Suppose your company is working on a grant or cooperative agreement or planning to submit a proposal in response to a funding opportunity announcement. In that case, the regulations that apply will be Code of Federal Regulations (CFR) Title 2 Grants and Agreements. The problem is, when you receive a grant, generally, the award agreement says to comply with 2 CFR. There are no specific clauses or wording; basically, you are responsible for reading the entire regulation to see what applies to your award. 2 CFR includes inconsistent language and terms.
In our article, Understanding your Lower-Tier Relationships with Subrecipient and Contractor Determinations under 2 CFR 200, we addressed the required determination as to whether the lower-tier organization supporting your Awards or Subawards are classified as subrecipients or contractors. Now that the determination is made and documented is that all that needs to be done? Well no.
2 CFR 200.331, Subrecipient and contractor determinations, requires that an organization performing a grant or cooperative agreement document a case-by-case determination as to whether each sub-agreement it makes classifies the lower-tier organization in the role of a subrecipient or a contractor. The guidance provided to assist with this required determination is extremely subjective.
2 Code of Federal Regulations (CFR) 200 lays out the Procurement Standards (i.e., purchasing system requirements) in section 317 to 327. 2 CFR 200.317 (Procurement by States) requires State Governments making purchases under Federal awards to use the same policies and procedures it uses for placing purchases when it spends State funds. 2 CFR 200.318 (General Procurement Standards) relates to non-Federal entities other than State Governments. This section requires the non-Federal entity to have and use documented procurement procedures, consistent with laws and regulations and conform to the procurement standards identified in §§ 200.317 through 200.327.
Organizations receiving Federal awards (i.e., grants or cooperative agreements) are required by 2 CFR 200.303(a) to “[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” This section goes on to provide that the internal controls should comply with the guidance in:
Organizations that have federal awards, whether that be grants, cooperative agreements or contracts, must comply with specific cost accounting regulations. Unfortunately, depending on the type of federal award, the regulations may not be the same. Both, both Grants or Cooperative Agreements awarded under 2 Code of Federal Regulations (CFR) 200 and Contracts awarded under 48 CFR Federal Acquisition Regulations (FAR) provide requirements for cost allowability, allocability, and reasonableness as well as the required cost accounting treatment for all cost:
The Office of Management and Budget (OMB) issued a proposed rule to add a new Part 184 in 2 CFR Chapter I and revisions to 2 CFR 200.322 Domestic preferences for procurements on Build America/Buy America Act for Grants and Agreements. The revision will address the Buy American Preference for awards with infrastructure expenditures. Comments to the proposed rule are due March 13, 2023.
So, you have Federal Acquisition Regulation (FAR) based government contracts. Submitting a proposal for a grant should be similar, after all government regulations are government regulations – Right? Not really.