On August 7, 2024, USAID issued an Acquisition & Assistance Policy Directive to implement OMB’s recent revisions to the Uniform Grant Guidance. Pub K is providing a review of each substantive change USAID has made to its standard provisions. The post highlights the changes to the standard provisions for Non-U.S. Nongovernmental Organizations.
- M1 Allowable Costs – Cost Principles for Nonprofit Organizations: Adds effective dates to manage the transition by stating, “If this award is being issued or amended between August 7, 2024 and September 30, 2024, the cost principles outlined in Subpart E of the “2024 Revisions” of 2 CFR 200 (89 FR 30046 dated April 22, 2024) are applicable. Otherwise, the cost principles set forth in Subpart E of 2 CFR 200 in effect on the date of this award or amendment are applicable.” Cost Principles for Commercial Organizations: The Federal Acquisition Regulation (FAR) at 48 CFR 31.2 and USAID Acquisition Regulation (AIDAR) at 48 CFR 731.2 are applicable.
- M2 Accounting, Record Retention and Access, and Audits – The revision expands the language on the financial management system, stating, “The recipient’s financial management system, including records documenting compliance with applicable statutes, regulations, and terms and conditions of this award, must be sufficient to permit the preparation of reports and track expenditures to establish that funds have been used in accordance with the terms and conditions of this award.” Further, “The records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken …” or “when the recipient or subrecipient is notified in writing by the Federal agency (or recipient) to extend the retention.” “The recipient must give timely access [to] execute site visits, or any other Federal use.” “…access to the recipient’s personnel for the purpose of interview and discussion related to such documents or the award in general.” “USAID’s rights of access are not limited to the required retention period of this provision but lasts as long as the records are retained.”Beginning in recipient’s 2025 fiscal year, the recipient must have an annual single or program-related audit, consistent with 2 CFR 200, Subpart F, for any recipient fiscal year in which the recipient expends $1,000,000 or more in all Federal awards
- M3 Amendment of Award, Revision of Budget and Program Plans – This provision deals with budget deviations which must be reported to the Agreement Officer, including a one-time extension of the period of performance by up to 12 months with the exception of three conditions. Prior written approvals from the Agreement Officer are revised to include: changing the scope of the project, increasing the total award amount, revising the period of performance, changing named key personnel, permitting the absence of the project director for more than 3 months or 25% reduction of time and effort, including costs requiring prior approval, transferring participant training support costs to other budget categories, approving subaward activities not proposed in the application, changing the total approved cost-sharing amount, or obtaining a no-cost extension of the period of performance, other than the one-time extension noted above.
- M5 Procurement Policies – This provision was revised to be more comprehensive and provide greater flexibility to the recipient in using informal procurement procedures. “The recipient may designate a reasonable micro-purchase threshold not to exceed $10,000, under which it may use informal procurement methods.” For procurements that do not exceed the simplified acquisition threshold, currently $250,000, the recipient may also use informal procurement methods to expedite the transaction, minimize administrative burden and reduce costs. For procurements exceeding the recipient’s micro-purchase threshold and below the simplified acquisition threshold as established by FAR Subpart 2.1, the recipient “must obtain price or rate quotations from an adequate number of qualified sources. For procurements exceeding the simplified acquisition threshold, “all responsible sources must be allowed to compete in an equal manner” Contracts must be awarded to offerors whose proposals are responsive and determined to be the best value considering price and other factors. “Contracts must be awarded only to responsible offerors that possess the ability to perform successfully under the terms and conditions of a proposed contract.” “Avoid conflicts of interest” and “retains all procurement records.” For awards above the micro-purchase threshold, the recipient must retain written documentation on the basis for contractor selection, justification for lack of competition if not conducted, and the basis for award cost or price. The recipient is responsible for the settlement of all contractual and administrative issues arising out of procurement transactions.
- M7 Title to and Care of Property (Cooperating Country Title) – The new language clarifies and provides more flexibility in managing equipment, particularly computer devices. The terms “equipment,” “materials” and “supplies” have the meaning given in 2 CFR 200. “Equipment means tangible personal property with a capitalization level established by the recipient for financial statement purposes, or $10,000.” Supplies include computing devices with a capitalization level below $10,000 or the level established by the recipient. “The records for property acquired under this award with support of USAID funds must be retained for three years after final disposition.”
- M10 Award Suspension and Termination – The provision was restructured and the basis for termination was added back from earlier versions, although the bases for termination remain largely the same. The Agreement Officer (USAID) may terminate this award … if the recipient fails to comply with the terms and conditions of the award, or if the recipient consents. The recipient (or subrecipient) may terminate the award by a written notification of the reasons for termination. If the award (subaward) “no longer effectuates the program goals or agency priorities,” USAID or the recipient may terminate the award. The AO may suspend or terminate the award in whole or in part if USAID determines that continuation would not be in the national interest or would violate applicable law if the recipient or an employee, subrecipient, or contractor is convicted of a narcotics offense, has engaged in drug trafficking, or does not make a good-faith effort to maintain a drug-free workplace.
- M15 Trafficking in Persons – In addition to clarifying edits, the revisions specify four bases for termination of an award or take remedial actions in para. (b). Para. (d) provides the USAID offices that must be notified when a covered entity has engaged in prohibited behavior. These offices are the Responsibility, Safeguarding and Compliance Division at disclosures@usaid.gov, the OIG, and the AO. (a). For awards exceeding $500,000, the recipient must certify annually it has a plan and has implemented procedures to prevent activities described in para. (a), and has no knowledge of entities engaged in prohibited activities. Note the link to Department of State examples of awareness programs. Several definitions were either added or modified in para, (i).
- M18 Nondiscrimination – Coverage is expanded to “sexual orientation or gender identity” and “transgender status, age (40 or over), physical or mental disability, genetic information, marital or parental status … membership in an employee organization, political affiliation, or involvement in protected equal employment opportunity (EEO) activity.”
- M22 Enhancement of Grantee Employee Whistleblower Protections – The provision is edited for clarity and consistency, noting that whistleblowing must be USAID-specific.
- M26 Mandatory Disclosures – Requires prompt disclosure of “credible evidence of any violation of Federal criminal law involving fraud, conflict of interest or bribery … or violation of the civil False Claims Act.” Applicant and recipient disclosures must be made in writing to the Office of Inspector General, copying the prime recipient.
- M28 Conflict of Interest – The provision has been expanded herein to include “board members.”
- M29 Prohibition on Certain Telecommunication and Video Surveillance Equipment and Services – The provision now allows the use [not purchases] of prohibited equipment or services when using award funds incurred for costs on or after October 1, 2022, through September 30, 2028 – if the recipient determines that there is no available alternate eligible source. See para. (b) and (c).
- M31 Award Term and Condition for Recipient Integrity and Performance Matters – The revised provision now requires recipients [with awards of over $10 million to ensure the information available in the responsibility/qualification records through SAM.gov is accurate and complete.
- M33 System for Award Management and Unique Entity Identifier – The provision requires “the recipient to maintain a current and active registration in SAM.gov until the recipient submits all final reports required under the Federal award or receives the final payment, whichever is later.” “Potential subrecipients [not second-tier subrecipients] must have a Unique Entity Identifier to receive a subaward.”
- RAA1 Advance Payment and Refunds – The provision provides additional flexibility in adding conditions for exemption from the use of interest-bearing accounts. The recipient must maintain advances of USAID funds in interest-bearing accounts unless, among others, “the bank requires too high an average or minimum balance or is not readily accessible (for example, due to public or political unrest in the country.)” “Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s).”
- RAA2 Reimbursement Payment and Refunds – The revision states that “When the award expires, the recipient must submit the final financial report no later than 120 calendar days after the expiry date.” It also clarifies (finally) that “Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s).
- RAA3 Indirect Costs – Negotiated Indirect Cost Rates Provisional & Final – The provision reinforces that Federal agencies (and primes) must respect NICRAs issued by the recipient’s cognizant agency. It also reflects the requirement many readers heard recently that the Overhead Branch of OAA expects proposals for each fiscal year under the term of an award. “Provisional rate or billing rate means a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending establishment of a final rate for the period.” “Provisional indirect cost rates must be established for each of the recipient’s fiscal years during the term of this award.” If USAID is the cognizant agency, “the recipient must submit four copies of the audit report, along with the proposed provisional and final indirect cost rates and supporting cost data [within six months after the close of each fiscal year] to USAID’s … Overhead, Special Cost and Closeout Branch (OCC) at non-profit-icr-proposal@usaid.gov. Note that the recipient may agree to use the current indirect rate to close out the award, or not.
- RAA4 Indirect Costs – Charged as a Fixed Amount – This option exists due to “the recipient [choosing] not to use the up to 15 percent de minimis rate authorized in 2 CFR 200.414(f) and indirect costs charged as a fixed amount are not otherwise included in the award budget.”
- RAA5 Indirect Costs – De Minimis Rates – The rate has been increased to 15%. “De minimis rate means an indirect cost rate of up to 15% that a recipient without a NICRA may elect to apply to modified total indirect costs (MTDC) in accordance with 2 CFR 200.414(f). The de minimis rate does not require documentation to justify its use and may be used indefinitely.” This provision specifies the cost elements making up MTDC in para. (a)(3).
- RAA7 Reporting Subawards and Executive Compensation – This provision is required in all solicitations and awards where the total Federal funding is anticipated to equal or exceed $30,000. “The recipient must report [no later than the end of the month following the month in which the subaward was issued] each subaward described in para. (a)(1) of this provision to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) at http://www,fsrs.gov. Total compensation of recipient executives must be reported if in the preceding fiscal year, the recipient received 80 percent or more of the recipient’s annual gross revenues from Federal procurement contracts (and subcontracts) and Federal awards (and subawards)…”
- RAA8 Subawards – The revised provision lists what must be included in all subawards. The revision highlights the requirement for the subrecipent’s Unique Entity Identifier and applicable standard provisions.”
- RAA15 Cost Sharing – The provision clarifies that “Unrecovered indirect costs, including indirect costs on cost sharing, may be included as part of cost sharing with the prior approval of USAID or the pass-through entity. Unrecovered indirect cost means the difference between the amount charged to the award and the amount which could have been charged to the award under the recipient’s or subrecipient’s approved indirect cost rate.” The provision also adds as a criterion for eligibility that the cost sharing must conform to the other applicable provisions of the award.
- RAA16 Program Income – The revised provision clarifies how program income and interest are used. Note that the agreement must state the method program that will be used. Note that program income may be used for closeout costs. At para. (f), “the recipient may continue to use program income earned after the period of performance of the award to further award objectives … However, program income earned after the period of performance may not be earned or kept as profit.” In para. (g), when the award requires reporting on program income after the period of performance, records must be retained for three years from the end of the recipient’s or subrecipient’s fiscal year in which the program income is earned.
- RAA31 Never Contract with the Enemy – Edited for clarity and consistency.
