80 FR 55721 - USAID Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

AGENCY FOR INTERNATIONAL DEVELOPMENT

Federal Register Volume 80, Issue 180 (September 17, 2015)

Page Range		55721-55726
FR Document		2015-23419
USAID is issuing a final rule adopting with amendments the ``Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,'' issued by the Office of Management and Budget and published in Federal Register on December 26, 2013. Consistent with the OMB rule, USAID's rule supersedes USAID's ``Administration of Assistance Awards to U.S. Non-Governmental Organizations.'' Parts of this final rule apply to for-profit entities in limited circumstances and to foreign organizations as described in this guidance.
Federal Register, Volume 80 Issue 180 (Thursday, September 17, 2015)
[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Rules and Regulations]
[Pages 55721-55726]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23419]



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Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / 
Rules and Regulations

[[Page 55721]]



AGENCY FOR INTERNATIONAL DEVELOPMENT

2 CFR Part 700

RIN 0412-AA73


USAID Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards

AGENCY: Agency for International Development (USAID).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: USAID is issuing a final rule adopting with amendments the 
``Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards,'' issued by the Office of Management 
and Budget and published in Federal Register on December 26, 2013. 
Consistent with the OMB rule, USAID's rule supersedes USAID's 
``Administration of Assistance Awards to U.S. Non-Governmental 
Organizations.'' Parts of this final rule apply to for-profit entities 
in limited circumstances and to foreign organizations as described in 
this guidance.

DATES: This final rule is effective October 19, 2015.

FOR FURTHER INFORMATION CONTACT: Michael Gushue, Telephone: 202-567-
4678, Email: [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    The Agency for International Development issued an interim final 
rule with a request for comments adopting the Office of Management and 
Budget's ``Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards, and published in the Federal 
Register in Vol. 78, No. 248 (Dec. 26, 2013). This OMB rule is codified 
at 2 CFR part 200 and superseded OMB Circulars A-21, A-87, A-110, A-
122, A-89, A-102, and A-133, and the guidance in Circular A-50 on 
Single Audit Act follow-up. USAID's interim final rule and subsequent 
final rule replace 22 CFR part 226, ``Administration of Assistance 
Awards to U.S. Nongovernmental Organizations.'' Parts of this final 
rule also apply to for-profit entities in limited circumstances and to 
foreign organizations as described in this guidance.
    Regulatory Authority: The authority for Part 700 reads as follows:

    Authority: Sec. 621, Public L. 87-195, 75 Stat 445, (22 U.S.C. 
2381) as amended, E.O. 12163, Sept 29, 1979, 44 FR 56673; 2 CFR 1979 
Comp., p. 435

B. Discussion of Comments

    The public comment period on the proposed rule closed on March 6, 
2015. USAID received comments and suggestions from two organizations on 
its interim final rule. The following responses address comments that 
were specific to USAID's implementation of OMB's rule. Comments 
regarding OMB's Administrative Requirements, Cost Principles, and Audit 
Requirements at 2 CFR part 200 that did not affect USAID's 
implementation at 2 CFR part 700 were not considered.

Applicability of Subparts D and E to Foreign Organizations

    Comment: Two commenters addressed USAID's application of 2 CFR part 
200 and 2 CFR part 700 to foreign organizations. Agencies were given 
decision making authority on the applicability of 2 CFR part 200 to 
non-US entities, which has resulted in a lack of consistency in 
applicability to non-US entities across the various federal agencies. 
Because the goal of this new regulation was to increase uniformity and 
reduce administrative burden, Subparts A through E of 2 CFR part 200 
should be made applicable to all non-US entities, which will simplify 
and streamline sub-recipient monitoring, as well as implementation. The 
U.S. Agency for International Development has applied Subpart E 
inconsistently. Non-US entities will face different administrative 
requirements when they receive federal awards directly from these 
agencies. Pass-through entities that subaward funds to local indigenous 
organizations in host countries as well as to U.S. based entities must 
craft differing subaward agreements for each class of subrecipients and 
monitor and enforce differing requirements. Those non-US based 
subrecipients who receive funds that originate from USAID and from 
other federal agencies are subject to policies that are not uniform. We 
encourage USAID to use references to 2 CFR part 200, subpart D in its 
policies affecting non-US entities and to use the provisions of 2 CFR 
200.207 to differentiate on an individual basis whether differing 
special conditions are warranted rather than continue to differentiate 
as they have done.
    Response: USAID has modified 2 CFR part 700 to clearly identify 
what parts of 2 CFR part 200 apply to different entities. USAID will 
continue its longstanding practice of not applying the uniform set of 
administrative requirements consolidated in the new Uniform 
Requirements to foreign organizations. The Uniform Requirements would 
have significant negative implications for USAID's ongoing operations 
and awards involving foreign organizations. Taken as a whole, adoption 
by USAID of the Uniform Requirements to foreign organizations would 
impose U.S. requirements on local organizations working in English as a 
second language and unfamiliar with the technical wording and systems 
logic of federal regulations primarily directed at U.S. recipients, 
including U.S. and international non-governmental organizations, 
universities, and research organizations. Application of these 
requirements would result in an across-the-board increase of 
administrative burden on local organizations and would seriously 
undermine USAID's development and sustainability goals that have been 
the subject of significant efforts to reduce such burdens and barriers 
to local organization partnerships with USAID.
    More broadly, these changes would have a significant impact on the 
Agency's ongoing efforts to work directly with capable local 
organizations to fulfill our overall mandate to support sustainable 
development.

Applicability to Commercial Organizations

    Comment: Two commenters addressed the application of cost 
principles to for-profit entities. Section 2 CFR 200.101 indicates that 
Federal

[[Page 55722]]

agencies may apply the Cost Principles, found in Subpart E, to 
commercial entities. OMB's decision to permit Federal awarding agencies 
to decide whether to apply the provisions of the Uniform Guidance to 
commercial organizations and its discussion of the applicability of 
Subpart E of 2 CFR part 200 has created confusion as to the continuing 
role that the cost principles for commercial organizations contained in 
48 CFR Subpart 31.2 have when the Federal award is made to a commercial 
organization.
    In particular, the statement in 2 CFR 200.101(a) (i.e., ``These 
requirements are applicable to all costs related to Federal awards.''), 
the chart that follows in 2 CFR 200.101(b), and particularly the 
statement contained in 2 CFR 200.101(c) lead to the conclusion that 
OMB's intent is for commercial organizations to follow Subpart E when 
administering grants and cooperative agreements. However, Subpart E 
only applies to non-commercial entities, while 48 CFR Subpart 31.2 
applies to commercial entities. It is clear that when those 
organizations are administering a Federal contract, they would be 
directed to follow 48 CFR Subpart 31.2, leading to potential 
inconsistency of costing. The Department of State has addressed this 
subject by promulgating 2 CFR 600.101(b) to assure cost consistency 
shows that this clarification should be made on a government-wide 
basis.
    Response: USAID has revised 2 CFR part 700 to clarify that Subpart 
E does not apply to for-profit entities.

Regulatory Findings

    For the regulatory findings regarding this rulemaking, please refer 
to the analysis prepared by OIRA in the interim final rule, which is 
incorporated herein. 79 FR at 75876.

List of Subjects in 22 CFR Part 700

    Accounting, Administrative practice and procedure, Audit 
requirements, Grant administration, Grant programs, Reporting and 
recordkeeping requirements.

Regulatory Text

    For the reasons stated in the preamble, The Agency for 
International Development amends 2 CFR Chapter VII by revising part 700 
to read as follows:

PART 700--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Sec.
Subpart A--Acronyms and Definitions
700.1 Definitions.
Subpart B--General Provisions
700.2 Adoption of 2 CFR part 200.
700.3 Applicability.
700.4 Exceptions.
700.5 Supersession.
Subpart C--Pre-Federal Award Requirements and Contents of Federal 
Awards
700.6 Metric system of measurement.
700.7 Advance payment.
Subpart D--Post Federal Award Requirements
700.8 Payment.
700.9 Property standards.
700.10 Cost sharing or matching.
700.11 Contracting with small and minority businesses, women's 
business enterprises, and labor surplus area firms.
700.12 Contract provisions.
700.13 Additional provisions for awards to for-profit entities.

Termination and Disputes

700.14 Termination.
700.15 Disputes.

USAID--Specific Requirements

700.16 Marking.

    Authority: Sec. 621, Public L. 87-195, 75 Stat 445, (22 U.S.C. 
2381) as amended, E.O. 12163, Sept 29, 1979, 44 FR 56673; 2 CFR 1979 
Comp., p. 435.

Subpart A--Acronyms and Definitions


Sec.  700.1  Definitions.

    These are the definitions for terms used in this part. Different 
definitions may be found in Federal statutes or regulations that apply 
more specifically to particular programs or activities.
    Activity means a set of actions through which inputs--such as 
commodities, technical assistance, training, or resource transfers--are 
mobilized to produce specific outputs, such as vaccinations given, 
schools built, microenterprise loans issued, or policies changed. 
Activities are undertaken to achieve objectives that have been formally 
approved and notified to Congress.
    Agreement Officer means a person with the authority to enter into, 
administer, terminate and/or closeout assistance agreements subject to 
this part, and make related determinations and findings on behalf of 
USAID. An Agreement Officer can only act within the scope of a duly 
authorized warrant or other valid delegation of authority. The term 
``Agreement Officer'' includes persons warranted as ``Grant Officers.'' 
It also includes certain authorized representatives of the Agreement 
Officer acting within the limits of their authority as delegated by the 
Agreement Officer.
    Apparently successful applicant(s) means the applicant(s) for USAID 
funding recommended for an award after merit review, but who has not 
yet been awarded a grant, cooperative agreement or other assistance 
award by the Agreement Officer. Apparently successful applicant status 
confers no right and constitutes no USAID commitment to an award, which 
still must be executed by the Agreement Officer.
    Award means financial assistance that provides support or 
stimulation to accomplish a public purpose. Awards include grants, 
cooperative agreements, and other agreements in the form of money or 
property in lieu of money, by the Federal Government to an eligible 
recipient. The term does not include: Technical assistance, which 
provides services instead of money; other assistance in the form of 
loans, loan guarantees, interest subsidies, or insurance; direct 
payments of any kind to individuals; contracts which are required to be 
entered into and administered under procurement laws and regulations.
    Branding strategy means a strategy the apparently successful 
applicant submits at the specific request of an USAID Agreement Officer 
after merit review of an application for USAID funding, describing how 
the program, project, or activity is named and positioned, as well as 
how it is promoted and communicated to beneficiaries and cooperating 
country citizens. It identifies all donors and explains how they will 
be acknowledged. A Branding Strategy is required even if a Presumptive 
Exception is approved in the Marking Plan.
    Commodities mean any material, article, supply, goods or equipment, 
excluding recipient offices, vehicles, and non-deliverable items for 
recipient's internal use in administration of the USAID-funded grant, 
cooperative agreement, or other agreement or subagreement.
    Date of completion means the date on which all work under an award 
is completed or the date on the award document, or any supplement or 
amendment, on which USAID sponsorship ends.
    Marking plan means a plan that the apparently successful applicant 
submits at the specific request of a USAID Agreement Officer after 
merit review of an application for USAID funding, detailing the public 
communications, commodities, and program materials and other items that 
will visibly bear the USAID Identity. Recipients may request approval 
of Presumptive Exceptions to

[[Page 55723]]

marking requirements in the Marking Plan.
    Principal officer means the most senior officer in an USAID 
Operating Unit in the field, e.g., USAID Mission Director or USAID 
Representative. For global programs managed from Washington but 
executed across many countries such as disaster relief and assistance 
to internally displaced persons, humanitarian emergencies or immediate 
post conflict and political crisis response, the cognizant Principal 
Officer may be an Office Director, for example, the Directors of USAID/
W/Office of Foreign Disaster Assistance and Office of Transition 
Initiatives. For non-presence countries, the cognizant Principal 
Officer is the Senior USAID officer in a regional USAID Operating Unit 
responsible for the non-presence country, or in the absence of such a 
responsible operating unit, the Principle U.S Diplomatic Officer in the 
non-presence country exercising delegated authority from USAID.
    Program means an organized set of activities and allocation of 
resources directed toward a common purpose, objective, or goal 
undertaken or proposed by an organization to carry out the 
responsibilities assigned to it. Projects include all the marginal 
costs of inputs (including the proposed investment) technically 
required to produce a discrete marketable output or a desired result 
(for example, services from a fully functional water/sewage treatment 
facility).
    Public communications are documents and messages intended for 
distribution to audiences external to the recipient's organization. 
They include, but are not limited to, correspondence, publications, 
studies, reports, audio visual productions, and other informational 
products; applications, forms, press and promotional materials used in 
connection with USAID funded programs, projects or activities, 
including signage and plaques; Web sites/Internet activities; and 
events such as training courses, conferences, seminars, press 
conferences and the like.
    Suspension means an action by USAID that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award. Suspension of 
an award is a separate action from suspension under USAID regulations 
implementing E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 
2 CFR part 780.
    Unrecovered indirect cost means the difference between the amount 
awarded and the amount which could have been awarded under the 
recipient's approved negotiated indirect cost rate.
    USAID means the United States Agency for International Development.
    USAID Identity (Identity) means the official marking for the United 
States Agency for International Development (USAID) comprised of the 
USAID logo or seal and new brandmark with the tagline that clearly 
communicates our assistance is ``from the American people.'' In 
exceptional circumstances, upon a written determination by the USAID 
Administrator, the definition of the USAID Identity may be amended to 
include additional or substitute use of a logo or seal and tagline 
representing a presidential initiative or other high level interagency 
Federal initiative that requires consistent and uniform branding and 
marking by all participating agencies. The USAID Identity (including 
any required presidential initiative or related identity) is available 
on the USAID Web site at http://www.usaid.gov/branding and is provided 
without royalty, license or other fee to recipients of USAID funded 
grants or cooperative agreements or other assistance awards.

Subpart B--General Provisions


Sec.  700.2  Adoption of 2 CFR Part 200.

    Under the authority listed above the Agency for International 
Development adopts the Office of Management and Budget (OMB) guidance 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards to Non-Federal Entities (subparts A 
through F of 2 CFR part 200), as supplemented by this part, as the 
Agency for International Development (USAID) policies and procedures 
for financial assistance administration. This part satisfies the 
requirements of 2 CFR 200.110(a) and gives regulatory effect to the OMB 
guidance as supplemented by this part.


Sec.  700.3  Applicability.

    (a) Subparts A through D of 2 CFR part 200 apply to for-profit 
entities. The Federal Acquisition Regulation (FAR) at 48 CFR part 30, 
Cost Accounting Standards, and Part 31, Contract Cost Principles and 
Procedures, takes precedence over the cost principles in Subpart E for 
Federal awards to for-profit entities.
    (b) Subpart E applies to foreign organizations and foreign public 
entities, except where the Federal awarding agency determines that the 
application of these subparts would be inconsistent with the 
international obligations of the United States or the statute or 
regulations of a foreign government.


Sec.  700.4  Exceptions.

    Consistent with 2 CFR 200.102(b):
    (a) Exceptions on a case-by-case basis for individual non-Federal 
entities may be authorized by USAID's Assistant Administrator, Bureau 
for Management, or designee as delegated in Agency policy, except where 
otherwise required by law or where OMB or other approval is expressly 
required by this Part. No case-by-case exceptions may be granted to the 
provisions of Subpart F--Audit Requirements of this Part.
    (b) USAID's Assistant Administrator, Bureau for Management, or 
designee as delegated in Agency policy, is also authorized to approve 
exceptions, on a class or an individual case basis, to USAID program 
specific assistance regulations other than those which implement 
statutory and executive order requirements.
    (c) The Federal awarding agency may apply more restrictive 
requirements to a class of Federal awards or non-Federal entities when 
approved by OMB, required by Federal statutes or regulations except for 
the requirements in Subpart F--Audit Requirements of this part. A 
Federal awarding agency may apply less restrictive requirements when 
making awards at or below the simplified acquisition threshold, or when 
making fixed amount awards as defined in Subpart A--Acronyms and 
Definitions of 2 CFR part 200, except for those requirements imposed by 
statute or in Subpart F--Audit Requirements of this part.


Sec.  700.5  Supersession.

    Effective December 26, 2014, this part supersedes the following 
regulations under Title 22 of the Code of Federal Regulations: 22 CFR 
part 226, ``Administration of Assistance Awards To U.S. Non-
Governmental Organizations.''

Subpart C--Pre-Federal Award Requirements and Contents of Federal 
Awards


Sec.  700.6  Metric system of measurement.

    (a) The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205) declares that the metric system is 
the preferred measurement system for U.S. trade and commerce.
    (b) Wherever measurements are required or authorized, they must be 
made, computed, and recorded in metric system units of measurement, 
unless otherwise authorized by the Agreement Officer in writing when it

[[Page 55724]]

has been found that such usage is impractical or is likely to cause 
U.S. firms to experience significant inefficiencies or the loss of 
markets. Where the metric system is not the predominant standard for a 
particular application, measurements may be expressed in both the 
metric and the traditional equivalent units, provided the metric units 
are listed first.


Sec.  700.7  Advance payment.

    Advance payment mechanisms include, but are not limited to, Letter 
of Credit, Treasury check and electronic funds transfer and must comply 
with applicable guidance in 31 CFR part 205.

Subpart D--Post Federal Award Requirements


Sec.  700.8  Payment.

    (a) Use of resources before requesting advance payments. To the 
extent available, the non-Federal entity must disburse funds available 
from program income (including repayments to a revolving fund), 
rebates, refunds, contract settlements, audit recoveries, and interest 
earned on such funds before requesting additional cash payments. This 
paragraph is not applicable to such earnings which are generated as 
foreign currencies.
    (b) Standards governing the use of banks and other institutions as 
depositories of advance payments under Federal awards are as follows:
    (1) Except for situations described in paragraph (b)(2) of this 
section, USAID does not require separate depository accounts for funds 
provided to a non-Federal entity or establish any eligibility 
requirements for depositories for funds provided to the non-Federal 
entity. However, the non-Federal entity must be able to account for 
receipt, obligation and expenditure of funds.
    (2) Advance payments of Federal funds must be deposited and 
maintained in insured accounts whenever possible.


Sec.  700.9  Property standards.

    (a) Real property. Unless the agreement provides otherwise, title 
to real property will vest in accordance with 2 CFR 200.311.
    (b) Equipment. Unless the agreement provides otherwise, title to 
equipment will vest in accordance with 2 CFR 200.313.


Sec.  700.10  Cost sharing or matching.

    Unrecovered indirect costs, including indirect costs on cost 
sharing or matching may be included as part of cost sharing or 
matching. Unrecovered indirect cost means the difference between the 
amount charged to the Federal award and the amount which would have 
been charged to the Federal award under the non-Federal entity's 
approved negotiated indirect cost rate.


Sec.  700.11  Contracting with small and minority businesses, women's 
business enterprises, and labor surplus area firms.

    (a) Make information on forthcoming opportunities available and 
arrange time frames for purchases and contracts to encourage and 
facilitate participation by small businesses, minority-owned firms, and 
women's business enterprises. To permit USAID, in accordance with the 
small business provisions of the Foreign Assistance Act of 1961, as 
amended, to give United States small business firms an opportunity to 
participate in supplying commodities and services procured under the 
award, the recipient must to the maximum extent possible provide the 
following information to the Office of Small Disadvantaged Business 
Utilization (OSDBU), USAID, Washington, DC 20523, at least 45 days 
prior to placing any order or contract in excess of the simplified 
acquisition threshold:
    (1) Brief general description and quantity of goods or services;
    (2) Closing date for receiving quotations, proposals or bids; and
    (3) Address where solicitations or specifications can be obtained.
    (b) [Reserved]


Sec.  700.12  Contract provisions.

    (a) The non-Federal entity's contracts must contain the applicable 
provisions described in Appendix II to Part 200--Contract Provisions 
for non-Federal Entity Contracts Under Federal Awards.
    (b) All negotiated contracts (except those for less than the 
simplified acquisition threshold) awarded by the non-Federal entity 
must include a provision to the effect that the non-Federal Entity, 
USAID, the Comptroller General of the United States, or any of their 
duly authorized representatives, must have access to any books, 
documents, papers and records of the contractor which are directly 
pertinent to a specific program for the purpose of making audits, 
examinations, excerpts and transcriptions.


Sec.  700.13  Additional provisions for awards to for-profit entities.

    (a) This paragraph contains additional provisions that apply to 
awards to for-profit entities. These provisions supplement and make 
exceptions for awards to for-profit entities from other provisions of 
this part.
    (1) Prohibition against profit. No funds will be paid as profit to 
any for-profit entity receiving or administering Federal financial 
assistance as a recipient or subrecipient. Federal financial assistance 
does not include contracts as defined at 2 CFR 200.22, other contracts 
a Federal agency uses to buy goods or services from a contractor, or 
contracts to operate Federal government owned, contractor operated 
facilities (GOCOs). Profit is any amount in excess of allowable direct 
and indirect costs.
    (2) Program income. As described in Sec.  200.307(e)(2), program 
income earned by a for-profit entity may not be added to the Federal 
award.
    (b) [Reserved]

Termination and Disputes


Sec.  700.14  Termination.

    If at any time USAID determines that continuation of all or part of 
the funding for a program should be suspended or terminated because 
such assistance would not be in the national interest of the United 
States or would be in violation of an applicable law, then USAID may, 
following notice to the recipient, suspend or terminate the award in 
whole or in part and prohibit the recipient from incurring additional 
obligations chargeable to the award other than those costs specified in 
the notice of suspension. If a suspension is put into effect and the 
situation causing the suspension continues for 60 calendar days or 
more, then USAID may terminate the award in whole or in part on written 
notice to the recipient and cancel any portion of the award which has 
not been disbursed or irrevocably committed to third parties.


Sec.  700.15  Disputes.

    (a) Any dispute under or relating to a grant or agreement will be 
decided by the USAID Agreement Officer. The Agreement Officer must 
furnish the recipient a written copy of the decision.
    (b) Decisions of the USAID Agreement Officer will be final unless, 
within 30 calendar days of receipt of the decision, the recipient 
appeals the decision to USAID's Assistant Administrator, Bureau for 
Management, or designee as delegated in Agency policy. Appeals must be 
in writing with a copy concurrently furnished to the Agreement Officer.
    (c) In order to facilitate review of the record by the USAID's 
Assistant Administrator, Bureau for Management, or designee as 
delegated in Agency policy, the recipient will be given an opportunity 
to submit written evidence in support of its appeal. No hearing will be 
provided.
    (d) Decisions by the Assistant Administrator, Bureau for 
Management, or designee as delegated in Agency policy, will be final.

[[Page 55725]]

USAID--Specific Requirements


Sec.  700.16  Marking.

    (a) USAID policy is that all programs, projects, activities, public 
communications, and commodities, specified further at paragraphs (c) 
through (f) of this section, partially or fully funded by a USAID grant 
or cooperative agreement or other assistance award or subaward must be 
marked appropriately overseas with the USAID Identity, of a size and 
prominence equivalent to or greater than the recipient's, other donor's 
or any other third party's identity or logo.
    (1) USAID reserves the right to require the USAID Identity to be 
larger and more prominent if it is the majority donor, or to require 
that a cooperating country government's identity be larger and more 
prominent if circumstances warrant; any such requirement will be on a 
case-by-case basis depending on the audience, program goals and 
materials produced.
    (2) USAID reserves the right to request pre-production review of 
USAID funded public communications and program materials for compliance 
with the approved Marking Plan.
    (3) USAID reserves the right to require marking with the USAID 
Identity in the event the recipient does not choose to mark with its 
own identity or logo.
    (4) To ensure that the marking requirements ``flow down'' to 
subrecipients of subawards, recipients of USAID funded grants and 
cooperative agreements or other assistance awards are required to 
include a USAID-approved marking provision in any USAID funded 
subaward, to read as follows:

    As a condition of receipt of this subaward, marking with the 
USAID Identity of a size and prominence equivalent to or greater 
than the recipient's, subrecipient's, other donor's or third party's 
is required. In the event the recipient chooses not to require 
marking with its own identity or logo by the subrecipient, USAID 
may, at its discretion, require marking by the subrecipient with the 
USAID Identity.

    (b) Subject to Sec.  700.16(a), (h), and (j), program, project, or 
activity sites funded by USAID, including visible infrastructure 
projects (for example, roads, bridges, buildings) or other programs, 
projects, or activities that are physical in nature (for example, 
agriculture, forestry, water management), must be marked with the USAID 
Identity. Temporary signs or plaques should be erected early in the 
construction or implementation phase. When construction or 
implementation is complete, a permanent, durable sign, plaque or other 
marking must be installed.
    (c) Subject to Sec.  700.16(a), (h), and (j), technical assistance, 
studies, reports, papers, publications, audio-visual productions, 
public service announcements, Web sites/Internet activities and other 
promotional, informational, media, or communications products funded by 
USAID must be marked with the USAID Identity.
    (1) Any ``public communications'' as defined in Sec.  700.1, funded 
by USAID, in which the content has not been approved by USAID, must 
contain the following disclaimer:

    This study/report/audio/visual/other information/media product 
(specify) is made possible by the generous support of the American 
people through the United States Agency for International 
Development (USAID). The contents are the responsibility of [insert 
recipient name] and do not necessarily reflect the views of USAID or 
the United States Government.

    (2) The recipient must provide the Agreement Officer's 
Representative (AOR) or other USAID personnel designated in the grant 
or cooperative agreement with at least two copies of all program and 
communications materials produced under the award. In addition, the 
recipient must submit one electronic and/or one hard copy of all final 
documents to USAID's Development Experience Clearinghouse.
    (d) Subject to Sec.  700.16(a), (h), and (j), events financed by 
USAID such as training courses, conferences, seminars, exhibitions, 
fairs, workshops, press conferences and other public activities, must 
be marked appropriately with the USAID Identity. Unless directly 
prohibited and as appropriate to the surroundings, recipients should 
display additional materials such as signs and banners with the USAID 
Identity. In circumstances in which the USAID Identity cannot be 
displayed visually, recipients are encouraged otherwise to acknowledge 
USAID and the American people's support.
    (e) Subject to Sec.  700.16(a), (h), and (j), all commodities 
financed by USAID, including commodities or equipment provided under 
humanitarian assistance or disaster relief programs, and all other 
equipment, supplies and other materials funded by USAID, and their 
export packaging, must be marked with the USAID Identity.
    (f) After merit review of applications for USAID funding, USAID 
Agreement Officers will request apparently successful applicants to 
submit a Branding Strategy, defined in Sec.  700.1. The proposed 
Branding Strategy will not be evaluated competitively. The Agreement 
Officer will review for adequacy the proposed Branding Strategy, and 
will negotiate, approve and include the Branding Strategy in the award. 
Failure to submit or negotiate a Branding Strategy within the time 
specified by the Agreement Officer will make the apparently successful 
applicant ineligible for award.
    (g) After merit review of applications for USAID funding, USAID 
Agreement Officers will request apparently successful applicants to 
submit a Marking Plan, defined in Sec.  700.1. The Marking Plan may 
include requests for approval of Presumptive Exceptions, paragraph (h) 
of this section. All estimated costs associated with branding and 
marking USAID programs, such as plaques, labels, banners, press events, 
promotional materials, and the like, must be included in the total cost 
estimate of the grant or cooperative agreement or other assistance 
award, and are subject to revision and negotiation with the Agreement 
Officer upon submission of the Marking Plan. The Marking Plan will not 
be evaluated competitively. The Agreement Officer will review for 
adequacy the proposed Marking Plan, and will negotiate, approve and 
include the Marking Plan in the award. Failure to submit or negotiate a 
Marking Plan within the time specified by the Agreement Officer will 
make the apparently successful applicant ineligible for award. 
Agreement Officers have the discretion to suspend the implementation 
requirements of the Marking Plan if circumstances warrant. Recipients 
of USAID funded grant or cooperative agreement or other assistance 
award or subaward should retain copies of any specific marking 
instructions or waivers in their project, program or activity files. 
Agreement Officer's Representatives will be assigned responsibility to 
monitor marking requirements on the basis of the approved Marking Plan.
    (h) Presumptive exceptions:
    (1) The above marking requirements in Sec.  700.16(a) through (e) 
may not apply if marking would:
    (i) Compromise the intrinsic independence or neutrality of a 
program or materials where independence or neutrality is an inherent 
aspect of the program and materials, such as election monitoring or 
ballots, and voter information literature; political party support or 
public policy advocacy or reform; independent media, such as television 
and radio broadcasts, newspaper articles and editorials; public service 
announcements or public opinion polls and surveys.
    (ii) Diminish the credibility of audits, reports, analyses, 
studies, or policy recommendations whose data or findings must be seen 
as independent.

[[Page 55726]]

    (iii) Undercut host-country government ``ownership'' of 
constitutions, laws, regulations, policies, studies, assessments, 
reports, publications, surveys or audits, public service announcements, 
or other communications better positioned as ``by'' or ``from'' a 
cooperating country ministry or government official.
    (iv) Impair the functionality of an item, such as sterilized 
equipment or spare parts.
    (v) Incur substantial costs or be impractical, such as items too 
small or other otherwise unsuited for individual marking, such as food 
in bulk.
    (vi) Offend local cultural or social norms, or be considered 
inappropriate on such items as condoms, toilets, bed pans, or similar 
commodities.
    (vii) Conflict with international law.
    (2) These exceptions are presumptive, not automatic and must be 
approved by the Agreement Officer. Apparently successful applicants may 
request approval of one or more of the presumptive exceptions, 
depending on the circumstances, in their Marking Plan. The Agreement 
Officer will review requests for presumptive exceptions for adequacy, 
along with the rest of the Marking Plan. When reviewing a request for 
approval of a presumptive exception, the Agreement Officer may review 
how program materials will be marked (if at all) if the USAID identity 
is removed. Exceptions approved will apply to subrecipients unless 
otherwise provided by USAID.
    (i) In cases where the Marking Plan has not been complied with, the 
Agreement Officer will initiate corrective action. Such action may 
involve informing the recipient of a USAID grant or cooperative 
agreement or other assistance award or subaward of instances of 
noncompliance and requesting that the recipient carry out its 
responsibilities as set forth in the Marking Plan and award. Major or 
repeated non-compliance with the Marking Plan will be governed by the 
uniform suspension and termination procedures set forth at 2 CFR 
200.338 through 2 CFR 200.342, and 2 CFR 700.14.
    (j)(1) Waivers. USAID Principal Officers, defined for purposes of 
this provision at Sec.  700.1, may at any time after award waive in 
whole or in part the USAID approved Marking Plan, including USAID 
marking requirements for each USAID funded program, project, activity, 
public communication or commodity, or in exceptional circumstances may 
make a waiver by region or country, if the Principal Officer determines 
that otherwise USAID required marking would pose compelling political, 
safety, or security concerns, or marking would have an adverse impact 
in the cooperating country. USAID recipients may request waivers of the 
Marking Plan in whole or in part, through the AOR. No marking is 
required while a waiver determination is pending. The waiver 
determination on safety or security grounds must be made in 
consultation with U.S. Government security personnel if available, and 
must consider the same information that applies to determinations of 
the safety and security of U.S. Government employees in the cooperating 
country, as well as any information supplied by the AOR or the 
recipient for whom the waiver is sought. When reviewing a request for 
approval of a waiver, the Principal Officer may review how program 
materials will be marked (if at all) if the USAID Identity is removed. 
Approved waivers are not limited in duration but are subject to 
Principal Officer review at any time due to changed circumstances. 
Approved waivers ``flow down'' to recipients of subawards unless 
specified otherwise. Principal Officers may also authorize the removal 
of USAID markings already affixed if circumstances warrant. Principal 
Officers' determinations regarding waiver requests are subject to 
appeal to the Principal Officer's cognizant Assistant Administrator. 
Recipients may appeal by submitting a written request to reconsider the 
Principal Officer's waiver determination to the cognizant Assistant 
Administrator.
    (2) Non-retroactivity. Marking requirements apply to any obligation 
of USAID funds for new awards as of January 2, 2006. Marking 
requirements also will apply to new obligations under existing awards, 
such as incremental funding actions, as of January 2, 2006, when the 
total estimated cost of the existing award has been increased by USAID 
or the scope of effort is changed to accommodate any costs associated 
with marking. In the event a waiver is rescinded, the marking 
requirements will apply from the date forward that the waiver is 
rescinded. In the event a waiver is rescinded after the period of 
performance as defined in 2 CFR 200.77 but before closeout as defined 
in 2 CFR 200.16., the USAID mission or operating unit with initial 
responsibility to administer the marking requirements must make a cost 
benefit analysis as to requiring USAID marking requirements after the 
date of completion of the affected programs, projects, activities, 
public communications or commodities.
    (k) The USAID Identity and other guidance will be provided at no 
cost or fee to recipients of USAID grants, cooperative agreements or 
other assistance awards or subawards. Additional costs associated with 
marking requirements will be met by USAID if reasonable, allowable, and 
allocable under 2 CFR part 200, subpart E. The standard cost 
reimbursement provisions of the grant, cooperative agreement, other 
assistance award or subaward must be followed when applying for 
reimbursement of additional marking costs.
    (End of award term)

Angelique M. Crumbly,
Agency Regulatory Official, U.S. Agency for International Development.
[FR Doc. 2015-23419 Filed 9-16-15; 8:45 am]
BILLING CODE 6116-01-P
55721

Rules and Regulations Federal Register
Vol. 80, No. 180

Thursday, September 17, 2015

This section of the FEDERAL REGISTER and superseded OMB Circulars A–21, differing subaward agreements for each
contains regulatory documents having general A–87, A–110, A–122, A–89, A–102, and class of subrecipients and monitor and
applicability and legal effect, most of which A–133, and the guidance in Circular A– enforce differing requirements. Those
are keyed to and codified in the Code of 50 on Single Audit Act follow-up. non-US based subrecipients who receive
Federal Regulations, which is published under USAID’s interim final rule and funds that originate from USAID and
50 titles pursuant to 44 U.S.C. 1510.
subsequent final rule replace 22 CFR from other federal agencies are subject
The Code of Federal Regulations is sold by part 226, ‘‘Administration of Assistance to policies that are not uniform. We
the Superintendent of Documents. Prices of Awards to U.S. Nongovernmental encourage USAID to use references to 2
new books are listed in the first FEDERAL Organizations.’’ Parts of this final rule CFR part 200, subpart D in its policies
REGISTER issue of each week. also apply to for-profit entities in affecting non-US entities and to use the
limited circumstances and to foreign provisions of 2 CFR 200.207 to
organizations as described in this differentiate on an individual basis
AGENCY FOR INTERNATIONAL guidance. whether differing special conditions are
DEVELOPMENT Regulatory Authority: The authority warranted rather than continue to
for Part 700 reads as follows: differentiate as they have done.
2 CFR Part 700 Response: USAID has modified 2 CFR
Authority: Sec. 621, Public L. 87–195, 75
RIN 0412–AA73 Stat 445, (22 U.S.C. 2381) as amended, E.O. part 700 to clearly identify what parts of
12163, Sept 29, 1979, 44 FR 56673; 2 CFR 2 CFR part 200 apply to different
USAID Uniform Administrative 1979 Comp., p. 435 entities. USAID will continue its
Requirements, Cost Principles, and B. Discussion of Comments longstanding practice of not applying
Audit Requirements for Federal the uniform set of administrative
Awards The public comment period on the
requirements consolidated in the new
proposed rule closed on March 6, 2015.
AGENCY: Agency for International Uniform Requirements to foreign
USAID received comments and
Development (USAID). suggestions from two organizations on organizations. The Uniform
its interim final rule. The following Requirements would have significant
ACTION: Final rule.
responses address comments that were negative implications for USAID’s
SUMMARY: USAID is issuing a final rule specific to USAID’s implementation of ongoing operations and awards
adopting with amendments the OMB’s rule. Comments regarding OMB’s involving foreign organizations. Taken
‘‘Uniform Administrative Requirements, Administrative Requirements, Cost as a whole, adoption by USAID of the
Cost Principles, and Audit Principles, and Audit Requirements at 2 Uniform Requirements to foreign
Requirements for Federal Awards,’’ CFR part 200 that did not affect USAID’s organizations would impose U.S.
issued by the Office of Management and implementation at 2 CFR part 700 were requirements on local organizations
Budget and published in Federal not considered. working in English as a second language
Register on December 26, 2013. and unfamiliar with the technical
Applicability of Subparts D and E to wording and systems logic of federal
Consistent with the OMB rule, USAID’s
Foreign Organizations regulations primarily directed at U.S.
rule supersedes USAID’s
‘‘Administration of Assistance Awards Comment: Two commenters recipients, including U.S. and
to U.S. Non-Governmental addressed USAID’s application of 2 CFR international non-governmental
Organizations.’’ Parts of this final rule part 200 and 2 CFR part 700 to foreign organizations, universities, and research
apply to for-profit entities in limited organizations. Agencies were given organizations. Application of these
circumstances and to foreign decision making authority on the requirements would result in an across-
organizations as described in this applicability of 2 CFR part 200 to non- the-board increase of administrative
guidance. US entities, which has resulted in a lack burden on local organizations and
of consistency in applicability to non- would seriously undermine USAID’s
DATES:This final rule is effective US entities across the various federal development and sustainability goals
October 19, 2015. agencies. Because the goal of this new that have been the subject of significant
FOR FURTHER INFORMATION CONTACT: regulation was to increase uniformity efforts to reduce such burdens and
Michael Gushue, Telephone: 202–567– and reduce administrative burden, barriers to local organization
4678, Email: mgushue@usaid.gov. Subparts A through E of 2 CFR part 200 partnerships with USAID.
SUPPLEMENTARY INFORMATION: should be made applicable to all non- More broadly, these changes would
US entities, which will simplify and have a significant impact on the
A. Background streamline sub-recipient monitoring, as Agency’s ongoing efforts to work
The Agency for International well as implementation. The U.S. directly with capable local organizations
Development issued an interim final Agency for International Development to fulfill our overall mandate to support
rule with a request for comments has applied Subpart E inconsistently. sustainable development.
adopting the Office of Management and Non-US entities will face different
tkelley on DSK3SPTVN1PROD with RULES

Budget’s ‘‘Uniform Administrative administrative requirements when they Applicability to Commercial
Requirements, Cost Principles, and receive federal awards directly from Organizations
Audit Requirements for Federal Awards, these agencies. Pass-through entities Comment: Two commenters
and published in the Federal Register in that subaward funds to local indigenous addressed the application of cost
Vol. 78, No. 248 (Dec. 26, 2013). This organizations in host countries as well principles to for-profit entities. Section
OMB rule is codified at 2 CFR part 200 as to U.S. based entities must craft 2 CFR 200.101 indicates that Federal

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55722 Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Rules and Regulations

agencies may apply the Cost Principles, Subpart A—Acronyms and Definitions Apparently successful applicant(s)
found in Subpart E, to commercial 700.1 Definitions. means the applicant(s) for USAID
entities. OMB’s decision to permit funding recommended for an award
Subpart B—General Provisions
Federal awarding agencies to decide after merit review, but who has not yet
whether to apply the provisions of the 700.2 Adoption of 2 CFR part 200. been awarded a grant, cooperative
700.3 Applicability.
Uniform Guidance to commercial 700.4 Exceptions.
agreement or other assistance award by
organizations and its discussion of the 700.5 Supersession. the Agreement Officer. Apparently
applicability of Subpart E of 2 CFR part successful applicant status confers no
200 has created confusion as to the Subpart C—Pre-Federal Award right and constitutes no USAID
Requirements and Contents of Federal
continuing role that the cost principles Awards
commitment to an award, which still
for commercial organizations contained must be executed by the Agreement
in 48 CFR Subpart 31.2 have when the 700.6 Metric system of measurement. Officer.
700.7 Advance payment.
Federal award is made to a commercial Award means financial assistance that
organization. Subpart D—Post Federal Award provides support or stimulation to
Requirements accomplish a public purpose. Awards
In particular, the statement in 2 CFR
200.101(a) (i.e., ‘‘These requirements are 700.8 Payment. include grants, cooperative agreements,
applicable to all costs related to Federal 700.9 Property standards. and other agreements in the form of
700.10 Cost sharing or matching. money or property in lieu of money, by
awards.’’), the chart that follows in 2 700.11 Contracting with small and minority
CFR 200.101(b), and particularly the businesses, women’s business
the Federal Government to an eligible
statement contained in 2 CFR 200.101(c) enterprises, and labor surplus area firms. recipient. The term does not include:
lead to the conclusion that OMB’s intent 700.12 Contract provisions. Technical assistance, which provides
is for commercial organizations to 700.13 Additional provisions for awards to services instead of money; other
follow Subpart E when administering for-profit entities. assistance in the form of loans, loan
grants and cooperative agreements. Termination and Disputes guarantees, interest subsidies, or
However, Subpart E only applies to non- insurance; direct payments of any kind
700.14 Termination.
commercial entities, while 48 CFR 700.15 Disputes. to individuals; contracts which are
Subpart 31.2 applies to commercial required to be entered into and
USAID—Specific Requirements administered under procurement laws
entities. It is clear that when those
organizations are administering a 700.16 Marking. and regulations.
Federal contract, they would be directed Authority: Sec. 621, Public L. 87–195, 75 Branding strategy means a strategy the
to follow 48 CFR Subpart 31.2, leading Stat 445, (22 U.S.C. 2381) as amended, E.O. apparently successful applicant submits
to potential inconsistency of costing. 12163, Sept 29, 1979, 44 FR 56673; 2 CFR at the specific request of an USAID
The Department of State has addressed 1979 Comp., p. 435. Agreement Officer after merit review of
this subject by promulgating 2 CFR an application for USAID funding,
Subpart A—Acronyms and Definitions describing how the program, project, or
600.101(b) to assure cost consistency
shows that this clarification should be § 700.1 Definitions. activity is named and positioned, as
made on a government-wide basis. These are the definitions for terms well as how it is promoted and
Response: USAID has revised 2 CFR used in this part. Different definitions communicated to beneficiaries and
part 700 to clarify that Subpart E does may be found in Federal statutes or cooperating country citizens. It
not apply to for-profit entities. regulations that apply more specifically identifies all donors and explains how
to particular programs or activities. they will be acknowledged. A Branding
Regulatory Findings Activity means a set of actions Strategy is required even if a
through which inputs—such as Presumptive Exception is approved in
For the regulatory findings regarding
commodities, technical assistance, the Marking Plan.
this rulemaking, please refer to the
analysis prepared by OIRA in the training, or resource transfers—are Commodities mean any material,
interim final rule, which is incorporated mobilized to produce specific outputs, article, supply, goods or equipment,
herein. 79 FR at 75876. such as vaccinations given, schools excluding recipient offices, vehicles,
built, microenterprise loans issued, or and non-deliverable items for recipient’s
List of Subjects in 22 CFR Part 700 policies changed. Activities are internal use in administration of the
undertaken to achieve objectives that USAID-funded grant, cooperative
Accounting, Administrative practice agreement, or other agreement or
and procedure, Audit requirements, have been formally approved and
notified to Congress. subagreement.
Grant administration, Grant programs,
Agreement Officer means a person Date of completion means the date on
Reporting and recordkeeping
with the authority to enter into, which all work under an award is
requirements.
administer, terminate and/or closeout completed or the date on the award
Regulatory Text assistance agreements subject to this document, or any supplement or
part, and make related determinations amendment, on which USAID
For the reasons stated in the and findings on behalf of USAID. An sponsorship ends.
preamble, The Agency for International Agreement Officer can only act within Marking plan means a plan that the
Development amends 2 CFR Chapter VII the scope of a duly authorized warrant apparently successful applicant submits
by revising part 700 to read as follows: or other valid delegation of authority. at the specific request of a USAID
The term ‘‘Agreement Officer’’ includes Agreement Officer after merit review of
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PART 700—UNIFORM
ADMINISTRATIVE REQUIREMENTS, persons warranted as ‘‘Grant Officers.’’ an application for USAID funding,
COST PRINCIPLES, AND AUDIT It also includes certain authorized detailing the public communications,
REQUIREMENTS FOR FEDERAL representatives of the Agreement Officer commodities, and program materials
AWARDS acting within the limits of their and other items that will visibly bear the
authority as delegated by the Agreement USAID Identity. Recipients may request
Sec. Officer. approval of Presumptive Exceptions to

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Document Created: 2015-12-15 09:33:42
Document Modified: 2015-12-15 09:33:42
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		This final rule is effective October 19, 2015.
Contact		Michael Gushue, Telephone: 202-567- 4678, Email: [email protected]
FR Citation		80 FR 55721
RIN Number		0412-AA73
CFR Associated		Accounting; Administrative Practice and Procedure; Audit Requirements; Grant Administration; Grant Programs and Reporting and Recordkeeping Requirements