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 U.S. Nongovernmental Organizations.
- M1 Applicability of 2 CFR 200 and 2 CFR 700 – If the award is being issued or amended between August 7, 2024, and September 30, 2024, all parts of the “2024 Revisions of 2 CFR 200 (89 FR 30046 dated April 22, 2024), the 2 CFR 700 in effect on the date of this award or amendment, and all Standard Provisions … are applicable to the award.”
Note: The revision to 2 CFR 200 increases the thresholds for audits from $750,000 to $1 million, applicable to audits in the fiscal year beginning on or after October 1, 2024, and for equipment and supplies from $5,000 to $10,000.
- M3 Nondiscrimination – Coverage 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.”
- M6 Subawards and Contracts – “The recipient must use the Standard Provisions” and “substitute where USAID’s [name] is mentioned ‘the recipient name … and where ‘recipient’ appears, the subrecipient’s name …”
- M9 Debarment, Suspension, and Other Responsibility Matters – Coverage expanded to “violating Federal criminal tax laws”
- M10 Drug-Free Workplace – Added a legal citation.
- M20 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 of 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).
- M24 M22 Enhancement of Grantee Employee Whistleblower Protections – The provision is edited for clarity and consistency, noting that whistleblowing must be USAID-specific.
- M28 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 disclosure must be made in writing to the Office of Inspector General, copying the prime recipient.
- M30 Conflict of Interest – The provision has been expanded to include “board members.”
- M31 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).
- M33 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.
- M35 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 Negotiated Indirect Cost Rates – Predetermined – “Predetermined rate” means an indirect cost rate, applicable to a specified current or future period, usually the organization’s fiscal year. The rate is based on an estimate of the costs to be incurred during the period. A predetermined rate is not subject to adjustment.”
- RAA2 Negotiated Indirect Cost Rates – Nonprofit 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.
- RAA3 Negotiated Indirect Cost Rates – For-Profit Provisional & Final – Provisions similar to those that apply to nonprofit organizations apply to for-profit entities, except three copies of the provisional and final indirect cost rates and supporting cost data must be submitted to OCC at for-profit-icr-submissions@usaod.gov.
- RAA4 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). Note that under Applicability, the recipient must not use the de minimis rate under a directly awarded Federal contract, presumably because it would be a cost-plus-a-percentage-of-cost type contract, which is prohibited under the FAR.
- RAA9 Title to and Care of Property (Cooperating Country Title) – The terms “equipment,” “materials” and “supplies” have the meaning given in 2 CFR 200. See note above under M1. “The records for property acquired under this award with support of USAID funds must be retained for three years after final disposition.”
- RAA10 Cost Sharing – Minor edits.
- RAA24 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) …”
- RAA30 Program Income – The revised provision clarifies how program income and interest are used. The agreement must state the method of applying program income (deduction, addition, cost-sharing, or combination). 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.
