment or its officers.

§ 1152.2 What definitions apply tothese regulations?

Chairman means the Chairman of theNational Endowment for the Arts or anofficial or employee of the Endowmentacting for the Chairman under a dele-gation of authority.

Endowment means the National En-dowment for the Arts.

Order means Executive Order 12372,issued July 14, 1982, and amended April8, 1983 and titled ‘‘IntergovernmentalReview of Federal Programs.’’

State means any of the 50 states, theDistrict of Columbia, the Common-wealth of Puerto Rico, the Common-wealth of the Northern Mariana Is-lands, Guam, American Samoa, theU.S. Virgin Islands, or the Trust Terri-tory of the Pacific Islands.

§ 1152.3 What programs and activitiesof the Endowment are subject tothese regulations?

The Chairman publishes in the FED-ERAL REGISTER a list of the Endow-ment’s programs and activities thatare subject to these regulations.

§ 1152.4 What are the Chairman’s gen-eral responsibilities under theOrder?

(a) The Chairman provides opportuni-ties for consultation by elected offi-cials of those state and local govern-ments that would provide the non-Fed-eral funds for, or that would be directlyaffected by, proposed Federal financialassistance from the Endowment.

(b) If a state adopts a process underthe Order to review and coordinate pro-posed Federal financial assistance theChairman, to the extent permitted bylaw:

(1) Uses the state process to deter-mine official views of state and localelected officials;

(2) Communicates with state andlocal elected officials as early in a pro-gram planning cycle as is reasonablyfeasible to explain specific plans andactions;

(3) Makes efforts to accommodatestate and local elected officials’ con-cerns with proposed Federal financialassistance that is communicatedthrough the state process;

(4) Allows the states to simplify andconsolidate existing federally requiredstate plan submissions;

(5) Where state planning and budget-ing systems are sufficient and wherepermitted by law, encourages the sub-stitution of state plans for federally re-quired state plans;

(6) Seeks the coordination of views ofaffected state and local elected offi-cials in one state with those of another


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45 CFR Ch. XI (10–1–97 Edition)§ 1152.5

state when proposed Federal financialassistance has an impact on interstatemetropolitan urban centers or otherinterstate areas; and

(7) Supports state and local govern-ments by discouraging the reauthoriza-tion or creation of any planning orga-nization which is federally-funded,which has a limited purpose, and whichis not adequately representative of, oraccountable to, state or local electedofficials.

§ 1152.5 What is the Chairman’s obliga-tion with respect to Federal inter-agency coordination?

The Chairman to the extent prac-ticable, consults with and seeks advicefrom all other substantially affectedFederal departments and agencies inan effort to assure full coordination be-tween such agencies and the Endow-ment regarding programs and activi-ties covered under these regulations.

§ 1152.6 What procedures apply to theselection of programs and activitiesunder these regulations?

(a) A state may select any programor activity published in the FEDERAL

REGISTER in accordance with § 1152.3 ofthis part for intergovernmental reviewunder these regulations. Each state,before selecting programs and activi-ties shall consult with local elected of-ficials.

(b) Each state that adopts a processshall notify the Chairman of the En-dowment’s programs and activities se-lected for that process.

(c) A state may notify the Chairmanof changes in its selections at anytime. For each change, the state shallsubmit to the Chairman an assurancethat the state has consulted with elect-ed local officials regarding the change.The Endowment may establish dead-lines by which states are required toinform the Chairman of changes intheir program selections.

(d) The Chairman uses a state’s proc-ess as soon as feasible, depending on in-dividual programs and activities, afterthe Chairman is notified of its selec-tions.

§ 1152.7 How does the Chairman com-municate with state and local offi-cials concerning the Endowment’sprograms and activities?

(a) [Reserved](b) The Chairman provides notice to

directly affected state, areawide, re-gional, and local entities in a state ofproposed Federal financial assistanceif—

(1) The state has not adopted a proc-ess under the Order; or

(2) The assistance or development isunder program or activity not selectedfor the state process.

This notice is made by the publicationin the FEDERAL REGISTER or other ap-propriate means which the Endowmentin its discretion deems appropriate.

§ 1152.8 How does the Chairman pro-vide states with an opportunity tocomment on proposed Federal fi-nancial assistance?

(a) Except in unusual circumstance,the Chairman gives state processes ordirectly affected state, areawide, re-gional and local officials and entities—

(1) [Reserved](2) At least 60 days from the date es-

tablished by the Chairman to commenton proposed Federal financial assist-ance.

(b) This section also applies to com-ments in cases in which the review, co-ordination, and communication withthe Endowment have been delegated.

§ 1152.9 How does the Chairman re-ceive and respond to comments?

(a) The Chairman follows the proce-dures in § 1152.10 if:

(1) A state office or official is des-ignated to act as a single point of con-tact between a state process and allFederal agencies; and

(2) That office or official transmits astate process recommendation for aprogram selected under § 1152.6.

(b)(1) The single point of contact isnot obligated to transmit commentsfrom state, areawide, regional or localofficials and entities where there is nostate process recommendation.

(2) If a state process recommendationis transmitted by a single point of con-tact, all comments from state,


361


areawide, regional, and local officialsand entities that differ from it mustalso be transmitted.

(c) If a state has not established aprocess, or is unable to submit a stateprocess recommendation, state,areawide, regional and local officialsand entities may submit comments tothe Endowment.

(d) If a program or activity is not se-lected for a state process, state,areawide, regional and local officialsand entities may submit comments tothe Endowment. In addition, if a stateprocess recommendation for a non-selected program or activity is trans-mitted to the Endowment by the singlepoint of contact, the Chairman followsthe procedure of § 1152.10 of this part.

(e) The Chairman considers com-ments which do not constitute a stateprocess recommendation submittedunder these regulations and for whichthe Chairman is not required to applythe procedures of § 1152.10 of this part,when such comments are provided by asingle point of contact or directly tothe Endowment by a commentingparty.

§ 1152.10 How does the Chairmanmake efforts to accommodate Inter-governmental concerns?

(a) If a state process provides a stateprocess recommendation to the Endow-ment through its single point of con-tact, the Chairman either:

(1) Accepts the recommendation;(2) Reaches a mutually agreeable so-

lution with the state process; or(3) Provides the single point of con-

tact with such written explanation ofthe decision, as the Chairman in his orher discretion deems appropriate. TheChairman may supplement the writtenexplanation by also providing the ex-planation to the single point of contactby telephone other telecommunication,or other means.

(b) In any explanation under para-graph (a)(3) of this section the Chair-man informs the single point of con-tact that:

(1) The Endowment will not imple-ment its decision for ten days after thesingle point of contact receives the ex-planation; or

(2) The Chairman has reviewed thedecision and determined that, because

of unusual circumstances, the ten-daywaiting period is not feasible.

(c) For purposes of computing thewaiting period under paragraph (b)(1)of this section, a single point of con-tact is presumed to have received writ-ten notification 5 days after the date ofmailing of such notification.

§ 1152.11 What are the Chairman’s ob-ligations in interstate situations?

(a) The Chairman is responsible for:(1) Identifying proposed Gederal fi-

nancial assistance that has an impacton interstate areas;

(2) Notifying appropriate officialsand entities in states which haveadopted a process and which select theEndowment’s program or activity;

(3) Making efforts to identify and no-tify the affected state, areawide, re-gional, and local officials and entitiesin those states that have not adopted aprocess under the Order or do not se-lect the Endowment’s program or ac-tivity;

(4) Responding pursuant to § 1152.10 ofthis part if the Chairman receives arecommendation from a designatedareawide agency transmitted by a sin-gle point of contact, in cases in whichthe review, coordination, and commu-nication with the Endowment havebeen delegated.

(b) The Chairman uses the proceduresin § 1152.10 if a state process provides astate process recommendation to theEndowment through a single point ofcontact.

§ 1152.12 How may a state simplify,consolidate, or substitute federallyrequired state plans?

(a) As used in this section:(1) Simplify means that a state may

develop its own format, choose its ownsubmission date, and select the plan-ning period for a state plan.

(2) Consolidate means that a statemay meet statutory and regulatory re-quirements by combining two or moreplans into one document and that thestate can select the format, submissiondate, and planning period for the con-solidated plan.

(3) Substitute means that a state mayuse a plan or other document that ithas developed for its own purposes tomeet Federal requirements.


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45 CFR Ch. XI (10–1–97 Edition)§ 1152.13

(b) If not inconsistent with law, astate may decide to try to simplify,consolidate, or substitute Federally re-quired state plans without prior ap-proval by the Chairman.

(c) The Chairman reviews each stateplan that a state has simplified, con-solidated, or substituted and acceptsthe plan only if it meets Federal re-quirements.

§ 1152.13 May the Chairman waive anyprovision of these regulations?

In an emergency, the Chairman maywaive any provision of these regula-tions.

PART 1153—ENFORCEMENT OFNONDISCRIMINATION ON THEBASIS OF HANDICAP IN PRO-GRAMS OR ACTIVITIES CON-DUCTED BY THE NATIONAL EN-DOWMENT FOR THE ARTS

Sec.1153.101 Purpose.1153.102 Application.1153.103 Definitions.1153.104—1153.109 [Reserved]1153.110 Self-evaluation.1153.111 Notice.1153.112—153.129 [Reserved]1153.130 General prohibitions against dis-

crimination.1153.131—1153.139 [Reserved]1153.140 Employment.1153.141—1153.148 [Reserved]1153.149 Program accessibility: Discrimina-

tion prohibited.1153.150 Program accessibility: Existing fa-

cilities.1153.151 Program accessibility: New con-

struction and alterations.1153.152—1153.159 [Reerved]1153.160 Communications.1153.161–—1153.169 [Reserved]1153.170 Compliance procedures.1153.171—1153.999 [Reserved]


SOURCE: 51 FR 22895 and 22896, June 23, 1986,unless otherwise noted.

§ 1153.101 Purpose.This part effectuates section 119 of

the Rehabilitation, ComprehensiveServices, and Developmental Disabil-ities Amendments of 1978, whichamended section 504 of the Rehabilita-tion Act of 1973 to prohibit discrimina-tion on the basis of handicap in pro-grams or activities conducted by Exec-

utive agencies or the United StatesPostal Service.

§ 1153.102 Application.This part applies to all programs or

activities conducted by the agency.

§ 1153.103 Definitions.For purposes of this part, the term—Assistant Attorney General means the

Assistant Attorney General, CivilRights Division, United States Depart-ment of Justice.

Auxiliary aids means services or de-vices that enable persons with im-paired sensory, manual, or speakingskills to have an equal opportunity toparticipate in, and enjoy the benefitsof, programs or activities conducted bythe agency. For example, auxiliary aidsuseful for persons with impaired visioninclude readers, brailled materials,audio recordings, telecommunicationsdevices and other similar services anddevices. Auxiliary aids useful for per-sons with impaired hearing includetelephone handset amplifiers, tele-phones compatible with hearing aids,telecommunication devices for deafpersons (TDD’s), interpreters,notetakers, written materials, andother similar services and devices.

Complete complaint means a writtenstatement that contains the complain-ant’s name and address and describesthe agency’s alleged discriminatory ac-tion in sufficient detail to inform theagency of the nature and date of the al-leged violation of section 504. It shallbe signed by the complainant or bysomeone authorized to do so on his orher behalf. Complaints filed on behalfof classes or third parties shall describeor identify (by name, if possible) thealleged victims of discrimination.

Facility means all or any portion ofbuildings, structures, equipment,roads, walks, parking lots, rollingstock or other conveyances, or otherreal or personal property.

Handicapped person means any personwho has a physical or mental impair-ment that substantially limits one ormore major life activities, has a recordof such an impairment, or is regardedas having such an impairment.

As used in this definition, the phrase:(1) Physical or mental impairment in-

cludes—


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(i) Any physiological disorder or con-dition, cosmetic disfigurement, or ana-tomical loss affecting one or more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genitourinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional ormental illness, and specific learningdisabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addiction and alocoholism.

(2) Major life activities includes func-tions such as caring for one’s self, per-forming manual tasks, walking, seeing,hearing, speaking, breathing, learning,and working.


(4) Is regarded as having an impairmentmeans—

(i) Has a physical or mental impair-ment that does not substantially limitmajor life activities but is treated bythe agency as constituting such a limi-tation;

(ii) Has a physical or mental impair-ment that substantially limits majorlife activities only as a result of the at-titudes of others toward such impair-ment; or

(iii) Has none of the impairments de-fined in paragraph (1) of this definitionbut is treated by the agency as havingsuch an impairment.

Historic preservation programs meansprograms conducted by the agency thathave preservation of historic propertiesas a primary purpose.

Historic properties means those prop-erties that are listed or eligible forlisting in the National Register of His-toric Places or properties designated ashistoric under a statute of the appro-priate State or local government body.

Qualified handicapped person means—(1) With respect to preschool, elemen-

tary, or secondary education servicesprovided by the agency, a handicappedperson who is a member of a class ofpersons otherwise entitled by statute,regulation, or agency policy to receiveeducation services from the agency.

(2) With respect to any other agencyprogram or activity under which a per-son is required to perform services orto achieve a level of accomplishment, ahandicapped person who meets the es-sential eligibility requirements andwho can acheive the purpose of the pro-gram or activity without modificationsin the program or activity that theagency can demonstrate would resultin a fundamental alteration in its na-ture;

(3) With respect to any other pro-gram or activity, a handicapped personwho meets the essential eligibility re-quirements for participation in, or re-ceipt of benefits from, that program oractivity; and

(4) Qualified handicapped person is de-fined for purposes of employment in 29CFR 1613.702(f), which is made applica-ble to this part by § 1153.140.

Section 504 means section 504 of theRehabilitation Act of 1973 (Pub. L. 93–112, 87 Stat. 394 (29 U.S.C. 794)), asamended by the Rehabilitation ActAmendments of 1974 (Pub. L. 93–516, 88Stat. 1617), and the Rehabilitation,Comprehensive Services, and Devel-opmental Disabilities Amendments of1978 (Pub. L. 95–602, 92 Stat. 2955). Asused in this part, section 504 appliesonly to programs or activities con-ducted by Executive agencies and notto federally assisted programs.

Substantial impairment means a sig-nificant loss of the integrity of finishedmaterials, design quality, or specialcharacter resulting from a permanentalteration.

§§ 1153.104—1153.109 [Reserved]

§ 1153.110 Self-evaluation.(a) The agency shall, by August 24,

1987, evaluate its current policies andpractices, and the effects thereof, thatdo not or may not meet the require-ments of this part, and, to the extentmodification of any such policies andpractices is required, the agency shall


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45 CFR Ch. XI (10–1–97 Edition)§ 1153.111

proceed to make the necessary modi-fications.

(b) The agency shall provide an op-portunity to interested persons, includ-ing handicapped persons or organiza-tions representing handicapped per-sons, to participate in the self-evalua-tion process by submitting comments(both oral and written).

(c) The agency shall, until threeyears following the completion of theself-evaluation, maintain on file andmake available for public inspection:

(1) A description of areas examinedand any problems identified, and

(2) A description of any modificationsmade.

§ 1153.111 Notice.

The agency shall make available toemployees, applicants, participants,beneficiaries, and other interested per-sons such information regarding theprovisions of this part and its applica-bility to the programs or activitiesconducted by the agency, and makesuch information available to them insuch manner as the head of the agencyfinds necessary to apprise such personsof the protections against discrimina-tion assured them by section 504 andthis regulation.

§§ 1153.112—1153.129 [Reserved]

§§ 1153.130 General prohibitionsagainst discrimination.

(a) No qualified handicapped personshall, on the basis of handicap, be ex-cluded from participation in, be deniedthe benefits of, or otherwise be sub-jected to discrimination under any pro-gram or activity conducted by theagency.

(b)(1) The agency, in providing anyaid, benefit, or service, may not, di-rectly or through contractual, licens-ing, or other arrangements, on thebasis of handicap—

(i) Deny a qualified handicapped per-son the opportunity to participate inor benefit from the aid, benefit, orservice;

(ii) Afford a qualified handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;

(iii) Provide a qualified handicappedperson with an aid, benefit, or servicethat is not as effective in affordingequal opportunity to obtain the sameresult, to gain the same benefit, or toreach the same level of achievement asthat provided to others;

(iv) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons than is provided to others un-less such action is necessary to providequalified handicapped persons with aid,benefits, or services that are as effec-tive as those provided to others;

(v) Deny a qualified handicapped per-son the opportunity to participate as amember of planning or advisory boards;or

(vi) Otherwise limit a qualifiedhandicapped person in the enjoymentof any right, privilege, advantage, oropportunity enjoyed by others receiv-ing the aid, benefit, or service.

(2) The agency may not deny a quali-fied handicapped person the oppor-tunity to participate in programs oractivities that are not separate or dif-ferent, despite the existence of permis-sibly separate or different programs oractivities.

(3) The agency may not, directly orthrough contractual or otherarrangments, utilize criteria or meth-ods of administration the purpose or ef-fect of which would—

(i) Subject qualified handicapped per-sons to discrimination on the basis ofhandicap; or

(ii) Defeat or substantially impair ac-complishment of the objectives of aprogram or activity with respect tohandicapped persons.

(4) The agency may not, in determin-ing the site or location of a facility,make selections the purpose or effectof which would—

(i) Exclude handicapped personsfrom, deny them the benefits of, or oth-erwise subject them to discriminationunder any program or activity con-ducted by the agency; or

(ii) Defeat or substantially impairthe accomplishment of the objectivesof a program or activity with respectto handicapped persons.

(5) The agency, in the selection ofprocurement contractors, may not use


365


criteria that subject qualified handi-capped persons to discrimination onthe basis of handicap.

(6) The agency may not administer alicensing or certification program in amanner that subjects qualified handi-capped persons to discrimination onthe basis of handicap, nor may theagency establish requirements for theprograms or activities of licensees orcertified entities that subject qualifiedhandicapped persons to discriminationon the basis of handicap. However, theprograms or activities of entities thatare licensed or certified by the agencyare not, themselves, covered by thispart.

(c) The exclusion of nonhandicappedpersons from the benefits of a programlimited by Federal statute or Execu-tive order to handicapped persons orthe exclusion of a specific class ofhandicapped persons from a programlimited by Federal statute or Execu-tive order to a different class of handi-capped persons is not prohibited bythis part.

(d) The agency shall administer pro-grams and activities in the most inte-grated setting appropriate to the needsof qualified handicapped persons.

§§ 1153.131—1153.139 [Reserved]

§ 1153.140 Employment.No qualified handicapped person

shall, on the basis of handicap, be sub-jected to discrimination in employ-ment under any program or activityconducted by the agency. The defini-tions, requirements, and procedures ofsection 501 of the Rehabilitation Act of1973 (29 U.S.C. 791), as established bythe Equal Employment OpportunityCommission in 29 CFR part 1613, shallapply to employment in federally con-ducted programs or activities.

§§ 1153.141—1153.148 [Reserved]

§ 1153.149 Program accessibility: Dis-crimination prohibited.

Except as otherwise provided in§ 1153.150, no qualified handicapped per-son shall, because the agency’s facili-ties are inaccessible to or unusable byhandicapped persons, be denied thebenefits of, be excluded from participa-tion in, or otherwise be subjected to

discrimination under any program oractivity conducted by the agency.

§ 1153.150 Program accessibility: Exist-ing facilities.

(a) General. The agency shall operateeach program or activity so that theprogram or activity, when viewed in itsentirety, is readily accessible to andusable by handicapped persons. Thisparagraph does not—

(1) Necessarily require the agency tomake each of its existing facilities ac-cessible to and usable by handicappedpersons;

(2) In the case of historic preserva-tion programs, require the agency totake any action that would result in asubstantial impairment of significanthistoric features of an historic prop-erty; or

(3) Require the agency to take anyaction that it can demonstrate wouldresult in a fundamental alteration inthe nature of a program or activity orin undue financial and administrativeburdens. In those circumstances whereagency personnel believe that the pro-posed action would fundamentallyalter the program or activity or wouldresult in undue financial and adminis-trative burdens, the agency has theburden of proving that compliance with§1153.150(a) would result in such alter-ation or burdens. The decision thatcompliance would result in such alter-ation or burdens must be made by theagency head or his or her designeeafter considering all agency resourcesavailable for use in the funding and op-eration of the conducted program oractivity, and must be accompanied bya written statement of the reasons forreaching that conclusion. If an actionwould result in such an alteration orsuch burdens, the agency shall takeany other action that would not resultin such an alteration or such burdensbut would nevertheless ensure thathandicapped persons receive the bene-fits and services of the program or ac-tivity.

(b) Methods—(1) General. The agencymay comply with the requirements ofthis section through such means as re-design of equipment, reassignment ofservices to accessible buildings, assign-ment of aides to beneficiaries, homevisits, delivery of services at alternate


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45 CFR Ch. XI (10–1–97 Edition)§ 1153.151

accessible sites, alteration of existingfacilities and construction of new fa-cilities, use of accessible rolling stock,or any other methods that result inmaking its programs or activities read-ily accessible to and usable by handi-capped persons. The agency is not re-quired to make structural changes inexisting facilities where other methodsare effective in achieving compliancewith this section. The agency, in mak-ing alterations to existing buildings,shall meet accessibility requirementsto the extent compelled by the Archi-tectural Barriers Act of 1968, as amend-ed (42 U.S.C. 4151 through 4157), and anyregulations implementing it. In choos-ing among available methods for meet-ing the requirements of this section,the agency shall give priority to thosemethods that offer programs and ac-tivities to qualified handicapped per-sons in the most integrated setting ap-propriate.

(2) Historic preservation programs. Inmeeting the requirements of§ 1153.150(a) in historic preservationprograms, the agency shall give prior-ity to methods that provide physicalaccess to handicapped persons. In caseswhere a physical alteration to an his-toric property is not required becauseof § 1153.150(a)(2) or (a)(3), alternativemethods of achieving program acces-sibility include—

(i) Using audio-visual materials anddevices to depict those portions of anhistoric property that cannot other-wise be made accessible;

(ii) Assigning persons to guide handi-capped persons into or through por-tions of historic properties that cannototherwise be made accessible; or

(iii) Adopting other innovative meth-ods.

(c) Time period for compliance. Theagency shall comply with the obliga-tions established under this section byOctober 21, 1986, except that wherestructural changes in facilities are un-dertaken, such changes shall be madeby August 22, 1989, but in any event asexpeditiously as possible.

(d) Transition plan. In the event thatstructural changes to facilities will beundertaken to achieve program acces-sibility, the agency shall develop, byFebruary 23, 1987, a transition plan set-ting forth the steps necessary to com-

plete such changes. The agency shallprovide an opportunity to interestedpersons, including handicapped personsor organizations representing handi-capped persons, to participate in thedevelopment of the transition plan bysubmitting comments (both oral andwritten). A copy of the transition planshall be made available for public in-spection. The plan shall, at a mini-mum—

(1) Identify physical obstacles in theagency’s facilities that limit the acces-sibility of its programs or activities tohandicapped persons;


(3) Specify the schedule for takingthe steps necessary to achieve compli-ance with this section and, if the timeperiod of the transition plan is longerthan one year, identify steps that willbe taken during each year of the tran-sition period; and

(4) Indicate the official responsiblefor implementation of the plan.

§ 1153.151 Program accessibility: Newconstruction and alterations.

Each building or part of a buildingthat is constructed or altered by, onbehalf of, or for the use of the agencyshall be designed, constructed, or al-tered so as to be readily accessible toand usable by handicapped persons.The definitions, requirements, andstandards of the Architectural BarriersAct (42 U.S.C. 4151 through 4157), as es-tablished in 41 CFR 101–19.600 to 101–19.607, apply to buildings covered bythis section.

§§ 1153.152—1153.159 [Reserved]

§ 1153.160 Communications.(a) The agency shall take appropriate

steps to ensure effective communica-tion with applicants, participants, per-sonnel of other Federal entities, andmembers of the public.

(1) The agency shall furnish appro-priate auxiliary aids where necessaryto afford a handicapped person an equalopportunity to participate in, andenjoy the benefits of, a program or ac-tivity conducted by the agency.

(i) In determining what type of auxil-iary aid is necessary, the agency shall


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give primary consideration to the re-quests of the handicapped person.

(ii) The agency need not provide indi-vidually prescribed devices, readers forpersonal use or study, or other devicesof a personal nature.

(2) Where the agency communicateswith applicants and beneficiaries bytelephone, telecommunication devicesfor deaf person (TDD’s) or equally ef-fective telecommunication systemsshall be used.

(b) The agency shall ensure that in-terested persons, including personswith impaired vision or hearing, canobtain information as to the existenceand location of accessible services, ac-tivities, and facilities.

(c) The agency shall provide signageat a primary entrance to each of its in-accessible facilities, directing users toa location at which they can obtain in-formation about accessible facilities.The international symbol for acces-sibility shall be used at each primaryentrance of an accessible facility.

(d) This section does not require theagency to take any action that it candemonstrate would result in a fun-damental alteration in the nature of aprogram or activity or in undue finan-cial and adminstrative burdens. Inthose circumstances where agency per-sonnel believe that the proposed actionwould fundamentally alter the programor activity or would result in undue fi-nancial and administrative burdens,the agency has the burden of provingthat compliance with § 1153.160 wouldresult in such alteration or burdens.The decision that compliance would re-sult in such alteration or burdens mustbe made by the agency head or his orher designee after considering all agen-cy resources available for use in thefunding and operation of the conductedprogram or activity, and must be ac-companied by a written statement ofthe reasons for reaching that conclu-sion. If an action required to complywith this section would result in suchan alteration or such burdens, theagency shall take any other actionthat would not result in such an alter-ation or such burdens but would never-theless ensure that, to the maximumextent possible, handicapped personsreceive the benefits and services of theprogram or activity.

§§ 1153.161—1153.169 [Reserved]

§ 1153.170 Compliance procedures.(a) Except as provided in paragraph

(b) of this section, this section appliesto all allegations of discrimination onthe basis of handicap in programs oractivities conducted by the agency.

(b) The agency shall process com-plaints alleging violations of section504 with respect to employment accord-ing to the procedures established bythe Equal Employment OpportunityCommission in 29 CFR part 1613 pursu-ant to section 501 of the RehabilitationAct of 1973 (29 U.S.C. 791).

(c) The Director, Office for CivilRights, shall be responsible for coordi-nating implementation of this section.Complaints may be sent to the Office ofGeneral Counsel, National Endowmentfor the Arts, 1100 Pennsylvania AvenueNW., Washington, DC 20506.

(d) The agency shall accept and in-vestigate all complete complaints forwhich it has jurisdiction. All completecomplaints must be filed within 180days of the alleged act of discrimina-tion. The agency may extend this timeperiod for good cause.

(e) If the agency receives a complaintover which it does not have jurisdic-tion, it shall promptly notify the com-plainant and shall make reasonable ef-forts to refer the complaint to the ap-propriate government entity.

(f) The agency shall notify the Archi-tectural and Transportation BarriersCompliance Board upon receipt of anycomplaint alleging that a building orfacility that is subject to the Architec-tural Barriers Act of 1968, as amended(42 U.S.C. 4151–4157), or section 502 ofthe Rehabilitation Act of 1973, asamended (29 U.S.C. 792), is not readilyaccessible to and usable by handi-capped persons.

(g) Within 180 days of the receipt of acomplete complaint for which it has ju-risdiction, the agency shall notify thecomplainant of the results of the inves-tigation in a letter containing—

(1) Findings of fact and conclusionsof law;

(2) A description of a remedy for eachviolation found; and

(3) A notice of the right to appeal.(h) Appeals of the findings of fact and

conclusions of law or remedies must be


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45 CFR Ch. XI (10–1–97 Edition)§§ 1153.171—1153.999

filed by the complainant within 90 daysof receipt from the agency of the letterrequired by § 1153.170(g). The agencymay extend this time for good cause.

(i) Timely appeals shall be acceptedand processed by the head of the agen-cy.

(j) The head of the agency shall no-tify the complainant of the results ofthe appeal within 60 days of the receiptof the request. If the head of the agen-cy determines that additional informa-tion is needed from the complainant,he or she shall have 60 days from thedate of receipt of the additional infor-mation to make his or her determina-tion on the appeal.

(k) The time limits cited in para-graphs (g) and (j) of this section may beextended with the permission of theAssistant Attorney General.

(l) The agency may delegate its au-thority for conducting complaint in-vestigations to other Federal agencies,except that the authority for makingthe final determination may not bedelegated to another agency.

[51 FR 22895 and 22896, June 23, 1986, asamended at 51 FR 22895, June 23, 1986]

§§ 1153.171—1153.999 [Reserved]

PART 1154—GOVERNMENTWIDEDEBARMENT AND SUSPENSION(NONPROCUREMENT) AND GOV-ERNMENTWIDE REQUIREMENTSFOR DRUG-FREE WORKPLACE(GRANTS)

Subpart A—General

Sec.1154.100 Purpose.1154.105 Definitions.1154.110 Coverage.1154.115 Policy.

Subpart B—Effect of Action

1154.200 Debarment or suspension.1154.205 Ineligible persons.1154.210 Voluntary exclusion.1154.215 Exception provision.1154.220 Continuation of covered trans-

actions.1154.225 Failure to adhere to restrictions.

Subpart C—Debarment

1154.300 General.1154.305 Causes for debarment.1154.310 Procedures.

1154.311 Investigation and referral.1154.312 Notice of proposed debarment.1154.313 Opportunity to contest proposed de-

barment.1154.314 Debarring official’s decision.1154.315 Settlement and voluntary exclu-

sion.1154.320 Period of debarment.1154.325 Scope of debarment.

Subpart D—Suspension

1154.400 General.1154.405 Causes for suspension.1154.410 Procedures.1154.411 Notice of suspension.1154.412 Opportunity to contest suspension.1154.413 Suspending official’s decision.1154.415 Period of suspension.1154.420 Scope of suspension.

Subpart E—Responsibilities of GSA, ArtsEndowment and Participants

1154.500 GSA responsibilities.1154.505 Arts Endowment responsibilities.1154.510 Participants’ responsibilities.

Subpart F—Drug-Free WorkplaceRequirements (Grants)

1154.600 Purpose.1154.605 Definitions.1154.610 Coverage.1154.615 Grounds for suspension of pay-

ments, suspension or termination ofgrants, or suspension or debarment.

1154.620 Effect of violation.1154.625 Exception provision.1154.630 Certification requirements and pro-

cedures.1154.635 Reporting of and employee sanc-

tions for convictions of criminal drug of-fenses.

APPENDIX A TO PART 1154—CERTIFICATION RE-GARDING DEBARMENT, SUSPENSION, ANDOTHER RESPONSIBILITY MATTERS—PRI-MARY COVERED TRANSACTIONS

APPENDIX B TO PART 1154—CERTIFICATION RE-GARDING DEBARMENT, SUSPENSION, INELI-GIBILITY AND VOLUNTARY EXCLUSION—LOWER TIER COVERED TRANSACTIONS

APPENDIX C TO PART 1154—CERTIFICATION RE-GARDING DRUG-FREE WORKPLACE RE-QUIREMENTS

AUTHORITY: 20 U.S.C. 959(a)(1); 41 U.S.C. 701et seq.; E.O. 12549, 3 CFR, 1986 comp., p. 189.

SOURCE: 53 FR 19201 and 19204, May 26, 1988,unless otherwise noted.

CROSS REFERENCE: See also Office of Man-agement and Budget notices published at 55FR 21679, May 25, 1990, and 60 FR 33036, June26, 1995.

EDITORIAL NOTES:


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(1) For nomenclature changes to part 1154,see 53 FR 19201, May 26, 1988.

(2) For additional information, see relateddocuments published at 52 FR 20360, May 29,1987, 53 FR 19160, May 26, 1988, and 53 FR34474, September 6, 1988.

Subpart A—General

§ 1154.100 Purpose.(a) Executive Order (E.O.) 12549 pro-

vides that, to the extent permitted bylaw, Executive departments and agen-cies shall participate in a government-wide system for nonprocurement debar-ment and suspension. A person who isdebarred or suspended shall be excludedfrom Federal financial and non-financial assistance and benefits underFederal programs and activities. De-barment or suspension of a participantin a program by one agency shall havegovernmentwide effect.

(b) These regulations implement sec-tion 3 of E.O. 12549 and the guidelinespromulgated by the Office of Manage-ment and Budget under section 6 of theE.O. by:

(1) Prescribing the programs and ac-tivities that are covered by the govern-mentwide system;

(2) Prescribing the governmentwidecriteria and governmentwide minimumdue process procedures that each agen-cy shall use;

(3) Providing for the listing ofdebarred and suspended participants,participants declared ineligible (seedefinition of ‘‘ineligible’’ in § 1154.105),and participants who have voluntarilyexcluded themselves from participationin covered transactions;

(4) Setting forth the consequences ofa debarment, suspension, determina-tion of ineligibility, or voluntary ex-clusion; and

(5) Offering such other guidance asnecessary for the effective implementa-tion and administration of the govern-mentwide system.

(c) These regulations also implementExecutive Order 12689 (3 CFR, 1989Comp., p. 235) and 31 U.S.C. 6101 note(Public Law 103–355, sec. 2455, 108 Stat.3327) by—

(1) Providing for the inclusion in theList of Parties Excluded from Federal Pro-curement and Nonprocurement Programsall persons proposed for debarment,

debarred or suspended under the Fed-eral Acquisition Regulation, 48 CFRPart 9, subpart 9.4; persons againstwhich governmentwide exclusions havebeen entered under this part; and per-sons determined to be ineligible; and

(2) Setting forth the consequences ofa debarment, suspension, determina-tion of ineligibility, or voluntary ex-clusion.

(d) Although these regulations coverthe listing of ineligible participantsand the effect of such listing, they donot prescribe policies and proceduresgoverning declarations of ineligibility.

[60 FR 33040, 33062, June 26, 1995]

§ 1154.105 Definitions.The following definitions apply to

this part:Adequate evidence. Information suffi-

cient to support the reasonable beliefthat a particular act or omission hasoccurred.

Affiliate. Persons are affiliates ofeach other if, directly or indirectly, ei-ther one controls or has the power tocontrol the other, or, a third personcontrols or has the power to controlboth. Indicia of control include, but arenot limited to: interlocking manage-ment or ownership, identity of inter-ests among family members, shared fa-cilities and equipment, common use ofemployees, or a business entity orga-nized following the suspension or de-barment of a person which has thesame or similar management, owner-ship, or principal employees as the sus-pended, debarred, ineligible, or volun-tarily excluded person.

Agency. Any executive department,military department or defense agencyor other agency of the executivebranch, excluding the independent reg-ulatory agencies.

Arts Endowment. National Endow-ment for the Arts.

Civil judgment. The disposition of acivil action by any court of competentjurisdiction, whether entered by ver-dict, decision, settlement, stipulation,or otherwise creating a civil liabilityfor the wrongful acts complained of; ora final determination of liability underthe Program Fraud Civil Remedies Actof 1988 (31 U.S.C. 3801–12).

Conviction. A judgment or convictionof a criminal offense by any court of


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45 CFR Ch. XI (10–1–97 Edition)§ 1154.105

competent jurisdiction, whether en-tered upon a verdict or a plea, includ-ing a plea of nolo contendere.

Debarment. An action taken by a de-barring official in accordance withthese regulations to exclude a personfrom participating in covered trans-actions. A person so excluded is‘‘debarred.’’

Debarring official. An official author-ized to impose debarment. The debar-ring official is either:

(1) The agency head, or(2) An official designated by the

agency head.Indictment. Indictment for a criminal

offense. An information or other filingby competent authority charging acriminal offense shall be given thesame effect as an indictment.

Ineligible. Excluded from participa-tion in Federal nonprocurement pro-grams pursuant to a determination ofineligibility under statutory, executiveorder, or regulatory authority, otherthan Executive Order 12549 and itsagency implementing regulations; forexemple, excluded pursuant to theDavis-Bacon Act and its implementingregulations, the equal employment op-portunity acts and executive orders, orthe environmental protection acts andexecutive orders. A person is ineligiblewhere the determination of ineligibil-ity affects such person’s eligibility toparticipate in more than one coveredtransaction.

Legal proceedings. Any criminal pro-ceeding or any civil judicial proceedingto which the Federal Government or aState or local government or quasi-governmental authority is a party. Theterm includes appeals from such pro-ceedings.

List of Parties Excluded from FederalProcurement and Nonprocurement Pro-grams. A list compiled, maintained anddistributed by the General Services Ad-ministration (GSA) containing thenames and other information aboutpersons who have been debarred, sus-pended, or voluntarily excluded underExecutive Orders 12549 and 12689 andthese regulations or 48 CFR part 9, sub-part 9.4, persons who have been pro-posed for debarment under 48 CFR part9, subpart 9.4, and those persons whohave been determined to be ineligible.

Notice. A written communicationserved in person or sent by certifiedmail, return receipt requested, or itsequivalent, to the last known addressof a party, its identified counsel, itsagent for service of process, or anypartner, officer, director, owner, orjoint venturer of the party. Notice, ifundeliverable, shall be considered tohave been received by the addresseefive days after being properly sent tothe last address known by the agency.

Participant. Any person who submitsa proposal for, enters into, or reason-ably may be expected to enter into acovered transaction. This term also in-cludes any person who acts on behalf ofor is authorized to commit a partici-pant in a covered transaction as anagent or representative of another par-ticipant.

Person. Any individual, corporation,partnership, association, unit of gov-ernment or legal entity, however orga-nized, except: foreign governments orforeign governmental entities, publicinternational organizations, foreigngovernment owned (in whole or in part)or controlled entities, and entities con-sisting wholly or partially of foreigngovernments or foreign governmentalentities.

Preponderance of the evidence. Proofby information that, compared withthat opposing it, leads to the conclu-sion that the fact at issue is more prob-ably true than not.

Principal. Officer, director, owner,partner, key employee, or other personwithin a participant with primarymanagement or supervisory respon-sibilities; or a person who has a criticalinfluence on or substantive controlover a covered transaction, whether ornot employed by the participant. Per-sons who have a critical influence on orsubstantive control over a coveredtransaction are:

(1) Principal investigators.(2) [Reserved]Proposal. A solicited or unsolicited

bid, application, request, invitation toconsider or similar communication byor on behalf of a person seeking to par-ticipate or to receive a benefit, directlyor indirectly, in or under a coveredtransaction.


371


Respondent. A person against whom adebarment or suspension action hasbeen initiated.

State. Any of the States of the UnitedStates, the District of Columbia, theCommonwealth of Puerto Rico, anyterritory or possession of the UnitedStates, or any agency of a State, exclu-sive of institutions of higher education,hospitals, and units of local govern-ment. A State instrumentality will beconsidered part of the State govern-ment if it has a written determinationfrom a State government that suchState considers that instrumentalityto be an agency of the State govern-ment.

Suspending official. An official au-thorized to impose suspension. The sus-pending official is either:


agency head.Suspension. An action taken by a sus-

pending official in accordance withthese regulations that immediately ex-cludes a person from participating incovered transactions for a temporaryperiod, pending completion of an inves-tigation and such legal, debarment, orProgram Fraud Civil Remedies Actproceedings as may ensue. A person soexcluded is ‘‘suspended.’’

Voluntary exclusion or voluntarily ex-cluded. A status of nonparticipation orlimited participation in covered trans-actions assumed by a person pursuantto the terms of a settlement.

[53 FR 19201, 19204, May 26, 1988, as amendedat 60 FR 33041, 33062, June 26, 1995]

§ 1154.110 Coverage.(a) These regulations apply to all per-

sons who have participated, are cur-rently participating or may reasonablybe expected to participate in trans-actions under Federal nonprocurementprograms. For purposes of these regula-tions such transactions will be referredto as ‘‘covered transactions.’’

(1) Covered transaction. For purposesof these regulations, a covered trans-action is a primary covered transactionor a lower tier covered transaction.Covered transactions at any tier neednot involve the transfer of Federalfunds.

(i) Primary covered transaction. Exceptas noted in paragraph (a)(2) of this sec-

tion, a primary covered transaction isany nonprocurement transaction be-tween an agency and a person, regard-less of type, including: grants, coopera-tive agreements, scholarships, fellow-ships, contracts of assistance, loans,loan guarantees, subsidies, insurance,payments for specified use, donationagreements and any other nonprocure-ment transactions between a Federalagency and a person. Primary coveredtransactions also include those trans-actions specially designated by theU.S. Department of Housing and UrbanDevelopment in such agency’s regula-tions governing debarment and suspen-sion.

(ii) Lower tier covered transaction. Alower tier covered transaction is:

(A) Any transaction between a par-ticipant and a person other than a pro-curement contract for goods or serv-ices, regardless of type, under a pri-mary covered transaction.

(B) Any procurement contract forgoods or services between a participantand a person, regardless of type, ex-pected to equal or exceed the Federalprocurement small purchase thresholdfixed at 10 U.S.C. 2304(g) and 41 U.S.C.253(g) (currently $25,000) under a pri-mary covered transaction.

(C) Any procurement contract forgoods or services between a participantand a person under a covered trans-action, regardless of amount, underwhich that person will have a criticalinfluence on or substantive controlover that covered transaction. Suchpersons are:

(1) Principal investigators.(2) Providers of federally-required

audit services.(2) Exceptions. The following trans-

actions are not covered:(i) Statutory entitlements or manda-

tory awards (but not subtier awardsthereunder which are not themselvesmandatory), including deposited fundsinsured by the Federal Government;

(ii) Direct awards to foreign govern-ments or public international organiza-tions, or transactions with foreign gov-ernments or foreign governmental en-tities, public international organiza-tions, foreign government owned (inwhole or in part) or controlled entities,entities consisting wholly or partially


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45 CFR Ch. XI (10–1–97 Edition)§ 1154.115

of foreign governments or foreign gov-ernmental entities;

(iii) Benefits to an individual as apersonal entitlement without regard tothe individual’s present responsibility(but benefits received in an individual’sbusiness capacity are not excepted);

(iv) Federal employment;(v) Transactions pursuant to national

or agency-recognized emergencies ordisasters;

(vi) Incidental benefits derived fromordinary governmental operations; and

(vii) Other transactions where the ap-plication of these regulations would beprohibited by law.

(b) Relationship to other sections. Thissection describes the types of trans-actions to which a debarment or sus-pension under the regulations willapply. Subpart B, ‘‘Effect of Action,’’§ 1154.200, ‘‘Debarment or suspension,’’sets forth the consequences of a debar-ment or suspension. Those con-sequences would obtain only with re-spect to participants and principals inthe covered transactions and activitiesdescribed in § 1154.110(a). Sections1154.325, ‘‘Scope of debarment,’’ and1154.420, ‘‘Scope of suspension,’’ governthe extent to which a specific partici-pant or organizational elements of aparticipant would be automatically in-cluded within a debarment or suspen-sion action, and the conditions underwhich affiliates or persons associatedwith a participant may also be broughtwithin the scope of the action.

(c) Relationship to Federal procurementactivities. In accordance with E.O. 12689and section 2455 of Public Law 103–355,any debarment, suspension, proposeddebarment or other governmentwideexclusion initiated under the FederalAcquisition Regulation (FAR) on orafter August 25, 1995 shall be recog-nized by and effective for ExecutiveBranch agencies and participants as anexclusion under this regulation. Simi-larly, any debarment, suspension orother governmentwide exclusion initi-ated under this regulation on or afterAugust 25, 1995 shall be recognized byand effective for those agencies as a de-barment or suspension under the FAR.


§ 1154.115 Policy.

(a) In order to protect the public in-terest, it is the policy of the FederalGovernment to conduct business onlywith responsible persons. Debarmentand suspension are discretionary ac-tions that, taken in accordance withExecutive Order 12549 and these regula-tions, are appropriate means to imple-ment this policy.

(b) Debarment and suspension are se-rious actions which shall be used onlyin the public interest and for the Fed-eral Government’s protection and notfor purposes of punishment. Agenciesmay impose debarment or suspensionfor the causes and in accordance withthe procedures set forth in these regu-lations.

(c) When more than one agency hasan interest in the proposed debarmentor suspension of a person, consider-ation shall be given to designating oneagency as the lead agency for makingthe decision. Agencies are encouragedto establish methods and proceduresfor coordinating their debarment orsuspension actions.


§ 1154.200 Debarment or suspension.

(a) Primary covered transactions. Ex-cept to the extent prohibited by law,persons who are debarred or suspendedshall be excluded from primary coveredtransactions as either participants orprincipals throughout the ExecutiveBranch of the Federal Government forthe period of their debarment, suspen-sion, or the period they are proposedfor debarment under 48 CFR part 9,subpart 9.4. Accordingly, no agencyshall enter into primary covered trans-actions with such excluded personsduring such period, except as permittedpursuant to § 1154.215.

(b) Lower tier covered transactions. Ex-cept to the extent prohibited by law,persons who have been proposed for de-barment under 48 CFR part 9, subpart9.4, debarred or suspended shall be ex-cluded from participating as eitherparticipants or principals in all lowertier covered transactions (see§ 1154.110(a)(1)(ii)) for the period of theirexclusion.


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(c) Exceptions. Debarment or suspen-sion does not affect a person’s eligi-bility for—

(1) Statutory entitlements or manda-tory awards (but not subtier awardsthereunder which are not themselvesmandatory), including deposited fundsinsured by the Federal Government;

(2) Direct awards to foreign govern-ments or public international organiza-tions, or transactions with foreign gov-ernments or foreign governmental en-tities, public international organiza-tions, foreign government owned (inwhole or in part) or controlled entities,and entities consisting wholly or par-tially of foreign governments or for-eign governmental entities;

(3) Benefits to an individual as a per-sonal entitlement without regard tothe individual’s present responsibility(but benefits received in an individual’sbusiness capacity are not excepted);

(4) Federal employment;(5) Transactions pursuant to national


(6) Incidental benefits derived fromordinary governmental operations; and

(7) Other transactions where the ap-plication of these regulations would beprohibited by law.

[60 FR 33041, 33062, June 26, 1995]

§ 1154.205 Ineligible persons.Persons who are ineligible, as defined

in § 1154.105(i), are excluded in accord-ance with the applicable statutory, ex-ecutive order, or regulatory authority.

§ 1154.210 Voluntary exclusion.Persons who accept voluntary exclu-

sions under § 1154.315 are excluded inaccordance with the terms of their set-tlements. Arts Endowment shall, andparticipants may, contact the originalaction agency to ascertain the extentof the exclusion.

§ 1154.215 Exception provision.The Arts Endowment may grant an

exception permitting a debarred, sus-pended, or voluntarily excluded person,or a person proposed for debarmentunder 48 CFR part 9, subpart 9.4, to par-ticipate in a particular covered trans-action upon a written determinationby the agency head or an authorized

designee stating the reason(s) for devi-ating from the Presidential policy es-tablished by Executive Order 12549 and§ 1154.200. However, in accordance withthe President’s stated intention in theExecutive Order, exceptions shall begranted only infrequently. Exceptionsshall be reported in accordance with§ 1154.505(a).

[60 FR 33041, 33062, June 26, 1995]

§ 1154.220 Continuation of coveredtransactions.

(a) Notwithstanding the debarment,suspension, proposed debarment under48 CFR part 9, subpart 9.4, determina-tion of ineligibility, or voluntary ex-clusion of any person by an agency,agencies and participants may con-tinue covered transactions in existenceat the time the person was debarred,suspended, proposed for debarmentunder 48 CFR part 9, subpart 9.4, de-clared ineligible, or voluntarily ex-cluded. A decision as to the type of ter-mination action, if any, to be takenshould be made only after thorough re-view to ensure the propriety of the pro-posed action.

(b) Agencies and participants shallnot renew or extend covered trans-actions (other than no-cost time exten-sions) with any person who is debarred,suspended, proposed for debarmentunder 48 CFR part 9, subpart 9.4, ineli-gible or voluntary excluded, except asprovided in § 1154.215.

[60 FR 33041, 33062, June 26, 1995]

§ 1154.225 Failure to adhere to restric-tions.

(a) Except as permitted under§ 1154.215 or § 1154.220, a participantshall not knowingly do business undera covered transaction with a personwho is—

(1) Debarred or suspended;(2) Proposed for debarment under 48

CFR part 9, subpart 9.4; or(3) Ineligible for or voluntarily ex-

cluded from the covered transaction.(b) Violation of the restriction under

paragraph (a) of this section may re-sult in disallowance of costs, annul-ment or termination of award, issuanceof a stop work order, debarment or sus-pension, or other remedies as appro-priate.


374

45 CFR Ch. XI (10–1–97 Edition)§ 1154.300

(c) A participant may rely upon thecertification of a prospective partici-pant in a lower tier covered trans-action that it and its principals are notdebarred, suspended, proposed for de-barment under 48 CFR part 9, subpart9.4, ineligible, or voluntarily excludedfrom the covered transaction (See Ap-pendix B of these regulations), unless itknows that the certification is erro-neous. An agency has the burden ofproof that a participant did knowinglydo business with a person that filed anerroneous certification.

[60 FR 33041, 33062, June 26, 1995]


§ 1154.300 General.The debarring official may debar a

person for any of the causes in§ 1154.305, using procedures establishedin §§ 1154.310 through 1154.314. The exist-ence of a cause for debarment, how-ever, does not necessarily require thatthe person be debarred; the seriousnessof the person’s acts or omissions andany mitigating factors shall be consid-ered in making any debarment deci-sion.

§ 1154.305 Causes for debarment.Debarment may be imposed in ac-

cordance with the provisions of§§ 1154.300 through 1154.314 for:

(a) Conviction of or civil judgmentfor:

(1) Commission of fraud or a criminaloffense in connection with obtaining,attempting to obtain, or performing apublic or private agreement or trans-action;

(2) Violation of Federal or State anti-trust statutes, including those pro-scribing price fixing between competi-tors, allocation of customers betweencompetitors, and bid rigging;

(3) Commission of embezzlement,theft, forgery, bribery, falsification ordestruction of records, making falsestatements, receiving stolen property,making false claims, or obstruction ofjustice; or

(4) Commission of any other offenseindicating a lack of business integrityor business honesty that seriously anddirectly affects the present responsibil-ity of a person.

(b) Violation of the terms of a publicagreement or transaction so serious asto affect the integrity of an agencyprogram, such as:

(1) A willful failure to perform in ac-cordance with the terms of one or morepublic agreements or transactions;

(2) A history of failure to perform orof unsatisfactory performance of one ormore public agreements or trans-actions; or

(3) A willful violation of a statutoryor regulatory provision or requirementapplicable to a public agreement ortransaction.

(c) Any of the following causes:(1) A nonprocurement debarment by

any Federal agency taken before Octo-ber 1, 1988, the effective date of theseregulations, or a procurement debar-ment by any Federal agency taken pur-suant to 48 CFR subpart 9.4;

(2) Knowingly doing business with adebarred, suspended, ineligible, or vol-untarily excluded person, in connectionwith a covered transaction, except aspermitted in § 1154.215 or § 1154.220;

(3) Failure to pay a single substantialdebt, or a number of outstanding debts(including disallowed costs and over-payments, but not including sums owedthe Federal Government under the In-ternal Revenue Code) owed to any Fed-eral agency or instrumentality, pro-vided the debt is uncontested by thedebtor or, if contested, provided thatthe debtor’s legal and administrativeremedies have been exhausted;

(4) Violation of a material provisionof a voluntary exclusion agreement en-tered into under § 1154.315 or of any set-tlement of a debarment or suspensionaction; or

(5) Violation of any requirement ofsubpart F of this part, relating to pro-viding a drug-free workplace, as setforth in § 1154.615 of this part.

(d) Any other cause of so serious orcompelling a nature that it affects thepresent responsibility of a person.

[53 FR 19201 and 19204, May 26, 1988, asamended at 54 FR 4964, Jan. 31, 1989]

§ 1154.310 Procedures.Arts Endowment shall process debar-

ment actions as informally as prac-ticable, consistent with the principlesof fundamental fairness, using the pro-cedures in §§ 1154.311 through 1154.314.


375


§ 1154.311 Investigation and referral.Information concerning the existence

of a cause for debarment from anysource shall be promptly reported, in-vestigated, and referred, when appro-priate, to the debarring official for con-sideration. After consideration, the de-barring official may issue a notice ofproposed debarment.

§ 1154.312 Notice of proposed debar-ment.

A debarment proceeding shall be ini-tiated by notice to the respondent ad-vising:

(a) That debarment is being consid-ered;

(b) Of the reasons for the proposeddebarment in terms sufficient to putthe respondent on notice of the con-duct or transaction(s) upon which it isbased;

(c) Of the cause(s) relied upon under§ 1154.305 for proposing debarment;

(d) Of the provisions of § 1154.311through § 1154.314, and any other ArtsEndowment procedures, if applicable,governing debarment decisionmaking;and

(e) Of the potential effect of a debar-ment.

§ 1154.313 Opportunity to contest pro-posed debarment.

(a) Submission in opposition. Within 30days after receipt of the notice of pro-posed debarment, the respondent maysubmit, in person, in writing, orthrough a representative, informationand argument in opposition to the pro-posed debarment.

(b) Additional proceedings as to dis-puted material facts. (1) In actions notbased upon a conviction or civil judg-ment, if the debarring official findsthat the respondent’s submission in op-position raises a genuine dispute overfacts material to the proposed debar-ment, respondent(s) shall be affordedan opportunity to appear with a rep-resentative, submit documentary evi-dence, present witnesses, and confrontany witness the agency presents.

(2) A transcribed record of any addi-tional proceedings shall be made avail-able at cost to the respondent, upon re-quest, unless the respondent and theagency, by mutual agreement, waivethe requirement for a transcript.

§ 1154.314 Debarring official’s decision.(a) No additional proceedings necessary.

In actions based upon a conviction orcivil judgment, or in which there is nogenuine dispute over material facts,the debarring official shall make a de-cision on the basis of all the informa-tion in the administrative record, in-cluding any submission made by the re-spondent. The decision shall be madewithin 45 days after receipt of any in-formation and argument submitted bythe respondent, unless the debarringofficial extends this period for goodcause.

(b) Additional proceedings necessary.(1) In actions in which additional pro-ceedings are necessary to determinedisputed material facts, written find-ings of fact shall be prepared. The de-barring official shall base the decisionon the facts as found, together withany information and argument submit-ted by the respondent and any other in-formation in the administrative record.

(2) The debarring official may referdisputed material facts to another offi-cial for findings of fact. The debarringofficial may reject any such findings,in whole or in part, only after specifi-cally determining them to be arbitraryand capricious or clearly erroneous.

(3) The debarring official’s decisionshall be made after the conclusion ofthe proceedings with respect to dis-puted facts.

(c) (1) Standard of proof. In any debar-ment action, the cause for debarmentmust be established by a preponderanceof the evidence. Where the proposed de-barment is based upon a conviction orcivil judgment, the standard shall bedeemed to have been met.

(2) Burden of proof. The burden ofproof is on the agency proposing debar-ment.

(d) Notice of debarring official’s deci-sion. (1) If the debarring official decidesto impose debarment, the respondentshall be given prompt notice:

(i) Referring to the notice of proposeddebarment;

(ii) Specifying the reasons for debar-ment;

(iii) Stating the period of debarment,including effective dates; and

(iv) Advising that the debarment iseffective for covered transactionsthroughout the executive branch of the


376

45 CFR Ch. XI (10–1–97 Edition)§ 1154.315

Federal Government unless an agencyhead or an authorized designee makesthe determination referred to in§ 1154.215.

(2) If the debarring official decidesnot to impose debarment, the respond-ent shall be given prompt notice ofthat decision. A decision not to imposedebarment shall be without prejudiceto a subsequent imposition of debar-ment by any other agency.

§ 1154.315 Settlement and voluntaryexclusion.

(a) When in the best interest of theGovernment, Arts Endowment may, atany time, settle a debarment or sus-pension action.

(b) If a participant and the agencyagree to a voluntary exclusion of theparticipant, such voluntary exclusionshall be entered on the Nonprocure-ment List (see subpart E).

§ 1154.320 Period of debarment.(a) Debarment shall be for a period

commensurate with the seriousness ofthe cause(s). If a suspension precedes adebarment, the suspension period shallbe considered in determining the de-barment period.

(1) Debarment for causes other thanthose related to a violation of the re-quirements of subpart F of this partgenerally should not exceed threeyears. Where circumstances warrant, alonger period of debarment may be im-posed.

(2) In the case of a debarment for aviolation of the requirements of sub-part F of this part (see 1154.305(c)(5)),the period of debarment shall not ex-ceed five years.

(b) The debarring official may extendan existing debarment for an addi-tional period, if that official deter-mines that an extension is necessary toprotect the public interest. However, adebarment may not be extended solelyon the basis of the facts and cir-cumstances upon which the initial de-barment action was based. If debar-ment for an additional period is deter-mined to be necessary, the proceduresof §§ 1154.311 through 1154.314 shall befollowed to extend the debarment.

(c) The respondent may request thedebarring official to reverse the debar-ment decision or to reduce the period

or scope of debarment. Such a requestshall be in writing and supported bydocumentation. The debarring officialmay grant such a request for reasonsincluding, but not limited to:

(1) Newly discovered material evi-dence;

(2) Reversal of the conviction or civiljudgment upon which the debarmentwas based;

(3) Bona fide change in ownership ormanagement;

(4) Elimination of other causes forwhich the debarment was imposed; or

(5) Other reasons the debarring offi-cial deems appropriate.


§ 1154.325 Scope of debarment.

(a) Scope in general. (1) Debarment ofa person under these regulations con-stitutes debarment of all its divisionsand other organizational elementsfrom all covered transactions, unlessthe debarment decision is limited byits terms to one or more specificallyidentified individuals, divisions orother organizational elements or tospecific types of transactions.

(2) The debarment action may in-clude any affiliate of the participantthat is specifically named and givennotice of the proposed debarment andan opportunity to respond (see§§ 1154.311 through 1154.314).

(b) Imputing conduct. For purposes ofdetermining the scope of debarment,conduct may be imputed as follows:

(1) Conduct imputed to participant. Thefraudulent, criminal or other seriouslyimproper conduct of any officer, direc-tor, shareholder, partner, employee, orother individual associated with a par-ticipant may be imputed to the partici-pant when the conduct occurred in con-nection with the individual’s perform-ance of duties for or on behalf of theparticipant, or with the participant’sknowledge, approval, or acquiescence.The participant’s acceptance of thebenefits derived from the conduct shallbe evidence of such knowledge, ap-proval, or acquiescence.

(2) Conduct imputed to individuals asso-ciated with participant. The fraudulent,criminal, or other seriously improper


377


conduct of a participant may be im-puted to any officer, director, share-holder, partner, employee, or other in-dividual associated with the partici-pant who participated in, knew of, orhad reason to know of the participant’sconduct.

(3) Conduct of one participant imputedto other participants in a joint venture.The fraudulent, criminal, or other seri-ously improper conduct of one partici-pant in a joint venture, grant pursuantto a joint application, or similar ar-rangement may be imputed to otherparticipants if the conduct occurred foror on behalf of the joint venture, grantpursuant to a joint application, orsimilar arrangement may be imputedto other participants if the conduct oc-curred for or on behalf of the joint ven-ture, grant pursuant to a joint applica-tion, or similar arrangement or withthe knowledge, approval, or acquies-cence of these participants. Acceptanceof the benefits derived from the con-duct shall be evidence of such knowl-edge, approval, or acquiescence.


§ 1154.400 General.

(a) The suspending official may sus-pend a person for any of the causes in§ 1154.405 using procedures establishedin §§ 1154.410 through 1154.413.

(b) Suspension is a serious action tobe imposed only when:

(1) There exists adequate evidence ofone or more of the causes set out in§ 1154.405, and

(2) Immediate action is necessary toprotect the public interest.

(c) In assessing the adequacy of theevidence, the agency should considerhow much information is available,how credible it is given the cir-cumstances, whether or not importantallegations are corroborated, and whatinferences can reasonably be drawn asa result. This assessment should in-clude an examination of basic docu-ments such as grants, cooperativeagreements, loan authorizations, andcontracts.

§ 1154.405 Causes for suspension.

(a) Suspension may be imposed in ac-cordance with the provisions of

§§ 1154.400 through 1154.413 upon ade-quate evidence:

(1) To suspect the commission of anoffense listed in § 1154.305(a); or

(2) That a cause for debarment under§ 1154.305 may exist.

(b) Indictment shall constitute ade-quate evidence for purposes of suspen-sion actions.

§ 1154.410 Procedures.

(a) Investigation and referral. Informa-tion concerning the existence of acause for suspension from any sourceshall be promptly reported, inves-tigated, and referred, when appro-priate, to the suspending official forconsideration. After consideration, thesuspending official may issue a noticeof suspension.

(b) Decisionmaking process. Arts En-dowment shall process suspension ac-tions as informally as practicable, con-sistent with principles of fundamentalfairness, using the procedures in§ 1154.411 through § 1154.413.

§ 1154.411 Notice of suspension.

When a respondent is suspended, no-tice shall immediately be given:

(a) That suspension has been im-posed;

(b) That the suspension is based onan indictment, conviction, or otheradequate evidence that the respondenthas committed irregularities seriouslyreflecting on the propriety of furtherFederal Government dealings with therespondent;

(c) Describing any such irregularitiesin terms sufficient to put the respond-ent on notice without disclosing theFederal Government’s evidence;

(d) Of the cause(s) relied upon under§ 1154.405 for imposing suspension;

(e) That the suspension is for a tem-porary period pending the completionof an investigation or ensuing legal, de-barment, or Program Fraud Civil Rem-edies Act proceedings;

(f) Of the provisions of §§ 1154.411through 1154.413 and any other Arts En-dowment procedures, if applicable, gov-erning suspension decisionmaking; and

(g) Of the effect of the suspension.


378

45 CFR Ch. XI (10–1–97 Edition)§ 1154.412

§ 1154.412 Opportunity to contest sus-pension.

(a) Submission in opposition. Within 30days after receipt of the notice of sus-pension, the respondent may submit, inperson, in writing, or through a rep-resentative, information and argumentin opposition to the suspension.

(b) Additional proceedings as to dis-puted material facts. (1) If the suspend-ing official finds that the respondent’ssubmission in opposition raises a genu-ine dispute over facts material to thesuspension, respondent(s) shall be af-forded an opportunity to appear with arepresentative, submit documentaryevidence, present witnesses, andconfront any witness the agency pre-sents, unless:

(i) The action is based on an indict-ment, conviction or civil judgment, or

(ii) A determination is made, on thebasis of Department of Justice advice,that the substantial interests of theFederal Government in pending or con-templated legal proceedings based onthe same facts as the suspension wouldbe prejudiced.

(2) A transcribed record of any addi-tional proceedings shall be preparedand made available at cost to the re-spondent, upon request, unless the re-spondent and the agency, by mutualagreement, waive the requirement for atranscript.

§ 1154.413 Suspending official’s deci-sion.

The suspending official may modifyor terminate the suspension (for exam-ple, see § 1154.320(c) for reasons for re-ducing the period or scope of debar-ment) or may leave it in force. How-ever, a decision to modify or terminatethe suspension shall be without preju-dice to the subsequent imposition ofsuspension by any other agency or de-barment by any agency. The decisionshall be rendered in accordance withthe following provisions:

(a) No additional proceedings necessary.In actions: based on an indictment,conviction, or civil judgment; in whichthere is no genuine dispute over mate-rial facts; or in which additional pro-ceedings to determine disputed mate-rial facts have been denied on the basisof Department of Justice advice, thesuspending official shall make a deci-

sion on the basis of all the informationin the administrative record, includingany submission made by the respond-ent. The decision shall be made within45 days after receipt of any informationand argument submitted by the re-spondent, unless the suspending officialextends this period for good cause.

(b) Additional proceedings necessary.(1) In actions in which additional pro-ceedings are necessary to determinedisputed material facts, written find-ings of fact shall be prepared. The sus-pending official shall base the decisionon the facts as found, together withany information and argument submit-ted by the respondent and any other in-formation in the administrative record.

(2) The suspending official may refermatters involving disputed materialfacts to another official for findings offact. The suspending official may re-ject any such findings, in whole or inpart, only after specifically determin-ing them to be arbitrary or capriciousor clearly erroneous.

(c) Notice of suspending official’s deci-sion. Prompt written notice of the sus-pending official’s decision shall be sentto the respondent.

§ 1154.415 Period of suspension.(a) Suspension shall be for a tem-

porary period pending the completionof an investigation or ensuing legal, de-barment, or Program Fraud Civil Rem-edies Act proceedings, unless termi-nated sooner by the suspending officialor as provided in paragraph (b) of thissection.

(b) If legal or administrative proceed-ings are not initiated within 12 monthsafter the date of the suspension notice,the suspension shall be terminated un-less an Assistant Attorney General orUnited States Attorney requests its ex-tension in writing, in which case itmay be extended for an additional sixmonths. In no event may a suspensionextend beyond 18 months, unless suchproceedings have been initiated withinthat period.

(c) The suspending official shall no-tify the Department of Justice of animpending termination of a suspension,at least 30 days before the 12-month pe-riod expires, to give that Departmentan opportunity to request an exten-sion.


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§ 1154.420 Scope of suspension.

The scope of a suspension is the sameas the scope of a debarment (see§ 1154.325), except that the procedures of§§ 1154.410 through 1154.413 shall be usedin imposing a suspension.

Subpart E—Responsibilities of GSA,Arts Endowment and Participants

§ 1154.500 GSA responsibilities.

(a) In accordance with the OMBguidelines, GSA shall compile, main-tain, and distribute a list of all personswho have been debarred, suspended, orvoluntarily excluded by agencies underExecutive Order 12549 and these regula-tions, and those who have been deter-mined to be ineligible.

(b) At a minimum, this list shall in-dicate:

(1) The names and addresses of alldebarred, suspended, ineligible, andvoluntarily excluded persons, in alpha-betical order, with cross-referenceswhen more than one name is involvedin a single action;

(2) The type of action;(3) The cause for the action;(4) The scope of the action;(5) Any termination date for each

listing; and(6) The agency and name and tele-

phone number of the agency point ofcontact for the action.

§ 1154.505 Arts Endowment respon-sibilities.

(a) The agency shall provide GSAwith current information concerningdebarments, suspension, determina-tions of ineligibility, and voluntary ex-clusions it has taken. Until February18, 1989, the agency shall also provideGSA and OMB with information con-cerning all transactions in which ArtsEndowment has granted exceptionsunder § 1154.215 permitting participa-tion by debarred, suspended, or volun-tarily excluded persons.

(b) Unless an alternative schedule isagreed to by GSA, the agency shall ad-vise GSA of the information set forthin § 1154.500(b) and of the exceptionsgranted under § 1154.215 within fiveworking days after taking such ac-tions.

(c) The agency shall direct inquiriesconcerning listed persons to the agencythat took the action.

(d) Arts Endowment officials shallcheck the Nonprocurement List beforeentering covered transactions to deter-mine whether a participant in a pri-mary transaction is debarred, sus-pended, ineligible, or voluntarily ex-cluded (Tel. #).

(e) Arts Endowment officials shallcheck the Nonprocurement List beforeapproving principals or lower tier par-ticipants where agency approval of theprincipal or lower tier participant isrequired under the terms of the trans-action, to determine whether suchprincipals or participants are debarred,suspended, ineligible, or voluntarilyexcluded.

§ 1154.510 Participants’ responsibil-ities.

(a) Certification by participants in pri-mary covered transactions. Each partici-pant shall submit the certification inappendix A to this part for it and itsprincipals at the time the participantsubmits its proposal in connection witha primary covered transaction, exceptthat States need only complete suchcertification as to their principals.Participants may decide the methodand frequency by which they determinethe eligibility of their principals. Inaddition, each participant may, but isnot required to, check the Nonprocure-ment List for its principals (Tel. #).Adverse information on the certifi-cation will not necessarily result in de-nial of participation. However, the cer-tification, and any additional informa-tion pertaining to the certificationsubmitted by the participant, shall beconsidered in the administration ofcovered transactions.

(b) Certification by participants inlower tier covered transactions. (1) Eachparticipant shall require participantsin lower tier covered transactions toinclude the certification in appendix Bto this part for it and its principals inany proposal submitted in connectionwith such lower tier covered trans-actions.

(2) A participant may rely upon thecertification of a prospective partici-pant in a lower tier covered trans-action that it and its principals are not


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debarred, suspended, ineligible, or vol-untarily excluded from the coveredtransaction by any Federal agency, un-less it knows that the certification iserroneous. Participants may decide themethod and frequency by which theydetermine the eligiblity of their prin-cipals. In addition, a participant may,but is not required to, check the Non-procurement List for its principals andfor participants (Tel. #).

(c) Changed circumstances regardingcertification. A participant shall provideimmediate written notice to Arts En-dowment if at any time the participantlearns that its certification was erro-neous when submitted or has becomeerroneous by reason of changed cir-cumstances. Participants in lower tiercovered transactions shall provide thesame updated notice to the participantto which it submitted its proposals.


SOURCE: 55 FR 21688, 21703, May 25, 1990, un-less otherwise noted.

§ 1154.600 Purpose.(a) The purpose of this subpart is to

carry out the Drug-Free Workplace Actof 1988 by requiring that—

(1) A grantee, other than an individ-ual, shall certify to the agency that itwill provide a drug-free workplace;

(2) A grantee who is an individualshall certify to the agency that, as acondition of the grant, he or she willnot engage in the unlawful manufac-ture, distribution, dispensing, posses-sion or use of a controlled substance inconducting any activity with thegrant.

(b) Requirements implementing theDrug-Free Workplace Act of 1988 forcontractors with the agency are foundat 48 CFR subparts 9.4, 23.5, and 52.2.

§ 1154.605 Definitions.(a) Except as amended in this sec-

tion, the definitions of § 1154.105 applyto this subpart.

(b) For purposes of this subpart—(1) Controlled substance means a con-

trolled substance in schedules Ithrough V of the Controlled SubstancesAct (21 U.S.C. 812), and as further de-

fined by regulation at 21 CFR 1308.11through 1308.15;

(2) Conviction means a finding of guilt(including a plea of nolo contendere) orimposition of sentence, or both, by anyjudicial body charged with the respon-sibility to determine violations of theFederal or State criminal drug stat-utes;

(3) Criminal drug statute means a Fed-eral or non-Federal criminal statuteinvolving the manufacture, distribu-tion, dispensing, use, or possession ofany controlled substance;

(4) Drug-free workplace means a sitefor the performance of work done inconnection with a specific grant atwhich employees of the grantee areprohibited from engaging in the unlaw-ful manufacture, distribution, dispens-ing, possession, or use of a controlledsubstance;

(5) Employee means the employee of agrantee directly engaged in the per-formance of work under the grant, in-cluding:

(i) All direct charge employees;(ii) All indirect charge employees, un-

less their impact or involvement is in-significant to the performance of thegrant; and,

(iii) Temporary personnel and con-sultants who are directly engaged inthe performance of work under thegrant and who are on the grantee’spayroll.

This definition does not include work-ers not on the payroll of the grantee(e.g., volunteers, even if used to meet amatching requirement; consultants orindependent contractors not on thepayroll; or employees of subrecipientsor subcontractors in covered work-places);

(6) Federal agency or agency meansany United States executive depart-ment, military department, govern-ment corporation, government con-trolled corporation, any other estab-lishment in the executive branch (in-cluding the Executive Office of thePresident), or any independent regu-latory agency;

(7) Grant means an award of financialassistance, including a cooperativeagreement, in the form of money, orproperty in lieu of money, by a Federalagency directly to a grantee. The term


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grant includes block grant and entitle-ment grant programs, whether or notexempted from coverage under thegrants management government-widecommon rule on uniform administra-tive requirements for grants and coop-erative agreements. The term does notinclude technical assistance that pro-vides services instead of money, orother assistance in the form of loans,loan guarantees, interest subsidies, in-surance, or direct appropriations; orany veterans’ benefits to individuals,i.e., any benefit to veterans, their fami-lies, or survivors by virtue of the serv-ice of a veteran in the Armed Forces ofthe United States;

(8) Grantee means a person who ap-plies for or receives a grant directlyfrom a Federal agency (except anotherFederal agency);

(9) Individual means a natural person;(10) State means any of the States of

the United States, the District of Co-lumbia, the Commonwealth of PuertoRico, any territory or possession of theUnited States, or any agency of aState, exclusive of institutions of high-er education, hospitals, and units oflocal government. A State instrumen-tality will be considered part of theState government if it has a writtendetermination from a State govern-ment that such State considers the in-strumentality to be an agency of theState government.

§ 1154.610 Coverage.

(a) This subpart applies to any grant-ee of the agency.

(b) This subpart applies to any grant,except where application of this sub-part would be inconsistent with theinternational obligations of the UnitedStates or the laws or regulations of aforeign government. A determinationof such inconsistency may be madeonly by the agency head or his/her des-ignee.

(c) The provisions of subparts A, B, C,D and E of this part apply to matterscovered by this subpart, except wherespecifically modified by this subpart.In the event of any conflict betweenprovisions of this subpart and otherprovisions of this part, the provisionsof this subpart are deemed to controlwith respect to the implementation of

drug-free workplace requirements con-cerning grants.

§ 1154.615 Grounds for suspension ofpayments, suspension or termi-nation of grants, or suspension ordebarment.

A grantee shall be deemed in viola-tion of the requirements of this sub-part if the agency head or his or her of-ficial designee determines, in writing,that—

(a) The grantee has made a false cer-tification under § 1154.630;

(b) With respect to a grantee otherthan an individual—

(1) The grantee has violated the cer-tification by failing to carry out therequirements of paragraphs (A)(a)through (g) and/or (B) of the certifi-cation (Alternate I to appendix C) or

(2) Such a number of employees ofthe grantee have been convicted of vio-lations of criminal drug statutes forviolations occurring in the workplaceas to indicate that the grantee hasfailed to make a good faith effort toprovide a drug-free workplace.

(c) With respect to a grantee who isan individual—

(1) The grantee has violated the cer-tification by failing to carry out its re-quirements (Alternate II to appendixC); or

(2) The grantee is convicted of acriminal drug offense resulting from aviolation occurring during the conductof any grant activity.

§ 1154.620 Effect of violation.

(a) In the event of a violation of thissubpart as provided in § 1154.615, and inaccordance with applicable law, thegrantee shall be subject to one or moreof the following actions:

(1) Suspension of payments under thegrant;

(2) Suspension or termination of thegrant; and

(3) Suspension or debarment of thegrantee under the provisions of thispart.

(b) Upon issuance of any final deci-sion under this part requiring debar-ment of a grantee, the debarred grant-ee shall be ineligible for award of anygrant from any Federal agency for aperiod specified in the decision, not to


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exceed five years (see § 1154.320(a)(2) ofthis part).

§ 1154.625 Exception provision.The agency head may waive with re-

spect to a particular grant, in writing,a suspension of payments under agrant, suspension or termination of agrant, or suspension or debarment of agrantee if the agency head determinesthat such a waiver would be in the pub-lic interest. This exception authoritycannot be delegated to any other offi-cial.

§ 1154.630 Certification requirementsand procedures.

(a)(1) As a prior condition of beingawarded a grant, each grantee shallmake the appropriate certification tothe Federal agency providing thegrant, as provided in appendix C to thispart.

(2) Grantees are not required to makea certification in order to continue re-ceiving funds under a grant awardedbefore March 18, 1989, or under a no-cost time extension of such a grant.However, the grantee shall make a one-time drug-free workplace certificationfor a non-automatic continuation ofsuch a grant made on or after March18, 1989.

(b) Except as provided in this section,all grantees shall make the requiredcertification for each grant. For man-datory formula grants and entitle-ments that have no application proc-ess, grantees shall submit a one-timecertification in order to continue re-ceiving awards.

(c) A grantee that is a State mayelect to make one certification in eachFederal fiscal year. States that pre-viously submitted an annual certifi-cation are not required to make a cer-tification for Fiscal Year 1990 untilJune 30, 1990. Except as provided inparagraph (d) of this section, this cer-tification shall cover all grants to allState agencies from any Federal agen-cy. The State shall retain the originalof this statewide certification in itsGovernor’s office and, prior to grantaward, shall ensure that a copy is sub-mitted individually with respect toeach grant, unless the Federal agencyhas designated a central location forsubmission.

(d)(1) The Governor of a State mayexclude certain State agencies fromthe statewide certification and author-ize these agencies to submit their owncertifications to Federal agencies. Thestatewide certification shall name anyState agencies so excluded.

(2) A State agency to which thestatewide certification does not apply,or a State agency in a State that doesnot have a statewide certification, mayelect to make one certification in eachFederal fiscal year. State agencies thatpreviously submitted a State agencycertification are not required to makea certification for Fiscal Year 1990until June 30, 1990. The State agencyshall retain the original of this Stateagency-wide certification in its centraloffice and, prior to grant award, shallensure that a copy is submitted indi-vidually with respect to each grant,unless the Federal agency designates acentral location for submission.

(3) When the work of a grant is doneby more than one State agency, thecertification of the State agency di-rectly receiving the grant shall bedeemed to certify compliance for allworkplaces, including those located inother State agencies.

(e)(1) For a grant of less than 30 daysperformance duration, grantees shallhave this policy statement and pro-gram in place as soon as possible, butin any case by a date prior to the dateon which performance is expected to becompleted.

(2) For a grant of 30 days or more per-formance duration, grantees shall havethis policy statement and program inplace within 30 days after award.

(3) Where extraordinary cir-cumstances warrant for a specificgrant, the grant officer may determinea different date on which the policystatement and program shall be inplace.

§ 1154.635 Reporting of and employeesanctions for convictions of crimi-nal drug offenses.

(a) When a grantee other than an in-dividual is notified that an employeehas been convicted for a violation of acriminal drug statute occurring in theworkplace, it shall take the followingactions:


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(1) Within 10 calendar days of receiv-ing notice of the conviction, the grant-ee shall provide written notice, includ-ing the convicted employee’s positiontitle, to every grant officer, or otherdesignee on whose grant activity theconvicted employee was working, un-less a Federal agency has designated acentral point for the receipt of such no-tifications. Notification shall includethe identification number(s) for each ofthe Federal agency’s affected grants.

(2) Within 30 calendar days of receiv-ing notice of the conviction, the grant-ee shall do the following with respectto the employee who was convicted.

(i) Take appropriate personnel actionagainst the employee, up to and includ-ing termination, consistent with re-quirements of the Rehabilitation Actof 1973, as amended; or

(ii) Require the employee to partici-pate satisfactorily in a drug abuse as-sistance or rehabilitation program ap-proved for such purposes by a Federal,State, or local health, law enforce-ment, or other appropriate agency.

(b) A grantee who is an individualwho is convicted for a violation of acriminal drug statute occurring duringthe conduct of any grant activity shallreport the conviction, in writing, with-in 10 calendar days, to his or her Fed-eral agency grant officer, or other des-ignee, unless the Federal agency hasdesignated a central point for the re-ceipt of such notices. Notification shallinclude the identification number(s)for each of the Federal agency’s af-fected grants.

(Approved by the Office of Management andBudget under control number 0991–0002)

APPENDIX A TO PART 1154—CERTIFICATION REGARDING DEBAR-MENT, SUSPENSION, AND OTHER RE-SPONSIBILITY MATTERS—PRIMARYCOVERED TRANSACTIONS

Instructions for Certification

1. By signing and submitting this proposal,the prospective primary participant is pro-viding the certification set out below.

2. The inability of a person to provide thecertification required below will not nec-essarily result in denial of participation inthis covered transaction. The prospectiveparticipant shall submit an explanation ofwhy it cannot provide the certification setout below. The certification or explanation

will be considered in connection with the de-partment or agency’s determination whetherto enter into this transaction. However, fail-ure of the prospective primary participant tofurnish a certification or an explanationshall disqualify such person from participa-tion in this transaction.

3. The certification in this clause is a ma-terial representation of fact upon which reli-ance was placed when the department oragency determined to enter into this trans-action. If it is later determined that the pro-spective primary participant knowingly ren-dered an erroneous certification, in additionto other remedies available to the FederalGovernment, the department or agency mayterminate this transaction for cause or de-fault.

4. The prospective primary participantshall provide immediate written notice tothe department or agency to which this pro-posal is submitted if at any time the pro-spective primary participant learns that itscertification was erroneous when submittedor has become erroneous by reason ofchanged circumstances.

5. The terms covered transaction, debarred,suspended, ineligible, lower tier covered trans-action, participant, person, primary coveredtransaction, principal, proposal, and volun-tarily excluded, as used in this clause, havethe meanings set out in the Definitions andCoverage sections of the rules implementingExecutive Order 12549. You may contact thedepartment or agency to which this proposalis being submitted for assistance in obtain-ing a copy of those regulations.

6. The prospective primary participantagrees by submitting this proposal that,should the proposed covered transaction beentered into, it shall not knowingly enterinto any lower tier covered transaction witha person who is proposed for debarmentunder 48 CFR part 9, subpart 9.4, debarred,suspended, declared ineligible, or voluntarilyexcluded from participation in this coveredtransaction, unless authorized by the depart-ment or agency entering into this trans-action.

7. The prospective primary participant fur-ther agrees by submitting this proposal thatit will include the clause titled ‘‘Certifi-cation Regarding Debarment, Suspension,Ineligibility and Voluntary Exclusion-LowerTier Covered Transaction,’’ provided by thedepartment or agency entering into this cov-ered transaction, without modification, inall lower tier covered transactions and in allsolicitations for lower tier covered trans-actions.

8. A participant in a covered transactionmay rely upon a certification of a prospec-tive participant in a lower tier coveredtransaction that it is not proposed for debar-ment under 48 CFR part 9, subpart 9.4,


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debarred, suspended, ineligible, or volun-tarily excluded from the covered trans-action, unless it knows that the certificationis erroneous. A participant may decide themethod and frequency by which it deter-mines the eligibility of its principals. Eachparticipant may, but is not required to,check the List of Parties Excluded from Fed-eral Procurement and Nonprocurement Pro-grams.

9. Nothing contained in the foregoing shallbe construed to require establishment of asystem of records in order to render in goodfaith the certification required by thisclause. The knowledge and information of aparticipant is not required to exceed thatwhich is normally possessed by a prudentperson in the ordinary course of businessdealings.

10. Except for transactions authorizedunder paragraph 6 of these instructions, if aparticipant in a covered transaction know-ingly enters into a lower tier covered trans-action with a person who is proposed for de-barment under 48 CFR part 9, subpart 9.4,suspended, debarred, ineligible, or volun-tarily excluded from participation in thistransaction, in addition to other remediesavailable to the Federal Government, the de-partment or agency may terminate thistransaction for cause or default.

Certification Regarding Debarment, Suspension,and Other Responsibility Matters—PrimaryCovered Transactions

(1) The prospective primary participantcertifies to the best of its knowledge and be-lief, that it and its principals:

(a) Are not presently debarred, suspended,proposed for debarment, declared ineligible,or voluntarily excluded by any Federal de-partment or agency;

(b) Have not within a three-year periodpreceding this proposal been convicted of orhad a civil judgment rendered against themfor commission of fraud or a criminal offensein connection with obtaining, attempting toobtain, or performing a public (Federal,State or local) transaction or contract undera public transaction; violation of Federal orState antitrust statutes or commission ofembezzlement, theft, forgery, bribery, fal-sification or destruction of records, makingfalse statements, or receiving stolen prop-erty;

(c) Are not presently indicted for or other-wise criminally or civilly charged by a gov-ernmental entity (Federal, State or local)with commission of any of the offenses enu-merated in paragraph (1)(b) of this certifi-cation; and

(d) Have not within a three-year periodpreceding this application/proposal had oneor more public transactions (Federal, Stateor local) terminated for cause or default.

(2) Where the prospective primary partici-pant is unable to certify to any of the state-

ments in this certification, such prospectiveparticipant shall attach an explanation tothis proposal.

[60 FR 33042, 33062, June 26, 1995]

APPENDIX B TO PART 1154—CERTIFI-CATION REGARDING DEBARMENT,SUSPENSION, INELIGIBILTY AND VOL-UNTARY EXCLUSION—LOWER TIERCOVERED TRANSACTIONS


1. By signing and submitting this proposal,the prospective lower tier participant is pro-viding the certification set out below.

2. The certification in this clause is a ma-terial representation of fact upon which reli-ance was placed when this transaction wasentered into. If it is later determined thatthe prospective lower tier participant know-ingly rendered an erroneous certification, inaddition to other remedies available to theFederal Government the department oragency with which this transaction origi-nated may pursue available remedies, includ-ing suspension and/or debarment.

3. The prospective lower tier participantshall provide immediate written notice tothe person to which this proposal is submit-ted if at any time the prospective lower tierparticipant learns that its certification waserroneous when submitted or had become er-roneous by reason of changed circumstances.

4. The terms covered transaction, debarred,suspended, ineligible, lower tier covered trans-action, participant, person, primary coveredtransaction, principal, proposal, and volun-tarily excluded, as used in this clause, havethe meaning set out in the Definitions andCoverage sections of rules implementing Ex-ecutive Order 12549. You may contact theperson to which this proposal is submittedfor assistance in obtaining a copy of thoseregulations.

5. The prospective lower tier participantagrees by submitting this proposal that,should the proposed covered transaction beentered into, it shall not knowingly enterinto any lower tier covered transaction witha person who is proposed for debarmentunder 48 CFR part 9, subpart 9.4, debarred,suspended, declared ineligible, or voluntarilyexcluded from participation in this coveredtransaction, unless authorized by the depart-ment or agency with which this transactionoriginated.

6. The prospective lower tier participantfurther agrees by submitting this proposalthat it will include this clause titled ‘‘Cer-tification Regarding Debarment, Suspension,Ineligibility and Voluntary Exclusion-LowerTier Covered Transaction,’’ without modi-fication, in all lower tier covered trans-actions and in all solicitations for lower tiercovered transactions.


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7. A participant in a covered transactionmay rely upon a certification of a prospec-tive participant in a lower tier coveredtransaction that it is not proposed for debar-ment under 48 CFR part 9, subpart 9.4,debarred, suspended, ineligible, or volun-tarily excluded from covered transactions,unless it knows that the certification is erro-neous. A participant may decide the methodand frequency by which it determines theeligibility of its principals. Each participantmay, but is not required to, check the List ofParties Excluded from Federal Procurementand Nonprocurement Programs.


9. Except for transactions authorized underparagraph 5 of these instructions, if a partic-ipant in a covered transaction knowingly en-ters into a lower tier covered transactionwith a person who is proposed for debarmentunder 48 CFR part 9, subpart 9.4, suspended,debarred, ineligible, or voluntarily excludedfrom participation in this transaction, in ad-dition to other remedies available to theFederal Government, the department oragency with which this transaction origi-nated may pursue available remedies, includ-ing suspension and/or debarment.

Certification Regarding Debarment, Suspension,Ineligibility an Voluntary Exclusion—LowerTier Covered Transactions

(1) The prospective lower tier participantcertifies, by submission of this proposal, thatneither it nor its principals is presentlydebarred, suspended, proposed for debarment,declared ineligible, or voluntarily excludedfrom participation in this transaction by anyFederal department or agency.

(2) Where the prospective lower tier partic-ipant is unable to certify to any of the state-ments in this certification, such prospectiveparticipant shall attach an explanation tothis proposal.

[60 FR 33042, 33062, June 26, 1995]

APPENDIX C TO PART 1154—CERTIFI-CATION REGARDING DRUG-FREEWORKPLACE REQUIREMENTS


1. By signing and/or submitting this appli-cation or grant agreement, the grantee isproviding the certification set out below.

2. The certification set out below is a ma-terial representation of fact upon which reli-ance is placed when the agency awards thegrant. If it is later determined that the

grantee knowingly rendered a false certifi-cation, or otherwise violates the require-ments of the Drug-Free Workplace Act, theagency, in addition to any other remediesavailable to the Federal Government, maytake action authorized under the Drug-FreeWorkplace Act.

3. For grantees other than individuals, Al-ternate I applies.

4. For grantees who are individuals, Alter-nate II applies.

5. Workplaces under grants, for granteesother than individuals, need not be identifiedon the certification. If known, they may beidentified in the grant application. If thegrantee does not identify the workplaces atthe time of application, or upon award, ifthere is no application, the grantee mustkeep the identity of the workplace(s) on filein its office and make the information avail-able for Federal inspection. Failure to iden-tify all known workplaces constitutes a vio-lation of the grantee’s drug-free workplacerequirements.

6. Workplace identifications must includethe actual address of buildings (or parts ofbuildings) or other sites where work underthe grant takes place. Categorical descrip-tions may be used (e.g., all vehicles of a masstransit authority or State highway depart-ment while in operation, State employees ineach local unemployment office, performersin concert halls or radio studios).

7. If the workplace identified to the agencychanges during the performance of the grant,the grantee shall inform the agency of thechange(s), if it previously identified theworkplaces in question (see paragraph five).

8. Definitions of terms in the Nonprocure-ment Suspension and Debarment commonrule and Drug-Free Workplace common ruleapply to this certification. Grantees’ atten-tion is called, in particular, to the followingdefinitions from these rules:

Controlled substance means a controlledsubstance in Schedules I through V of theControlled Substances Act (21 U.S.C. 812) andas further defined by regulation (21 CFR1308.11 through 1308.15);

Conviction means a finding of guilt (includ-ing a plea of nolo contendere) or impositionof sentence, or both, by any judicial bodycharged with the responsibility to determineviolations of the Federal or State criminaldrug statutes;

Criminal drug statute means a Federal ornon-Federal criminal statute involving themanufacture, distribution, dispensing, use,or possession of any controlled substance;

Employee means the employee of a granteedirectly engaged in the performance of workunder a grant, including: (i) All direct chargeemployees; (ii) All indirect charge employeesunless their impact or involvement is insig-nificant to the performance of the grant;


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and, (iii) Temporary personnel and consult-ants who are directly engaged in the per-formance of work under the grant and whoare on the grantee’s payroll. This definitiondoes not include workers not on the payrollof the grantee (e.g., volunteers, even if usedto meet a matching requirement; consult-ants or independent contractors not on thegrantee’s payroll; or employees of subrecipi-ents or subcontractors in covered work-places).

Certification Regarding Drug-Free WorkplaceRequirements

Alternate I. (GRANTEES OTHER THANINDIVIDUALS)

A. The grantee certifies that it will or willcontinue to provide a drug-free workplaceby:

(a) Publishing a statement notifying em-ployees that the unlawful manufacture, dis-tribution, dispensing, possession, or use of acontrolled substance is prohibited in thegrantee’s workplace and specifying the ac-tions that will be taken against employeesfor violation of such prohibition;

(b) Establishing an ongoing drug-freeawareness program to inform employeesabout—

(1) The dangers of drug abuse in the work-place;

(2) The grantee’s policy of maintaining adrug-free workplace;

(3) Any available drug counseling, rehabili-tation, and employee assistance programs;and

(4) The penalties that may be imposedupon employees for drug abuse violations oc-curring in the workplace;

(c) Making it a requirement that each em-ployee to be engaged in the performance ofthe grant be given a copy of the statementrequired by paragraph (a);

(d) Notifying the employee in the state-ment required by paragraph (a) that, as acondition of employment under the grant,the employee will—

(1) Abide by the terms of the statement;and

(2) Notify the employer in writing of his orher conviction for a violation of a criminaldrug statute occurring in the workplace nolater than five calendar days after such con-viction;

(e) Notifying the agency in writing, withinten calendar days after receiving noticeunder paragraph (d)(2) from an employee orotherwise receiving actual notice of suchconviction. Employers of convicted employ-ees must provide notice, including positiontitle, to every grant officer or other designeeon whose grant activity the convicted em-ployee was working, unless the Federal agen-cy has designated a central point for the re-ceipt of such notices. Notice shall include

the identification number(s) of each affectedgrant;

(f) Taking one of the following actions,within 30 calendar days of receiving noticeunder paragraph (d)(2), with respect to anyemployee who is so convicted—

(1) Taking appropriate personnel actionagainst such an employee, up to and includ-ing termination, consistent with the require-ments of the Rehabilitation Act of 1973, asamended; or

(2) Requiring such employee to participatesatisfactorily in a drug abuse assistance orrehabilitation program approved for suchpurposes by a Federal, State, or local health,law enforcement, or other appropriate agen-cy;

(g) Making a good faith effort to continueto maintain a drug-free workplace throughimplementation of paragraphs (a), (b), (c),(d), (e) and (f).

B. The grantee may insert in the space pro-vided below the site(s) for the performance ofwork done in connection with the specificgrant:Place of Performance (Street address, city,

county, state, zip code)————————————————————————————————————————————————————————————————————————Check b if there are workplaces on file thatare not identified here.

Alternate II. (GRANTEES WHO AREINDIVIDUALS)

(a) The grantee certifies that, as a condi-tion of the grant, he or she will not engagein the unlawful manufacture, distribution,dispensing, possession, or use of a controlledsubstance in conducting any activity withthe grant;

(b) If convicted of a criminal drug offenseresulting from a violation occurring duringthe conduct of any grant activity, he or shewill report the conviction, in writing, within10 calendar days of the conviction, to everygrant officer or other designee, unless theFederal agency designates a central point forthe receipt of such notices. When notice ismade to such a central point, it shall includethe identification number(s) of each affectedgrant.

[55 FR 21690, 21703, May 25, 1990]

PART 1157—UNIFORM ADMINIS-TRATIVE REQUIREMENTS FORGRANTS AND COOPERATIVEAGREEMENTS TO STATE ANDLOCAL GOVERNMENTS

Subpart A—General

Sec.1157.1 Purpose and scope of this part.


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1157.2 Scope of subpart.1157.3 Definitions.1157.4 Applicability.1157.5 Effect on other issuances.1157.6 Additions and exceptions.

Subpart B—Pre-Award Requirements

1157.10 Forms for applying for grants.1157.11 State plans.1157.12 Special grant or subgrant conditions

for ‘‘high-risk’’ grantees.

Subpart C—Post-Award Requirements

FINANCIAL ADMINISTRATION

1157.20 Standards for financial managementsystems.

1157.21 Payment.1157.22 Allowable costs.1157.23 Period of availability of funds.1157.24 Matching or cost sharing.1157.25 Program income.1157.26 Non-Federal audit.

CHANGES, PROPERTY, AND SUBAWARDS

1157.30 Changes.1157.31 Real property.1157.32 Equipment.1157.33 Supplies.1157.34 Copyrights.1157.35 Subawards to debarred and sus-

pended parties.1157.36 Procurement.1157.37 Subgrants.

REPORTS, RECORDS, RETENTION, ANDENFORCEMENT

1157.40 Monitoring and reporting programperformance.

1157.41 Financial reporting.1157.42 Retention and access requirements

for records.1157.43 Enforcement.1157.44 Termination for convenience.

Subpart D—After-the-Grant Requirements

1157.50 Closeout.1157.51 Later disallowances and adjust-

ments.1157.52 Collection of amounts due.

Subpart E—Entitlements [Reserved]

AUTHORITY: 20 U.S.C. 959(a)(1).

SOURCE: 53 FR 8081, 8087, Mar. 11, 1988, un-less otherwise noted.

EDITORIAL NOTE: For additional informa-tion, see related documents published at 49FR 24958, June 18, 1984, 52 FR 20178, May 29,1987, and 53 FR 8028, March 11, 1988.

Subpart A—General§ 1157.1 Purpose and scope of this

part.This part establishes uniform admin-

istrative rules for Federal grants andcooperative agreements and subawardsto State, local and Indian tribal gov-ernments.

§ 1157.2 Scope of subpart.This subpart contains general rules

pertaining to this part and proceduresfor control of exceptions from thispart.

§ 1157.3 Definitions.As used in this part:Accrued expenditures mean the

charges incurred by the grantee duringa given period requiring the provisionof funds for: (1) Goods and other tan-gible property received; (2) servicesperformed by employees, contractors,subgrantees, subcontractors, and otherpayees; and (3) other amounts becom-ing owed under programs for which nocurrent services or performance is re-quired, such as annuities, insuranceclaims, and other benefit payments.

Accrued income means the sum of: (1)Earnings during a given period fromservices performed by the grantee andgoods and other tangible property de-livered to purchasers, and (2) amountsbecoming owed to the grantee forwhich no current services or perform-ance is required by the grantee.

Acquisition cost of an item of pur-chased equipment means the net in-voice unit price of the property includ-ing the cost of modifications, attach-ments, accessories, or auxiliary appa-ratus necessary to make the propertyusable for the purpose for which it wasacquired. Other charges such as thecost of installation, transportation,taxes, duty or protective in-transit in-surance, shall be included or excludedfrom the unit acquisition cost in ac-cordance with the grantee’s regular ac-counting practices.

Administrative requirements meanthose matters common to grants ingeneral, such as financial management,kinds and frequency of reports, and re-tention of records. These are distin-guished from programmatic require-ments, which concern matters that can


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be treated only on a program-by-pro-gram or grant-by-grant basis, such askinds of activities that can be sup-ported by grants under a particularprogram.

Awarding agency means (1) with re-spect to a grant, the Federal agency,and (2) with respect to a subgrant, theparty that awarded the subgrant.

Cash contributions means the grant-ee’s cash outlay, including the outlayof money contributed to the grantee orsubgrantee by other public agenciesand institutions, and private organiza-tions and individuals. When authorizedby Federal legislation, Federal fundsreceived from other assistance agree-ments may be considered as grantee orsubgrantee cash contributions.

Contract means (except as used in thedefinitions for grant and subgrant inthis section and except where qualifiedby Federal) a procurement contractunder a grant or subgrant, and means aprocurement subcontract under a con-tract.

Cost sharing or matching means thevalue of the third party in-kind con-tributions and the portion of the costsof a federally assisted project or pro-gram not borne by the Federal Govern-ment.

Cost-type contract means a contract orsubcontract under a grant in which thecontractor or subcontractor is paid onthe basis of the costs it incurs, with orwithout a fee.

Equipment means tangible, non-expendable, personal property having auseful life of more than one year andan acquisition cost of $5,000 or moreper unit. A grantee may use its owndefinition of equipment provided thatsuch definition would at least includeall equipment defined above.

Expenditure report means: (1) For non-construction grants, the SF–269 Finan-cial Status Report (or other equivalentreport); (2) for construction grants, theSF–271 Outlay Report and Request forReimbursement (or other equivalentreport).

Federally recognized Indian tribal gov-ernment means the governing body or agovernmental agency of any Indiantribe, band, nation, or other organizedgroup or community (including anyNative village as defined in section 3 ofthe Alaska Native Claims Settlement

Act, 85 Stat 688) certified by the Sec-retary of the Interior as eligible for thespecial programs and services providedby him through the Bureau of IndianAffairs.

Government means a State or localgovernment or a federally recognizedIndian tribal government.

Grant means an award of financial as-sistance, including cooperative agree-ments, in the form of money, or prop-erty in lieu of money, by the FederalGovernment to an eligible grantee. Theterm does not include technical assist-ance which provides services instead ofmoney, or other assistance in the formof revenue sharing, loans, loan guaran-tees, interest subsidies, insurance, ordirect appropriations. Also, the termdoes not include assistance, such as afellowship or other lump sum award,which the grantee is not required to ac-count for.

Grantee means the government towhich a grant is awarded and which isaccountable for the use of the fundsprovided. The grantee is the entirelegal entity even if only a particularcomponent of the entity is designatedin the grant award document.

Local government means a county,municipality, city, town, township,local public authority (including anypublic and Indian housing agencyunder the United States Housing Act of1937) school district, special district,intrastate district, council of govern-ments (whether or not incorporated asa nonprofit corporation under statelaw), any other regional or interstategovernment entity, or any agency orinstrumentality of a local government.

Obligations means the amounts of or-ders placed, contracts and subgrantsawarded, goods and services received,and similar transactions during a givenperiod that will require payment bythe grantee during the same or a futureperiod.

OMB means the United States Officeof Management and Budget.

Outlays (expenditures) mean chargesmade to the project or program. Theymay be reported on a cash or accrualbasis. For reports prepared on a cashbasis, outlays are the sum of actualcash disbursement for direct chargesfor goods and services, the amount ofindirect expense incurred, the value of


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in-kind contributions applied, and theamount of cash advances and paymentsmade to contractors and subgrantees.For reports prepared on an accrued ex-penditure basis, outlays are the sum ofactual cash disbursements, the amountof indirect expense incurred, the valueof inkind contributions applied, andthe new increase (or decrease) in theamounts owed by the grantee for goodsand other property received, for serv-ices performed by employees, contrac-tors, subgrantees, subcontractors, andother payees, and other amounts be-coming owed under programs for whichno current services or performance arerequired, such as annuities, insuranceclaims, and other benefit payments.

Percentage of completion method refersto a system under which payments aremade for construction work accordingto the percentage of completion of thework, rather than to the grantee’s costincurred.

Prior approval means documentationevidencing consent prior to incurringspecific cost.

Real property means land, includingland improvements, structures and ap-purtenances thereto, excluding mov-able machinery and equipment.

Share, when referring to the awardingagency’s portion of real property,equipment or supplies, means the samepercentage as the awarding agency’sportion of the acquiring party’s totalcosts under the grant to which the ac-quisition costs under the grant towhich the acquisition cost of the prop-erty was charged. Only costs are to becounted—not the value of third-partyin-kind contributions.

State means any of the several Statesof the United States, the District ofColumbia, the Commonwealth of Puer-to Rico, any territory or possession ofthe United States, or any agency or in-strumentality of a State exclusive oflocal governments. The term does notinclude any public and Indian housingagency under United States HousingAct of 1937.

Subgrant means an award of financialassistance in the form of money, orproperty in lieu of money, made undera grant by a grantee to an eligible sub-grantee. The term includes financialassistance when provided by contrac-tual legal agreement, but does not in-

clude procurement purchases, nor doesit include any form of assistance whichis excluded from the definition of grantin this part.

Subgrantee means the government orother legal entity to which a subgrantis awarded and which is accountable tothe grantee for the use of the fundsprovided.

Supplies means all tangible personalproperty other than equipment as de-fined in this part.

Suspension means depending on thecontext, either (1) temporary with-drawal of the authority to obligategrant funds pending corrective actionby the grantee or subgrantee or a deci-sion to terminate the grant, or (2) anaction taken by a suspending official inaccordance with agency regulationsimplementing E.O. 12549 to imme-diately exclude a person from partici-pating in grant transactions for a pe-riod, pending completion of an inves-tigation and such legal or debarmentproceedings as may ensue.

Termination means permanent with-drawal of the authority to obligate pre-viously-awarded grant funds beforethat authority would otherwise expire.It also means the voluntary relinquish-ment of that authority by the granteeor subgrantee. Termination does not in-clude: (1) Withdrawal of funds awardedon the basis of the grantee’s underesti-mate of the unobligated balance in aprior period; (2) withdrawal of the un-obligated balance as of the expirationof a grant; (3) refusal to extend a grantor award additional funds, to make acompeting or noncompeting continu-ation, renewal, extension, or supple-mental award; or (4) voiding of a grantupon determination that the award wasobtained fraudulently, or was other-wise illegal or invalid from inception.

Terms of a grant or subgrant mean allrequirements of the grant or subgrant,whether in statute, regulations, or theaward document.

Third party in-kind contributions meanproperty or services which benefit afederally assisted project or programand which are contributed by non-Fed-eral third parties without charge to thegrantee, or a cost-type contractorunder the grant agreement.

Unliquidated obligations for reportsprepared on a cash basis mean the


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amount of obligations incurred by thegrantee that has not been paid. For re-ports prepared on an accrued expendi-ture basis, they represent the amountof obligations incurred by the granteefor which an outlay has not been re-corded.

Unobligated balance means the por-tion of the funds authorized by theFederal agency that has not been obli-gated by the grantee and is determinedby deducting the cumulative obliga-tions from the cumulative funds au-thorized.

§ 1157.4 Applicability.

(a) General. Subparts A through D ofthis part apply to all grants and sub-grants to governments, except whereinconsistent with Federal statutes orwith regulations authorized in accord-ance with the exception provision of§ 1157.6, or:

(1) Grants and subgrants to State andlocal institutions of higher educationor State and local hospitals.

(2) The block grants authorized bythe Omnibus Budget ReconciliationAct of 1981 (Community Services; Pre-ventive Health and Health Services; Al-cohol, Drug Abuse, and Mental HealthServices; Maternal and Child HealthServices; Social Services; Low-IncomeHome Energy Assistance; States’ Pro-gram of Community DevelopmentBlock Grants for Small Cities; and Ele-mentary and Secondary Educationother than programs administered bythe Secretary of Education under TitleV, Subtitle D, Chapter 2, Section 583—the Secretary’s discretionary grantprogram) and Titles I–III of the JobTraining Partnership Act of 1982 andunder the Public Health Services Act(Section 1921), Alcohol and Drug AbuseTreatment and Rehabilitation BlockGrant and Part C of Title V, MentalHealth Service for the Homeless BlockGrant).

(3) Entitlement grants to carry outthe following programs of the SocialSecurity Act:

(i) Aid to Needy Families with De-pendent Children (Title IV–A of theAct, not including the Work IncentiveProgram (WIN) authorized by section402(a)19(G); HHS grants for WIN aresubject to this part);

(ii) Child Support Enforcement andEstablishment of Paternity (Title IV–Dof the Act);

(iii) Foster Care and Adoption Assist-ance (Title IV–E of the Act);

(iv) Aid to the Aged, Blind, and Dis-abled (Titles I, X, XIV, and XVI–AABDof the Act); and

(v) Medical Assistance (Medicaid)(Title XIX of the Act) not including theState Medicaid Fraud Control programauthorized by section 1903(a)(6)(B).

(4) Entitlement grants under the fol-lowing programs of The NationalSchool Lunch Act:

(i) School Lunch (section 4 of theAct),

(ii) Commodity Assistance (section 6of the Act),

(iii) Special Meal Assistance (section11 of the Act),

(iv) Summer Food Service for Chil-dren (section 13 of the Act), and

(v) Child Care Food Program (section17 of the Act).

(5) Entitlement grants under the fol-lowing programs of The Child Nutri-tion Act of 1966:

(i) Special Milk (section 3 of the Act),and

(ii) School Breakfast (section 4 of theAct).

(6) Entitlement grants for State Ad-ministrative expenses under The FoodStamp Act of 1977 (section 16 of theAct).

(7) A grant for an experimental, pilot,or demonstration project that is alsosupported by a grant listed in para-graph (a)(3) of this section;

(8) Grant funds awarded under sub-section 412(e) of the Immigration andNationality Act (8 U.S.C. 1522(e)) andsubsection 501(a) of the Refugee Edu-cation Assistance Act of 1980 (Pub. L.96–422, 94 Stat. 1809), for cash assist-ance, medical assistance, and supple-mental security income benefits to ref-ugees and entrants and the administra-tive costs of providing the assistanceand benefits;

(9) Grants to local education agenciesunder 20 U.S.C. 236 through 241–1(a),and 242 through 244 (portions of the Im-pact Aid program), except for 20 U.S.C.238(d)(2)(c) and 240(f) (Entitlement In-crease for Handicapped Children); and


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(10) Payments under the VeteransAdministration’s State Home Per DiemProgram (38 U.S.C. 641(a)).

(b) Entitlement programs. Entitlementprograms enumerated above in§ 1157.4(a) (3) through (8) are subject toSubpart E.

§ 1157.5 Effect on other issuances.All other grants administration pro-

visions of codified program regula-tions, program manuals, handbooksand other nonregulatory materialswhich are inconsistent with this partare superseded, except to the extentthey are required by statute, or au-thorized in accordance with the excep-tion provision in § 1157.6.

§ 1157.6 Additions and exceptions.(a) For classes of grants and grantees

subject to this part, Federal agenciesmay not impose additional administra-tive requirements except in codifiedregulations published in the FEDERALREGISTER.

(b) Exceptions for classes of grants orgrantees may be authorized only byOMB.

(c) Exceptions on a case-by-case basisand for subgrantees may be authorizedby the affected Federal agencies.

Subpart B—Pre-AwardRequirements

§ 1157.10 Forms for applying forgrants.

(a) Scope. (1) This section prescribesforms and instructions to be used bygovernmental organizations (excepthospitals and institutions of highereducation operated by a government)in applying for grants. This section isnot applicable, however, to formulagrant programs which do not requireapplicants to apply for funds on aproject basis.

(2) This section applies only to appli-cations to Federal agencies for grants,and is not required to be applied bygrantees in dealing with applicants forsubgrants. However, grantees are en-couraged to avoid more detailed or bur-densome application requirements forsubgrants.

(b) Authorized forms and instructionsfor governmental organizations. (1) In ap-plying for grants, applicants shall only

use standard application forms or thoseprescribed by the granting agency withthe approval of OMB under the Paper-work Reduction Act of 1980.

(2) Applicants are not required tosubmit more than the original and twocopies of preapplications or applica-tions.

(3) Applicants must follow all appli-cable instructions that bear OMBclearance numbers. Federal agenciesmay specify and describe the programs,functions, or activities that will beused to plan, budget, and evaluate thework under a grant. Other supple-mentary instructions may be issuedonly with the approval of OMB to theextent required under the PaperworkReduction Act of 1980. For any stand-ard form, except the SF–424 facesheet,Federal agencies may shade out or in-struct the applicant to disregard anyline item that is not needed.

(4) When a grantee applies for addi-tional funding (such as a continuationor supplemental award) or amends apreviously submitted application, onlythe affected pages need be submitted.Previously submitted pages with infor-mation that is still current need not beresubmitted.

§ 1157.11 State plans.

(a) Scope. The statutes for some pro-grams require States to submit plansbefore receiving grants. Under regula-tions implementing Executive Order12372, ‘‘Intergovernmental Review ofFederal Programs,’’ States are allowedto simplify, consolidate and substituteplans. This section contains additionalprovisions for plans that are subject toregulations implementing the Execu-tive order.

(b) Requirements. A State need meetonly Federal administrative or pro-grammatic requirements for a planthat are in statutes or codified regula-tions.

(c) Assurances. In each plan the Statewill include an assurance that theState shall comply with all applicableFederal statutes and regulations in ef-fect with respect to the periods forwhich it receives grant funding. Forthis assurance and other assurances re-quired in the plan, the State may:


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.12

(1) Cite by number the statutory orregulatory provisions requiring the as-surances and affirm that it gives theassurances required by those provi-sions,

(2) Repeat the assurance language inthe statutes or regulations, or

(3) Develop its own language to theextent permitted by law.

(d) Amendments. A State will amend aplan whenever necessary to reflect: (1)New or revised Federal statutes or reg-ulations or (2) a material change in anyState law, organization, policy, orState agency operation. The State willobtain approval for the amendment andits effective date but need submit forapproval only the amended portions ofthe plan.

§ 1157.12 Special grant or subgrantconditions for ‘‘high-risk’’ grantees.

(a) A grantee or subgrantee may beconsidered ‘‘high risk’’ if an awardingagency determines that a grantee orsubgrantee:

(1) Has a history of unsatisfactoryperformance, or

(2) Is not financially stable, or(3) Has a management system which

does not meet the management stand-ards set forth in this part, or

(4) Has not conformed to terms andconditions of previous awards, or

(5) Is otherwise not responsible; andif the awarding agency determines thatan award will be made, special condi-tions and/or restrictions shall cor-respond to the high risk condition andshall be included in the award.

(b) Special conditions or restrictionsmay include:

(1) Payment on a reimbursementbasis;

(2) Withholding authority to proceedto the next phase until receipt of evi-dence of acceptable performance withina given funding period;

(3) Requiring additional, more de-tailed financial reports;

(4) Additional project monitoring;(5) Requiring the grante or sub-

grantee to obtain technical or manage-ment assistance; or

(6) Establishing additional prior ap-provals.

(c) If an awarding agency decides toimpose such conditions, the awardingofficial will notify the grantee or sub-

grantee as early as possible, in writing,of:

(1) The nature of the special condi-tions/restrictions;

(2) The reason(s) for imposing them;(3) The corrective actions which must

be taken before they will be removedand the time allowed for completingthe corrective actions and

(4) The method of requesting recon-sideration of the conditions/restric-tions imposed.

Subpart C—Post-AwardRequirements


§ 1157.20 Standards for financial man-agement systems.

(a) A State must expand and accountfor grant funds in accordance withState laws and procedures for expend-ing and accounting for its own funds.Fiscal control and accounting proce-dures of the State, as well as its sub-grantees and cost-type contractors,must be sufficient to—

(1) Permit preparation of reports re-quired by this part and the statutes au-thorizing the grant, and

(2) Permit the tracing of funds to alevel of expenditures adequate to es-tablish that such funds have not beenused in violation of the restrictionsand prohibitions of applicable statutes.

(b) The financial management sys-tems of other grantees and subgranteesmust meet the following standards:

(1) Financial reporting. Accurate, cur-rent, and complete disclosure of the fi-nancial results of financially assistedactivities must be made in accordancewith the financial reporting require-ments of the grant or subgrant.

(2) Accounting records. Grantees andsubgrantees must maintain recordswhich adequately identify the sourceand application of funds provided for fi-nancially-assisted activities. Theserecords must contain information per-taining to grant or subgrant awardsand authorizations, obligations, unobli-gated balances, assets, liabilities, out-lays or expenditures, and income.

(3) Internal control. Effective controland accountability must be maintainedfor all grant and subgrant cash, real


393


and personal property, and other as-sets. Grantees and subgrantees mustadequately safeguard all such propertyand must assure that it is used solelyfor authorized purposes.

(4) Budget control. Actual expendi-tures or outlays must be comparedwith budgeted amounts for each grantor subgrant. Financial informationmust be related to performance or pro-ductivity data, including the develop-ment of unit cost information when-ever appropriate or specifically re-quired in the grant or subgrant agree-ment. If unit cost data are required, es-timates based on available documenta-tion will be accepted whenever pos-sible.

(5) Allowable cost. Applicable OMBcost principles, agency program regula-tions, and the terms of grant andsubgrant agreements will be followedin determining the reasonableness, al-lowability, and allocability of costs.

(6) Source documentation. Accountingrecords must be supported by suchsource documentation as cancelledchecks, paid bills, payrolls, time andattendance records, contract andsubgrant award documents, etc.

(7) Cash management. Procedures forminimizing the time elapsing betweenthe transfer of funds from the U.S.Treasury and disbursement by granteesand subgrantees must be followedwhenever advance payment proceduresare used. Grantees must establish rea-sonable procedures to ensure the re-ceipt of reports on subgrantees’ cashbalances and cash disbursements insufficient time to enable them to pre-pare complete and accurate cash trans-actions reports to the awarding agen-cy. When advances are made by letter-of-credit or electronic transfer of fundsmethods, the grantee must makedrawdowns as close as possible to thetime of making disbursements. Grant-ees must monitor cash drawdowns bytheir subgrantees to assure that theyconform substantially to the samestandards of timing and amount asapply to advances to the grantees.

(c) An awarding agency may reviewthe adequacy of the financial manage-ment system of any applicant for fi-nancial assistance as part of apreaward review or at any time subse-quent to award.

§ 1157.21 Payment.

(a) Scope. This section prescribes thebasic standard and the methods underwhich a Federal agency will make pay-ments to grantees, and grantees willmake payments to subgrantees andcontractors.

(b) Basic standard. Methods and pro-cedures for payment shall minimizethe time elapsing between the transferof funds and disbursement by thegrantee or subgrantee, in accordancewith Treasury regulations at 31 CFRpart 205.

(c) Advances. Grantees and sub-grantees shall be paid in advance, pro-vided they maintain or demonstratethe willingness and ability to maintainprocedures to minimize the time elaps-ing between the transfer of the fundsand their disbursement by the granteeor subgrantee.

(d) Reimbursement. Reimbursementshall be the preferred method when therequirements in paragraph (c) of thissection are not met. Grantees and sub-grantees may also be paid by reim-bursement for any construction grant.Except as otherwise specified in regula-tion, Federal agencies shall not use thepercentage of completion method topay construction grants. The granteeor subgrantee may use that method topay its construction contractor, and ifit does, the awarding agency’s pay-ments to the grantee or subgranteewill be based on the grantee’s or sub-grantee’s actual rate of disbursement.

(e) Working capital advances. If agrantee cannot meet the criteria foradvance payments described in para-graph (c) of this section, and the Fed-eral agency has determined that reim-bursement is not feasible because thegrantee lacks sufficient working cap-ital, the awarding agency may providecash or a working capital advancebasis. Under this procedure the award-ing agency shall advance cash to thegrantee to cover its estimated dis-bursement needs for an initial periodgenerally geared to the grantee’s dis-bursing cycle. Thereafter, the awardingagency shall reimburse the grantee forits actual cash disbursements. Theworking capital advance method ofpayment shall not be used by granteesor subgrantees if the reason for using


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.22

such method is the unwillingness or in-ability of the grantee to provide timelyadvances to the subgrantee to meet thesubgrantee’s actual cash disburse-ments.

(f) Effect of program income, refunds,and audit recoveries on payment. (1)Grantees and subgrantees shall dis-burse repayments to and interestearned on a revolving fund before re-questing additional cash payments forthe same activity.

(2) Except as provided in paragraph(f)(1) of this section, grantees and sub-grantees shall disburse program in-come, rebates, refunds, contract settle-ments, audit recoveries and interestearned on such funds before requestingadditional cash payments.

(g) Withholding payments. (1) Unlessotherwise required by Federal statute,awarding agencies shall not withholdpayments for proper charges incurredby grantees or subgrantees unless—

(i) The grantee or subgrantee hasfailed to comply with grant award con-ditions or

(ii) The grantee or subgrantee is in-debted to the United States.

(2) Cash withheld for failure to com-ply with grant award condition, butwithout suspension of the grant, shallbe released to the grantee upon subse-quent compliance. When a grant is sus-pended, payment adjustments will bemade in accordance with § 1157.43(c).

(3) A Federal agency shall not makepayment to grantees for amounts thatare withheld by grantees or sub-grantees from payment to contractorsto assure satisfactory completion ofwork. Payments shall be made by theFederal agency when the grantees orsubgrantees actually disburse the with-held funds to the contractors or to es-crow accounts established to assuresatisfactory completion of work.

(h) Cash depositories. (1) Consistentwith the national goal of expanding theopportunities for minority business en-terprises, grantees and subgrantees areencouraged to use minority banks (abank which is owned at least 50 percentby minority group members). A list ofminority owned banks can be obtainedfrom the Minority Business Develop-ment Agency, Department of Com-merce, Washington, DC 20230.

(2) A grantee or subgrantee shallmaintain a separate bank account onlywhen required by Federal-State agree-ment.

(i) Interest earned on advances. Exceptfor interest earned on advances offunds exempt under the Intergovern-mental Cooperation Act (31 U.S.C. 6501et seq.) and the Indian Self-Determina-tion Act (23 U.S.C. 450), grantees andsubgrantees shall promptly, but atleast quarterly, remit interest earnedon advances to the Federal agency. Thegrantee or subgrantee may keep inter-est amounts up to $100 per year for ad-ministrative expenses.

§ 1157.22 Allowable costs.

(a) Limitation on use of funds. Grantfunds may be used only for:

(1) The allowable costs of the grant-ees, subgrantees and cost-type contrac-tors, including allowable costs in theform of payments to fixed-price con-tractors; and

(2) Reasonable fees or profit to cost-type contractors but not any fee orprofit (or other increment above allow-able costs) to the grantee or sub-grantee.

(b) Applicable cost principles. For eachkind of organization, there is a set ofFederal principles for determining al-lowable costs. Allowable costs will bedetermined in accordance with the costprinciples applicable to the organiza-tion incurring the costs. The followingchart lists the kinds of organizationsand the applicable cost principles.

For the costs of a— Use the principles in—

State, local or Indian tribalgovernment.

OMB Circular A–87.

Private nonprofit organizationother than an (1) institutionof higher education, (2)hospital, or (3) organizationnamed in OMB Circular A–122 as not subject to thatcircular.


Educational institutions. ......... OMB Circular A–21.For-profit organization other

than a hospital and an or-ganization named in OBMCircular A–122 as not sub-ject to that circular.

48 CFR part 31. ContractCost Principles and Proce-dures, or uniform cost ac-counting standards thatcomply with cost principlesacceptable to the Federalagency.


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§ 1157.23 Period of availability offunds.

(a) General. Where a funding period isspecified, a grantee may charge to theaward only costs resulting from obliga-tions of the funding period unless car-ryover of unobligated balances is per-mitted, in which case the carryoverbalances may be charged for costs re-sulting from obligations of the subse-quent funding period.

(b) Liquidation of obligations. A grant-ee must liquidate all obligations in-curred under the award not later than90 days after the end of the funding pe-riod (or as specified in a program regu-lation) to coincide with the submissionof the annual Financial Status Report(SF–269). The Federal agency may ex-tend this deadline at the request of thegrantee.

§ 1157.24 Matching or cost sharing.(a) Basic rule: Costs and contributions

acceptable. With the qualifications andexceptions listed in paragraph (b) ofthis section, a matching or cost shar-ing requirement may be satisfied by ei-ther or both of the following:

(1) Allowable costs incurred by thegrantee, subgrantee or a cost-type con-tractor under the assistance agree-ment. This includes allowable costsborne by non-Federal grants or by oth-ers cash donations from non-Federalthird parties.

(2) The value of third party in-kindcontributions applicable to the periodto which the cost sharing or matchingrequirements applies.

(b) Qualifications and exceptions—(1)Costs borne by other Federal grant agree-ments. Except as provided by Federalstatute, a cost sharing or matching re-quirement may not be met by costsborne by another Federal grant. Thisprohibition does not apply to incomeearned by a grantee or subgrantee froma contract awarded under another Fed-eral grant.

(2) General revenue sharing. For thepurpose of this section, general revenuesharing funds distributed under 31U.S.C. 6702 are not considered Federalgrant funds.

(3) Cost or contributions counted to-wards other Federal costs-sharing require-ments. Neither costs nor the values ofthird party in-kind contributions may

count towards satisfying a cost sharingor matching requirement of a grantagreement if they have been or will becounted towards satisfying a cost shar-ing or matching requirement of an-other Federal grant agreement, a Fed-eral procurement contract, or anyother award of Federal funds.

(4) Costs financed by program income.Costs financed by program income, asdefined in § 1157.25, shall not count to-wards satisfying a cost sharing ormatching requirement unless they areexpressly permitted in the terms of theassistance agreement. (This use of gen-eral program income is described in§ 1157.25(g).)

(5) Services or property financed by in-come earned by contractors. Contractorsunder a grant may earn income fromthe activities carried out under thecontract in addition to the amountsearned from the party awarding thecontract. No costs of services or prop-erty supported by this income maycount toward satisfying a cost sharingor matching requirement unless otherprovisions of the grant agreement ex-pressly permit this kind of income tobe used to meet the requirement.

(6) Records. Costs and third party in-kind contributions counting towardssatisfying a cost sharing or matchingrequirement must be verifiable fromthe records of grantees and subgranteeor cost-type contractors. These recordsmust show how the value placed onthird party in-kind contributions wasderived. To the extent feasible, volun-teer services will be supported by thesame methods that the organizationuses to support the allocability of regu-lar personnel costs.

(7) Special standards for third party in-kind contributions. (i) Third party in-kind contributions count towards sat-isfying a cost sharing or matching re-quirement only where, if the party re-ceiving the contributions were to payfor them, the payments would be allow-able costs.

(ii) Some third party in-kind con-tributions are goods and services that,if the grantee, subgrantee, or contrac-tor receiving the contribution had topay for them, the payments would havebeen an indirect costs. Costs sharing ormatching credit for such contributions


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shall be given only if the grantee, sub-grantee, or contractor has established,along with its regular indirect costrate, a special rate for allocating to in-dividual projects or programs the valueof the contributions.

(iii) A third party in-kind contribu-tion to a fixed-price contract maycount towards satisfying a cost sharingor matching requirement only if it re-sults in:

(A) An increase in the services orproperty provided under the contract(without additional cost to the granteeor subgrantee) or

(B) A cost savings to the grantee orsubgrantee.

(iv) The values placed on third partyin-kind contributions for cost sharingor matching purposes will conform tothe rules in the succeeding sections ofthis part. If a third party in-kind con-tribution is a type not treated in thosesections, the value placed upon it shallbe fair and reasonable.

(c) Valuation of donated services—(1)Volunteer services. Unpaid services pro-vided to a grantee or subgrantee by in-dividuals will be valued at rates con-sistent with those ordinarily paid forsimilar work in the grantee’s or sub-grantee’s organization. If the granteeor subgrantee does not have employeesperforming similar work, the rates willbe consistent with those ordinarilypaid by other employers for similarwork in the same labor market. In ei-ther case, a reasonable amount forfringe benefits may be included in thevaluation.

(2) Employees of other organizations.When an employer other than a grant-ee, subgrantee, or cost-type contractorfurnishes free of charge the services ofan employee in the employee’s normalline of work, the services will be valuedat the employee’s regular rate of payexclusive of the employee’s fringe ben-efits and overhead costs. If the servicesare in a different line of work, para-graph (c)(1) of this section applies.

(d) Valuation of third party donatedsupplies and loaned equipment or space.(1) If a third party donates supplies,the contribution will be valued at themarket value of the supplies at thetime of donation.

(2) If a third party donates the use ofequipment or space in a building but

retains title, the contribution will bevalued at the fair rental rate of theequipment or space.

(e) Valuation of third party donatedequipment, buildings, and land. If a thirdparty donates equipment, buildings, orland, and title passes to a grantee orsubgrantee, the treatment of the do-nated property will depend upon thepurpose of the grant or subgrant, asfollows:

(1) Awards for capital expenditures. Ifthe purpose of the grant or subgrant isto assist the grantee or subgrantee inthe acquisition of property, the marketvalue of that property at the time ofdonation may be counted as cost shar-ing or matching,

(2) Other awards. If assisting in theacquisition of property is not the pur-pose of the grant or subgrant, para-graphs (e)(2) (i) and (ii) of this sectionapply:

(i) If approval is obtained from theawarding agency, the market value atthe time of donation of the donatedequipment or buildings and the fairrental rate of the donated land may becounted as cost sharing or matching.In the case of a subgrant, the terms ofthe grant agreement may require thatthe approval be obtained from the Fed-eral agency as well as the grantee. Inall cases, the approval may be givenonly if a purchase of the equipment orrental of the land would be approved asan allowable direct cost. If any part ofthe donated property was acquiredwith Federal funds, only the non-fed-eral share of the property may becounted as cost-sharing or matching.

(ii) If approval is not obtained underparagraph (e)(2)(i) of this section, noamount may be counted for donatedland, and only depreciation or use al-lowances may be counted for donatedequipment and buildings. The deprecia-tion or use allowances for this propertyare not treated as third party in-kindcontributions. Instead, they are treat-ed as costs incurred by the grantee orsubgrantee. They are computed and al-located (usually as indirect costs) inaccordance with the cost principlesspecified in § 1157.22, in the same way asdepreciation or use allowances for pur-chased equipment and buildings. The


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amount of depreciation or use allow-ances for donated equipment and build-ings is based on the property’s marketvalue at the time it was donated.

(f) Valuation of grantee or subgranteedonated real property for construction/ac-quisition. If a grantee or subgrantee do-nates real property for a constructionor facilities acquisition project, thecurrent market value of that propertymay be counted as cost sharing ormatching. If any part of the donatedproperty was acquired with Federalfunds, only the non-federal share of theproperty may be counted as cost shar-ing or matching.

(g) Appraisal of real property. In somecases under paragraphs (d), (e) and (f)of this section, it will be necessary toestablish the market value of land or abuilding or the fair rental rate of landor of space in a building. In these cases,the Federal agency may require themarket value or fair rental value be setby an independent appraiser, and thatthe value or rate be certified by thegrantee. This requirement will also beimposed by the grantee on subgrantees.

§ 1157.25 Program income.(a) General. Grantees are encouraged

to earn income to defray programcosts. Program income includes incomefrom fees for services performed, fromthe use or rental of real or personalproperty acquired with grant funds,from the sale of commodities or itemsfabricated under a grant agreement,and from payments of principal and in-terest on loans made with grant funds.Except as otherwise provided in regula-tions of the Federal agency, programincome does not include interest ongrant funds, rebates, credits, discounts,refunds, etc. and interest earned onany of them.

(b) Definition of program income. Pro-gram income means gross income re-ceived by the grantee or subgrantee di-rectly generated by a grant supportedactivity, or earned only as a result ofthe grant agreement during the grantperiod. ‘‘During the grant period’’ isthe time between the effective date ofthe award and the ending date of theaward reflected in the final financialreport.

(c) Cost of generating program income.If authorized by Federal regulations or

the grant agreement, costs incident tothe generation of program income maybe deducted from gross income to de-termine program income.

(d) Governmental revenues. Taxes, spe-cial assessments, levies, fines, andother such revenues raised by a granteeor subgrantee are not program incomeunless the revenues are specificallyidentified in the grant agreement orFederal agency regulations as programincome.

(e) Royalties. Income from royaltiesand license fees for copyrighted mate-rial, patents, and inventions developedby a grantee or subgrantee is programincome only if the revenues are specifi-cally identified in the grant agreementor Federal agency regulations as pro-gram income. (See § 1157.34.)

(f) Property. Proceeds from the sale ofreal property or equipment will be han-dled in accordance with the require-ments of §§ 1157.31 and 1157.32.

(g) Use of program income. Programincome shall be deducted from outlayswhich may be both Federal and non-Federal as described below, unless theFederal agency regulations or thegrant agreement specify another alter-native (or a combination of the alter-natives). In specifying alternatives, theFederal agency may distinguish be-tween income earned by the granteeand income earned by subgrantees andbetween the sources, kinds, or amountsof income. When Federal agencies au-thorize the alternatives in paragraphs(g) (2) and (3) of this section, programincome in excess of any limits stipu-lated shall also be deducted from out-lays.

(1) Deduction. Ordinarily program in-come shall be deducted from total al-lowable costs to determine the net al-lowable costs. Program income shall beused for current costs unless the Fed-eral agency authorizes otherwise. Pro-gram income which the grantee did notanticipate at the time of the awardshall be used to reduce the Federalagency and grantee contributions rath-er than to increase the funds commit-ted to the project.

(2) Addition. When authorized, pro-gram income may be added to thefunds committed to the grant agree-ment by the Federal agency and thegrantee. The program income shall be


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.26

used for the purposes and under theconditions of the grant agreement.

(3) Cost sharing or matching. When au-thorized, program income may be usedto meet the cost sharing or matchingrequirement of the grant agreement.The amount of the Federal grant awardremains the same.

(h) Income after the award period.There are no Federal requirements gov-erning the disposition of program in-come earned after the end of the awardperiod (i.e., until the ending date of thefinal financial report, see paragraph (a)of this section), unless the terms of theagreement or the Federal agency regu-lations provide otherwise.

§ 1157.26 Non-Federal audit.(a) Basic rule. Grantees and sub-

grantees are responsible for obtainingaudits in accordance with the SingleAudit Act Amendments of 1996 (31U.S.C. 7501–7507) and revised OMB Cir-cular A–133, ‘‘Audits of States, LocalGovernments, and Non-Profit Organi-zations.’’ The audits shall be made byan independent auditor in accordancewith generally accepted governmentauditing standards covering financialaudits.

(b) Subgrantees. State or local govern-ments, as those terms are defined forpurposes of the Single Audit ActAmendments of 1996, that provide Fed-eral awards to a subgrantee, which ex-pends $300,000 or more (or otheramount as specified by OMB) in Fed-eral awards in a fiscal year, shall:

(1) Determine whether State or localsubgrantees have met the audit re-quirements of the Act and whether sub-grantees covered by OMB Circular A–110, ‘‘Uniform Administrative Require-ments for Grants and Agreements withInstitutions of Higher Education, Hos-pitals, and Other Non-Profit Organiza-tions,’’ have met the audit require-ments of the Act. Commercial contrac-tors (private for-profit and private andgovernmental organizations) providinggoods and services to State and localgovernments are not required to have asingle audit performed. State and localgovernments should use their own pro-cedures to ensure that the contractorhas complied with laws and regulationsaffecting the expenditure of Federalfunds;

(2) Determine whether the sub-grantee spent Federal assistance fundsprovided in accordance with applicablelaws and regulations. This may be ac-complished by reviewing an audit ofthe subgrantee made in accordancewith the Act, Circular A–110, orthrough other means (e.g., program re-views) if the subgrantee has not hadsuch an audit;

(3) Ensure that appropriate correc-tive action is taken within six monthsafter receipt of the audit report in in-stance of noncompliance with Federallaws and regulations;

(4) Consider whether subgrantee au-dits necessitate adjustment of thegrantee’s own records; and

(5) Require each subgrantee to permitindependent auditors to have access tothe records and financial statements.

(c) Auditor selection. In arranging foraudit services, § 1157.36 shall be fol-lowed.

[53 FR 8081, 8087, Mar. 11, 1988, as amended at62 FR 45939, 45946, Aug. 29, 1997]


§ 1157.30 Changes.(a) General. Grantees and subgrantees

are permitted to rebudget within theapproved direct cost budget to meetunanticipated requirements and maymake limited program changes to theapproved project. However, unlesswaived by the awarding agency, certaintypes of post-award changes in budgetsand projects shall require the priorwritten approval of the awarding agen-cy.

(b) Relation to cost principles. The ap-plicable cost principles (see § 1157.22)contain requirements for prior ap-proval of certain types of costs. Exceptwhere waived, those requirementsapply to all grants and subgrants evenif paragraphs (c) through (f) of this sec-tion do not.

(c) Budget changes—(1) Nonconstruc-tion projects. Except as stated in otherregulations or an award document,grantees or subgrantees shall obtainthe prior approval of the awardingagency whenever any of the followingchanges is anticipated under a non-construction award:

(i) Any revision which would resultin the need for additional funding.


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(ii) Unless waived by the awardingagency, cumulative transfers among di-rect cost categories, or, if applicable,among separately budgeted programs,projects, functions, or activities whichexceed or are expected to exceed tenpercent of the current total approvedbudget, whenever the awarding agen-cy’s share exceeds $100,000.

(iii) Transfer of funds allotted fortraining allowances (i.e., from directpayments to trainees to other expensecategories).

(2) Construction projects. Grantees andsubgrantees shall obtain prior writtenapproval for any budget revision whichwould result in the need for additionalfunds.

(3) Combined construction and non-construction projects. When a grant orsubgrant provides funding for both con-struction and nonconstruction activi-ties, the grantee or subgrantee mustobtain prior written approval from theawarding agency before making anyfund or budget transfer from non-construction to construction or viceversa.

(d) Programmatic changes. Grantees orsubgrantees must obtain the prior ap-proval of the awarding agency when-ever any of the following actions is an-ticipated:

(1) Any revision of the scope or objec-tives of the project (regardless ofwhether there is an associated budgetrevision requiring prior approval).

(2) Need to extend the period of avail-ability of funds.

(3) Changes in key persons in caseswhere specified in an application or agrant award. In research projects, achange in the project director or prin-cipal investigator shall always requireapproval unless waived by the award-ing agency.

(4) Under nonconstruction projects,contracting out, subgranting (if au-thorized by law) or otherwise obtainingthe services of a third party to performactivities which are central to the pur-poses of the award. This approval re-quirement is in addition to the ap-proval requirements of § 1157.36 butdoes not apply to the procurement ofequipment, supplies, and general sup-port services.

(e) Additional prior approval require-ments. The awarding agency may not

require prior approval for any budgetrevision which is not described in para-graph (c) of this section.

(f) Requesting prior approval. (1) A re-quest for prior approval of any budgetrevision will be in the same budget for-mal the grantee used in its applicationand shall be accompanied by a nar-rative justification for the proposed re-vision.

(2) A request for a prior approvalunder the applicable Federal cost prin-ciples (see § 1157.22) may be made byletter.

(3) A request by a subgrantee forprior approval will be addressed inwriting to the grantee. The granteewill promptly review such request andshall approve or disapprove the requestin writing. A grantee will not approveany budget or project revision which isinconsistent with the purpose or termsand conditions of the Federal grant tothe grantee. If the revision, requestedby the subgrantee would result in achange to the grantee’s approvedproject which requires Federal priorapproval, the grantee will obtain theFederal agency’s approval before ap-proving the subgrantee’s request.

§ 1157.31 Real property.(a) Title. Subject to the obligations

and conditions set forth in this section,title to real property acquired under agrant or subgrant will vest upon acqui-sition in the grantee or subgrantee re-spectively.

(b) Use. Except as otherwise providedby Federal statutes, real property willbe used for the originally authorizedpurposes as long as needed for that pur-poses, and the grantee or subgranteeshall not dispose of or encumber itstitle or other interests.

(c) Disposition. When real property isno longer needed for the originally au-thorized purpose, the grantee or sub-grantee will request disposition in-structions from the awarding agency.The instructions will provide for one ofthe following alternatives:

(1) Retention of title. Retain title aftercompensating the awarding agency.The amount paid to the awarding agen-cy will be computed by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the fair market value of


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.32

the property. However, in those situa-tions where a grantee or subgrantee isdisposing of real property acquiredwith grant funds and acquiring replace-ment real property under the same pro-gram, the net proceeds from the dis-position may be used as an offset to thecost of the replacement property.

(2) Sale of property. Sell the propertyand compensate the awarding agency.The amount due to the awarding agen-cy will be calculated by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the proceeds of the saleafter deduction of any actual and rea-sonable selling and fixing-up expenses.If the grant is still active, the net pro-ceeds from sale may be offset againstthe original cost of the property. Whena grantee or subgrantee is directed tosell property, sales procedures shall befollowed that provide for competitionto the extent practicable and result inthe highest possible return.

(3) Transfer of title. Transfer title tothe awarding agency or to a third-party designated/approved by theawarding agency. The grantee or sub-grantee shall be paid an amount cal-culated by applying the grantee or sub-grantee’s percentage of participationin the purchase of the real property tothe current fair market value of theproperty.

§ 1157.32 Equipment.(a) Title. Subject to the obligations

and conditions set forth in this section,title to equipment acquired under agrant or subgrant will vest upon acqui-sition in the grantee or subgrantee re-spectively.

(b) States. A State will use, manage,and dispose of equipment acquiredunder a grant by the State in accord-ance with State laws and procedures.Other grantees and subgrantees willfollow paragraphs (c) through (e) ofthis section.

(c) Use. (1) Equipment shall be usedby the grantee or subgrantee in theprogram or project for which it was ac-quired as long as needed, whether ornot the project or program continuesto be supported by Federal funds. Whenno longer needed for the original pro-gram or project, the equipment may beused in other activities currently or

previously supported by a Federalagency.

(2) The grantee or subgrantee shallalso make equipment available for useon other projects or programs cur-rently or previously supported by theFederal Government, providing suchuse will not interfere with the work onthe projects or program for which itwas originally acquired. First pref-erence for other use shall be given toother programs or projects supportedby the awarding agency. User feesshould be considered if appropriate.

(3) Notwithstanding the encourage-ment in § 1157.25(a) to earn program in-come, the grantee or subgrantee mustnot use equipment acquired with grantfunds to provide services for a fee tocompete unfairly with private compa-nies that provide equivalent services,unless specifically permitted or con-templated by Federal statute.

(4) When acquiring replacementequipment, the grantee or subgranteemay use the equipment to be replacedas a trade-in or sell the property anduse the proceeds to offset the cost ofthe replacement property, subject tothe approval of the awarding agency.

(d) Management requirements. Proce-dures for managing equipment (includ-ing replacement equipment), whetheracquired in whole or in part with grantfunds, until disposition takes placewill, as a minimum, meet the followingrequirements:

(1) Property records must be main-tained that include a description of theproperty, a serial number or otheridentification number, the source ofproperty, who holds title, the acquisi-tion date, and cost of the property, per-centage of Federal participation in thecost of the property, the location, useand condition of the property, and anyultimate disposition data including thedate of disposal and sale price of theproperty.

(2) A physical inventory of the prop-erty must be taken and the results rec-onciled with the property records atleast once every two years.

(3) A control system must be devel-oped to ensure adequate safeguards toprevent loss, damage, or theft of theproperty. Any loss, damage, or theftshall be investigated.


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(4) Adequate maintenance proceduresmust be developed to keep the propertyin good condition.

(5) If the grantee or subgrantee is au-thorized or required to sell the prop-erty, proper sales procedures must beestablished to ensure the highest pos-sible return.

(e) Disposition. When original or re-placement equipment acquired under agrant or subgrant is no longer neededfor the original project or program orfor other activities currently or pre-viously supported by a Federal agency,disposition of the equipment will bemade as follows:

(1) Items of equipment with a currentper-unit fair market value of less than$5,000 may be retained, sold or other-wise disposed of with no further obliga-tion to the awarding agency.

(2) Items of equipment with a currentper unit fair market value in excess of$5,000 may be retained or sold and theawarding agency shall have a right toan amount calculated by multiplyingthe current market value or proceedsfrom sale by the awarding agency’sshare of the equipment.

(3) In cases where a grantee or sub-grantee fails to take appropriate dis-position actions, the awarding agencymay direct the grantee or subgranteeto take excess and disposition actions.

(f) Federal equipment. In the event agrantee or subgrantee is provided fed-erally-owned equipment:

(1) Title will remain vested in theFederal Government.

(2) Grantees or subgrantees will man-age the equipment in accordance withFederal agency rules and procedures,and submit an annual inventory list-ing.

(3) When the equipment is no longerneeded, the grantee or subgrantee willrequest disposition instructions fromthe Federal agency.

(g) Right to transfer title. The Federalawarding agency may reserve the rightto transfer title to the Federal Govern-ment or a third part named by theawarding agency when such a thirdparty is otherwise eligible under exist-ing statutes. Such transfers shall besubject to the following standards:

(1) The property shall be identified inthe grant or otherwise made known tothe grantee in writing.

(2) The Federal awarding agencyshall issue disposition instructionwithin 120 calendar days after the endof the Federal support of the projectfor which it was acquired. If the Fed-eral awarding agency fails to issue dis-position instructions within the 120calendar-day period the grantee shallfollow § 1157.32(e).

(3) When title to equipment is trans-ferred, the grantee shall be paid anamount calculated by applying the per-centage of participation in the pur-chase to the current fair market valueof the property.

§ 1157.33 Supplies.

(a) Title. Title to supplies acquiredunder a grant or subgrant will vest,upon acquisition, in the grantee or sub-grantee respectively.

(b) Disposition. If there is a residualinventory of unused supplies exceeding$5,000 in total aggregate fair marketvalue upon termination or completionof the award, and if the supplies arenot needed for any other federallysponsored programs or projects, thegrantee or subgrantee shall com-pensate the awarding agency for itsshare.

§ 1157.34 Copyrights.

The Federal awarding agency re-serves a royalty-free, nonexclusive, andirrevocable license to reproduce, pub-lish or otherwise use, and to authorizeothers to use, for Federal Governmentpurposes:

(a) The copyright in any work devel-oped under a grant, subgrant, or con-tract under a grant or subgrant; and

(b) Any rights of copyright to whicha grantee, subgrantee or a contractorpurchases ownership with grant sup-port.

§ 1157.35 Subawards to debarred andsuspended parties.

Grantees and subgrantees must notmake any award or permit any award(subgrant or contract) at any tier toany party which is debarred or sus-pended or is otherwise excluded from orineligible for participation in Federalassistance programs under ExecutiveOrder 12549, ‘‘Debarment and Suspen-sion.’’


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.36

§ 1157.36 Procurement.(a) States. When procuring property

and services under a grant, a State willfollow the same policies and proceduresit uses for procurements from its non-Federal funds. The State will ensurethat every purchase order or other con-tract includes any clauses required byFederal statutes and executive ordersand their implementing regulations.Other grantees and subgrantees willfollow paragraphs (b) through (i) inthis section.

(b) Procurement standards. (1) Grant-ees and subgrantees will use their ownprocurement procedures which reflectapplicable State and local laws andregulations, provided that the procure-ments conform to applicable Federallaw and the standards identified in thissection.

(2) Grantees and subgrantees willmaintain a contract administrationsystem which ensures that contractorsperform in accordance with the terms,conditions, and specifications of theircontracts or purchase orders.

(3) Grantees and subgrantees willmaintain a written code of standards ofconduct governing the performance oftheir employees engaged in the awardand administration of contracts. Noemployee, officer or agent of the grant-ee or subgrantee shall participate in se-lection, or in the award or administra-tion of a contract supported by Federalfunds if a conflict of interest, real orapparent, would be involved. Such aconflict would arise when:

(i) The employee, officer or agent,(ii) Any member of his immediate

family,(iii) His or her partner, or(iv) An organization which employs,

or is about to employ, any of theabove, has a financial or other interestin the firm selected for award. Thegrantee’s or subgrantee’s officers, em-ployees or agents will neither solicitnor accept gratuities, favors or any-thing of monetary value from contrac-tors, potential contractors, or partiesto subagreements. Grantee and sub-grantees may set minimum rules wherethe financial interest is not substantialor the gift is an unsolicited item ofnominal intrinsic value. To the extentpermitted by State or local law or reg-ulations, such standards or conduct

will provide for penalties, sanctions, orother disciplinary actions for viola-tions of such standards by the grant-ee’s and subgrantee’s officers, employ-ees, or agents, or by contractors ortheir agents. The awarding agency mayin regulation provide additional prohi-bitions relative to real, apparent, orpotential conflicts of interest.

(4) Grantee and subgrantee proce-dures will provide for a review of pro-posed procurements to avoid purchaseof unnecessary or duplicative items.Consideration should be given to con-solidating or breaking out procure-ments to obtain a more economicalpurchase. Where appropriate, an analy-sis will be made of lease versus pur-chase alternatives, and any other ap-propriate analysis to determine themost economical approach.

(5) To foster greater economy and ef-ficiency, grantees and subgrantees areencouraged to enter into State andlocal intergovernmental agreementsfor procurement or use of commongoods and services.

(6) Grantees and subgrantees are en-couraged to use Federal excess and sur-plus property in lieu of purchasing newequipment and property whenever suchuse is feasible and reduces projectcosts.

(7) Grantees and subgrantees are en-couraged to use value engineeringclauses in contracts for constructionprojects of sufficient size to offer rea-sonable opportunities for cost reduc-tions. Value engineering is a system-atic and creative anaylsis of each con-tract item or task to ensure that its es-sential function is provided at theoverall lower cost.

(8) Grantees and subgrantees willmake awards only to responsible con-tractors possessing the ability to per-form successfully under the terms andconditions of a proposed procurement.Consideration will be given to suchmatters as contractor integrity, com-pliance with public policy, record ofpast performance, and financial andtechnical resources.

(9) Grantees and subgrantees willmaintain records sufficient to detailthe significant history of a procure-ment. These records will include, butare not necessarily limited to the fol-lowing: rationale for the method of


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procurement, selection of contracttype, contractor selection or rejection,and the basis for the contract price.

(10) Grantees and subgrantees willuse time and material type contractsonly—

(i) After a determination that noother contract is suitable, and

(ii) If the contract includes a ceilingprice that the contractor exceeds at itsown risk.

(11) Grantees and subgrantees alonewill be responsible, in accordance withgood administrative practice and soundbusiness judgment, for the settlementof all contractual and administrativeissues arising out of procurements.These issues include, but are not lim-ited to source evaluation, protests, dis-putes, and claims. These standards donot relieve the grantee or subgranteeof any contractual responsibilitiesunder its contracts. Federal agencieswill not substitute their judgment forthat of the grantee or subgrantee un-less the matter is primarily a Federalconcern. Violations of law will be re-ferred to the local, State, or Federalauthority having proper jurisdiction.

(12) Grantees and subgrantees willhave protest procedures to handle andresolve disputes relating to their pro-curements and shall in all instancesdisclose information regarding the pro-test to the awarding agency. Aprotestor must exhaust all administra-tive remedies with the grantee and sub-grantee before pursuing a protest withthe Federal agency. Reviews of pro-tests by the Federal agency will be lim-ited to:

(i) Violations of Federal law or regu-lations and the standards of this sec-tion (violations of State or local lawwill be under the jurisdiction of Stateor local authorities) and

(ii) Violations of the grantee’s or sub-grantee’s protest procedures for failureto review a complaint or protest. Pro-tests received by the Federal agencyother than those specified above will bereferred to the grantee or subgrantee.

(c) Competition. (1) All procurementtransactions will be conducted in amanner providing full and open com-petition consistent with the standardsof § 1157.36. Some of the situations con-sidered to be restrictive of competitioninclude but are not limited to:

(i) Placing unreasonable require-ments on firms in order for them toqualify to do business,

(ii) Requiring unnecessary experienceand excessive bonding,

(iii) Noncompetitive pricing practicesbetween firms or between affiliatedcompanies,

(iv) Noncompetitive awards to con-sultants that are on retainer contracts,

(v) Organizational conflicts of inter-est,

(vi) Specifying only a ‘‘brand name’’product instead of allowing ‘‘an equal’’product to be offered and describingthe performance of other relevant re-quirements of the procurement, and

(vii) Any arbitrary action in the pro-curement process.

(2) Grantees and subgrantees willconduct procurements in a mannerthat prohibits the use of statutorily oradministratively imposed in-State orlocal geographical preferences in theevaluation of bids or proposals, exceptin those cases where applicable Federalstatutes expressly mandate or encour-age geographic preference. Nothing inthis section preempts State licensinglaws. When contracting for architec-tural and engineering (A/E) services,geographic location may be a selectioncriteria provided its application leavesan appropriate number of qualifiedfirms, given the nature and size of theproject, to compete for the contract.

(3) Grantees will have written selec-tion procedures for procurement trans-actions. These procedures will ensurethat all solicitations:

(i) Incorporate a clear and accuratedescription of the technical require-ments for the material, product, orservice to be procured. Such descrip-tion shall not, in competitive procure-ments, contain features which undulyrestrict competition. The descriptionmay include a statement of the quali-tative nature of the material, productor service to be procured, and whennecessary, shall set forth those mini-mum essential characteristics andstandards to which it must conform ifit is to satisfy its intended use. De-tailed product specifications should beavoided if at all possible. When it isimpractical or uneconomical to make aclear and accurate description of thetechnical requirements, a ‘‘brand name


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or equal’’ description may be used as ameans to define the performance orother salient requirements of a pro-curement. The specific features of thenamed brand which must be met byofferors shall be clearly stated; and

(ii) Identify all requirements whichthe offerors must fulfill and all otherfactors to be used in evaluating bids orproposals.

(4) Grantees and subgrantees will en-sure that all prequalified lists of per-sons, firms, or products which are usedin acquiring goods and services are cur-rent and include enough qualifiedsources to ensure maximum open andfree competition. Also, grantees andsubgrantees will not preclude potentialbidders from qualifying during the so-licitation period.

(d) Methods of procurement to be fol-lowed—(1) Procurement by small purchaseprocedures. Small purchase proceduresare those relatively simple and infor-mal procurement methods for securingservices, supplies, or other propertythat do not cost more than the sim-plified acquisition threshold fixed at 41U.S.C. 403(11) (currently set at $100,000).If small purchase procedures are used,price or rate quotations shall be ob-tained from an adequate number ofqualified sources.

(2) Procurement by sealed bids (for-mal advertising). Bids are publicly so-licited and a firm-fixed-price contract(lump sum or unit price) is awarded tothe responsible bidder whose bid, con-forming with all the material termsand conditions of the invitation forbids, is the lowest in price. The sealedbid method is the preferred method forprocuring construction, if the condi-tions in § 1157.36(d)(2)(i) apply.

(i) In order for sealed bidding to befeasible, the following conditionsshould be present:

(A) A complete, adequate, and realis-tic specification or purchase descrip-tion is available;

(B) Two or more responsible biddersare willing and able to compete effec-tively and for the business; and

(C) The procurement lends itself to afirm fixed price contract and the selec-tion of the successful bidder can bemade principally on the basis of price.

(ii) If sealed bids are used, the follow-ing requirements apply:

(A) The invitation for bids will bepublicly advertised and bids shall besolicited from an adequate number ofknown suppliers, providing them suffi-cient time prior to the date set foropening the bids;

(B) The invitation for bids, whichwill include any specifications and per-tinent attachments, shall define theitems or services in order for the bidderto properly respond;

(C) All bids will be publicly opened atthe time and place prescribed in the in-vitation for bids;

(D) A firm fixed-price contract awardwill be made in writing to the lowestresponsive and responsible bidder.Where specified in bidding documents,factors such as discounts, transpor-tation cost, and life cycle costs shall beconsidered in determining which bid islowest. Payment discounts will only beused to determine the low bid whenprior experience indicates that suchdiscounts are usually taken advantageof; and

(E) Any or all bids may be rejected ifthere is a sound documented reason.

(3) Procurement by competitive propos-als. The technique of competitive pro-posals is normally conducted withmore than one source submitting anoffer, and either a fixed-price or cost-reimbursement type contract is award-ed. It is generally used when conditionsare not appropriate for the use ofsealed bids. If this method is used, thefollowing requirements apply:

(i) Requests for proposals will be pub-licized and identify all evaluation fac-tors and their relative importance. Anyresponse to publicized requests for pro-posals shall be honored to the maxi-mum extent practical;

(ii) Proposals will be solicited froman adequate number of qualifiedsources;

(iii) Grantees and subgrantees willhave a method for conducting tech-nical evaluations of the proposals re-ceived and for selecting awardees;

(iv) Awards will be made to the re-sponsible firm whose proposal is mostadvantageous to the program, withprice and other factors considered; and

(v) Grantees and subgrantees mayuse competitive proposal proceduresfor qualifications-based procurement of


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architectural/engineering (A/E) profes-sional services whereby competitors’qualifications are evaluated and themost qualified competitor is selected,subject to negotiation of fair and rea-sonable compensation. The method,where price is not used as a selectionfactor, can only be used in procure-ment of A/E professional services. Itcannot be used to purchase other typesof services though A/E firms are a po-tential source to perform the proposedeffort.

(4) Procurement by noncompetitiveproposals is procurement through solic-itation of a proposal from only onesource, or after solicitation of a num-ber of sources, competition is deter-mined inadequate.

(i) Procurement by noncompetitiveproposals may be used only when theaward of a contract is infeasible undersmall purchase procedures, sealed bidsor competitive proposals and one of thefollowing circumstances applies:

(A) The item is available only from asingle source;

(B) The public exigency or emergencyfor the requirement will not permit adelay resulting from competitive solic-itation;

(C) The awarding agency authorizesnoncompetitive proposals; or

(D) After solicitation of a number ofsources, competition is determined in-adequate.

(ii) Cost analysis, i.e., verifying theproposed cost data, the projections ofthe data, and the evaluation of the spe-cific elements of costs and profits, isrequired.

(iii) Grantees and subgrantees maybe required to submit the proposed pro-curement to the awarding agency forpre-award review in accordance withparagraph (g) of this section.

(e) Contracting with small and minorityfirms, women’s business enterprise andlabor surplus area firms. (1) The granteeand subgrantee will take all necessaryaffirmative steps to assure that minor-ity firms, women’s business enter-prises, and labor surplus area firms areused when possible.

(2) Affirmative steps shall include:(i) Placing qualified small and minor-

ity businesses and women’s businessenterprises on solicitation lists;

(ii) Assuring that small and minoritybusinesses, and women’s business en-terprises are solicited whenever theyare potential sources;

(iii) Dividing total requirements,when economically feasible, into small-er tasks or quantities to permit maxi-mum participation by small and minor-ity business, and women’s business en-terprises;

(iv) Establishing delivery schedules,where the requirement permits, whichencourage participation by small andminority business, and women’s busi-ness enterprises;

(v) Using the services and assistanceof the Small Business Administration,and the Minority Business Develop-ment Agency of the Department ofCommerce; and

(vi) Requiring the prime contractor,if subcontracts are to be let, to takethe affirmative steps listed in para-graphs (e)(2) (i) through (v) of this sec-tion.

(f) Contract cost and price. (1) Grant-ees and subgrantees must perform acost or price analysis in connectionwith every procurement action includ-ing contract modifications. The meth-od and degree of analysis is dependenton the facts surrounding the particularprocurement situation, but as a start-ing point, grantees must make inde-pendent estimates before receiving bidsor proposals. A cost analysis must beperformed when the offeror is requiredto submit the elements of his esti-mated cost, e.g., under professional,consulting, and architectural engineer-ing services contracts. A cost analysiswill be necessary when adequate pricecompetition is lacking, and for solesource procurements, including con-tract modifications or change orders,unless price resonableness can be es-tablished on the basis of a catalog ormarket price of a commercial productsold in substantial quantities to thegeneral public or based on prices set bylaw or regulation. A price analysis willbe used in all other instances to deter-mine the reasonableness of the pro-posed contract price.

(2) Grantees and subgrantees will ne-gotiate profit as a separate element ofthe price for each contract in whichthere is no price competition and in allcases where cost analysis is performed.


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To establish a fair and reasonable prof-it, consideration will be given to thecomplexity of the work to be per-formed, the risk borne by the contrac-tor, the contractor’s investment, theamount of subcontracting, the qualityof its record of past performance, andindustry profit rates in the surround-ing geographical area for similar work.

(3) Costs or prices based on estimatedcosts for contracts under grants will beallowable only to the extent that costsincurred or cost estimates included innegotiated prices are consistent withFederal cost principles (see § 1157.22).Grantees may reference their own costprinciples that comply with the appli-cable Federal cost principles.

(4) The cost plus a percentage of costand percentage of construction costmethods of contracting shall not beused.

(g) Awarding agency review. (1) Grant-ees and subgrantees must make avail-able, upon request of the awardingagency, technical specifications on pro-posed procurements where the award-ing agency believes such review isneeded to ensure that the item and/orservice specified is the one being pro-posed for purchase. This review gen-erally will take place prior to the timethe specification is incorporated into asolicitation document. However, if thegrantee or subgrantee desires to havethe review accomplished after a solici-tation has been developed, the award-ing agency may still review the speci-fications, with such review usually lim-ited to the technical aspects of the pro-posed purchase.

(2) Grantees and subgrantees must onrequest make available for awardingagency pre-award review procurementdocuments, such as requests for propos-als or invitations for bids, independentcost estimates, etc. when:

(i) A grantee’s or subgrantee’s pro-curement procedures or operation failsto comply with the procurement stand-ards in this section; or

(ii) The procurement is expected toexceed the simplified acquisitionthreshold and is to be awarded withoutcompetition or only one bid or offer isreceived in response to a solicitation;or

(iii) The procurement, which is ex-pected to exceed the simplified acquisi-

tion threshold, specifies a ‘‘brandname’’ product; or

(iv) The proposed award is more thanthe simplified acquisition thresholdand is to be awarded to other than theapparent low bidder under a sealed bidprocurement; or

(v) A proposed contract modificationchanges the scope of a contract or in-creases the contract amount by morethan the simplified acquisition thresh-old.

(3) A grantee or subgrantee will beexempt from the pre-award review inparagraph (g)(2) of this section if theawarding agency determines that itsprocurement systems comply with thestandards of this section.

(i) A grantee or subgrantee may re-quest that its procurement system bereviewed by the awarding agency to de-termine whether its system meetsthese standards in order for its systemto be certified. Generally, these re-views shall occur where there is a con-tinuous high-dollar funding, and third-party contracts are awarded on a regu-lar basis.

(ii) A grantee or subgrantee may self-certify its procurement system. Suchself-certification shall not limit theawarding agency’s right to survey thesystem. Under a self-certification pro-cedure, awarding agencies may wish torely on written assurances from thegrantee or subgrantee that it is com-plying with these standards. A granteeor subgrantee will cite specific proce-dures, regulations, standards, etc., asbeing in compliance with these require-ments and have its system availablefor review.

(h) Bonding requirements. For con-struction or facility improvement con-tracts or subcontracts exceeding thesimplified acquisition threshold, theawarding agency may accept the bond-ing policy and requirements of thegrantee or subgrantee provided theawarding agency has made a deter-mination that the awarding agency’sinterest is adequately protected. Ifsuch a determination has not beenmade, the minimum requirements shallbe as follows:

(1) A bid guarantee from each bidderequivalent to five percent of the bid price.The ‘‘bid guarantee’’ shall consist of afirm commitment such as a bid bond,


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certified check, or other negotiable in-strument accompanying a bid as assur-ance that the bidder will, upon accept-ance of his bid, execute such contrac-tual documents as may be requiredwithin the time specified.

(2) A performance bond on the part ofthe contractor for 100 percent of the con-tract price. A ‘‘performance bond’’ isone executed in connection with a con-tract to secure fulfillment of all thecontractor’s obligations under suchcontract.

(3) A payment bond on the part of thecontractor for 100 percent of the contractprice. A ‘‘payment bond’’ is one exe-cuted in connection with a contract toassure payment as required by law ofall persons supplying labor and mate-rial in the execution of the work pro-vided for in the contract.

(i) Contract provisions. A grantee’sand subgrantee’s contracts must con-tain provisions in paragraph (i) of thissection. Federal agencies are permittedto require changes, remedies, changedconditions, access and records reten-tion, suspension of work, and otherclauses approved by the Office of Fed-eral Procurement Policy.

(1) Administrative, contractual, orlegal remedies in instances where con-tractors violate or breach contractterms, and provide for such sanctionsand penalties as may be appropriate.(Contracts more than the simplified ac-quisition threshold)

(2) Termination for cause and forconvenience by the grantee or sub-grantee including the manner by whichit will be effected and the basis for set-tlement. (All contracts in excess of$10,000)

(3) Compliance with Executive Order11246 of September 24, 1965, entitled‘‘Equal Employment Opportunity,’’ asamended by Executive Order 11375 ofOctober 13, 1967, and as supplementedin Department of Labor regulations (41CFR chapter 60). (All construction con-tracts awarded in excess of $10,000 bygrantees and their contractors or sub-grantees)

(4) Compliance with the Copeland‘‘Anti-Kickback’’ Act (18 U.S.C. 874) assupplemented in Department of Laborregulations (29 CFR Part 3). (All con-tracts and subgrants for constructionor repair)

(5) Compliance with the Davis-BaconAct (40 U.S.C. 276a to 276a–7) as supple-mented by Department of Labor regu-lations (29 CFR Part 5). (Constructioncontracts in excess of $2000 awarded bygrantees and subgrantees when re-quired by Federal grant program legis-lation)

(6) Compliance with Sections 103 and107 of the Contract Work Hours andSafety Standards Act (40 U.S.C. 327–330)as supplemented by Department ofLabor regulations (29 CFR Part 5).(Construction contracts awarded bygrantees and subgrantees in excess of$2000, and in excess of $2500 for othercontracts which involve the employ-ment of mechanics or laborers)

(7) Notice of awarding agency re-quirements and regulations pertainingto reporting.

(8) Notice of awarding agency re-quirements and regulations pertainingto patent rights with respect to anydiscovery or invention which arises oris developed in the course of or undersuch contract.

(9) Awarding agency requirementsand regulations pertaining to copy-rights and rights in data.

(10) Access by the grantee, the sub-grantee, the Federal grantor agency,the Comptroller General of the UnitedStates, or any of their duly authorizedrepresentatives to any books, docu-ments, papers, and records of the con-tractor which are directly pertinent tothat specific contract for the purposeof making audit, examination, ex-cerpts, and transcriptions.

(11) Retention of all required recordsfor three years after grantees or sub-grantees make final payments and allother pending matters are closed.

(12) Compliance with all applicablestandards, orders, or requirements is-sued under section 306 of the Clean AirAct (42 U.S.C. 1857(h)), section 508 ofthe Clean Water Act (33 U.S.C. 1368),Executive Order 11738, and Environ-mental Protection Agency regulations(40 CFR part 15). (Contracts, sub-contracts, and subgrants of amounts inexcess of $100,000)

(13) Mandatory standards and policiesrelating to energy efficiency which arecontained in the state energy conserva-tion plan issued in compliance with the


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.37

Energy Policy and Conservation Act(Pub. L. 94–163, 89 Stat. 871).

[53 FR 8081, 8087, Mar. 11, 1988, as amended at60 FR 19639, 19645, Apr. 19, 1995]

§ 1157.37 Subgrants.(a) States. States shall follow state

law and procedures when awarding andadministering subgrants (whether on acost reimbursement or fixed amountbasis) of financial assistance to localand Indian tribal governments. Statesshall:

(1) Ensure that every subgrant in-cludes any clauses required by Federalstatute and executive orders and theirimplementing regulations;

(2) Ensure that subgrantees areaware of requirements imposed uponthem by Federal statute and regula-tion;

(3) Ensure that a provision for com-pliance with § 1157.42 is placed in everycost reimbursement subgrant; and

(4) Conform any advances of grantfunds to subgrantees substantially tothe same standards of timing andamount that apply to cash advances byFederal agencies.

(b) All other grantees. All other grant-ees shall follow the provisions of thispart which are applicable to awardingagencies when awarding and admin-istering subgrants (whether on a costreimbursement or fixed amount basis)of financial assistance to local and In-dian tribal governments. Granteesshall:

(1) Ensure that every subgrant in-cludes a provision for compliance withthis part;

(2) Ensure that every subgrant in-cludes any clauses required by Federalstatute and executive orders and theirimplementing regulations; and

(3) Ensure that subgrantees areaware of requirements imposed uponthem by Federal statutes and regula-tions.

(c) Exceptions. By their own terms,certain provisions of this part do notapply to the award and administrationof subgrants:

(1) Section 1157.10;(2) Section 1157.11;(3) The letter-of-credit procedures

specified in Treasury Regulations at 31CFR part 205, cited in § 1157.21; and

(4) Section 1157.50.


§ 1157.40 Monitoring and reportingprogram performance.

(a) Monitoring by grantees. Granteesare responsible for managing the day-to-day operations of grant andsubgrant supported activities. Granteesmust monitor grant and subgrant sup-ported activities to assure compliancewith applicable Federal requirementsand that performance goals are beingachieved. Grantee monitoring mustcover each program, function or activ-ity.

(b) Nonconstruction performance re-ports. The Federal agency may, if it de-cides that performance informationavailable from subsequent applicationscontains sufficient information tomeet its programmatic needs, requirethe grantee to submit a performancereport only upon expiration or termi-nation of grant support. Unless waivedby the Federal agency this report willbe due on the same date as the final Fi-nancial Status Report.

(1) Grantees shall submit annual per-formance reports unless the awardingagency requires quarterly or semi-an-nual reports. However, performance re-ports will not be required more fre-quently than quarterly. Annual reportsshall be due 90 days after the grantyear, quarterly or semi-annual reportsshall be due 30 days after the reportingperiod. The final performance reportwill be due 90 days after the expirationor termination of grant support. If ajustified request is submitted by agrantee, the Federal agency may ex-tend the due date for any performancereport. Additionally, requirements forunnecessary performance reports maybe waived by the Federal agency.

(2) Performance reports will contain,for each grant, brief information on thefollowing:

(i) A comparison of actual accom-plishments to the objectives estab-lished for the period. Where the outputof the project can be quantified, a com-putation of the cost per unit of outputmay be required if that informationwill be useful.

(ii) The reasons for slippage if estab-lished objectives were not met.


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(iii) Additional pertinent informationincluding, when appropriate, analysisand explanation of cost overruns orhigh unit costs.

(3) Grantees will not be required tosubmit more than the original and twocopies of performance reports.

(4) Grantees will adhere to the stand-ards in this section in prescribing per-formance reporting requirements forsubgrantees.

(c) Construction performance reports.For the most part, on-site technical in-spections and certified percentage-of-completion data are relied on heavilyby Federal agencies to monitorprogress under construction grants andsubgrants. The Federal agency will re-quire additional formal performancereports only when considered nec-essary, and never more frequently thanquarterly.

(d) Significant developments. Eventsmay occur between the scheduled per-formance reporting dates which havesignificant impact upon the grant orsubgrant supported activity. In suchcases, the grantee must inform theFederal agency as soon as the followingtypes of conditions become known:

(1) Problems, delays, or adverse con-ditions which will materially impairthe ability to meet the objective of theaward. This disclosure must include astatement of the action taken, or con-templated, and any assistance neededto resolve the situation.

(2) Favorable developments which en-able meeting time schedules and objec-tives sooner or at less cost than antici-pated or producing more beneficial re-sults than originally planned.

(e) Federal agencies may make sitevisits as warranted by program needs.

(f) Waivers, extensions. (1) Federalagencies may waive any performancereport required by this part if not need-ed.

(2) The grantee may waive any per-formance report from a subgranteewhen not needed. The grantee may ex-tend the due date for any performancereport from a subgrantee if the granteewill still be able to meet its perform-ance reporting obligations to the Fed-eral agency.

§ 1157.41 Financial reporting.(a) General. (1) Except as provided in

paragraphs (a) (2) and (5) of this sec-tion, grantees will use only the formsspecified in paragraphs (a) through (e)of this section, and such supple-mentary or other forms as may fromtime to time be authorized by OMB,for:

(i) Submitting financial reports toFederal agencies, or

(ii) Requesting advances or reim-bursements when letters of credit arenot used.

(2) Grantees need not apply the formsprescribed in this section in dealingwith their subgrantees. However,grantees shall not impose more burden-some requirements on subgrantees.

(3) Grantees shall follow all applica-ble standard and supplemental Federalagency instructions approved by OMBto the extend required under the Paper-work Reduction Act of 1980 for use inconnection with forms specified inparagraphs (b) through (e) of this sec-tion. Federal agencies may issue sub-stantive supplementary instructionsonly with the approval of OMB. Federalagencies may shade out or instruct thegrantee to disregard any line item thatthe Federal agency finds unnecessaryfor its decisionmaking purposes.

(4) Grantees will not be required tosubmit more than the original and twocopies of forms required under thispart.

(5) Federal agencies may providecomputer outputs to grantees to expe-dite or contribute to the accuracy ofreporting. Federal agencies may acceptthe required information from granteesin machine usable format or computerprintouts instead of prescribed forms.

(6) Federal agencies may waive anyreport required by this section if notneeded.

(7) Federal agencies may extend thedue date of any financial report uponreceiving a justified request from agrantee.

(b) Financial Status Report—(1) Form.Grantees will use Standard Form 269 or269A, Financial Status Report, to re-port the status of funds for all non-construction grants and for construc-tion grants when required in accord-ance with paragraph § 1157.41(e)(2)(iii)of this section.


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45 CFR Ch. XI (10–1–97 Edition)§ 1157.41

(2) Accounting basis. Each grantee willreport program outlays and programincome on a cash or accrual basis asprescribed by the awarding agency. Ifthe Federal agency requires accrual in-formation and the grantee’s accountingrecords are not normally kept on theaccural basis, the grantee shall not berequired to convert its accounting sys-tem but shall develop such accrual in-formation through and analysis of thedocumentation on hand.

(3) Frequency. The Federal agencymay prescribe the frequency of the re-port for each project or program. How-ever, the report will not be requiredmore frequently than quarterly. If theFederal agency does not specify thefrequency of the report, it will be sub-mitted annually. A final report will berequired upon expiration or termi-nation of grant support.

(4) Due date. When reports are re-quired on a quarterly or semiannualbasis, they will be due 30 days after thereporting period. When required on anannual basis, they will be due 90 daysafter the grant year. Final reports willbe due 90 days after the expiration ortermination of grant support.

(c) Federal Cash Transactions Report—(1) Form. (i) For grants paid by letter orcredit, Treasury check advances orelectronic transfer of funds, the grant-ee will submit the Standard Form 272,Federal Cash Transactions Report, andwhen necessary, its continuation sheet,Standard Form 272a, unless the termsof the award exempt the grantee fromthis requirement.

(ii) These reports will be used by theFederal agency to monitor cash ad-vanced to grantees and to obtain dis-bursement or outlay information foreach grant from grantees. The formatof the report may be adapted as appro-priate when reporting is to be accom-plished with the assistance of auto-matic data processing equipment pro-vided that the information to be sub-mitted is not changed in substance.

(2) Forecasts of Federal cash require-ments. Forecasts of Federal cash re-quirements may be required in the‘‘Remarks’’ section of the report.

(3) Cash in hands of subgrantees. Whenconsidered necessary and feasible bythe Federal agency, grantees may berequired to report the amount of cash

advances in excess of three days’ needsin the hands of their subgrantees orcontractors and to provide short nar-rative explanations of actions taken bythe grantee to reduce the excess bal-ances.

(4) Frequency and due date. Granteesmust submit the report no later than 15working days following the end of eachquarter. However, where an advance ei-ther by letter of credit or electronictransfer of funds is authorized at anannualized rate of one million dollarsor more, the Federal agency may re-quire the report to be submitted within15 working days following the end ofeach month.

(d) Request for advance or reimburse-ment—(1) Advance payments. Requestsfor Treasury check advance paymentswill be submitted on Standard Form270, Request for Advance or Reimburse-ment. (This form will not be used fordrawdowns under a letter of credit,electronic funds transfer or whenTreasury check advance payments aremade to the grantee automatically ona predetermined basis.)

(2) Reimbursements. Requests for reim-bursement under nonconstructiongrants will also be submitted on Stand-ard Form 270. (For reimbursement re-quests under construction grants, seeparagraph (e)(1) of this section.)

(3) The frequency for submitting pay-ment requests is treated in§ 1157.41(b)(3).

(e) Outlay report and request for reim-bursement for construction programs. (1)Grants that support construction ac-tivities paid by reimbursement meth-od.

(i) Requests for reimbursement underconstruction grants will be submittedon Standard Form 271, Outlay Reportand Request for Reimbursement forConstruction Programs. Federal agen-cies may, however, prescribe the Re-quest for Advance or Reimbursementform, specified in § 1157.41(d), instead ofthis form.

(ii) The frequency for submitting re-imbursement requests is treated in§ 1157.41(b)(3).

(2) Grants that support constructionactivities paid by letter of credit, elec-tronic funds transfer or Treasury checkadvance.


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(i) When a construction grant is paidby letter of credit, electronic fundstransfer or Treasury check advances,the grantee will report its outlays tothe Federal agency using StandardForm 271, Outlay Report and Requestfor Reimbursement for ConstructionPrograms. The Federal agency will pro-vide any necessary special instruction.However, frequency and due date shallbe governed by § 1157.41(b) (3) and (4).

(ii) When a construction grant is paidby Treasury check advances based onperiodic requests from the grantee, theadvances will be requested on the formspecified in § 1157.41(d).

(iii) The Federal agency may sub-stitute the Financial Status Reportspecified in § 1157.41(b) for the OutlayReport and Request for Reimbursementfor Construction Programs.

(3) Accounting basis. The accountingbasis for the Outlay Report and Re-quest for Reimbursement for Construc-tion Programs shall be governed by§ 1157.41(b)(2).

§ 1157.42 Retention and access re-quirements for records.

(a) Applicability. (1) This section ap-plies to all financial and programmaticrecords, supporting documents, statis-tical records, and other records ofgrantees or subgrantees which are:

(i) Required to be maintained by theterms of this part, program regulationsor the grant agreement, or

(ii) Otherwise reasonably consideredas pertinent to program regulations orthe grant agreement.

(2) This section does not apply torecords maintained by contractors orsubcontractors. For a requirement toplace a provision concerning records incertain kinds of contracts, see§ 1157.36(i)(10).

(b) Length of retention period. (1) Ex-cept as otherwise provided, recordsmust be retained for three years fromthe starting date specified in paragraph(c) of this section.

(2) If any litigation, claim, negotia-tion, audit or other action involvingthe records has been started before theexpiration of the 3-year period, therecords must be retained until comple-tion of the action and resolution of allissues which arise from it, or until the

end of the regular 3-year period, which-ever is later.

(3) To avoid duplicate recordkeeping,awarding agencies may make specialarrangements with grantees and sub-grantees to retain any records whichare continuously needed for joint use.The awarding agency will requesttransfer of records to its custody whenit determines that the records possesslong-term retention value. When therecords are transferred to or main-tained by the Federal agency, the 3-year retention requirement is not ap-plicable to the grantee or subgrantee.

(c) Starting date of retention period—(1)General. When grant support is contin-ued or renewed at annual or other in-tervals, the retention period for therecords of each funding period starts onthe day the grantee or subgrantee sub-mits to the awarding agency its singleor last expenditure report for that pe-riod. However, if grant support is con-tinued or renewed quarterly, the reten-tion period for each year’s recordsstarts on the day the grantee submitsits expenditure report for the last quar-ter of the Federal fiscal year. In allother cases, the retention period startson the day the grantee submits itsfinal expenditure report. If an expendi-ture report has been waived, the reten-tion period starts on the day the reportwould have been due.

(2) Real property and equipmentrecords. The retention period for realproperty and equipment records startsfrom the date of the disposition or re-placement or transfer at the directionof the awarding agency.

(3) Records for income transactionsafter grant or subgrant support. In somecases grantees must report incomeafter the period of grant support.Where there is such a requirement, theretention period for the records per-taining to the earning of the incomestarts from the end of the grantee’s fis-cal year in which the income is earned.

(4) Indirect cost rate proposals, cost al-locations plans, etc. This paragraph ap-plies to the following types of docu-ments, and their supporting records:Indirect cost rate computations or pro-posals, cost allocation plans, and anysimilar accounting computations ofthe rate at which a particular group ofcosts is chargeable (such as computer


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usage chargeback rates or compositefringe benefit rates).

(i) If submitted for negotiation. If theproposal, plan, or other computation isrequired to be submitted to the FederalGovernment (or to the grantee) to formthe basis for negotiation of the rate,then the 3-year retention period for itssupporting records starts from the dateof such submission.

(ii) If not submitted for negotiation. Ifthe proposal, plan, or other computa-tion is not required to be submitted tothe Federal Government (or to thegrantee) for negotiation purposes, thenthe 3-year retention period for the pro-posal plan, or computation and its sup-porting records starts from end of thefiscal year (or other accounting period)covered by the proposal, plan, or othercomputation.

(d) Substitution of microfilm. Copiesmade by microfilming, photocopying,or similar methods may be substitutedfor the original records.

(e) Access to records—(1) Records ofgrantees and subgrantees. The awardingagency and the Comptroller General ofthe United States, or any of their au-thorized representatives, shall have theright of access to any pertinent books,documents, papers, or other records ofgrantees and subgrantees which arepertinent to the grant, in order tomake audits, examinations, excerpts,and transcripts.

(2) Expiration of right of access. Therights of access in this section mustnot be limited to the required reten-tion period but shall last as long as therecords are retained.

(f) Restrictions on public access. TheFederal Freedom of Information Act (5U.S.C. 552) does not apply to recordsUnless required by Federal, State, orlocal law, grantees and subgrantees arenot required to permit public access totheir records.

§ 1157.43 Enforcement.

(a) Remedies for noncompliance. If agrantee or subgrantee materially failsto comply with any term of an award,whether stated in a Federal statute orregulation, an assurance, in a Stateplan or application, a notice of award,or elsewhere, the awarding agency maytake one or more of the following ac-

tions, as appropriate in the cir-cumstances:

(1) Temporarily withhold cash pay-ments pending correction of the defi-ciency by the grantee or subgrantee ormore severe enforcement action by theawarding agency,

(2) Disallow (that is, deny both use offunds and matching credit for) all orpart of the cost of the activity or ac-tion not in compliance,

(3) Wholly or partly suspend or ter-minate the current award for thegrantee’s or subgrantee’s program,

(4) Withhold further awards for theprogram, or

(5) Take other remedies that may belegally available.

(b) Hearings, appeals. In taking an en-forcement action, the awarding agencywill provide the grantee or subgranteean opportunity for such hearing, ap-peal, or other administrative proceed-ing to which the grantee or subgranteeis entitled under any statute or regula-tion applicable to the action involved.

(c) Effects of suspension and termi-nation. Costs of grantee or subgranteeresulting from obligations incurred bythe grantee or subgrantee during a sus-pension or after termination of anaward are not allowable unless theawarding agency expressly authorizesthem in the notice of suspension or ter-mination or subsequently. Other grant-ee or subgrantee costs during suspen-sion or after termination which arenecessary and not reasonably avoidableare allowable if:

(1) The costs result from obligationswhich were properly incurred by thegrantee or subgrantee before the effec-tive date of suspension or termination,are not in anticipation of it, and, in thecase of a termination, arenoncancellable, and,

(2) The costs would be allowable ifthe award were not suspended or ex-pired normally at the end of the fund-ing period in which the terminationtakes effect.

(d) Relationship to debarment and sus-pension. The enforcement remediesidentified in this section, includingsuspension and termination, do notpreclude grantee or subgrantee frombeing subject to ‘‘Debarment and Sus-pension’’ under E.O. 12549 (see § 1157.35).


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§ 1157.44 Termination for convenience.Except as provided in § 1157.43 awards

may be terminated in whole or in partonly as follows:

(a) By the awarding agency with theconsent of the grantee or subgrantee inwhich case the two parties shall agreeupon the termination conditions, in-cluding the effective date and in thecase of partial termination, the portionto be terminated, or

(b) By the grantee or subgranteeupon written notification to the award-ing agency, setting forth the reasonsfor such termination, the effectivedate, and in the case of partial termi-nation, the portion to be terminated.However, if, in the case of a partial ter-mination, the awarding agency deter-mines that the remaining portion ofthe award will not accomplish the pur-poses for which the award was made,the awarding agency may terminatethe award in its entirety under either§ 1157.43 or paragraph (a) of this sec-tion.

Subpart D—After-the-GrantRequirements

§ 1157.50 Closeout.(a) General. The Federal agency will

close out the award when it determinesthat all applicable administrative ac-tions and all required work of thegrant has been completed.

(b) Reports. Within 90 days after theexpiration or termination of the grant,the grantee must submit all financial,performance, and other reports re-quired as a condition of the grant.Upon request by the grantee, Federalagencies may extend this timeframe.These may include but are not limitedto:

(1) Final performance or progress re-port.

(2) Financial Status Report (SF 269) orOutlay Report and Request for Reim-bursement for Construction Programs(SF–271) (as applicable).

(3) Final request for payment (SF–270)(if applicable).

(4) Invention disclosure (if applicable).(5) Federally-owned property report:

In accordance with § 1157.32(f), a grant-ee must submit an inventory of all fed-erally owned property (as distinct from

property acquired with grant funds) forwhich it is accountable and request dis-position instructions from the Federalagency of property no longer needed.

(c) Cost adjustment. The Federal agen-cy will, within 90 days after receipt ofreports in paragraph (b) of this section,make upward or downward adjust-ments to the allowable costs.

(d) Cash adjustments. (1) The Federalagency will make prompt payment tothe grantee for allowable reimbursablecosts.

(2) The grantee must immediately re-fund to the Federal agency any balanceof unobligated (unencumbered) cashadvanced that is not authorized to beretained for use on other grants.

§ 1157.51 Later disallowances and ad-justments.

The closeout of a grant does not af-fect:

(a) The Federal agency’s right to dis-allow costs and recover funds on thebasis of a later audit or other review;

(b) The grantee’s obligation to returnany funds due as a result of later re-funds, corrections, or other trans-actions;

(c) Records retention as required in§ 1157.42;

(d) Property management require-ments in §§ 1157.31 and 1157.32; and

(e) Audit requirements in § 1157.26.

§ 1157.52 Collection of amounts due.

(a) Any funds paid to a grantee in ex-cess of the amount to which the grant-ee is finally determined to be entitledunder the terms of the award con-stitute a debt to the Federal Govern-ment. If not paid within a reasonableperiod after demand, the Federal agen-cy may reduce the debt by:

(1) Making an adminstrative offsetagainst other requests for reimburse-ments,

(2) Withholding advance paymentsotherwise due to the grantee, or

(3) Other action permitted by law.(b) Except where otherwise provided

by statutes or regulations, the Federalagency will charge interest on an over-due debt in accordance with the Fed-eral Claims Collection Standards (4CFR Chapter II). The date from whichinterest is computed is not extended by


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litigation or the filing of any form ofappeal.

Subpart E—Entitlements[Reserved]

PART 1158—NEW RESTRICTIONS ONLOBBYING

Subpart A—General

Sec.1158.100 Conditions on use of funds.1158.105 Definitions.1158.110 Certification and disclosure.

Subpart B—Activities by Own Employees

1158.200 Agency and legislative liaison.1158.205 Professional and technical services.1158.210 Reporting.

Subpart C—Activities by Other Than OwnEmployees

1158.300 Professional and technical services.

Subpart D—Penalties and Enforcement

1158.400 Penalties.1158.405 Penalty procedures.1158.410 Enforcement.

Subpart E—Exemptions

1158.500 Secretary of Defense.

Subpart F—Agency Reports

1158.600 Semi-annual compilation.1158.605 Inspector General report.

APPENDIX A TO PART 1158—CERTIFICATION RE-GARDING LOBBYING

APPENDIX B TO PART 1158—DISCLOSURE FORMTO REPORT LOBBYING

AUTHORITY: Sec. 319, Pub. L. 101–121 (31U.S.C. 1352); 20 U.S.C. 959.

SOURCE: 55 FR 6737, 6755, Feb. 26, 1990, un-less otherwise noted.

CROSS REFERENCE: See also Office of Man-agement and Budget notice published at 54FR 52306, December 20, 1989.

Subpart A—General

§ 1158.100 Conditions on use of funds.(a) No appropriated funds may be ex-

pended by the recipient of a Federalcontract, grant, loan, or cooperativeageement to pay any person for influ-encing or attempting to influence anofficer or employee of any agency, a

Member of Congress, an officer or em-ployee of Congress, or an employee of aMember of Congress in connection withany of the following covered Federalactions: the awarding of any Federalcontract, the making of any Federalgrant, the making of any Federal loan,the entering into of any cooperativeagreement, and the extension, continu-ation, renewal, amendment, or modi-fication of any Federal contract, grant,loan, or cooperative agreement.

(b) Each person who requests or re-ceives from an agency a Federal con-tract, grant, loan, or cooperativeagreement shall file with that agency acertification, set forth in appendix A,that the person has not made, and willnot make, any payment prohibited byparagraph (a) of this section.

(c) Each person who requests or re-ceives from an agency a Federal con-tract, grant, loan, or a cooperativeagreement shall file with that agency adisclosure form, set forth in appendixB, if such person has made or hasagreed to make any payment usingnonappropriated funds (to include prof-its from any covered Federal action),which would be prohibited under para-graph (a) of this section if paid for withappropriated funds.

(d) Each person who requests or re-ceives from an agency a commitmentproviding for the United States to in-sure or guarantee a loan shall file withthat agency a statement, set forth inappendix A, whether that person hasmade or has agreed to make any pay-ment to influence or attempt to influ-ence an officer or employee of anyagency, a Member of Congress, an offi-cer or employee of Congress, or an em-ployee of a Member of Congress in con-nection with that loan insurance orguarantee.

(e) Each person who requests or re-ceives from an agency a commitmentproviding for the United States to in-sure or guarantee a loan shall file withthat agency a disclosure form, set forthin appendix B, if that person has madeor has agreed to make any payment toinfluence or attempt to influence an of-ficer or employee of any agency, aMember of Congress, an officer or em-ployee of Congress, or an employee of aMember of Congress in connection withthat loan insurance or guarantee.


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§ 1158.105 Definitions.For purposes of this part:(a) Agency, as defined in 5 U.S.C.

552(f), includes Federal executive de-partments and agencies as well as inde-pendent regulatory commissions andGovernment corporations, as defined in31 U.S.C. 9101(1).

(b) Covered Federal action means anyof the following Federal actions:

(1) The awarding of any Federal con-tract;

(2) The making of any Federal grant;(3) The making of any Federal loan;(4) The entering into of any coopera-

tive agreement; and,(5) The extension, continuation, re-

newal, amendment, or modification ofany Federal contract, grant, loan, orcooperative agreement.

Covered Federal action does not in-clude receiving from an agency a com-mitment providing for the UnitedStates to insure or guarantee a loan.Loan guarantees and loan insuranceare addressed independently withinthis part.

(c) Federal contract means an acquisi-tion contract awarded by an agency,including those subject to the FederalAcquisition Regulation (FAR), and anyother acquisition contract for real orpersonal property or services not sub-ject to the FAR.

(d) Federal cooperative agreementmeans a cooperative agreement en-tered into by an agency.

(e) Federal grant means an award offinancial assistance in the form ofmoney, or property in lieu of money,by the Federal Government or a directappropriation made by law to any per-son. The term does not include tech-nical assistance which provides serv-ices instead of money, or other assist-ance in the form of revenue sharing,loans, loan guarantees, loan insurance,interest subsidies, insurance, or directUnited States cash assistance to an in-dividual.

(f) Federal loan means a loan made byan agency. The term does not includeloan guarantee or loan insurance.

(g) Indian tribe and tribal organizationhave the meaning provided in section 4of the Indian Self-Determination andEducation Assistance Act (25 U.S.C.450B). Alaskan Natives are included

under the definitions of Indian tribes inthat Act.

(h) Influencing or attempting to influ-ence means making, with the intent toinfluence, any communication to or ap-pearance before an officer or employeeor any agency, a Member of Congress,an officer or employee of Congress, oran employee of a Member of Congressin connection with any covered Federalaction.

(i) Loan guarantee and loan insurancemeans an agency’s guarantee or insur-ance of a loan made by a person.

(j) Local government means a unit ofgovernment in a State and, if char-tered, established, or otherwise recog-nized by a State for the performance ofa governmental duty, including a localpublic authority, a special district, anintrastate district, a council of govern-ments, a sponsor group representativeorganization, and any other instrumen-tality of a local government.

(k) Officer or employee of an agency in-cludes the following individuals whoare employed by an agency:

(1) An individual who is appointed toa position in the Government undertitle 5, U.S. Code, including a positionunder a temporary appointment;

(2) A member of the uniformed serv-ices as defined in section 101(3), title 37,U.S. Code;

(3) A special Government employeeas defined in section 202, title 18, U.S.Code; and,

(4) An individual who is a member ofa Federal advisory committee, as de-fined by the Federal Advisory Commit-tee Act, title 5, U.S. Code appendix 2.

(l) Person means an individual, cor-poration, company, association, au-thority, firm, partnership, society,State, and local government, regard-less of whether such entity is operatedfor profit or not for profit. This termexcludes an Indian tribe, tribal organi-zation, or any other Indian organiza-tion with respect to expenditures spe-cifically permitted by other Federallaw.

(m) Reasonable compensation means,with respect to a regularly employedofficer or employee of any person, com-pensation that is consistent with thenormal compensation for such officer


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or employee for work that is not fur-nished to, not funded by, or not fur-nished in cooperation with the FederalGovernment.

(n) Reasonable payment means, withrespect to perfessional and other tech-nical services, a payment in an amountthat is consistent with the amount nor-mally paid for such services in the pri-vate sector.

(o) Recipient includes all contractors,subcontractors at any tier, and sub-grantees at any tier of the recipient offunds received in connection with aFederal contract, grant, loan, or coop-erative agreement. The term excludesan Indian tribe, tribal organization, orany other Indian organization with re-spect to expenditures specifically per-mitted by other Federal law.

(p) Regularly employed means, withrespect to an officer or employee of aperson requesting or receiving a Fed-eral contract, grant, loan, or coopera-tive agreement or a commitment pro-viding for the United States to insureor guarantee a loan, an officer or em-ployee who is employed by such personfor at least 130 working days withinone year immediately preceding thedate of the submission that initiatesagency consideration of such person forreceipt of such contract, grant, loan,cooperative agreement, loan insurancecommitment, or loan guarantee com-mitment. An officer or employee who isemployed by such person for less than130 working days within one year im-mediately preceding the date of thesubmission that initiates agency con-sideration of such person shall be con-sidered to be regularly employed assoon as he or she is employed by suchperson for 130 working days.

(q) State means a State of the UnitedStates, the District of Columbia, theCommonwealth of Puerto Rico, a terri-tory or possession of the United States,an agency or instrumentality of aState, and a multi-State, regional, orinterstate entity having governmentalduties and powers.

§ 1158.110 Certification and disclosure.(a) Each person shall file a certifi-

cation, and a disclosure form, if re-quired, with each submission that ini-tiates agency consideration of suchperson for:

(1) Award of a Federal contract,grant, or cooperative agreement ex-ceeding $100,000; or

(2) An award of a Federal loan or acommitment providing for the UnitedStates to insure or guarantee a loanexceeding $150,000.

(b) Each person shall file a certifi-cation, and a disclosure form, if re-quired, upon receipt by such person of:

(1) A Federal contract, grant, or co-operative agreement exceeding $100,000;or

(2) A Federal loan or a commitmentproviding for the United States to in-sure or guarantee a loan exceeding$150,000,

unless such person previously filed acertification, and a disclosure form, ifrequired, under paragraph (a) of thissection.

(c) Each person shall file a disclosureform at the end of each calendar quar-ter in which there occurs any eventthat requires disclosure or that materi-ally affects the accuracy of the infor-mation contained in any disclosureform previously filed by such personunder paragraph (a) or (b) of this sec-tion. An event that materially affectsthe accuracy of the information re-ported includes:

(1) A cumulative increase of $25,000 ormore in the amount paid or expected tobe paid for influencing or attemptingto influence a covered Federal action;or

(2) A change in the person(s) or indi-vidual(s) influencing or attempting toinfluence a covered Federal action; or,

(3) A change in the officer(s), em-ployee(s), or Member(s) contacted toinfluence or attempt to influence acovered Federal action.

(d) Any person who requests or re-ceives from a person referred to inparagraph (a) or (b) of this section:

(1) A subcontract exceeding $100,000at any tier under a Federal contract;

(2) A subgrant, contract, or sub-contract exceeding $100,000 at any tierunder a Federal grant;

(3) A contract or subcontract exceed-ing $100,000 at any tier under a Federalloan exceeding $150,000; or,

(4) A contract or subcontract exceed-ing $100,000 at any tier under a Federalcooperative agreement,


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shall file a certification, and a disclo-sure form, if required, to the next tierabove.

(e) All disclosure forms, but not cer-tifications, shall be forwarded fromtier to tier until received by the personreferred to in paragraph (a) or (b) ofthis section. That person shall forwardall disclosure forms to the agency.

(f) Any certification or disclosureform filed under paragraph (e) of thissection shall be treated as a materialrepresentation of fact upon which allreceiving tiers shall rely. All liabilityarising from an erroneous representa-tion shall be borne solely by the tierfiling that representation and shall notbe shared by any tier to which the er-roneous representation is forwarded.Submitting an erroneous certificationor disclosure constitutes a failure tofile the required certification or disclo-sure, respectively. If a person fails tofile a required certification or disclo-sure, the United States may pursue allavailable remedies, including those au-thorized by section 1352, title 31, U.S.Code.

(g) For awards and commitments inprocess prior to December 23, 1989, butnot made before that date, certifi-cations shall be required at award orcommitment, covering activities oc-curring between December 23, 1989, andthe date of award or commitment.However, for awards and commitmentsin process prior to the December 23,1989 effective date of these provisions,but not made before December 23, 1989,disclosure forms shall not be requiredat time of award or commitment butshall be filed within 30 days.

(h) No reporting is required for an ac-tivity paid for with appropriated fundsif that activity is allowable under ei-ther subpart B or C.

Subpart B—Activities by OwnEmployees

§ 1158.200 Agency and legislative liai-son.

(a) The prohibition on the use of ap-propriated funds, in § 1158.100 (a), doesnot apply in the case of a payment ofreasonable compensation made to anofficer or employee of a person request-ing or receiving a Federal contract,grant, loan, or cooperative agreement

if the payment is for agency and legis-lative liaison activities not directly re-lated to a covered Federal action.

(b) For purposes of paragraph (a) ofthis section, providing any informationspecifically requested by an agency orCongress is allowable at any time.

(c) For purposes of paragraph (a) ofthis section, the following agency andlegislative liaison activities are allow-able at any time only where they arenot related to a specific solicitation forany covered Federal action:

(1) Discussing with an agency (in-cluding individual demonstrations) thequalities and characteristics of the per-son’s products or services, conditionsor terms of sale, and service capabili-ties; and,

(2) Technical discussions and otheractivities regarding the application oradaptation of the person’s products orservices for an agency’s use.

(d) For purposes of paragraph (a) ofthis section, the following agencies andlegislative liaison activities are allow-able only where they are prior to for-mal solicitation of any covered Federalaction:

(1) Providing any information notspecifically requested but necessary foran agency to make an informed deci-sion about initiation of a covered Fed-eral action;

(2) Technical discussions regardingthe preparation of an unsolicited pro-posal prior to its official submission;and,

(3) Capability presentations by per-sons seeking awards from an agencypursuant to the provisions of the SmallBusiness Act, as amended by Pub. L.95–507 and other subsequent amend-ments.

(e) Only those activities expressly au-thorized by this section are allowableunder this section.

§ 1158.205 Professional and technicalservices.

(a) The prohibition on the use of ap-propriated funds, in § 1158.100 (a), doesnot apply in the case of a payment ofreasonable compensation made to anofficer or employee of a person request-ing or receiving a Federal contract,grant, loan, or cooperative agreementor an extension, continuation, renewal,


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45 CFR Ch. XI (10–1–97 Edition)§ 1158.210

amendment, or modification of a Fed-eral contract, grant, loan, or coopera-tive agreement if payment is for pro-fessional or technical services rendereddirectly in the preparation, submis-sion, or negotiation of any bid, pro-posal, or application for that Federalcontract, grant, loan, or cooperativeagreement or for meeting requirementsimposed by or pursuant to law as acondition for receiving that Federalcontract, grant, loan, or cooperativeagreement.

(b) For purposes of paragraph (a) ofthis section, professional and technicalservices shall be limited to advice andanalysis directly applying any profes-sional or technical discipline. For ex-ample, drafting of a legal document ac-companying a bid or proposal by a law-yer is allowable. Similarly, technicaladvice provided by an engineer on theperformance or operational capabilityof a piece of equipment rendered di-rectly in the negotiation of a contractis allowable. However, communicationswith the intent to influence made by aprofessional (such as a licensed lawyer)or a technical person (such as a li-censed accountant) are not allowableunder this section unless they provideadvice and analysis directly applyingtheir professional or technical exper-tise and unless the advice or analysis isrendered directly and solely in thepreparation, submission or negotiationof a covered Federal action. Thus, forexample, communications with the in-tent to influence made by a lawyerthat do not provide legal advice oranalysis directly and solely related tothe legal aspects of his or her client’sproposal, but generally advocate oneproposal over another are not allow-able under this section because thelawyer is not providing professionallegal services. Similarly, communica-tions with the intent to influence madeby an engineer providing an engineer-ing analysis prior to the preparation orsubmission of a bid or proposal are notallowable under this section since theengineer is providing technical servicesbut not directly in the preparation,submission or negotiation of a coveredFederal action.

(c) Requirements imposed by or pur-suant to law as a condition for receiv-ing a covered Federal award include

those required by law or regulation, orreasonably expected to be required bylaw or regulation, and any other re-quirements in the actual award docu-ments.

(d) Only those services expressly au-thorized by this section are allowableunder this section.

§ 1158.210 Reporting.No reporting is required with respect

to payments of reasonable compensa-tion made to regularly employed offi-cers or employees of a person.

Subpart C—Activities by OtherThan Own Employees


(a) The prohibition on the use of ap-propriated funds, in § 1158.100 (a), doesnot apply in the case of any reasonablepayment to a person, other than an of-ficer or employee of a person request-ing or receiving a covered Federal ac-tion, if the payment is for professionalor technical services rendered directlyin the preparation, submission, or ne-gotiation of any bid, proposal, or appli-cation for that Federal contract, grant,loan, or cooperative agreement or formeeting requirements imposed by orpursuant to law as a condition for re-ceiving that Federal contract, grant,loan, or cooperative agreement.

(b) The reporting requirements in§ 1158.110 (a) and (b) regarding filing adisclosure form by each person, if re-quired, shall not apply with respect toprofessional or technical services ren-dered directly in the preparation, sub-mission, or negotiation of any commit-ment providing for the United Statesto insure or guarantee a loan.

(c) For purposes of paragraph (a) ofthis section, professional and technicalservices shall be limited to advice andanalysis directly applying any profes-sional or technical discipline. For ex-ample, drafting or a legal document ac-companying a bid or proposal by a law-yer is allowable. Similarly, technicaladvice provided by an engineer on theperformance or operational capabilityof a piece of equipment rendered di-rectly in the negotiation of a contractis allowable. However, communicationswith the intent to influence made by a


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professional (such as a licensed lawyer)or a technical person (such as a li-censed accountant) are not allowableunder this section unless they provideadvice and analysis directly applyingtheir professional or technical exper-tise and unless the advice or analysis isrendered directly and solely in thepreparation, submission or negotiationof a covered Federal action. Thus, forexample, communications with the in-tent to influence made by a lawyerthat do not provide legal advice oranalysis directly and solely related tothe legal aspects of his or her client’sproposal, but generally advocate oneproposal over another are not allow-able under this section because thelawyer is not providing professionallegal services. Similarly, communica-tions with the intent to influence madeby an engineer providing an engineer-ing analysis prior to the preparation orsubmission of a bid or proposal are notallowable under this section since theengineer is providing technical servicesbut not directly in the preparation,submission or negotiation of a coveredFederal action.

(d) Requirements imposed by or pur-suant to law as a condition for receiv-ing a covered Federal award includethose required by law or regulation, orreasonably expected to be required bylaw or regulation, and any other re-quirements in the actual award docu-ments.

(e) Persons other than officers or em-ployees of a person requesting or re-ceiving a covered Federal action in-clude consultants and trade associa-tions.

(f) Only those services expressly au-thorized by this section are allowableunder this section.

Subpart D—Penalties andEnforcement

§ 1158.400 Penalties.(a) Any person who makes an expend-

iture prohibited herein shall be subjectto a civil penalty of not less than$10,000 and not more than $100,000 foreach such expenditure.

(b) Any person who fails to file oramend the disclosure form (see Appen-dix B) to be filed or amended if re-quired herein, shall be subject to a civil

penalty of not less than $10,000 and notmore than $100,000 for each such fail-ure.

(c) A filing or amended filing on orafter the date on which an administra-tive action for the imposition of a civilpenalty is commenced does not preventthe imposition of such civil penalty fora failure occurring before that date. Anadministrative action is commencedwith respect to a failure when an inves-tigating official determines in writingto commence an investigation of an al-legation of such failure.

(d) In determining whether to imposea civil penalty, and the amount of anysuch penalty, by reason of a violationby any person, the agency shall con-sider the nature, circumstances, ex-tent, and gravity of the violation, theeffect on the ability of such person tocontinue in business, any prior viola-tions by such person, the degree of cul-pability of such person, the ability ofthe person to pay the penalty, and suchother matters as may be appropriate.

(e) First offenders under paragraph(a) or (b) of this section shall be subjectto a civil penalty of $10,000, absent ag-gravating circumstances. Second andsubsequent offenses by persons shall besubject to an appropriate civil penaltybetween $10,000 and $100,000, as deter-mined by the agency head or his or herdesignee.

(f) An imposition of a civil penaltyunder this section does not prevent theUnited States from seeking any otherremedy that may apply to the sameconduct that is the basis for the impo-sition of such civil penalty.

§ 1158.405 Penalty procedures.

Agencies shall impose and collectcivil penalties pursuant to the provi-sions of the Program Fraud and CivilRemedies Act, 31 U.S.C. sections 3803(except subsection (c)), 3804, 3805, 3806,3807, 3808, and 3812, insofar as these pro-visions are not inconsistent with therequirements herein.

§ 1158.410 Enforcement.

The head of each agency shall takesuch actions as are necessary to ensurethat the provisions herein are vigor-ously implemented and enforced inthat agency.


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45 CFR Ch. XI (10–1–97 Edition)§ 1158.500

Subpart E—Exemptions§ 1158.500 Secretary of Defense.

(a) The Secretary of Defense may ex-empt, on a case-by-case basis, a cov-ered Federal action from the prohibi-tion whenever the Secretary deter-mines, in writing, that such an exemp-tion is in the national interest. TheSecretary shall transmit a copy of eachsuch written exemption to Congressimmediately after making such a de-termination.

(b) The Department of Defense mayissue supplemental regulations to im-plement paragraph (a) of this section.

Subpart F—Agency Reports§ 1158.600 Semi-annual compilation.

(a) The head of each agency shall col-lect and compile the disclosure reports(see Appendix B) and, on May 31 andNovember 30 of each year, submit tothe Secretary of the Senate and theClerk of the House of Representatives areport containing a compilation of theinformation contained in the disclo-sure reports received during the six-month period ending on March 31 orSeptember 30, respectively, of thatyear.

(b) The report, including the com-pilation, shall be available for publicinspection 30 days after receipt of thereport by the Secretary and the Clerk.

(c) Information that involves intel-ligence matters shall be reported onlyto the Select Committee on Intel-ligence of the Senate, the PermanentSelect Committee on Intelligence ofthe House of Representatives, and theCommittees on Appropriations of theSenate and the House of Representa-tives in accordance with proceduresagreed to by such committees. Such in-formation shall not be available forpublic inspection.

(d) Information that is classifiedunder Executive Order 12356 or any suc-cessor order shall be reported only tothe Committee on Foreign Relations ofthe Senate and the Committee on For-eign Affairs of the House of Represent-atives or the Committees on ArmedServices of the Senate and the House ofRepresentatives (whichever such com-mittees have jurisdiction of mattersinvolving such information) and to the

Committees on Appropriations of theSenate and the House of Representa-tives in accordance with proceduresagreed to by such committees. Such in-formation shall not be available forpublic inspection.

(e) The first semi-annual compilationshall be submitted on May 31, 1990, andshall contain a compilation of the dis-closure reports received from Decem-ber 23, 1989 to March 31, 1990.

(f) Major agencies, designated by theOffice of Management and Budget(OMB), are required to provide ma-chine-readable compilations to theSecretary of the Senate and the Clerkof the House of Representatives nolater than with the compilations dueon May 31, 1991. OMB shall provide de-tailed specifications in a memorandumto these agencies.

(g) Non-major agencies are requestedto provide machine-readable compila-tions to the Secretary of the Senateand the Clerk of the House of Rep-resentatives.

(h) Agencies shall keep the originalsof all disclosure reports in the officialfiles of the agency.

§ 1158.605 Inspector General report.(a) The Inspector General, or other

official as specified in paragraph (b) ofthis section, of each agency shall pre-pare and submit to Congress each year,commencing with submission of thePresident’s Budget in 1991, an evalua-tion of the compliance of that agencywith, and the effectiveness of, the re-quirements herein. The evaluation mayinclude any recommended changes thatmay be necessary to strengthen or im-prove the requirements.

(b) In the case of an agency that doesnot have an Inspector General, theagency official comparable to an In-spector General shall prepare and sub-mit the annual report, or, if there is nosuch comparable official, the head ofthe agency shall prepare and submitthe annual report.

(c) The annual report shall be sub-mitted at the same time the agencysubmits its annual budget justifica-tions to Congress.

(d) The annual report shall includethe following: All alleged violations re-lating to the agency’s covered Federalactions during the year covered by the


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report, the actions taken by the headof the agency in the year covered bythe report with respect to those allegedviolations and alleged violations inprevious years, and the amounts ofcivil penalties imposed by the agencyin the year covered by the report.

APPENDIX A TO PART 1158—CERTIFICATION REGARDING LOBBYING

Certification for Contracts, Grants, Loans, andCooperative Agreements

The undersigned certifies, to the best of hisor her knowledge and belief, that:

(1) No Federal appropriated funds havebeen paid or will be paid, by or on behalf ofthe undersigned, to any person for influenc-ing or attempting to influence an officer oremployee of an agency, a Member of Con-gress, an officer or employee of Congress, oran employee of a Member of Congress in con-nection with the awarding of any Federalcontract, the making of any Federal grant,the making of any Federal loan, the enteringinto of any cooperative agreement, and theextension, continuation, renewal, amend-ment, or modification of any Federal con-tract, grant, loan, or cooperative agreement.

(2) If any funds other than Federal appro-priated funds have been paid or will be paidto any person for influencing or attemptingto influence an officer or employee of anyagency, a Member of Congress, an officer oremployee of Congress, or an employee of aMember of Congress in connection with thisFederal contract, grant, loan, or cooperativeagreement, the undersigned shall completeand submit Standard Form–LLL, ‘‘Disclo-sure Form to Report Lobbying,’’ in accord-ance with its instructions.

(3) The undersigned shall require that thelanguage of this certification be included inthe award documents for all subawards at alltiers (including subcontracts, subgrants, andcontracts under grants, loans, and coopera-tive agreements) and that all subrecipientsshall certify and disclose accordingly.

This certification is a material representa-tion of fact upon which reliance was placedwhen this transaction was made or enteredinto. Submission of this certification is aprerequisite for making or entering into thistransaction imposed by section 1352, title 31,U.S. Code. Any person who fails to file therequired certification shall be subject to acivil penalty of not less than $10,000 and notmore than $100,000 for each such failure.

Statement for Loan Guarantees and LoanInsurance

The undersigned states, to the best of hisor her knowledge and belief, that:

If any funds have been paid or will be paidto any person for influencing or attemptingto influence an officer or employee of anyagency, a Member of Congress, an officer oremployee of Congress, or an employee of aMember of Congress in connection with thiscommitment providing for the United Statesto insure or guarantee a loan, the under-signed shall complete and submit StandardForm–LLL, ‘‘Disclosure Form to Report Lob-bying,’’ in accordance with its instructions.

Submission of this statement is a pre-requisite for making or entering into thistransaction imposed by section 1352, title 31,U.S. Code. Any person who fails to file therequired statement shall be subject to a civilpenalty of not less than $10,000 and not morethan $100,000 for each such failure.


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APPENDIX B TO PART 1158—DISCLOSURE FORM TO REPORT LOBBYING


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National Foundation on the Arts and Humanities Pt. 1158, App. B


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SUBCHAPTER C—FEDERAL COUNCIL ON THE ARTS ANDTHE HUMANITIES

PART 1160—INDEMNITIES UNDERTHE ARTS AND ARTIFACTS IN-DEMNITY ACT

Sec.1160.1 Purpose and scope.1160.2 Federal Council on the Arts and the

Humanities.1160.3 Definitions.1160.4 Eligibility.1160.5 Application for indemnification.1160.6 Certificate of national interest.1160.7 Indemnity agreement.1160.8 Letter of intent.1160.9 Loss adjustment.1160.10 Certification of claim and amount of

loss to the Congress.1160.11 Appraisal procedures.1160.12 Indemnification limits.

AUTHORITY: 20 U.S.C. 971–977.

SOURCE: 56 FR 49848, Oct. 2, 1991, unlessotherwise noted.

§ 1160.1 Purpose and scope.(a) This part sets forth the exhibition

indemnity procedures of the FederalCouncil on the Arts and Humanitiesunder the Arts and Artifacts IndemnityAct (Pub. L. 94–158) as required by sec-tion 2(a)(2) of the Act.

(1) Eligible items from outside theUnited States while on exhibition inthe United States or

(2) Eligible items from the UnitedStates while on exhibition outside thiscountry, preferably when they are partof an exchange of exhibitions.

(b) Program guidelines and furtherinformation are available from the In-demnity Administrator, c/o MuseumProgram, National Endowment for theArts, 1100 Pennsylvania Avenue, NW.,Washington, DC 20506.

[56 FR 49848, Oct. 2, 1991, as amended at 60 FR42465, Aug. 16, 1995]

§ 1160.2 Federal Council on the Artsand the Humanities

For the purposes of this part (45 CFRpart 1160) the Federal Council on theArts and the Humanities shall be com-posed of the Chairman of the NationalEndowment for the Arts, the Chairmanof the National Endowment for the Hu-manities, the Secretary of Education,

the Director of the National ScienceFoundation, the Librarian of Congress,the Chairman of the Commission ofFine Arts, the Archivist of the UnitedStates, the Commissioner, PublicBuildings Service, General ServicesAdministration, the Administrator ofthe General Services Administration,the Director of the United States Infor-mation Agency, the Secretary of theInterior, the Secretary of Commerce,the Secretary of Transportation, theChairman of the National MuseumServices Board, the Director of the In-stitute of Museum Services, the Sec-retary of Housing and Urban Develop-ment, the Secretary of Labor, the Sec-retary of Veterans Affairs, and theCommissioner of the Administrationon Aging.

§ 1160.3 Definitions.

For the purposes of this part:(a) Council means the Federal Council

on the Arts and the Humanities as de-fined in § 1160.2.

(b) Letter of Intent means an agree-ment by the Council to provide an in-demnity covering a future exhibitionsubject to compliance with all require-ments at the date the indemnity is tobe effective.

(c) Lender means the owner of an ob-ject.

(d) Eligible item means an objectwhich qualifies for coverage under theArts and Artifacts Indemnity Act.

(e) Exhibition means a public displayof an indemnified items(s) at one ormore locations, as approved by theCouncil, presented by any person, non-profit agency or institution, or Govern-ment, in the United States or else-where.

(f) On Exhibition means the period oftime beginning on the date an indem-nified item leaves the place designatedby the lender and ending on the termi-nation date.

(g) Indemnity Agreement means thecontract between the Council and theindemnitee covering loss or damage toindemnified items under the authority


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45 CFR Ch. XI (10–1–97 Edition)§ 1160.4

of the Arts and Artifacts IndemnityAct.

(h) Indemnitee means the party orparties to an indemnity agreement is-sued by the Council, to whom thepromise of indemnification is made.

(i) Participating institution(s) meansthe location(s) where an exhibition in-demnified under this part will be dis-played.

(j) Termination date means the datethirty (30) calendar days after the datespecified in the indemnity Certificateby which an indemnified item is to bereturned to the place designated by thelender or the date on which the item isactually so returned, whichever date isearlier. (In museum terms this meanswall–to–wall coverage.) After 11:59 p.m.on the termination date, the item is nolonger covered by the indemnity agree-ment unless an extension has thereto-fore been requested by the indemniteeand granted in writing by the Council.

§ 1160.4 Eligibility.

An indemnity agreement made underthese regulations shall cover:

(a) Eligible items from outside theUnited States while on exhibition inthe United States;

(b) Eligible items from the UnitedStates while on exhibition outside thiscountry, preferably when they are partof an exchange of exhibitions; and

(c) Eligible items from the UnitedStates while on exhibition in the Unit-ed States, in connection with other eli-gible items from outside the UnitedStates which are integral to the exhi-bition as a whole.

EXAMPLE 1

Museum A, an American art museum, isorganizing a retrospective exhibition whichwill include more than 150 works of art bythe Impressionist painter Auguste Renoir.The exhibition will present the full range ofRenoir’s production for the first time ever inan American museum. Museums B and C,large national museums in Paris and Lon-don, have agreed to lend 125 major works ofart illustrating every aspect of Renoir’s ca-reer. Museum A is also planning to includerelated works from other American publicand private collections which have not beenseen together since the artist’s death in 1919.Museums D and E, major east coast Amer-ican art museums, have agreed to lend 25masterworks by Renoir. The exhibition will

open in Chicago and travel to San Franciscoand Washington.

DISCUSSION

Example 1 is a straightforward applicationof the amended indemnity regulations.Under the old regulations, only the works ofart from Museums B and C, the foreign mu-seums, would have been eligible for indem-nification. Under the proposed Regulations,the works of art from American museumsand other public and private collections alsowould be eligible for indemnification. In de-termining whether to indemnify the entireexhibition, the Federal Council will evaluatethe exhibibition as a whole and whether theforeign loans are integral to the educational,cultural, historical or scientific significanceof the exhibition. In this example, the Fed-eral Council would likely approve indem-nification of the entire exhibit.

EXAMPLE 2

Museum A in Massachusetts is organizingan exhibition celebrating 250 Years of Deco-rative Arts in America, to be held in con-junction with the state’s celebration of themillennium. Included among the objects tobe borrowed from museums and historical so-cieties in the United States are furniture,textiles, metalwork, ceramics, glass and jew-elry, illustrating the best examples of Amer-ican design from colonial times to thepresent. The curator traveled abroad re-cently and saw an exhibition of Americanquilts which have been acquired by a Britishdecorative arts museums. He intends to bor-row several of the quilts for the exhibition.

DISCUSSION

Example 2 raises the question as to wheth-er the American museum organizing the ex-hibition has included the British-ownedAmerican quilts merely to obtain insurancerelief. In determining whether to indemnifythe entire exhibition, the Federal Councilwill evaluate the exhibition as a whole andwhether the foreign loans are integral toachieving its educational, cultural and his-torical purposes. Here, it is likely that theFederal Council will conclude that the for-eign work are not an essential component ofthe exhibition. The Federal Council also mayseek additional information from the appli-cant to determine whether the objectives ofthe exhibition could have been accomplishedas satisfactorily by borrowing Americanquilts from U.S. collections. On these facts,the Federal Council in all likelihood woulddeny indemnification for the entire exhi-bition.

EXAMPLE 3

Museum A, an American museum, is orga-nizing an exhibition of the works of JamesWatkins, a nineteenth century American


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painter, focusing on his studies of humananatomy. Museum A has the foremost collec-tion of preparatory drawings related to Wat-kins’ major painting, ‘‘The Surgeon and HisStudents.’’ The painting is in the permanentcollection of Museum B, located in the southof France, which has agreed to lend thepainting for the exhibition. The exhibitionwill be shown at Museum B after the U.S.tour. American Universities, C and D, havealso agreed to lend anatomical illustrationsand drawings which show Watkins’ develop-ment as a draughtsman. The exhibition andaccompanying catalogue are expected toshed new light on Watkins contributions toart and scientific history.

DISCUSSION

Example 3 addresses the issue of whetherthe Federal Council will indemnify an exhi-bition even where the U.S. objects out-number the foreign works. In determiningwhether to indemnify the entire exhibition,the Federal Council will evaluate the exhi-bition as a whole and the relationship of theforeign loans to the educational, cultural,historical and scientific significance of theexhibition. In this example, the exhibitionpromises to make important contributionsnot only to the history of art but also to thehistory of science. While there is only a sin-gle foreign work of art, it is clearly an essen-tial component of the exhibition as a whole.The case for indemnification of the entireexhibition is further strengthened by thefact that a foreign masterpiece, which isclosely related to the preparatory drawingsand anatomical illustrations and drawingsowned by American institutions, will bemade available to the American public.Thus, the mere fact that the U.S. loans out-number the foreign works will not in itselfdisqualify the entire exhibition for indem-nification.

[60 FR 42466, Aug. 16, 1995]

§ 1160.5 Application for indemnifica-tion.

An applicant for an indemnity shallsubmit an Application for Indemnifica-tion, addressed to the Indemnity Ad-ministrator, National Endowment forthe Arts, Washington, DC 20506, whichshall described as fully as possible:

(a) The time, place, nature andProject Director/Curator of the exhi-bition for which the indemnity issought;

(b) Evidence that the owner andpresent possessor are willing to lendthe eligible items, and both are pre-pared to be bound by the terms of theindemnity agreement;

(c) The total value of all items to beindemnified, including a description ofeach item to be covered by the agree-ment and each item’s value;

(d) The source of valuations of eachitem, plus an opinion by a disinterestedthird party of the valuations estab-lished by lenders;

(e) The significance, and the edu-cational, cultural, historical, or sci-entific value of the items to be indem-nified, and of the exhibition as a whole;

(f) Statements describing policies,procedures, techniques, and methods tobe employed with respect to:

(1) Packing of items at the premisesof, or the place designated by the lend-er;

(2) Shipping arrangements;(3) Condition reports at lender’s loca-

tion;(4) Condition reports at borrower’s

location;(5) Condition reports upon return of

items to lender’s location;(6) Security during the exhibition

and security during transportation, in-cluding couriers were applicable;

(7) Maximum values to be trans-ported in a single vehicle of transport.

(g) Insurance arrangements, if any,which are proposed to cover the de-ductible amount provided by law or theexcess over the amount indemnified;

(h) Any loss incurred by theindemnitee or participating institu-tions during the three years prior tothe Application for Indemnificationwhich involved a borrowed or loaneditem(s) or item(s) in their permanentcollections where the amount of loss ordamage exceeded $5,000. Details shouldinclude the date of loss, nature andcause of damage, and appraised valueof the damaged items(s) both beforeand after loss;

(i) If the application is for an exhi-bition of loans from the United States,which are being shown outside theUnited States, the applicant should de-scribe in detail the nature of the ex-change of exhibitions of which it is apart if any, including all circumstancessurrounding the exhibition beingshown in the United States, with par-ticular emphasis on facts concerninginsurance or indemnity arrangements.


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45 CFR Ch. XI (10–1–97 Edition)§ 1160.6

(j) Upon proper submission of theabove required information an applica-tion will be selected or rejected for in-demnification by the Council. The re-view criteria include:

(1) Review of educational, cultural,historical, or scientific value as re-quired under the provisions of the Artsand Artifacts Indemnity Act;

(2) Certification by the Director ofthe United States Information Agencythat the exhibition is in the nationalinterest; and

(3) Review of the availability of in-demnity obligational authority undersection 5(b) of the Arts and ArtifactsIndemnity Act (20 U.S.C. 974).

[Approved under OMB control number 3135–0094]

[56 FR 49848, Oct. 2, 1991; 56 FR 51842, Oct. 16,1991. Redesignated at 60 FR 42465, Aug. 16,1995]

§ 1160.6 Certificate of national inter-est.

After preliminary review the applica-tion will be submitted to the Directorof the United States Information Agen-cy for determination of national inter-est and issuance of a Certificate of Na-tional Interest.

[56 FR 49848, Oct. 2, 1991. Redesignated at 60FR 42465, Aug. 16, 1995]

§ 1160.7 Indemnity agreement.In cases where the requirements of

§§ 1160.4 and 1160.5 have been met to thesatisfaction of the Council, an Indem-nity Agreement pledging the full faithand credit of the United States for theagreed value of the exhibition in ques-tion may be issued to the indemniteeby the Council, subject to the provi-sions of § 1160.7.


1160.8 Letter of intent.In cases where an exhibition proposed

for indemnification is planned to beginon a date more than twelve (12) monthsafter the submission of the application,the Council, upon approval of such apreliminary application, may provide aLetter of Intent stating that it will,subject to the conditions set forththerein, issue an Indemnity Agreement

prior to commencement of the exhi-bition. In such cases, the Council willexamine a final application during thetwelve (12) month period prior to thedate the exhibition is to commence,and shall, upon being satisfied thatsuch conditions have been fulfilled,issue an Indemnity Agreement.


§ 1160.9 Loss adjustment.

(a) In the event of loss or damagecovered by an Indemnity Agreement,the indemnitee without delay shall filea Notice of Loss or Damage with theCouncil and shall exercise reasonablecare in order to minimize the amountof loss. Within a reasonable time aftera loss has been sustained, the claimantshall file a Proof of Loss or Damage onforms provided by the Council. Failureto report such loss or damage and tofile such Proof of Loss within sixty (60)days after the termination date as de-fined in § 1160.3(k) shall invalidate anyclaim under the Indemnity Agreement.

(b) In the event of total loss or de-struction of an indemnified item, in-demnification will be made on thebasis of the amount specified in the In-demnity Agreement.

(c) In the event of partial loss, ordamage, and reduction in the fair mar-ket value, as a result thereof, to an in-demnified item, indemnification will bemade on the basis provided for in theIndemnity Agreement.

(d) No loss or damage claim will bepaid in excess of the IndemnificationLimits specified in § 1160.11.


§ 1160.10 Certification of claim andamount of loss to the Congress.

Upon receipt of a claim of total lossor a claim in which the Council is inagreement with respect to the amountof partial loss, or damage and reduc-tion in fair market value as a resultthereof, the Council shall certify thevalidity of the claim and the amount ofsuch loss or damage and reduction infair market value as a result thereof,


429


to the Speaker of the House of Rep-resentatives and the President protempore of the Senate.


§ 1160.11 Appraisal procedures.(a) In the event the Council and the

indemnitee fail to agree on the amountof partial loss, or damage to, or any re-duction in the fair market value as aresult thereof, to the indemnifieditem(s), each shall select a competentappraiser(s) with evidence to be pro-vided to show that the indemnitee’s se-lection is satisfactory to the owner.The appraiser(s) selected by the Coun-cil and the indemnitee shall then selecta competent and disinterested arbitra-tor.

(b) After selection of an arbitrator,the appraisers shall assess the partialloss, or damage to, or where appro-priate, any reduction in the fair mar-ket value of, the indemnified item(s).The appraisers’ agreement with respectto these issues shall determine the dol-lar value of such loss or damage or re-pair costs, and where appropriate, suchreduction in the fair market value. Dis-putes between the appraisers with re-spect to partial loss, damage repaircosts, and fair market value reductionof any item shall be submitted to thearbitrator for determination. The ap-praisers’ agreement or the arbitrator’sdetermination shall be final and bind-

ing on the parties, and agreement onamount or such determination onamount shall be certified to the Speak-er of the House and the President protempore of the Senate by the Council.

(c) Each appraiser shall be paid bythe party selecting him or her. The ar-bitrator and all other expenses of theappraisal shall be paid by the parties inequal shares.


§ 1160.12 Indemnification Limits.The dollar amounts of the limits de-

scribed below are found in the guide-lines referred to in § 1160.1 and arebased upon the statutory limits in theArts and Artifacts Indemnity Act (20U.S.C. 974).

(a) There is a maximum amount ofloss or damage covered in a single exhi-bition or an Indemnity Agreement.

(b) A sliding scale deductible amountis applicable to loss or damage arisingout of a single exhibition for which anindemnity is issued.

(c) There is an aggregate amount ofloss or damage covered by indemnityagreements at any one time.

(d) The maximum value of eligibleitems carried in or upon any single in-strumentality of transportation at anyone time, is established by the Council.



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SUBCHAPTER D—NATIONAL ENDOWMENT FOR THEHUMANITIES

PART 1168—NEW RESTRICTIONS ONLOBBYING

Subpart A—General

Sec.1168.100 Conditions on use of funds.1168.105 Definitions.1168.110 Certification and disclosure.

Subpart B—Activities by Own Employees

1168.200 Agency and legislative liaison.1168.205 Professional and technical services.1168.210 Reporting.

Subpart C—Activities by Other Than OwnEmployees

1168.300 Professional and technical services.

Subpart D—Penalties and Enforcement

1168.400 Penalties.1168.405 Penalty procedures.1168.410 Enforcement.


1168.500 Secretary of Defense.

Subpart F—Agency Reports

1168.600 Semi-annual compilation.1168.605 Inspector General report.

APPENDIX A TO PART 1168—CERTIFICATION RE-GARDING LOBBYING

APPENDIX B TO PART 1168—DISCLOSURE FORMTO REPORT LOBBYING

AUTHORITY: Sec. 319, Pub. L. 101–121 (31U.S.C. 1352); 20 U.S.C. 959 (a) (1).

SOURCE: 55 FR 6737, 6755, Feb. 26, 1990, un-less otherwise noted.

CROSS REFERENCE: See also Office of Man-agement and Budget notice published at 54FR 52306, December 20, 1989.

Subpart A—General

§ 1168.100 Conditions on use of funds.(a) No appropriated funds may be ex-

pended by the recipient of a Federalcontract, grant, loan, or cooperativeageement to pay any person for influ-encing or attempting to influence anofficer or employee of any agency, aMember of Congress, an officer or em-ployee of Congress, or an employee of a

Member of Congress in connection withany of the following covered Federalactions: the awarding of any Federalcontract, the making of any Federalgrant, the making of any Federal loan,the entering into of any cooperativeagreement, and the extension, continu-ation, renewal, amendment, or modi-fication of any Federal contract, grant,loan, or cooperative agreement.

(b) Each person who requests or re-ceives from an agency a Federal con-tract, grant, loan, or cooperativeagreement shall file with that agency acertification, set forth in appendix A,that the person has not made, and willnot make, any payment prohibited byparagraph (a) of this section.

(c) Each person who requests or re-ceives from an agency a Federal con-tract, grant, loan, or a cooperativeagreement shall file with that agency adisclosure form, set forth in appendixB, if such person has made or hasagreed to make any payment usingnonappropriated funds (to include prof-its from any covered Federal action),which would be prohibited under para-graph (a) of this section if paid for withappropriated funds.

(d) Each person who requests or re-ceives from an agency a commitmentproviding for the United States to in-sure or guarantee a loan shall file withthat agency a statement, set forth inappendix A, whether that person hasmade or has agreed to make any pay-ment to influence or attempt to influ-ence an officer or employee of anyagency, a Member of Congress, an offi-cer or employee of Congress, or an em-ployee of a Member of Congress in con-nection with that loan insurance orguarantee.

(e) Each person who requests or re-ceives from an agency a commitmentproviding for the United States to in-sure or guarantee a loan shall file withthat agency a disclosure form, set forthin appendix B, if that person has madeor has agreed to make any payment toinfluence or attempt to influence an of-ficer or employee of any agency, a


431


Member of Congress, an officer or em-ployee of Congress, or an employee of aMember of Congress in connection withthat loan insurance or guarantee.

§ 1168.105 Definitions.For purposes of this part:(a) Agency, as defined in 5 U.S.C.

552(f), includes Federal executive de-partments and agencies as well as inde-pendent regulatory commissions andGovernment corporations, as defined in31 U.S.C. 9101(1).

(b) Covered Federal action means anyof the following Federal actions:

(1) The awarding of any Federal con-tract;

(2) The making of any Federal grant;(3) The making of any Federal loan;(4) The entering into of any coopera-

tive agreement; and,(5) The extension, continuation, re-

newal, amendment, or modification ofany Federal contract, grant, loan, orcooperative agreement.

Covered Federal action does not in-clude receiving from an agency a com-mitment providing for the UnitedStates to insure or guarantee a loan.Loan guarantees and loan insuranceare addressed independently withinthis part.

(c) Federal contract means an acquisi-tion contract awarded by an agency,including those subject to the FederalAcquisition Regulation (FAR), and anyother acquisition contract for real orpersonal property or services not sub-ject to the FAR.

(d) Federal cooperative agreementmeans a cooperative agreement en-tered into by an agency.

(e) Federal grant means an award offinancial assistance in the form ofmoney, or property in lieu of money,by the Federal Government or a directappropriation made by law to any per-son. The term does not include tech-nical assistance which provides serv-ices instead of money, or other assist-ance in the form of revenue sharing,loans, loan guarantees, loan insurance,interest subsidies, insurance, or directUnited States cash assistance to an in-dividual.

(f) Federal loan means a loan made byan agency. The term does not includeloan guarantee or loan insurance.

(g) Indian tribe and tribal organizationhave the meaning provided in section 4of the Indian Self-Determination andEducation Assistance Act (25 U.S.C.450B). Alaskan Natives are includedunder the definitions of Indian tribes inthat Act.

(h) Influencing or attempting to influ-ence means making, with the intent toinfluence, any communication to or ap-pearance before an officer or employeeor any agency, a Member of Congress,an officer or employee of Congress, oran employee of a Member of Congressin connection with any covered Federalaction.

(i) Loan guarantee and loan insurancemeans an agency’s guarantee or insur-ance of a loan made by a person.

(j) Local government means a unit ofgovernment in a State and, if char-tered, established, or otherwise recog-nized by a State for the performance ofa governmental duty, including a localpublic authority, a special district, anintrastate district, a council of govern-ments, a sponsor group representativeorganization, and any other instrumen-tality of a local government.

(k) Officer or employee of an agency in-cludes the following individuals whoare employed by an agency:

(1) An individual who is appointed toa position in the Government undertitle 5, U.S. Code, including a positionunder a temporary appointment;

(2) A member of the uniformed serv-ices as defined in section 101(3), title 37,U.S. Code;

(3) A special Government employeeas defined in section 202, title 18, U.S.Code; and,

(4) An individual who is a member ofa Federal advisory committee, as de-fined by the Federal Advisory Commit-tee Act, title 5, U.S. Code appendix 2.

(l) Person means an individual, cor-poration, company, association, au-thority, firm, partnership, society,State, and local government, regard-less of whether such entity is operatedfor profit or not for profit. This termexcludes an Indian tribe, tribal organi-zation, or any other Indian organiza-tion with respect to expenditures spe-cifically permitted by other Federallaw.

(m) Reasonable compensation means,with respect to a regularly employed


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45 CFR Ch. XI (10–1–97 Edition)§ 1168.110

officer or employee of any person, com-pensation that is consistent with thenormal compensation for such officeror employee for work that is not fur-nished to, not funded by, or not fur-nished in cooperation with the FederalGovernment.

(n) Reasonable payment means, withrespect to perfessional and other tech-nical services, a payment in an amountthat is consistent with the amount nor-mally paid for such services in the pri-vate sector.

(o) Recipient includes all contractors,subcontractors at any tier, and sub-grantees at any tier of the recipient offunds received in connection with aFederal contract, grant, loan, or coop-erative agreement. The term excludesan Indian tribe, tribal organization, orany other Indian organization with re-spect to expenditures specifically per-mitted by other Federal law.

(p) Regularly employed means, withrespect to an officer or employee of aperson requesting or receiving a Fed-eral contract, grant, loan, or coopera-tive agreement or a commitment pro-viding for the United States to insureor guarantee a loan, an officer or em-ployee who is employed by such personfor at least 130 working days withinone year immediately preceding thedate of the submission that initiatesagency consideration of such person forreceipt of such contract, grant, loan,cooperative agreement, loan insurancecommitment, or loan guarantee com-mitment. An officer or employee who isemployed by such person for less than130 working days within one year im-mediately preceding the date of thesubmission that initiates agency con-sideration of such person shall be con-sidered to be regularly employed assoon as he or she is employed by suchperson for 130 working days.

(q) State means a State of the UnitedStates, the District of Columbia, theCommonwealth of Puerto Rico, a terri-tory or possession of the United States,an agency or instrumentality of aState, and a multi-State, regional, orinterstate entity having governmentalduties and powers.

§ 1168.110 Certification and disclosure.(a) Each person shall file a certifi-

cation, and a disclosure form, if re-

quired, with each submission that ini-tiates agency consideration of suchperson for:

(1) Award of a Federal contract,grant, or cooperative agreement ex-ceeding $100,000; or

(2) An award of a Federal loan or acommitment providing for the UnitedStates to insure or guarantee a loanexceeding $150,000.

(b) Each person shall file a certifi-cation, and a disclosure form, if re-quired, upon receipt by such person of:

(1) A Federal contract, grant, or co-operative agreement exceeding $100,000;or

(2) A Federal loan or a commitmentproviding for the United States to in-sure or guarantee a loan exceeding$150,000,

unless such person previously filed acertification, and a disclosure form, ifrequired, under paragraph (a) of thissection.

(c) Each person shall file a disclosureform at the end of each calendar quar-ter in which there occurs any eventthat requires disclosure or that materi-ally affects the accuracy of the infor-mation contained in any disclosureform previously filed by such personunder paragraph (a) or (b) of this sec-tion. An event that materially affectsthe accuracy of the information re-ported includes:

(1) A cumulative increase of $25,000 ormore in the amount paid or expected tobe paid for influencing or attemptingto influence a covered Federal action;or

(2) A change in the person(s) or indi-vidual(s) influencing or attempting toinfluence a covered Federal action; or,

(3) A change in the officer(s), em-ployee(s), or Member(s) contacted toinfluence or attempt to influence acovered Federal action.

(d) Any person who requests or re-ceives from a person referred to inparagraph (a) or (b) of this section:

(1) A subcontract exceeding $100,000at any tier under a Federal contract;

(2) A subgrant, contract, or sub-contract exceeding $100,000 at any tierunder a Federal grant;

(3) A contract or subcontract exceed-ing $100,000 at any tier under a Federalloan exceeding $150,000; or,


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(4) A contract or subcontract exceed-ing $100,000 at any tier under a Federalcooperative agreement,

shall file a certification, and a disclo-sure form, if required, to the next tierabove.

(e) All disclosure forms, but not cer-tifications, shall be forwarded fromtier to tier until received by the personreferred to in paragraph (a) or (b) ofthis section. That person shall forwardall disclosure forms to the agency.

(f) Any certification or disclosureform filed under paragraph (e) of thissection shall be treated as a materialrepresentation of fact upon which allreceiving tiers shall rely. All liabilityarising from an erroneous representa-tion shall be borne solely by the tierfiling that representation and shall notbe shared by any tier to which the er-roneous representation is forwarded.Submitting an erroneous certificationor disclosure constitutes a failure tofile the required certification or disclo-sure, respectively. If a person fails tofile a required certification or disclo-sure, the United States may pursue allavailable remedies, including those au-thorized by section 1352, title 31, U.S.Code.

(g) For awards and commitments inprocess prior to December 23, 1989, butnot made before that date, certifi-cations shall be required at award orcommitment, covering activities oc-curring between December 23, 1989, andthe date of award or commitment.However, for awards and commitmentsin process prior to the December 23,1989 effective date of these provisions,but not made before December 23, 1989,disclosure forms shall not be requiredat time of award or commitment butshall be filed within 30 days.

(h) No reporting is required for an ac-tivity paid for with appropriated fundsif that activity is allowable under ei-ther subpart B or C.

Subpart B—Activities by OwnEmployees

§ 1168.200 Agency and legislative liai-son.

(a) The prohibition on the use of ap-propriated funds, in § 1168.100 (a), doesnot apply in the case of a payment of

reasonable compensation made to anofficer or employee of a person request-ing or receiving a Federal contract,grant, loan, or cooperative agreementif the payment is for agency and legis-lative liaison activities not directly re-lated to a covered Federal action.

(b) For purposes of paragraph (a) ofthis section, providing any informationspecifically requested by an agency orCongress is allowable at any time.

(c) For purposes of paragraph (a) ofthis section, the following agency andlegislative liaison activities are allow-able at any time only where they arenot related to a specific solicitation forany covered Federal action:

(1) Discussing with an agency (in-cluding individual demonstrations) thequalities and characteristics of the per-son’s products or services, conditionsor terms of sale, and service capabili-ties; and,

(2) Technical discussions and otheractivities regarding the application oradaptation of the person’s products orservices for an agency’s use.

(d) For purposes of paragraph (a) ofthis section, the following agencies andlegislative liaison activities are allow-able only where they are prior to for-mal solicitation of any covered Federalaction:

(1) Providing any information notspecifically requested but necessary foran agency to make an informed deci-sion about initiation of a covered Fed-eral action;

(2) Technical discussions regardingthe preparation of an unsolicited pro-posal prior to its official submission;and,

(3) Capability presentations by per-sons seeking awards from an agencypursuant to the provisions of the SmallBusiness Act, as amended by Pub. L.95–507 and other subsequent amend-ments.

(e) Only those activities expressly au-thorized by this section are allowableunder this section.


(a) The prohibition on the use of ap-propriated funds, in § 1168.100 (a), doesnot apply in the case of a payment ofreasonable compensation made to an


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45 CFR Ch. XI (10–1–97 Edition)§ 1168.210

officer or employee of a person request-ing or receiving a Federal contract,grant, loan, or cooperative agreementor an extension, continuation, renewal,amendment, or modification of a Fed-eral contract, grant, loan, or coopera-tive agreement if payment is for pro-fessional or technical services rendereddirectly in the preparation, submis-sion, or negotiation of any bid, pro-posal, or application for that Federalcontract, grant, loan, or cooperativeagreement or for meeting requirementsimposed by or pursuant to law as acondition for receiving that Federalcontract, grant, loan, or cooperativeagreement.

(b) For purposes of paragraph (a) ofthis section, ‘‘professional and tech-nical services’’ shall be limited to ad-vice and analysis directly applying anyprofessional or technical discipline.For example, drafting of a legal docu-ment accompanying a bid or proposalby a lawyer is allowable. Similarly,technical advice provided by an engi-neer on the performance or operationalcapability of a piece of equipment ren-dered directly in the negotiation of acontract is allowable. However, com-munications with the intent to influ-ence made by a professional (such as alicensed lawyer) or a technical person(such as a licensed accountant) are notallowable under this section unlessthey provide advice and analysis di-rectly applying their professional ortechnical expertise and unless the ad-vice or analysis is rendered directlyand solely in the preparation, submis-sion or negotiation of a covered Fed-eral action. Thus, for example, commu-nications with the intent to influencemade by a lawyer that do not providelegal advice or analysis directly andsolely related to the legal aspects ofhis or her client’s proposal, but gen-erally advocate one proposal over an-other are not allowable under this sec-tion because the lawyer is not provid-ing professional legal services. Simi-larly, communications with the intentto influence made by an engineer pro-viding an engineering analysis prior tothe preparation or submission of a bidor proposal are not allowable underthis section since the engineer is pro-viding technical services but not di-rectly in the preparation, submission

or negotiation of a covered Federal ac-tion.

(c) Requirements imposed by or pur-suant to law as a condition for receiv-ing a covered Federal award includethose required by law or regulation, orreasonably expected to be required bylaw or regulation, and any other re-quirements in the actual award docu-ments.

(d) Only those services expressly au-thorized by this section are allowableunder this section.

§ 1168.210 Reporting.

No reporting is required with respectto payments of reasonable compensa-tion made to regularly employed offi-cers or employees of a person.

Subpart C—Activities by OtherThan Own Employees


(a) The prohibition on the use of ap-propriated funds, in § 1168.100 (a), doesnot apply in the case of any reasonablepayment to a person, other than an of-ficer or employee of a person request-ing or receiving a covered Federal ac-tion, if the payment is for professionalor technical services rendered directlyin the preparation, submission, or ne-gotiation of any bid, proposal, or appli-cation for that Federal contract, grant,loan, or cooperative agreement or formeeting requirements imposed by orpursuant to law as a condition for re-ceiving that Federal contract, grant,loan, or cooperative agreement.

(b) The reporting requirements in§ 1168.110 (a) and (b) regarding filing adisclosure form by each person, if re-quired, shall not apply with respect toprofessional or technical services ren-dered directly in the preparation, sub-mission, or negotiation of any commit-ment providing for the United Statesto insure or guarantee a loan.

(c) For purposes of paragraph (a) ofthis section, ‘‘professional and tech-nical services’’ shall be limited to ad-vice and analysis directly applying anyprofessional or technical discipline.For example, drafting or a legal docu-ment accompanying a bid or proposalby a lawyer is allowable. Similarly,


435


technical advice provided by an engi-neer on the performance or operationalcapability of a piece of equipment ren-dered directly in the negotiation of acontract is allowable. However, com-munications with the intent to influ-ence made by a professional (such as alicensed lawyer) or a technical person(such as a licensed accountant) are notallowable under this section unlessthey provide advice and analysis di-rectly applying their professional ortechnical expertise and unless the ad-vice or analysis is rendered directlyand solely in the preparation, submis-sion or negotiation of a covered Fed-eral action. Thus, for example, commu-nications with the intent to influencemade by a lawyer that do not providelegal advice or analysis directly andsolely related to the legal aspects ofhis or her client’s proposal, but gen-erally advocate one proposal over an-other are not allowable under this sec-tion because the lawyer is not provid-ing professional legal services. Simi-larly, communications with the intentto influence made by an engineer pro-viding an engineering analysis prior tothe preparation or submission of a bidor proposal are not allowable underthis section since the engineer is pro-viding technical services but not di-rectly in the preparation, submissionor negotiation of a covered Federal ac-tion.

(d) Requirements imposed by or pur-suant to law as a condition for receiv-ing a covered Federal award includethose required by law or regulation, orreasonably expected to be required bylaw or regulation, and any other re-quirements in the actual award docu-ments.

(e) Persons other than officers or em-ployees of a person requesting or re-ceiving a covered Federal action in-clude consultants and trade associa-tions.

(f) Only those services expressly au-thorized by this section are allowableunder this section.

Subpart D—Penalties andEnforcement

§ 1168.400 Penalties.(a) Any person who makes an expend-

iture prohibited herein shall be subject

to a civil penalty of not less than$10,000 and not more than $100,000 foreach such expenditure.

(b) Any person who fails to file oramend the disclosure form (see appen-dix B) to be filed or amended if re-quired herein, shall be subject to a civilpenalty of not less than $10,000 and notmore than $100,000 for each such fail-ure.

(c) A filing or amended filing on orafter the date on which an administra-tive action for the imposition of a civilpenalty is commenced does not preventthe imposition of such civil penalty fora failure occurring before that date. Anadministrative action is commencedwith respect to a failure when an inves-tigating official determines in writingto commence an investigation of an al-legation of such failure.

(d) In determining whether to imposea civil penalty, and the amount of anysuch penalty, by reason of a violationby any person, the agency shall con-sider the nature, circumstances, ex-tent, and gravity of the violation, theeffect on the ability of such person tocontinue in business, any prior viola-tions by such person, the degree of cul-pability of such person, the ability ofthe person to pay the penalty, and suchother matters as may be appropriate.

(e) First offenders under paragraph(a) or (b) of this section shall be subjectto a civil penalty of $10,000, absent ag-gravating circumstances. Second andsubsequent offenses by persons shall besubject to an appropriate civil penaltybetween $10,000 and $100,000, as deter-mined by the agency head or his or herdesignee.

(f) An imposition of a civil penaltyunder this section does not prevent theUnited States from seeking any otherremedy that may apply to the sameconduct that is the basis for the impo-sition of such civil penalty.

§ 1168.405 Penalty procedures.

Agencies shall impose and collectcivil penalties pursuant to the provi-sions of the Program Fraud and CivilRemedies Act, 31 U.S.C. sections 3803(except subsection (c)), 3804, 3805, 3806,3807, 3808, and 3812, insofar as these pro-visions are not inconsistent with therequirements herein.


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45 CFR Ch. XI (10–1–97 Edition)§ 1168.410

§ 1168.410 Enforcement.The head of each agency shall take

such actions as are necessary to ensurethat the provisions herein are vigor-ously implemented and enforced inthat agency.


§ 1168.500 Secretary of Defense.(a) The Secretary of Defense may ex-

empt, on a case-by-case basis, a cov-ered Federal action from the prohibi-tion whenever the Secretary deter-mines, in writing, that such an exemp-tion is in the national interest. TheSecretary shall transmit a copy of eachsuch written exemption to Congressimmediately after making such a de-termination.

(b) The Department of Defense mayissue supplemental regulations to im-plement paragraph (a) of this section.

Subpart F—Agency Reports§ 1168.600 Semi-annual compilation.

(a) The head of each agency shall col-lect and compile the disclosure reports(see appendix B) and, on May 31 andNovember 30 of each year, submit tothe Secretary of the Senate and theClerk of the House of Representatives areport containing a compilation of theinformation contained in the disclo-sure reports received during the six-month period ending on March 31 orSeptember 30, respectively, of thatyear.

(b) The report, including the com-pilation, shall be available for publicinspection 30 days after receipt of thereport by the Secretary and the Clerk.

(c) Information that involves intel-ligence matters shall be reported onlyto the Select Committee on Intel-ligence of the Senate, the PermanentSelect Committee on Intelligence ofthe House of Representatives, and theCommittees on Appropriations of theSenate and the House of Representa-tives in accordance with proceduresagreed to by such committees. Such in-formation shall not be available forpublic inspection.

(d) Information that is classifiedunder Executive Order 12356 or any suc-cessor order shall be reported only to

the Committee on Foreign Relations ofthe Senate and the Committee on For-eign Affairs of the House of Represent-atives or the Committees on ArmedServices of the Senate and the House ofRepresentatives (whichever such com-mittees have jurisdiction of mattersinvolving such information) and to theCommittees on Appropriations of theSenate and the House of Representa-tives in accordance with proceduresagreed to by such committees. Such in-formation shall not be available forpublic inspection.

(e) The first semi-annual compilationshall be submitted on May 31, 1990, andshall contain a compilation of the dis-closure reports received from Decem-ber 23, 1989 to March 31, 1990.

(f) Major agencies, designated by theOffice of Management and Budget(OMB), are required to provide ma-chine-readable compilations to theSecretary of the Senate and the Clerkof the House of Representatives nolater than with the compilations dueon May 31, 1991. OMB shall provide de-tailed specifications in a memorandumto these agencies.

(g) Non-major agencies are requestedto provide machine-readable compila-tions to the Secretary of the Senateand the Clerk of the House of Rep-resentatives.

(h) Agencies shall keep the originalsof all disclosure reports in the officialfiles of the agency.

§ 1168.605 Inspector General report.(a) The Inspector General, or other

official as specified in paragraph (b) ofthis section, of each agency shall pre-pare and submit to Congress each year,commencing with submission of thePresident’s Budget in 1991, an evalua-tion of the compliance of that agencywith, and the effectiveness of, the re-quirements herein. The evaluation mayinclude any recommended changes thatmay be necessary to strengthen or im-prove the requirements.

(b) In the case of an agency that doesnot have an Inspector General, theagency official comparable to an In-spector General shall prepare and sub-mit the annual report, or, if there is nosuch comparable official, the head ofthe agency shall prepare and submitthe annual report.


437


(c) The annual report shall be sub-mitted at the same time the agencysubmits its annual budget justifica-tions to Congress.

(d) The annual report shall includethe following: All alleged violations re-lating to the agency’s covered Federalactions during the year covered by thereport, the actions taken by the headof the agency in the year covered bythe report with respect to those allegedviolations and alleged violations inprevious years, and the amounts ofcivil penalties imposed by the agencyin the year covered by the report.

APPENDIX A TO PART 1168—CERTIFICATION REGARDING LOBBYING

Certification for Contracts, Grants, Loans, andCooperative Agreements

The undersigned certifies, to the best of hisor her knowledge and belief, that:

(1) No Federal appropriated funds havebeen paid or will be paid, by or on behalf ofthe undersigned, to any person for influenc-ing or attempting to influence an officer oremployee of an agency, a Member of Con-gress, an officer or employee of Congress, oran employee of a Member of Congress in con-nection with the awarding of any Federalcontract, the making of any Federal grant,the making of any Federal loan, the enteringinto of any cooperative agreement, and theextension, continuation, renewal, amend-ment, or modification of any Federal con-tract, grant, loan, or cooperative agreement.

(2) If any funds other than Federal appro-priated funds have been paid or will be paidto any person for influencing or attemptingto influence an officer or employee of anyagency, a Member of Congress, an officer oremployee of Congress, or an employee of aMember of Congress in connection with this

Federal contract, grant, loan, or cooperativeagreement, the undersigned shall completeand submit Standard Form–LLL, ‘‘Disclo-sure Form to Report Lobbying,’’ in accord-ance with its instructions.

(3) The undersigned shall require that thelanguage of this certification be included inthe award documents for all subawards at alltiers (including subcontracts, subgrants, andcontracts under grants, loans, and coopera-tive agreements) and that all subrecipientsshall certify and disclose accordingly.

This certification is a material representa-tion of fact upon which reliance was placedwhen this transaction was made or enteredinto. Submission of this certification is aprerequisite for making or entering into thistransaction imposed by section 1352, title 31,U.S. Code. Any person who fails to file therequired certification shall be subject to acivil penalty of not less than $10,000 and notmore than $100,000 for each such failure.

Statement for Loan Guarantees and LoanInsurance

The undersigned states, to the best of hisor her knowledge and belief, that:

If any funds have been paid or will be paidto any person for influencing or attemptingto influence an officer or employee of anyagency, a Member of Congress, an officer oremployee of Congress, or an employee of aMember of Congress in connection with thiscommitment providing for the United Statesto insure or guarantee a loan, the under-signed shall complete and submit StandardForm–LLL, ‘‘Disclosure Form to Report Lob-bying,’’ in accordance with its instructions.

Submission of this statement is a pre-requisite for making or entering into thistransaction imposed by section 1352, title 31,U.S. Code. Any person who fails to file therequired statement shall be subject to a civilpenalty of not less than $10,000 and not morethan $100,000 for each such failure.


438


APPENDIX B TO PART 1168—DISCLOSURE FORM TO REPORT LOBBYING


439



440



441


PART 1169—GOVERNMENTWIDEDEBARMENT AND SUSPENSION(NONPROCUREMENT) AND GOV-ERNMENTWIDE REQUIREMENTSFOR DRUG-FREE WORKPLACE(GRANTS)

Subpart A—General






1169.300 General.1169.305 Causes for debarment.1169.310 Procedures.1169.311 Investigation and referral.1169.312 Notice of proposed debarment.1169.313 Opportunity to contest proposed de-





Subpart E—Responsibilities of GSA, NEHand Participants

1169.500 GSA responsibilities.1169.505 NEH responsibilities.1169.510 Participants’ responsibilities.


1169.600 Purpose.1169.605 Definitions.1169.610 Coverage.

1169.615 Grounds for suspension of pay-ments, suspension or termination ofgrants, or suspension or debarment.







AUTHORITY: 20 U.S.C. 959(a)(1); 41 U.S.C. 701et seq.; E.O. 12549, 3 CFR, 1986 Comp., p. 189;E.O. 12689, 3 CFR, 1989 Comp., p. 235.



EDITORIAL NOTES:

(1) For nomenclature change to Part 1169,see 53 FR 19202, May 26, 1988.


Subpart A—General

§ 1169.100 Purpose.

(a) Executive Order (E.O.) 12549 pro-vides that, to the extent permitted bylaw, Executive departments and agen-cies shall participate in a government-wide system for nonprocurement debar-ment and suspension. A person who isdebarred or suspended shall be excludedfrom Federal financial and non-financial assistance and benefits underFederal programs and activities. De-barment or suspension of a participantin a program by one agency shall havegovernmentwide effect.



442

45 CFR Ch. XI (10–1–97 Edition)§ 1169.105







(1) Providing for the inclusion in theList of Parties Excluded from Federal Pro-curement and Nonprocurement Programsall persons proposed for debarment,debarred or suspended under the Fed-eral Acquisition Regulation, 48 CFRPart 9, subpart 9.4; persons againstwhich governmentwide exclusions havebeen entered under this part; and per-sons determined to be ineligible; and



[60 FR 33040, 33062, June 26, 1995]

§ 1169.105 Definitions.The following definitions apply to

this part:Adequate evidence. Information suffi-


Affiliate. Persons are affiliates ofeach other if, directly or indirectly, ei-ther one controls or has the power tocontrol the other, or, a third person

controls or has the power to controlboth. Indicia of control include, but arenot limited to: interlocking manage-ment or ownership, identity of inter-ests among family members, shared fa-cilities and equipment, common use ofemployees, or a business entity orga-nized following the suspension or de-barment of a person which has thesame or similar management, owner-ship, or principal employees as the sus-pended, debarred, ineligible, or volun-tarily excluded person.



Conviction. A judgment or convictionof a criminal offense by any court ofcompetent jurisdiction, whether en-tered upon a verdict or a plea, includ-ing a plea of nolo contendere.






Ineligible. Excluded from participa-tion in Federal nonprocurement pro-grams pursuant to a determination ofineligibility under statutory, executiveorder, or regulatory authority, otherthan Executive Order 12549 and itsagency implementing regulations; forexemple, excluded pursuant to theDavis-Bacon Act and its implementing


443


regulations, the equal employment op-portunity acts and executive orders, orthe environmental protection acts andexecutive orders. A person is ineligiblewhere the determination of ineligibil-ity affects such person’s eligibility toparticipate in more than one coveredtransaction.


List of Parties Excluded from FederalProcurement and Nonprocurement Pro-grams. A list compiled, maintained anddistributed by the General Services Ad-ministration (GSA) containing thenames and other information aboutpersons who have been debarred, sus-pended, or voluntarily excluded underExecutive Orders 12549 and 12689 andthese regulations or 48 CFR part 9, sub-part 9.4, persons who have been pro-posed for debarment under 48 CFR part9, subpart 9.4, and those persons whohave been determined to be ineligible.

NEH. National Endowment for theHumanities.



Person. Any individual, corporation,partnership, association, unit of gov-ernment or legal entity, however orga-nized, except: Foreign governments orforeign governmental entities, publicinternational organizations, foreigngovernment owned (in whole or in part)

or controlled entities, and entities con-sisting wholly or partially of foreigngovernments or foreign governmentalentities.










pending official in accordance withthese regulations that immediately ex-cludes a person from participating incovered transactions for a temporaryperiod, pending completion of an inves-tigation and such legal, debarment, or


444

45 CFR Ch. XI (10–1–97 Edition)§ 1169.110

Program Fraud Civil Remedies Actproceedings as may ensue. A person soexcluded is ‘‘suspended.’’


[53 FR 19201, 19202, 19204, May 26, 1988, asamended at 60 FR 33041, 33062, June 26, 1995]

§ 1169.110 Coverage.(a) These regulations apply to all per-

sons who have participated, are cur-rently participating or may reasonablybe expected to participate in trans-actions under Federal nonprocurementprograms. For purposes of these regula-tions such transactions will be referredto as ‘‘covered transactions.’’


(i) Primary covered transaction. Exceptas noted in paragraph (a)(2) of this sec-tion, a primary covered transaction isany nonprocurement transaction be-tween an agency and a person, regard-less of type, including: grants, coopera-tive agreements, scholarships, fellow-ships, contracts of assistance, loans,loan guarantees, subsidies, insurance,payments for specified use, donationagreements and any other nonprocure-ment transactions between a Federalagency and a person. Primary coveredtransactions also include those trans-actions specially designated by theU.S. Department of Housing and UrbanDevelopment in such agency’s regula-tions governing debarment and suspen-sion.



(B) Any procurement contract forgoods or services between a participantand a person, regardless of type, ex-pected to equal or exceed the Federalprocurement small purchase thresholdfixed at 10 U.S.C. 2304(g) and 41 U.S.C.

253(g) (currently $25,000) under a pri-mary covered transaction.


(1) Principal investigators.(2) Providers of federally-required




(ii) Direct awards to foreign govern-ments or public international organiza-tions, or transactions with foreign gov-ernments or foreign governmental en-tities, public international organiza-tions, foreign government owned (inwhole or in part) or controlled entities,entities consisting wholly or partiallyof foreign governments or foreign gov-ernmental entities;






(b) Relationship to other sections. Thissection describes the types of trans-actions to which a debarment or sus-pension under the regulations willapply. Subpart B, ‘‘Effect of Action,’’§ 1169.200, ‘‘Debarment or suspension,’’sets forth the consequences of a debar-ment or suspension. Those con-sequences would obtain only with re-spect to participants and principals inthe covered transactions and activitiesdescribed in § 1169.110(a). Sections1169.325, ‘‘Scope of debarment,’’ and1169.420, ‘‘Scope of suspension,’’ govern


445


the extent to which a specific partici-pant or organizational elements of aparticipant would be automatically in-cluded within a debarment or suspen-sion action, and the conditions underwhich affiliates or persons associatedwith a participant may also be broughtwithin the scope of the action.


[53 FR 19201, 19202, 19204, May 26, 1988, asamended at 60 FR 33041, 33062, June 26, 1995]

§ 1169.115 Policy.





§ 1169.200 Debarment or suspension.











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45 CFR Ch. XI (10–1–97 Edition)§ 1169.205


[60 FR 33041, 33062, June 26, 1995]




sions under § 1169.315 are excluded inaccordance with the terms of their set-tlements. NEH shall, and participantsmay, contact the original action agen-cy to ascertain the extent of the exclu-sion.

§ 1169.215 Exception provision.NEH may grant an exception permit-

ting a debarred, suspended, or volun-tarily excluded person, or a person pro-posed for debarment under 48 CFR part9, subpart 9.4, to participate in a par-ticular covered transaction upon awritten determination by the agencyhead or an authorized designee statingthe reason(s) for deviating from thePresidential policy established by Ex-ecutive Order 12549 and § 1169.200. How-ever, in accordance with the Presi-dent’s stated intention in the Execu-tive Order, exceptions shall be grantedonly infrequently. Exceptions shall bereported in accordance with§ 1169.505(a).

[60 FR 33041, 33063, June 26, 1995]




[60 FR 33041, 33062, June 26, 1995]








[60 FR 33041, 33062, June 26, 1995]


§ 1169.300 General.

The debarring official may debar aperson for any of the causes in§ 1169.305, using procedures establishedin §§ 1169.310 through 1169.314. The exist-ence of a cause for debarment, how-ever, does not necessarily require thatthe person be debarred; the seriousnessof the person’s acts or omissions and


447

National Foundation on the Arts and Humanities § 1169 .312

any mitigating factors shall be consid-ered in making any debarment deci-sion.

§ 1169.305 Causes for debarment.

Debarment may be imposed in ac-cordance with the provisions of§§ 1169.300 through 1169.314 for:


















§ 1169.310 Procedures.NEH shall process debarment actions

as informally as practicable, consistentwith the principles of fundamentalfairness, using the procedures in§§ 1169 .311 through 1169.314.



§ 1169 .312 Notice of proposed debar-ment.





(d) Of the provisions of §§ 1169.311through 1169.314, and any other NEH


448

45 CFR Ch. XI (10–1–97 Edition)§ 1169.313

procedures, if applicable, governing de-barment decisionmaking; and






§ 1169.314 Debarring official’s decision.

(a) No additional proceedings necessary.In actions based upon a conviction orcivil judgment, or in which there is nogenuine dispute over material facts,the debarring official shall make a de-cision on the basis of all the informa-tion in the administrative record, in-cluding any submission made by the re-spondent. The decision shall be madewithin 45 days after receipt of any in-formation and argument submitted bythe respondent, unless the debarringofficial extends this period for goodcause.




(c)(1) Standard of proof. In any debar-ment action, the cause for debarmentmust be established by a preponderanceof the evidence. Where the proposed de-barment is based upon a conviction orcivil judgment, the standard shall bedeemed to have been met.






(iv) Advising that the debarment iseffective for covered transactionsthroughout the executive branch of theFederal Government unless an agencyhead or an authorized designee makesthe determination referred to in§ 1169.215.



(a) When in the best interest of theGovernment, NEH may, at any time,settle a debarment or suspension ac-tion.



449





(2) In the case of a debarment for aviolation of the requirements of sub-part F of this part (see § 1169.305(c)(5)),the period of debarment shall not ex-ceed five years.


(c) The respondent may request thedebarring official to reverse the debar-ment decision or to reduce the periodor scope of debarment. Such a requestshall be in writing and supported bydocumentation. The debarring officialmay grant such a request for reasonsincluding, but not limited to:







§ 1169.325 Scope of debarment.(a) Scope in general. (1) Debarment of

a person under these regulations con-stitutes debarment of all its divisions

and other organizational elementsfrom all covered transactions, unlessthe debarment decision is limited byits terms to one or more specificallyidentified individuals, divisions orother organizational elements or tospecific types of transactions.




(2) Conduct imputed to individuals asso-ciated with participant. The fraudulent,criminal, or other seriously improperconduct of a participant may be im-puted to any officer, director, share-holder, partner, employee, or other in-dividual associated with the partici-pant who participated in, knew of, orhad reason to know of the participant’sconduct.

(3) Conduct of one participant imputedto other participants in a joint venture.The fraudulent, criminal, or other seri-ously improper conduct of one partici-pant in a joint venture, grant pursuantto a joint application, or similar ar-rangement may be imputed to otherparticipants if the conduct occurred foror on behalf of the joint venture, grantpursuant to a joint application, orsimilar arrangement may be imputedto other participants if the conduct oc-curred for or on behalf of the joint ven-ture, grant pursuant to a joint applica-tion, or similar arrangement or withthe knowledge, approval, or acquies-cence of these participants. Acceptance


450

45 CFR Ch. XI (10–1–97 Edition)§ 1169.400

of the benefits derived from the con-duct shall be evidence of such knowl-edge, approval, or acquiescence.


§ 1169.400 General.(a) The suspending official may sus-

pend a person for any of the causes in§ 1169.405 using procedures establishedin §§ 1169.410 through 1169.413.





§ 1169.405 Causes for suspension.(a) Suspension may be imposed in ac-

cordance with the provisions of§§ 1169.400 through 1169.413 upon ade-quate evidence:




§ 1169.410 Procedures.(a) Investigation and referral. Informa-

tion concerning the existence of acause for suspension from any sourceshall be promptly reported, inves-tigated, and referred, when appro-priate, to the suspending official forconsideration. After consideration, thesuspending official may issue a noticeof suspension.

(b) Decisionmaking process. NEH shallprocess suspension actions as infor-mally as practicable, consistent withprinciples of fundamental fairness,

using the procedures in § 1169.411through § 1169.413.








(f) Of the provisions of § 1169.411through § 1169.413 and any other NEHprocedures, if applicable, governingsuspension decisionmaking; and






(ii) A determination is made, on thebasis of Department of Justice advice,that the substantial interests of theFederal Government in pending or con-templated legal proceedings based on


451


the same facts as the suspension wouldbe prejudiced.




(a) No additional proceedings necessary.In actions: Based on an indictment,conviction, or civil judgment; in whichthere is no genuine dispute over mate-rial facts; or in which additional pro-ceedings to determine disputed mate-rial facts have been denied on the basisof Department of Justice advice, thesuspending official shall make a deci-sion on the basis of all the informationin the administrative record, includingany submission made by the respond-ent. The decision shall be made within45 days after receipt of any informationand argument submitted by the re-spondent, unless the suspending officialextends this period for good cause.








§ 1169.420 Scope of suspension.The scope of a suspension is the same

as the scope of a debarment (see§ 1169.325), except that the procedures of§§ 1169.410 through 1169.413 shall be usedin imposing a suspension.

Subpart E—Responsibilities of GSA,NEH and Participants

§ 1169.500 GSA responsibilities.(a) In accordance with the OMB

guidelines, GSA shall compile, main-tain, and distribute a list of all personswho have been debarred, suspended, orvoluntarily excluded by agencies underExecutive Order 12549 and these regula-tions, and those who have been deter-mined to be ineligible.


(1) The names and addresses of alldebarred, suspended, ineligible, andvoluntarily excluded persons, in alpha-betical order, with cross-references


452

45 CFR Ch. XI (10–1–97 Edition)§ 1169.505

when more than one name is involvedin a single action;




§ 1169.505 NEH responsibilities.(a) The agency shall provide GSA

with current information concerningdebarments, suspension, determina-tions of ineligibility, and voluntary ex-clusions it has taken. Until February18, 1989, the agency shall also provideGSA and OMB with information con-cerning all transactions in which NEHhas granted exceptions under § 1169.215permitting participation by debarred,suspended, or voluntarily excluded per-sons.



(d) NEH officials shall check the Non-procurement List before entering cov-ered transactions to determine whethera participant in a primary transactionis debarred, suspended, ineligible, orvoluntarily excluded (Tel. #).

(e) NEH officials shall check the Non-procurement List before approvingprincipals or lower tier participantswhere agency approval of the principalor lower tier participant is requiredunder the terms of the transaction, todetermine whether such principals orparticipants are debarred, suspended,ineligible, or voluntarily excluded.


(a) Certification by participants in pri-mary covered transactions. Each partici-pant shall submit the certification inappendix A to this part for it and itsprincipals at the time the participantsubmits its proposal in connection witha primary covered transaction, except

that States need only complete suchcertification as to their principals.Participants may decide the methodand frequency by which they determinethe eligibility of their principals. Inaddition, each participant may, but isnot required to, check the Nonprocure-ment List for its principals (Tel. #).Adverse information on the certifi-cation will not necessarily result in de-nial of participation. However, the cer-tification, and any additional informa-tion pertaining to the certificationsubmitted by the participant, shall beconsidered in the administration ofcovered transactions.

(b) Certification by participants inlower tier covered transactions. (1) Eachparticipant shall require participantsin lower tier covered transactions toinclude the certification in appendix Bto this part for it and its principals inany proposal submitted in connectionwith such lower tier covered trans-actions.

(2) A participant may rely upon thecertification of a prospective partici-pant in a lower tier covered trans-action that it and its principals are notdebarred, suspended, ineligible, or vol-untarily excluded from the coveredtransaction by any Federal agency, un-less it knows that the certification iserroneous. Participants may decide themethod and frequency by which theydetermine the eligiblity of their prin-cipals. In addition, a participant may,but is not required to, check the Non-procurement List for its principals andfor participants (Tel. #).

(c) Changed circumstances regardingcertification. A participant shall provideimmediate written notice to NEH if atany time the participant learns thatits certification was erroneous whensubmitted or has become erroneous byreason of changed circumstances. Par-ticipants in lower tier covered trans-actions shall provide the same updatednotice to the participant to which itsubmitted its proposals.




453










trolled substance in schedules Ithrough V of the Controlled SubstancesAct (21 U.S.C. 812), and as further de-fined by regulation at 21 CFR 1308.11through 1308.15;






less their impact or involvement is in-

significant to the performance of thegrant; and,




(7) Grant means an award of financialassistance, including a cooperativeagreement, in the form of money, orproperty in lieu of money, by a Federalagency directly to a grantee. The termgrant includes block grant and entitle-ment grant programs, whether or notexempted from coverage under thegrants management government-widecommon rule on uniform administra-tive requirements for grants and coop-erative agreements. The term does notinclude technical assistance that pro-vides services instead of money, orother assistance in the form of loans,loan guarantees, interest subsidies, in-surance, or direct appropriations; orany veterans’ benefits to individuals,i.e., any benefit to veterans, their fami-lies, or survivors by virtue of the serv-ice of a veteran in the Armed Forces ofthe United States;



the United States, the District of Co-lumbia, the Commonwealth of PuertoRico, any territory or possession of theUnited States, or any agency of aState, exclusive of institutions of high-er education, hospitals, and units of


454

45 CFR Ch. XI (10–1–97 Edition)§ 1169.610

local government. A State instrumen-tality will be considered part of theState government if it has a writtendetermination from a State govern-ment that such State considers the in-strumentality to be an agency of theState government.

§ 1169.610 Coverage.(a) This subpart applies to any grant-

ee of the agency.(b) This subpart applies to any grant,

except where application of this sub-part would be inconsistent with theinternational obligations of the UnitedStates or the laws or regulations of aforeign government. A determinationof such inconsistency may be madeonly by the agency head or his/her des-ignee.

(c) The provisions of subparts A, B, C,D and E of this part apply to matterscovered by this subpart, except wherespecifically modified by this subpart.In the event of any conflict betweenprovisions of this subpart and otherprovisions of this part, the provisionsof this subpart are deemed to controlwith respect to the implementation ofdrug-free workplace requirements con-cerning grants.





(1) The grantee has violated the cer-tification by failing to carry out therequirements of paragraphs (A)(a)through (g) and/or (B) of the certifi-cation (Alternate I to appendix C) or



(1) The grantee has violated the cer-tification by failing to carry out its re-quirements (Alternate II to appendixC); or


§ 1169.620 Effect of violation.(a) In the event of a violation of this

subpart as provided in § 1169.615, and inaccordance with applicable law, thegrantee shall be subject to one or moreof the following actions:




(b) Upon issuance of any final deci-sion under this part requiring debar-ment of a grantee, the debarred grant-ee shall be ineligible for award of anygrant from any Federal agency for aperiod specified in the decision, not toexceed five years (see § 1169.320(a)(2) ofthis part).




(a)(1) As a prior condition of beingawarded a grant, each grantee shallmake the appropriate certification tothe Federal agency providing thegrant, as provided in appendix C to thispart.

(2) Grantees are not required to makea certification in order to continue re-ceiving funds under a grant awardedbefore March 18, 1989, or under a no-cost time extension of such a grant.However, the grantee shall make a one-time drug-free workplace certificationfor a non-automatic continuation of


455


such a grant made on or after March18, 1989.















(b) A grantee who is an individualwho is convicted for a violation of acriminal drug statute occurring duringthe conduct of any grant activity shall


456

45 CFR Ch. XI (10–1–97 Edition)Pt. 1169, App. A

report the conviction, in writing, with-in 10 calendar days, to his or her Fed-eral agency grant officer, or other des-ignee, unless the Federal agency hasdesignated a central point for the re-ceipt of such notices. Notification shallinclude the identification number(s)for each of the Federal agency’s af-fected grants.





2. The inability of a person to provide thecertification required below will not nec-essarily result in denial of participation inthis covered transaction. The prospectiveparticipant shall submit an explanation ofwhy it cannot provide the certification setout below. The certification or explanationwill be considered in connection with the de-partment or agency’s determination whetherto enter into this transaction. However, fail-ure of the prospective primary participant tofurnish a certification or an explanationshall disqualify such person from participa-tion in this transaction.



5. The terms covered transaction, debarred,suspended, ineligible, lower tier covered trans-action, participant, person, primary coveredtransaction, principal, proposal, and volun-tarily excluded, as used in this clause, havethe meanings set out in the Definitions andCoverage sections of the rules implementingExecutive Order 12549. You may contact the

department or agency to which this proposalis being submitted for assistance in obtain-ing a copy of those regulations.



8. A participant in a covered transactionmay rely upon a certification of a prospec-tive participant in a lower tier coveredtransaction that it is not proposed for debar-ment under 48 CFR part 9, subpart 9.4,debarred, suspended, ineligible, or volun-tarily excluded from the covered trans-action, unless it knows that the certificationis erroneous. A participant may decide themethod and frequency by which it deter-mines the eligibility of its principals. Eachparticipant may, but is not required to,check the List of Parties Excluded from Fed-eral Procurement and Nonprocurement Pro-grams.




457








(2) Where the prospective primary partici-pant is unable to certify to any of the state-ments in this certification, such prospectiveparticipant shall attach an explanation tothis proposal.

[60 FR 33042, 33062, June 26, 1995]

APPENDIX B TO PART 1169—CERTIFICATION REGARDING DEBAR-MENT, SUSPENSION, INELIGIBILTYAND VOLUNTARY EXCLUSION—LOWERTIER COVERED TRANSACTIONS




3. The prospective lower tier participantshall provide immediate written notice tothe person to which this proposal is submit-ted if at any time the prospective lower tier

participant learns that its certification waserroneous when submitted or had become er-roneous by reason of changed circumstances.






9. Except for transactions authorized underparagraph 5 of these instructions, if a partic-ipant in a covered transaction knowingly en-ters into a lower tier covered transactionwith a person who is proposed for debarmentunder 48 CFR part 9, subpart 9.4, suspended,debarred, ineligible, or voluntarily excludedfrom participation in this transaction, in ad-dition to other remedies available to the


458

45 CFR Ch. XI (10–1–97 Edition)Pt. 1169, App. C

Federal Government, the department oragency with which this transaction origi-nated may pursue available remedies, includ-ing suspension and/or debarment.




[60 FR 33042, 33062, June 26, 1995]

APPENDIX C TO PART 1169—CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS



2. The certification set out below is a ma-terial representation of fact upon which reli-ance is placed when the agency awards thegrant. If it is later determined that thegrantee knowingly rendered a false certifi-cation, or otherwise violates the require-ments of the Drug-Free Workplace Act, theagency, in addition to any other remediesavailable to the Federal Government, maytake action authorized under the Drug-FreeWorkplace Act.




6. Workplace identifications must includethe actual address of buildings (or parts ofbuildings) or other sites where work underthe grant takes place. Categorical descrip-tions may be used (e.g., all vehicles of a masstransit authority or State highway depart-ment while in operation, State employees in

each local unemployment office, performersin concert halls or radio studios).






Employee means the employee of a granteedirectly engaged in the performance of workunder a grant, including: (i) All direct chargeemployees; (ii) All indirect charge employeesunless their impact or involvement is insig-nificant to the performance of the grant;and, (iii) Temporary personnel and consult-ants who are directly engaged in the per-formance of work under the grant and whoare on the grantee’s payroll. This definitiondoes not include workers not on the payrollof the grantee (e.g., volunteers, even if usedto meet a matching requirement; consult-ants or independent contractors not on thegrantee’s payroll; or employees of subrecipi-ents or subcontractors in covered work-places).








459









(e) Notifying the agency in writing, withinten calendar days after receiving noticeunder paragraph (d)(2) from an employee orotherwise receiving actual notice of suchconviction. Employers of convicted employ-ees must provide notice, including positiontitle, to every grant officer or other designeeon whose grant activity the convicted em-ployee was working, unless the Federal agen-cy has designated a central point for the re-ceipt of such notices. Notice shall includethe identification number(s) of each affectedgrant;





B. The grantee may insert in the space pro-vided below the site(s) for the performance ofwork done in connection with the specificgrant:

Place of Performance (Street address, city,county, state, zip code)

————————————————————————————————————————————————————————————————————————

Check b if there are workplaces on file thatare not identified here.




[55 FR 21690, 21703, May 25, 1990]

PART 1170—NONDISCRIMINATIONON THE BASIS OF HANDICAP INFEDERALLY ASSISTED PROGRAMSAND ACTIVITIES


Sec.1170.1 Purpose.1170.2 Application.1170.3 Definitions.1170.4 Effect of State or local law or other

requirements and effect of employmentopportunities.

1170.5—1170.10 [Reserved]

Subpart B-Discrimination Prohibited

1170.11 General prohibition against dis-crimination.

1170.12 Discriminatory actions prohibited.1170.13 Illustrative examples.1170.14—1170.20 [Reserved]

Subpart C—Employment Practices

1170.21 Discrimination prohibited.1170.22 Reasonable accommodation.1170.23 Employment criteria.1170.24 Preemployment inquiries.1170.25—1170.30 [Reserved]

Subpart D—Program Accessibility

1170.31 Discrimination prohibited.1170.32 Existing facilities.1170.33 New construction.1170.34 Historic properties. [Reserved]1170.35—1170.40 [Reserved]

Subpart E—Postsecondary Education

1170.41 Application of this subpart.1170.42 Admissions and recruitment.1170.43 Treatment of students; general.


460

45 CFR Ch. XI (10–1–97 Edition)§ 1170.1

1170.44 Academic adjustments.1170.45 Housing.1170.46 Financial and employment assist-

ance to students.1170.47 Nonacademic services.1170.48—1170.50 [Reserved]

Subpart F—Enforcement

1170.51 Assurances required.1170.52 Remedial action, voluntary action,

and self-evaluation.1170.53 Designation of responsible employee

and adoption of grievance procedures.1170.54 Notice.1170.55 Endowment enforcement and com-

pliance procedures.1170.56—1170.99 [Reserved]


SOURCE: 46 FR 55897, Nov. 12, 1981, unlessotherwise noted.


§ 1170.1 Purpose.The purpose of this part is to imple-

ment section 504 of the RehabilitationAct of 1973, which is designed to elimi-nate discrimination on the basis ofhandicap in any program or activityreceiving Federal financial assistance.

§ 1170.2 Application.This part applies to each recipient of

Federal financial assistance from theNational Endowment for the Human-ities and to each program or activitythat receives or benefits from such as-sistance.

§ 1170.3 Definitions.As used in this part:(a) Section 504 means section 504 of

the Rehabilitation Act of 1973, Pub. L.93–112, as amended by the Rehabilita-tion Act Amendments of 1974, Pub. L.93–516, 29 U.S.C. 794 et seq. and by theRehabilitation, Comprehensive Serv-ices and Developmental DisabilitiesAmendments of 1978, Pub. L. 95–602.

(b) The term Endowment or the termagency means the National Endowmentfor the Humanities.

(c) The term Chairman means theChairman of the National Endowmentfor the Humanities.

(d) The term responsible Endowmentofficial with respect to any program re-ceiving Federal financial assistancemeans the Chairman of the Endow-

ment, the Director of the Office ofEqual Employment Opportunity, orother Endowment official designatedby the Chairman.

(e) The term United States means theStates of the United States, the Dis-trict of Columbia, Puerto Rico, theVirgin Islands, American Samoa,Guam, the Northern Mariana Islands,Wake Island, the Canal Zone, and theterritories and possessions of the Unit-ed States, and the term State meansany one of the foregoing.

(f) Federal financial assistance meansany grant, loan, contract (other than aprocurement contract or a contract ofinsurance or guaranty), or any otherarrangement by which the agency pro-vides or otherwise makes available as-sistance in the form of:

(1) Funds;(2) Services of Federal personnel; or(3) Real and personal property or any

interest in or use of such property, in-cluding:

(i) Transfers or leases of such prop-erty for less than fair market value orfor reduced consideration; and

(ii) Proceeds from a subsequenttransfer or lease of such property if theFederal share of its fair market valueis not returned to the Federal govern-ment.

(g) The term program includes anyprogram, project, or activity involvingthe provision of services, financial aid,or other benefits to individuals (includ-ing education or training, health, hous-ing, or other services, whether providedthrough employees of the recipient ofFederal financial assistance or pro-vided by others through contracts orother arrangements with the recipient,and including work opportunities andcash or loan or other assistance to in-dividuals), or for provision of facilitiesfor furnishing services, financial aid orother benefits to individuals. The serv-ice, financial aid, or other benefits pro-vided under a program receiving Fed-eral financial assistance shall bedeemed to include any services, finan-cial aid, or other benefits provided withthe aid of Federal financial assistanceor with the aid of any non-Federalfunds, property, or other resources re-quired to be expended or made avail-able for the program to meet matchingrequirements or other conditions which


461


must be met in order to receive theFederal financial assistance, and to in-clude any services, financial aid, orother benefits provided in or through afacility provided with the aid of Fed-eral financial assistance or such non-Federal resources.

(h) Facility means all or any portionof buildings, structures, equipment,roads, walks, parking lots, or otherreal or personal property or interest insuch property.

(i) Recipient means any state or itspolitical subdivision, any instrumen-tality of a state or its political subdivi-sion, any public or private agency, in-stitution, organization, or other en-tity, or any person to which Federal fi-nancial assistance is extended directlyor through another recipient, includingany successor, assignee, or transfereeof a recipient, but excluding the ulti-mate beneficiary of the assistance.

(j) Handicapped person means any per-son who has a physical or mental im-pairment that substantially limits oneor more major life activities, has arecord of such an impairment, or is re-garded as having such an impairment.For purposes of section 504, in connec-tion with employment, this term doesnot include any individual who is an al-coholic or drug abuser whose currentuse of alcohol or drugs prevents suchindividual from performing the dutiesof the job in question or whose employ-ment, by reason of such current alco-hol or drug abuse, would constitute adirect threat to the property or thesafety of others. As used in this para-graph, the phrase:

(1) Physical or mental impairmentmeans:

(i) Any physiological disorder or con-dition, cosmetic disfigurement, or ana-tomical loss affecting one or more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genitourinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional ormental illness, and specific learningdisabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-

thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addiction and alcoholism.

(2) Major life activities means func-tions such as caring for one’s self, per-forming manual tasks, walking, seeing,hearing, speaking, breathing, learning,and working.

(3) Has a record of such impairmentmeans has a history of, or has beenmisclassified as having, a mental orphysical impairment that substantiallylimits one or more major life activi-ties.

(4) Is regarded as having an impairmentmeans

(i) Has a physical or mental impair-ment that does not substantially limitmajor life activities but is treated by arecipient as constituting such a limita-tion;


(iii) Has none of the impairments de-fined in paragraph (j)(1) of this sectionbut is treated by a recipient as havingsuch an impairment.

(k) Qualified handicapped personmeans:

(1) With respect to employment, ahandicapped person who, with reason-able accommodation, can perform theessential functions of the job in ques-tion and

(2) With respect to postsecondary andvocational education services, a handi-capped person who meets the academicand technical standards requisite toadmission or participation in the re-cipient’s education program or activ-ity;

(3) With respect to services, a handi-capped person who meets the essentialeligibility requirements for the receiptof such services.

§ 1170.4 Effect of State or local law orother requirements and effect ofemployment opportunities.

(a) The obligation to comply withthis part is not obviated or alleviatedby the existence of any state or locallaw or other requirement that, on the


462

45 CFR Ch. XI (10–1–97 Edition)§§ 1170.5—1170.10

basis of handicap, imposes prohibitionsor limits upon the eligibility of quali-fied handicapped persons to receiveservices or to practice any occupationor profession.

(b) The obligation to comply withthis part is not obviated or alleviatedbecause employment opportunities inany occupation or profession are ormay be more limited for handicappedpersons than for nonhandicapped per-sons.

§§ 1170.5—1170.10 [Reserved]

Subpart B—DiscriminationProhibited

§ 1170.11 General prohibition againstdiscrimination.

No qualified handicapped personshall, on the basis of handicap, be ex-cluded from participation in, be deniedthe benefits of, or otherwise be sub-jected to discrimination under any pro-gram or activity that receives or bene-fits from Federal financial assistance.

§ 1170.12 Discriminatory actions pro-hibited.

(a) A recipient, in providing any aid,benefit, or service, may not, directly orthrough contractual, licensing, orother arrangements, on the basis ofhandicap:

(1) Deny a qualified handicapped per-son the opportunity to participate inor benefit from the aid, benefit, orservice;

(2) Afford a qualified handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;

(3) Provide a qualified handicappedperson with an aid, benefit, or servicethat is not as effective in affordingequal opportunity to obtain the sameresult, to gain the same benefit, or toreach the same level of achievement asthat provided to others;

(4) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons than is provided to others un-less such action is necessary to providequalified handicapped persons with aid,benefits, or services that are as effec-tive as those provided to others;

(5) Aid or perpetuate discriminationagainst a qualified handicapped personby providing significant assistance toan agency, organization, or person thatdiscriminates on the basis of handicapin providing any aid, benefit, or serviceto beneficiaries of the recipient’s pro-gram;

(6) Deny a qualified handicapped per-son the opportunity to participate as amember of planning or advisory boards;or

(7) Otherwise limit a qualified handi-capped person in the enjoyment of anyright, privilege, advantage, or oppor-tunity enjoyed by others receiving theaid, benefit, or service.

(b) A recipient may not deny a quali-fied handicapped person the oppor-tunity to participate in programs oractivities that are not separate or dif-ferent, despite the existence of permis-sibly separate or different programs oractivities.

(c) A recipient may not, directly orthrough contractual or other arrange-ments, utilize criteria or methods ofadministration.

(1) that have the effect of subjectingqualified handicapped persons to dis-crimination on the basis of handicap,

(2) that have the purpose or effect ofdefeating or substantially impairingaccomplishment of the objectives ofthe recipient’s program with respect tohandicapped persons, or

(3) that perpetuate the discrimina-tion of another recipient if both recipi-ents are subject to common adminis-trative control or are agencies of thesame state.

(d) A recipient may not, in determin-ing the site or location of a facility,make selections

(1) that have the effect of excludinghandicapped persons from, denyingthem the benefits of, or otherwise sub-jecting them to discrimination underany program or activity that receivesor benefits from Federal financial as-sistance or

(2) that have the purpose or effect ofdefeating or substantially impairingthe accomplishment of the objectivesof the program or activity with respectto handicapped persons.

(e) The exclusion of nonhandicappedpersons from the benefits of a programlimited by Federal statute or executive


463


order to handicapped persons or the ex-clusion of a specific class of handi-capped persons from a program limitedby Federal statute or executive orderto a different class of handicapped per-sons is not prohibited by this part.

(f) Recipients shall administer pro-grams and activities in the most inte-grated setting appropriate to the needsof qualified handicapped persons.

(g) Recipients shall take appropriatesteps to ensure that communicationswith their applicants, employees, andbeneficiaries are available to personswith impaired vision and hearing.

§ 1170.13 Illustrative examples.(a) The following examples will illus-

trate the application of the foregoingprovisions to some of the activitiesfunded by the National Endowment forthe Humanities.

(1) A publication or a museum cata-logue supported by the Endowmentmay be made usable by the blind andthe visually impaired through cassettetapes, records, discs, braille, readersand simultaneous publications.

(2) A lecture, meeting or symposiumsupported by Federal funds may bemade available to deaf and hearing im-paired persons through the use of asign language interpreter or by provid-ing scripts in advance of the perform-ance.

(3) Specific programs supported byFederal funds may be offered in an in-accessible facility provided that thesame program is also offered to thepublic at large in an accessible space.

(4) A qualified handicapped person isone who is able to meet all of a pro-gram’s requirements in spite of hishandicap. An educational institution isnot required to disregard the disabil-ities of handicapped individuals or tolower or to make substantial modifica-tions of standards to accommodate ahandicapped person.

(b) State humanities committees areobligated to develop methods of admin-istering Federal funds so as to ensurethat handicapped persons are not sub-jected to discrimination on the basis ofhandicap either by sub-grantees or bythe manner in which the funds are dis-tributed.

(c) In the event Endowment funds areutilized to construct, expand, alter,

lease or rent a facility, the benefits ofthe programs and activities provided inor through that facility must be con-ducted in accordance with these regu-lations, e.g., a museum receiving agrant to renovate an existing facilitymust assure that all museum programsand activities conducted in that facil-ity are accessible to handicapped per-sons.

(d) In carrying out the mandate ofsection 504 and these implementingregulations recipients should admin-ister Endowment assisted programsand activities in the most integratedsetting appropriate, e.g., tours madeavailable to the hearing impairedshould be open to the public at largeand everyone should be permitted toenjoy the benefits of a tactile experi-ence in a museum.

§§ 1170.14—1170.20 [Reserved]

Subpart C—Employment Practices§ 1170.21 Discrimination prohibited.

(a) General. No qualified handicappedperson shall, on the basis of handicap,be subjected to discrimination in em-ployment under any program or activ-ity that receives or benefits from Fed-eral financial assistance.

(b) A recipient shall make all deci-sions concerning employment underany program or activity to which thispart applies in a manner which ensuresthat discrimination on the basis ofhandicap does not occur and may notlimit, segregate, or classify applicantsor employees in any way that ad-versely affects their opportunities orstatus because of handicap.

(c) A recipient may not participate ina contractual or other relationshipthat has the effect of subjecting quali-fied handicapped applicants or employ-ees to discrimination prohibited bythis subpart. The relationships referredto in this paragraph include relation-ships with employment and referralagencies, with labor unions, with orga-nizations providing or administeringfringe benefits to employees of the re-cipient, and with organizations provid-ing training and apprenticeship pro-grams.

(d) Specific activities. The provisionsof this subpart apply to:


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(1) Recruitment, advertising, and theprocessing of applications for employ-ment;

(2) Hiring, upgrading, promotion,award of tenure, demotion, transfer,layoff, termination, right of returnfrom layoff and rehiring;

(3) Rates of pay or any other form ofcompensation and changes in com-pensation;

(4) Job assignments, job classifica-tions, organizational structures, posi-tion descriptions, lines of progression,and seniority lists;

(5) Leaves of absence, sick leave, orany other leave;

(6) Fringe benefits available by vir-tue of employment, whether or not ad-ministered by the recipient;

(7) Selection and financial supportfor training, including apprenticeship,professional meetings, conferences, andother related activities, and selectionfor leaves of absence to pursue train-ing;

(8) Employer sponsored activities, in-cluding social or recreational pro-grams; and

(9) Any other term, condition, orprivilege of employment.

(e) A recipient’s obligation to complywith this subpart is not affected by anyinconsistent term of any collectivebargaining agreement to which it is aparty.

§ 1170.22 Reasonable accommodation.(a) A recipient shall make reasonable

accommodation to the known physicalor mental limitations of an otherwisequalified handicapped applicant or em-ployee unless the recipient can dem-onstrate that the accommodationwould impose an undue hardship on theoperation of its program.

(b) Reasonable accommodation mayinclude:

(1) Making facilities used by employ-ees readily accessible to and usable byhandicapped persons, and

(2) Job restructuring, part-time ormodified work schedules, acquisitionor modification of equipment or de-vices, the provision of readers or inter-preters, and other similar actions.

(c) In determining pursuant to para-graph (a) of this section whether an ac-commodation would impose an unduehardship on the operation of a recipi-

ent’s program, factors to be consideredinclude:

(1) The overall size of the recipient’sprogram with respect to number of em-ployees, number and type of facilities,and size of budget;

(2) The type of the recipient’s oper-ation, including the composition andstructure of the recipient’s workforce;and

(3) The nature and cost of the accom-modation needed.

§ 1170.23 Employment criteria.(a) A recipient may not make use of

any employment test or other selectioncriterion that screens out or tends toscreen out handicapped persons or anyclass of handicapped persons unless:

(1) The test score or other selectioncriterion, as used by the recipient, isshown to be job-related for the positionin question; and

(2) Alternative job-related tests orcriteria are unavailable.

(b) A recipient shall select and ad-minister tests concerning employmentso as best to ensure that, when admin-istered to an applicant or employeewho has a handicap that impairs sen-sory, manual, or speaking skills, thetest results accurately reflect the ap-plicant’s or employee’s job skills, apti-tude, or other factors relevant to ade-quate performance of the job in ques-tion.

§ 1170.24 Preemployment inquiries.(a) A recipient may not, except as

provided below, conduct apreemployment medical examination,make preemployment inquiry as towhether the applicant is a handicappedperson, or inquire as to the nature orseverity of a handicap. A recipientmay, however, make preemploymentinquiry into an applicant’s ability toperform job-related functions.

(b) If a recipient is taking remedialaction to correct the effects of past dis-crimination, if a recipient is takingvoluntary action to overcome the ef-fects of conditions that resulted in lim-ited participation in its federally as-sisted program or activity, or if a re-cipient is taking affirmative actionunder section 503 of the RehabilitationAct, the recipient may invite appli-cants for employment to indicate


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whether and to what extent they arehandicapped, provided, that:

(1) The recipient states clearly onany written questionnaire used for thispurpose or makes clear orally if nowritten questionnaire is used that theinformation requested is intended foruse solely in connection with its reme-dial action obligations or its voluntaryor affirmative action efforts; and

(2) The recipient states clearly thatthe information is being requested on avoluntary basis, that it will be keptconfidential as provided in paragraph(d) of this section, that refusal to pro-vide it will not subject the applicant oremployee to any adverse treatment,and that it will be used only in accord-ance with this part.

(c) Nothing in this section shall pro-hibit a recipient from conditioning anoffer of employment on the results of amedical examination conducted priorto the employee’s entrance on duty,provided, that:

(1) All entering employees are sub-jected to such an examination regard-less of handicap; and

(2) The results of such an examina-tion are used only in accordance withthe requirements of this part.

(d) Information obtained in accord-ance with this section as to the medi-cal condition or history of the appli-cant shall be collected and maintainedon separate forms that shall be ac-corded confidentiality as medicalrecords, except that:

(1) Supervisors and managers may beinformed regarding restrictions on thework or duties of handicapped personsand regarding necessary accommoda-tions;

(2) First aid and safety personnelmay be informed, where appropriate, ifthe condition might require emergencytreatment; and

(3) Government officials investigat-ing compliance with the Act shall beprovided relevant information upon re-quest.

§§ 1170.25—1170.30 [Reserved]

Subpart D—Program Accessibility

§ 1170.31 Discrimination prohibited.No qualified handicapped person

shall, because recipient’s facilities are

inaccessible to or unusable by handi-capped persons, be denied the benefitsof, be excluded from participation in,or otherwise be subjected to discrimi-nation under any program or activityto which this part applies.

§ 1170.32 Existing facilities.

(a) Program accessibility. A recipientshall operate each program or activityto which this part applies so that theprogram or activity, when viewed in itsentirety, is readily accessible to handi-capped persons. This paragraph doesnot necessarily require a recipient tomake each of its existing facilities orevery part of a facility accessible toand usable by handicapped persons.

(b) Methods. A recipient may complywith the requirements of paragraph (a)of this section through such means asredesign of equipment, reassignment ofclasses or other services to accessiblebuildings, alteration of existing facili-ties and construction of new facilitiesin conformance with the requirementsof § 1170.33, or any other methods thatresult in making its program or activ-ity accessible to handicapped persons.A recipient is not required to makestructural changes in existing facilitieswhere other methods are effective inachieving compliance with paragraph(a) of this section. In choosing amongavailable methods for meeting the re-quirement of paragraph (a) of this sec-tion, a recipient shall give priority tothose methods that offer program andactivities to handicapped persons inthe most integrated setting appro-priate.

(c) Time period. A recipient shall com-ply with the requirement of paragraph(a) of this section within sixty days ofthe effective date of this part exceptthat where structural changes in facili-ties are necessary, such changes shallbe made within three years of the ef-fective date of this part, but in anyevent as expeditiously as possible.

(d) Transition plan. In the event thatstructural changes to facilities are nec-essary to meet the requirement ofparagraph (a) of this section, a recipi-ent shall develop, within one year ofthe effective date of this part, a transi-tion plan setting forth the steps nec-essary to complete such changes. The


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plan shall be developed with the assist-ance of interested persons, includinghandicapped persons or organizationsrepresenting handicapped persons. Acopy of the transition plan shall bemade available upon request for publicinspection. The plan shall, at a mini-mum:

(1) Identify physical obstacles in therecipient’s facilities that limit the ac-cessibility of its program or activity tohandicapped persons;


(3) Specify the schedule for takingthe steps necessary to achieve full pro-gram accessibility and, if the time pe-riod of the transition plan is longerthan one year, identify the steps thatwill be taken during each year of thetransition period; and

(4) Indicate the person responsible forimplementation of the plan.

(e) Notice. The recipient shall adoptand implement procedures to ensurethat interested persons, including per-sons with impaired vision or hearingcan obtain information as to the exist-ence and location of services, activi-ties, and facilities that are accessibleto and usable by handicapped persons.

§ 1170.33 New construction.(a) Design, construction, and alteration.

New facilities shall be designed andconstructed to be readily accessible toand usable by handicapped persons. Al-terations to existing facilities shall, tothe maximum extent feasible, be de-signed and constructed to be readilyaccessible to and usable by handi-capped persons.

(b) Conformance with Uniform FederalAccessibility Standards. (1) Effective asof January 18, 1991, design, construc-tion, or alteration of buildings in con-formance with sections 3-8 of the Uni-form Federal Accessibility Standards(USAF) (appendix A to 41 CFR subpart101–19.6) shall be deemed to complywith the requirements of this sectionwith respect to those buildings. Depar-tures from particular technical andscoping requirements of UFAS by theuse of other methods are permittedwhere substantially equivalent orgreater access to and usability of thebuilding is provided.

(2) For purposes of this section, sec-tion 4.1.6(1)(g) of UFAS shall be inter-preted to exempt from the require-ments of UFAS only mechanical roomsand other spaces that, because of theirintended use, will not require acces-sibility to the public or beneficiaries orresult in the employment or residencetherein of persons with physical handi-caps.

(3) This section does not require re-cipients to make building alterationsthat have little likelihood of being ac-complished without removing or alter-ing a load-bearing structural member.

[46 FR 55897, Nov. 12, 1981, as amended at 55FR 52138, 52142, Dec. 19, 1990]

§ 1170.34 Historic properties. [Re-served]

§§ 1170.35—1170.40 [Reserved]

[46 FR 55897, Nov. 12, 1981, as amended at 55FR 52138, 52142, Dec. 19, 1990]

Subpart E—PostsecondaryEducation

§ 1170.41 Application of this subpart.

Subpart E applies to postsecondaryeducation programs and activities, in-cluding postsecondary vocational edu-cation programs and activities, that re-ceive or benefit from Federal financialassistance and to recipients that oper-ate, or that receive or benefit fromFederal financial assistance for the op-eration of, such programs or activities.

§ 1170.42 Admissions and recruitment.

(a) General. Qualified handicappedpersons may not, on the basis of handi-cap, be denied admission or be sub-jected to discrimination in admissionor recruitment by a recipient to whichthis subpart applies.

(b) Admissions. In administering itsadmission policies, a recipient to whichthis subpart applies:

(1) May not apply limitations uponthe number or proportion of handi-capped persons who may be admitted;

(2) May not make use of any test orcriterion for admission that has a dis-proportionate, adverse effect on handi-capped persons or any class of handi-capped persons unless


467


(i) The test or criterion, as used bythe recipient, has been validated as apredictor of success in the educationprogram or activity in question and

(ii) Alternate tests or criteria thathave a less disproportionate, adverseeffect are not shown by the Chairmanto be available.

(3) Shall assure itself that:(i) Admissions tests are selected and

administered so as best to ensure that,when a test is administered to an appli-cant who has a handicap that impairssensory, manual, or speaking skills,the test results accurately reflect theapplicant’s aptitude or achievementlevel or whatever other factor the testpurports to measure, rather than re-flecting the applicant’s impaired sen-sory, manual, or speaking skills (ex-cept where those skills are the factorsthat the test purports to measure);

(ii) Admissions tests that are de-signed for persons with impaired sen-sory, manual, or speaking skills are of-fered as often and in as timely a man-ner as are other admissions tests; and

(iii) Admissions tests are adminis-tered in facilities that, on the whole,are accessible to handicapped persons;and

(4) Except as provided in paragraph(c) of this section, may not makepreadmission inquiry as to whether anapplicant for admission is a handi-capped person but, after admission,may make inquiries on a confidentialbasis as to handicaps that may requireaccommodation.

(c) Preadmission inquiry exception.When a recipient is taking remedial ac-tion to correct the effects of past dis-crimination pursuant to § 1170.52(a) orwhen a recipient is taking voluntaryaction to overcome the effects of condi-tions that resulted in limited partici-pation in its federally assisted programor activity pursuant to § 1170.52(b), therecipient may invite applicants for ad-mission to indicate whether and towhat extent they are handicapped, pro-vided, that:

(1) The recipient states clearly onany written questionnaire used for thispurpose or makes clear orally if nowritten questionnaire is used that theinformation requested is intended foruse solely in connection with its reme-

dial action obligations or its voluntaryaction efforts; and

(2) The recipient states clearly thatthe information is being requested on avoluntary basis, that it will be keptconfidential, that refusal to provide itwill not subject the applicant to anyadverse treatment, and that it will beused only in accordance with this part.

(d) Validity studies. For the purpose ofparagraph (b)(2) of this section, a recip-ient may base prediction equations onfirst year grades, but shall conductperiodic validity studies against thecriterion of overall success in the edu-cation program or activity in questionin order to monitor the general valid-ity of the test scores.

§ 1170.43 Treatment of students; gen-eral.

(a) No qualified handicapped studentshall, on the basis of handicap, be ex-cluded from participation in, be deniedthe benefits of, or otherwise be sub-jected to discrimination under any aca-demic, research, occupational training,housing, health insurance, counseling,financial aid, physical education, ath-letics, recreation, transportation, orother postsecondary education pro-gram or activity to which this subpartapplies.

(b) A recipient to which this subpartapplies that considers participation bystudents in education programs or ac-tivities not operated wholly by the re-cipient as part of, or equivalent to, aneducation program or activity operatedby the recipient shall assure itself thatthe other education program or activ-ity, as a whole, provides an equal op-portunity for the participation ofqualified handicapped persons.

(c) A recipient to which this subpartapplies may not, on the basis of handi-cap, exclude any qualified handicappedstudent from any course, course ofstudy, or other part of its educationprogram or activity.

(d) A recipient to which this subpartapplies shall operate its programs andactivities in the most integrated set-ting appropriate.

§ 1170.44 Academic adjustments.

(a) Academic requirements. A recipientto which this subpart applies shall


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make such modifications to its aca-demic requirements as are necessary toensure that such requirements do notdiscriminate or have the effect of dis-criminating, on the basis of handicap,against a qualified handicapped appli-cant or student. Academic require-ments that the recipient can dem-onstrate are essential to the programof instruction being pursued by suchstudent or to any directly related li-censing requirement will not be re-garded as discriminatory within themeaning of this section. Modificationsmay include changes in the length oftime permitted for the completion ofdegree requirements, substitution ofspecific courses required for the com-pletion of degree requirements, and ad-aptation of the manner in which spe-cific courses are conducted.

(b) Other rules. A recipient to whichthis subpart applies may not imposeupon handicapped students other rules,such as the prohibitation of tape re-corders in classrooms or of dog guidesin campus buildings, that have the ef-fect of limiting the participation ofhandicapped students in the recipient’seducation program or activity.

(c) Course examinations. In its courseexaminations or other procedures forevaluating students’ academic achieve-ment in its program, a recipient towhich this subpart applies shall pro-vide such methods for evaluating theachievement of students who have ahandicap that impairs sensory, man-ual, or speaking skills as will best en-sure that the results of the evaluationrepresents the student’s achievementin the course, rather than reflectingthe student’s impaired sensory, man-ual, or speaking skills (except wheresuch skills are the factors that the testpurports to measure).

(d) Auxiliary aids. (1) A recipient towhich this subpart applies shall takesuch steps as are necessary to ensurethat no handicapped student is deniedthe benefits of, excluded from partici-pation in, or otherwise subjected todiscrimination under the educationprogram or activity operated by the re-cipient because of the absence of edu-cational auxiliary aids for studentswith impaired sensory, manual, orspeaking skills.

(2) Auxiliary aids may include tapedtexts, interpreters or other effectivemethods of making orally deliveredmaterials available to students withhearing impairments, readers in librar-ies for students with visual impair-ments, classroom equipment adaptedfor use by students with manual im-pairments, and other similar servicesand actions. Recipients need not pro-vide attendants, individually pre-scribed devices, readers for personaluse or study, or other devices or serv-ices of a personal nature.

§ 1170.45 Housing.

(a) Housing provided by the recipient. Arecipient that provides housing to itsnonhandicapped students shall providecomparable, convenient, and accessiblehousing to handicapped students at thesame cost as to others. At the end ofthe transition period provided for inSubpart D, such housing shall be avail-able in sufficient quantity and varietyso that the scope of handicapped stu-dents’ choice of living accommodationsis, as a whole, comparable to that ofnonhandicapped students.

(b) Other housing. A recipient that as-sists any agency, organization, or per-son in making housing available to anyof its students shall take such actionas may be necessary to assure itselfthat such housing is, as a whole, madeavailable in a manner that does not re-sult in discrimination on the basis ofhandicap.

§ 1170.46 Financial and employmentassistance to students.

(a) Provision of financial assistance. (1)In providing financial assistance toqualified handicapped persons, a recipi-ent to which this subpart applies maynot

(i) On the basis of handicap, provideless assistance than is provided to non-handicapped persons, limit eligibilityfor assistance, or otherwise discrimi-nate or

(ii) Assist any entity or person thatprovides assistance to any of the re-cipient’s students in a manner that dis-criminates against qualified handi-capped persons on the basis of handi-cap.


469


(2) A recipient may administer or as-sist in the administration of scholar-ships, fellowships, or other forms of fi-nancial assistance established underwills, trusts, bequests, or similar legalinstruments that require awards to bemade on the basis of factors that dis-criminate or have the effect of dis-criminating on the basis of handicaponly if the overall effect of the awardof scholarships, fellowships, and otherforms of financial assistance is not dis-criminatory on the basis of handicap.

(b) Assistance in making available out-side employment. A recipient that as-sists any agency, organization, or per-son in providing employment opportu-nities to any of its students shall as-sure itself that such employment op-portunities, as a whole, are made avail-able in a manner that would not vio-late Subpart C if they were provided bythe recipient.

(c) Employment of students by recipi-ents. A recipient that employs any ofits students may not do so in a mannerthat violates Subpart C.

§ 1170.47 Nonacademic services.(a) Physical education and athletics. (1)

In providing physical education coursesand athletics and similar programs andactivities to any of its students, a re-cipient to which this subpart appliesmay not discriminate on the basis ofhandicap. A recipient that offers phys-ical education courses or that operatesor sponsors intercollegiate, club, or in-tramural athletics shall provide toqualified handicapped students anequal opportunity for participation inthese activities.

(2) A recipient may offer to handi-capped students physical education andathletic activities that are separate ordifferent only if separation or differen-tiation is consistent with the require-ments of § 1170.43(d) and only if noqualified handicapped student is deniedthe opportunity to compete for teamsor to participate in courses that arenot separate or different.

(b) Counseling and placement services.A recipient to which this subpart ap-plies that provides personal, academic,or vocational counseling, guidance, orplacement services to its students shallprovide these services without dis-crimination on the basis of handicap.

The recipient shall ensure that quali-fied handicapped students are notcounseled toward more restrictive ca-reer objectives than are nonhandi-capped students with similar interestsand abilities. This requirement doesnot preclude a recipient from providingfactual information about licensingand certification requirements thatmay present obstacles to handicappedpersons in their pursuit of particularcareers.

(c) Social organizations. A recipientthat provides significant assistance tofraternities, sororities, or similar orga-nizations shall assure itself that themembership practices of such organiza-tions do not permit discrimination oth-erwise prohibited by this subpart.

§§ 1170.48—1170.50 [Reserved]

Subpart F—Enforcement

§ 1170.51 Assurances required.

(a) Assurances. An applicant for Fed-eral financial assistance for a programor activity to which this part appliesshall submit an assurance, on a formspecified by the responsible Endow-ment official, that the program will beoperated in compliance with this part.An applicant may incorporate these as-surances by reference in subsequent ap-plications to the Endowment.

(b) Duration of obligation. (1) In thecase of Federal financial assistance ex-tended in the form of real property orto provide real property or structureson the property, the assurance will ob-ligate the recipient or, in the case of asubsequent transfer, the transferee, forthe period during which the real prop-erty or structures are used for the pur-pose for which Federal financial assist-ance is extended or for another purposeinvolving the provision of similar serv-ices or benefits.

(2) In the case of Federal financial as-sistance extended to provide personalproperty, the assurance will obligatethe recipient for the period duringwhich it retains ownership or posses-sion of the property.

(3) In all other cases the assurancewill obligate the recipient for the pe-riod during which Federal financial as-sistance is extended.


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(c) Covenants. (1) Where Federal fi-nancial assistance is provided in theform of real property or interest in theproperty from the Endowment, the in-strument effecting or recording thistransfer shall contain a covenant run-ning with the land to assure non-discrimination for the period duringwhich the real property is used for apurpose for which the Federal financialassistance is extended or for anotherpurpose involving the provision ofsimilar services or benefits.

(2) Where no transfer of property isinvolved but property is purchased orimproved with Federal financial assist-ance, the recipient shall agree to in-clude the covenant described in para-graph (b)(2) of this section in the in-strument effecting or recording anysubsequent transfer of the property.

(3) Where Federal financial assist-ance is provided in the form of realproperty or interest in the propertyfrom the Endowment, the covenantshall also include a condition coupledwith a right to be reserved by the En-dowment to revert title to the propertyin the event of a breach of the cov-enant. If a transferee of real propertyproposes to mortgage or to otherwiseencumber the real property as securityfor financing construction of new, orimprovement of existing, facilities onthe property for the purposes for whichthe property was transferred, the re-sponsible Endowment official may,upon request of the transferee and ifnecessary to accomplish such financingand upon such conditions as he or shedeems appropriate, agree to forbear theexercise of such right to revert title forso long as the lien of such mortgage orother encumbrance remains effective.

§ 1170.52 Remedial action, voluntaryaction, and self-evaluation.

(a) Remedial action. (1) If the Chair-man finds that a recipient has dis-criminated against persons on the basisof handicap in violation of section 504or this part, the recipient shall takesuch remedial action as the Chairmandeems necessary to overcome the ef-fects of the discrimination.

(2) Where a recipient is found to havediscriminated against persons on thebasis of handicap in violation of sec-tion 504 or this part and where another

recipient exercises control over the re-cipient that has discriminated, theChairman, where appropriate, may re-quire either or both recipients to takeremedial action.

(3) The Chairman may, where nec-essary to overcome the effects of dis-crimination in violation of section 504or this part, require a recipient to takeremedial action:

(i) With respect to handicapped per-sons who are no longer participants inthe recipient’s program but who wereparticipants in the program when suchdiscrimination occurred, or

(ii) With respect to handicapped per-sons who would have been participantsin the program had the discriminationnot occurred.

(b) Voluntary action. A recipient maytake steps, in addition to any actionthat is required by this part, to over-come the effects of conditions that re-sulted in limited participation in therecipient’s program or activity byqualified handicapped persons.

(c) A recipient shall within one yearof the effective date of this part:

(1) Evaluate, with the assistance ofinterested persons, including handi-capped persons or organizations rep-resenting handicapped persons, its cur-rent policies and practices and the ef-fects thereof that do not or may notmeet the requirements of this part;

(2) Modify, after consultation withinterested persons, including handi-capped persons or organizations rep-resenting handicapped persons, anypolicies and practices that do not meetthe requirements of this part;

(3) Take, after consultation with in-terested persons, including handi-capped persons or organizations rep-resenting handicapped persons, appro-priate remedial steps to eliminate theeffects of any discrimination that re-sulted from adherence to these policiesand practices.

(4) A recipient that employs fifteenor more persons shall maintain on file,make available for public inspection,and provide to the Endowment upon re-quest, for at least three years followingcompletion of the self-evaluation:

(i) A list of the interested personsconsulted;

(ii) A description of areas examinedand any problems identified; and


471


(iii) A description of any modifica-tions made and of any remedial stepstaken.

(5) The completed self-evaluationshould be signed by a responsible offi-cial designated to coordinate the re-cipient’s efforts in connection with thissection.

§ 1170.53 Designation of responsibleemployee and adoption of grievanceprocedures.

(a) Designation of responsible employee.A recipient that employs fifteen ormore persons shall designate at leastone person to coordinate its efforts tocomply with this part.

(b) Adoption of grievance procedures. Arecipient that employs fifteen or morepersons shall adopt grievance proce-dures that incorporate appropriate dueprocess standards and that provide forthe prompt and equitable resolution ofcomplaints alleging any action prohib-ited by this part. Such procedures neednot be established with respect to com-plaints from applicants for employ-ment or from applicants for admissionto postsecondary educational institu-tions.

§ 1170.54 Notice.(a) A recipient that employs fifteen

or more persons shall take appropriateinitial and continuing steps to notifyparticipants, beneficiaries, applicants,and employees, including those withimpaired vision or hearing, and unionsor professional organizations holdingcollective bargaining or professionalagreements with the recipient that itdoes not discriminate on the basis ofhandicap in violation of section 504 andthis part. The notification shall state,where appropriate, that the recipientdoes not discriminate in admission oraccess to, or treatment or employmentin, its programs and activities. The no-tification shall also include an identi-fication of the responsible employeedesignated pursuant to § 1170.53(a). Arecipient shall make the initial notifi-cation required by this paragraph with-in 90 days of the effective date of thispart. Methods of initial and continuingnotification may include the posting ofnotices, publication in newspapers andmagazines, placement of notices in re-cipients’ publication, and distribution

of memoranda or other written com-munications.

(b) If a recipient publishes or uses re-cruitment materials or publicationscontaining general information that itmakes available to participants, bene-ficiaries, applicants, or employees, itshall include in those materials or pub-lications a statement of the policy de-scribed in paragraph (a) of this section.A recipient may meet the requirementof this paragraph either by includingappropriate inserts in existing mate-rials and publications or by revisingand reprinting the materials and publi-cations.

§ 1170.55 Endowment enforcement andcompliance procedures.

The procedural provisions applicableto Title VI of the Civil Rights Act of1964 apply to this part. These proce-dures are found in §§ 1110.6 through1110.11 of part 1100 of this title.

§§ 1170.56—1170.99 [Reserved]


Subpart A—General

Sec.1174.1 Purpose and scope of this part.1174.2 Scope of subpart.1174.3 Definitions.1174.4 Applicability.1174.5 Effect on other issuances.1174.6 Additions and exceptions.









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ments.1174.52 . Collection of amounts due.


AUTHORITY: 20 U.S.C. 959(a)(1).



Subpart A—General

§ 1174.1 Purpose and scope of thispart.

This part establishes uniform admin-istrative rules for Federal grants andcooperative agreements and subawardsto State, local and Indian tribal gov-ernments.


pertaining to this part and proceduresfor control of exceptions from thispart.


charges incurred by the grantee duringa given period requiring the provisionof funds for: (1) Goods and other tan-gible property received; (2) services

performed by employees, contractors,subgrantees, subcontractors, and otherpayees; and (3) other amounts becom-ing owed under programs for which nocurrent services or performance is re-quired, such as annuities, insuranceclaims, and other benefit payments.



Administrative requirements meanthose matters common to grants ingeneral, such as financial management,kinds and frequency of reports, and re-tention of records. These are distin-guished from programmatic require-ments, which concern matters that canbe treated only on a program-by-pro-gram or grant-by-grant basis, such askinds of activities that can be sup-ported by grants under a particularprogram.


Cash contributions means the grant-ee’s cash outlay, including the outlayof money contributed to the grantee orsubgrantee by other public agenciesand institutions, and private organiza-tions and individuals. When authorizedby Federal legislation, Federal fundsreceived from other assistance agree-ments may be considered as grantee orsubgrantee cash contributions.

Contract means (except as used in thedefinitions for grant and subgrant inthis section and except where qualifiedby Federal) a procurement contract


473


under a grant or subgrant, and means aprocurement subcontract under a con-tract.




Expenditure report means: (1) For non-construction grants, the SF–269 ‘‘Fi-nancial Status Report’’ (or other equiv-alent report); (2) for constructiongrants, the SF–271 ‘‘Outlay Report andRequest for Reimbursement’’ (or otherequivalent report).

Federally recognized Indian tribal gov-ernment means the governing body or agovernmental agency of any Indiantribe, band, nation, or other organizedgroup or community (including anyNative village as defined in section 3 ofthe Alaska Native Claims SettlementAct, 85 Stat 688) certified by the Sec-retary of the Interior as eligible for thespecial programs and services providedby him through the Bureau of IndianAffairs.


Grant means an award of financial as-sistance, including cooperative agree-ments, in the form of money, or prop-erty in lieu of money, by the FederalGovernment to an eligible grantee. Theterm does not include technical assist-ance which provides services instead ofmoney, or other assistance in the formof revenue sharing, loans, loan guaran-tees, interest subsidies, insurance, ordirect appropriations. Also, the termdoes not include assistance, such as afellowship or other lump sum award,which the grantee is not required to ac-count for.





Outlays (expenditures) mean chargesmade to the project or program. Theymay be reported on a cash or accrualbasis. For reports prepared on a cashbasis, outlays are the sum of actualcash disbursement for direct chargesfor goods and services, the amount ofindirect expense incurred, the value ofin-kind contributions applied, and theamount of cash advances and paymentsmade to contractors and subgrantees.For reports prepared on an accrued ex-penditure basis, outlays are the sum ofactual cash disbursements, the amountof indirect expense incurred, the valueof inkind contributions applied, andthe new increase (or decrease) in theamounts owed by the grantee for goodsand other property received, for serv-ices performed by employees, contrac-tors, subgrantees, subcontractors, andother payees, and other amounts be-coming owed under programs for whichno current services or performance arerequired, such as annuities, insuranceclaims, and other benefit payments.

Percentage of completion method refersto a system under which payments aremade for construction work accordingto the percentage of completion of the


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45 CFR Ch. XI (10–1–97 Edition)§ 1174.4

work, rather than to the grantee’s costincurred.





Subgrant means an award of financialassistance in the form of money, orproperty in lieu of money, made undera grant by a grantee to an eligible sub-grantee. The term includes financialassistance when provided by contrac-tual legal agreement, but does not in-clude procurement purchases, nor doesit include any form of assistance whichis excluded from the definition of grantin this part.



Suspension means depending on thecontext, either (1) temporary with-drawal of the authority to obligategrant funds pending corrective actionby the grantee or subgrantee or a deci-sion to terminate the grant, or (2) anaction taken by a suspending official inaccordance with agency regulationsimplementing E.O. 12549 to imme-diately exclude a person from partici-

pating in grant transactions for a pe-riod, pending completion of an inves-tigation and such legal or debarmentproceedings as may ensue.

Termination means permanent with-drawal of the authority to obligate pre-viously-awarded grant funds beforethat authority would otherwise expire.It also means the voluntary relinquish-ment of that authority by the granteeor subgrantee. Termination does not in-clude: (1) Withdrawal of funds awardedon the basis of the grantee’s underesti-mate of the unobligated balance in aprior period; (2) withdrawal of the un-obligated balance as of the expirationof a grant; (3) refusal to extend a grantor award additional funds, to make acompeting or noncompeting continu-ation, renewal, extension, or supple-mental award; or (4) voiding of a grantupon determination that the award wasobtained fraudulently, or was other-wise illegal or invalid from inception.



Unliquidated obligations for reportsprepared on a cash basis mean theamount of obligations incurred by thegrantee that has not been paid. For re-ports prepared on an accrued expendi-ture basis, they represent the amountof obligations incurred by the granteefor which an outlay has not been re-corded.

Unobligated balance means the por-tion of the funds authorized by theFederal agency that has not been obli-gated by the grantee and is determinedby deducting the cumulative obliga-tions from the cumulative funds au-thorized.


(a) General. Subparts A through D ofthis part apply to all grants and sub-grants to governments, except whereinconsistent with Federal statutes or


475


with regulations authorized in accord-ance with the exception provision of§ 1174.6, or:


(2) The block grants authorized bythe Omnibus Budget ReconciliationAct of 1981 (Community Services; Pre-ventive Health and Health Services; Al-cohol, Drug Abuse, and Mental HealthServices; Maternal and Child HealthServices; Social Services; Low-IncomeHome Energy Assistance; States’ Pro-gram of Community DevelopmentBlock Grants for Small Cities; and Ele-mentary and Secondary Educationother than programs administered bythe Secretary of Education under TitleV, Subtitle D, Chapter 2, Section 583—the Secretary’s discretionary grantprogram) and Titles I–III of the JobTraining Partnership Act of 1982 andunder the Public Health Services Act(Section 1921), Alcohol and Drug AbuseTreatment and Rehabilitation BlockGrant and Part C of Title V, MentalHealth Service for the Homeless BlockGrant).


(i) Aid to Needy Families with De-pendent Children (Title IV–A of theAct, not including the Work IncentiveProgram (WIN) authorized by section402(a)19(G); HHS grants for WIN aresubject to this part);

(ii) Child Support Enforcement andEstablishment of Paternity (Title IV–Dof the Act);

(iii) Foster Care and Adoption Assist-ance (Title IV–E of the Act);

(iv) Aid to the Aged, Blind, and Dis-abled (Titles I, X, XIV, and XVI–AABDof the Act); and

(v) Medical Assistance (Medicaid)(Title XIX of the Act) not including theState Medicaid Fraud Control programauthorized by section 1903(a)(6)(B).















(b) Entitlement programs. Entitlementprograms enumerated above in§ 1174.4(a) (3) through (8) are subject toSubpart E.

§ 1174.5 Effect on other issuances.

All other grants administration pro-visions of codified program regula-tions, program manuals, handbooksand other nonregulatory materialswhich are inconsistent with this partare superseded, except to the extentthey are required by statute, or au-thorized in accordance with the excep-tion provision in § 1174.6.

§ 1174.6 Additions and exceptions.

(a) For classes of grants and granteessubject to this part, Federal agencies


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45 CFR Ch. XI (10–1–97 Edition)§ 1174.10

may not impose additional administra-tive requirements except in codifiedregulations published in the FEDERALREGISTER.







(b) Authorized forms and instructionsfor governmental organizations. (1) In ap-plying for grants, applicants shall onlyuse standard application forms or thoseprescribed by the granting agency withthe approval of OMB under the Paper-work Reduction Act of 1980.


(3) Applicants must follow all appli-cable instructions that bear OMBclearance numbers. Federal agenciesmay specify and describe the programs,functions, or activities that will beused to plan, budget, and evaluate thework under a grant. Other supple-mentary instructions may be issuedonly with the approval of OMB to theextent required under the PaperworkReduction Act of 1980. For any stand-ard form, except the SF–424 facesheet,Federal agencies may shade out or in-

struct the applicant to disregard anyline item that is not needed.


§ 1174.11 State plans.

(a) Scope. The statutes for some pro-grams require States to submit plansbefore receiving grants. Under regula-tions implementing Executive Order12372, ‘‘Intergovernmental Review ofFederal Programs,’’ States are allowedto simplify, consolidate and substituteplans. This section contains additionalprovisions for plans that are subject toregulations implementing the Execu-tive order.






(d) Amendments. A State will amend aplan whenever necessary to reflect: (1)New or revised Federal statutes or reg-ulations or (2) a material change in anyState law, organization, policy, orState agency operation. The State willobtain approval for the amendment andits effective date but need submit forapproval only the amended portions ofthe plan.


477
















(c) If an awarding agency decides toimpose such conditions, the awardingofficial will notify the grantee or sub-grantee as early as possible, in writing,of:














(3) Internal control. Effective controland accountability must be maintainedfor all grant and subgrant cash, realand personal property, and other as-sets. Grantees and subgrantees mustadequately safeguard all such propertyand must assure that it is used solelyfor authorized purposes.

(4) Budget control. Actual expendi-tures or outlays must be comparedwith budgeted amounts for each grantor subgrant. Financial information


478

45 CFR Ch. XI (10–1–97 Edition)§ 1174.21

must be related to performance or pro-ductivity data, including the develop-ment of unit cost information when-ever appropriate or specifically re-quired in the grant or subgrant agree-ment. If unit cost data are required, es-timates based on available documenta-tion will be accepted whenever pos-sible.





§ 1174.21 Payment.


(b) Basic standard. Methods and pro-cedures for payment shall minimizethe time elapsing between the transferof funds and disbursement by thegrantee or subgrantee, in accordancewith Treasury regulations at 31 CFRPart 205.



(e) Working capital advances. If agrantee cannot meet the criteria foradvance payments described in para-graph (c) of this section, and the Fed-eral agency has determined that reim-bursement is not feasible because thegrantee lacks sufficient working cap-ital, the awarding agency may providecash or a working capital advancebasis. Under this procedure the award-ing agency shall advance cash to thegrantee to cover its estimated dis-bursement needs for an initial periodgenerally geared to the grantee’s dis-bursing cycle. Thereafter, the awardingagency shall reimburse the grantee forits actual cash disbursements. Theworking capital advance method ofpayment shall not be used by granteesor subgrantees if the reason for usingsuch method is the unwillingness or in-ability of the grantee to provide timelyadvances to the subgrantee to meet thesubgrantee’s actual cash disburse-ments.

(f) Effect of program income, refunds,and audit recoveries on payment. (1)


479


Grantees and subgrantees shall dis-burse repayments to and interestearned on a revolving fund before re-questing additional cash payments forthe same activity.









(i) Interest earned on advances. Exceptfor interest earned on advances offunds exempt under the Intergovern-mental Cooperation Act (31 U.S.C. 6501

et seq.) and the Indian Self-Determina-tion Act (23 U.S.C. 450), grantees andsubgrantees shall promptly, but atleast quarterly, remit interest earnedon advances to the Federal agency. Thegrantee or subgrantee may keep inter-est amounts up to $100 per year for ad-ministrative expenses.

§ 1174.22 Allowable costs.(a) Limitation on use of funds. Grant

funds may be used only for:(1) The allowable costs of the grant-

ees, subgrantees and cost-type contrac-tors, including allowable costs in theform of payments to fixed-price con-tractors; and










48 CFR Part 31. ContractCost Principles and Proce-dures, or uniform cost ac-counting standards thatcomply with cost principlesacceptable to the Federalagency.




480

45 CFR Ch. XI (10–1–97 Edition)§ 1174.24








(3) Cost or contributions counted to-wards other Federal costs-sharing require-ments. Neither costs nor the values ofthird party in-kind contributions maycount towards satisfying a cost sharingor matching requirement of a grantagreement if they have been or will becounted towards satisfying a cost shar-ing or matching requirement of an-other Federal grant agreement, a Fed-eral procurement contract, or anyother award of Federal funds.

(4) Costs financed by program income.Costs financed by program income, asdefined in § 1174.25, shall not count to-

wards satisfying a cost sharing ormatching requirement unless they areexpressly permitted in the terms of theassistance agreement. (This use of gen-eral program income is described in§ 1174.25(g).)




(ii) Some third party in-kind con-tributions are goods and services that,if the grantee, subgrantee, or contrac-tor receiving the contribution had topay for them, the payments would havebeen an indirect costs. Costs sharing ormatching credit for such contributionsshall be given only if the grantee, sub-grantee, or contractor has established,along with its regular indirect costrate, a special rate for allocating to in-dividual projects or programs the valueof the contributions.



481








(2) If a third party donates the use ofequipment or space in a building butretains title, the contribution will bevalued at the fair rental rate of theequipment or space.





(ii) If approval is not obtained underparagraph (e)(2)(i) of this section, noamount may be counted for donatedland, and only depreciation or use al-lowances may be counted for donatedequipment and buildings. The deprecia-tion or use allowances for this propertyare not treated as third party in-kindcontributions. Instead, they are treat-ed as costs incurred by the grantee orsubgrantee. They are computed and al-located (usually as indirect costs) inaccordance with the cost principlesspecified in § 1174.22, in the same way asdepreciation or use allowances for pur-chased equipment and buildings. Theamount of depreciation or use allow-ances for donated equipment and build-ings is based on the property’s marketvalue at the time it was donated.

(f) Valuation of grantee or subgranteedonated real property for construction/ac-quisition. If a grantee or subgrantee do-nates real property for a constructionor facilities acquisition project, thecurrent market value of that propertymay be counted as cost sharing ormatching. If any part of the donatedproperty was acquired with Federal


482

45 CFR Ch. XI (10–1–97 Edition)§ 1174.25

funds, only the non-federal share of theproperty may be counted as cost shar-ing or matching.


§ 1174.25 Program income.

(a) General. Grantees are encouragedto earn income to defray programcosts. Program income includes incomefrom fees for services performed, fromthe use or rental of real or personalproperty acquired with grant funds,from the sale of commodities or itemsfabricated under a grant agreement,and from payments of principal and in-terest on loans made with grant funds.Except as otherwise provided in regula-tions of the Federal agency, programincome does not include interest ongrant funds, rebates, credits, discounts,refunds, etc. and interest earned onany of them.


(c) Cost of generating program income.If authorized by Federal regulations orthe grant agreement, costs incident tothe generation of program income maybe deducted from gross income to de-termine program income.






(2) Addition. When authorized, pro-gram income may be added to thefunds committed to the grant agree-ment by the Federal agency and thegrantee. The program income shall beused for the purposes and under theconditions of the grant agreement.


(h) Income after the award period.There are no Federal requirements gov-erning the disposition of program in-come earned after the end of the award


483


period (i.e., until the ending date of thefinal financial report, see paragraph (a)of this section), unless the terms of theagreement or the Federal agency regu-lations provide otherwise.






(3) Ensure that appropriate correc-tive action is taken within six months

after receipt of the audit report in in-stance of noncompliance with Federallaws and regulations;






§ 1174.30 Changes.

(a) General. Grantees and subgranteesare permitted to rebudget within theapproved direct cost budget to meetunanticipated requirements and maymake limited program changes to theapproved project. However, unlesswaived by the awarding agency, certaintypes of post-award changes in budgetsand projects shall require the priorwritten approval of the awarding agen-cy.





(iii) Transfer of funds allotted fortraining allowances (i.e., from direct


484

45 CFR Ch. XI (10–1–97 Edition)§ 1174.31

payments to trainees to other expensecategories).








(e) Additional prior approval require-ments. The awarding agency may notrequire prior approval for any budgetrevision which is not described in para-graph (c) of this section.








(1) Retention of title. Retain title aftercompensating the awarding agency.The amount paid to the awarding agen-cy will be computed by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the fair market value ofthe property. However, in those situa-tions where a grantee or subgrantee isdisposing of real property acquiredwith grant funds and acquiring replace-ment real property under the same pro-gram, the net proceeds from the dis-position may be used as an offset to thecost of the replacement property.

(2) Sale of property. Sell the propertyand compensate the awarding agency.


485


The amount due to the awarding agen-cy will be calculated by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the proceeds of the saleafter deduction of any actual and rea-sonable selling and fixing-up expenses.If the grant is still active, the net pro-ceeds from sale may be offset againstthe original cost of the property. Whena grantee or subgrantee is directed tosell property, sales procedures shall befollowed that provide for competitionto the extent practicable and result inthe highest possible return.





(c) Use. (1) Equipment shall be usedby the grantee or subgrantee in theprogram or project for which it was ac-quired as long as needed, whether ornot the project or program continuesto be supported by Federal funds. Whenno longer needed for the original pro-gram or project, the equipment may beused in other activities currently orpreviously supported by a Federalagency.

(2) The grantee or subgrantee shallalso make equipment available for useon other projects or programs cur-rently or previously supported by theFederal Government, providing suchuse will not interfere with the work onthe projects or program for which itwas originally acquired. First pref-

erence for other use shall be given toother programs or projects supportedby the awarding agency. User feesshould be considered if appropriate.









(e) Disposition. When original or re-placement equipment acquired under agrant or subgrant is no longer needed


486

45 CFR Ch. XI (10–1–97 Edition)§ 1174.33

for the original project or program orfor other activities currently or pre-viously supported by a Federal agency,disposition of the equipment will bemade as follows:











(3) When title to equipment is trans-ferred, the grantee shall be paid an

amount calculated by applying the per-centage of participation in the pur-chase to the current fair market valueof the property.

§ 1174.33 Supplies.(a) Title. Title to supplies acquired

under a grant or subgrant will vest,upon acquisition, in the grantee or sub-grantee respectively.


§ 1174.34 Copyrights.The Federal awarding agency re-

serves a royalty-free, nonexclusive, andirrevocable license to reproduce, pub-lish or otherwise use, and to authorizeothers to use, for Federal Governmentpurposes:






and services under a grant, a State willfollow the same policies and proceduresit uses for procurements from its non-Federal funds. The State will ensurethat every purchase order or other con-tract includes any clauses required byFederal statutes and executive ordersand their implementing regulations.Other grantees and subgrantees will


487


follow paragraphs (b) through (i) inthis section.






or is about to employ, any of theabove, has a financial or other interestin the firm selected for award. Thegrantee’s or subgrantee’s officers, em-ployees or agents will neither solicitnor accept gratuities, favors or any-thing of monetary value from contrac-tors, potential contractors, or partiesto subagreements. Grantee and sub-grantees may set minimum rules wherethe financial interest is not substantialor the gift is an unsolicited item ofnominal intrinsic value. To the extentpermitted by State or local law or reg-ulations, such standards or conductwill provide for penalties, sanctions, orother disciplinary actions for viola-tions of such standards by the grant-ee’s and subgrantee’s officers, employ-ees, or agents, or by contractors ortheir agents. The awarding agency mayin regulation provide additional prohi-bitions relative to real, apparent, orpotential conflicts of interest.

(4) Grantee and subgrantee proce-dures will provide for a review of pro-

posed procurements to avoid purchaseof unnecessary or duplicative items.Consideration should be given to con-solidating or breaking out procure-ments to obtain a more economicalpurchase. Where appropriate, an analy-sis will be made of lease versus pur-chase alternatives, and any other ap-propriate analysis to determine themost economical approach.





(9) Grantees and subgrantees willmaintain records sufficient to detailthe significant history of a procure-ment. These records will include, butare not necessarily limited to the fol-lowing: rationale for the method ofprocurement, selection of contracttype, contractor selection or rejection,and the basis for the contract price.





488

45 CFR Ch. XI (10–1–97 Edition)§ 1174.36















(i) Incorporate a clear and accuratedescription of the technical require-ments for the material, product, orservice to be procured. Such descrip-tion shall not, in competitive procure-ments, contain features which undulyrestrict competition. The descriptionmay include a statement of the quali-tative nature of the material, productor service to be procured, and whennecessary, shall set forth those mini-mum essential characteristics andstandards to which it must conform ifit is to satisfy its intended use. De-tailed product specifications should beavoided if at all possible. When it isimpractical or uneconomical to make aclear and accurate description of thetechnical requirements, a ‘‘brand nameor equal’’ description may be used as ameans to define the performance orother salient requirements of a pro-curement. The specific features of thenamed brand which must be met byofferors shall be clearly stated; and



489











(B) The invitation for bids, whichwill include any specifications and per-tinent attachments, shall define the

items or services in order for the bidderto properly respond;









(v) Grantees and subgrantees mayuse competitive proposal proceduresfor qualifications-based procurement ofarchitectural/engineering (A/E) profes-sional services whereby competitors’qualifications are evaluated and themost qualified competitor is selected,subject to negotiation of fair and rea-sonable compensation. The method,where price is not used as a selectionfactor, can only be used in procure-ment of A/E professional services. Itcannot be used to purchase other types


490

45 CFR Ch. XI (10–1–97 Edition)§ 1174.36

of services though A/E firms are a po-tential source to perform the proposedeffort.


















(2) Grantees and subgrantees will ne-gotiate profit as a separate element ofthe price for each contract in whichthere is no price competition and in allcases where cost analysis is performed.To establish a fair and reasonable prof-it, consideration will be given to thecomplexity of the work to be per-formed, the risk borne by the contrac-tor, the contractor’s investment, theamount of subcontracting, the qualityof its record of past performance, andindustry profit rates in the surround-ing geographical area for similar work.


491








(iii) The procurement, which is ex-pected to exceed the simplified acquisi-tion threshold, specifies a ‘‘brandname’’ product; or


(v) A proposed contract modificationchanges the scope of a contract or in-

creases the contract amount by morethan the simplified acquisition thresh-old.





(1) A bid guarantee from each bidderequivalent to five percent of the bid price.The ‘‘bid guarantee’’ shall consist of afirm commitment such as a bid bond,certified check, or other negotiable in-strument accompanying a bid as assur-ance that the bidder will, upon accept-ance of his bid, execute such contrac-tual documents as may be requiredwithin the time specified.

(2) A performance bond on the part ofthe contractor for 100 percent of the con-tract price. A ‘‘performance bond’’ is


492

45 CFR Ch. XI (10–1–97 Edition)§ 1174.37

one executed in connection with a con-tract to secure fulfillment of all thecontractor’s obligations under suchcontract.















(13) Mandatory standards and policiesrelating to energy efficiency which arecontained in the state energy conserva-tion plan issued in compliance with theEnergy Policy and Conservation Act(Pub. L. 94–163, 89 Stat. 871).



law and procedures when awarding andadministering subgrants (whether on a


493


cost reimbursement or fixed amountbasis) of financial assistance to localand Indian tribal governments. Statesshall:












(4) Section 1174.50.



(a) Monitoring by grantees. Granteesare responsible for managing the day-to-day operations of grant andsubgrant supported activities. Grantees

must monitor grant and subgrant sup-ported activities to assure compliancewith applicable Federal requirementsand that performance goals are beingachieved. Grantee monitoring mustcover each program, function or activ-ity.









494

45 CFR Ch. XI (10–1–97 Edition)§ 1174.41









§ 1174.41 Financial reporting.(a) General. (1) Except as provided in

paragraphs (a) (2) and (5) of this sec-tion, grantees will use only the formsspecified in paragraphs (a) through (e)of this section, and such supple-mentary or other forms as may fromtime to time be authorized by OMB,for:










(2) Accounting basis. Each grantee willreport program outlays and programincome on a cash or accrual basis asprescribed by the awarding agency. Ifthe Federal agency requires accrual in-formation and the grantee’s accountingrecords are not normally kept on theaccural basis, the grantee shall not be


495


required to convert its accounting sys-tem but shall develop such accrual in-formation through and analysis of thedocumentation on hand.






(3) Cash in hands of subgrantees. Whenconsidered necessary and feasible bythe Federal agency, grantees may berequired to report the amount of cashadvances in excess of three days’ needsin the hands of their subgrantees orcontractors and to provide short nar-rative explanations of actions taken bythe grantee to reduce the excess bal-ances.

(4) Frequency and due date. Granteesmust submit the report no later than 15

working days following the end of eachquarter. However, where an advance ei-ther by letter of credit or electronictransfer of funds is authorized at anannualized rate of one million dollarsor more, the Federal agency may re-quire the report to be submitted within15 working days following the end ofeach month.








(i) When a construction grant is paidby letter of credit, electronic fundstransfer or Treasury check advances,the grantee will report its outlays tothe Federal agency using StandardForm 271, Outlay Report and Requestfor Reimbursement for ConstructionPrograms. The Federal agency will pro-vide any necessary special instruction.


496

45 CFR Ch. XI (10–1–97 Edition)§ 1174.42

However, frequency and due date shallbe governed by § 1174.41(b) (3) and (4).










(2) If any litigation, claim, negotia-tion, audit or other action involvingthe records has been started before theexpiration of the 3-year period, therecords must be retained until comple-tion of the action and resolution of allissues which arise from it, or until theend of the regular 3-year period, which-ever is later.

(3) To avoid duplicate recordkeeping,awarding agencies may make specialarrangements with grantees and sub-grantees to retain any records whichare continuously needed for joint use.The awarding agency will requesttransfer of records to its custody whenit determines that the records possess

long-term retention value. When therecords are transferred to or main-tained by the Federal agency, the 3-year retention requirement is not ap-plicable to the grantee or subgrantee.




(4) Indirect cost rate proposals, cost al-locations plans, etc. This paragraph ap-plies to the following types of docu-ments, and their supporting records:indirect cost rate computations or pro-posals, cost allocation plans, and anysimilar accounting computations ofthe rate at which a particular group ofcosts is chargeable (such as computerusage chargeback rates or compositefringe benefit rates).



497







§ 1174.43 Enforcement.(a) Remedies for noncompliance. If a

grantee or subgrantee materially failsto comply with any term of an award,whether stated in a Federal statute orregulation, an assurance, in a Stateplan or application, a notice of award,or elsewhere, the awarding agency maytake one or more of the following ac-tions, as appropriate in the cir-cumstances:










(d) Relationship to debarment and sus-pension. The enforcement remediesidentified in this section, includingsuspension and termination, do notpreclude grantee or subgrantee frombeing subject to ‘‘Debarment and Sus-pension’’ under Executive Order 12549(see § 1174.35).

§ 1174.44 Termination for convenience.

Except as provided in § 1174.43 awardsmay be terminated in whole or in partonly as follows:

(a) By the awarding agency with theconsent of the grantee or subgrantee inwhich case the two parties shall agreeupon the termination conditions, in-cluding the effective date and in the


498

45 CFR Ch. XI (10–1–97 Edition)§ 1174.50

case of partial termination, the portionto be terminated, or










In accordance with § 1174.32(f), a grant-ee must submit an inventory of all fed-erally owned property (as distinct fromproperty acquired with grant funds) forwhich it is accountable and request dis-position instructions from the Federalagency of property no longer needed.

(c) Cost adjustment. The Federal agen-cy will, within 90 days after receipt ofreports in paragraph (b) of this section,

make upward or downward adjust-ments to the allowable costs.















by statutes or regulations, the Federalagency will charge interest on an over-due debt in accordance with the Fed-eral Claims Collection Standards (4CFR Ch. II). The date from which inter-est is computed is not extended by liti-gation or the filing of any form of ap-peal.


499



PART 1175—ENFORCEMENT OFNONDISCRIMINATION ON THEBASIS OF HANDICAP IN PRO-GRAMS OR ACTIVITIES CON-DUCTED BY THE NATIONAL EN-DOWMENT FOR THE HUMANITIES





struction and alterations.1175.152—1175.159 [Reserved]1175.160 Communications.1175.161—1175.169 [Reserved]1175.170 Compliance procedures.1175.171—1175.999 [Reserved]


SOURCE: 51 FR 4578 and 4579, Feb. 5, 1986,unless otherwise noted.


the Rehabilitation, ComprehensiveServices, and Developmental Disabil-ities Amendments of 1978, whichamended section 504 of the Rehabilita-tion Act of 1973 to prohibit discrimina-tion on the basis of handicap in pro-grams or activities conducted by Exec-utive agencies or the United StatesPostal Service.





Auxiliary aids means services or de-vices that enable persons with im-paired sensory, manual, or speakingskills to have an equal opportunity toparticipate in, and enjoy the benefitsof, programs or activities conducted bythe agency. For example, auxiliary aidsuseful for persons with impaired visioninclude readers, Brailled materials,audio recordings, telecommunicationsdevices and other similar services anddevices. Auxiliary aids useful for per-sons with impaired hearing includetelephone handset amplifiers, tele-phones compatible with hearing aids,telecommunication devices for deafpersons (TDD’s), interpreters,notetakers, written materials, andother similar services and devices.





cludes—(i) Any physiological disorder or con-

dition, cosmetic disfigurement, or ana-tomical loss affecting one of more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genitourinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional ormental illness, and specific learning


500

45 CFR Ch. XI (10–1–97 Edition)§§ 1175.104—1175.109

disabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addition and alcholism.







Qualified handicapped person means—(1) With respect to any agency pro-

gram or activity under which a personis required to perform services or toachieve a level of accomplishment, ahandicapped person who meets the es-sential eligibility requirements andwho can achieve the purpose of the pro-gram or activity without modificationsin the program or activity that theagency can demonstrate would resultin a fundamental alteration in its na-ture; or

(2) With respect to any other pro-gram or activity, a handicapped personwho meets the essential eligibility re-quirements for participation in, or re-ceipt of benefits from, that program oractivity.



[51 FR 4578 and 4579, Feb. 5, 1986; 51 FR 7543,Mar. 5, 1986]

§§ 1175.104—1175.109 [Reserved]

§ 1175.110 Self-evaluation.

(a) The agency shall, by April 9, 1987,evaluate its current policies and prac-tices, and the effects thereof, that donot or may not meet the requirementsof this part, and, to the extent modi-fication of any such policies and prac-tices is required, the agency shall pro-ceed to make the necessary modifica-tions.


(c) The agency shall, until threeyears following the completion of theself-evaluation, maintain on file andmake available for public inspections:



§ 1175.111 Notice.

The agency shall make available toemployees, applicants, participants,beneficiaries, and other interested per-sons such information regarding theprovisions of this part and its applica-bility to the programs or activitiesconducted by the agency, and makesuch information available to them insuch manner as the head of the agencyfinds necessary to apprise such personsof the protections against discrimina-tion assured them by section 504 andthis regulation.


501


§§ 1175.112—1175.129 [Reserved]

§ 1175.130 General prohibitionsagainst discrimination.




(ii) Afford a qualfied handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;


(iv) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons than is provided to others un-less such action is necessary to providequalified handicapped persons with aid,benefits, or services that are as effec-tive as those provided to others;




(3) The agency may not, directly orthrough contractual or other arrange-ments, utilize criteria or methods of

administration the purpose or effect ofwhich would—






(5) The agency, in the selection ofprocurement contractors, may not usecriteria that subject qualified handi-capped persons to discrimination onthe basis of handicap.



§§ 1175.131—1175.139 [Reserved]

§ 1175.140 Employment.

No qualified handicapped personshall, on the basis of handicap, be sub-jected to discrimination in employ-ment under any program or activityconducted by the agency. The defini-tions, requirements, and procedures ofsection 501 of the Rehabilitation Act of1973 (29 U.S.C. 791), as established bythe Equal Employment OpportunityCommission in 29 CFR Part 1613, shallapply to employment in federally con-ducted programs or activities.


502

45 CFR Ch. XI (10–1–97 Edition)§§ 1175.141—1175.148

§§ 1175.141—1175.148 [Reserved]


Except as otherwise provided in§ 1175.150, no qualified handicapped per-son shall, because the agency’s facili-ties are inaccessible to or unusable byhandicapped persons, be denied thebenefits of, be excluded from participa-tion in, or otherwise be subjected todiscrimination under any program oractivity conducted by the agency.



(1) Necessarily require the agency tomake each of its existing facilities ac-cessible to and usable by handicappedpersons; or

(2) Require the agency to take anyaction that it can demonstrate wouldresult in a fundamental alteration inthe nature of a program or activity orin undue financial and administrativeburdens. In those circumstances whereagency personnel believe that the pro-posed action would fundamentallyalter the program or activity or wouldresult in undue financial and adminis-trative burdens, the agency has theburden of proving that compliance with§ 1175.150(a) would result in such alter-ation or burdens. The decision thatcompliance would result in such alter-ation or burdens must be made by theagency head or his or her designeeafter considering all agency resourcesavailable for use in the funding and op-eration of the conducted program oractivity, and must be accompanied bya written statement of the reasons forreaching that conclusion. If an actionwould result in such an alteration orsuch burdens, the agency shall takeany other action that would not resultin such an alteration or such burdensbut would nevertheless ensure thathandicapped persons receive the bene-fits and services of the program or ac-tivity.

(b) Methods. The agency may complywith the requirements of this section

through such means as redesign ofequipment, reassignment of services toaccessible buildings, assignment ofaides to beneficiaries, home visits, de-livery of services at alternate acces-sible sites, alteration of existing facili-ties and construction of new facilities,use of accessible rolling stock, or anyother methods that result in makingits programs or activities readily ac-cessible to and usable by handicappedpersons. The agency is nor required tomake structural changes in existing fa-cilities where other methods are effec-tive in achieving compliance with thissection. The agency, in making alter-ations to existing buildings, shall meetaccessibility requirements to the ex-tent compelled by the ArchitecturalBarriers Act of 1968, as amended (42U.S.C. 4151 through 4157), and any regu-lations implementing it. In choosingamong available methods for meetingthe requirements of this section, theagency shall give priority to thosemethods that offer programs and ac-tivities to qualified handicapped per-sons in the most integrated setting ap-propriate.

(c) Time period for compliance. Theagency shall comply with the obliga-tions established under this section byJune 6, 1986, except that where struc-tural changes in facilities are under-taken, such changes shall be made byApril 7, 1989, but in any event as expe-ditiously as possible.

(d) Transition plan. In the event thatstructural changes to facilities will beundertaken to achieve program acces-sibility, the agency shall develop, byOctober 7, 1986, a transition plan set-ting forth the steps necessary to com-plete such changes. The agency shallprovide an opportunity to interestedpersons, including handicapped personsor organizations representing handi-capped persons, to participate in thedevelopment of the transition plan bysubmitting comments (both oral andwritten). A copy of the transition planshall be made available for public in-spection. The plan shall, at a mini-mum—



503





[51 FR 4578 and 4579, Feb. 5, 1986; 51 FR 7543,Mar. 5, 1986]


Each building or part of a buildingthat is constructed or altered by, onbehalf of, or for the use of the agencyshall be designed, constructed, or al-tered so as to be readily accessible toand usable by handicapped persons.The definitions, requirements, andstandards of the Architectural BarriersAct (42 U.S.C. 4151 through 4157), as es-tablished in 41 CFR 101–19.600 to 101–19.607, apply to buildings covered bythis section.

§§ 1175.152—1175.159 [Reserved]

§ 1175.160 Communications.

(a) The agency shall take appropriatesteps to ensure effective communica-tion with applicants, participants, per-sonnel of other Federal entities, andmembers of the public.

(1) The agency shall furnish appro-priate auxiliary aids where necessaryto afford a handicapped person an equalopportunity to participate in, andenjoy the benefits of, a program or ac-tivity conducted by the agency.

(i) In determining what type of auxil-iary aid is necessary, the agency shallgive primary consideration to the re-quests of the handicapped person.


(2) Where the agency communicateswith applicants and beneficiaries bytelephone, telecommunication devicesfor deaf persons (TDD’s) or equally ef-fective telecommunication systemsshall be used.



(d) This section does not require theagency to take any action that it candemonstrate would result in a fun-damental alteration in the nature of aprogram or activity or in undue finan-cial and administrative burdens. Inthose circumstances where agency per-sonnel believe that the proposed actionwould fundamentally alter the programor activity or would result in undue fi-nancial and administrative burdens,the agency has the burden of provingthat compliance with § 1175.160 wouldresult in such alteration or burdens.The decision that compliance would re-sult in such alteration or burdens mustbe made by the agency head or his orher designee after considering all agen-cy resources available for use in thefunding and operation of the conductedprogram or activity, and must be ac-companied by a written statement ofthe reasons for reaching that conclu-sion. If an action required to complywith this section would result in suchan alteration or such burdens, theagency shall take any other actionthat would not result in such an alter-ation or such burdens but would never-theless ensure that, to the maximumextent possible, handicapped personsreceive the benefits and services of theprogram or activity.

§§ 1175.161—1175.169 [Reserved]

§ 1175.170 Compliance procedures.

(a) Except as provided in paragraph(b) of this section, this section appliesto all allegations of discrimination onthe basis of handicap in programs oractivities conducted by the agency.

(b) The agency shall process com-plaints alleging violations of section


504

45 CFR Ch. XI (10–1–97 Edition)§§ 1175.171—1175.999

504 with respect to employment accord-ing to the procedures established bythe Equal Employment OpportunityCommission in 29 CFR Part 1613 pursu-ant to section 501 of the RehabilitationAct of 1973 (29 U.S.C. 791).

(c) The Director, Office of Equal Op-portunity shall be responsible for co-ordinating implementation of this sec-tion. Complaints may be sent to Direc-tor, Office of Equal Opportunity, Na-tional Endowment for the Humanities,1100 Pennsylvania Avenue, NW., Room419, Washington, DC 20506.



(f) The agency shall notify the Archi-tectural and Transportation BarriersCompliance Board upon receipt of anycomplaint alleging that a building orfacility that is subject to the Architec-tural Barriers Act of 1968, as amended(42 U.S.C. 4151 through 4157), or section502 of the Rehabilitation Act of 1973, asamended (29 U.S.C. 792), is not readilyaccessible to and usable by handi-capped persons.



(2) A description of a remedy for eachviolation found;


conclusions of law or remedies must befiled by the complainant within 90 daysof receipt from the agency of the letterrequired by § 1175.170(g). The agencymay extend this time for good cause.


(j) The head of the agency shall no-tify the complainant of the results of

the appeal within 60 days of the receiptof the request. If the head of the agen-cy determines that additional informa-tion is needed from the complainant,he or she shall have 60 days from thedate of receipt of the additional infor-mation to make his or her determina-tion on the appeal.



[51 FR 4578 and 4579, Feb. 5, 1986, as amendedat 51 FR 4578, Feb. 5, 1986]

§§ 1175.171—1175.999 [Reserved]

PART 1176—PART-TIME CAREEREMPLOYMENT

Sec.1176.1 General.1176.2 Definitions.1176.3 Criteria.1176.4 Establishing and converting part-

time positions.1176.5 Annual plan.1176.6 Review and evaluation.1176.7 Publicizing vacancies.1176.8 Exceptions.1176.9—1176.99 [Reserved]

AUTHORITY: Federal Employees Part-TimeCareer Employment Act of 1978, Pub. L. 95–437, 92 Stat. 1055, 5 U.S.C. 3401–3408.


§ 1176.1 General.(a) Purpose. Many individuals in soci-

ety possess great productive potentialwhich goes unrealized because theycannot meet the requirements of astandard workweek. Permanent part-time employment also provides bene-fits to other individuals in a variety ofways, such as providing older individ-uals with a gradual transition into re-tirement, providing employment op-portunities to handicapped individualsor others who require a reduced work-week, providing parents with opportu-nities to balance family responsibil-ities with the need for added income,


505


and assisting students who must fi-nance their own education or voca-tional training. In view of this, the Na-tional Endowment for the Humanitieswill operate a part-time career employ-ment program, consistent with its re-sponsibilities and in accordance withPublic Law 95–437, the Federal Employ-ees’ Part-Time Career EmploymentAct of 1978.

(b) Program Coordinator. The Person-nel Officer is responsible for programoperation and coordination.

§ 1176.2 Definitions.(a) Part-time employment means em-

ployment of 16 to 32 hours a weekunder a schedule consisting of an equalor varied number of hours per day,whether in a position which would bepart-time without regard to the Act orone established to allow job-sharing orcomparable arrangements, but does notinclude employment on a temporary orintermittent basis.

(b) Career employment includes com-petitive and excepted service employ-ees in tenure groups I and II.

§ 1176.3 Criteria.Positions becoming vacant, unless

excepted as provided by § 1176.8, will bereviewed to determine the feasibility ofconverting them to part-time. Amongthe criteria which may be used whenconducting this review are:

(a) Mission requirements.(b) Workload.(c) Employment ceilings and budg-

etary considerations.(d) Availability of qualified appli-

cants willing to work part-time.

§ 1176.4 Establishing and convertingpart-time positions.

Position management and other in-ternal reviews may indicate that posi-tions may be either converted fromfull-time or initially established aspart-time positions. Criteria listed in§ 1176.3 may be used during these re-views. If a decision is made to convertto or to establish a part-time position,regular position management and clas-sification procedures will be followed.

§ 1176.5 Annual plan.(a) An agencywide plan for promoting

part-time employment opportunities

will be developed annually. This planwill establish annual goals and set in-terim and final deadlines for achievingthese goals. This plan will be applica-ble throughout the agency, and will betransmitted to the Office of PersonnelManagement with the required reportto OPM on the status of the program asof September 30 of each year.

(b) Beginning in FY 1981 in admin-istering personnel ceilings, part-timecareer employees shall be countedagainst ceiling authorizations as afraction. This will be determined by di-viding 40 hours into the average num-ber of hours of such employee’s regu-larly scheduled workweek.

§ 1176.6 Review and evaluation.Regular employment reports will be

used to determine levels of part-timeemployment. This program will also bedesignated an item of special interestto be reviewed during personnel man-agement reviews.

§ 1176.7 Publicizing vacancies.When applicants from outside the

Federal service are desired, part-timevacanies may be publicized throughvarious recruiting means, such as:

(a) Federal Job Information Centers.(b) State Employment Offices.(c) Veterans’ Administration Re-

cruiting Bulletins.

§ 1176.8 Exceptions.(a) The Personnel Officer may except

positions from inclusion in this pro-gram to provide fewer than 16 hoursper week. This will normally be done infurtherance of special hiring programssuch as the Stay-in-School or Handi-capped Employment Program.

(b) On occasions when it becomesnecessary to allow supervisors andmanagers to temporarily increase thehours of duty of employees above 32hours per week for limited and specificperiods of time to meet heavy work-loads, perform special assignments,permit employee training, etc., the En-dowment policy is as follows:

(1) Requests to work NEH employeeson a 32 hour/week appointment morethan 32 hours must be submitted in ad-vance to the Personnel Office;

(2) Justification should be concisebut specific and must state the exact


506

45 CFR Ch. XI (10–1–97 Edition)§§ 1176.9—1176.99

time frame for the increase in hoursabove 32 hours per week; and

(3) The Program Coordinator will de-cide if the request meets the intent ofthe law and this agency’s policy.

§§ 1176.9—1176.99 [Reserved]

PART 1177—CLAIMS COLLECTION

Sec.1177.1 Purpose and scope.1177.2 Definitions.1177.3 Other remedies.1177.4 Claims involving criminal activity or

misconduct.1177.5 Collection.1177.6 Notice to debtor.1177.7 Interest, penalties, and administra-

tive costs.1177.8 Administrative offset.1177.9 Use of credit reporting agencies.1177.10 Collection services.1177.11 Referral to the Department of Jus-

tice or the General Accounting Office.1177.12 Compromise, suspension and termi-

nation.1177.13 Omissions not a defense.1177.14—1177.99 [Reserved]

AUTHORITY: 31 U.S.C. 3711, 3716–3719.


§ 1177.1 Purpose and scope.

This part prescribes standards andprocedures for officers and employeesof the National Endowment for the Hu-manities who are responsible for thecollection and disposition of debtsowed to the United States. The author-ity for this part is the Federal ClaimsCollection Act of 1966, as amended, 31U.S.C. 3711 and 3716 through 3719; theFederal Claims Collection Standards at4 CFR parts 101 through 105, as amend-ed by 49 FR 8889, 5 U.S.C. 552a, and Of-fice of Management and Budget Cir-cular A–129. The activities covered in-clude: collecting claims in any amount;compromising claims, or suspending orterminating the collection of claimsthat do not exceed $20,000 exclusive ofinterest and charges, and referringdebts that cannot be disposed of by theEndowment to the Department of Jus-tice or to the General Accounting Of-fice for further administrative actionor litigation.

§ 1177.2 Definitions.For the purpose of this part the fol-

lowing definitions will apply:(a) Claim or debt means an amount of

property owed to the United States.These include but are not limited to:Overpayments to program bene-ficiaries; overpayments to contractorsand grantees, including overpaymentsarising from audit disallowances; ex-cessive cash advances to grantees andcontractors; and civil penalties and as-sessments. A debt is overdue or delin-quent if it is not paid by the due datespecified in the initial notice of thedebt (see § 1177.6 of this part) or if thedebtor fails to satisfy his or her obliga-tion under a repayment agreement.

(b) Debtor means an individual, orga-nization, group, association, partner-ship, or corporation indebted to theUnited States, or the person or entitywith legal responsibility for assumingthe debtor’s obligation.

(c) Endowment means the NationalEndowment for the Humanities.

(d) Administrative offset means satis-fying a debt by withholding moneypayable by the United States to or heldby the United States for a debtor.

§ 1177.3 Other remedies.The remedies and sanctions available

to the National Endowment for the Hu-manities under this part are not in-tended to be exclusive. The Chair-person of the National Endowment forthe Humanities or his designee mayimpose other appropriate sanctionsupon a debtor for prolonged or repeatedfailure to pay a debt. For example, theChairperson or his designee may placethe debtor’s name on a list of debarred,suspended, or ineligible grantees andcontractors, convert the method ofpayment under a grant from an ad-vance to a reimbursement method, orrevoke a grantee’s letter of credit. Insuch cases the debtor will be advised ofthe Endowment’s action.

§ 1177.4 Claims involving criminal ac-tivity or misconduct.

(a) A debtor whose indebtedness in-volves criminal activity such as fraud,embezzlement, theft, or misuse of gov-ernment funds or property is subject topunishment by fine or imprisonment aswell as to a civil claim by the United


507


States for compensation for the mis-appropriated funds. The Endowmentwill refer these cases to the appro-priate law enforcement agency forprosecution.

(b) Debts involving fraud, false,claims, or misrepresentation shall notbe compromised, terminated, sus-pended, or otherwise disposed of underthis rule. Only the Department of Jus-tice is authorized to compromise, ter-minate, suspend, or otherwise disposeof such debts.

§ 1177.5 Collection.(a) The Endowment will take aggres-

sive action to collect debts and reducedelinquencies. Collection efforts shallinclude sending to the debtor’s lastknown address a total of three progres-sively stronger written demands forpayment at not more than 30 day inter-vals. When necessary to protect theGovernment’s interest, written demandmay be preceded by other appropriateaction, including immediate referralfor litigation. Other contact with thedebtor or his or her representative orguarantor by telephone, in person and/or in writing may be appropriate to de-mand prompt payment, to discuss thedebtor’s position regarding the exist-ence, amount and repayment of thedebt, and to inform the debtor of his orher rights and the effect of nonpay-ment or delayed payment. A debtorwho disputes a debt must promptlyprovide available supporting evidence.

(b) If a debtor is involved in insol-vency proceedings, the debt will be re-ferred to the appropriate United StatesAttorney to file a claim. The UnitedStates may have a priority over othercreditors under 31 U.S.C. 3713.

§ 1177.6 Notice to debtor.The first written demand for pay-

ment must inform the debtor of the fol-lowing:

(a) The amount and nature of thedebt:

(b) The date payment is due, whichwill generally be 30 days from the datethe notice was mailed;

(c) The assessment of interest under§ 1177.7 from the date the notice wasmailed if payment is not received with-in the 30 days;

(d) The right to dispute the debt;

(e) The office, address and telphonenumber that the debtor should contactto discuss repayment and reconsider-ation of the debt and;

(f) The sanctions available to the Na-tional Endowment for the Humanitiesto collect a delinquent debt including,but not limited to, referral of the debtto a credit reporting agency, a privatecollection bureau, or the Departmentof Justice for litigation.

§ 1177.7 Interest, penalties, and admin-istrative costs.

(a) Interest will accrue on all debtsfrom the date when the first notice ofthe debt and the interest requirementis mailed to the last known address orhand-delivered to the debtor if the debtis not paid within 30 days from the datethe first notice was mailed. The En-dowment will charge an annual rate ofinterest that is equal to the average in-vestment rate for the Treasury tax andloan accounts on September 30 of eachyear, rounded to the nearest whole percentum. This rate, which representsthe current value of funds to the Unit-ed States Treasury, may be revisedquarterly by the Secretary of theTreasury and is published by the Sec-retary of the Treasury annually orquarterly in the FEDERAL REGISTER andthe Treasury Financial Manual Bul-letins.

(b) The rate of interest initially as-sessed will remain fixed for the dura-tion of the indebtedness, except that ifa debtor defaults on a repaymentagreement interest may be set at theTreasury rate in effect on the date anew agreement is executed.

(c) The Endowment shall chargedebtors for administrative costs in-curred in handling overdue debts.

(d) Interest will not be charged on ad-ministrative costs.

(e) The Endowment shall assess apenalty charge, not to exceed 6 percent per year on debts which have beendelinquent for more than 90 days. Thischarge shall accrue from the date thatthe debt became delinquent.

(f) The Chairperson or his designeemay waive in whole or in part the col-lection of interest and administrativeand penalty charges if determined thatcollection would be against equity ornot in the best interests of the United


508

45 CFR Ch. XI (10–1–97 Edition)§ 1177.8

States. The Endowment shall waive thecollection of interest on the debt orany part of the debt which is paid with-in 30 days after the date on which in-terest began to accrue.

§ 1177.8 Administrative offset.

(a) The Endowment may collect debtsowed by administrative offset if:

(1) The debt is certain in amount;(2) Efforts to obtain direct payment

have been, or would most likely be un-successful, or the Endowment and thedebtor agree to the offset;

(3) Offset is cost effective or has sig-nificant deterrent value; and

(4) Offset is best suited to further andprotect the Government’s interest.

(b) The Endowment may offset a debtowed to another Federal agency fromamounts due or payable by the Endow-ment to the debtor or request anotherFederal agency to offset a debt owed tothe Endowment;

(c) Prior to initiating administrativeoffset, the National Endowment for theHumanities will send the debtor writ-ten notice of the following:

(1) The nature and amount of thedebt and the agency’s intention to col-lect the debt by offset 30 days from thedate the notice was mailed if neitherpayment nor a satisfactory response isreceived by that date;

(2) The debtor’s right to an oppor-tunity to submit a good faith alter-native repayment schedule to inspectand copy agency records pertaining tothe debt, to request a review of the de-termination of indebtedness; and toenter into a written agreement torepay the debt and;

(3) The applicable interest.(d) The National Endowment for the

Humanities may effect an administra-tive offset against a payment to bemade to a debtor prior to the comple-tion of the procedures required byparagraph (c) of this section if:

(1) Failure to offset would substan-tially prejudice the Government’s abil-ity to collect the debt and

(2) The time before the payment is tobe made does not reasonably permitcompletion of those procedures.

§ 1177.9 Use of credit reporting agen-cies.

(a) The Endowment may report delin-quent accounts to credit reportingagencies consistent with the notice re-quirements contained in the § 1177.6 ofthis part. Individual debtors must begiven at least 60 days written noticethat the debt is overdue and will be re-ported to a credit reporting agency.

(b) Debts may be reported toconsumer or commercial reportingagencies. Consumer reporting agenciesare defined in 31 U.S.C. 3701(a)(3) pursu-ant to 5 U.S.C. 552a(b)(12) and 31 U.S.C.3711(f). The Endowment may discloseonly an individual’s name, address, so-cial security number, and the nature,amount, status and history of the debtand the program under which the claimarose.

§ 1177.10 Collection services.(a) The Endowment may contract for

collection services to recover outstand-ing debts. The Endowment may referdelinquent debts to private collectionagencies listed on the schedule com-piled by the General Services Adminis-tration. In such contracts, the Na-tional Endowment for the Humanitieswill retain the authority to resolve dis-putes, compromise claims, terminateor suspend collection, and refer thematter to the Department of Justice orthe General Accounting Office.

(b) The contractor shall be subject tothe disclosure provisions of the PrivacyAct of 1974, as amended (5 U.S.C.552a(m)), and to applicable federal andstate laws and regulations pertainingto debt collection practices, includingthe Fair Debt Collection Practices Act,15 U.S.C. 1692. The contractor shall bestrictly accountable for all amountscollected.

(c) The contractor shall be requiredto provide to the Endowment any datacontained in its files relating to thedebt account upon agency request orupon returning an account to the En-dowment for referral to the Depart-ment of Justice for litigation.

§ 1177.11 Referral to the Departmentof Justice or the General Account-ing Office.

Debts over $600 but less than $100,000which the Endowment determines can


509


neither be collected nor otherwise dis-posed of will be referred for litigationto the United States Attorney in whosejudicial district the debtor is located.Claims for amounts exceeding $100,000shall be referred for litigation to theCommercial Litigation Branch, CivilDivision of the Department of Justice.

§ 1177.12 Compromise, suspension andtermination.

(a) The Chairperson of the NationalEndowment for the Humanities or hisdesignee may compromise, suspend orterminate the collection of debts wherethe outstanding principal is not great-er than $20,000. Endowment proceduresfor writing off outstanding accountsare available to the public.

(b) The Chairperson of the NationalEndowment for the Humanities maycompromise, suspend or terminate col-lection of debts where the outstandingprincipal is greater than $20,000 onlywith the approval of, or by referral tothe United States Attorney or the De-partment of Justice.

(c) The Chairman of the National En-dowment for the Humanities will referto the General Accounting Office(GAO) debts arising from GAO auditexceptions.

§ 1177.13 Omissions not a defense.Failure to comply with any provi-

sions of this rule may not serve as a de-fense to any debtor.

§ 1177.14—1177.99 [Reserved]

PART 1178—USE OF PENALTY MAILIN THE LOCATION AND RECOV-ERY OF MISSING CHILDREN

Sec.1178.1 Purpose and scope.1178.2 Withdrawal of information.


§ 1178.1 Purpose and scope.(a) The Chairperson of the National

Endowment for the Humanities (NEH)may direct the agency to use penaltymail to assist in the location and re-covery of missing children. When de-termined to be appropriate and cost-ef-fective, the National Endowment forthe Humanities may print, insert oruse any other effective method to affix

pictures and biographical data relatingto missing children on NEH mail. Thecontact person for matters related tothe implementation of this part isTracy J. Joselson, Esq. Office of theGeneral Counsel, National Endowmentfor the Humanities, 1100 PennsylvaniaAvenue, NW., Washington, DC 20506,(202) 786–0322.

(b) The National Center for Missingand Exploited Children will be the ex-clusive source from which the NationalEndowment for the Humanities will ob-tain photographic and biographical in-formation for dissemination to thepublic.

(c) It is estimated that the NationalEndowment for the Humanities willincur no additional costs to implementthis program during its initial year.This estimate is based on a review ofEndowment mailings that would maxi-mize dissemination of this informa-tion.

[51 FR 20974, June 10, 1986]

§ 1178.2 Withdrawal of information.The National Endowment for the Hu-

manities will withdraw or exhaust thesupply of all materials bearing the pho-tograph and biographical informationof a missing child within a three monthperiod from the date the National Cen-ter for Missing and Exploited Childrenreceives notice that the child has beenrecovered or that the parents or guard-ian of the child have revoked permis-sion to use the information. The Na-tional Center for Missing and ExploitedChildren will be responsible for imme-diately notifying the agency contact,in writing, of the need to withdraw orremove this material.

[51 FR 20974, June 10, 1986]

PART 1179—SALARY OFFSET

1179.1 Purpose and scope.1179.2 Definitions.1179.3 Applicability.1179.4 Notice requirements.1179.5 Hearing.1179.6 Written decision.1179.7 Coordinating offset with another Fed-

eral agency.1179.8 Procedures for salary offset.1179.9 Refunds.1179.10 Statute of limitations.1179.11 Non-waiver of rights.


510

45 CFR Ch. XI (10–1–97 Edition)§ 1179.1

1179.12 Interest, penalties, and administra-tive costs.

AUTHORITY: 5 U.S.C. 5514, E.O. 11809 (redes-ignated E.O. 12107), and 5 CFR part 550, sub-part K.


§ 1179.1 Purpose and scope.(a) This regulation provides proce-

dures for the collection by administra-tive offset of a Federal employee’s sal-ary without his/her consent to satisfycertain debts owed to the Federal gov-ernment. These regulations apply to allFederal employees who owe debts tothe National Endowment for the Hu-manities (NEH) and to current employ-ees of the National Endowment for theHumanities who owe debts to otherFederal agencies. This regulation doesnot apply when the employee consentsto recovery from his/her current payaccount.

(b) This regulation does not apply todebts or claims arising under:

(1) The Internal Revenue Code of 1954,as amended, 26 U.S.C. 1 et seq;

(2) The Social Security Act, 42 U.S.C.301 et seq;

(3) The tariff laws of the UnitedStates; or

(4) Any case where a collection of adebt by salary offset is explicitly pro-vided for or prohibited by another stat-ute.

(c) This regulation does not apply toany adjustment to pay arising out ofan employee’s selection of coverage ora change in coverage under a Federalbenefits program requiring periodic de-ductions from pay if the amount to berecovered was accumulated over fourpay periods or less.

(d) This regulation does not precludethe compromise, suspension, or termi-nation of collection action where ap-propriate under the standards imple-menting the Federal Claims CollectionAct 31 U.S.C. 3711 et seq. 4 CFR parts 101through 105 45 CFR part 1177.

(e) This regulation does not precludean employee from requesting waiver ofan overpayment under 5 U.S.C. 5584, 10U.S.C. 2774 or 32 U.S.C. 716 or in anyway questioning the amount or valid-ity of the debt by submitting a subse-quent claim to the General AccountingOffice. This regulation does not pre-

clude an employee from requesting awaiver pursuant to other statutoryprovisions applicable to the particulardebt being collected.

(f) Matters not addressed in theseregulations should be reviewed in ac-cordance with the Federal Claims Col-lection Standards at 4 CFR 101.1 et seq.

§ 1179.2 Definitions.For the purposes of the part the fol-

lowing definitions will apply:Agency means an executive agency as

is defined at 5 U.S.C. 105 including theU.S. Postal Service, the U.S. PostalCommission, a military department asdefined at 5 U.S.C. 102, an agency orcourt in the judicial branch, an agencyof the legislative branch including theU.S. Senate and House of Representa-tives and other independent establish-ments that are entities of the Federalgovernment.

Chairperson means the Chairperson ofthe National Endowment for the Hu-manities or the Chairperson’s designee.

Creditor agency means the agency towhich the debt is owed.

Debt means an amount owed to theUnited States from sources which in-clude loans insured or guaranteed bythe United States and all otheramounts due the United States fromfees, leases, rents, royalties, services,sales or real or personal property, over-payments, penalties, damages, inter-ests, fines, forfeitures, (except thosearising under the Uniform Code of Mili-tary Justice) and all other similarsources.

Disposable pay means the amountthat remains from an employee’s Fed-eral pay after required deductions forsocial security, Federal, state or localincome tax, health insurance pre-miums, retirement contributions, lifeinsurance premiums, Federal employ-ment taxes, and any other deductionsthat are required to be withheld bylaw.

Hearing official means an individualresponsible for conducting any hearingwith respect to the existence oramount of a debt claimed, and who ren-ders a decision on the basis of suchhearing. A hearing official may not beunder the supervision or control of theChairperson of the National Endow-ment for the Humanities.


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Paying Agency means the agency thatemployes the individual who owes thedebt and authorizes the payment of his/her current pay.

Salary offset means an administrativeoffset to collect a debt pursuant to 5U.S.C. 5514 by deduction(s) at one ormore officially established pay inter-vals from the current pay account ofan employee without his/her consent.


(a) These regulations are to be fol-lowed when:

(1) The National Endowment for theHumanities is owed a debt by an indi-vidual currently employed by anotherFederal agency;

(2) The National Endowment for theHumanities is owed a debt by an indi-vidual who is a current employee of theNational Endowment for the Human-ities; or

(3) The National Endowment for theHumanities employs an individual whoowes a debt to another Federal agency.

§ 1179.4 Notice requirements.

(a) Deductions shall not be made un-less the employee is provided withwritten notice signed by the Chair-person of the debt at least 30 days be-fore salary offset commences.

(b) The written notice shall contain:(1) A statement that the debt is owed

and an explanation of its nature, andamount;

(2) The agency’s intention to collectthe debt by deducting from the employ-ee’s current disposable pay account;

(3) The amount, frequency proposedbeginning date, and duration of the in-tended deduction(s);

(4) An explanation of interest, pen-alties, and administrative charges, in-cluding a statement that such chargeswill be assessed unless excused in ac-cordance with the Federal Claims Col-lections Standards at 4 CFR 101.1 etseq.;

(5) The employee’s right to inspect,request, or receive a copy of govern-ment records relating to the debt;

(6) The opportunity to establish awritten schedule for the voluntary re-payment of the debt;

(7) The right to a hearing conductedby an impartial hearing official;

(8) The methods and time period forpetitioning for hearings;

(9) A statement that the timely filingof a petition for a hearing will stay thecommencement of collection proceed-ings;

(10) A statement that a final decisionon the hearing will be issued not laterthan 60 days after the filing of the peti-tion requesting the hearing unless theemployee requests and the hearing offi-cial grants a delay in the proceedings;

(11) A statement that knowinglyfalse or frivolous statements, represen-tations, or evidence may subject theemployee to appropriate disciplinaryprocedures;

(12) A statement of other rights andremedies available to the employeeunder statutes or regulations govern-ing the program for which the collec-tion is being made; and

(13) Unless there are contractual orstatutory provisions to the contrary, astatement that amounts paid on or de-ducted for the debt which are laterwaived or found not owed to the UnitedStates will be prompty refunded to theemployee.

§ 1179.5 Hearing.

(a) Request for hearing. (1) An em-ployee must file a petition for a hear-ing in accordance with the instructionsoutlined in the agency’s notice to off-set. (2) A hearing may be requested byfiling a written petition addressed tothe Chairperson of the National En-dowment for the Humanities statingwhy the employee disputes the exist-ence or amount of the debt. The peti-tion for a hearing must be received bythe Chairperson no later than fifteen(15) calendar days after the date of thenotice to offset unless the employeecan show good cause for failing to meetthe deadline date.

(b) Hearing procedures. (1) The hear-ing will be presided over by an impar-tial hearing official. (2) The hearingshall conform to procedures containedin the Federal Claims CollectionStandards 4 CFR 102.3(c). The burdenshall be on the employee to dem-onstrate that the existence or theamount of the debt is in error.


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45 CFR Ch. XI (10–1–97 Edition)§ 1179.6

§ 1179.6 Written decision.(a) The hearing official shall issue a

written opinion no later than 60 daysafter the hearing.

(b) The written opinion will include:a statement of the facts presented todemonstrate the nature and origin ofthe alleged debt; the hearing official’sanalysis, findings and conclusions; theamount and validity of the debt, andthe repayment schedule.

§ 1179.7 Coordinating offset with an-other Federal agency.

(a) The Endowment as the creditoragency. (1) When the Chairperson deter-mines that an employee of a Federalagency owes a delinquent debt to theNational Endowment for the Human-ities, the Chairperson shall as appro-priate:

(i) Arrange for a hearing upon theproper petitioning by the employee;

(ii) Certify in writing that the em-ployee owes the debt, the amount andbasis of the debt, the date on whichpayment is due, the date the Govern-ment’s right to collect the debt ac-crued, and that Endowment regula-tions for salary offset have been ap-proved by the Office of Personnel Man-agement;

(iii) If collection must be made in in-stallments, the Chairperson must ad-vise the paying agency of the amountor percentage of disposable pay to becollected in each installment;

(iv) Advise the paying agency of theactions taken under 5 U.S.C. 5514(b)and provide the dates on which actionwas taken unless the employee hasconsented to salary offset in writing orsigned a statement acknowledging re-ceipt of procedures required by law.The written consent or acknowledg-ment must be sent to the paying agen-cy;

(v) If the employee is in the processof separating, the Endowment mustsubmit its debt claim to the payingagency as provided in this part. Thepaying agency must certify anyamounts already collected, notify theemployee, and send a copy of the cer-tification and notice of the employee’sseparation to the creditor agency. Ifthe paying agency is aware that theemployee is entitled to Civil ServiceRetirement and Disability Fund or

similar payments, it must certify tothe agency responsible for making suchpayments the amount of the debt andthat the provisions of this part havebeen followed; and

(vi) If the employee has already sepa-rated and all payments due from thepaying agency have been paid, theChairperson may request unless other-wise prohibited, that money payable tothe employee from the Civil ServiceRetirement and Disability Fund orother similar funds be collected by ad-ministrative offset.

(b) The Endowment as the paying agen-cy. (1) Upon receipt of a properly cer-tified debt claim from another agency,deductions will be scheduled to beginat the next established pay interval.The employee must receive written no-tice that the National Endowment forthe Humanities has received a certifieddebt claim from the creditor agency,the amount of the debt, the date salaryoffset will begin, and the amount of thededuction(s). The National Endowmentfor the Humanities shall not review themerits of the creditor agency’s deter-mination of the validity or the amountof the certified claim.

(2) If the employee transfers to an-other agency after the creditor agencyhas submitted its debt claim to the Na-tional Endowment for the Humanitiesand before the debt is collected com-pletely, the National Endowment forthe Humanities must certify the totalamount collected. One copy of the cer-tification must be furnished to the em-ployee. A copy must be furnished thecreditor agency with notice of the em-ployee’s transfer.

§ 1179.8 Procedures for salary offset.

(a) Deductions to liquidate an em-ployee’s debt will be by the method andin the amount stated in the Chair-person’s notice of intention to offset asprovided in § 1179.4. Debts will be col-lected in one lump sum where possible.If the employee is financially unable topay in one lump sum, collection mustbe made in installments.

(b) Debts will be collected by deduc-tion at officially established pay inter-vals from an employee’s current payaccount unless alternative arrange-ments for repayment are made.


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(c) Installment deductions will bemade over a period not greater thanthe anticipated period of employment.The size of installment deductionsmust bear a reasonable relationship tothe size of the debt and the employee’sability to pay. The deduction for thepay intervals for any period must notexceed 15% of disposable pay unless theemployee has agreed in writing to a de-duction of a greater amount.

(d) Unliquidated debts may be offsetagainst any financial payment due to aseparated employee including but notlimited to final salary payment orleave in accordance with 31 U.S.C. 3716.

§ 1179.9 Refunds.

(a) The National Endowment for theHumanities will refund promptly anyamounts deducted to satisfy debtsowed to the NEH when the debt iswaived, found not owed to the NEH, orwhen directed by an administrative orjudicial order.

(b) The creditor agency will promptlyreturn any amounts deducted by NEHto satisfy debts owed to the creditoragency when the debt is waived, foundnot owed, or when directed by an ad-ministrative or judicial order.

(c) Unless required by law, refundsunder this section shall not bear inter-est.

§ 1179.10 Statute of limitations.If a debt has been outstanding for

more than 10 years after the agency’sright to collect the debt first accrued,the agency may not collect by salaryoffset unless facts material to the Gov-ernment’s right to collect were notknown and could not reasonably havebeen known by the official or officialswho were charged with the responsibil-ity for discovery and collection of suchdebts.

§ 1179.11 Non-waiver of rights.An employee’s involuntary payment

of all or any part of a debt collectedunder these regulations will not beconstrued as a waiver of any rightsthat employee may have under 5 U.S.C.5514 or any other provision of contractlaw unless there are statutes or con-tract(s) to the contrary.

§ 1179.12 Interest, penalties, and ad-ministrative costs.

Charges may be assessed for interest,penalties, and administrative costs inaccordance with the Federal ClaimsCollection Standards, 4 CFR 102.13.


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SUBCHAPTER E—INSTITUTE OF MUSEUM SERVICES

PART 1180—GRANTS REGULATIONS

Subpart A—General Operating Support;Conservation Grants

Sec.1180.1 Purpose of museum services program.1180.2 Scope of this document.1180.3 Definition of museum.1180.4 Other definitions.1180.5 Eligibility and burden of proof—Who

may apply.1180.6 Related institutions.1180.7 General Operating Support.1180.8 Two–Year grant period.1180.9 Limitation on amount of General Op-

erating Support grants.1180.10 Allowable costs.1180.11 Basic requirements which a museum

must meet to be considered for funding.1180.12 How applications are judged.1180.13 Criteria for evaluation of applica-

tions for General Operating Support.1180.14 [Reserved]1180.15 Duration of grants.1180.16 Contributions, restricted accounts.1180.17 Reports.1180.18 Maintenance of effort.1180.19 [Reserved]1180.20 Guidelines and standards for con-

servation projects.

Subpart B—General Application, Selectionand Award Procedures Applications

APPLICATIONS

1180.30 Publication of an application notice;content of the notice.

1180.31 Information in the application no-tice.

1180.32 Deadline date for applications.1180.33 Applicants must meet procedural

rules.1180.34 Number of copies.1180.35 Group applications.

SELECTION AND AWARD PROCEDURES

1180.36 Rejection of an application.1180.37 Rejection for technical deficiency—

appeal; reconsideration; waiver.1180.38 How grants are processed.1180.39 Applications not selected for fund-

ing.1180.40 [Reserved]1180.41 The cost analysis; basis for grant

amount.1180.42 The notification of grant award.1180.43 Effect of the grant.

Subpart C—General Conditions WhichMust Be Met by a Grantee

NONDISCRIMINATION

1180.44 Federal statutes and regulations onnondiscrimination.

1180.45 Use of consultants in SpecialProjects.

EVALUATION

1180.46 Evaluation by the grantee.1180.47 Federal evaluation—cooperation by

a grantee.

PUBLICATIONS AND COPYRIGHTS

1180.48 General conditions on publications.1180.49 Copyright policy for grantees.1180.50 Definition of ‘‘materials.’’

GENERAL ADMINISTRATIVE RESPONSIBILITIES

1180.51 Compliance with statutes, regula-tions, and its approved grant application.

1180.52 The grantee administers or super-vises the grant.

1180.53 Fiscal control and fund accountingprocedures.

1180.54 Obligation of funds during the grantperiod.

1180.55 Prohibition of subgrants.

RECORDS

1180.56 Records related to grant funds.1180.57 Records related to compliance.1180.58 Records related to performance.1180.59 Applicability.

Subpart D—Museum Assessment

1180.70 Purpose of program.1180.71 Eligibility.1180.72 Allowable costs.1180.73 Form of assistance; limitation on

amount.1180.74 Conditions of participation.1180.75 Funding and award procedures.1180.76 Responsibility of a museum.

Subpart E—Assistance to ProfessionalMuseum Organizations

1180.77 Contracts and cooperative agree-ments with professional museum organi-zations.

1180.78 Technical training and implementa-tion grants to museums.


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Subpart F [Reserved]

Subpart G—Meetings of the NationalMuseum Services Board

GENERAL

1180.80 Scope.1180.81 General rule.1180.82 Application to NMSB committees.1180.83 Record vote.

ANNOUNCEMENT OF MEETINGS

1180.84 Public announcement of meetings.1180.85 Changes in time or place of meeting.1180.86 Changes in subject matter of meet-

ing.1180.87 Publication of announcements.

CLOSED MEETINGS

1180.88 Reasons and procedures for closingmeetings.

1180.89 Requests to close meetings.1180.90 Materials related to closed portions

of meetings.1180.91 Opening of transcript or recording of

closed meeting.

APPENDIX A TO PART 1180

AUTHORITY: 20 U.S.C. 961–968; Pub. L. 97–100,95 Stat. 1414; Pub. L. 97–394, 96 Stat. 1994; 29U.S.C. 794.


Subpart A—General OperatingSupport; Conservation Grants

§ 1180.1 Purpose of museum servicesprogram.

The purpose of this program of Fed-eral financial assistance is to ease thefinancial burden borne by museums asa result of their increasing use by thepublic and to encourage and assistthem to carry out their educationaland conservation roles as well as otherfunctions and to modernize their meth-ods and facilities.

§ 1180.2 Scope of this document.

This document establishes rules forthe award of grants to museums fromfunds appropriated under the MuseumServices Act including rules governingthe eligibility of applicant institu-tions, the type of assistance which maybe provided, requirements which appli-cants must meet and criteria to beused in judging applications.

§ 1180.3 Definition of museum.For the purpose of this part:(a) Museum means a public or private

nonprofit institution which is organizedon a permanent basis for essentially edu-cational or aesthetic purposes and which,using a professional staff:

(1) Owns or uses tangible objects, ei-ther animate or inanimate;

(2) Cares for these objects; and(3) Exhibits them to the general pub-

lic on a regular basis.(i) An institution which exhibits ob-

jects to the general public for at least120 days a year shall be deemed to meetthis requirement.

(ii) An institution which exhibits ob-jects by appointment may meet this re-quirement if it can establish, in lightof the facts under all the relevant cir-cumstances, that this method of exhi-bition does not unreasonably restrictthe accessibility of the institution’s ex-hibits to the general public.

(b) Museum includes (but is not lim-ited to) the following institutions ifthey satisfy the provisions of this sec-tion:

(1) Aquariums and zoological parks;(2) Botanical gardens and arbore-

tums;(3) Nature Centers;(4) Museums relating to art, history

(including historic buildings), naturalhistory, science and technology; and

(5) Planetariums.(c) For the purposes of this section,

an institution uses a professional staffif it employs at least one staff member,or the fulltime equivalent, whetherpaid or unpaid primarily engaged inthe acquisition, care, or exhibition tothe public of objects owned or used bythe institution.

(d)(1) Except as set forth in para-graph (d)(2) of this section, an institu-tion exhibits objects to the generalpublic for the purposes of this sectionif such exhibition is a primary purposeof the institution.

(2) An institution which does nothave as a primary purpose the exhi-bition of objects to the general publicbut which can demonstrate that it ex-hibits objects to the general public ona regular basis as a significant, sepa-rate, distinct, and continuing portionof its activities, and that it otherwisemeets the requirements of this section,


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45 CFR Ch. XI (10–1–97 Edition)§ 1180.4

may be determined to be a museumunder this section. In order to establishits eligibility, such an institution mustprovide information regarding the fol-lowing:

(i) The number of staff members de-voted to museum functions as de-scribed in paragraph (a) of this section.

(ii) The period of time that such mu-seum functions have been carried outby the institution over the course ofthe institution’s history.

(iii) Appropriate financial informa-tion for such functions presented sepa-rately from the financial informationof the institution as a whole.

(iv) The percentage of the institu-tion’s total space devoted to such mu-seum functions.

(v) Such other information as the Di-rector requests.

(3) The Director uses the informationfurnished under paragraph (d)(2) of thissection in making a determination re-garding the eligibility of such an insti-tution under this section.

(e) For the purpose of this section, aninstitution exhibits objects to the pub-lic if it exhibits the objects through fa-cilities which it owns or operates.

[48 FR 27728, June 17, 1983, as amended at 50FR 27587, July 5, 1985]

§ 1180.4 Other definitions.The following other definitions apply

in this document:Act means the Museum Services Act,

Title II of the Arts, Humanities andCultural Affairs Act of 1976, Public Law94–462 (20 U.S.C. 961–968).

Board means the National MuseumServices Board established under Sec-tion 204 of the Act.

Collection includes objects owned,used or loaned by a museum as well asthose literary, archival and documen-tary resources specifically required forthe study and interpretation of theseobjects.

Foundation means the National Foun-dation on the Arts and the Humanities.

Director means the Director of the In-stitute of Museum Services.

Grantee means the recipient of agrant under the Act.

Institute means the Institute of Mu-seum Services (IMS) established underSection 203 of the Act.

Museum services means services pro-vided by a museum, primarily exhibit-ing objects to the general public, andincluding but not limited to preservingand maintaining its collections, andproviding educational and other pro-grams to the public through the use ofits collections and other resources.

§ 1180.5 Eligibility and burden ofproof—Who may apply.

(a) A museum located in any of thefifty States of the Union, the Common-wealth of Puerto Rico, AmericanSamoa, the Virgin Islands, the North-ern Mariana Islands, the Trust Terri-tory of the Pacific Islands, Guam, orthe District of Columbia may apply fora grant under the Act.

(b) No museum is eligible to apply forfunding available under the Act unlessit has provided museum services, in-cluding exhibiting objects to the gen-eral public on a regular basis, for atleast two years prior to application.

(c) A public or private nonprofitagency which is responsible for the op-eration of a museum may, if necessary,apply on behalf of the museum.

(d) A museum operated by a depart-ment or agency of the Federal Govern-ment is not eligible to apply.

(e) An applicant has the burden of es-tablishing that it is eligible for assist-ance under these regulations.

(f) In a given year, a museum thathas not received two consecutive Gen-eral Operating Support awards in theimmediately preceding two-year cyclesis eligible to apply for General Operat-ing Support.

[50 FR 27588, July 5, 1985, as amended at 60FR 63964, Dec. 13, 1995]

§ 1180.6 Related institutions.(a) If two or more institutions are

under the common control of one agen-cy or institution or are otherwise orga-nizationally related and apply for as-sistance under the Act, the Directordetermines under all the relevant cir-cumstances whether they are separatemuseums for the purposes of establish-ing eligibility for assistance underthese regulations. See §§ 1180.5 and1180.9.

(b) IMS regards the following factors,among others, as showing that a relat-ed institution is a separate museum:


517


(1) The institution has its own gov-erning body;

(2) The institution has budgetary au-tonomy; and

(3) The institution has administra-tive autonomy.

§ 1180.7 General Operating Support.In order to maintain, increase or im-

prove museum services, a museum mayapply for a grant under the Act to meetadministrative, staff and operatingcosts, except as otherwise provided inthese regulations.

§ 1180.8 Two-year grant period.(a) IMS makes General Operating

Support grants for a period of twenty-four months beginning with the firstmonth of the grant period.

(b) A museum that receives a GeneralOperating Support grant in a Federalfiscal year may not apply for an addi-tional General Operating Supportgrant in the succeeding Federal fiscalyear.

Example. A museum applies for a GeneralOperating Support grant in Federal fiscalyear 1993. The museum receives a grant thatit may use during the applicable 24-monthgrant period. The museum may not apply foran additional General Operating Supportgrant in Federal fiscal year 1994.

[57 FR 36905, Aug. 17, 1992]

§ 1180.9 Limitation on amount of Gen-eral Operating Support grants.

(a) General rule. IMS makes GeneralOperating Support grants in an amountnot to exceed the lesser of:

(1) the ceiling amount establishedunder paragraph (b);

(2)(i) 15 percent of the applicant mu-seum’s non-Federal operating incomefor its most recently completed fiscalyear that is prior to the Federal fiscalyear in which the application is filed;or

(ii) $7,500, if larger.(b) Ceiling amount. The ceiling

amount of a General Operating Supportgrant will be established through a no-tice published in the FEDERAL REG-ISTER. Beginning in FY 1993, the ceilingamount is $112,500.

(c) Statutory requirement. Under sec-tion 206(c) of the Act, IMS may notmake a grant in excess of 50 percent ofthe annual cost of the program for

which the grant is made. If the applica-tion of the $7,500 limitation in para-graph (a)(2) of this section causes aGeneral Operating Support grant to ex-ceed 50 percent of the museum’s annualoperating income for the grant periodin question, IMS reduces the grant tothat level in order to satisfy the statu-tory requirement.

(d) Computation of non-Federal operat-ing income. For the purposes of this sec-tion, a museum may include in non-Federal operating income an amountreflecting the reasonable and conserv-ative value of non-cash contributionsto the museum in the applicable fiscalyear.

Examples. The application of these rules isset forth in the following examples:

(1) In fiscal year 1993, a museum with cal-endar year 1991 operating income of $5,000,000applies to IMS for a General Operating Sup-port grant. Its application is approved. Itmay receive a grant of no more than $112,500,the lesser of $112,500 and $750,000 which is 15percent of the museum’s non-Federal operat-ing income.

(2) In fiscal year 1993, a museum with cal-endar 1991 operating income of $700,000 ap-plies to IMS for a General Operating Supportgrant. Its application is approved. It may re-ceive a grant of no more than $105,000 thelesser of $112,500 and 15 percent of the operat-ing income which is $105,000.

(3) In fiscal year 1993, a museum with cal-endar 1991 operating income of $40,000 appliesto IMS for a General Operating Supportgrant. Its application is approved. It may re-ceive a grant of no more than $7,500, thelarger of $7,500 or 15 percent of the museum’soperating income which is $6,000. The grantsatisfies the requirement of paragraph (c)(and the statute) that it not exceed 50 per-cent of the museum’s operating income forthat year.

[57 FR 36905, Aug. 17, 1992]

§ 1180.10 Allowable costs.

(a) Determination of costs allowableunder a grant is made in accordancewith government-wide cost principlesin applicable OMB circulars. (OMB cir-cular A–21 (educational institutions)February 26, 1979, published in 44 FR12368 (March 6, 1979); OMB circular A–87(State and local governments) January15, 1981 published in 46 FR 9548 (Janu-ary 28, 1981); and OMB circular A–122(Nonprofit organizations) June 27, 1980,published in 45 FR 46022 (July 8, 1980)).


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45 CFR Ch. XI (10–1–97 Edition)§ 1180.11

(b) No costs shall be allowed for thepurchase of any object to be includedin the collection of a museum, exceptlibrary, literary, or archival materialspecifically required for a designatedactivity under a grant under the Act.

§ 1180.11 Basic requirements which amuseum must meet to be consid-ered for funding.

(a) Application. To apply for a grant,a museum must submit the designatedapplication form containing the infor-mation requested in the form. Failureto submit the information required bythe application at the time of filingcan subject an applicant to rejection ofthe application without considerationon its merits.

(b) IRS letter. A museum applying asa private, nonprofit institution mustsubmit a copy of the letter from the In-ternal Revenue Service indicating theapplicant’s eligibility for nonprofit sta-tus under the applicable provision ofthe Internal Revenue Code of 1954, asamended.

(c) Financial statements. (1) Each ap-plicant museum must submit, with itsapplication at the time of filing, its fi-nancial statements for the two fiscalyears immediately preceding the fiscalyear for which application is made or,if not available, for the second andthird immediately preceding years.Each financial statement must includea statement of financial operations andif applicable, a balance sheet. Exam-ples of a financial statement and a bal-ance sheet may be found in the Mu-seum Accounting Guidelines of the As-sociation of Science-Technology Cen-ters (1976) or in the Museum Account-ing Handbook of the American Associa-tion of Museums (1978).

(2)(i) Every applicant which has pre-viously received an IMS award mustsubmit its audited financial statementfor the last fiscal year immediatelypreceding the fiscal year in which ap-plication is made or the immediatelypreceding fiscal year, prepared by anindividual or organization meeting thequalifications of the Comptroller Gen-eral of the United States for individ-uals or organizations conducting Gov-ernment audits. Reference is made toGAO, Standards for Audit of Govern-

mental Organizations, Programs andFunctions (1981 revision).

(ii) In the case of a museum whichdoes not use cash basis accounting, theindividual or organization performingthe audit must offer an opinion thatthe financial statement of the museumpresents fairly the financial positionand the results of financial operationsin accordance with generally acceptedaccounting principles. In the case of amuseum which uses cash basis account-ing, the individual or organization per-forming the audit must offer an opin-ion that the statement presents fairly(A) revenues collected and expendi-tures made and (B), where a balancesheet is involved, the assets, liabilities,and fund balances of the museum aris-ing from cash transactions.

(3) If a museum is part of an organi-zation such as a university, State ormunicipality and does not receive au-dits separate from those of the organi-zation of which it is a part, it may sub-mit its financial statement as drawnfrom and containing only audited fig-ures of the organization of which themuseum is a part. This financial state-ment, so prepared, must present fairlythe financial position and the results offinancial operations of the museum,and must clearly indicate that it hasbeen so prepared and the Director may,upon written request filed at the timeof the application, waive the require-ment of a separate audit and proceed toprocess the application on its merits.Where the organization is not auditedon an annual basis, the financial state-ment may be drawn from the most re-cent audited figures of the organiza-tion.

(4) The Director is authorized todefer the audit requirement set forth inparagraph (c)(2) of this section in thecase of a museum with non-federal op-erating income of $250,000 or less, ex-clusive of the value of non-cash con-tributions (in the fiscal period preced-ing the fiscal period for which the de-ferral is requested) if the Director findsthat circumstances justify a deferraland that the grant of the deferral willnot be inequitable to other applicants.A deferral may be granted only uponthose conditions and in light of thoseassurances which the Director deemsappropriate in order to ensure that the


519


purposes of this paragraph areachieved. If the museum receives anaward, the museum must submit au-dited financial statements no laterthan the end of the grant period forwhich the deferral is requested.

(d) Long-range plans. Each applicantmuseum must include long-range plansfor program and financial development.

(Museum Services Act, sec. 206, as amended,20 U.S.C. 965)


[48 FR 27728, June 17, 1983, as amended at 49FR 14110, Apr. 10, 1984; 50 FR 27588, July 5,1985; 51 FR 43354, Dec. 2, 1986; 55 FR 10461,Mar. 21, 1990; 59 FR 55593, Nov. 8, 1994]

§ 1180.12 How applications are judged.(a) To select grantees and determine

the amount of their awards. IMS ratescompetitive applications under the ap-plicable criteria stated in § 1180.13. Nor-mally, these applications are first eval-uated by field reviewers, panels of ex-perts, or both. Final determinations asto the award of grants are made by theDirector after review by the Board.

(b) To achieve diversity in the dis-tribution of assistance, the Institutemay consider the location, size and dis-cipline of the applicant in addition tothe criteria in § 1180.13.

[50 FR 27588, July 5, 1985]

§ 1180.13 Criteria for evaluation of ap-plications for General OperatingSupport.

The following criteria apply to theevaluation of all applications for Gen-eral Operating Support. In applyingthese criteria, the total operation ofthe applicant museum is assessed, in-cluding the museum’s operation as itwould be if the General Operating Sup-port is granted. This assessment isbased primarily on the informationsupplied in the museum’s application.

(a) Museum services. Are the appli-cant’s museum services of high qual-ity? IMS considers factors such as:

(1) The quality of the museum’s edu-cational and interpretive services andtheir relevance to the collections andaudience including the special con-stituencies which the museum serves;

(2) The quality of the museum’s phys-ical facilities and the manner in which

space is allocated to various museumactivities; and

(3) The qualifications of the profes-sional staff (both full-time and part-time; paid and volunteer) and the qual-ity of the opportunities for professionalstaff development and in-service train-ing afforded by the museum.

(b) Collections and exhibits. Are themuseum’s collections and exhibits ofhigh quality and significance? IMStakes into account such factors as:

(1) The intrinsic value of the collec-tions and exhibits;

(2) The significance of the museum’scollections to the community; and

(3) The quality of the care and con-servation of the collections; the qual-ity of exhibit designs.

(c) Accessibility. How accessible to thegeneral public are the museum’s serv-ices, collections and exhibits? IMS con-siders such factors as:

(1) The percentage of the museum’scollections on view to the general pub-lic on a regular basis; the extent of themuseum’s regular program for out-reach, loans, and other means of exhib-iting its collections to the public;

(2) The annual schedule of open hoursfor the museum; and

(3) The appropriateness of this sched-ule to the museum’s audience.

(d) Population served. To what extentdoes the museum serve a general publicwhich otherwise would have limited ac-cess to the type of museum serviceswhich it provides or to museum serv-ices of any type? To what extent doesthe public seek access to the museum’sservices? IMS considers such factors as:

(1) The characteristics of the audi-ence and the community which the mu-seum serves;

(2) The availability of other museums(or types of museums) which serve thisaudience and this community; and

(3) The museum’s annual attendanceby calendar quarters.

(e) Financial Management. What is thequality of the financial management ofthe museum? In how many of the lastfive years has the museum shown anexcess of revenues over expenditures?IMS considers such factors as:

(1) The financial condition of the mu-seum as reflected in its financial state-ments;


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45 CFR Ch. XI (10–1–97 Edition)§ 1180.14

(2) The quality of the museum’s plansfor remedying any financial weak-nesses in the museum’s operations; and

(3) The qualifications of the museumstaff assigned to financial managementactivities.

(f) Long-range plans. What is the qual-ity of the museum’s long-range plansfor financial and program develop-ment? What are the museum’s plans forthe expenditure of the grant funds?IMS considers such factors as:

(1) The quality of the museum’s long-range plans; how the museum proposesto implement them; how practical arethe steps the museum plans to take toimplement them?

(2) The probability that the GeneralOperating Support grant, if awarded,will assist the museum in carrying outits long-range plans;

(3) In what manner will this grant, ifawarded, contribute to maintaining,increasing or improving the museum’sservices?

(g) Community commitment. How com-mitted to the museum are its users andsupporters? Does the museum have asubstantial base of non-Federal sup-port? Does it have a strong volunteerprogram? IMS considers such factorsas:

(1) The quality and extent of the fi-nancial support that the museum re-ceives from the private sector andother non-Federal sources and the ex-tent to which this support is stable,broad-based and indicative of continu-ing community commitment;

(2) The quality of the museum’s vol-unteer program and its program of in-kind contributions and their impor-tance to the museum’s annual oper-ations; and

(3) The commitment of its users tothe museum as evidenced by such fac-tors as participation in membershipand docent programs, fund raising andother supportive activities.

(h) Non-Federal support. To what ex-tent, if any, will the General OperatingSupport requested enable the museumto increase its base of State, local andprivate funding in the year for whichassistance is requested and beyond?

(i) Past use of IMS funds (when appli-cable). Has the museum used its IMSfunds effectively? How and in what

amounts and in what manner have theybeen used?

§ 1180.14 [Reserved]

§ 1180.15 Duration of grants.

The grantee may use grant funds dur-ing the period specified in the grantdocument unless the grant is suspendedor terminated. If the grantee needs ad-ditional time to complete the grant,the grantee may apply for an extensionof the grant period without additionalfunds. The Director may approve thisextension at his or her discretion.

[57 FR 36905, Aug. 17, 1992]

§ 1180.16 Contributions, restricted ac-counts.

(a) For a particular fiscal year, andfor one or more programs, the Boardmay determine that an amount equalto the amount to be awarded (or a per-centage thereof) to an applicant underthe Act must consist of non-Federalfunds contributed to the museum in ex-cess of the non-Federal funds contrib-uted to the museum for its imme-diately preceding fiscal year.

(b) A museum shall maintain a re-stricted account for funds receivedunder the Act.

[57 FR 36905, Aug. 17, 1992]

§ 1180.17 Reports.

In its final reports a grantee shallbriefly detail how the expenditure ofthe grant funds has satisfied the pro-posed use of the funds as stated in itsGeneral Operating Support applicationor has accomplished the proposal as setforth in its application and has servedthe purpose of the Act as reflected inthe applicable evaluation criteria in§ 1180.13.

[60 FR 63964, Dec. 13, 1995]

§ 1180.18 Maintenance of effort.A grantee must be able to dem-

onstrate a continuing effort to main-tain or increase its base of financialsupport during the fiscal year forwhich it receives a grant from IMS. Agrantee successfully demonstratesmaintenance of effort if its non-federaloperating income during the fiscal yearof its award is at least equal to its non-


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federal operating income for its imme-diately preceding fiscal year.

[49 FR 14111, Apr. 10, 1984]


§ 1180.20 Guidelines and standards forconservation projects.

(a) Scope. The guidelines and stand-ards in this document apply to all as-pects of the IMS conservation grantprogram including the submission ofapplications by museums for conserva-tion grants, to the award, review andapproval of such applications by IMS,and to the carrying out of conservationgrants awarded by IMS.

(b) Applicability of regulations. (1) Ex-cept as otherwise provided in theseguidelines, subparts A–C of this part,part 1180 of Title 45 CFR, (45 CFR1180.1–1180.58) (IMS Grants Regula-tions), as amended, including §§ 1180.35,1180.41, 1180.45, 1180.48, and 1180.49,apply to the IMS conservation grantprogram.

(2) Sections 1180.11(d) does not apply.A museum which applies for a con-servation grant need not submit along-range plan.

(3) Section 1180.16(b), which providesfor the maintenance of a restricted ac-count, does apply to conservationgrants.

(4) Section 1180.18 (relating to main-tenance of effort) does not apply.

(5) In addition to submitting the finalreport required by § 1180.17, a granteemust submit an interim report in ac-cordance with a schedule set forth inthe grant award document. An appli-cant that has received a prior con-servation grant from IMS the perform-ance of which has not been completedmay be required to submit an addi-tional performance report or submit aninterim report early.

(c) Definition. As used in these guide-lines, the term conservation includes,but is not limited to, the followingfunctions, as applied to art, history,natural history, science and tech-nology, and living collections:

(1) Technical examination of mate-rials and surveys of environmental andcollection conditions;

(2) Provision, insofar as practicable,of optimum environmental conditionsfor housing, exhibition, monitoring, re-

formating, nurturing and transpor-tation of objects;

(3) Physical treatment of objects,specimens and organisms, for the pur-pose of stabilizing, conserving and pre-serving their condition, removal ofinauthentic additions or accretions,and physical compensation for losses;species survival activities; and

(4) Research and training in con-servation.

(d) Applicants. Under the MuseumServices Act only a museum may re-ceive a grant. (20 U.S.C. 965(a)). See§ 1180.3 of the IMS regulations for thedefinition of ‘‘museum’’. A museummay apply for and receive only oneconservation grant under this programin a fiscal year.

(e) Types of conservation projects fund-ed. IMS considers applications to carryout conservation projects such as:

(1) Projects to develop improved orless costly methods of conservation, orto maintain or improve conservationwith respect to one or more collec-tions, including—

(i) Projects involving surveys of con-servation needs and

(ii) Projects to establish or maintainoptimum environmental conditions.

(2) Projects to conduct research inconservation (including developmentaland basic research).

(3) Projects to conduct or obtaintraining in conservation (includingtraining of persons for careers as pro-fessional conservators; training or up-grading of practicing conservators andconservation technicians in the use ofnew materials and techniques; andtraining of persons to become con-servation technicians).

(4) Projects related to museum con-servation needs not regularly addressedby other Federal funding agencies.

(5) Projects to meet the conservationneeds of museums which are unable tomaintain their own individual con-servation facilities. Because grants aremade only to museums, organizationswhich operate regional conservationcenters but which are not museums areineligible for a direct grant. However, amuseum or a group of museums mayuse a grant to obtain services fromsuch a center.


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45 CFR Ch. XI (10–1–97 Edition)§ 1180.20

(6) Projects to conserve particularobjects in a museum’s collection (in-cluding plants and animals) or to meetthe conservation needs of a particularmuseum (through such activities as theemployment of conservators and theprocurement of conservation servicesor equipment).

(f) Limits for Federal funding. (1) Thenormal amount of a ConservationProject Support grant will be estab-lished through a notice published inthe FEDERAL REGISTER. Beginning inFY 1996, the normal maximum amountis $50,000. Unless otherwise provided bylaw, if the Director determines that ex-ceptional circumstance warrant, theDirector, consistent with the policy di-rection of the Board, may award a con-servation grant which obligates anamount in Federal funds in excess ofthe normal maximum award. IMS mayestablish a maximum award level forexceptional project grants for a par-ticular fiscal year through informationmade available in guidelines or othermaterial distributed to all applicants.

(2) A conservation grant is not in-cluded in the maximum amount whicha museum may expect to receive fromIMS for a fiscal year, as set forth pur-suant to § 1180.9 of the regulations.Therefore, a museum may receive, forexample, a General Operating Supportgrant for the amount specified pursu-ant to that section and an additionalamount for a conservation grant in afiscal year.

(3) IMS makes conservation grantsonly on a matching basis. This meansthat at least 50 per cent of the costs ofa conservation project must be metfrom non-federal funds. Principles inapplicable OMB circulars regardingcosts sharing or matching apply. See,e.g., OMB Circular A–102, AttachmentF.

(g) Application requirements; priorities;survey required in certain cases. (1) Ap-plication requirements in § 1180.11 (a),(b), and (c) apply. An application shalldescribe when, during the term of thegrant, the applicant plans to completeeach objective or phase of the project.Where appropriate, IMS may require anapplicant to submit a disseminationplan.

(2) The Board, by notice published inthe FEDERAL REGISTER, may establish

priorities with respect to all or part ofthe funds available to IMS for con-servation for a fiscal year among thetypes of projects specified in paragraph(e) of this section. If the Board estab-lishes one or more types of projects asa priority for a fiscal year, applicationsproposing projects of that type (ortypes) are evaluated, ranked and (ifrecommended for funding) approved be-fore applications proposing other typesof projects.

(3) The Director may, to the extentappropriate, require (by instructions inthe application materials) that an ap-plicant which proposes a project toconserve particular objects must showthat, prior to the submission of the ap-plication, it has carried out a generalsurvey of its conservation needs andpriorities and that the project in ques-tion is consistent with such survey. Inexceptional circumstances, the Direc-tor may adjust this requirement, con-sistent with the policy direction of theBoard. The Director may also (throughsuch instructions) require an applicantfor a conservation project to submitadditional information, material, orundertakings to carry out the purposesof this part.

(h) Procedures for review of applica-tions. (1) IMS uses the procedures stat-ed in this paragraph to review applica-tions for conservation projects.

(2) IMS evaluates all eligible applica-tions for conservation projects in ac-cordance with applicable criteria. (Seeparagraph (i) of this section.) The Di-rector expects to use panels of expertsto review at least a portion of the ap-plications for conservation grants. De-pending upon the number of applica-tions received as well as other factors,the Director may also use field review-ers to evaluate applications before sub-mission of applications to the panels.In addition, the Director may use tech-nical experts to provide technical ad-vice regarding certain applications.See generally § 1180.12 of the IMS regu-lations.

(3) IMS evaluates applications forconservation projects separately fromapplications for general operating sup-port.


523


(i) Criteria. This paragraph sets forththe criteria which IMS uses in evaluat-ing and reviewing applications for con-servation grants. Panelists and field re-viewers are instructed to use onlythese criteria in the evaluation and re-view of these applications.

(1) The following programmatic cri-teria apply to the evaluation and re-view of conservation grants:

(i) What is the importance of the ob-ject or objects to be conserved? What isthe significance of the object or objectsto the museum’s collection and/or audi-ence?

(ii) What is the need for the project,including the relationship of theproject to the conservation needs andpriorities of the applicant museum asreflected in a survey of conservationneeds or similar needs assessment?

(iii) What are the applicant’s plans touse and maintain the anticipated re-sults or benefits of the project after theexpiration of Federal support?

(iv) Does the applicant plan to devoteadequate financial and other resourcesto the project without inhibiting itsongoing activities?

(2) The following technical criteriaapply to the evaluation and review ofapplications for conservation grants:

(i) What is the nature of the proposedproject with respect to project designand management plan?

(ii) To what extent does the applica-tion exhibit knowledge of the technicalarea to which the conservation projectrelates and employ the most promisingor appropriate methods or techniquesof conservation? To what extent is theconservation project likely to use, de-velop or demonstrate improved, moreefficient, or more economic methods ofconservation?

(iii) Does the project have an ade-quate budget to achieve its purpose? Isthe budget reasonable and adequate inrelation to the objectives of theproject?

(iv) What are the qualifications ofthe personnel the applicant plans touse on the project and the proposedtime that each such person is obligatedto commit to the project?

(j) Duration of grant. IMS makes aconservation grant under this sectionfor a period of not to exceed two years.

(k) Grant condition. An applicantwhich has received a grant in a priorfiscal year under the IMS conservationgrant program may not receive a grantin a subsequent fiscal year under thissection until required reports havebeen submitted regarding the perform-ance of the previous grant.

(l) Allowable and unallowable costs. (1)Section 1180.10 of the IMS regulations,which applies to conservation grants,sets forth the rules applicable to deter-mining the allowability of costs underIMS grants and refers readers to theOMB circulars containing applicablecost principles which govern Federalgrants generally.

(2) In general such costs as com-pensation for personal services, costs ofmaterials and supplies, rental costs,and other administrative costs specifi-cally related to a conservation projectare allowable under a conservationgrant in accordance with applicablecost principles.

(3) Costs of alterations, repairs andrestoration to an existing facility areallowable when they are related to aconservation project under a conserva-tion grant in accordance with applica-ble cost principles.

(4) Costs of equipment are generallyallowable if related to a conservationproject but do require the specific ap-proval of the Director as indicated inthe grant award document.

(5) A grantee may award a stipend toan individual for training in connec-tion with a conservation project. Sti-pends and allowances may be paid atrates and under conditions establishedby the Director consistent with poli-cies of other agencies in the Founda-tion or other agencies or instrumental-ities of the United States providingcomparable assistance with respect toconservation.

(6) Costs of new construction are un-allowable. For example, a museum maynot a use a conservation grant to con-struct a new building or an addition toan existing building to improve the en-vironment in which its collections arehoused.

[50 FR 27585, July 5, 1985, as amended at 51FR 43353, Dec. 2, 1986; 56 FR 10178, Mar. 11,1991; 57 FR 36905, Aug. 17, 1992; 60 FR 63964,Dec. 13, 1995]


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45 CFR Ch. XI (10–1–97 Edition)§ 1180.30

Subpart B—General Application,Selection and Award Proce-dures Applications

APPLICATIONS

§ 1180.30 Publication of an applicationnotice; content of the notice.

Each fiscal year the Director pub-lishes application notices in the FED-ERAL REGISTER that explain what kindof assistance is available that fiscalyear under the Act.

§ 1180.31 Information in the applica-tion notice.

(a) The application notice usually in-cludes:

(1) How an applicant can get an appli-cation packet containing detailed in-formation about the program includingan application form;

(2) Where an applicant must send itsapplication;

(3) The amount of funds available forgrants;

(4) The approximate number ofgrants the Institute expects to makeunder the program;

(5) The expected cap on grant(s) thatmay be applied for;

(6) Any priorities established by theInstitute for that year;

(7) A reference to the applicable regu-lations.

(b) [Reserved]

§ 1180.32 Deadline date for applica-tions.

(a) The application notice sets dead-line date for applications to be post-marked or hand delivered to the Insti-tute. The applicant shall:

(1) Mail the application to the ad-dress specified in the application no-tice on or before the deadline date; or

(2) Hand deliver the application tothe address specified in the applicationnotice by 4:30 p.m. (Washington, DCtime) on deadline date.

(b) An applicant must be prepared toshow one of the following as proof oftimely mailing:

(1) A legibly dated U.S. Postal Serv-ice postmark.

(2) A legible mail receipt with thedate of mailing stamped by the U.S.Postal Service.

(3) A dated shipping label, invoice, orreceipt from a commercial carrier.

(4) Any other dated proof of mailingacceptable to the Director.

(c) If an application is mailedthrough the U.S. Postal Service, theDirector does not accept either of thefollowing as proof of mailing:

(1) A private metered postmark.(2) A mail receipt that is not date

cancelled by the U.S. Postal Service.

§ 1180.33 Applicants must meet proce-dural rules.

The Director is authorized to make agrant only to an eligible applicant thatsubmits a complete application, includ-ing attachments, on or before the dead-line.

§ 1180.34 Number of copies.Each applicant shall submit an origi-

nal and four copies of its application tothe Institute.

§ 1180.35 Group applications.(a) Eligible museums may apply as a

group for a project grant.(b) If a group of museums applies for

a grant, the members of the group shalleither:

(1) Designate one member of thegroup to apply for the grant; or

(2) Establish a separate, eligible legalentity, consisting solely of the museumgroup, to apply for the grant.

(c) The members of the group, or en-tity, shall enter into an agreementthat:

(1) Details the activities that eachmember of the group plans to perform;and

(2) Binds each member of the groupto every statement and assurance madeby the applicant in the application.

(d) The applicant shall submit theagreement together with its applica-tion.

(e) If the Director makes a grant to agroup of eligible museums, the appli-cant for the group is the grantee and islegally responsible for:

(1) The use of all grant funds; and(2) Ensuring that the project is car-

ried out by the group in accordancewith applicable Federal laws, regula-tions, and requirements.

(f) Each member of the group is le-gally responsible for:


525


(1) Carrying out the activities itagrees to perform; and

(2) Using the funds it receives underthe agreement in accordance with ap-plicable Federal laws, regulations, andrequirements.

[48 FR 27728, June 17, 1983, as amended at 60FR 63964, Dec. 13, 1995]

SELECTION AND AWARD PROCEDURES

§ 1180.36 Rejection of an application.

(a) The Director rejects an applica-tion if:

(1) The applicant is not eligible;(2) The applicant fails to comply with

procedural rules that govern the sub-mission of the application;

(3) The application does not containthe information required;

(4) The application cannot be fundedunder the authorizing statute or imple-menting regulations.

(b) If the Director rejects an applica-tion under this section, the Directorinforms the applicant and explains whythe application was rejected.

§ 1180.37 Rejection for technical defi-ciency—appeal; reconsideration;waiver.

(a) An applicant whose application isrejected because of technical deficiencymay appeal such rejection in writing tothe Director within 10 days of post-mark of notice of rejection.

(b) If an application was rejected be-cause material did not accompany theapplication, the Director shall recon-sider the application upon receipt ofmaterial in a timely manner.

(c) As has always been the practice ofIMS, the Director waives the require-ment in these regulations of certainrecords under circumstances whichwould require such waivers where theregulations specifically provide forwaiver. (See § 1180.51(b) (Pub. L. 97–394))

§ 1180.38 How grants are processed.

(a)(1) The Director may use one ormore groups of experts or readers toevaluate eligible applications.

(2) Each group consists of three ormore qualified persons.

(3) In each group there must be atleast one person who is not an em-ployee of the Federal Government.

(4) A person may not serve as a mem-ber of a group of experts or readers ifthe person is an employee of the Insti-tute who is regularly involved ingrants processing; however, the Direc-tor may sign a waiver for such personand that person may serve as a memberof a group of experts or readers.

(b) When the director uses a group ofexperts or readers, the group of expertsor readers uses the applicable evalua-tion criteria set forth in the Regula-tions to evaluate each application.

(c) After the groups of experts orreaders have evaluated the applica-tions, a rank ordering of the applica-tion is prepared. The rank ordering ofthe eligible applications is based solelyon the evaluations of the applicationsby the groups of experts.

(d) Subject to § 1180.12, the Director,in consultation with the Board, thendetermines the order in which applica-tions will be selected. The Directormakes these determinations on thebasis of the evaluation criteria and anypriorities or other program require-ments that have been published in theFEDERAL REGISTER. The Director mayconsider the following in making thesedeterminations:

(1) The application.(2) The rank ordering of the applica-

tions.(3) Any other information relevant to

applicable criteria, priorities, or anyother applicable information or re-quirements. (Cross reference. See§ 1180.12)

§ 1180.39 Applications not selected forfunding.

If an application is not selected forfunding, the Director informs the ap-plicant.


§ 1180.41 The cost analysis; basis forgrant amount.

Before the Director sets the amountof a grant, a cost analysis of theproject is made which involves an ex-amination of:

(a) The cost data in the detailedbudget for the project;

(b) Specific elements of cost; and


526

45 CFR Ch. XI (10–1–97 Edition)§ 1180.42

(c) The necessity, reasonableness,and allowability under applicable stat-utes and regulations.

[60 FR 63964, Dec. 13, 1995]

§ 1180.42 The notification of grantaward.

(a) The Director furnishes a notifica-tion of grant award to the grantee.

(b) The notification of grant awardsets the amount of the grant and givesother information about the grant.

§ 1180.43 Effect of the grant.The grant obligates both the Federal

Government and the grantee to all ofthe requirements, regulations and stat-utes that apply to the grant.

Subpart C—General ConditionsWhich Must Be Met by a Grantee

NONDISCRIMINATION

§ 1180.44 Federal statutes and regula-tions on nondiscrimination.

(a) Each grantee shall comply withthe following statutes:

Subject Statute

Discrimination on the basis ofrace, color or national ori-gin.

Title VI of the Civil Rights Actof 1964 (42 U.S.C. 2000dthrough 2000d–4)

Discrimination on the basis ofsex.

Title IX of the EducationAmendments of 1972 (20U.S.C. 1681–1683).

Discrimination on the basis ofhandicap.

Section 504 of the Rehabilita-tion Act of 1973 (29 U.S.C.794).

Discrimination on the basis ofage.

The Age Discrimination Act(420 U.S.C. 8101 et. seq).

(b)–(c) [reserved](d) Regulations under section 504 of the

Rehabilitation Act of 1973. The Instituteapplies the regulations in 45 CFR part1170, issued by the National Endow-ment for the Humanities and relatingto nondiscrimination on the basis ofhandicap in federally assisted pro-grams and activities, in determiningthe compliance of museums with sec-tion 504 of the Rehabilitation Act of1973 as it applies to recipients of Fed-eral financial assistance from the In-stitute. These regulations apply toeach program or activity that receivessuch assistance. In applying these reg-ulations, references to the Endowmentof the agency shall be deemed to be ref-erences to the Institute and references

to the Chairman shall be deemed to bereferences to the Director.

[55 FR 51104, Dec. 12, 1990]

§ 1180.45 Use of consultants in SpecialProjects.

(a) Subject to Federal statutes andregulations, a grantee shall adhere toits general policies and practices whenit hires, uses, and pays a consultant aspart of the staff.

(b) The grantee may not use its grantto pay a consultant unless:

(1) There is a need in the project forthe services of that consultant; and

(2) The grantee cannot meet thatneed through using an employee ratherthan a consultant.

[48 FR 27728, June 17, 1983, as amended at 60FR 63964, Dec. 13, 1995]

EVALUATION

§ 1180.46 Evaluation by the grantee.A grantee shall evaluate at least

semi-annually:(a) The grantee’s progress in achiev-

ing the objectives set forth in its ap-proved application: and

(b) The contribution of the grant to-ward meeting the purposes of the Act.

§ 1180.47 Federal evaluation—coopera-tion by a grantee.

A grantee shall cooperate in anyevaluation by the Director of the par-ticular grant program in which granteehas participated.

PUBLICATIONS AND COPYRIGHTS

§ 1180.48 General conditions on publi-cations.

(a) Content of materials. Subject toany specific requirements that apply toits grant, a grantee may decide the for-mat and content of materials that itpublishes or arranges to have pub-lished.

(b) Required Statement. The granteeshall ensure that any publication thatcontains materials also contains thefollowing statement:

The contents of this (insert type of publi-cation, e.g., book, report, film) were devel-oped in whole or in part under a grant fromthe Institute of Museum Services. However,the contents do not necessarily represent thepolicy of the Institute, and endorsement by


527


the Federal Government should not be as-sumed.

[60 FR 63964, Dec. 13, 1995]

§ 1180.49 Copyright policy for grant-ees.

A grantee may copyright materialsin accordance with government-widepolicy applicable to copyright of publi-cations developed under Federalgrants.

[60 FR 63964, Dec. 13, 1995]

§ 1180.50 Definition of ‘‘materials.’’

As used in §§ 1180.48 through 1180.49,materials means a copyrightable workdeveloped in whole or in part withfunds from a grant from the Institute.

[60 FR 63964, Dec. 13, 1995]

GENERAL ADMINISTRATIVERESPONSIBILITIES

§ 1180.51 Compliance with statutes,regulations, and its approved grantapplication.

(a) A grantee shall comply with ap-plicable statutes, regulations, and theapproved grant application, and shalluse Federal funds in accordance there-with.

(b) No official, agent, or employee ofthe Institute may waive any regulationunless the regulation specifically pro-vides for waiver.

(c) No act or failure to act by an offi-cial, agent, or employee of the Insti-tute can affect the authority of the Di-rector to enforce regulations.

(d) In any circumstance for whichwaiver is provided, the determinationof the Director shall be final.

§ 1180.52 The grantee administers orsupervises the grant.

A grantee shall directly administeror supervise the administration of thegrant and be answerable therefor.

§ 1180.53 Fiscal control and fund ac-counting procedures.

A grantee shall exert fiscal controland employ fund accounting proceduresthat ensure proper disbursement of andaccounting for Federal funds in accord-ance with OMB circulars A–102 and A–110.

§ 1180.54 Obligation of funds duringthe grant period.

A grantee may use grant funds forobligations it makes only during thegrant period.

§ 1180.55 Prohibition of subgrants.(a) A grantee may not make a

subgrant.(b) A grantee may contract for sup-

plies, equipment, and services subjectto § 1180.45(a).

RECORDS

§ 1180.56 Records related to grantfunds.

A grantee shall, in accordance withOMB circular A–102 and A–110, keeprecords that show accurately and infull:

(a) The amount of funds awardedunder the grant;

(b) The exact uses of the funds;(c) The total amount expended under

the grant;(d) The amount expended under the

grant during the grant period providedfrom non-Federal sources; and

(e) Other records necessary to facili-tate an effective audit.

§ 1180.57 Records related to compli-ance.

A grantee shall, in accordance withOMB circulars A–102 and A–110, keepaccurate and full records to show itscompliance with specific requirementsset forth in the regulations and pub-lished notices, or contained in thegrant award documents.

§ 1180.58 Records related to perform-ance.

(a) A grantee shall keep records re-vealing progress and results under thegrant.

(b) The grantee shall use the recordsunder paragraph (a) of this section to:

(1) Determine progress in accom-plishing objectives; and

(2) Revise those objectives, if nec-essary and authorized under the grant.

[60 FR 63965, Dec. 13, 1995]

§ 1180.59 Applicability.Subparts B and C (§§ 1180.30 through

1180.58) apply to General Operating


528

45 CFR Ch. XI (10–1–97 Edition)§ 1180.70

Support assistance, except as otherwiseprovided in these regulations.

[60 FR 63965, Dec. 13, 1995]

Subpart D—Museum Assessment


§ 1180.70 Purpose of program.The Director of the Institute of Mu-

seum Services makes grants under thissubpart to assist museums in carryingout institutional assessments. Thegrants enable museums to obtain tech-nical assistance in order to evaluatetheir programs and operations by gen-erally accepted professional standards.The Director may make grants for sep-arate categories of assessment activi-ties and establish conditions for receiptof assistance for such separate cat-egories. Such categories may includeassessment activities relating to—

(a) General operations;(b) Collections;(c) Museum security, and(d) Other aspects of museum services,

as specified by the Board.

[51 FR 43354, Dec. 2, 1986]

§ 1180.71 Eligibility.(a) A museum as defined in § 1180.3

may apply for assessment assistanceunder this subpart.

(b) A museum which receives a grantfor assessment assistance under thissubpart for a fiscal year may not re-ceive another grant for the same cat-egory of assessment assistance in thesame or a subsequent fiscal year.

§ 1180.72 Allowable costs.A museum may use a grant under

this subpart for expenses of institu-tional assessment, such as registrationfees, surveyor honorariums, travel andother expense of a surveyor, and tech-nical assistance materials.

§ 1180.73 Form of assistance; limitationon amount.

(a) The Director makes payments toa museum under this subpart in ad-vance.

(b) The amount of a grant to a mu-seum under this subpart will be deter-mined by the Director, in accordance

with the policy direction of the Boardregarding the maximum amount of agrant to be awarded for the variouscategories of assistance under this sub-part and in consultation with the ap-propriate professional organization ar-ranging for the assessment in question.

[50 FR 27588, July 5, 1985, as amended at 55FR 10461, Mar. 21, 1990]

§ 1180.74 Conditions of participation.The Director considers an application

by a museum on a form supplied byIMS for a grant under this subpart forassessment assistance only if:

(a) The museum requests assessmentfrom an appropriate professional orga-nization as defined in this section, and

(b) That organization notifies IMSthat the request for the assessment as-sistance is complete and that the mu-seum is eligible to participate. An ap-propriate professional organization forpurposes of this subpart means: (1) TheAmerican Association of Museums or(2) other professional organizationsthat are determined to be capable ofarranging for a program of assessmentservices for a category of museums andare so designated by notice publishedin the FEDERAL REGISTER.

§ 1180.75 Funding and award proce-dures.

(a) The Director approves applica-tions meeting the requirements of thissubpart on first-come, first-servedbasis, in the order in which it is deter-mined by IMS that such requirements(including all application require-ments) have been met.

(b) There are no selection criteria.(c) Section 1180.16 (IMS share of the

cost of a proposal) does not apply togrants under this subpart.

(d) A museum receiving assistanceunder this subpart must submit a finalfinancial and narrative report thatevaluates the success of the assessmentand actions taken by the museum as aresult of the assessment. IMS may re-quest that the report be submitted upto 12 months after the close of thegrant period.

(e)(1) Except as provided in § 1180.71and paragraph (e)(2) of this section sub-parts A, B, and C of part 1180 of title 45CFR do not apply to the Museum As-sessment Program.


529


(2) The following sections do apply tothe Museum Assessment Program: Sec-tions 1180.5(a); 1180.5(c); 1180.5(d);1180.5(e); 1180.15; 1180.44; 1180.47; and1180.51–1180.57.

[50 FR 27588, July 5, 1985, as amended at 60FR 63965, Dec. 13, 1995]

§ 1180.76 Responsibility of a museum.Except in unusual circumstances, a

museum which receives a grant underthis subpart must take the steps nor-mally expected of it to complete theassessment process for which it has re-ceived assistance. Section 1180.13(i) (acriterion for evaluation of general op-erating support applications) applies tothe use of funds under this subpart.

Subpart E—Assistance To Profes-sional Museum Organizations

§ 1180.77 Contracts and cooperativeagreements with professional mu-seum organizations.

(a) Scope. The guidelines and stand-ards in this section apply to all aspectsof the Institute’s program to provide fi-nancial assistance, through contractsand cooperative agreements, to profes-sional museum organizations for thecarrying out of certain projects pursu-ant to section 206(b) of the Act.

(b) Definitions. For the purposes ofthis subpart, the term professional mu-seum organization means a private, non-profit professional museum services-re-lated organization, institution, or asso-ciation which engages in activities de-signed to advance the well-being of mu-seums eligible for assistance under thispart and the museum professionthrough such activities as technical as-sistance, dissemination of information,professional development activities,and professional services.

(c) Applicability of other regulations.The following IMS regulations apply toassistance under this subpart:

(1) Section 1180.3; § 1180.4; and§ 1180.5(e) of subpart A and

(2) Sections 1180.30–1180.33 and§§ 1180.36–1180.39 of subpart B; and

(3) Section 1180.44, § 1180.46 and§§ 1180.51–1180.59 of subpart C.

(d) Applicants. (1) A professional mu-seum organization may apply for as-sistance through a contract or coopera-tive agreement under this subpart.

(2) A professional museum organiza-tion that serves museums or museumprofessionals at the national, regional,state, or local level may apply.

(3) An entity eligible for assistanceunder other subparts of this part 1180may not apply.

(e) Types of projects. The Instituteconsiders applications under this sub-part to carry out projects designed tostrengthen museum services such as:

(1) Programs to educate professionalsin improved or innovative standards ofmuseum operations or other mattersrelating to museum management;

(2) Research or surveys to determineeffective and innovative methods toprovide museum services or conductoperations;

(3) Projects to investigate the fea-sibility of cooperative methods for thecarrying out by museums of manage-ment, storage, and information gather-ing and sharing, or other museum func-tions; or

(4) Research projects to help muse-ums and museum associations servetheir publics more effectively.

(f) Limitation. No financial assistancemay be provided under this subpart topay for the operational expenses of anyprofessional museum organization.

(g) Amount of contract or cooperativeagreement. The amount of contracts orcooperative agreements shall be sub-ject to the availability of appropria-tions. Guidance on probable awardranges will be provided with applica-tion materials each year.

(h) Matching. A contract or coopera-tive agreement under this subpart forany fiscal year may not normally ex-ceed 50 per centum of the cost of theproject for which the contract or coop-erative agreement is made. In excep-tional circumstances applicable to aparticular applicant, the Director,upon consultation with the Board, maywaive this requirement pursuant tosection 206(c) of the Act.

(i) Application requirements. (1) An ap-plicant under this subpart must submitan application in such time and suchmanner, and containing such informa-tion, as requested by the Institute.

(2) An applicant must submit with itsapplication its financial statements forthe two most recent fiscal years for


530

45 CFR Ch. XI (10–1–97 Edition)§ 1180.78

which information is available. For ap-plications requesting in excess of$20,000, the Institute requests that oneof those statements be audited.

(j) Procedures for review of applica-tions. To evaluate applications and de-termine the amount of their awards,the Institute rates competitive appli-cations under the applicable criteriastated in paragraph (k) of this section.Normally, these applications are evalu-ated by field reviewers, panels of ex-perts, or both. The Director may alsouse technical experts in the review ofapplications. Final determinations asto the award of contracts or coopera-tive agreements are made by the Direc-tor after consultation with the Boardwith respect to policy matters.

(k) Criteria. This paragraph sets forththe criteria that the Institute uses inevaluating and reviewing applicationsfor contracts or cooperative agree-ments under this subpart. Panelistsand field reviewers are instructed touse only these criteria in the evalua-tion and review of these applications:

(1) To what extent is the project like-ly to strengthen museum services?

(2) To what extent does the projecthold promise of exploring or developingeffective and innovative solutions toproblems affecting the provision of mu-seum services or operations?

(3) Has the need for the project beenadequately documented?

(4) What is the quality of the projectdesign?

(5) Does the project have an adequatebudget to achieve its purpose?

(6) What are the qualifications of thepersonnel the applicant plans to utilizein the project?

(7) What are the anticipated long-term benefits of the project?

(l) Limitation on number of applica-tions. An applicant may submit onlyone application with respect to eachdeadline.

[53 FR 31338, Aug. 18, 1988, as amended at 56FR 10178, Mar. 11, 1991]

§ 1180.78 Technical training and imple-mentation grants to museums.

(a) Purpose of program. The Directorof the Institute of Museum Servicesmakes two-part grants under this sub-part to assist those who work in muse-ums (paid or volunteer) to obtain train-

ing in technical areas of museum oper-ations and to implement the trainingto improve museum services to thepublic.

(b) Eligibility. (1) To be eligible toapply for a grant under this subpart, amuseum must:

(i) Be a public or private nonprofitinstitution that is organized on a per-manent basis for essentially edu-cational or aesthetic purposes; and

(ii) Care for, and own or use tangibleobjects, whether animate or inanimate,and exhibit these objects to the publicon a regular basis through facilitieswhich it owns or operates, and

(iii) Have at least one staff member,whether paid or unpaid, full-time orpart-time, whose primary responsibil-ity is the acquisition, care or exhi-bition to the public of objects owned orused by the museum; and

(iv) Be open and providing museumservices to the general public on a reg-ular basis; and

(v) Be located in one of the fiftyStates of the Union, the District of Co-lumbia, the Commonwealth of PuertoRico, Guam, American Samoa, the Vir-gin Islands, the Northern Mariana Is-lands, or Palau (until its compact offree association is approved.)

(2) A museum must have an operat-ing budget for the fiscal year imme-diately preceding the deadline to whichthe museum applies of no more than$250,000 exclusive of non-cash support.

(3) Museum includes (but is not lim-ited to) the following institutions ifthey satisfy the provisions of this sec-tion:

(i) Aquariums and zoological parks;(ii) Botanical gardens and arbore-

tums;(iii) Nature centers;(iv) Museums relating to art, history

(including historic buildings and sites);(v) Natural history, science and tech-

nology, planetariums, and specializedsubject.

(4) A museum that receives a grantfor training and implementation underthis subpart for a fiscal year may notreceive another grant under this sub-part for the same or subsequent fiscalyears.

(5) Preference for funding will begiven to a museum that has not re-ceived any grants from the Institute


531


within two years of the deadline towhich it applies over funding for a mu-seum that has received a grant fromthe Institute within two years of appli-cation.

(c) Applicability of other regulations.The following sections in part 1180 doapply to grants for training and imple-mentation under this subpart: Sections1180.3(d), 1180.4, 1180.5(c)–(e), 1180.6,1180.10, 1180.11(a)–(b), 1180.16(b), 1180.30–34, 1180.36–37, 1180.39, 1180.42–44, 1180.47–48, 1180.51–57, part 1183, part 1185.

(d) Application requirements. (1) An ap-plicant under this subpart must submitan application in such time and suchmanner, and containing such informa-tion, as requested by the Institute.

(2) An applicant must submit with itsapplication financial information forits most recently completed fiscal yearfor which satisfactory information isavailable and projected financial infor-mation for the fiscal year(s) that in-cludes the time of the grant period.

(e) Procedures and criteria for review ofapplications. (1) To evaluate applica-tions and determine the amount oftheir awards, the Institute rates com-petitive applications under the criteriastated in paragraph (e)(2) of this sec-tion. Normally, these applications areevaluated by field reviewers, panels ofexperts, or both. The director may alsouse technical experts in the review ofapplications.

(2) This paragraph sets forth the cri-teria the Institute uses in evaluatingand reviewing applications for tech-nical training and implementationgrants under this subpart. Evaluatorsare instructed to use only these cri-teria in the evaluation of these appli-cations.

(i) Does the museum demonstrate itsimportance to the community itserves?

(ii) Is the type of training requestedappropriate to the purpose or missionof the museum?

(iii) Are the costs requested to obtainthe training reasonable and necessary?

(iv) Is the training needed at the mu-seum?

(v) Is the staff member(s) (paid orvolunteer) identified to receive thetraining the appropriate person(s)within the museum’s organizationalstructure?

(vi) Does the individual(s) identifiedfor training demonstrate at least atwo-year commitment to the museumfield?

(vii) Does the museum demonstrate acommitment to implement the train-ing?

(f) Allowable costs. (1) A museum mayuse a grant under this subpart for ex-penses to obtain training in areas ofmuseum operations and for activitiesto implement the training.

(2) Funds may be used to pay for reg-istration or tuition fees for trainingcourses or workshops. Individual(s)may use the grant funds to pay for acourse that is part of a degree-grantingprogram only for non-credit such as toaudit the course.) Funds are generallynot intended to support attendance atassociation annual meetings unless aspecific training session or workshop ispart of the meeting (or as a pre or postconference activity). A course of studythat is identified by clearly and specifi-cally named sessions that are part ofan annual meeting program and thatclearly and specifically address thearea of training need will be consid-ered.

(3) Funds may be used for travel toand from training activities and ex-penses incurred during travel, such ashousing and meals.

(4) Funds may be used to purchase in-structional materials.

(5) Funds may not be used to pay thesalary of the person(s) receiving thetraining. The time the staff member(s)expends to obtain the training and toimplement the training is considered amatching, in-kind contribution to thegrant activities.

(6) Funds may not be used for con-sulting fees. (In special cases wheretraining is not available otherwise, theInstitute may consider an individuallydesigned training agenda that includesthe use of a consultant clearly servingas a trainer to the applicant in specificareas of museum operations.)

(7) Funds may be used to purchasesupplies, materials, and equipment forareas of museum operations for whichtraining was received.

(8) Funds may support additionaltravel as needed to implement training(eg. travel to libraries, archives, etc. todocument collections).


532

45 CFR Ch. XI (10–1–97 Edition)§ 1180.80

(g) Conditions of participation. Follow-ing the completion of the training ac-tivity the museum must submit an im-plementation plan to the Institute forreview before implementation fundsare released. The implementation planmust indicate the time frame for im-plementation activities, the personnelinvolved, the activities to be com-pleted, where the activities will takeplace, and the costs for implementingthe plan.

(h) Form of assistance: Limitation ofamount. (1) The Director makes pay-ments to a museum under this subpartin advance.

(2) The amount of the grant to a mu-seum will be determined by the Direc-tor, in accordance with the policy di-rection of the Board, regarding themaximum amount available for eachpart of the grant. The amount of thegrant will be subject to the availabilityof funds.

(i) Reporting requirements. The mu-seum receiving a grant for training andimplementation under this subpartmust submit a final financial and nar-rative report that evaluates the suc-cess of the applicant in meeting thestated goals and any plans to continueactivities in the area of training.

(j) Limitation on number of applica-tions. A museum may submit only oneapplication for each deadline.

(k) Duration of grant. (1) Grants madeunder this subpart generally permitthe grantee to use the funds for a pe-riod of up to 24 months from the startof the grant period. The grantee mayuse grant funds during the period speci-fied in the grant document unless thegrant is suspended or terminated.

(2) If the grantee needs additionaltime to complete the grant, the grant-ee may apply for an extension of thegrant period without additional funds.The Director may approve this exten-sion at his or her discretion.

[59 FR 15344, Apr. 1, 1994]

Subpart F [Reserved]

Subpart G—Meetings of theNational Museum Services Board

GENERAL

AUTHORITY: Museum Services Act (20U.S.C. 961–68), as amended, and Pub. L. 97–100, 95 Stat. 1414; Pub. L. 97–394, 96 Stat. 1994;5 U.S.C. 552b.

SOURCE: 49 FR 3184, Jan. 26, 1984, unlessotherwise noted.

§ 1180.80 Scope.5 U.S.C. 552b, added to the United

States Code by the Government in theSunshine Act, Public Law 94–409 (1976),provides that collegial bodies whichhead Federal agencies must, with cer-tain exceptions, hold their meetings inpublic. Section 552b applies to meet-ings of the National Museum ServicesBoard (‘‘NMSB’’). The regulations inthis document (subpart G of part 1180,title 45 CFR) set forth procedures forthe conduct of meetings of the NMSBin accordance with Section 552b.

§ 1180.81 General rule.Unless properly closed under § 1180.88,

every portion of every meeting of theNMSB is open to public observation.For the purposes of this document ameeting means the deliberations of atleast the number of members of theNMSB required to take action on be-half of the NMSB, where these delib-erations determine, or result in thejoint conduct or disposition of officialIMS business. (A meeting does not in-clude deliberations required or per-mitted by subsection (d) or (e) of sec-tion 552b.)

§ 1180.82 Application to NMSB commit-tees.

This document applies to committeesof the NMSB when they are authorizedto make final policy decisions on theNMSB’s behalf. This document doesnot apply to committees or informalworking groups of the NMSB which areauthorized to make recommendationsor reports to the NMSB or to performtechnical or ministerial functions onits behalf.


533


§ 1180.83 Record vote.

(a) Certain action of the NMSB withregard to meetings under these regula-tions may be taken only by ‘‘recordvote.’’ For purposes of this document, avote of the NMSB is a record vote if—

(1) It carries by a majority of allthose holding offices as NMSB mem-bers at the time of the vote;

(2) No proxies are counted toward thenecessary majority; and

(3) The individual vote of each mem-ber voting is recorded.

(b) Within one day of a record vote toclose, or withhold information about ameeting, or any record vote for thispurpose that does not achieve the nec-essary majority, the NMSB makesavailable to the public a written recordshowing the vote of each member.

(c) The NMSB may take a vote withrespect to matters governed by thispart (without convening) by means ofcirculation of a written ballot, tallysheet, or other notation procedures.

ANNOUNCEMENT OF MEETINGS

§ 1180.84 Public announcement ofmeetings.

(a) Except as stated in paragraphs (b)and (c) this section, the NMSB makes apublic announcement of each meetingat least one week before the meeting.The announcement covers:

(1) The time, place, and subject mat-ter of the meeting;

(2) What portions of the meeting, ifany, are to be closed to the public; and

(3) The name and phone number ofthe official designated to respond to re-quests for information on the meeting.

(b) The announcement may be madeless than a week before the meeting itannounces or after the meeting onlyif—

(1) The NMSB by record vote deter-mines that agency business requiresthe meeting to be called on such shortor after-the-fact notice and (2) a publicannouncement is made at the earliestpracticable time.

(c) All or any portion of the an-nouncement of any meeting may beomitted if the NMSB by record vote de-termines that the announcement woulddisclose information which should bewithheld under the same standards as

apply for closing meetings under§ 1180.88.

§ 1180.85 Changes in time or place ofmeeting.

The time or place of a meeting of theNMSB that has been publicly an-nounced as provided in § 1180.84 maysubsequently be changed. However, thechange must be publicly announced atthe earliest practicable time.

§ 1180.86 Changes in subject matter ofmeeting.

The subject matter of any portion ofany meeting of the NMSB that hasbeen publicly announced as provided in§ 1180.84 (or the determination whetherany portion of any meeting so publiclyannounced will be open or closed) maysubsequently be changed if—

(a) The NMSB determines by recordvote that agency business so requiresand that no earlier announcement ofchange was possible; and

(b) The NMSB publicly announces thechange and the vote of each member onthe change at the earliest practicabletime. (Deletion or postponement ofagenda items are not subject to the re-quirements of this section.)

§ 1180.87 Publication of announce-ments.

Promptly following a public an-nouncement required by these regula-tions, the NMSB submits, for publica-tion in the FEDERAL REGISTER, a noticecontaining information regarding theannouncement as required by section552b.

CLOSED MEETINGS

§ 1180.88 Reasons and procedures forclosing meetings.

(a) The NMSB may, by record vote inaccordance with section 552b, close anyportion of a meeting if it determinesthat the portion falls within one of theexceptions stated in 5 U.S.C. section552(c). (These exceptions are listed inAppendix A.)

(b) In making a determination underparagraph (a) of this section, theNMSB considers whether the public in-terest merits keeping the meeting openalthough an exception applies.


534

45 CFR Ch. XI (10–1–97 Edition)§ 1180.89

(c) The Board addresses requests forthe certification required by section552b to the individual responsible forproviding legal services to the Insti-tute with respect to section 552b.

(d) Within one day of a record voteclosing a portion of a NMSB meeting,the NMSB makes available a full writ-ten explanation of the NMSB’s actionand a list of all persons it expects toattend the meeting and their affili-ations.

§ 1180.89 Requests to close meetings.A person who believes his or her in-

terests may be directly affected by ameeting or a portion of a meeting mayrequest the NMSB to close it to thepublic for a reason cited in paragraphs(5), (6), or (7) of Appendix A. Such re-quests are handled under procedures es-tablished by the NMSB in accordancewith section 552b. This information col-lection has been assigned OMB No.3137–0005.

§ 1180.90 Materials related to closedportions of meetings.

If a portion or portions of any meet-ing of the NMSB are closed to the pub-lic—

(a) The presiding officer of the meet-ing (usually the Chairman of theNMSB) furnishes a statement settingforth the time and place of the meetingand the persons present (includingstaff).

(b) Except where the Act authorizesminutes to be kept, the NMSB makes acomplete transcript or electronic re-cording adequate to record fully theproceedings of each portion of themeeting that is closed to the public.

(c) The NMSB maintains the presid-ing officer’s statement, the certificatedescribed in § 1180.88(c) as required bysection 552b, and the transcript, record-ing, or minutes of the meeting for atleast two years after the meeting andat least one year after the NMSB com-pletes consideration of any proposal,report, resolution, or similar matterdiscussed in any closed portion of themeeting.

§ 1180.91 Opening of transcript or re-cording of closed meeting.

(a) Except as stated in paragraph (b)of this section, the NMSB makes avail-

able for inspection the transcript, elec-tronic recording or minutes of everyportion of a very closed meeting on re-quest tm any member of the public.The transcript or recording is madeavailable in an easily accessible place.The NMSB furnishes to any member ofthe public on request copies of thetranscript (or of a transcription of therecording) disclosing the identity ofeach speaker. The NMSB charges forthe copies or transcriptions no morethan the actual cost of duplication ortranscription.

(b) The NMSB withholds the tran-scripts or recording of the discussion ofany agenda item if the Chairman of theNMSB (or a NMSB member designatedby the Chairman) determines that thediscussion contains information whichshould be withheld under the samestandards which apply for closingmeetings under § 1180.88. The NMSB re-leases the transcript or recording sowithheld when the Chairman (or theChairman’s designee) determines thatthe grounds for withholding no longerapply.

APPENDIX A TO PART 1180

A meeting may be closed if:(1) It is likely to disclose matters that (1)

are specifically authorized under criteria es-tablished by Executive Order to be kept se-cret in the interest of national defense orforeign policy and (ii) are in fact properlyclassified pursuant to the Executive Order;

(2) It is likely to relate solely to the inter-nal personnel rules and practices of the IMSor another Federal agency;

(3) It is likely to disclose matters specifi-cally exempted from disclosure by statute(other than 5 U.S.C. 552): Provided, That thestatute (i) requires that the matter be with-held from the public in such a manner as toleave no discretion on the issue, or (ii) estab-lishes particular criteria for withholding orrefers to particular types of matters to bewithheld;

(4) It is likely to disclose trade secrets andcommercial or financial information ob-tained from the person and privileged or con-fidential;

(5) It is likely to involve accusing any per-son of a crime, or formally censuring anyperson;

(6) It is likely to disclose personal informa-tion where the disclosure would constitute aclearly unwarranted invasion of personal pri-vacy;

(7) It is likely to disclose investigatorylaw-enforcement records, or informationwhich, if written, would be contained in such


535


records, but only to the extent provided in 5U.S.C. 552b(7);

(8) It is likely to disclose information con-tained in or related to examination, operat-ing, or condition reports prepared by, on be-half of, or for the use of an agency respon-sible for the regulation or supervision of fi-nancial institutions;

(9) It is likely to disclose information, thepremature disclosure of which (i) in the caseof information received from an agencywhich regulates currencies, securities, com-modities, or financial institutions, be likelyto (A) lead to significant financial specula-tion in currencies, securities, or commod-ities, or (B) significantly endanger the sta-bility of any financial institution: or (ii) belikely to significantly frustrate implementa-tion of a proposed IMS action unless the IMShas already disclosed to the public the con-tent or nature of its proposed action or is re-quired by law to make such disclosure on itsown initiative before taking final action; or

(10) Is likely to specifically concern theIMS participation in a civil action or pro-ceeding, or action in a foreign court or inter-national tribunal, or an arbitration.

PART 1181—ENFORCEMENT OFNONDISCRIMINATION ON THEBASIS OF HANDICAP IN PRO-GRAMS OR ACTIVITIES CON-DUCTED BY THE INSTITUTE OF MU-SEUM SERVICES





struction and alterations.1181.152—1175.159 [Reserved]1181.160 Communications.1181.161—1181.169 [Reserved]1181.170 Compliance procedures.1181.171—1181.999 [Reserved]


SOURCE: 51 FR 4578 and 4579, Feb. 5, 1986,unless otherwise noted.


the Rehabilitation, ComprehensiveServices, and Developmental Disabil-ities Amendments of 1978, whichamended section 504 of the Rehabilita-tion Act of 1973 to prohibit discrimina-tion on the basis of handicap in pro-grams or activities conducted by Exec-utive agencies or the United StatesPostal Service.





Auxiliary aids means services or de-vices that enable persons with im-paired sensory, manual, or speakingskills to have an equal opportunity toparticipate in, and enjoy the benefitsof, programs or activities conducted bythe agency. For example, auxiliary aidsuseful for persons with impaired visioninclude readers, Brailled materials,audio recordings, telecommunicationsdevices and other similar services anddevices. Auxiliary aids useful for per-sons with impaired hearing includetelephone handset amplifiers, tele-phones compatible with hearing aids,telecommunication devices for deafpersons (TDD’s), interpreters,notetakers, written materials, andother similar services and devices.




536

45 CFR Ch. XI (10–1–97 Edition)§§ 1181.104—1181.109



cludes—(i) Any physiological disorder or con-

dition, cosmetic disfigurement, or ana-tomical loss affecting one of more ofthe following body systems: Neuro-logical; musculoskeletal; special senseorgans; respiratory, including speechorgans; cardiovascular; reproductive;digestive; genitourinary; hemic andlymphatic; skin; and endocrine; or

(ii) Any mental or psychological dis-order, such as mental retardation, or-ganic brain syndrome, emotional ormental illness, and specific learningdisabilities. The term physical or mentalimpairment includes, but is not limitedto, such diseases and conditions as or-thopedic, visual, speech, and hearingimpairments, cerebral palsy, epilepsy,muscular dystrophy, multiple sclerosis,cancer, heart disease, diabetes, mentalretardation, emotional illness, anddrug addition and alcholism.







Qualified handicapped person means—

(1) With respect to any agency pro-gram or activity under which a personis required to perform services or toachieve a level of accomplishment, ahandicapped person who meets the es-sential eligibility requirements andwho can achieve the purpose of the pro-gram or activity without modificationsin the program or activity that theagency can demonstrate would resultin a fundamental alteration in its na-ture; or

(2) With respect to any other pro-gram or activity, a handicapped personwho meets the essential eligibility re-quirements for participation in, or re-ceipt of benefits from, that program oractivity.



[51 FR 4578 and 4579, Feb. 5, 1986; 51 FR 7543,Mar. 5, 1986]

§§ 1181.104—1181.109 [Reserved]

§ 1181.110 Self-evaluation.(a) The agency shall, by April 9, 1987,

evaluate its current policies and prac-tices, and the effects thereof, that donot or may not meet the requirementsof this part, and, to the extent modi-fication of any such policies and prac-tices is required, the agency shall pro-ceed to make the necessary modifica-tions.


(c) The agency shall, until threeyears following the completion of the


537


self-evaluation, maintain on file andmake available for public inspections:



§ 1181.111 Notice.The agency shall make available to

employees, applicants, participants,beneficiaries, and other interested per-sons such information regarding theprovisions of this part and its applica-bility to the programs or activitiesconducted by the agency, and makesuch information available to them insuch manner as the head of the agencyfinds necessary to apprise such personsof the protections against discrimina-tion assured them by section 504 andthis regulation.

§§ 1181.112—1181.129 [Reserved]

§ 1181.130 General prohibitionsagainst discrimination.




(ii) Afford a qualfied handicappedperson an opportunity to participate inor benefit from the aid, benefit, orservice that is not equal to that af-forded others;


(iv) Provide different or separate aid,benefits, or services to handicappedpersons or to any class of handicappedpersons than is provided to others un-less such action is necessary to provide

qualified handicapped persons with aid,benefits, or services that are as effec-tive as those provided to others;




(3) The agency may not, directly orthrough contractual or other arrange-ments, utilize criteria or methods ofadministration the purpose or effect ofwhich would—






(5) The agency, in the selection ofprocurement contractors, may not usecriteria that subject qualified handi-capped persons to discrimination onthe basis of handicap.



538

45 CFR Ch. XI (10–1–97 Edition)§§ 1181.131—1181.139


§§ 1181.131—1181.139 [Reserved]

§ 1181.140 Employment.No qualified handicapped person

shall, on the basis of handicap, be sub-jected to discrimination in employ-ment under any program or activityconducted by the agency. The defini-tions, requirements, and procedures ofsection 501 of the Rehabilitation Act of1973 (29 U.S.C. 791), as established bythe Equal Employment OpportunityCommission in 29 CFR part 1613, shallapply to employment in federally con-ducted programs or activities.

§§ 1181.141—1181.148 [Reserved]


Except as otherwise provided in§ 1181.150, no qualified handicapped per-son shall, because the agency’s facili-ties are inaccessible to or unusable byhandicapped persons, be denied thebenefits of, be excluded from participa-tion in, or otherwise be subjected todiscrimination under any program oractivity conducted by the agency.



(1) Necessarily require the agency tomake each of its existing facilities ac-cessible to and usable by handicappedpersons; or

(2) Require the agency to take anyaction that it can demonstrate wouldresult in a fundamental alteration inthe nature of a program or activity orin undue financial and administrativeburdens. In those circumstances whereagency personnel believe that the pro-posed action would fundamentallyalter the program or activity or wouldresult in undue financial and adminis-trative burdens, the agency has theburden of proving that compliance with§ 1181.150(a) would result in such alter-

ation or burdens. The decision thatcompliance would result in such alter-ation or burdens must be made by theagency head or his or her designeeafter considering all agency resourcesavailable for use in the funding and op-eration of the conducted program oractivity, and must be accompanied bya written statement of the reasons forreaching that conclusion. If an actionwould result in such an alteration orsuch burdens, the agency shall takeany other action that would not resultin such an alteration or such burdensbut would nevertheless ensure thathandicapped persons receive the bene-fits and services of the program or ac-tivity.

(b) Methods. The agency may complywith the requirements of this sectionthrough such means as redesign ofequipment, reassignment of services toaccessible buildings, assignment ofaides to beneficiaries, home visits, de-livery of services at alternate acces-sible sites, alteration of existing facili-ties and construction of new facilities,use of accessible rolling stock, or anyother methods that result in makingits programs or activities readily ac-cessible to and usable by handicappedpersons. The agency is nor required tomake structural changes in existing fa-cilities where other methods are effec-tive in achieving compliance with thissection. The agency, in making alter-ations to existing buildings, shall meetaccessibility requirements to the ex-tent compelled by the ArchitecturalBarriers Act of 1968, as amended (42U.S.C. 4151–4157), and any regulationsimplementing it. In choosing amongavailable methods for meeting the re-quirements of this section, the agencyshall give priority to those methodsthat offer programs and activities toqualified handicapped persons in themost integrated setting appropriate.

(c) Time period for compliance. Theagency shall comply with the obliga-tions established under this section byJune 6, 1986, except that where struc-tural changes in facilities are under-taken, such changes shall be made byApril 7, 1989, but in any event as expe-ditiously as possible.

(d) Transition plan. In the event thatstructural changes to facilities will be


539


undertaken to achieve program acces-sibility, the agency shall develop, byOctober 7, 1986, a transition plan set-ting forth the steps necessary to com-plete such changes. The agency shallprovide an opportunity to interestedpersons, including handicapped personsor organizations representing handi-capped persons, to participate in thedevelopment of the transition plan bysubmitting comments (both oral andwritten). A copy of the transition planshall be made available for public in-spection. The plan shall, at a mini-mum—





[51 FR 4578 and 4579, Feb. 5, 1986; 51 FR 7543,Mar. 5, 1986]


Each building or part of a buildingthat is constructed or altered by, onbehalf of, or for the use of the agencyshall be designed, constructed, or al-tered so as to be readily accessible toand usable by handicapped persons.The definitions, requirements, andstandards of the Architectural BarriersAct (42 U.S.C. 4151–4157), as establishedin 41 CFR 101–19.600 to 101–19.607, applyto buildings covered by this section.

§§ 1181.152—1181.159 [Reserved]

§ 1181.160 Communications.(a) The agency shall take appropriate

steps to ensure effective communica-tion with applicants, participants, per-sonnel of other Federal entities, andmembers of the public.

(1) The agency shall furnish appro-priate auxiliary aids where necessaryto afford a handicapped person an equal

opportunity to participate in, andenjoy the benefits of, a program or ac-tivity conducted by the agency.

(i) In determining what type of auxil-iary aid is necessary, the agency shallgive primary consideration to the re-quests of the handicapped person.


(2) Where the agency communicateswith applicants and beneficiaries bytelephone, telecommunication devicesfor deaf persons (TDD’s) or equally ef-fective telecommunication systemsshall be used.



(d) This section does not require theagency to take any action that it candemonstrate would result in a fun-damental alteration in the nature of aprogram or activity or in undue finan-cial and administrative burdens. Inthose circumstances where agency per-sonnel believe that the proposed actionwould fundamentally alter the programor activity or would result in undue fi-nancial and administrative burdens,the agency has the burden of provingthat compliance with § 1181.160 wouldresult in such alteration or burdens.The decision that compliance would re-sult in such alteration or burdens mustbe made by the agency head or his orher designee after considering all agen-cy resources available for use in thefunding and operation of the conductedprogram or activity, and must be ac-companied by a written statement ofthe reasons for reaching that conclu-sion. If an action required to complywith this section would result in suchan alteration or such burdens, theagency shall take any other action


540

45 CFR Ch. XI (10–1–97 Edition)§§ 1181.161—1181.169

that would not result in such an alter-ation or such burdens but would never-theless ensure that, to the maximumextent possible, handicapped personsreceive the benefits and services of theprogram or activity.

§§ 1181.161—1181.169 [Reserved]

§ 1181.170 Compliance procedures.

(a) Except as provided in paragraph(b) of this section, this section appliesto all allegations of discrimination onthe basis of handicap in programs oractivities conducted by the agency.

(b) The agency shall process com-plaints alleging violations of section504 with respect to employment accord-ing to the procedures established bythe Equal Employment OpportunityCommission in 29 CFR part 1613 pursu-ant to section 501 of the RehabilitationAct of 1973 (29 U.S.C. 791).

(c) The Director shall be responsiblefor coordinating implementation ofthis section. Complaints may be sentto Director, Institute of Museum Serv-ices, 1100 Pennsylvania Ave., NW.,room 510, Washington, DC 20506.



(f) The agency shall notify the Archi-tectural and Transportation BarriersCompliance Board upon receipt of anycomplaint alleging that a building orfacility that is subject to the Architec-tural Barriers Act of 1968, as amended(42 U.S.C. 4151–4157), or section 502 ofthe Rehabilitation Act of 1973, asamended (29 U.S.C. 792), is not readilyaccessible to and usable by handi-capped persons.



(2) A description of a remedy for eachviolation found;


conclusions of law or remedies must befiled by the complainant within 90 daysof receipt from the agency of the letterrequired by § 1181.170(g). The agencymay extend this time for good cause.


(j) The head of the agency shall no-tify the complainant of the results ofthe appeal within 60 days of the receiptof the request. If the head of the agen-cy determines that additional informa-tion is needed from the complainant,he or she shall have 60 days from thedate of receipt of the additional infor-mation to make his or her determina-tion on the appeal.



[51 FR 4578 and 4579, Feb. 5, 1986, as amendedat 51 FR 4578, Feb. 5, 1986]

§§ 1181.171—1181.999 [Reserved]


Subpart A—General

Sec.1183.1 Purpose and scope of this part.1183.2 Scope of subpart.1183.3 Definitions.1183.4 Applicability.1183.5 Effect on other issuances.1183.6 Additions and exceptions.





541















ments.1183.52 Collection of amounts due.


AUTHORITY: 20 U.S.C. 961—968.



Subpart A—General§ 1183.1 Purpose and scope of this

part.This part establishes uniform admin-

istrative rules for Federal grants andcooperative agreements and subawardsto State, local and Indian tribal gov-ernments.


pertaining to this part and procedures

for control of exceptions from thispart.


charges incurred by the grantee duringa given period requiring the provisionof funds for: (1) Goods and other tan-gible property received; (2) servicesperformed by employees, contractors,subgrantees, subcontractors, and otherpayees; and (3) other amounts becom-ing owed under programs for which nocurrent services or performance is re-quired, such as annuities, insuranceclaims, and other benefit payments.



Administrative requirements meanthose matters common to grants ingeneral, such as financial management,kinds and frequency of reports, and re-tention of records. These are distin-guished from programmatic require-ments, which concern matters that canbe treated only on a program-by-pro-gram or grant-by-grant basis, such askinds of activities that can be sup-ported by grants under a particularprogram.


Cash contributions means the grant-ee’s cash outlay, including the outlayof money contributed to the grantee orsubgrantee by other public agencies


542

45 CFR Ch. XI (10–1–97 Edition)§ 1183.3

and institutions, and private organiza-tions and individuals. When authorizedby Federal legislation, Federal fundsreceived from other assistance agree-ments may be considered as grantee orsubgrantee cash contributions.

Contract means (except as used in thedefinitions for grant and subgrant inthis section and except where qualifiedby Federal) a procurement contractunder a grant or subgrant, and means aprocurement subcontract under a con-tract.




Expenditure report means: (1) For non-construction grants, the SF–269 ‘‘Fi-nancial Status Report’’ (or other equiv-alent report); (2) for constructiongrants, the SF–271 ‘‘Outlay Report andRequest for Reimbursement’’ (or otherequivalent report).

Federally recognized Indian tribal gov-ernment means the governing body or agovernmental agency of any Indiantribe, band, nation, or other organizedgroup or community (including anyNative village as defined in section 3 ofthe Alaska Native Claims SettlementAct, 85 Stat 688) certified by the Sec-retary of the Interior as eligible for thespecial programs and services providedby him through the Bureau of IndianAffairs.


Grant means an award of financial as-sistance, including cooperative agree-ments, in the form of money, or prop-erty in lieu of money, by the FederalGovernment to an eligible grantee. The

term does not include technical assist-ance which provides services instead ofmoney, or other assistance in the formof revenue sharing, loans, loan guaran-tees, interest subsidies, insurance, ordirect appropriations. Also, the termdoes not include assistance, such as afellowship or other lump sum award,which the grantee is not required to ac-count for.





Outlays (expenditures) mean chargesmade to the project or program. Theymay be reported on a cash or accrualbasis. For reports prepared on a cashbasis, outlays are the sum of actualcash disbursement for direct chargesfor goods and services, the amount ofindirect expense incurred, the value ofin-kind contributions applied, and theamount of cash advances and paymentsmade to contractors and subgrantees.For reports prepared on an accrued ex-penditure basis, outlays are the sum ofactual cash disbursements, the amountof indirect expense incurred, the valueof inkind contributions applied, andthe new increase (or decrease) in theamounts owed by the grantee for goodsand other property received, for serv-ices performed by employees, contrac-tors, subgrantees, subcontractors, and


543


other payees, and other amounts be-coming owed under programs for whichno current services or performance arerequired, such as annuities, insuranceclaims, and other benefit payments.

Percentage of completion method refersto a system under which payments aremade for construction work accordingto the percentage of completion of thework, rather than to the grantee’s costincurred.





Subgrant means an award of financialassistance in the form of money, orproperty in lieu of money, made undera grant by a grantee to an eligible sub-grantee. The term includes financialassistance when provided by contrac-tual legal agreement, but does not in-clude procurement purchases, nor doesit include any form of assistance whichis excluded from the definition of grantin this part.



Suspension means depending on thecontext, either (1) temporary with-drawal of the authority to obligategrant funds pending corrective actionby the grantee or subgrantee or a deci-sion to terminate the grant, or (2) anaction taken by a suspending official inaccordance with agency regulationsimplementing E.O. 12549 to imme-diately exclude a person from partici-pating in grant transactions for a pe-riod, pending completion of an inves-tigation and such legal or debarmentproceedings as may ensue.

Termination means permanent with-drawal of the authority to obligate pre-viously-awarded grant funds beforethat authority would otherwise expire.It also means the voluntary relinquish-ment of that authority by the granteeor subgrantee. Termination does not in-clude: (1) Withdrawal of funds awardedon the basis of the grantee’s underesti-mate of the unobligated balance in aprior period; (2) Withdrawal of the un-obligated balance as of the expirationof a grant; (3) Refusal to extend a grantor award additional funds, to make acompeting or noncompeting continu-ation, renewal, extension, or supple-mental award; or (4) voiding of a grantupon determination that the award wasobtained fraudulently, or was other-wise illegal or invalid from inception.



Unliquidated obligations for reportsprepared on a cash basis mean theamount of obligations incurred by thegrantee that has not been paid. For re-ports prepared on an accrued expendi-ture basis, they represent the amountof obligations incurred by the granteefor which an outlay has not been re-corded.

Unobligated balance means the por-tion of the funds authorized by theFederal agency that has not been obli-gated by the grantee and is determined


544

45 CFR Ch. XI (10–1–97 Edition)§ 1183.4

by deducting the cumulative obliga-tions from the cumulative funds au-thorized.

§ 1183.4 Applicability.(a) General. Subparts A through D of

this part apply to all grants and sub-grants to governments, except whereinconsistent with Federal statutes orwith regulations authorized in accord-ance with the exception provision of§ 1183.6, or:


(2) The block grants authorized bythe Omnibus Budget ReconciliationAct of 1981 (Community Services; Pre-ventive Health and Health Services; Al-cohol, Drug Abuse, and Mental HealthServices; Maternal and Child HealthServices; Social Services; Low-IncomeHome Energy Assistance; States’ Pro-gram of Community DevelopmentBlock Grants for Small Cities; and Ele-mentary and Secondary Educationother than programs administered bythe Secretary of Education under titleV, subtitle D, chapter 2, section 583—the Secretary’s discretionary grantprogram) and titles I–III of the JobTraining Partnership Act of 1982 andunder the Public Health Services Act(section 1921), Alcohol and Drug AbuseTreatment and Rehabilitation BlockGrant and Part C of title V, MentalHealth Service for the Homeless BlockGrant).


(i) Aid to Needy Families with De-pendent Children (title IV–A of theAct, not including the Work IncentiveProgram (WIN) authorized by section402(a)19(G); HHS grants for WIN aresubject to this part);

(ii) Child Support Enforcement andEstablishment of Paternity (title IV–Dof the Act);

(iii) Foster Care and Adoption Assist-ance (title IV–E of the Act);

(iv) Aid to the Aged, Blind, and Dis-abled (titles I, X, XIV, and XVI–AABDof the Act); and

(v) Medical Assistance (Medicaid)(title XIX of the Act) not including theState Medicaid Fraud Control programauthorized by section 1903(a)(6)(B).















(b) Entitlement programs. Entitlementprograms enumerated above in§ 1183.4(a) (3) through (8) are subject tosubpart E.

§ 1183.5 Effect on other issuances.All other grants administration pro-

visions of codified program regula-tions, program manuals, handbooksand other nonregulatory materialswhich are inconsistent with this part


545


are superseded, except to the extentthey are required by statute, or au-thorized in accordance with the excep-tion provision in § 1183.6.

§ 1183.6 Additions and exceptions.(a) For classes of grants and grantees

subject to this part, Federal agenciesmay not impose additional administra-tive requirements except in codifiedregulations published in the FEDERALREGISTER.







(b) Authorized forms and instructionsfor governmental organizations. (1) In ap-plying for grants, applicants shall onlyuse standard application forms or thoseprescribed by the granting agency withthe approval of OMB under the Paper-work Reduction Act of 1980.


(3) Applicants must follow all appli-cable instructions that bear OMBclearance numbers. Federal agenciesmay specify and describe the programs,functions, or activities that will beused to plan, budget, and evaluate the

work under a grant. Other supple-mentary instructions may be issuedonly with the approval of OMB to theextent required under the PaperworkReduction Act of 1980. For any stand-ard form, except the SF–424 facesheet,Federal agencies may shade out or in-struct the applicant to disregard anyline item that is not needed.


§ 1183.11 State plans.(a) Scope. The statutes for some pro-

grams require States to submit plansbefore receiving grants. Under regula-tions implementing Executive Order12372, ‘‘Intergovernmental Review ofFederal Programs,’’ States are allowedto simplify, consolidate and substituteplans. This section contains additionalprovisions for plans that are subject toregulations implementing the Execu-tive order.






(d) Amendments. A State will amend aplan whenever necessary to reflect: (1)New or revised Federal statutes or reg-ulations or (2) a material change in anyState law, organization, policy, orState agency operation. The State willobtain approval for the amendment and


546

45 CFR Ch. XI (10–1–97 Edition)§ 1183.12

its effective date but need submit forapproval only the amended portions ofthe plan.















(c) If an awarding agency decides toimpose such conditions, the awardingofficial will notify the grantee or sub-grantee as early as possible, in writing,of:














(3) Internal control. Effective controland accountability must be maintainedfor all grant and subgrant cash, realand personal property, and other as-sets. Grantees and subgrantees mustadequately safeguard all such propertyand must assure that it is used solelyfor authorized purposes.

(4) Budget control. Actual expendi-tures or outlays must be comparedwith budgeted amounts for each grantor subgrant. Financial information


547


must be related to performance or pro-ductivity data, including the develop-ment of unit cost information when-ever appropriate or specifically re-quired in the grant or subgrant agree-ment. If unit cost data are required, es-timates based on available documenta-tion will be accepted whenever pos-sible.





§ 1183.21 Payment.


(b) Basic standard. Methods and pro-cedures for payment shall minimizethe time elapsing between the transferof funds and disbursement by thegrantee or subgrantee, in accordancewith Treasury regulations at 31 CFRpart 205.



(e) Working capital advances. If agrantee cannot meet the criteria foradvance payments described in para-graph (c) of this section, and the Fed-eral agency has determined that reim-bursement is not feasible because thegrantee lacks sufficient working cap-ital, the awarding agency may providecash or a working capital advancebasis. Under this procedure the award-ing agency shall advance cash to thegrantee to cover its estimated dis-bursement needs for an initial periodgenerally geared to the grantee’s dis-bursing cycle. Thereafter, the awardingagency shall reimburse the grantee forits actual cash disbursements. Theworking capital advance method ofpayment shall not be used by granteesor subgrantees if the reason for usingsuch method is the unwillingness or in-ability of the grantee to provide timelyadvances to the subgrantee to meet thesubgrantee’s actual cash disburse-ments.

(f) Effect of program income, refunds,and audit recoveries on payment. (1)


548

45 CFR Ch. XI (10–1–97 Edition)§ 1183.22

Grantees and subgrantees shall dis-burse repayments to and interestearned on a revolving fund before re-questing additional cash payments forthe same activity.









(i) Interest earned on advances. Exceptfor interest earned on advances offunds exempt under the Intergovern-mental Cooperation Act (31 U.S.C. 6501

et seq.) and the Indian Self-Determina-tion Act (23 U.S.C. 450), grantees andsubgrantees shall promptly, but atleast quarterly, remit interest earnedon advances to the Federal agency. Thegrantee or subgrantee may keep inter-est amounts up to $100 per year for ad-ministrative expenses.

§ 1183.22 Allowable costs.(a) Limitation on use of funds. Grant

funds may be used only for:(1) The allowable costs of the grant-

ees, subgrantees and cost-type contrac-tors, including allowable costs in theform of payments to fixed-price con-tractors; and










48 CFR Part 31. ContractCost Principles and Proce-dures, or uniform cost ac-counting standards thatcomply with cost principlesacceptable to the Federalagency.




549









(3) Cost or contributions counted to-wards other Federal costs-sharing require-ments. Neither costs nor the values ofthird party in-kind contributions maycount towards satisfying a cost sharingor matching requirement of a grantagreement if they have been or will becounted towards satisfying a cost shar-ing or matching requirement of an-other Federal grant agreement, a Fed-eral procurement contract, or anyother award of Federal funds.

(4) Costs financed by program income.Costs financed by program income, asdefined in § 1183.25, shall not count to-

wards satisfying a cost sharing ormatching requirement unless they areexpressly permitted in the terms of theassistance agreement. (This use of gen-eral program income is described in§ 1183.25(g).)




(ii) Some third party in-kind con-tributions are goods and services that,if the grantee, subgrantee, or contrac-tor receiving the contribution had topay for them, the payments would havebeen an indirect costs. Costs sharing ormatching credit for such contributionsshall be given only if the grantee, sub-grantee, or contractor has established,along with its regular indirect costrate, a special rate for allocating to in-dividual projects or programs the valueof the contributions.



550

45 CFR Ch. XI (10–1–97 Edition)§ 1183.24







(2) If a third party donates the use ofequipment or space in a building butretains title, the contribution will bevalued at the fair rental rate of theequipment or space.





(ii) If approval is not obtained underparagraph (e)(2)(i) of this section, noamount may be counted for donatedland, and only depreciation or use al-lowances may be counted for donatedequipment and buildings. The deprecia-tion or use allowances for this propertyare not treated as third party in-kindcontributions. Instead, they are treat-ed as costs incurred by the grantee orsubgrantee. They are computed and al-located (usually as indirect costs) inaccordance with the cost principlesspecified in § 1183.22, in the same way asdepreciation or use allowances for pur-chased equipment and buildings. Theamount of depreciation or use allow-ances for donated equipment and build-ings is based on the property’s marketvalue at the time it was donated.

(f) Valuation of grantee or subgranteedonated real property for construction/ac-quisition. If a grantee or subgrantee do-nates real property for a constructionor facilities acquisition project, thecurrent market value of that propertymay be counted as cost sharing ormatching. If any part of the donatedproperty was acquired with Federal


551


funds, only the non-federal share of theproperty may be counted as cost shar-ing or matching.


§ 1183.25 Program income.

(a) General. Grantees are encouragedto earn income to defray programcosts. Program income includes incomefrom fees for services performed, fromthe use or rental of real or personalproperty acquired with grant funds,from the sale of commodities or itemsfabricated under a grant agreement,and from payments of principal and in-terest on loans made with grant funds.Except as otherwise provided in regula-tions of the Federal agency, programincome does not include interest ongrant funds, rebates, credits, discounts,refunds, etc. and interest earned onany of them.


(c) Cost of generating program income.If authorized by Federal regulations orthe grant agreement, costs incident tothe generation of program income maybe deducted from gross income to de-termine program income.






(2) Addition. When authorized, pro-gram income may be added to thefunds committed to the grant agree-ment by the Federal agency and thegrantee. The program income shall beused for the purposes and under theconditions of the grant agreement.


(h) Income after the award period.There are no Federal requirements gov-erning the disposition of program in-come earned after the end of the award


552

45 CFR Ch. XI (10–1–97 Edition)§ 1183.26

period (i.e., until the ending date of thefinal financial report, see paragraph (a)of this section), unless the terms of theagreement or the Federal agency regu-lations provide otherwise.






(3) Ensure that appropriate correc-tive action is taken within six months

after receipt of the audit report in in-stance of noncompliance with Federallaws and regulations;






§ 1183.30 Changes.

(a) General. Grantees and subgranteesare permitted to rebudget within theapproved direct cost budget to meetunanticipated requirements and maymake limited program changes to theapproved project. However, unlesswaived by the awarding agency, certaintypes of post-award changes in budgetsand projects shall require the priorwritten approval of the awarding agen-cy.





(iii) Transfer of funds allotted fortraining allowances (i.e., from direct


553


payments to trainees to other expensecategories).








(e) Additional prior approval require-ments. The awarding agency may notrequire prior approval for any budgetrevision which is not described in para-graph (c) of this section.








(1) Retention of title. Retain title aftercompensating the awarding agency.The amount paid to the awarding agen-cy will be computed by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the fair market value ofthe property. However, in those situa-tions where a grantee or subgrantee isdisposing of real property acquiredwith grant funds and acquiring replace-ment real property under the same pro-gram, the net proceeds from the dis-position may be used as an offset to thecost of the replacement property.

(2) Sale of property. Sell the propertyand compensate the awarding agency.


554

45 CFR Ch. XI (10–1–97 Edition)§ 1183.32

The amount due to the awarding agen-cy will be calculated by applying theawarding agency’s percentage of par-ticipation in the cost of the originalpurchase to the proceeds of the saleafter deduction of any actual and rea-sonable selling and fixing-up expenses.If the grant is still active, the net pro-ceeds from sale may be offset againstthe original cost of the property. Whena grantee or subgrantee is directed tosell property, sales procedures shall befollowed that provide for competitionto the extent practicable and result inthe highest possible return.





(c) Use. (1) Equipment shall be usedby the grantee or subgrantee in theprogram or project for which it was ac-quired as long as needed, whether ornot the project or program continuesto be supported by Federal funds. Whenno longer needed for the original pro-gram or project, the equipment may beused in other activities currently orpreviously supported by a Federalagency.

(2) The grantee or subgrantee shallalso make equipment available for useon other projects or programs cur-rently or previously supported by theFederal Government, providing suchuse will not interfere with the work onthe projects or program for which itwas originally acquired. First pref-

erence for other use shall be given toother programs or projects supportedby the awarding agency. User feesshould be considered if appropriate.









(e) Disposition. When original or re-placement equipment acquired under agrant or subgrant is no longer needed


555


for the original project or program orfor other activities currently or pre-viously supported by a Federal agency,disposition of the equipment will bemade as follows:











(3) When title to equipment is trans-ferred, the grantee shall be paid an

amount calculated by applying the per-centage of participation in the pur-chase to the current fair market valueof the property.

§ 1183.33 Supplies.(a) Title. Title to supplies acquired

under a grant or subgrant will vest,upon acquisition, in the grantee or sub-grantee respectively.


§ 1183.34 Copyrights.The Federal awarding agency re-

serves a royalty-free, nonexclusive, andirrevocable license to reproduce, pub-lish or otherwise use, and to authorizeothers to use, for Federal Governmentpurposes:






and services under a grant, a State willfollow the same policies and proceduresit uses for procurements from its non-Federal funds. The State will ensurethat every purchase order or other con-tract includes any clauses required byFederal statutes and executive ordersand their implementing regulations.Other grantees and subgrantees will


556

45 CFR Ch. XI (10–1–97 Edition)§ 1183.36

follow paragraphs (b) through (i) inthis section.






or is about to employ, any of theabove, has a financial or other interestin the firm selected for award. Thegrantee’s or subgrantee’s officers, em-ployees or agents will neither solicitnor accept gratuities, favors or any-thing of monetary value from contrac-tors, potential contractors, or partiesto subagreements. Grantee and sub-grantees may set minimum rules wherethe financial interest is not substantialor the gift is an unsolicited item ofnominal intrinsic value. To the extentpermitted by State or local law or reg-ulations, such standards or conductwill provide for penalties, sanctions, orother disciplinary actions for viola-tions of such standards by the grant-ee’s and subgrantee’s officers, employ-ees, or agents, or by contractors ortheir agents. The awarding agency mayin regulation provide additional prohi-bitions relative to real, apparent, orpotential conflicts of interest.

(4) Grantee and subgrantee proce-dures will provide for a review of pro-

posed procurements to avoid purchaseof unnecessary or duplicative items.Consideration should be given to con-solidating or breaking out procure-ments to obtain a more economicalpurchase. Where appropriate, an analy-sis will be made of lease versus pur-chase alternatives, and any other ap-propriate analysis to determine themost economical approach.





(9) Grantees and subgrantees willmaintain records sufficient to detailthe significant history of a procure-ment. These records will include, butare not necessarily limited to the fol-lowing: rationale for the method ofprocurement, selection of contracttype, contractor selection or rejection,and the basis for the contract price.





557
















(i) Incorporate a clear and accuratedescription of the technical require-ments for the material, product, orservice to be procured. Such descrip-tion shall not, in competitive procure-ments, contain features which undulyrestrict competition. The descriptionmay include a statement of the quali-tative nature of the material, productor service to be procured, and whennecessary, shall set forth those mini-mum essential characteristics andstandards to which it must conform ifit is to satisfy its intended use. De-tailed product specifications should beavoided if at all possible. When it isimpractical or uneconomical to make aclear and accurate description of thetechnical requirements, a ‘‘brand nameor equal’’ description may be used as ameans to define the performance orother salient requirements of a pro-curement. The specific features of thenamed brand which must be met byofferors shall be clearly stated; and



558

45 CFR Ch. XI (10–1–97 Edition)§ 1183.36










(B) The invitation for bids, whichwill include any specifications and per-tinent attachments, shall define the

items or services in order for the bidderto properly respond;









(v) Grantees and subgrantees mayuse competitive proposal proceduresfor qualifications-based procurement ofarchitectural/engineering (A/E) profes-sional services whereby competitors’qualifications are evaluated and themost qualified competitor is selected,subject to negotiation of fair and rea-sonable compensation. The method,where price is not used as a selectionfactor, can only be used in procure-ment of A/E professional services. Itcannot be used to purchase other types


559


of services though A/E firms are a po-tential source to perform the proposedeffort.


















(2) Grantees and subgrantees will ne-gotiate profit as a separate element ofthe price for each contract in whichthere is no price competition and in allcases where cost analysis is performed.To establish a fair and reasonable prof-it, consideration will be given to thecomplexity of the work to be per-formed, the risk borne by the contrac-tor, the contractor’s investment, theamount of subcontracting, the qualityof its record of past performance, andindustry profit rates in the surround-ing geographical area for similar work.


560

45 CFR Ch. XI (10–1–97 Edition)§ 1183.36







(iii) The procurement, which is ex-pected to exceed the simplified acquisi-tion threshold, specifies a ‘‘brandname’’ product; or


(v) A proposed contract modificationchanges the scope of a contract or in-

creases the contract amount by morethan the simplified acquisition thresh-old.





(1) A bid guarantee from each bidderequivalent to five percent of the bid price.The ‘‘bid guarantee’’ shall consist of afirm commitment such as a bid bond,certified check, or other negotiable in-strument accompanying a bid as assur-ance that the bidder will, upon accept-ance of his bid, execute such contrac-tual documents as may be requiredwithin the time specified.

(2) A performance bond on the part ofthe contractor for 100 percent of the con-tract price. A ‘‘performance bond’’ is


561


one executed in connection with a con-tract to secure fulfillment of all thecontractor’s obligations under suchcontract.















(13) Mandatory standards and policiesrelating to energy efficiency which arecontained in the state energy conserva-tion plan issued in compliance with theEnergy Policy and Conservation Act(Pub. L. 94–163, 89 Stat. 871).



law and procedures when awarding andadministering subgrants (whether on a


562

45 CFR Ch. XI (10–1–97 Edition)§ 1183.40

cost reimbursement or fixed amountbasis) of financial assistance to localand Indian tribal governments. Statesshall:












(4) Section 1183.50.



(a) Monitoring by grantees. Granteesare responsible for managing the day-to-day operations of grant andsubgrant supported activities. Grantees

must monitor grant and subgrant sup-ported activities to assure compliancewith applicable Federal requirementsand that performance goals are beingachieved. Grantee monitoring mustcover each program, function or activ-ity.









563










§ 1183.41 Financial reporting.

(a) General. (1) Except as provided inparagraphs (a)(2) and (5) of this section,grantees will use only the forms speci-fied in paragraphs (a) through (e) ofthis section, and such supplementaryor other forms as may from time totime be authorized by OMB, for:










(2) Accounting basis. Each grantee willreport program outlays and programincome on a cash or accrual basis asprescribed by the awarding agency. Ifthe Federal agency requires accrual in-formation and the grantee’s accountingrecords are not normally kept on theaccural basis, the grantee shall not be


564

45 CFR Ch. XI (10–1–97 Edition)§ 1183.41

required to convert its accounting sys-tem but shall develop such accrual in-formation through and analysis of thedocumentation on hand.






(3) Cash in hands of subgrantees. Whenconsidered necessary and feasible bythe Federal agency, grantees may berequired to report the amount of cashadvances in excess of three days’ needsin the hands of their subgrantees orcontractors and to provide short nar-rative explanations of actions taken bythe grantee to reduce the excess bal-ances.

(4) Frequency and due date. Granteesmust submit the report no later than 15

working days following the end of eachquarter. However, where an advance ei-ther by letter of credit or electronictransfer of funds is authorized at anannualized rate of one million dollarsor more, the Federal agency may re-quire the report to be submitted within15 working days following the end ofeach month.








(i) When a construction grant is paidby letter of credit, electronic fundstransfer or Treasury check advances,the grantee will report its outlays tothe Federal agency using StandardForm 271, Outlay Report and Requestfor Reimbursement for ConstructionPrograms. The Federal agency will pro-vide any necessary special instruction.


565


However, frequency and due date shallbe governed by § 1183.41(b) (3) and (4).










(2) If any litigation, claim, negotia-tion, audit or other action involvingthe records has been started before theexpiration of the 3-year period, therecords must be retained until comple-tion of the action and resolution of allissues which arise from it, or until theend of the regular 3-year period, which-ever is later.

(3) To avoid duplicate recordkeeping,awarding agencies may make specialarrangements with grantees and sub-grantees to retain any records whichare continuously needed for joint use.The awarding agency will requesttransfer of records to its custody whenit determines that the records possess

long-term retention value. When therecords are transferred to or main-tained by the Federal agency, the 3-year retention requirement is not ap-plicable to the grantee or subgrantee.




(4) Indirect cost rate proposals, cost al-locations plans, etc. This paragraph ap-plies to the following types of docu-ments, and their supporting records:indirect cost rate computations or pro-posals, cost allocation plans, and anysimilar accounting computations ofthe rate at which a particular group ofcosts is chargeable (such as computerusage chargeback rates or compositefringe benefit rates).



566

45 CFR Ch. XI (10–1–97 Edition)§ 1183.43






§ 1183.43 Enforcement.(a) Remedies for noncompliance. If a

grantee or subgrantee materially failsto comply with any term of an award,whether stated in a Federal statute orregulation, an assurance, in a Stateplan or application, a notice of award,or elsewhere, the awarding agency maytake one or more of the following ac-tions, as appropriate in the cir-cumstances:










(d) Relationship to debarment and sus-pension. The enforcement remediesidentified in this section, includingsuspension and termination, do notpreclude grantee or subgrantee frombeing subject to ‘‘Debarment and Sus-pension’’ under E.O. 12549 (see § 1183.35).

§ 1183.44 Termination for convenience.Except as provided in § 1183.43 awards

may be terminated in whole or in partonly as follows:

(a) By the awarding agency with theconsent of the grantee or subgrantee inwhich case the two parties shall agreeupon the termination conditions, in-cluding the effective date and in thecase of partial termination, the portionto be terminated, or


567











In accordance with § 1183.32(f), a grant-ee must submit an inventory of all fed-erally owned property (as distinct fromproperty acquired with grant funds) forwhich it is accountable and request dis-position instructions from the Federalagency of property no longer needed.

(c) Cost adjustment. The Federal agen-cy will, within 90 days after receipt ofreports in paragraph (b) of this section,make upward or downward adjust-ments to the allowable costs.















by statutes or regulations, the Federalagency will charge interest on an over-due debt in accordance with the Fed-eral Claims Collection Standards (4CFR Ch. II). The date from which inter-est is computed is not extended by liti-gation or the filing of any form of ap-peal.



568


PART 1185—GOVERNMENTWIDEDEBARMENT AND SUSPENSION(NONPROCUREMENT) AND GOV-ERNMENT WIDE REQUIREMENTSFOR DRUG-FREE WORKPLACE(GRANTS)

Subpart A—General






1185.300 General.1185.305 Causes for debarment.1185.310 Procedures.1185.311 Investigation and referral.1185.312 Notice of proposed debarment.1185.313 Opportunity to contest proposed de-





Subpart E—Responsibilities of GSA, IMSand Participants

1185.500 GSA responsibilities.1185.505 IMS responsibilities.1185.510 Participants’ responsibilities.


1185.600 Purpose.1185.605 Definitions.1185.610 Coverage.

1185.615 Grounds for suspension of pay-ments, suspension or termination ofgrants, or suspension or debarment.







AUTHORITY: 20 U.S.C. 961–968; 41 U.S.C. 701et seq.; E.O. 12549, 3 CFR, 1986 Comp., p. 189.



EDITORIAL NOTES:

(1) For nomenclature change to part 1185,see 53 FR 19202, May 26, 1988.


Subpart A—General

§ 1185.100 Purpose.

(a) Executive Order (E.O.) 12549 pro-vides that, to the extent permitted bylaw, Executive departments and agen-cies shall participate in a government-wide system for nonprocurement debar-ment and suspension. A person who isdebarred or suspended shall be excludedfrom Federal financial and non-financial assistance and benefits underFederal programs and activities. De-barment or suspension of a participantin a program by one agency shall havegovernmentwide effect.



569








(1) Providing for the inclusion in theList of Parties Excluded from Federal Pro-curement and Nonprocurement Programsall persons proposed for debarment,debarred or suspended under the Fed-eral Acquisition Regulation, 48 CFRPart 9, subpart 9.4; persons againstwhich governmentwide exclusions havebeen entered under this part; and per-sons determined to be ineligible; and



[60 FR 33040, 33063, June 26, 1995]

§ 1185.105 Definitions.Adequate evidence. Information suffi-


Affiliate. Persons are affiliates ofeach other if, directly or indirectly, ei-ther one controls or has the power tocontrol the other, or, a third personcontrols or has the power to controlboth. Indicia of control include, but are

not limited to: interlocking manage-ment or ownership, identity of inter-ests among family members, shared fa-cilities and equipment, common use ofemployees, or a business entity orga-nized following the suspension or de-barment of a person which has thesame or similar management, owner-ship, or principal employees as the sus-pended, debarred, ineligible, or volun-tarily excluded person.



Conviction. A judgment or convictionof a criminal offense by any court ofcompetent jurisdiction, whether en-tered upon a verdict or a plea, includ-ing a plea of nolo contendere.






Ineligible. Excluded from participa-tion in Federal nonprocurement pro-grams pursuant to a determination ofineligibility under statutory, executiveorder, or regulatory authority, otherthan Executive Order 12549 and itsagency implementing regulations; forexemple, excluded pursuant to theDavis-Bacon Act and its implementingregulations, the equal employment op-portunity acts and executive orders, orthe environmental protection acts and


570

45 CFR Ch. XI (10–1–97 Edition)§ 1185.105

executive orders. A person is ineligiblewhere the determination of ineligibil-ity affects such person’s eligibility toparticipate in more than one coveredtransaction.

IMS. Institute of Museum Services.List of Parties Excluded from Federal

Procurement and Nonprocurement Pro-grams. A list compiled, maintained anddistributed by the General Services Ad-ministration (GSA) containing thenames and other information aboutpersons who have been debarred, sus-pended, or voluntarily excluded underExecutive Orders 12549 and 12689 andthese regulations or 48 CFR part 9, sub-part 9.4, persons who have been pro-posed for debarment under 48 CFR part9, subpart 9.4, and those persons whohave been determined to be ineligible.




Person. Any individual, corporation,partnership, association, unit of gov-ernment or legal entity, however orga-nized, except: foreign governments orforeign governmental entities, publicinternational organizations, foreigngovernment owned (in whole or in part)or controlled entities, and entities con-sisting wholly or partially of foreigngovernments or foreign governmentalentities.










pending official in accordance withthese regulations that immediately ex-cludes a person from participating incovered transactions for a temporaryperiod, pending completion of an inves-tigation and such legal, debarment, orProgram Fraud Civil Remedies Actproceedings as may ensue. A person soexcluded is ‘‘suspended.’’


571




§ 1185.110 Coverage.

(a) These regulations apply to all per-sons who have participated, are cur-rently participating or may reasonablybe expected to participate in trans-actions under Federal nonprocurementprograms. For purposes of these regula-tions such transactions will be referredto as ‘‘covered transactions.’’


(i) Primary covered transaction. Exceptas noted in paragraph (a)(2) of this sec-tion, a primary covered transaction isany nonprocurement transaction be-tween an agency and a person, regard-less of type, including: grants, coopera-tive agreements, scholarships, fellow-ships, contracts of assistance, loans,loan guarantees, subsidies, insurance,payments for specified use, donationagreements and any other nonprocure-ment transactions between a Federalagency and a person. Primary coveredtransactions also include those trans-actions specially designated by theU.S. Department of Housing and UrbanDevelopment in such agency’s regula-tions governing debarment and suspen-sion.



(B) Any procurement contract forgoods or services between a participantand a person, regardless of type, ex-pected to equal or exceed the Federalprocurement small purchase thresholdfixed at 10 U.S.C. 2304(g) and 41 U.S.C.253(g) (currently $25,000) under a pri-mary covered transaction.


(1) Principal investigators.(2) Providers of federally required




(ii) Direct awards to foreign govern-ments or public international organiza-tions, or transactions with foreign gov-ernments or foreign governmental en-tities, public international organiza-tions, foreign government owned (inwhole or in part) or controlled entities,entities consisting wholly or partiallyof foreign governments or foreign gov-ernmental entities;






(b) Relationship to other sections. Thissection describes the types of trans-actions to which a debarment or sus-pension under the regulations willapply. Subpart B, ‘‘Effect of Action,’’§ 1185.200, ‘‘Debarment or suspension,’’sets forth the consequences of a debar-ment or suspension. Those con-sequences would obtain only with re-spect to participants and principals inthe covered transactions and activitiesdescribed in § 1185.110(a). Sections1185.325, ‘‘Scope of debarment,’’ and1185.420, ‘‘Scope of suspension,’’ governthe extent to which a specific partici-pant or organizational elements of a


572

45 CFR Ch. XI (10–1–97 Edition)§ 1185.115

participant would be automatically in-cluded within a debarment or suspen-sion action, and the conditions underwhich affiliates or persons associatedwith a participant may also be broughtwithin the scope of the action.



§ 1185.115 Policy.




Subpart B—Effect of Action§ 1185.200 Debarment or suspension.











573



[60 FR 33041, 33063, June 26, 1995]




sions under § 1185.315 are excluded inaccordance with the terms of their set-tlements. IMS shall, and participantsmay, contact the original action agen-cy to ascertain the extent of the exclu-sion.

§ 1185.215 Exception provision.IMS may grant an exception permit-

ting a debarred, suspended, or volun-tarily excluded person, or a person pro-posed for debarment under 48 CFR part9, subpart 9.4, to participate in a par-ticular covered transaction upon awritten determination by the agencyhead or an authorized designee statingthe reason(s) for deviating from thePresidential policy established by Ex-ecutive Order 12549 and § 1185.200. How-ever, in accordance with the Presi-dent’s stated intention in the Execu-tive Order, exceptions shall be grantedonly infrequently. Exceptions shall bereported in accordance with§ 1185.505(a).

[60 FR 33041, 33063, June 26, 1995]




[60 FR 33041, 33063, June 26, 1995]








[60 FR 33041, 33063, June 26, 1995]


§ 1185.300 General.

The debarring official may debar aperson for any of the causes in§ 1185.305, using procedures establishedin §§ 1185.310 through 1185.314. The exist-ence of a cause for debarment, how-ever, does not necessarily require thatthe person be debarred; the seriousnessof the person’s acts or omissions and


574

45 CFR Ch. XI (10–1–97 Edition)§ 1185.305

any mitigating factors shall be consid-ered in making any debarment deci-sion.

§ 1185.305 Causes for debarment.

Debarment may be imposed in ac-cordance with the provisions of§§ 1185.300 through 1185.314 for:


















§ 1185.310 Procedures.IMS shall process debarment actions

as informally as practicable, consistentwith the principles of fundamentalfairness, using the procedures in§§ 1185.311 through 1185.314.



§ 1185.312 Notice of proposed debar-ment.





(d) Of the provisions of § 1185.311through § 1185.314, and any other IMS


575


procedures, if applicable, governing de-barment decisionmaking; and






§ 1185.314 Debarring official’s decision.

(a) No additional proceedings necessary.In actions based upon a conviction orcivil judgment, or in which there is nogenuine dispute over material facts,the debarring official shall make a de-cision on the basis of all the informa-tion in the administrative record, in-cluding any submission made by the re-spondent. The decision shall be madewithin 45 days after receipt of any in-formation and argument submitted bythe respondent, unless the debarringofficial extends this period for goodcause.




(c)(1) Standard of proof. In any debar-ment action, the cause for debarmentmust be established by a preponderanceof the evidence. Where the proposed de-barment is based upon a conviction orcivil judgment, the standard shall bedeemed to have been met.






(iv) Advising that the debarment iseffective for covered transactionsthroughout the executive branch of theFederal Government unless an agencyhead or an authorized designee makesthe determination referred to in§ 1185.215.



(a) When in the best interest of theGovernment, IMS may, at any time,settle a debarment or suspension ac-tion.



576

45 CFR Ch. XI (10–1–97 Edition)§ 1185.320




(2) In the case of a debarment for aviolation of the requirements of sub-part F of this part (see 1185.305(c)(5)),the period of debarment shall not ex-ceed five years.


(c) The respondent may request thedebarring official to reverse the debar-ment decision or to reduce the periodor scope of debarment. Such a requestshall be in writing and supported bydocumentation. The debarring officialmay grant such a request for reasonsincluding, but not limited to:







§ 1185.325 Scope of debarment.(a) Scope in general. (1) Debarment of

a person under these regulations con-stitutes debarment of all its divisions

and other organizational elementsfrom all covered transactions, unlessthe debarment decision is limited byits terms to one or more specificallyidentified individuals, divisions orother organizational elements or tospecific types of transactions.




(2) Conduct imputed to individuals asso-ciated with participant. The fraudulent,criminal, or other seriously improperconduct of a participant may be im-puted to any officer, director, share-holder, partner, employee, or other in-dividual associated with the partici-pant who participated in, knew of, orhad reason to know of the participant’sconduct.

(3) Conduct of one participant imputedto other participants in a joint venture.The fraudulent, criminal, or other seri-ously improper conduct of one partici-pant in a joint venture, grant pursuantto a joint application, or similar ar-rangement may be imputed to otherparticipants if the conduct occurred foror on behalf of the joint venture, grantpursuant to a joint application, orsimilar arrangement may be imputedto other participants if the conduct oc-curred for or on behalf of the joint ven-ture, grant pursuant to a joint applica-tion, or similar arrangement or withthe knowledge, approval, or acquies-cence of these participants. Acceptance


577


of the benefits derived from the con-duct shall be evidence of such knowl-edge, approval, or acquiescence.


§ 1185.400 General.(a) The suspending official may sus-

pend a person for any of the causes in§ 1185.405 using procedures establishedin §§ 1185.410 through 1185.413.





§ 1185.405 Causes for suspension.(a) Suspension may be imposed in ac-

cordance with the provisions of§§ 1185.400 through 1185.413 upon ade-quate evidence:




§ 1185.410 Procedures.(a) Investigation and referral. Informa-

tion concerning the existence of acause for suspension from any sourceshall be promptly reported, inves-tigated, and referred, when appro-priate, to the suspending official forconsideration. After consideration, thesuspending official may issue a noticeof suspension.

(b) Decisionmaking process. IMS shallprocess suspension actions as infor-mally as practicable, consistent withprinciples of fundamental fairness,

using the procedures in § 1185.411through § 1185.413.








(f) Of the provisions of §§ 1185.411through 1185.413 and any other IMSprocedures, if applicable, governingsuspension decisionmaking; and






(ii) A determination is made, on thebasis of Department of Justice advice,that the substantial interests of theFederal Government in pending or con-templated legal proceedings based on


578

45 CFR Ch. XI (10–1–97 Edition)§ 1185.413

the same facts as the suspension wouldbe prejudiced.




(a) No additional proceedings necessary.In actions: based on an indictment,conviction, or civil judgment; in whichthere is no genuine dispute over mate-rial facts; or in which additional pro-ceedings to determine disputed mate-rial facts have been denied on the basisof Department of Justice advice, thesuspending official shall make a deci-sion on the basis of all the informationin the administrative record, includingany submission made by the respond-ent. The decision shall be made within45 days after receipt of any informationand argument submitted by the re-spondent, unless the suspending officialextends this period for good cause.








§ 1185.420 Scope of suspension.The scope of a suspension is the same

as the scope of a debarment (see§ 1185.325), except that the procedures of§§ 1185.410 through 1185.413 shall be usedin imposing a suspension.

Subpart E—Responsibilities of GSA,IMS and Participants

§ 1185.500 GSA responsibilities.(a) In accordance with the OMB

guidelines, GSA shall compile, main-tain, and distribute a list of all personswho have been debarred, suspended, orvoluntarily excluded by agencies underExecutive Order 12549 and these regula-tions, and those who have been deter-mined to be ineligible.


(1) The names and addresses of alldebarred, suspended, ineligible, andvoluntarily excluded persons, in alpha-betical order, with cross-references


579


when more than one name is involvedin a single action;




§ 1185.505 IMS responsibilities.(a) The agency shall provide GSA

with current information concerningdebarments, suspension, determina-tions of ineligibility, and voluntary ex-clusions it has taken. Until February18, 1989, the agency shall also provideGSA and OMB with information con-cerning all transactions in which IMShas granted exceptions under § 1185.215permitting participation by debarred,suspended, or voluntarily excluded per-sons.



(d) IMS officials shall check the Non-procurement List before entering cov-ered transactions to determine whethera participant in a primary transactionis debarred, suspended, ineligible, orvoluntarily excluded (Tel. #).

(e) IMS officials shall check the Non-procurement List before approvingprincipals or lower tier participantswhere agency approval of the principalor lower tier participant is requiredunder the terms of the transaction, todetermine whether such principals orparticipants are debarred, suspended,ineligible, or voluntarily excluded.


(a) Certification by participants in pri-mary covered transactions. Each partici-pant shall submit the certification inAppendix A to this part for it and itsprincipals at the time the participantsubmits its proposal in connection witha primary covered transaction, except

that States need only complete suchcertification as to their principals.Participants may decide the methodand frequency by which they determinethe eligibility of their principals. Inaddition, each participant may, but isnot required to, check the Nonprocure-ment List for its principals (Tel. #).Adverse information on the certifi-cation will not necessarily result in de-nial of participation. However, the cer-tification, and any additional informa-tion pertaining to the certificationsubmitted by the participant, shall beconsidered in the administration ofcovered transactions.

(b) Certification by participants inlower tier covered transactions. (1) Eachparticipant shall require participantsin lower tier covered transactions toinclude the certification in Appendix Bto this part for it and its principals inany proposal submitted in connectionwith such lower tier covered trans-actions.

(2) A participant may rely upon thecertification of a prospective partici-pant in a lower tier covered trans-action that it and its principals are notdebarred, suspended, ineligible, or vol-untarily excluded from the coveredtransaction by any Federal agency, un-less it knows that the certification iserroneous. Participants may decide themethod and frequency by which theydetermine the eligiblity of their prin-cipals. In addition, a participant may,but is not required to, check the Non-procurement List for its principals andfor participants (Tel. #).

(c) Changed circumstances regardingcertification. A participant shall provideimmediate written notice to IMS if atany time the participant learns thatits certification was erroneous whensubmitted or has become erroneous byreason of changed circumstances. Par-ticipants in lower tier covered trans-actions shall provide the same updatednotice to the participant to which itsubmitted its proposals.




580

45 CFR Ch. XI (10–1–97 Edition)§ 1185.600









trolled substance in schedules Ithrough V of the Controlled SubstancesAct (21 U.S.C. 812), and as further de-fined by regulation at 21 CFR 1308.11through 1308.15;






less their impact or involvement is in-

significant to the performance of thegrant; and,




(7) Grant means an award of financialassistance, including a cooperativeagreement, in the form of money, orproperty in lieu of money, by a Federalagency directly to a grantee. The termgrant includes block grant and entitle-ment grant programs, whether or notexempted from coverage under thegrants management government-widecommon rule on uniform administra-tive requirements for grants and coop-erative agreements. The term does notinclude technical assistance that pro-vides services instead of money, orother assistance in the form of loans,loan guarantees, interest subsidies, in-surance, or direct appropriations; orany veterans’ benefits to individuals,i.e., any benefit to veterans, their fami-lies, or survivors by virtue of the serv-ice of a veteran in the Armed Forces ofthe United States;



the United States, the District of Co-lumbia, the Commonwealth of PuertoRico, any territory or possession of theUnited States, or any agency of aState, exclusive of institutions of high-er education, hospitals, and units of


581


local government. A State instrumen-tality will be considered part of theState government if it has a writtendetermination from a State govern-ment that such State considers the in-strumentality to be an agency of theState government.

§ 1185.610 Coverage.(a) This subpart applies to any grant-

ee of the agency.(b) This subpart applies to any grant,

except where application of this sub-part would be inconsistent with theinternational obligations of the UnitedStates or the laws or regulations of aforeign government. A determinationof such inconsistency may be madeonly by the agency head or his/her des-ignee.

(c) The provisions of subparts A, B, C,D and E of this part apply to matterscovered by this subpart, except wherespecifically modified by this subpart.In the event of any conflict betweenprovisions of this subpart and otherprovisions of this part, the provisionsof this subpart are deemed to controlwith respect to the implementation ofdrug-free workplace requirements con-cerning grants.





(1) The grantee has violated the cer-tification by failing to carry out therequirements of paragraphs (A)(a)through (g) and/or (B) of the certifi-cation (Alternate I to Appendix C) or



(1) The grantee has violated the cer-tification by failing to carry out its re-quirements (Alternate II to AppendixC); or


§ 1185.620 Effect of violation.(a) In the event of a violation of this

subpart as provided in § 1185.615, and inaccordance with applicable law, thegrantee shall be subject to one or moreof the following actions:




(b) Upon issuance of any final deci-sion under this part requiring debar-ment of a grantee, the debarred grant-ee shall be ineligible for award of anygrant from any Federal agency for aperiod specified in the decision, not toexceed five years (see § 1185.320(a)(2) ofthis part).




(a)(1) As a prior condition of beingawarded a grant, each grantee shallmake the appropriate certification tothe Federal agency providing thegrant, as provided in Appendix C tothis part.

(2) Grantees are not required to makea certification in order to continue re-ceiving funds under a grant awardedbefore March 18, 1989, or under a no-cost time extension of such a grant.However, the grantee shall make a one-time drug-free workplace certificationfor a non-automatic continuation of


582

45 CFR Ch. XI (10–1–97 Edition)§ 1185.635

such a grant made on or after March18, 1989.















(b) A grantee who is an individualwho is convicted for a violation of acriminal drug statute occurring duringthe conduct of any grant activity shall


583


report the conviction, in writing, with-in 10 calendar days, to his or her Fed-eral agency grant officer, or other des-ignee, unless the Federal agency hasdesignated a central point for the re-ceipt of such notices. Notification shallinclude the identification number(s)for each of the Federal agency’s af-fected grants.





2. The inability of a person to provide thecertification required below will not nec-essarily result in denial of participation inthis covered transaction. The prospectiveparticipant shall submit an explanation ofwhy it cannot provide the certification setout below. The certification or explanationwill be considered in connection with the de-partment or agency’s determination whetherto enter into this transaction. However, fail-ure of the prospective primary participant tofurnish a certification or an explanationshall disqualify such person from participa-tion in this transaction.



5. The terms covered transaction, debarred,suspended, ineligible, lower tier covered trans-action, participant, person, primary coveredtransaction, principal, proposal, and volun-tarily excluded, as used in this clause, havethe meanings set out in the Definitions andCoverage sections of the rules implementingExecutive Order 12549. You may contact the

department or agency to which this proposalis being submitted for assistance in obtain-ing a copy of those regulations.



8. A participant in a covered transactionmay rely upon a certification of a prospec-tive participant in a lower tier coveredtransaction that it is not proposed for debar-ment under 48 CFR part 9, subpart 9.4,debarred, suspended, ineligible, or volun-tarily excluded from the covered trans-action, unless it knows that the certificationis erroneous. A participant may decide themethod and frequency by which it deter-mines the eligibility of its principals. Eachparticipant may, but is not required to,check the List of Parties Excluded from Fed-eral Procurement and Nonprocurement Pro-grams.




584








(2) Where the prospective primary partici-pant is unable to certify to any of the state-ments in this certification, such prospectiveparticipant shall attach an explanation tothis proposal.

[60 FR 33041, 33062, June 26, 1995]

APPENDIX B TO PART 1185—CERTIFICATION REGARDING DEBAR-MENT, SUSPENSION, INELIGIBILTYAND VOLUNTARY EXCLUSION—LOWERTIER COVERED TRANSACTIONS




3. The prospective lower tier participantshall provide immediate written notice tothe person to which this proposal is submit-ted if at any time the prospective lower tier

participant learns that its certification waserroneous when submitted or had become er-roneous by reason of changed circumstances.






9. Except for transactions authorized underparagraph 5 of these instructions, if a partic-ipant in a covered transaction knowingly en-ters into a lower tier covered transactionwith a person who is proposed for debarmentunder 48 CFR part 9, subpart 9.4, suspended,debarred, ineligible, or voluntarily excludedfrom participation in this transaction, in ad-dition to other remedies available to the


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National Foundation on the Arts and Humanities Pt. 1185, App. C

Federal Government, the department oragency with which this transaction origi-nated may pursue available remedies, includ-ing suspension and/or debarment.




[60 FR 33042, 33062, June 26, 1995]

APPENDIX C TO PART 1185—CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS



2. The certification set out below is a ma-terial representation of fact upon which reli-ance is placed when the agency awards thegrant. If it is later determined that thegrantee knowingly rendered a false certifi-cation, or otherwise violates the require-ments of the Drug-Free Workplace Act, theagency, in addition to any other remediesavailable to the Federal Government, maytake action authorized under the Drug-FreeWorkplace Act.




6. Workplace identifications must includethe actual address of buildings (or parts ofbuildings) or other sites where work underthe grant takes place. Categorical descrip-tions may be used (e.g., all vehicles of a masstransit authority or State highway depart-ment while in operation, State employees in

each local unemployment office, performersin concert halls or radio studios).






Employee means the employee of a granteedirectly engaged in the performance of workunder a grant, including: (i) All direct chargeemployees; (ii) All indirect charge employeesunless their impact or involvement is insig-nificant to the performance of the grant;and, (iii) Temporary personnel and consult-ants who are directly engaged in the per-formance of work under the grant and whoare on the grantee’s payroll. This definitiondoes not include workers not on the payrollof the grantee (e.g., volunteers, even if usedto meet a matching requirement; consult-ants or independent contractors not on thegrantee’s payroll; or employees of subrecipi-ents or subcontractors in covered work-places).








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45 CFR Ch. XI (10–1–97 Edition)Pt. 1185, App. C








(e) Notifying the agency in writing, withinten calendar days after receiving noticeunder paragraph (d)(2) from an employee orotherwise receiving actual notice of suchconviction. Employers of convicted employ-ees must provide notice, including positiontitle, to every grant officer or other designeeon whose grant activity the convicted em-ployee was working, unless the Federal agen-cy has designated a central point for the re-ceipt of such notices. Notice shall includethe identification number(s) of each affectedgrant;





B. The grantee may insert in the space pro-vided below the site(s) for the performance ofwork done in connection with the specificgrant:

Place of Performance (Street address, city,county, state, zip code)

————————————————————————————————————————————————————————————————————————

Check b if there are workplaces on file thatare not identified here.




[55 FR 21690, 21704, May 25, 1990]

PARTS 1186—1199 [RESERVED]


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