Beaumont City Council
May 7, 2024

OMB Guidance
Type A programs. This recalculation of
the Type A program is performed after
removing the total of all large loan
programs. For the purposes of this
paragraph a program is only considered
to be a Federal program providing
loans if the value of Federal awards ex-
pended for loans within the program
comprises fifty percent or more of the
total Federal awards expended for the
program. A cluster of programs is
treated as one program and the value
of Federal awards expended under a
loan program is determined as de-
scribed in § 200.502.
(4) For biennial audits permitted
under § 200.504, the determination of
Type A and Type B programs must be
based upon the Federal awards ex-
pended during the two-year period.
(c) Step two. (1) The auditor must
identify Type A programs which are
low -risk. In making this determina-
tion, the auditor must consider wheth-
er the requirements in §200.519(c), the
results of audit follow-up, or any
changes in personnel or systems affect-
ing the program indicate significantly
increased risk and preclude the pro-
gram from being low risk. For a Type
A program to be considered low -risk, it
must have been audited as a major pro-
gram in at least one of the two most
recent audit periods (in the most re-
cent audit period in the case of a bien-
nial audit), and, in the most recent
audit period, the program must have
not had:
(i) Internal control deficiencies
which were identified as material
weaknesses in the auditor's report on
internal control for major programs as
required under § 200.515(o);
(ii) A modified opinion on the pro-
gram in the auditor's report on major
programs as required under §200.515(c);
or
(iii) Known or likely questioned costs
that exceed five percent of the total
Federal awards expended for the pro-
gram.
(2) Notwithstanding paragraph (c)(1)
of this section, OMB may approve a
Federal awarding agency's request that
a Type A program may not be consid-
ered low risk for a certain recipient.

For example, it may be necessary for a
large Type A program to be audited as
a major program each year at a par-
§ 200.518
ticular recipient to allow the Federal
awarding agency to comply with 31
U.S.C. 3515. The Federal awarding
agency must notify the recipient and,
if known, the auditor of OMB's ap-
proval at least 180 calendar days prior
to the end of the fiscal year to be au-
dited.
(d) Step three. (1) The auditor must
identify Type B programs which are
high -risk using professional judgment
and the criteria in § 200.519. However,
the auditor is not required to identify
more high -risk Type B programs than
at least one fourth the number of low -
risk Type A programs identified as low -
risk under Step 2 (paragraph (c) of this
section). Except for known material
weakness in internal control or compli-
ance problems as discussed in
§200.519(b)(1) and (2) and (c)(1), a single
criterion in risk would seldom cause a
Type B program to be considered high -
risk. When identifying which Type B
programs to risk assess, the auditor is
encouraged to use an approach which
provides an opportunity for different
high -risk Type B programs to be au-
dited as major over a period of time.
(2) The auditor is not expected to per-
form risk assessments on relatively
small Federal programs. Therefore, the
auditor is only required to perform risk
assessments on Type B programs that
exceed twenty-five percent (0.25) of the
Type A threshold determined in Step 1
(paragraph (b) of this section).
(e) Step four. At a minimum, the
auditor must audit all of the following
as major programs:
(1) All Type A programs not identi-
fied as low risk under step two (para-
graph (c)(1) of this section).
(2) All Type B programs identified as
high -risk under step three (paragraph
(d) of this section).
(3) Such additional programs as may
be necessary to comply with the per-
centage of coverage rule discussed in
paragraph (f) of this section. This may
require the auditor to audit more pro-
grams as major programs than the
number of Type A programs.
(f) Percentage of coverage rule. If the
auditee meets the criteria in §200.520,
the auditor need only audit the major
programs identified in Step 4 (para-
graphs (e)(1) and (2) of this section) and
such additional Federal programs with
211

§ 200.519
Federal awards expended that, in ag-
gregate, all major programs encompass
at least 20 percent (0.20) of total Fed-
eral awards expended. Otherwise, the
auditor must audit the major programs
identified in Step 4 (paragraphs (e)(1)
and (2) of this section) and such addi-
tional Federal programs with Federal
awards expended that, in aggregate, all
major programs encompass at least 40
percent (0.40) of total Federal awards
expended.
(g) Documentation of risk. The auditor
must include in the audit documenta-
tion the risk analysis process used in
determining major programs.
(h) Auditor's judgment. When the
major program determination was per-
formed and documented in accordance
with this Subpart, the auditor's judg-
ment in applying the risk -based ap-
proach to determine major programs
must be presumed correct. Challenges
by Federal agencies and pass -through
entities must only be for clearly im-
proper use of the requirements in this
part. However, Federal agencies and
pass -through entities may provide
auditors guidance about the risk of a
particular Federal program and the
auditor must consider this guidance in
determining major programs in audits
not yet completed.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75887, Dec. 19, 2014; 85 FR 49574, Aug. 13,
2020]
§ 200.519 Criteria for Federal program
risk.
(a) General. The auditor's determina-
tion should be based on an overall eval-
uation of the risk of noncompliance oc-
curring that could be material to the
Federal program. The auditor must
consider criteria, such as described in
paragraphs (b), (c), and (d) of this sec-
tion, to identify risk in Federal pro-
grams. Also, as part of the risk anal-
ysis, the auditor may wish to discuss a
particular Federal program with
auditee management and the Federal
agency or pass -through entity.
(b) Current and prior audit experience.
(1) Weaknesses in internal control over
Federal programs would indicate high-
er risk. Consideration should be given
to the control environment over Fed-
eral programs and such factors as the
expectation of management's adher-
2 CFR Ch. 11 (1-1-21 Edition)
ence to Federal statutes, regulations,
and the terms and conditions of Fed-
eral awards and the competence and
experience of personnel who administer
the Federal programs.
(i) A Federal program administered
under multiple internal control struc-
tures may have higher risk. When as-
sessing risk in a large single audit, the
auditor must consider whether weak-
nesses are isolated in a single oper-
ating unit (e.g., one college campus) or
pervasive throughout the entity.
(ii) When significant parts of a Fed-
eral program are passed through to
subrecipients, a weak system for moni-
toring subrecipients would indicate
higher risk.
(2) Prior audit findings would indi-
cate higher risk, particularly when the
situations identified in the audit find-
ings could have a significant impact on
a Federal program or have not been
corrected.
(3) Federal programs not recently au-
dited as major programs may be of
higher risk than Federal programs re-
cently audited as major programs with-
out audit findings.
(c) Oversight exercised by Federal agen-
cies and pass -through entities. (1) Over-
sight exercised by Federal agencies or
pass -through entities could be used to
assess risk. For example, recent moni-
toring or other reviews performed by
an oversight entity that disclosed no
significant problems would indicate
lower risk, whereas monitoring that
disclosed significant problems would
indicate higher risk.
(2) Federal agencies, with the concur-
rence of OMB, may identify Federal
programs that are higher risk. OMB
will provide this identification in the
compliance supplement.
(d) Inherent risk of the Federal pro-
gram. (1) The nature of a Federal pro-
gram may indicate risk. Consideration
should be given to the complexity of
the program and the extent to which
the Federal program contracts for
goods and services. For example, Fed-
eral programs that disburse funds
through third -party contracts or have
eligibility criteria may be of higher
risk. Federal programs primarily in-
volving staff payroll costs may have
212

OMB Guidance
high risk for noncompliance with re-
quirements of § 200.430, but otherwise
be at low risk.
(2) The phase of a Federal program in
its life cycle at the Federal agency
may indicate risk. For example, a new
Federal program with new or interim
regulations may have higher risk than
an established program with time -test-
ed regulations. Also, significant
changes in Federal programs, statutes,
regulations, or the terms and condi-
tions of Federal awards may increase
risk.
(3) The phase of a Federal program in
its life cycle at the auditee may indi-
cate risk. For example, during the first
and last years that an auditee partici-
pates in a Federal program, the risk
may be higher clue to start-up or close-
out of program activities and staff.
(4) Type B programs with larger Fed-
eral awards expended would be of high-
er risk than programs with substan-
tially smaller Federal awards ex-
pended.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]
§ 200.520 Criteria for a low -risk
auditee.

An auditee that meets all of the fol-
lowing conditions for each of the pre-
ceding two audit periods must qualify
as a low -risk auditee and be eligible for
reduced audit coverage in accordance
with § 200.518.
(a) Single audits were performed on
an annual basis in accordance with the
provisions of this Subpart, including
submitting the data collection form
and the reporting package to the FAC
within the timeframe specified in
§200.512. A non -Federal entity that has
biennial audits does not qualify as a
low -risk auditee.
(b) The auditor's opinion on whether
the financial statements were prepared
in accordance with GAAP, or a basis of
accounting required by state law, and
the auditor's in relation to opinion on
the schedule of expenditures of Federal
awards were unmodified.
(c) There were no deficiencies in in-
ternal control which were identified as
material weaknesses under the require-
ments of GAGAS.
§ 200.521
(d) The auditor did not report a sub-
stantial doubt about the auditee's abil-
ity to continue as a going concern.
(e) None of the Federal programs had
audit findings from any of the fol-
lowing in either of the preceding two
audit periods in which they were classi-
fied as Type A programs:
(1) Internal control deficiencies that
were identified as material weaknesses
in the auditor's report on internal con-
trol for major programs as required
under § 200.515(c);
(2) A modified opinion on a major
program in the auditor's report on
major programs as required under
§200.515(c); or
(3) Known or likely questioned costs
that exceeded five percent of the total
Federal awards expended for a Type A
program during the audit period.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]

MANAGEMENT DECISIONS
§ 200.521 Management decision.
(a) General. The management deci-
sion must clearly state whether or not
the audit finding is sustained, the rea-
sons for the decision, and the expected
auditee action to repay disallowed
costs, make financial adjustments, or
take other action. If the auditee has
not completed corrective action, a
timetable for follow-up should be
given. Prior to issuing the manage-
ment decision, the Federal agency or
pass -through entity may request addi-
tional information or documentation
from the auditee, including a request
for auditor assurance related to the
documentation, as a way of mitigating
disallowed costs. The management de-
cision should describe any appeal proc-
ess available to the auditee. While not
required, the Federal agency or pass -
through entity may also issue a man-
agement decision on findings relating
to the financial statements which are
required to be reported in accordance
with GAGAS.
(b) Federal agency. As provided in
§200.513(a)(3)(vii), the cognizant agency
for audit must be responsible for co-
ordinating a management decision for
audit findings that affect the programs
of more than one Federal agency. As
provided in §200.513(c)(3)(i), a Federal
213

Pt. 200, App. 1
awarding agency is responsible for
issuing a management decision for
findings that relate to Federal awards
it makes to non -Federal entities.
(c) Pass -through entity. As provided in
§ 200.332(d), the pass -through entity
must be responsible for issuing a man-
agement decision for audit findings
that relate to Federal awards it makes
to subrecipients.
(d) Time requirements. The Federal
awarding agency or pass -through enti-
ty responsible for issuing a manage-
ment decision must do so within six
months of acceptance of the audit re-
port by the FAC. The auditee must ini-
tiate and proceed with corrective ac-
tion as rapidly as possible and correc-
tive action should begin no later than
upon receipt of the audit report.
(e) Reference numbers. Management
decisions must include the reference
numbers the auditor assigned to each
audit finding in accordance with
§ 200.516(c).
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49575, Aug. 13, 2020]
APPENDIX I TO PART 200 —FULL TEXT OF

NOTICE OF FUNDING OPPORTUNITY
The full text of the notice of funding op-
portunity is organized in sections. The re-
quired format outlined in this appendix indi-
cates immediately following the title of each
section whether that section is required in
every announcement or is a Federal award-
ing agency option. The format is designed so
that similar types of information will appear
in the same sections in announcements of
different Federal funding opportunities. To-
ward that end, there is text in each of the
following sections to describe the types of in-
formation that a Federal awarding agency
would include in that section of an actual
announcement.

A Federal awarding agency that wishes to
include information that the format does not
specifically discuss may address that subject
in whatever section(s) is most appropriate.

For example, if a Federal awarding agency
chooses to address performance goals in the
announcement, it might do so in the funding
opportunity description, the application con-
tent, or the reporting requirements.

Similarly, when this format calls for a
type of information to be in a particular sec-
tion, a Federal awarding agency wishing to
address that subject in other sections may
elect to repeat the information in those sec-
tions or use cross references between the sec-
tions (there should be hyperlinks for cross-
references in any electronic versions of the
2 CFR Ch. 11 (1-1-21 Edition)
announcement). For example, a Federal
awarding agency may want to include Sec-
tion A information about the types of non -
Federal entities who are eligible to apply.

The format specifies a standard location for
that information in Section C.1 but does not
preclude repeating the information in Sec-
tion A or creating a cross reference between
Section A and C.1, as long as a potential ap-
plicant can find the information quickly and
easily from the standard location.

The sections of the full text of the an-
nouncement are described in the following
paragraphs.

A. PROGRAM DESCRIPTION —REQUIRED
This section contains the full program de-
scription of the funding opportunity. It may
be as long as needed to adequately commu-
nicate to potential applicants the areas in
which funding may be provided. It describes
the Federal awarding agency's funding prior-
ities or the technical or focus areas in which
the Federal awarding agency intends to pro-
vide assistance. As appropriate, it may in-
clude any program history (e.g., whether this
is a new program or a new or changed area of
program emphasis). This section must in-
clude program goals and objectives, a ref-
erence to the relevant Assistance Listings, a
description of how the award will contribute
to the achievement of the program's goals
and objectives, and the expected perform-
ance goals, indicators, targets, baseline data,
data collection, and other outcomes such
Federal awarding agency expects to achieve,
and may include examples of successful
projects that have been funded previously.

This section also may include other informa-
tion the Federal awarding agency deems nec-
essary, and must at a minimum include cita-
tions for authorizing statutes and regula-
tions for the funding opportunity.

B. FEDERAL AWARD INFORMATION —REQUIRED
This section provides sufficient informa-
tion to help an applicant make an informed
decision about whether to submit a proposal.

Relevant information could include the total
amount of funding that the Federal awarding
agency expects to award through the an-
nouncement; the expected performance indi-
cators, targets, baseline data, and data col-
lection; the anticipated number of Federal
awards; the expected amounts of individual
Federal awards (which may be a range); the
amount of funding per Federal award, on av-
erage, experienced in previous years; and the
anticipated start dates and periods of per-
formance for new Federal awards. This sec-
tion also should address whether applica-
tions for renewal or supplementation of ex-
isting projects are eligible to compete with
applications for new Federal awards.
214

OMB Guidance
This section also must indicate the type(s)
of assistance instrument (e.g., grant, cooper-
ative agreement) that may be awarded if ap-
plications are successful. If cooperative
agreements may be awarded, this section ei-
ther should describe the "substantial in-
volvement" that the Federal awarding agen-
cy expects to have or should reference where
the potential applicant can find that infor-
mation (e.g., in the funding opportunity de-
scription in Section A. or Federal award ad-
ministration information in Section D. If
procurement contracts also may be awarded,
this must be stated.

C. ELIGIBILITY INFORMATION
This section addresses the considerations
or factors that determine applicant or appli-
cation eligibility. This includes the eligi-
bility of particular types of applicant organi-
zations, any factors affecting the eligibility
of the principal investigator or project direc-
tor, and any criteria that make particular
projects ineligible. Federal agencies should
make clear whether an applicant's failure to
meet an eligibility criterion by the time of
an application deadline will result in the
Federal awarding agency returning the ap-
plication without review or, even though an
application may be reviewed, will preclude
the Federal awarding agency from making a
Federal award. Key elements to be addressed
are:

1. Eligible Applicants —Required. Announce-
ments must clearly identify the types of en-
tities that are eligible to apply. If there are
no restrictions on eligibility, this section
may simply indicate that all potential appli-
cants are eligible. If there are restrictions on
eligibility, it is important to be clear about
the specific types of entities that are eligi-
ble, not just the types that are ineligible.

For example, if the program is limited to
nonprofit organizations subject to 26 U.S.C.
501(c)(3) of the tax code (26 U.S.C. 501(c)(3)),
the announcement should say so. Similarly,
it is better to state explicitly that Native
American tribal organizations are eligible
than to assume that they can unambiguously
infer that from a statement that nonprofit
organizations may apply. Eligibility also can
be expressed by exception, (e.g., open to all
types of domestic applicants other than indi-
viduals). This section should refer to any
portion of Section D specifying documenta-
tion that must be submitted to support an
eligibility determination (e.g., proof of
501(c)(3) status as determined by the Internal
Revenue Service or an authorizing tribal res-
olution). To the extent that any funding re-
striction in Section D.6 could affect the eli-
gibility of an applicant or project, the an-
nouncement must either restate that restric-
tion in this section or provide a cross-ref-
erence to its description in Section D.6.

Pt. 200, App. 1

2. Cost Sharing or Matching —Required. An-
nouncements must state whether there is re-
quired cost sharing, matching, or cost par-
ticipation without which an application
would be ineligible (if cost sharing is not re-
quired, the announcement must explicitly
say so). Required cost sharing may be a cer-
tain percentage or amount, or may be in the
form of contributions of specified items or
activities (e.g., provision of equipment). It is
important that the announcement be clear
about any restrictions on the types of cost
(e.g., in -kind contributions) that are accept-
able as cost sharing. Cost sharing as an eligi-
bility criterion includes requirements based
in statute or regulation, as described in
§200.306 of this Part. This section should
refer to the appropriate portion(s) of section
D. stating any pre -award requirements for
submission of letters or other documentation
to verify commitments to meet cost -sharing
requirements if a Federal award is made.

3. Other —Required, if applicable. If there are
other eligibility criteria (i.e., criteria that
have the effect of making an application or
project ineligible for Federal awards, wheth-
er referred to as "responsiveness" criteria,
"go -no go" criteria, "threshold" criteria, or
in other ways), must be clearly stated and
must include a reference to the regulation of
requirement that describes the restriction,
as applicable. For example, if entities that
have been found to be in violation of a par-
ticular Federal statute are ineligible, it is
important to say so. This section must also
state any limit on the number of applica-
tions an applicant may submit under the an-
nouncement and make clear whether the
limitation is on the submitting organization,
individual investigator/program director, or
both. This section should also address any
eligibility criteria for beneficiaries or for
program participants other than Federal
award recipients.

D. APPLICATION AND SUBMISSION INFORMATION

1. Address to Request Application Package —
Required. Potential applicants must be told
how to get application forms, kits, or other
materials needed to apply (if this announce-
ment contains everything needed, this sec-
tion need only say so). An Internet address
where the materials can be accessed is ac-
ceptable. However, since high-speed Internet
access is not yet universally available for
downloading documents, and applicants may
have additional accessibility requirements,
there also should be a way for potential ap-
plicants to request paper copies of materials,
such as a U.S. Postal Service mailing ad-
dress, telephone or FAX number, Telephone
Device for the Deaf (TDD), Text Telephone
(TTY) number, and/or Federal Information
Relay Service (FIRS) number.

2. Content and Form of Application Submis-
sion —Required. This section must identify
215

Pt. 200, App. 1
the required content of an application and
the forms or formats that an applicant must
use to submit it. If any requirements are
stated elsewhere because they are general re-
quirements that apply to multiple programs
or funding opportunities, this section should
refer to where those requirements may be
found. This section also should include re-
quired forms or formats as part of the an-
nouncement or state where the applicant
may obtain them.

This section should specifically address
content and form or format requirements
for:
i. Pre -applications, letters of intent, or
white papers required or encouraged (see
Section D.4), including any limitations on
the number of pages or other formatting re-
quirements similar to those for full applica-
tions.
ii. The application as a whole. For all sub-
missions, this would include any limitations
on the number of pages, font size and type-
face, margins, paper size, number of copies,
and sequence or assembly requirements. If
electronic submission is permitted or re-
quired, this could include special require-
ments for formatting or signatures.
iii. Component pieces of the application
(e.g., if all copies of the application must
bear original signatures on the face page or
the program narrative may not exceed 10
pages). This includes any pieces that may be
submitted separately by third parties (e.g.,
references or letters confirming commit-
ments from third parties that will be con-
tributing a portion of any required cost shar-
ing).
iv. Information that successful applicants
must submit after notification of intent to
make a Federal award, but prior to a Federal
award. This could include evidence of com-
pliance with requirements relating to human
subjects or information needed to comply
with the National Environmental Policy Act
(NEPA) (42 U.S.C. 4321-4370h).

3. Unique entity identifier and System for
Award Management (SAM) —Required. This
paragraph must state clearly that each ap-
plicant (unless the applicant is an individual
or Federal awarding agency that is excepted
from those requirements under 2 CFR

25.110(b) or (c), or has an exception approved
by the Federal awarding agency under 2 CFR

25.110(d)) is required to: (i) Be registered in
SAM before submitting its application; (ii)
Provide a valid unique entity identifier in its
application; and (iii) Continue to maintain
an active SAM registration with current in-
formation at all times during which it has an
active Federal award or an application or
plan under consideration by a Federal award-
ing agency. It also must state that the Fed-
eral awarding agency may not make a Fed-
eral award to an applicant until the appli-
cant has complied with all applicable unique
entity identifier and SAM requirements and,
2 CFR Ch. 11 (1-1-21 Edition)
if an applicant has not fully complied with
the requirements by the time the Federal
awarding agency is ready to make a Federal
award, the Federal awarding agency may de-
termine that the applicant is not qualified to
receive a Federal award and use that deter-
mination as a basis for making a Federal
award to another applicant.

4. Submission Dates and Times —Required.

Announcements must identify due dates and
times for all submissions. This includes not
only the full applications but also any pre-
liminary submissions (e.g., letters of intent,
white papers, or pre -applications). It also in-
cludes any other submissions of information
before Federal award that are separate from
the full application. If the funding oppor-
tunity is a general announcement that is
open for a period of time with no specific due
dates for applications, this section should
say so. Note that the information on dates
that is included in this section also must ap-
pear with other overview information in a lo-
cation preceding the full text of the an-
nouncement (see § 200.204 of this part).

5. Intergovernmental Review —Required, if ap-
plicable. If the funding opportunity is subject
to Executive Order 12372, "Intergovern-
mental Review of Federal Programs," the
notice must say so and applicants must con-
tact their state's Single Point of Contact
(SPOC) to find out about and comply with
the state's process under Executive Order
12372, it may be useful to inform potential
applicants that the names and addresses of
the SPOCs are listed in the Office of Manage-
ment and Budget's website.

6. Funding Restrictions —Required. Notices
must include information on funding restric-
tions in order to allow an applicant to de-
velop an application and budget consistent
with program requirements. Examples are
whether construction is an allowable activ-
ity, if there are any limitations on direct
costs such as foreign travel or equipment
purchases, and if there are any limits on in-
direct costs (or facilities and administrative
costs). Applicants must be advised if Federal
awards will not allow reimbursement of pre -
Federal award costs.

7. Other Submission Requirements— Required.

This section must address any other submis-
sion requirements not included in the other
paragraphs of this section. This might in-
clude the format of submission, i.e., paper or
electronic, for each type of required submis-
sion. Applicants should not be required to
submit in more than one format and this sec-
tion should indicate whether they may
choose whether to submit applications in
hard copy or electronically, may submit only
in hard copy, or may submit only electroni-
cally.

This section also must indicate where ap-
plications (and any pre -applications) must be
submitted if sent by postal mail, electronic
means, or hand -delivery. For postal mail
216

OMB Guidance
submission, this must include the name of an
office, official, individual or function (e.g.,
application receipt center) and a complete
mailing address. For electronic submission,
this must include the URL or email address;
whether a password(s) is required; whether
particular software or other electronic capa-
bilities are required; what to do in the event
of system problems and a point of contact
who will be available in the event the appli-
cant experiences technical difficulties.,
E. APPLICATION REVIEW INFORMATION

1. Criteria —Required. This section must ad-
dress the criteria that the Federal awarding
agency will use to evaluate applications.

This includes the merit and other review cri-
teria that evaluators will use to judge appli-
cations, including any statutory, regulatory,
or other preferences (e.g., minority status or
Native American tribal preferences) that
will be applied in the review process. These
criteria are distinct from eligibility criteria
that are addressed before an application is
accepted for review and any program policy
or other factors that are applied during the
selection process, after the review process is
completed. The intent is to make the appli-
cation process transparent so applicants can
make informed decisions when preparing
their applications to maximize fairness of
the process. The announcement should clear-
ly describe all criteria, including any sub -
criteria. If criteria vary in importance, the
announcement should specify the relative
percentages, weights, or other means used to
distinguish among them. For statutory, reg-
ulatory, or other preferences, the announce-
ment should provide a detailed explanation
of those preferences with an explicit indica-
tion of their effect (e.g., whether they result
in additional points being assigned).

If an applicant's proposed cost sharing will
be considered in the review process (as op-
posed to being an eligibility criterion de-
scribed in Section C.2), the announcement
must specifically address how it will be con-
sidered (e.g., to assign a certain number of
additional points to applicants who offer
cost sharing, or to break ties among applica-
tions with equivalent scores after evaluation
against all other factors). If cost sharing will
not be considered in the evaluation, the an-
nouncement should say so, so that there is
no ambiguity for potential applicants. Vague
statements that cost sharing is encouraged,
without clarification as to what that means,
are unhelpful to applicants. It also is impor-
,With respect to electronic methods for
providing information about funding oppor-
tunities or accepting applicants' submissions
of information, each Federal awarding agen-
cy is responsible for compliance with Section
508 of the Rehabilitation Act of 1973 (29
U.S.C. 794d).

Pt. 200, App. 1
tant that the announcement be clear about
any restrictions on the types of cost (e.g., in -
kind contributions) that are acceptable as
cost sharing.

2. Review and Selection Process —Required.

This section may vary in the level of detail
provided. The announcement must list any
program policy or other factors or elements,
other than merit criteria, that the selecting
official may use in selecting applications for
Federal award (e.g., geographical dispersion,
program balance, or diversity). The Federal
awarding agency may also include other ap-
propriate details. For example, this section
may indicate who is responsible for evalua-
tion against the merit criteria (e.g., peers ex-
ternal to the Federal awarding agency or
Federal awarding agency personnel) and/or
who makes the final selections for Federal
awards. If there is a multi -phase review proc-
ess (e.g., an external panel advising internal
Federal awarding agency personnel who
make final recommendations to the deciding
official), the announcement may describe the
phases. It also may include: the number of
people on an evaluation panel and how it op-
erates, the way reviewers are selected, re-
viewer qualifications, and the way that con-
flicts of interest are avoided. With respect to
electronic methods for providing informa-
tion about funding opportunities or accept-
ing applicants' submissions of information,
each Federal awarding agency is responsible
for compliance with Section 508 of the Reha-
bilitation Act of 1973 (29 U.S.C. 794d).

In addition, if the Federal awarding agency
permits applicants to nominate suggested re-
viewers of their applications or suggest those
they feel may be inappropriate due to a con-
flict of interest, that information should be
included in this section.

3. For any Federal award under a notice of
funding opportunity, if the Federal awarding
agency anticipates that the total Federal
share will be greater than the simplified ac-
quisition threshold on any Federal award
under a notice of funding opportunity may
include, over the period of performance, this
section must also inform applicants:
i. That the Federal awarding agency, prior
to making a Federal award with a total
amount of Federal share greater than the
simplified acquisition threshold, is required
to review and consider any information
about the applicant that is in the designated
integrity and performance system accessible
through SAM (currently FAPIIS) (see 41
U.S.C. 2313);
ii. That an applicant, at its option, may re-
view information in the designated integrity
and performance systems accessible through
SAM and comment on any information about
itself that a Federal awarding agency pre-
viously entered and is currently in the des-
ignated integrity and performance system
accessible through SAM;
217

Pt. 200, App. 1
iii. That the Federal awarding agency will
consider any comments by the applicant, in
addition to the other information in the des-
ignated integrity and performance system,
in making a judgment about the applicant's
integrity, business ethics, and record of per-
formance under Federal awards when com-
pleting the review of risk posed by appli-
cants as described in §200.206.

4. Anticipated Announcement and Federal
Award Dates —Optional. This section is in-
tended to provide applicants with informa-
tion they can use for planning purposes. If
there is a single application deadline fol-
lowed by the simultaneous review of all ap-
plications, the Federal awarding agency can
include in this section information about the
anticipated dates for announcing or noti-
fying successful and unsuccessful applicants
and for having Federal awards in place. If ap-
plications are received and evaluated on a
"rolling" basis at different times during an
extended period, it may be appropriate to
give applicants an estimate of the time need-
ed to process an application and notify the
applicant of the Federal awarding agency's
decision.

F. FEDERAL AWARD ADMINISTRATION

INFORMATION

1. Federal Award Notices —Required. This
section must address what a successful appli-
cant can expect to receive following selec-
tion. If the Federal awarding agency's prac-
tice is to provide a separate notice stating
that an application has been selected before
it actually makes the Federal award, this
section would be the place to indicate that
the letter is not an authorization to begin
performance (to the extent that it allows
charging to Federal awards of pre -award
costs at the non -Federal entity's own risk).

This section should indicate that the notice
of Federal award signed by the grants officer
(or equivalent) is the authorizing document,
and whether it is provided through postal
mail or by electronic means and to whom. It
also may address the timing, form, and con-
tent of notifications to unsuccessful appli-
cants. See also §200.211.

2. Administrative and National Policy Re-
quirements —Required. This section must iden-
tify the usual administrative and national
policy requirements the Federal awarding
agency's Federal awards may include. Pro-
viding this information lets a potential ap-
plicant identify any requirements with
which it would have difficulty complying if
its application is successful. In those cases,
early notification about the requirements al-
lows the potential applicant to decide not to
apply or to take needed actions before re-
ceiving the Federal award. The announce-
ment need not include all of the terms and
conditions of the Federal award, but may
refer to a document (with information about
2 CFR Ch. 11 (1-1-21 Edition)
how to obtain it) or Internet site where ap-
plicants can see the terms and conditions. If
this funding opportunity will lead to Federal
awards with some special terms and condi-
tions that differ from the Federal awarding
agency's usual (sometimes called "general")
terms and conditions, this section should
highlight those special terms and conditions.

Doing so will alert applicants that have re-
ceived Federal awards from the Federal
awarding agency previously and might not
otherwise expect different terms and condi-
tions. For the same reason, the announce-
ment should inform potential applicants
about special requirements that could apply
to particular Federal awards after the review
of applications and other information, based
on the particular circumstances of the effort
to be supported (e.g., if human subjects were
to be involved or if some situations may jus-
tify special terms on intellectual property,
data sharing or security requirements).

3. Reporting —Required. This section must
include general information about the type
(e.g., financial or performance), frequency,
and means of submission (paper or elec-
tronic) of post -Federal award reporting re-
quirements. Highlight any special reporting
requirements for Federal awards under this
funding opportunity that differ (e.g., by re-
port type, frequency, form/format, or cir-
cumstances for use) from what the Federal
awarding agency's Federal awards usually
require. Federal awarding agencies must also
describe in this section all relevant require-
ments such as those at 2 CFR 180.335 and
180.350.

If the Federal share of any Federal award
may include more than $500,000 over the pe-
riod of performance, this section must in-
form potential applicants about the post
award reporting requirements reflected in
appendix XII to this part.

G. FEDERAL AWARDING AGENCY CONTACT(S)—

REQUIRED
The announcement must give potential ap-
plicants a point(s) of contact for answering
questions or helping with problems while the
funding opportunity is open. The intent of
this requirement is to be as helpful as pos-
sible to potential applicants, so the Federal
awarding agency should consider approaches
such as giving:
i. Points of contact who may be reached in
multiple ways (e.g., by telephone, FAX, and/
or email, as well as regular mail).
ii. A fax or email address that multiple
people access, so that someone will respond
even if others are unexpectedly absent dur-
ing critical periods.
iii. Different contacts for distinct kinds of
help (e.g., one for questions of programmatic
content and a second for administrative
questions).
218

OMB Guidance
H. OTHER INFORMATION —OPTIONAL
This section may include any additional
information that will assist a potential ap-
plicant. For example, the section might:
i. Indicate whether this is a new program
or a one-time initiative.
ii. Mention related programs or other up-
coming or ongoing Federal awarding agency
funding opportunities for similar activities.
iii. Include current Internet addresses for
Federal awarding agency Web sites that may
be useful to an applicant in understanding
the program.
iv. Alert applicants to the need to identify
proprietary information and inform them
about the way the Federal awarding agency
will handle it.
v. Include certain routine notices to appli-
cants (e.g., that the Federal Government is
not obligated to make any Federal award as
a result of the announcement or that only
grants officers can bind the Federal Govern-
ment to the expenditure of funds).
[78 FR 78608, Dec. 26, 2013, as amended at 80
FR 43310, July 22, 2015; 85 FR 49575, Aug. 13,
2020]
APPENDIX II TO PART 200 —CONTRACT

PROVISIONS FOR NON-FEDERAL ENTI-

TY CONTRACTS UNDER FEDERAL
AWARDS
In addition to other provisions required by
the Federal agency or non -Federal entity, all
contracts made by the non -Federal entity
under the Federal award must contain provi-
sions covering the following, as applicable.
(A) Contracts for more than the simplified
acquisition threshold, which is the inflation
adjusted amount determined by the Civilian
Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils)
as authorized by 41 U.S.C. 1908, must address
administrative, contractual, or legal rem-
edies in instances where contractors violate
or breach contract terms, and provide for
such sanctions and penalties as appropriate.
(B) All contracts in excess of $10,000 must
address termination for cause and for con-
venience by the non -Federal entity including
the manner by which it will be effected and
the basis for settlement.
(C) Equal Employment Opportunity. Ex-
cept as otherwise provided under 41 CFR
Part 60, all contracts that meet the defini-
tion of "federally assisted construction con-
tract" in 41 CFR Part 60-1.3 must include the
equal opportunity clause provided under 41
CFR 60-1.4(b), in accordance with Executive
Order 11246, "Equal Employment Oppor-
tunity" (30 FR 12319, 12935, 3 CFR Part, 1964-
1965 Comp., p. 339), as amended by Executive
Order 11375, "Amending Executive Order
11246 Relating to Equal Employment Oppor-
tunity," and implementing regulations at 41
CFR part 60, "Office of Federal Contract
Pt. 200, App. 11
Compliance Programs, Equal Employment
Opportunity, Department of Labor."
(D) Davis -Bacon Act, as amended (40 U.S.C.
3141-3148). When required by Federal program
legislation, all prime construction contracts
in excess of $2,000 awarded by non -Federal
entities must include a provision for compli-
ance with the Davis -Bacon Act (40 U.S.C.
3141-3144, and 3146-3148) as supplemented by
Department of Labor regulations (29 CFR
Part 5, "Labor Standards Provisions Appli-
cable to Contracts Covering Federally Fi-
nanced and Assisted Construction"). In ac-
cordance with the statute, contractors must
be required to pay wages to laborers and me-
chanics at a rate not less than the prevailing
wages specified in a wage determination
made by the Secretary of Labor. In addition,
contractors must be required to pay wages
not less than once a week. The non -Federal
entity must place a copy of the current pre-
vailing wage determination issued by the De-
partment of Labor in each solicitation. The
decision to award a contract or subcontract
must be conditioned upon the acceptance of
the wage determination. The non -Federal en-
tity must report all suspected or reported
violations to the Federal awarding agency.

The contracts must also include a provision
for compliance with the Copeland "Anti -
Kickback" Act (40 U.S.C. 3145), as supple-
mented by Department of Labor regulations
(29 CFR Part 3, "Contractors and Sub-
contractors on Public Building or Public
Work Financed in Whole or in Part by Loans
or Grants from the United States"). The Act
provides that each contractor or sub -
recipient must be prohibited from inducing,
by any means, any person employed in the
construction, completion, or repair of public
work, to give up any part of the compensa-
tion to which he or she is otherwise entitled.

The non -Federal entity must report all sus-
pected or reported violations to the Federal
awarding agency.
(E) Contract Work Hours and Safety
Standards Act (40 U.S.C. 3701-3708). Where
applicable, all contracts awarded by the non -
Federal entity in excess of $100,000 that in-
volve the employment of mechanics or labor-
ers must include a provision for compliance
with 40 U.S.C. 3702 and 3704, as supplemented
by Department of Labor regulations (29 CFR
Part 5). Under 40 U.S.C. 3702 of the Act, each
contractor must be required to compute the
wages of every mechanic and laborer on the
basis of a standard work week of 40 hours.

Work in excess of the standard work week is
permissible provided that the worker is com-
pensated at a rate of not less than one and a
half times the basic rate of pay for all hours
worked in excess of 40 hours in the work
week. The requirements of 40 U.S.C. 3704 are
applicable to construction work and provide
that no laborer or mechanic must be re-
quired to work in surroundings or under
working conditions which are unsanitary,
219

Pt. 200, App. 111
hazardous or dangerous. These requirements
do not apply to the purchases of supplies or
materials or articles ordinarily available on
the open market, or contracts for transpor-
tation or transmission of intelligence.
(F) Rights to Inventions Made Under a
Contract or Agreement. If the Federal award
meets the definition of "funding agreement"
under 37 CFR §401.2 (a) and the recipient or
subrecipient wishes to enter into a contract
with a small business firm or nonprofit orga-
nization regarding the substitution of par-
ties, assignment or performance of experi-
mental, developmental, or research work
under that "funding agreement," the recipi-
ent or subrecipient must comply with the re-
quirements of 37 CFR Part 401, "Rights to In-
ventions Made by Nonprofit Organizations
and Small Business Firms Under Govern-
ment Grants, Contracts and Cooperative
Agreements," and any implementing regula-
tions issued by the awarding agency.
(G) Clean Air Act (42 U.S.C. 7401-7671q.) and
the Federal Water Pollution Control Act (33
U.S.C. 1251-1387), as amended —Contracts and
subgrants of amounts in excess of $150,000
must contain a provision that requires the
non -Federal award to agree to comply with
all applicable standards, orders or regula-
tions issued pursuant to the Clean Air Act
(42 U.S.C. 7401-7671q) and the Federal Water
Pollution Control Act as amended (33 U.S.C.
1251-1387). Violations must be reported to the
Federal awarding agency and the Regional
Office of the Environmental Protection
Agency (EPA).
(H) Debarment and Suspension (Executive
Orders 12549 and 12689)—A contract award
(see 2 CFR 180.220) must not be made to par-
ties listed on the governmentwide exclusions
in the System for Award Management
(SAM), in accordance with the OMB guide-
lines at 2 CFR 180 that implement Executive
Orders 12549 (3 CFR part 1986 Comp., p. 189)
and 12689 (3 CFR part 1989 Comp., p. 235),
"Debarment and Suspension." SAM Exclu-
sions contains the names of parties debarred,
suspended, or otherwise excluded by agen-
cies, as well as parties declared ineligible
under statutory or regulatory authority
other than Executive Order 12549.
(I) Byrd Anti -Lobbying Amendment (31
U.S.C. 1352) —Contractors that apply or bid
for an award exceeding $100,000 must file the
required certification. Each tier certifies to
the tier above that it will not and has not
used Federal appropriated funds to pay any
person or organization for influencing or at-
tempting to influence an officer or employee
of any agency, a member of Congress, officer
or employee of Congress, or an employee of a
member of Congress in connection with ob-
taining any Federal contract, grant or any
other award covered by 31 U.S.C. 1352. Each
tier must also disclose any lobbying with
non -Federal funds that takes place in con-
nection with obtaining any Federal award.
2 CFR Ch. 11 (1-1-21 Edition)
Such disclosures are forwarded from tier to
tier up to the non -Federal award.
(J) See §200.323.
(K) See §200.216.
(L) See § 200.322.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75888, Dec. 19, 2014; 85 FR 49577, Aug. 13,
2020]
APPENDIX III TO PART 200 —INDIRECT
(F&A) COSTS IDENTIFICATION AND

ASSIGNMENT, AND RATE DETERMINA-

TION FOR INSTITUTIONS OF HIGHER
EDUCATION (IHEs)
A. GENERAL
This appendix provides criteria for identi-
fying and computing indirect (or indirect
(F&A)) rates at IHEs (institutions). Indirect
(F&A) costs are those that are incurred for
common or joint objectives and therefore
cannot be identified readily and specifically
with a particular sponsored project, an in-
structional activity, or any other institu-
tional activity. See subsection B.1 for a dis-
cussion of the components of indirect (F&A)
costs.

1. Major Functions of an Institution
Refers to instruction, organized research,
other sponsored activities and other institu-
tional activities as defined in this section:
a. Instruction means the teaching and
training activities of an institution. Except
for research training as provided in sub-
section b, this term includes all teaching and
training activities, whether they are offered
for credits toward a degree or certificate or
on a non-credit basis, and whether they are
offered through regular academic depart-
ments or separate divisions, such as a sum-
mer school division or an extension division.

Also considered part of this major function
are departmental research, and, where
agreed to, university research.
(1) Sponsored instruction and training means
specific instructional or training activity es-
tablished by grant, contract, or cooperative
agreement. For purposes of the cost prin-
ciples, this activity may be considered a
major function even though an institution's
accounting treatment may include it in the
instruction function.
(2) Departmental research means research,
development and scholarly activities that
are not organized research and, con-
sequently, are not separately budgeted and
accounted for. Departmental research, for
purposes of this document, is not considered
as a major function, but as a part of the in-
struction function of the institution.
(3) Only mandatory cost sharing or cost
sharing specifically committed in the project
budget must be included in the organized re-
search base for computing the indirect (F&A)
220

OMB Guidance
cost rate or reflected in any allocation of in-
direct costs. Salary costs above statutory
limits are not considered cost sharing.
b. Organized research means all research
and development activities of an institution
that are separately budgeted and accounted
for. It includes:
(1) Sponsored research means all research
and development activities that are spon-
sored by Federal and non -Federal agencies
and organizations. This term includes activi-
ties involving the training of individuals in
research techniques (commonly called re-
search training) where such activities utilize
the same facilities as other research and de-
velopment activities and where such activi-
ties are not included in the instruction func-
tion.
(2) University research means all research
and development activities that are sepa-
rately budgeted and accounted for by the in-
stitution under an internal application of in-
stitutional funds. University research, for
purposes of this document, must be com-
bined with sponsored research under the
function of organized research.
c. Other sponsored activities means programs
and projects financed by Federal and non -
Federal agencies and organizations which in-
volve the performance of work other than in-
struction and organized research. Examples
of such programs and projects are health
service projects and community service pro-
grams. However, when any of these activities
are undertaken by the institution without
outside support, they may be classified as
other institutional activities.
d. Other institutional activities means all ac-
tivities of an institution except for instruc-
tion, departmental research, organized re-
search, and other sponsored activities, as de-
fined in this section; indirect (F&A) cost ac-
tivities identified in this Appendix para-
graph B, Identification and assignment of in-
direct (F&A) costs; and specialized services
facilities described in § 200.468 of this part.

2. Criteria for Distribution
a. Base period. A base period for distribu-
tion of indirect (F&A) costs is the period
during which the costs are incurred. The
base period normally should coincide with
the fiscal year established by the institution,
but in any event the base period should be so
selected as to avoid inequities in the dis-
tribution of costs.
b. Need for cost groupings. The overall ob-
jective of the indirect (F&A) cost allocation
process is to distribute the indirect (F&A)
costs described in Section B, Identification
and assignment of indirect (F&A) costs, to
the major functions of the institution in pro-
portions reasonably consistent with the na-
ture and extent of their use of the institu-
tion's resources. In order to achieve this ob-
jective, it may be necessary to provide for
selective distribution by establishing sepa-
Pt. 200, App. 111
rate groupings of cost within one or more of
the indirect (F&A) cost categories referred
to in subsection B.1. In general, the cost
groupings established within a category
should constitute, in each case, a pool of
those items of expense that are considered to
be of like nature in terms of their relative
contribution to (or degree of remoteness
from) the particular cost objectives to which
distribution is appropriate. Cost groupings
should be established considering the general
guides provided in subsection c of this sec-
tion. Each such pool or cost grouping should
then be distributed individually to the re-
lated cost objectives, using the distribution
base or method most appropriate in light of
the guidelines set forth in subsection d of
this section.
c. General considerations on cost groupings.

The extent to which separate cost groupings
and selective distribution would be appro-
priate at an institution is a matter of judg-
ment to be determined on a case -by -case
basis. Typical situations which may warrant
the establishment of two or more separate
cost groupings (based on account classifica-
tion or analysis) within an indirect (F&A)
cost category include but are not limited to
the following:
(1) If certain items or categories of expense
relate solely to one of the major functions of
the institution or to less than all functions,
such expenses should be set aside as a sepa-
rate cost grouping for direct assignment or
selective allocation in accordance with the
guides provided in subsections b and d.
(2) If any types of expense ordinarily treat-
ed as general administration or depart-
mental administration are charged to Fed-
eral awards as direct costs, expenses applica-
ble to other activities of the institution
when incurred for the same purposes in like
circumstances must, through separate cost
groupings, be excluded from the indirect
(F&A) costs allocable to those Federal
awards and included in the direct cost of
other activities for cost allocation purposes.
(3) If it is determined that certain expenses
are for the support of a service unit or facil-
ity whose output is susceptible of measure-
ment on a workload or other quantitative
basis, such expenses should be set aside as a
separate cost grouping for distribution on
such basis to organized research, instruc-
tional, and other activities at the institution
or within the department.
(4) If activities provide their own pur-
chasing, personnel administration, building
maintenance or similar service, the distribu-
tion of general administration and general
expenses, or operation and maintenance ex-
penses to such activities should be accom-
plished through cost groupings which include
only that portion of central indirect (F&A)
costs (such as for overall management)
which are properly allocable to such activi-
ties.
221

Pt. 200, App. 111
(5) If the institution elects to treat fringe
benefits as indirect (F&A) charges, such
costs should be set aside as a separate cost
grouping for selective distribution to related
cost objectives.
(6) The number of separate cost groupings
within a category should be held within
practical limits, after taking into consider-
ation the materiality of the amounts in-
volved and the degree of precision attainable
through less selective methods of distribu-
tion.
d. Selection of distribution method.
(1) Actual conditions must be taken into
account in selecting the method or base to
be used in distributing individual cost
groupings. The essential consideration in se-
lecting a base is that it be the one best suit-
ed for assigning the pool of costs to cost ob-
jectives in accordance with benefits derived;
with a traceable cause -and -effect relation-
ship; or with logic and reason, where neither
benefit nor a cause -and -effect relationship is
determinable.
(2) If a cost grouping can be identified di-
rectly with the cost objective benefitted, it
should be assigned to that cost objective.
(3) If the expenses in a cost grouping are
more general in nature, the distribution may
be based on a cost analysis study which re-
sults in an equitable distribution of the
costs. Such cost analysis studies may take
into consideration weighting factors, popu-
lation, or space occupied if appropriate. Cost
analysis studies, however, must (a) be appro-
priately documented in sufficient detail for
subsequent review by the cognizant agency
for indirect costs, (b) distribute the costs to
the related cost objectives in accordance
with the relative benefits derived, (c) be sta-
tistically sound, (d) be performed specifically
at the institution at which the results are to
be used, and (e) be reviewed periodically, but
not less frequently than rate negotiations,
updated if necessary, and used consistently.

Any assumptions made in the study must be
stated and explained. The use of cost anal-
ysis studies and periodic changes in the
method of cost distribution must be fully
justified.
(4) If a cost analysis study is not per-
formed, or if the study does not result in an
equitable distribution of the costs, the dis-
tribution must be made in accordance with
the appropriate base cited in Section B, un-
less one of the following conditions is met:
(a) It can be demonstrated that the use of
a different base would result in a more equi-
table allocation of the costs, or that a more
readily available base would not increase the
costs charged to Federal awards, or
(b) The institution qualifies for, and elects
to use, the simplified method for computing
indirect (F&A) cost rates described in Sec-
tion D.
(5) Notwithstanding subsection (3), effec-
tive July 1, 1998, a cost analysis or base other
2 CFR Ch. 11 (1-1-21 Edition)
than that in Section B must not be used to
distribute utility or student services costs.

Instead, subsection B.4.c, may be used in the
recovery of utility costs.
e. Order of distribution.
(1) Indirect (F&A) costs are the broad cat-
egories of costs discussed in Section B.1.
(2) Depreciation, interest expenses, oper-
ation and maintenance expenses, and general
administrative and general expenses should
be allocated in that order to the remaining
indirect (F&A) cost categories as well as to
the major functions and specialized service
facilities of the institution. Other cost cat-
egories may be allocated in the order deter-
mined to be most appropriate by the institu-
tions. When cross allocation of costs is made
as provided in subsection (3), this order of al-
location does not apply.
(3) Normally an indirect (F&A) cost cat-
egory will be considered closed once it has
been allocated to other cost objectives, and
costs may not be subsequently allocated to
it. However, a cross allocation of costs be-
tween two or more indirect (F&A) cost cat-
egories may be used if such allocation will
result in a more equitable allocation of
costs. If a cross allocation is used, an appro-
priate modification to the composition of
the indirect (F&A) cost categories described
in Section B is required.

B. IDENTIFICATION AND ASSIGNMENT OF

INDIRECT (F&A) COSTS

1. Definition of Facilities and Administration
See §200.414 which provides the basis for
these indirect cost requirements.

2. Depreciation
a. The expenses under this heading are the
portion of the costs of the institution's
buildings, capital improvements to land and
buildings, and equipment which are com-
puted in accordance with §200.436.
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be allocated in
the following manner:
(1) Depreciation on buildings used exclu-
sively in the conduct of a single function,
and on capital improvements and equipment
used in such buildings, must be assigned to
that function.
(2) Depreciation on buildings used for more
than one function, and on capital improve-
ments and equipment used in such buildings,
must be allocated to the individual functions
performed in each building on the basis of
usable square feet of space, excluding com-
mon areas such as hallways, stairwells, and
rest rooms.
(3) Depreciation on buildings, capital im-
provements and equipment related to space
(e.g., individual rooms, laboratories) used
jointly by more than one function (as deter-
mined by the users of the space) must be
222

OMB Guidance
treated as follows. The cost of each jointly
used unit of space must be allocated to bene-
fitting functions on the basis of:
(a) The employee full-time equivalents
(FTEs) or salaries and wages of those indi-
vidual functions benefitting from the use of
that space; or
(b) Institution -wide employee FTEs or sal-
aries and wages applicable to the benefitting
major functions (see Section A.1) of the in-
stitution.
(4) Depreciation on certain capital im-
provements to land, such as paved parking
areas, fences, sidewalks, and the like, not in-
cluded in the cost of buildings, must be allo-
cated to user categories of students and em-
ployees on a full-time equivalent basis. The
amount allocated to the student category
must be assigned to the instruction function
of the institution. The amount allocated to
the employee category must be further allo-
cated to the major functions of the institu-
tion in proportion to the salaries and wages
of all employees applicable to those func-
tions.

3. Interest
Interest on debt associated with certain
buildings, equipment and capital improve-
ments, as defined in §200.449, must be classi-
fied as an expenditure under the category
Facilities. These costs must be allocated in
the same manner as the depreciation on the
buildings, equipment and capital improve-
ments to which the interest relates.

4. Operation and Maintenance Expenses
a. The expenses under this heading are
those that have been incurred for the admin-
istration, supervision, operation, mainte-
nance, preservation, and protection of the in-
stitution's physical plant. They include ex-
penses normally incurred for such items as
janitorial and utility services; repairs and
ordinary or normal alterations of buildings,
furniture and equipment; care of grounds;
maintenance and operation of buildings and
other plant facilities; security; earthquake
and disaster preparedness; environmental
safety; hazardous waste disposal; property,
liability and all other insurance relating to
property; space and capital leasing; facility
planning and management; and central re-
ceiving. The operation and maintenance ex-
pense category should also include its allo-
cable share of fringe benefit costs, deprecia-
tion, and interest costs.
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be allocated in
the same manner as described in subsection

2.b for depreciation.
c. A utility cost adjustment of up to 1.3
percentage points may be included in the ne-
gotiated indirect cost rate of the IHE for or-
ganized research, per the computation alter -
Pt. 200, App. 111
natives in paragraphs (c)(1) and (2) of this
section:
(1) Where space is devoted to a single func-
tion and metering allows unambiguous meas-
urement of usage related to that space, costs
must be assigned to the function located in
that space.
(2) Where space is allocated to different
functions and metering does not allow unam-
biguous measurement of usage by function,
costs must be allocated as follows:
(i) Utilities costs should be apportioned to
functions in the same manner as deprecia-
tion, based on the calculated difference be-
tween the site or building actual square foot-
age for monitored research laboratory space
(site, building, floor, or room), and a sepa-
rate calculation prepared by the IHE using
the "effective square footage" described in
subsection (c)(2)(ii) of this section.
(ii) "Effective square footage" allocated to
research laboratory space must be calculated
as the actual square footage times the rel-
ative energy utilization index (REUI) posted
on the OMB Web site at the time of a rate
determination.

A. This index is the ratio of a laboratory
energy use index (lab EUI) to the cor-
responding index for overall average college
or university space (college EUI).

B. In July 2012, values for these two indices
(taken respectively from the Lawrence
Berkeley Laboratory "Labs for the 21st Cen-
tury" benchmarking tool and the US Depart-
ment of Energy "Buildings Energy
Databook" and were 310 kBtu/sq ft-yr. and
155 kBtu/sq ft-yr., so that the adjustment
ratio is 2.0 by this methodology. To retain
currency, OMB will adjust the EUI numbers
from time to time (no more often than annu-
ally nor less often than every 5 years), using
reliable and publicly disclosed data. Current
values of both the EUIs and the REUI will be
posted on the OMB website.

5. General Administration and General Expenses
a. The expenses under this heading are
those that have been incurred for the general
executive and administrative offices of edu-
cational institutions and other expenses of a
general character which do not relate solely
to any major function of the institution; i.e.,
solely to (1) instruction, (2) organized re-
search, (3) other sponsored activities, or (4)
other institutional activities. The general
administration and general expense category
should also include its allocable share of
fringe benefit costs, operation and mainte-
nance expense, depreciation, and interest
costs. Examples of general administration
and general expenses include: Those expenses
incurred by administrative offices that serve
the entire university system of which the in-
stitution is a part; central offices of the in-
stitution such as the President's or
Chancellor's office, the offices for institu-
tion -wide financial management, business
223

Pt. 200, App. 111
services, budget and planning, personnel
management, and safety and risk manage-
ment; the office of the General Counsel; and
the operations of the central administrative
management information systems. General
administration and general expenses must
not include expenses incurred within non -
university -wide cleans' offices, academic de-
partments, organized research units, or simi-
lar organizational units. (See subsection 6.)
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be grouped first
according to common major functions of the
institution to which they render services or
provide benefits. The aggregate expenses of
each group must then be allocated to serv-
iced or benefitted functions on the modified
total cost basis. Modified total costs consist
of the same elements as those in Section C.2.

When an activity included in this indirect
(F&A) cost category provides a service or
product to another institution or organiza-
tion, an appropriate adjustment must be
made to either the expenses or the basis of
allocation or both, to assure a proper alloca-
tion of costs.

6. Departmental Administration Expenses
a. The expenses under this heading are
those that have been incurred for adminis-
trative and supporting services that benefit
common or joint departmental activities or
objectives in academic deans' offices, aca-
demic departments and divisions, and orga-
nized research units. Organized research
units include such units as institutes, study
centers, and research centers. Departmental
administration expenses are subject to the
following limitations.
(1) Academic deans' offices. Salaries and
operating expenses are limited to those at-
tributable to administrative functions.
(2) Academic departments:
(a) Salaries and fringe benefits attrib-
utable to the administrative work (including
bid and proposal preparation) of faculty (in-
cluding department heads) and other profes-
sional personnel conducting research and/or
instruction, must be allowed at a rate of 3.6
percent of modified total direct costs. This
category does not include professional busi-
ness or professional administrative officers.

This allowance must be added to the com-
putation of the indirect (F&A) cost rate for
major functions in Section C; the expenses
covered by the allowance must be excluded
from the departmental administration cost
pool. No documentation is required to sup-
port this allowance.
(b) Other administrative and supporting
expenses incurred within academic depart-
ments are allowable provided they are treat-
ed consistently in like circumstances. This
would include expenses such as the salaries
of secretarial and clerical staffs, the salaries
of administrative officers and assistants,
2 CFR Ch. 11 (1-1-21 Edition)
travel, office supplies, stockrooms, and the
like.
(3) Other fringe benefit costs applicable to
the salaries and wages included in sub-
sections (1) and (2) are allowable, as well as
an appropriate share of general administra-
tion and general expenses, operation and
maintenance expenses, and depreciation.
(4) Federal agencies may authorize reim-
bursement of additional costs for department
heads and faculty only in exceptional cases
where an institution can demonstrate undue
hardship or detriment to project perform-
ance.
b. The following guidelines apply to the de-
termination of departmental administrative
costs as direct or indirect (F&A) costs.
(1) In developing the departmental admin-
istration cost pool, special care should be ex-
ercised to ensure that costs incurred for the
same purpose in like circumstances are
treated consistently as either direct or indi-
rect (F&A) costs. For example, salaries of
technical staff, laboratory supplies (e.g.,
chemicals), telephone toll charges, animals,
animal care costs, computer costs, travel
costs, and specialized shop costs must be
treated as direct costs wherever identifiable
to a particular cost objective. Direct charg-
ing of these costs may be accomplished
through specific identification of individual
costs to benefitting cost objectives, or
through recharge centers or specialized serv-
ice facilities, as appropriate under the cir-
cumstances. See §§200.413(c) and 200.468.
(2) Items such as office supplies, postage,
local telephone costs, and memberships must
normally be treated as indirect (F&A) costs.
c. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be allocated as
follows:
(1) The administrative expenses of the
dean's office of each college and school must
be allocated to the academic departments
within that college or school on the modified
total cost basis.
(2) The administrative expenses of each
academic department, and the department's
share of the expenses allocated in subsection
(1) must be allocated to the appropriate func-
tions of the department on the modified
total cost basis.

7. Sponsored Projects Administration
a. The expenses under this heading are lim-
ited to those incurred by a separate organi-
zation(s) established primarily to administer
sponsored projects, including such functions
as grant and contract administration (Fed-
eral and non -Federal), special security, pur-
chasing, personnel, administration, and edit-
ing and publishing of research and other re-
ports. They include the salaries and expenses
of the head of such organization, assistants,
and immediate staff, together with the sala-
ries and expenses of personnel engaged in
224

OMB Guidance
supporting activities maintained by the or-
ganization, such as stock rooms, print shops,
and the like. This category also includes an
allocable share of fringe benefit costs, gen-
eral administration and general expenses,
operation and maintenance expenses, and de-
preciation. Appropriate adjustments will be
made for services provided to other functions
or organizations.
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be allocated to
the major functions of the institution under
which the sponsored projects are conducted
on the basis of the modified total cost of
sponsored projects.
c. An appropriate adjustment must be
made to eliminate any duplicate charges to
Federal awards when this category includes
similar or identical activities as those in-
cluded in the general administration and
general expense category or other indirect
(F&A) cost items, such as accounting, pro-
curement, or personnel administration.

8. Library Expenses
a. The expenses under this heading are
those that have been incurred for the oper-
ation of the library, including the cost of
books and library materials purchased for
the library, less any items of library income
that qualify as applicable credits under
§200.406. The library expense category should
also include the fringe benefits applicable to
the salaries and wages included therein, an
appropriate share of general administration
and general expense, operation and mainte-
nance expense, and depreciation. Costs in-
curred in the purchases of rare books (mu-
seum -type books) with no value to Federal
awards should not be allocated to them.
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in-
cluded in this category must be allocated
first on the basis of primary categories of
users, including students, professional em-
ployees, and other users.
(1) The student category must consist of
full-time equivalent students enrolled at the
institution, regardless of whether they earn
credits toward a degree or certificate.
(2) The professional employee category
must consist of all faculty members and
other professional employees of the institu-
tion, on a full-time equivalent basis. This
category may also include post -doctorate
fellows and graduate students.
(3) The other users category must consist
of a reasonable factor as determined by insti-
tutional records to account for all other
users of library facilities.
c. Amount allocated in paragraph b of this
section must be assigned further as follows:
(1) The amount in the student category
must be assigned to the instruction function
of the institution.

Pt. 200, App. 111
(2) The amount in the professional em-
ployee category must be assigned to the
major functions of the institution in propor-
tion to the salaries and wages of all faculty
members and other professional employees
applicable to those functions.
(3) The amount in the other users category
must be assigned to the other institutional
activities function of the institution.

9. Student Administration and Services
a. The expenses under this heading are
those that have been incurred for the admin-
istration of student affairs and for services
to students, including expenses of such ac-
tivities as deans of students, admissions, reg-
istrar, counseling and placement services,
student advisers, student health and infir-
mary services, catalogs, and commence-
ments and convocations. The salaries of
members of the academic staff whose respon-
sibilities to the institution require adminis-
trative work that benefits sponsored projects
may also be included to the extent that the
portion charged to student administration is
determined in accordance with subpart E of
this Part. This expense category also in-
cludes the fringe benefit costs applicable to
the salaries and wages included therein, an
appropriate share of general administration
and general expenses, operation and mainte-
nance, interest expense, and depreciation.
b. In the absence of the alternatives pro-
vided for in Section A.2.d, the expenses in
this category must be allocated to the in-
struction function, and subsequently to Fed-
eral awards in that function.

10. Offset for Indirect (F&A) Expenses Other-
wise Provided for by the Federal Govern-
ment
a. The items to be accumulated under this
heading are the reimbursements and other
payments from the Federal Government
which are made to the institution to support
solely, specifically, and directly, in whole or
in part, any of the administrative or service
activities described in subsections 2 through

9. b. The items in this group must be treated
as a credit to the affected individual indirect
(F&A) cost category before that category is
allocated to benefitting functions.

C. DETERMINATION AND APPLICATION OF

INDIRECT (F&A) COST RATE OR RATES

1. Indirect (F&A) Cost Pools
a. (1) Subject to subsection b, the separate
categories of indirect (F&A) costs allocated
to each major function of the institution as
prescribed in Section B, must be aggregated
and treated as a common pool for that func-
tion. The amount in each pool must be di-
vided by the distribution base described in
225

Pt. 200, App. 111
subsection 2 to arrive at a single indirect
(F&A) cost rate for each function.
(2) The rate for each function is used to
distribute indirect (F&A) costs to individual
Federal awards of that function. Since a
common pool is established for each major
function of the institution, a separate indi-
rect (F&A) cost rate would be established for
each of the major functions described in Sec-
tion A.1 under which Federal awards are car-
ried out.
(3) Each institution's indirect (F&A) cost
rate process must be appropriately designed
to ensure that Federal sponsors do not in
any way subsidize the indirect (F&A) costs of
other sponsors, specifically activities spon-
sored by industry and foreign governments.

Accordingly, each allocation method used to
identify and allocate the indirect (F&A) cost
pools, as described in Sections A.2 and B.2
through B.9, must contain the full amount of
the institution's modified total costs or
other appropriate units of measurement used
to make the computations. In addition, the
final rate distribution base (as defined in
subsection 2) for each major function (orga-
nized research, instruction, etc., as described
in Section A.1 functions of an institution)
must contain all the programs or activities
which utilize the indirect (F&A) costs allo-
cated to that major function. At the time an
indirect (F&A) cost proposal is submitted to
a cognizant agency for indirect costs, each
institution must describe the process it uses
to ensure that Federal funds are not used to
subsidize industry and foreign government
funded programs.

2. The Distribution Basis
Indirect (F&A) costs must be distributed to
applicable Federal awards and other benefit-
ting activities within each major function
(see section A.1) on the basis of modified
total direct costs (MTDC), consisting of all
salaries and wages, fringe benefits, materials
and supplies, services, travel, and up to the
first $25,000 of each subaward (regardless of
the period covered by the subaward). MTDC
is defined in §200.1. For this purpose, an indi-
rect (F&A) cost rate should be determined
for each of the separate indirect (F&A) cost
pools developed pursuant to subsection 1.

The rate in each case should be stated as the
percentage which the amount of the par-
ticular indirect (F&A) cost pool is of the
modified total direct costs identified with
such pool.

3. Negotiated Lump Sum for Indirect (F&A)
Costs
A negotiated fixed amount in lieu of indi-
rect (F&A) costs may be appropriate for self-
contained, off -campus, or primarily subcon-
tracted activities where the benefits derived
from an institution's indirect (F&A) services
cannot be readily determined. Such nego-
2 CFR Ch. 11 (1-1-21 Edition)
tiated indirect (F&A) costs will be treated as
an offset before allocation to instruction, or-
ganized research, other sponsored activities,
and other institutional activities. The base
on which such remaining expenses are allo-
cated should be appropriately adjusted.

4. Predetermined Rates for Indirect (F&A) Costs
Public Law 87-638 (76 Stat. 437) as amended
(41 U.S.C. 4708) authorizes the use of pre-
determined rates in determining the "indi-
rect costs" (indirect (F&A) costs) applicable
under research agreements with educational
institutions. The stated objectives of the law
are to simplify the administration of cost -
type research and development contracts (in-
cluding grants) with educational institu-
tions, to facilitate the preparation of their
budgets, and to permit more expeditious
closeout of such contracts when the work is
completed. In view of the potential advan-
tages offered by this procedure, negotiation
of predetermined rates for indirect (F&A)
costs for a period of two to four years should
be the norm in those situations where the
cost experience and other pertinent facts
available are deemed sufficient to enable the
parties involved to reach an informed judg-
ment as to the probable level of indirect
(F&A) costs during the ensuing accounting
periods.

5. Negotiated Fixed Rates and Carry -Forward
Provisions
When a fixed rate is negotiated in advance
for a fiscal year (or other time period), the
over- or under -recovery for that year may be
included as an adjustment to the indirect
(F&A) cost for the next rate negotiation.

When the rate is negotiated before the carry -
forward adjustment is determined, the carry -
forward amount may be applied to the next
subsequent rate negotiation. When such ad-
justments are to be made, each fixed rate ne-
gotiated in advance for a given period will be
computed by applying the expected indirect
(F&A) costs allocable to Federal awards for
the forecast period plus or minus the carry -
forward adjustment (over- or under -recovery)
from the prior period, to the forecast dis-
tribution base. Unrecovered amounts under
lump -sum agreements or cost -sharing provi-
sions of prior years must not be carried for-
ward for consideration in the new rate nego-
tiation. There must, however, be an advance
understanding in each case between the in-
stitution and the cognizant agency for indi-
rect costs as to whether these differences
will be considered in the rate negotiation
rather than making the determination after
the differences are known. Further, institu-
tions electing to use this carry -forward pro-
vision may not subsequently change without
prior approval of the cognizant agency for
indirect costs. In the event that an institu-
tion returns to a post -determined rate, any
226

OMB Guidance
over- or under -recovery during the period in
which negotiated fixed rates and carry -for-
ward provisions were followed will be in-
cluded in the subsequent post -determined
rates. Where multiple rates are used, the
same procedure will be applicable for deter-
mining each rate.

6. Provisional and Final Rates for Indirect
(F&A) Costs
Where the cognizant agency for indirect
costs determines that cost experience and
other pertinent facts do not justify the use
of predetermined rates, or a fixed rate with
a carry -forward, or if the parties cannot
agree on an equitable rate, a provisional rate
must be established. To prevent substantial
overpayment or underpayment, the provi-
sional rate may be adjusted by the cognizant
agency for indirect costs during the institu-
tion's fiscal year. Predetermined or fixed
rates may replace provisional rates at any
time prior to the close of the institution's
fiscal year. If a provisional rate is not re-
placed by a predetermined or fixed rate prior
to the end of the institution's fiscal year, a
final rate will be established and upward or
downward adjustments will be made based on
the actual allowable costs incurred for the
period involved.

7. Fixed Rates for the Life of the Sponsored
Agreement
a. Except as provided in paragraph (c)(1) of
§200.414, Federal agencies must use the nego-
tiated rates in effect at the time of the ini-
tial award throughout the life of the Federal
award. Award levels for Federal awards may
not be adjusted in future years as a result of
changes in negotiated rates. "Negotiated
rates" per the rate agreement include final,
fixed, and predetermined rates and exclude
provisional rates. "Life" for the purpose of
this subsection means each competitive seg-
ment of a project. A competitive segment is
a period of years approved by the Federal
awarding agency at the time of the Federal
award. If negotiated rate agreements do not
extend through the life of the Federal award
at the time of the initial award, then the ne-
gotiated rate for the last year of the Federal
award must be extended through the end of
the life of the Federal award.
b. Except as provided in §200.414, when an
educational institution does not have a nego-
tiated rate with the Federal Government at
the time of an award (because the edu-
cational institution is a new recipient or the
parties cannot reach agreement on a rate),
the provisional rate used at the time of the
award must be adjusted once a rate is nego-
tiated and approved by the cognizant agency
for indirect costs.

Pt. 200, App. 111

8. Limitation on Reimbursement of
Administrative Costs
a. Notwithstanding the provisions of sub-
section C.1.a, the administrative costs
charged to Federal awards awarded or
amended (including continuation and re-
newal awards) with effective dates beginning
on or after the start of the institution's first
fiscal year which begins on or after October
1, 1991, must be limited to 26% of modified
total direct costs (as defined in subsection 2)
for the total of General Administration and
General Expenses, Departmental Adminis-
tration, Sponsored Projects Administration,
and Student Administration and Services
(including their allocable share of deprecia-
tion, interest costs, operation and mainte-
nance expenses, and fringe benefits costs, as
provided by Section B, and all other types of
expenditures not listed specifically under
one of the subcategories of facilities in Sec-
tion B.
b. Institutions should not change their ac-
counting or cost allocation methods if the ef-
fect is to change the charging of a particular
type of cost from F&A to direct, or to reclas-
sify costs, or increase allocations from the
administrative pools identified in paragraph
B.1 of this Appendix to the other F&A cost
pools or fringe benefits. Cognizant agencies
for indirect cost are authorized to allow
changes where an institution's charging
practices are at variance with acceptable
practices followed by a substantial majority
of other institutions.

9. Alternative Method for Administrative Costs
a. Notwithstanding the provisions of sub-
section C.1.a, an institution may elect to
claim a fixed allowance for the "Adminis-
tration" portion of indirect (F&A) costs. The
allowance could be either 24% of modified
total direct costs or a percentage equal to
95% of the most recently negotiated fixed or
predetermined rate for the cost pools in-
cluded under "Administration" as defined in
Section B.1, whichever is less. Under this al-
ternative, no cost proposal need be prepared
for the "Administration" portion of the indi-
rect (F&A) cost rate nor is further identifica-
tion or documentation of these costs re-
quired (see subsection c). Where a negotiated
indirect (F&A) cost agreement includes this
alternative, an institution must make no
further charges for the expenditure cat-
egories described in Section B.5, Section B.6,
Section B.7, and Section B.9.
b. In negotiations of rates for subsequent
periods, an institution that has elected the
option of subsection a may continue to exer-
cise it at the same rate without further iden-
tification or documentation of costs.
c. If an institution elects to accept a
threshold rate as defined in subsection a of
this section, it is not required to perform a
detailed analysis of its administrative costs.
227

Pt. 200, App. 111
However, in order to compute the facilities
components of its indirect (F&A) cost rate,
the institution must reconcile its indirect
(F&A) cost proposal to its financial state-
ments and make appropriate adjustments
and reclassifications to identify the costs of
each major function as defined in Section
A.1, as well as to identify and allocate the fa-
cilities components. Administrative costs
that are not identified as such by the insti-
tution's accounting system (such as those in-
curred in academic departments) will be
classified as instructional costs for purposes
of reconciling indirect (F&A) cost proposals
to financial statements and allocating facili-
ties costs.

10. Individual Rate Components
In order to provide mutually agreed -upon
information for management purposes, each
indirect (F&A) cost rate negotiation or de-
termination must include development of a
rate for each indirect (F&A) cost pool as well
as the overall indirect (F&A) cost rate.

11. Negotiation and Approval of Indirect (F&A)
Rate
a. Cognizant agency for indirect costs is
defined in Subpart A.
(1) Cost negotiation cognizance is assigned
to the Department of Health and Human
Services (HHS) or the Department of De-
fense's Office of Naval Research (DOD), nor-
mally depending on which of the two agen-
cies (HHS or DOD) provides more funds di-
rectly to the educational institution for the
most recent three years. Information on
funding must be derived from relevant data
gathered by the National Science Founda-
tion. In cases where neither HHS nor DOD
provides Federal funding directly to an edu-
cational institution, the cognizant agency
for indirect costs assignment must default to
HHS. Notwithstanding the method for cog-
nizance determination described in this sec-
tion, other arrangements for cognizance of a
particular educational institution may also
be based in part on the types of research per-
formed at the educational institution and
must be decided based on mutual agreement
between HHS and DOD. Where a non -Federal
entity only receives funds as a subrecipient,
see §200.332.
(2) After cognizance is established, it must
continue for a five-year period.
b. Acceptance of rates. See §200.414.
c. Correcting deficiencies. The cognizant
agency for indirect costs must negotiate
changes needed to correct systems defi-
ciencies relating to accountability for Fed-
eral awards. Cognizant agencies for indirect
costs must address the concerns of other af-
fected agencies, as appropriate, and must ne-
gotiate special rates for Federal agencies
that are required to limit recovery of indi-
rect costs by statute.
2 CFR Ch. 11 (1-1-21 Edition)
d. Resolving questioned costs. The cog-
nizant agency for indirect costs must con-
duct any necessary negotiations with an edu-
cational institution regarding amounts ques-
tioned by audit that are due the Federal
Government related to costs covered by a ne-
gotiated agreement.
e. Reimbursement. Reimbursement to cog-
nizant agencies for indirect costs for work
performed under this Part may be made by
reimbursement billing under the Economy
Act, 31 U.S.C. 1535.
f. Procedure for establishing facilities and
administrative rates must be established by
one of the following methods:
(1) Formal negotiation. The cognizant
agency for indirect costs is responsible for
negotiating and approving rates for an edu-
cational institution on behalf of all Federal
agencies. Federal awarding agencies that do
not have cognizance for indirect costs must
notify the cognizant agency for indirect
costs of specific concerns (i.e., a need to es-
tablish special cost rates) which could affect
the negotiation process. The cognizant agen-
cy for indirect costs must address the con-
cerns of all interested agencies, as appro-
priate. A pre -negotiation conference may be
scheduled among all interested agencies, if
necessary. The cognizant agency for indirect
costs must then arrange a negotiation con-
ference with the educational institution.
(2) Other than formal negotiation. The cog-
nizant agency for indirect costs and edu-
cational institution may reach an agreement
on rates without a formal negotiation con-
ference; for example, through correspond-
ence or use of the simplified method de-
scribed in this section D of this Appendix.
g. Formalizing determinations and agree-
ments. The cognizant agency for indirect
costs must formalize all determinations or
agreements reached with an educational in-
stitution and provide copies to other agen-
cies having an interest. Determinations
should include a description of any adjust-
ments, the actual amount, both dollar and
percentage adjusted, and the reason for mak-
ing adjustments.
h. Disputes and disagreements. Where the
cognizant agency for indirect costs is unable
to reach agreement with an educational in-
stitution with regard to rates or audit reso-
lution, the appeal system of the cognizant
agency for indirect costs must be followed
for resolution of the disagreement.

12. Standard Format for Submission
For facilities and administrative (indirect
(F&A)) rate proposals, educational institu-
tions must use the standard format, shown
in section E of this appendix, to submit their
indirect (F&A) rate proposal to the cog-
nizant agency for indirect costs. The cog-
nizant agency for indirect costs may, on an
institution -by -institution basis, grant excep-
tions from all or portions of Part II of the
228

OMB Guidance
standard format requirement. This require-
ment does not apply to educational institu-
tions that use the simplified method for cal-
culating indirect (F&A) rates, as described in
Section D of this Appendix.

As provided in section C.10 of this appen-
dix, each F&A cost rate negotiation or deter-
mination must include development of a rate
for each F&A cost pool as well as the overall
F&A rate.

D. SIMPLIFIED METHOD FOR SMALL

INSTITUTIONS

1. General
a. Where the total direct cost of work cov-
ered by this Part at an institution does not
exceed $10 million in a fiscal year, the sim-
plified procedure described in subsections 2
or 3 may be used in determining allowable
indirect (F&A) costs. Under this simplified
procedure, the institution's most recent an-
nual financial report and immediately avail-
able supporting information must be utilized
as a basis for determining the indirect (F&A)
cost rate applicable to all Federal awards.

The institution may use either the salaries
and wages (see subsection 2) or modified
total direct costs (see subsection 3) as the
distribution basis.
b. The simplified procedure should not be
used where it produces results which appear
inequitable to the Federal Government or
the institution. In any such case, indirect
(F&A) costs should be determined through
use of the regular procedure.

2. Simplified Procedure —Salaries and Wages
Base
a. Establish the total amount of salaries
and wages paid to all employees of the insti-
tution.
b. Establish an indirect (F&A) cost pool
consisting of the expenditures (exclusive of
capital items and other costs specifically
identified as unallowable) which customarily
are classified under the following titles or
their equivalents:
(1) General administration and general ex-
penses (exclusive of costs of student adminis-
tration and services, student activities, stu-
dent aid, and scholarships).
(2) Operation and maintenance of physical
plant and depreciation (after appropriate ad-
justment for costs applicable to other insti-
tutional activities).
(3) Library.
(4) Department administration expenses,
which will be computed as 20 percent of the
salaries and expenses of deans and heads of
departments.

In those cases where expenditures classi-
fied under subsection (1) have previously
been allocated to other institutional activi-
ties, they may be included in the indirect
(F&A) cost pool. The total amount of sala-
Pt. 200, App. 111
ries and wages included in the indirect (F&A)
cost pool must be separately identified.
c. Establish a salary and wage distribution
base, determined by deducting from the total
of salaries and wages as established in sub-
section a from the amount of salaries and
wages included under subsection b.
d. Establish the indirect (F&A) cost rate,
determined by dividing the amount in the in-
direct (F&A) cost pool, subsection b, by the
amount of the distribution base, subsection
c.
e. Apply the indirect (F&A) cost rate to di-
rect salaries and wages for individual agree-
ments to determine the amount of indirect
(F&A) costs allocable to such agreements.

3. Simplified Procedure —Modified Total Direct
Cost Base
a. Establish the total costs incurred by the
institution for the base period.
b. Establish an indirect (F&A) cost pool
consisting of the expenditures (exclusive of
capital items and other costs specifically
identified as unallowable) which customarily
are classified under the following titles or
their equivalents:
(1) General administration and general ex-
penses (exclusive of costs of student adminis-
tration and services, student activities, stu-
dent aid, and scholarships).
(2) Operation and maintenance of physical
plant and depreciation (after appropriate ad-
justment for costs applicable to other insti-
tutional activities).
(3) Library.
(4) Department administration expenses,
which will be computed as 20 percent of the
salaries and expenses of deans and heads of
departments. In those cases where expendi-
tures classified under subsection (1) have
previously been allocated to other institu-
tional activities, they may be included in the
indirect (F&A) cost pool. The modified total
direct costs amount included in the indirect
(F&A) cost pool must be separately identi-
fied.
c. Establish a modified total direct cost
distribution base, as defined in Section C.2,
The distribution basis, that consists of all
institution's direct functions.
d. Establish the indirect (F&A) cost rate,
determined by dividing the amount in the in-
direct (F&A) cost pool, subsection b, by the
amount of the distribution base, subsection
c.
e. Apply the indirect (F&A) cost rate to
the modified total direct costs for individual
agreements to determine the amount of indi-
rect (F&A) costs allocable to such agree-
ments.

E. DOCUMENTATION REQUIREMENTS
The standard format for documentation re-
quirements for indirect (indirect (F&A)) rate
229

Pt. 200, App. IV
proposals for claiming costs under the reg-
ular method is available on the OMB
website.

F. CERTIFICATION

1. Certification of Charges
To assure that expenditures for Federal
awards are proper and in accordance with
the agreement documents and approved
project budgets, the annual and/or final fis-
cal reports or vouchers requesting payment
under the agreements will include a certifi-
cation, signed by an authorized official of
the university, which reads "By signing this
report, I certify to the best of my knowledge
and belief that the report is true, complete,
and accurate, and the expenditures, disburse-
ments and cash receipts are for the purposes
and intent set forth in the award documents.

I am aware that any false, fictitious, or
fraudulent information, or the omission of
any material fact, may subject me to crimi-
nal, civil or administrative penalties for
fraud, false statements, false claims or oth-
erwise. (U.S. Code, Title 18, Section 1001 and
Title 31, Sections 3729-3733 and 3801-3812)".

2. Certification of Indirect (F&A) Costs
a. Policy. Cognizant agencies must not ac-
cept a proposed indirect cost rate unless
such costs have been certified by the edu-
cational institution using the Certificate of
indirect (F&A) Costs set forth in subsection
F.2.c
b. The certificate must be signed on behalf
of the institution by the chief financial offi-
cer or an individual designated by an indi-
vidual at a level no lower than vice president
or chief financial officer.

An indirect (F&A) cost rate is not binding
upon the Federal Government if the most re-
cent required proposal from the institution
has not been certified. Where it is necessary
to establish indirect (F&A) cost rates, and
the institution has not submitted a certified
proposal for establishing such rates in ac-
cordance with the requirements of this sec-
tion, the Federal Government must unilater-
ally establish such rates. Such rates may be
based upon audited historical data or such
other data that have been furnished to the
cognizant agency for indirect costs and for
which it can be demonstrated that all unal-
lowable costs have been excluded. When indi-
rect (F&A) cost rates are unilaterally estab-
lished by the Federal Government because of
failure of the institution to submit a cer-
tified proposal for establishing such rates in
accordance with this section, the rates es-
tablished will be set at a level low enough to
ensure that potentially unallowable costs
will not be reimbursed.
c. Certificate. The certificate required by
this section must be in the following form:
2 CFR Ch. II (1-1-21 Edition)
Certificate of Indirect (F&A) Costs
This is to certify that to the best of my
knowledge and belief:
(1) I have reviewed the indirect (F&A) cost
proposal submitted herewith;
(2) All costs included in this proposal [iden-
tify date] to establish billing or final indi-
rect (F&A) costs rate for [identify period
covered by rate] are allowable in accordance
with the requirements of the Federal agree-
ment(s) to which they apply and with the
cost principles applicable to those agree-
ments.
(3) This proposal does not include any costs
which are unallowable under subpart E of
this part such as (without limitation): Public
relations costs, contributions and donations,
entertainment costs, fines and penalties, lob-
bying costs, and defense of fraud pro-
ceedings; and
(4) All costs included in this proposal are
properly allocable to Federal agreements on
the basis of a beneficial or causal relation-
ship between the expenses incurred and the
agreements to which they are allocated in
accordance with applicable requirements.

I declare that the foregoing is true and cor-
rect.

Institution of Higher Education:

Signature:

Name of Official:

Title:

Date of Execution:
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75888, Dec. 19, 2014; 80 FR 54409, Sept. 10,
2015; 85 FR 49577, Aug. 13, 2020]
APPENDIX IV TO PART 200 —INDIRECT
(F&A) COSTS IDENTIFICATION AND

ASSIGNMENT, AND RATE DETERMINA-

TION FOR NONPROFIT ORGANIZA-
TIONS
A. GENERAL

1. Indirect costs are those that have been
incurred for common or joint objectives and
cannot be readily identified with a par-
ticular final cost objective. Direct cost of
minor amounts may be treated as indirect
costs under the conditions described in
§200.413(d). After direct costs have been de-
termined and assigned directly to awards or
other work as appropriate, indirect costs are
those remaining to be allocated to benefit-
ting cost objectives. A cost may not be allo-
cated to a Federal award as an indirect cost
if any other cost incurred for the same pur-
pose, in like circumstances, has been as-
signed to a Federal award as a direct cost.

2. "Major nonprofit organizations" are de-
fined in paragraph (a) of §200.414. See indi-
rect cost rate reporting requirements in sec-
tions B.2.e and B.3.g of this Appendix.
230

OMB Guidance
B. ALLOCATION OF INDIRECT COSTS AND

DETERMINATION OF INDIRECT COST RATES

1. General
a. If a nonprofit organization has only one
major function, or where all its major func-
tions benefit from its indirect costs to ap-
proximately the same degree, the allocation
of indirect costs and the computation of an
indirect cost rate may be accomplished
through simplified allocation procedures, as
described in section B.2 of this Appendix.
b. If an organization has several major
functions which benefit from its indirect
costs in varying degrees, allocation of indi-
rect costs may require the accumulation of
such costs into separate cost groupings
which then are allocated individually to ben-
efitting functions by means of a base which
best measures the relative degree of benefit.

The indirect costs allocated to each function
are then distributed to individual Federal
awards and other activities included in that
function by means of an indirect cost rate(s).
c. The determination of what constitutes
an organization's major functions will de-
pend on its purpose in being; the types of
services it renders to the public, its clients,
and its members; and the amount of effort it
devotes to such activities as fundraising,
public information and membership activi-
ties.
d. Specific methods for allocating indirect
costs and computing indirect cost rates
along with the conditions under which each
method should be used are described in sec-
tion B.2 through B.5 of this Appendix.
e. The base period for the allocation of in-
direct costs is the period in which such costs
are incurred and accumulated for allocation
to work performed in that period. The base
period normally should coincide with the or-
ganization's fiscal year but, in any event,
must be so selected as to avoid inequities in
the allocation of the costs.

2. Simplified Allocation Method
a. Where an organization's major functions
benefit from its indirect costs to approxi-
mately the same degree, the allocation of in-
direct costs may be accomplished by (i) sepa-
rating the organization's total costs for the
base period as either direct or indirect, and
(ii) dividing the total allowable indirect
costs (net of applicable credits) by an equi-
table distribution base. The result of this
process is an indirect cost rate which is used
to distribute indirect costs to individual
Federal awards. The rate should be expressed
as the percentage which the total amount of
allowable indirect costs bears to the base se-
lected. This method should also be used
where an organization has only one major
function encompassing a number of indi-
vidual projects or activities, and may be
Pt. 200, App. IV
used where the level of Federal awards to an
organization is relatively small.
b. Both the direct costs and the indirect
costs must exclude capital expenditures and
unallowable costs. However, unallowable
costs which represent activities must be in-
cluded in the direct costs under the condi-
tions described in §200.413(e).
c. The distribution base may be total di-
rect costs (excluding capital expenditures
and other distorting items, such as sub -
awards for $25,000 or more), direct salaries
and wages, or other base which results in an
equitable distribution. The distribution base
must exclude participant support costs as de-
fined in §200.1.
d. Except where a special rate(s) is re-
quired in accordance with section B.5 of this
Appendix, the indirect cost rate developed
under the above principles is applicable to
all Federal awards of the organization. If a
special rate(s) is required, appropriate modi-
fications must be made in order to develop
the special rate(s).
e. For an organization that receives more
than $10 million in direct Federal funding in
a fiscal year, a breakout of the indirect cost
component into two broad categories, Facili-
ties and Administration as defined in para-
graph (a) of § 200.414, is required. The rate in
each case must be stated as the percentage
which the amount of the particular indirect
cost category (i.e., Facilities or Administra-
tion) is of the distribution base identified
with that category.

3. Multiple Allocation Base Method
a. General. Where an organization's indi-
rect costs benefit its major functions in
varying degrees, indirect costs must be accu-
mulated into separate cost groupings, as de-
scribed in subparagraph b. Each grouping
must then be allocated individually to bene-
fitting functions by means of a base which
best measures the relative benefits. The de-
fault allocation bases by cost pool are de-
scribed in section B.3.c of this Appendix.
b. Identification of indirect costs. Cost
groupings must be established so as to per-
mit the allocation of each grouping on the
basis of benefits provided to the major func-
tions. Each grouping must constitute a pool
of expenses that are of like character in
terms of functions they benefit and in terms
of the allocation base which best measures
the relative benefits provided to each func-
tion. The groupings are classified within the
two broad categories: "Facilities" and "Ad-
ministration," as described in section A.3 of
this Appendix. The indirect cost pools are de-
fined as follows:
(1) Depreciation. The expenses under this
heading are the portion of the costs of the
organization's buildings, capital improve-
ments to land and buildings, and equipment
which are computed in accordance with
§200.436.
231

Pt. 200, App. IV
(2) Interest. Interest on debt associated
with certain buildings, equipment and cap-
ital improvements are computed in accord-
ance with § 200.449.
(3) Operation and maintenance expenses.

The expenses under this heading are those
that have been incurred for the administra-
tion, operation, maintenance, preservation,
and protection of the organization's physical
plant. They include expenses normally in-
curred for such items as: janitorial and util-
ity services; repairs and ordinary or normal
alterations of buildings, furniture and equip-
ment; care of grounds; maintenance and op-
eration of buildings and other plant facili-
ties; security; earthquake and disaster pre-
paredness; environmental safety; hazardous
waste disposal; property, liability and other
insurance relating to property; space and
capital leasing; facility planning and man-
agement; and central receiving. The oper-
ation and maintenance expenses category
must also include its allocable share of
fringe benefit costs, depreciation, and inter-
est costs.
(4) General administration and general ex-
penses. The expenses under this heading are
those that have been incurred for the overall
general executive and administrative offices
of the organization and other expenses of a
general nature which do not relate solely to
any major function of the organization. This
category must also include its allocable
share of fringe benefit costs, operation and
maintenance expense, depreciation, and in-
terest costs. Examples of this category in-
clude central offices, such as the director's
office, the office of finance, business serv-
ices, budget and planning, personnel, safety
and risk management, general counsel, man-
agement information systems, and library
costs.

In developing this cost pool, special care
should be exercised to ensure that costs in-
curred for the same purpose in like cir-
cumstances are treated consistently as ei-
ther direct or indirect costs. For example,
salaries of technical staff, project supplies,
project publication, telephone toll charges,
computer costs, travel costs, and specialized
services costs must be treated as direct costs
wherever identifiable to a particular pro-
gram. The salaries and wages of administra-
tive and pooled clerical staff should nor-
mally be treated as indirect costs. Direct
charging of these costs may be appropriate
as described in §200.413. Items such as office
supplies, postage, local telephone costs, peri-
odicals and memberships should normally be
treated as indirect costs.
c. Allocation bases. Actual conditions
must be taken into account in selecting the
base to be used in allocating the expenses in
each grouping to benefitting functions. The
essential consideration in selecting a method
or a base is that it is the one best suited for
assigning the pool of costs to cost objectives
2 CFR Ch. II (1-1-21 Edition)
in accordance with benefits derived; a trace-
able cause and effect relationship; or logic
and reason, where neither the cause nor the
effect of the relationship is determinable.

When an allocation can be made by assign-
ment of a cost grouping directly to the func-
tion benefitted, the allocation must be made
in that manner. When the expenses in a cost
grouping are more general in nature, the al-
location must be made through the use of a
selected base which produces results that are
equitable to both the Federal Government
and the organization. The distribution must
be made in accordance with the bases de-
scribed herein unless it can be demonstrated
that the use of a different base would result
in a more equitable allocation of the costs,
or that a more readily available base would
not increase the costs charged to Federal
awards. The results of special cost studies
(such as an engineering utility study) must
not be used to determine and allocate the in-
direct costs to Federal awards.
(1) Depreciation. Depreciation expenses
must be allocated in the following manner:
(a) Depreciation on buildings used exclu-
sively in the conduct of a single function,
and on capital improvements and equipment
used in such buildings, must be assigned to
that function.
(b) Depreciation on buildings used for more
than one function, and on capital improve-
ments and equipment used in such buildings,
must be allocated to the individual functions
performed in each building on the basis of
usable square feet of space, excluding com-
mon areas, such as hallways, stairwells, and
restrooms.
(c) Depreciation on buildings, capital im-
provements and equipment related space
(e.g., individual rooms, and laboratories)
used jointly by more than one function (as
determined by the users of the space) must
be treated as follows. The cost of each joint-
ly used unit of space must be allocated to
the benefitting functions on the basis of:
(i) the employees and other users on a full-
time equivalent (FTE) basis or salaries and
wages of those individual functions benefit-
ting from the use of that space; or
(ii) organization -wide employee FTEs or
salaries and wages applicable to the benefit-
ting functions of the organization.
(d) Depreciation on certain capital im-
provements to land, such as paved parking
areas, fences, sidewalks, and the like, not in-
cluded in the cost of buildings, must be allo-
cated to user categories on a FTE basis and
distributed to major functions in proportion
to the salaries and wages of all employees
applicable to the functions.
(2) Interest. Interest costs must be allo-
cated in the same manner as the deprecia-
tion on the buildings, equipment and capital
equipment to which the interest relates.
(3) Operation and maintenance expenses.

Operation and maintenance expenses must
232

OMB Guidance
be allocated in the same manner as the de-
preciation.
(4) General administration and general ex-
penses. General administration and general
expenses must be allocated to benefitting
functions based on modified total costs
(MTC). The MTC is the modified total direct
costs (MTDC), as described in §200.1, plus the
allocated indirect cost proportion. The ex-
penses included in this category could be
grouped first according to major functions of
the organization to which they render serv-
ices or provide benefits. The aggregate ex-
penses of each group must then be allocated
to benefitting functions based on MTC.
d. Order of distribution.
(1) Indirect cost categories consisting of
depreciation, interest, operation and mainte-
nance, and general administration and gen-
eral expenses must be allocated in that order
to the remaining indirect cost categories as
well as to the major functions of the organi-
zation. Other cost categories should be allo-
cated in the order determined to be most ap-
propriate by the organization. This order of
allocation does not apply if cross allocation
of costs is made as provided in section B.3.d.2
of this Appendix.
(2) Normally, an indirect cost category will
be considered closed once it has been allo-
cated to other cost objectives, and costs
must not be subsequently allocated to it.

However, a cross allocation of costs between
two or more indirect costs categories could
be used if such allocation will result in a
more equitable allocation of costs. If a cross
allocation is used, an appropriate modifica-
tion to the composition of the indirect cost
categories is required.
e. Application of indirect cost rate or
rates. Except where a special indirect cost
rate(s) is required in accordance with section
B.5 of this Appendix, the separate groupings
of indirect costs allocated to each major
function must be aggregated and treated as a
common pool for that function. The costs in
the common pool must then be distributed to
individual Federal awards included in that
function by use of a single indirect cost rate.
f. Distribution basis. Indirect costs must
be distributed to applicable Federal awards
and other benefitting activities within each
major function on the basis of MTDC (see
definition in §200.1).
g. Individual Rate Components. An indi-
rect cost rate must be determined for each
separate indirect cost pool developed. The
rate in each case must be stated as the per-
centage which the amount of the particular
indirect cost pool is of the distribution base
identified with that pool. Each indirect cost
rate negotiation or determination agreement
must include development of the rate for
each indirect cost pool as well as the overall
indirect cost rate. The indirect cost pools
must be classified within two broad cat -
Pt. 200, App. IV
egories: "Facilities" and "Administration,"
as described in §200.414(a).

4. Direct Allocation Method
a. Some nonprofit organizations treat all
costs as direct costs except general adminis-
tration and general expenses. These organi-
zations generally separate their costs into
three basic categories: (i) General adminis-
tration and general expenses, (ii) fund-
raising, and (iii) other direct functions (in-
cluding projects performed under Federal
awards). Joint costs, such as depreciation,
rental costs, operation and maintenance of
facilities, telephone expenses, and the like
are prorated individually as direct costs to
each category and to each Federal award or
other activity using a base most appropriate
to the particular cost being prorated.
b. This method is acceptable, provided each
joint cost is prorated using a base which ac-
curately measures the benefits provided to
each Federal award or other activity. The
bases must be established in accordance with
reasonable criteria and be supported by cur-
rent data. This method is compatible with
the Standards of Accounting and Financial
Reporting for Voluntary Health and Welfare
Organizations issued jointly by the National
Health Council, Inc., the National Assembly
of Voluntary Health and Social Welfare Or-
ganizations, and the United Way of America.
c. Under this method, indirect costs con-
sist exclusively of general administration
and general expenses. In all other respects,
the organization's indirect cost rates must
be computed in the same manner as that de-
scribed in section B.2 of this Appendix.

5. Special Indirect Cost Rates
In some instances, a single indirect cost
rate for all activities of an organization or
for each major function of the organization
may not be appropriate, since it would not
take into account those different factors
which may substantially affect the indirect
costs applicable to a particular segment of
work. For this purpose, a particular segment
of work may be that performed under a sin-
gle Federal award or it may consist of work
under a group of Federal awards performed
in a common environment. These factors
may include the physical location of the
work, the level of administrative support re-
quired, the nature of the facilities or other
resources employed, the scientific disciplines
or technical skills involved, the organiza-
tional arrangements used, or any combina-
tion thereof. When a particular segment of
work is performed in an environment which
appears to generate a significantly different
level of indirect costs, provisions should be
made for a separate indirect cost pool appli-
cable to such work. The separate indirect
cost pool should be developed during the
course of the regular allocation process, and
233

Pt. 200, App. IV
the separate indirect cost rate resulting
therefrom should be used, provided it is de-
termined that (i) the rate differs signifi-
cantly from that which would have been ob-
tained under sections B.2, B.3, and B.4 of this
Appendix, and (ii) the volume of work to
which the rate would apply is material.

C. NEGOTIATION AND APPROVAL OF INDIRECT

COST RATES

1. Definitions
As used in this section, the following terms
have the meanings set forth in this section:
a. Cognizant agency for indirect costs means
the Federal agency responsible for negoti-
ating and approving indirect cost rates for a
nonprofit organization on behalf of all Fed-
eral agencies.
b. Predetermined rate means an indirect cost
rate, applicable to a specified current or fu-
ture period, usually the organization's fiscal
year. The rate is based on an estimate of the
costs to be incurred during the period. A pre-
determined rate is not subject to adjust-
ment.
c. Fixed rate means an indirect cost rate
which has the same characteristics as a pre-
determined rate, except that the difference
between the estimated costs and the actual
costs of the period covered by the rate is car-
ried forward as an adjustment to the rate
computation of a subsequent period.
d. Final rate means an indirect cost rate
applicable to a specified past period which is
based on the actual costs of the period. A
final rate is not subject to adjustment.
e. Provisional rate or billing rate means a
temporary indirect cost rate applicable to a
specified period which is used for funding, in-
terim reimbursement, and reporting indirect
costs on Federal awards pending the estab-
lishment of a final rate for the period.
f. Indirect cost proposal means the docu-
mentation prepared by an organization to
substantiate its claim for the reimbursement
of indirect costs. This proposal provides the
basis for the review and negotiation leading
to the establishment of an organization's in-
direct cost rate.
g. Cost objective means a function, organiza-
tional subdivision, contract, Federal award,
or other work unit for which cost data are
desired and for which provision is made to
accumulate and measure the cost of proc-
esses, projects, jobs and capitalized projects.

2. Negotiation and Approval of Rates
a. Unless different arrangements are
agreed to by the Federal agencies concerned,
the Federal agency with the largest dollar
value of Federal awards directly funded to an
organization will be designated as the cog-
nizant agency for indirect costs for the nego-
tiation and approval of the indirect cost
rates and, where necessary, other rates such
as fringe benefit and computer charge -out
2 CFR Ch. II (1-1-21 Edition)
rates. Once an agency is assigned cognizance
for a particular nonprofit organization, the
assignment will not be changed unless there
is a shift in the dollar volume of the Federal
awards directly funded to the organization
for at least three years. All concerned Fed-
eral agencies must be given the opportunity
to participate in the negotiation process but,
after a rate has been agreed upon, it will be
accepted by all Federal agencies. When a
Federal agency has reason to believe that
special operating factors affecting its Fed-
eral awards necessitate special indirect cost
rates in accordance with section B.5 of this
Appendix, it will, prior to the time the rates
are negotiated, notify the cognizant agency
for indirect costs. (See also §200.414.) If the
nonprofit does not receive any funding from
any Federal agency, the pass -through entity
is responsible for the negotiation of the indi-
rect cost rates in accordance with
§ 200.332(a)(4).
b. Except as otherwise provided in
§200.414(f), a nonprofit organization which
has not previously established an indirect
cost rate with a Federal agency must submit
its initial indirect cost proposal immediately
after the organization is advised that a Fed-
eral award will be made and, in no event,
later than three months after the effective
date of the Federal award.
c. Unless approved by the cognizant agency
for indirect costs in accordance with
§200.414(g), organizations that have pre-
viously established indirect cost rates must
submit a new indirect cost proposal to the
cognizant agency for indirect costs within
six months after the close of each fiscal year.
d. A predetermined rate may be negotiated
for use on Federal awards where there is rea-
sonable assurance, based on past experience
and reliable projection of the organization's
costs, that the rate is not likely to exceed a
rate based on the organization's actual costs.
e. Fixed rates may be negotiated where
predetermined rates are not considered ap-
propriate. A fixed rate, however, must not be
negotiated if (i) all or a substantial portion
of the organization's Federal awards are ex-
pected to expire before the carry -forward ad-
justment can be made; (ii) the mix of Federal
and non -Federal work at the organization is
too erratic to permit an equitable carry -for-
ward adjustment; or (iii) the organization's
operations fluctuate significantly from year
to year.
f. Provisional and final rates must be nego-
tiated where neither predetermined nor fixed
rates are appropriate. Predetermined or
fixed rates may replace provisional rates at
any time prior to the close of the organiza-
tion's fiscal year. If that event does not
occur, a final rate will be established and up-
ward or downward adjustments will be made
based on the actual allowable costs incurred
for the period involved.
234

OMB Guidance
g. The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the nonprofit organization. The cognizant
agency for indirect costs must make avail-
able copies of the agreement to all concerned
Federal agencies.
h. If a dispute arises in a negotiation of an
indirect cost rate between the cognizant
agency for indirect costs and the nonprofit
organization, the dispute must be resolved in
accordance with the appeals procedures of
the cognizant agency for indirect costs.
i. To the extent that problems are encoun-
tered among the Federal agencies in connec-
tion with the negotiation and approval proc-
ess, OMB will lend assistance as required to
resolve such problems in a timely manner.

D. Certification of Indirect (F&A) Costs
(1) Required Certification. No proposal to
establish indirect (F&A) cost rates must be
acceptable unless such costs have been cer-
tified by the nonprofit organization using
the Certificate of Indirect (F&A) Costs set
forth in section j. of this appendix. The cer-
tificate must be signed on behalf of the orga-
nization by an individual at a level no lower
than vice president or chief financial officer
for the organization.
(2) Each indirect cost rate proposal must
be accompanied by a certification in the fol-
lowing form:

Certificate of Indirect (F&A) Costs
This is to certify that to the best of my
knowledge and belief:
(1) I have reviewed the indirect (F&A) cost
proposal submitted herewith;
(2) All costs included in this proposal [iden-
tify date] to establish billing or final indi-
rect (F&A) costs rate for [identify period
covered by rate] are allowable in accordance
with the requirements of the Federal awards
to which they apply and with subpart E of
this part.
(3) This proposal does not include any costs
which are unallowable under subpart E of
this part such as (without limitation): Public
relations costs, contributions and donations,
entertainment costs, fines and penalties, lob-
bying costs, and defense of fraud pro-
ceedings; and
(4) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the Fed-
eral awards to which they are allocated in
accordance with applicable requirements.

I declare that the foregoing is true and cor-
rect.

Nonprofit Organization:

Signature:

Name of Official:

Title:

Pt. 200, App. V
Date of Execution:
[78 FR 78608, Dec. 26, 2013, as amended at 80
FR 54410, Sept. 10, 2015; 85 FR 49579, Aug. 13,
2020]
APPENDIX V TO PART 200—STATE/LOCAL

GOVERNMENTWIDE CENTRAL SERVICE

COST ALLOCATION PLANS
A. GENERAL

1. Most governmental units provide certain
services, such as motor pools, computer cen-
ters, purchasing, accounting, etc., to oper-
ating agencies on a centralized basis. Since
federally -supported awards are performed
within the individual operating agencies,
there needs to be a process whereby these
central service costs can be identified and
assigned to benefitted activities on a reason-
able and consistent basis. The central service
cost allocation plan provides that process.

All costs and other data used to distribute
the costs included in the plan should be sup-
ported by formal accounting and other
records that will support the propriety of the
costs assigned to Federal awards.

2. Guidelines and illustrations of central
service cost allocation plans are provided in
a brochure published by the Department of
Health and Human Services entitled "A
Guide for State, Local and Indian Tribal Gov-
ernments: Cost Principles and Procedures for
Developing Cost Allocation Plans and Indirect
Cost Rates for Agreements with the Federal
Government." A copy of this brochure may be
obtained from the HHS Cost Allocation Serv-
ices or at their website.

B. DEFINITIONS

1. Agency or operating agency means an or-
ganizational unit or sub -division within a
governmental unit that is responsible for the
performance or administration of Federal
awards or activities of the governmental
unit.

2. Allocated central services means central
services that benefit operating agencies but
are not billed to the agencies on a fee -for -
service or similar basis. These costs are allo-
cated to benefitted agencies on some reason-
able basis. Examples of such services might
include general accounting, personnel ad-
ministration, purchasing, etc.

3. Billed central services means central serv-
ices that are billed to benefitted agencies or
programs on an individual fee -for -service or
similar basis. Typical examples of billed cen-
tral services include computer services,
transportation services, insurance, and
fringe benefits.

4. Cognizant agency for indirect costs is de-
fined in §200.1. The determination of cog-
nizant agency for indirect costs for states
and local governments is described in section
F.1.
235

Pt. 200, App. V

5. Major local government means local gov-
ernment that receives more than $100 million
in direct Federal awards subject to this Part.

C. SCOPE OF THE CENTRAL SERVICE COST

ALLOCATION PLANS
The central service cost allocation plan
will include all central service costs that
will be claimed (either as a billed or an allo-
cated cost) under Federal awards and will be
documented as described in section E. omit-
ted from the plan will not be reimbursed.

D. SUBMISSION REQUIREMENTS

1. Each state will submit a plan to the De-
partment of Health and Human Services for
each year in which it claims central service
costs under Federal awards. The plan should
include (a) a projection of the next year's al-
located central service cost (based either on
actual costs for the most recently completed
year or the budget projection for the coming
year), and (b) a reconciliation of actual allo-
cated central service costs to the estimated
costs used for either the most recently com-
pleted year or the year immediately pre-
ceding the most recently completed year.

2. Each major local government is also re-
quired to submit a plan to its cognizant
agency for indirect costs annually.

3. All other local governments claiming
central service costs must develop a plan in
accordance with the requirements described
in this Part and maintain the plan and re-
lated supporting documentation for audit.

These local governments are not required to
submit their plans for Federal approval un-
less they are specifically requested to do so
by the cognizant agency for indirect costs.

Where a local government only receives
funds as a subrecipient, the pass -through en-
tity will be responsible for monitoring the
subrecipient's plan.

4. All central service cost allocation plans
will be prepared and, when required, sub-
mitted within six months prior to the begin-
ning of each of the governmental unit's fis-
cal years in which it proposes to claim cen-
tral service costs. Extensions may be grant-
ed by the cognizant agency for indirect costs
on a case -by -case basis.

E. DOCUMENTATION REQUIREMENTS FOR

SUBMITTED PLANS
The documentation requirements described
in this section may be modified, expanded, or
reduced by the cognizant agency for indirect
costs on a case -by -case basis. For example,
the requirements may be reduced for those
central services which have little or no im-
pact on Federal awards. Conversely, if a re-
view of a plan indicates that certain addi-
tional information is needed, and will likely
be needed in future years, it may be rou-
tinely requested in future plan submissions.

Items marked with an asterisk (*) should be
2 CFR Ch. 11 (1-1-21 Edition)
submitted only once; subsequent plans
should merely indicate any changes since the
last plan.

1. General
All proposed plans must be accompanied by
the following: an organization chart suffi-
ciently detailed to show operations including
the central service activities of the state/
local government whether or not they are
shown as benefitting from central service
functions; a copy of the Comprehensive An-
nual Financial Report (or a copy of the Exec-
utive Budget if budgeted costs are being pro-
posed) to support the allowable costs of each
central service activity included in the plan;
and, a certification (see subsection 4.) that
the plan was prepared in accordance with
this Part, contains only allowable costs, and
was prepared in a manner that treated simi-
lar costs consistently among the various
Federal awards and between Federal and
non -Federal awards/activities.

2. Allocated Central Services
For each allocated central service*, the
plan must also include the following: a brief
description of the service, an identification
of the unit rendering the service and the op-
erating agencies receiving the service, the
items of expense included in the cost of the
service, the method used to distribute the
cost of the service to benefitted agencies,
and a summary schedule showing the alloca-
tion of each service to the specific benefitted
agencies. If any self-insurance funds or
fringe benefits costs are treated as allocated
(rather than billed) central services, docu-
mentation discussed in subsections 3.b. and
c. must also be included.

3. Billed Services
a. General. The information described in
this section must be provided for all billed
central services, including internal service
funds, self-insurance funds, and fringe ben-
efit funds.
b. Internal service funds.
(1) For each internal service fund or simi-
lar activity with an operating budget of $5
million or more, the plan must include: A
brief description of each service; a balance
sheet for each fund based on individual ac-
counts contained in the governmental unit's
accounting system; a revenue/expenses state-
ment, with revenues broken out by source,
e.g., regular billings, interest earned, etc.; a
listing of all non -operating transfers (as de-
fined by GAAP) into and out of the fund; a
description of the procedures (methodology)
used to charge the costs of each service to
users, including how billing rates are deter-
mined; a schedule of current rates; and, a
schedule comparing total revenues (includ-
ing imputed revenues) generated by the serv-
ice to the allowable costs of the service, as
236

OMB Guidance
determined under this part, with an expla-
nation of how variances will be handled.
(2) Revenues must consist of all revenues
generated by the service, including unbilled
and uncollected revenues. If some users were
not billed for the services (or were not billed
at the full rate for that class of users), a
schedule showing the full imputed revenues
associated with these users must be pro-
vided. Expenses must be broken out by ob-
ject cost categories (e.g., salaries, supplies,
etc.).
c. Self-insurance funds. For each self-insur-
ance fund, the plan must include: the fund
balance sheet; a statement of revenue and
expenses including a summary of billings
and claims paid by agency; a listing of all
non -operating transfers into and out of the
fund; the type(s) of risk(s) covered by the
fund (e.g., automobile liability, workers'
compensation, etc.); an explanation of how
the level of fund contributions are deter-
mined, including a copy of the current actu-
arial report (with the actuarial assumptions
used) if the contributions are determined on
an actuarial basis; and, a description of the
procedures used to charge or allocate fund
contributions to benefitted activities. Re-
serve levels in excess of claims (1) submitted
and adjudicated but not paid, (2) submitted
but not adjudicated, and (3) incurred but not
submitted must be identified and explained.
d. Fringe benefits. For fringe benefit costs,
the plan must include: a listing of fringe ben-
efits provided to covered employees, and the
overall annual cost of each type of benefit;
current fringe benefit policies; and proce-
dures used to charge or allocate the costs of
the benefits to benefitted activities. In addi-
tion, for pension and post -retirement health
insurance plans, the following information
must be provided: the governmental unit's
funding policies, e.g., legislative bills, trust
agreements, or state -mandated contribution
rules, if different from actuarially deter-
mined rates; the pension plan's costs accrued
for the year; the amount funded, and date(s)
of funding; a copy of the current actuarial
report (including the actuarial assumptions);
the plan trustee's report; and, a schedule
from the activity showing the value of the
interest cost associated with late funding.

4. Required Certification
Each central service cost allocation plan
will be accompanied by a certification in the
following form:

CERTIFICATE OF COST ALLOCATION
PLAN
This is to certify that I have reviewed the
cost allocation plan submitted herewith and
to the best of my knowledge and belief:
(1) All costs included in this proposal [iden-
tify date] to establish cost allocations or bil-
lings for [identify period covered by plan] are
Pt. 200, App. V
allowable in accordance with the require-
ments of this Part and the Federal award(s)
to which they apply. Unallowable costs have
been adjusted for in allocating costs as indi-
cated in the cost allocation plan.
(2) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the Fed-
eral awards to which they are allocated in
accordance with applicable requirements.

Further, the same costs that have been
treated as indirect costs have not been
claimed as direct costs. Similar types of
costs have been accounted for consistently.

I declare that the foregoing is true and cor-
rect.

Governmental Unit:

Signature:

Name of Official:

Title:

Date of Execution:

F. NEGOTIATION AND APPROVAL OF CENTRAL

SERVICE PLANS

1. Federal Cognizant Agency for Indirect Costs
Assignments for Cost Negotiation
In general, unless different arrangements
are agreed to by the concerned Federal agen-
cies, for central service cost allocation
plans, the cognizant agency responsible for
review and approval is the Federal agency
with the largest dollar value of total Federal
awards with a governmental unit. For indi-
rect cost rates and departmental indirect
cost allocation plans, the cognizant agency
is the Federal agency with the largest dollar
value of direct Federal awards with a govern-
mental unit or component, as appropriate.

Once designated as the cognizant agency for
indirect costs, the Federal agency must re-
main so for a period of five years. In addi-
tion, the following Federal agencies continue
to be responsible for the indicated govern-
mental entities:

Department of Health and Human Services —
Public assistance and state-wide cost alloca-
tion plans for all states (including the Dis-
trict of Columbia and Puerto Rico), state
and local hospitals, libraries and health dis-
tricts.

Department of the Interior —Indian tribal
governments, territorial governments, and
state and local park and recreational dis-
tricts.

Department of Labor —State and local labor
departments.

Department of Education —School districts
and state and local education agencies.

Department of Agriculture —State and local
agriculture departments.

Department of Transportation —State and
local airport and port authorities and transit
districts.
237

Pt. 200, App. V
Department of Commerce —State and local
economic development districts.

Department of Housing and Urban Develop-
ment —State and local housing and develop-
ment districts.

Environmental Protection Agency —State and
local water and sewer districts.

2. Review
All proposed central service cost allocation
plans that are required to be submitted will
be reviewed, negotiated, and approved by the
cognizant agency for indirect costs on a
timely basis. The cognizant agency for indi-
rect costs will review the proposal within six
months of receipt of the proposal and either
negotiate/approve the proposal or advise the
governmental unit of the additional docu-
mentation needed to support/evaluate the
proposed plan or the changes required to
make the proposal acceptable. Once an
agreement with the governmental unit has
been reached, the agreement will be accepted
and used by all Federal agencies, unless pro-
hibited or limited by statute. Where a Fed-
eral awarding agency has reason to believe
that special operating factors affecting its
Federal awards necessitate special consider-
ation, the funding agency will, prior to the
time the plans are negotiated, notify the
cognizant agency for indirect costs.

3. Agreement
The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the governmental unit. This agreement will
be subject to re -opening if the agreement is
subsequently found to violate a statute or
the information upon which the plan was ne-
gotiated is later found to be materially in-
complete or inaccurate. The results of the
negotiation must be made available to all
Federal agencies for their use.

4. Adjustments
Negotiated cost allocation plans based on a
proposal later found to have included costs
that: (a) are unallowable (i) as specified by
law or regulation, (ii) as identified in subpart
F, General Provisions for selected Items of
Cost of this Part, or (iii) by the terms and
conditions of Federal awards, or (b) are unal-
lowable because they are clearly not allo-
cable to Federal awards, must be adjusted, or
a refund must be made at the option of the
cognizant agency for indirect costs, includ-
ing earned or imputed interest from the date
of transfer and debt interest, if applicable,
chargeable in accordance with applicable
Federal cognizant agency for indirect costs
regulations. Adjustments or cash refunds
may include, at the option of the cognizant
agency for indirect costs, earned or imputed
interest from the date of expenditure and de-
linquent debt interest, if applicable, charge -
2 CFR Ch. 11 (1-1-21 Edition)
able in accordance with applicable cognizant
agency claims collection regulations. These
adjustments or refunds are designed to cor-
rect the plans and do not constitute a re-
opening of the negotiation.

G. OTHER POLICIES

1. Billed Central Service Activities
Each billed central service activity must
separately account for all revenues (includ-
ing imputed revenues) generated by the serv-
ice, expenses incurred to furnish the service,
and profit/loss.

2. Working Capital Reserves
Internal service funds are dependent upon
a reasonable level of working capital reserve
to operate from one billing cycle to the next.

Charges by an internal service activity to
provide for the establishment and mainte-
nance of a reasonable level of working cap-
ital reserve, in addition to the full recovery
of costs, are allowable. A working capital re-
serve as part of retained earnings of up to 60
calendar days cash expenses for normal oper-
ating purposes is considered reasonable. A
working capital reserve exceeding 60 cal-
endar days may be approved by the cog-
nizant agency for indirect costs in excep-
tional cases.

3. Carry -Forward Adjustments of Allocated
Central Service Costs
Allocated central service costs are usually
negotiated and approved for a future fiscal
year on a "fixed with carry -forward" basis.

Under this procedure, the fixed amounts for
the future year covered by agreement are
not subject to adjustment for that year.

However, when the actual costs of the year
involved become known, the differences be-
tween the fixed amounts previously approved
and the actual costs will be carried forward
and used as an adjustment to the fixed
amounts established for a later year. This
"carry -forward" procedure applies to all cen-
tral services whose costs were fixed in the
approved plan. However, a carry -forward ad-
justment is not permitted, for a central serv-
ice activity that was not included in the ap-
proved plan, or for unallowable costs that
must be reimbursed immediately.

4. Adjustments of Billed Central Services
Billing rates used to charge Federal awards
must be based on the estimated costs of pro-
viding the services, including an estimate of
the allocable central service costs. A com-
parison of the revenue generated by each
billed service (including total revenues
whether or not billed or collected) to the ac-
tual allowable costs of the service will be
made at least annually, and an adjustment
will be made for the difference between the
238

OMB Guidance
revenue and the allowable costs. These ad-
justments will be made through one of the
following adjustment methods: (a) a cash re-
fund including earned or imputed interest
from the date of transfer and debt interest, if
applicable, chargeable in accordance with
applicable Federal cognizant agency for indi-
rect costs regulations to the Federal Govern-
ment for the Federal share of the adjust-
ment, (b) credits to the amounts charged to
the individual programs, (c) adjustments to
future billing rates, or (d) adjustments to al-
located central service costs. Adjustments to
allocated central services will not be per-
mitted where the total amount of the adjust-
ment for a particular service (Federal share
and non -Federal) share exceeds $500,000. Ad-
justment methods may include, at the option
of the cognizant agency, earned or imputed
interest from the date of expenditure and de-
linquent debt interest, if applicable, charge-
able in accordance with applicable cognizant
agency claims collection regulations.

5. Records Retention
All central service cost allocation plans
and related documentation used as a basis
for claiming costs under Federal awards
must be retained for audit in accordance
with the records retention requirements con-
tained in subpart D of this part.

6. Appeals
If a dispute arises in the negotiation of a
plan between the cognizant agency for indi-
rect costs and the governmental unit, the
dispute must be resolved in accordance with
the appeals procedures of the cognizant
agency for indirect costs.

7. OMB Assistance
To the extent that problems are encoun-
tered among the Federal agencies or govern-
mental units in connection with the negotia-
tion and approval process, OMB will lend as-
sistance, as required, to resolve such prob-
lems in a timely manner.
[78 FR 78608, Dec. 26, 2013, as amended at 80
FR 54410, Sept. 10, 2015; 85 FR 49581, Aug. 13,
2020]
APPENDIX VI TO PART 200 —PUBLIC

ASSISTANCE COST ALLOCATION PLANS
A. GENERAL
Federally -financed programs administered
by state public assistance agencies are fund-
ed predominately by the Department of
Health and Human Services (HHS). In sup-
port of its stewardship requirements, HHS
has published requirements for the develop-
ment, documentation, submission, negotia-
tion, and approval of public assistance cost
allocation plans in Subpart E of 45 CFR Part

95. All administrative costs (direct and indi-
Pt. 200, App. VI
rect) are normally charged to Federal awards
by implementing the public assistance cost
allocation plan. This Appendix extends these
requirements to all Federal awarding agen-
cies whose programs are administered by a
state public assistance agency. Major feder-
ally -financed programs typically adminis-
tered by state public assistance agencies in-
clude: Temporary Aid to Needy Families
(TANF), Medicaid, Food Stamps, Child Sup-
port Enforcement, Adoption Assistance and
Foster Care, and Social Services Block
Grant.

B. DEFINITIONS

1. State public assistance agency means a
state agency administering or supervising
the administration of one or more public as-
sistance programs operated by the state as
identified in Subpart E of 45 CFR Part 95.

For the purpose of this Appendix, these pro-
grams include all programs administered by
the state public assistance agency.

2. State public assistance agency costs means
all costs incurred by, or allocable to, the
state public assistance agency, except ex-
penditures for financial assistance, medical
contractor payments, food stamps, and pay-
ments for services and goods provided di-
rectly to program recipients.

C. POLICY
State public assistance agencies will de-
velop, document and implement, and the
Federal Government will review, negotiate,
and approve, public assistance cost alloca-
tion plans in accordance with Subpart E of 45
CFR Part 95. The plan will include all pro-
grams administered by the state public as-
sistance agency. Where a letter of approval
or disapproval is transmitted to a state pub-
lic assistance agency in accordance with
Subpart E, the letter will apply to all Fed-
eral agencies and programs. The remaining
sections of this Appendix (except for the re-
quirement for certification) summarize the
provisions of Subpart E of 45 CFR Part 95.

D. SUBMISSION, DOCUMENTATION, AND AP-

PROVAL OF PUBLIC ASSISTANCE COST ALLO-

CATION PLANS

1. State public assistance agencies are re-
quired to promptly submit amendments to
the cost allocation plan to HHS for review
and approval.

2. Under the coordination process outlined
in section E, affected Federal agencies will
review all new plans and plan amendments
and provide comments, as appropriate, to
HHS. The effective date of the plan or plan
amendment will be the first day of the cal-
endar quarter following the event that re-
quired the amendment, unless another date
is specifically approved by HHS. HHS, as the
cognizant agency for indirect costs acting on
behalf of all affected Federal agencies, will,
239

Pt. 200, App. VII
as necessary, conduct negotiations with the
state public assistance agency and will in-
form the state agency of the action taken on
the plan or plan amendment.

E. REVIEW OF IMPLEMENTATION OF APPROVED
PLANS

1. Since public assistance cost allocation
plans are of a narrative nature, the review
during the plan approval process consists of
evaluating the appropriateness of the pro-
posed groupings of costs (cost centers) and
the related allocation bases. As such, the
Federal Government needs some assurance
that the cost allocation plan has been imple-
mented as approved. This is accomplished by
reviews by the Federal awarding agencies,
single audits, or audits conducted by the
cognizant agency for indirect costs.

2. Where inappropriate charges affecting
more than one Federal awarding agency are
identified, the cognizant HHS cost negotia-
tion office will be advised and will take the
lead in resolving the issue(s) as provided for
in Subpart E of 45 CFR Part 95.

3. If a dispute arises in the negotiation of
a plan or from a disallowance involving two
or more Federal awarding agencies, the dis-
pute must be resolved in accordance with the
appeals procedures set out in 45 CFR Part 16.

Disputes involving only one Federal award-
ing agency will be resolved in accordance
with the Federal awarding agency's appeal
process.

4. To the extent that problems are encoun-
tered among the Federal awarding agencies
or governmental units in connection with
the negotiation and approval process, the Of-
fice of Management and Budget will lend as-
sistance, as required, to resolve such prob-
lems in a timely manner.

F. UNALLOWABLE COSTS
Claims developed under approved cost allo-
cation plans will be based on allowable costs
as identified in this Part. Where unallowable
costs have been claimed and reimbursed,
they will be refunded to the program that re-
imbursed the unallowable cost using one of
the following methods: (a) a cash refund, (b)
offset to a subsequent claim, or (c) credits to
the amounts charged to individual Federal
awards. Cash refunds, offsets, and credits
may include at the option of the cognizant
agency for indirect cost, earned or imputed
interest from the date of expenditure and de-
linquent debt interest, if applicable, charge-
able in accordance with applicable cognizant
agency for indirect cost claims collection
regulations.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49581, Aug. 13, 2020]
2 CFR Ch. II (1-1-21 Edition)
APPENDIX VII TO PART 200 —STATES AND

LOCAL GOVERNMENT AND INDIAN

TRIBE INDIRECT COST PROPOSALS
A. GENERAL

1. Indirect costs are those that have been
incurred for common or joint purposes.

These costs benefit more than one cost ob-
jective and cannot be readily identified with
a particular final cost objective without ef-
fort disproportionate to the results achieved.

After direct costs have been determined and
assigned directly to Federal awards and
other activities as appropriate, indirect costs
are those remaining to be allocated to bene-
fitted cost objectives. A cost may not be al-
located to a Federal award as an indirect
cost if any other cost incurred for the same
purpose, in like circumstances, has been as-
signed to a Federal award as a direct cost.

2. Indirect costs include (a) the indirect
costs originating in each department or
agency of the governmental unit carrying
out Federal awards and (b) the costs of cen-
tral governmental services distributed
through the central service cost allocation
plan (as described in Appendix V to this part)
and not otherwise treated as direct costs.

3. Indirect costs are normally charged to
Federal awards by the use of an indirect cost
rate. A separate indirect cost rate(s) is usu-
ally necessary for each department or agen-
cy of the governmental unit claiming indi-
rect costs under Federal awards. Guidelines
and illustrations of indirect cost proposals
are provided in a brochure published by the
Department of Health and Human Services
entitled "A Guide for States and Local Govern-
ment Agencies: Cost Principles and Procedures
for Establishing Cost Allocation Plans and Indi-
rect Cost Rates for Grants and Contracts with
the Federal Government." A copy of this bro-
chure may be obtained from HHS Cost Allo-
cation Services or at their website.

4. Because of the diverse characteristics
and accounting practices of governmental
units, the types of costs which may be classi-
fied as indirect costs cannot be specified in
all situations. However, typical examples of
indirect costs may include certain state/
local -wide central service costs, general ad-
ministration of the non -Federal entity ac-
counting and personnel services performed
within the non -Federal entity, depreciation
on buildings and equipment, the costs of op-
erating and maintaining facilities.

5. This Appendix does not apply to state
public assistance agencies. These agencies
should refer instead to Appendix VI to this
part.

B. DEFINITIONS

1. Base means the accumulated direct costs
(normally either total direct salaries and
wages or total direct costs exclusive of any
extraordinary or distorting expenditures)
240

OMB Guidance
used to distribute indirect costs to indi-
vidual Federal awards. The direct cost base
selected should result in each Federal award
bearing a fair share of the indirect costs in
reasonable relation to the benefits received
from the costs.

2. Base period for the allocation of indirect
costs is the period in which such costs are in-
curred and accumulated for allocation to ac-
tivities performed in that period. The base
period normally should coincide with the
governmental unit's fiscal year, but in any
event, must be so selected as to avoid inequi-
ties in the allocation of costs.

3. Cognizant agency for indirect costs means
the Federal agency responsible for reviewing
and approving the governmental unit's indi-
rect cost rate(s) on the behalf of the Federal
Government. The cognizant agency for indi-
rect costs assignment is described in Appen-
dix V, section F.

4. Final rate means an indirect cost rate ap-
plicable to a specified past period which is
based on the actual allowable costs of the pe-
riod. A final audited rate is not subject to
adjustment.

5. Fixed rate means an indirect cost rate
which has the same characteristics as a pre-
determined rate, except that the difference
between the estimated costs and the actual,
allowable costs of the period covered by the
rate is carried forward as an adjustment to
the rate computation of a subsequent period.

6. Indirect cost pool is the accumulated
costs that jointly benefit two or more pro-
grams or other cost objectives.

7. Indirect cost rate is a device for deter-
mining in a reasonable manner the propor-
tion of indirect costs each program should
bear. It is the ratio (expressed as a percent-
age) of the indirect costs to a direct cost
base.

8. Indirect cost rate proposal means the doc-
umentation prepared by a governmental unit
or subdivision thereof to substantiate its re-
quest for the establishment of an indirect
cost rate.

9. Predetermined rate means an indirect cost
rate, applicable to a specified current or fu-
ture period, usually the governmental unit's
fiscal year. This rate is based on an estimate
of the costs to be incurred during the period.

Except under very unusual circumstances, a
predetermined rate is not subject to adjust-
ment. (Because of legal constraints, pre-
determined rates are not permitted for Fed-
eral contracts; they may, however, be used
for grants or cooperative agreements.) Pre-
determined rates may not be used by govern-
mental units that have not submitted and
negotiated the rate with the cognizant agen-
cy for indirect costs. In view of the potential
advantages offered by this procedure, nego-
tiation of predetermined rates for indirect
costs for a period of two to four years should
be the norm in those situations where the
cost experience and other pertinent facts
Pt. 200, App. VII
available are deemed sufficient to enable the
parties involved to reach an informed judg-
ment as to the probable level of indirect
costs during the ensuing accounting periods.

10. Provisional rate means a temporary indi-
rect cost rate applicable to a specified period
which is used for funding, interim reimburse-
ment, and reporting indirect costs on Fed-
eral awards pending the establishment of a
"final" rate for that period.

C. ALLOCATION OF INDIRECT COSTS AND

DETERMINATION OF INDIRECT COST RATES

1. General
a. Where a governmental unit's depart-
ment or agency has only one major function,
or where all its major functions benefit from
the indirect costs to approximately the same
degree, the allocation of indirect costs and
the computation of an indirect cost rate may
be accomplished through simplified alloca-
tion procedures as described in subsection 2.
b. Where a governmental unit's depart-
ment or agency has several major functions
which benefit from its indirect costs in vary-
ing degrees, the allocation of indirect costs
may require the accumulation of such costs
into separate cost groupings which then are
allocated individually to benefitted func-
tions by means of a base which best meas-
ures the relative degree of benefit. The indi-
rect costs allocated to each function are
then distributed to individual Federal
awards and other activities included in that
function by means of an indirect cost rate(s).
c. Specific methods for allocating indirect
costs and computing indirect cost rates
along with the conditions under which each
method should be used are described in sub-
sections 2, 3 and 4.

2. Simplified Method
a. Where a non -Federal entity's major
functions benefit from its indirect costs to
approximately the same degree, the alloca-
tion of indirect costs may be accomplished
by (1) classifying the non -Federal entity's
total costs for the base period as either di-
rect or indirect, and (2) dividing the total al-
lowable indirect costs (net of applicable
credits) by an equitable distribution base.

The result of this process is an indirect cost
rate which is used to distribute indirect
costs to individual Federal awards. The rate
should be expressed as the percentage which
the total amount of allowable indirect costs
bears to the base selected. This method
should also be used where a governmental
unit's department or agency has only one
major function encompassing a number of in-
dividual projects or activities, and may be
used where the level of Federal awards to
that department or agency is relatively
small.
b. Both the direct costs and the indirect
costs must exclude capital expenditures and
241

Pt. 200, App. VII
unallowable costs. However, unallowable
costs must be included in the direct costs if
they represent activities to which indirect
costs are properly allocable.
c. The distribution base may be (1) total di-
rect costs (excluding capital expenditures
and other distorting items, such as pass -
through funds, subcontracts in excess of
$25,000, participant support costs, etc.), (2)
direct salaries and wages, or (3) another base
which results in an equitable distribution.

3. Multiple Allocation Base Method
a. Where a non -Federal entity's indirect
costs benefit its major functions in varying
degrees, such costs must be accumulated
into separate cost groupings. Each grouping
must then be allocated individually to bene-
fitted functions by means of a base which
best measures the relative benefits.
b. The cost groupings should be established
so as to permit the allocation of each group-
ing on the basis of benefits provided to the
major functions. Each grouping should con-
stitute a pool of expenses that are of like
character in terms of the functions they ben-
efit and in terms of the allocation base
which best measures the relative benefits
provided to each function. The number of
separate groupings should be held within
practical limits, taking into consideration
the materiality of the amounts involved and
the degree of precision needed.
c. Actual conditions must be taken into ac-
count in selecting the base to be used in allo-
cating the expenses in each grouping to ben-
efitted functions. When an allocation can be
made by assignment of a cost grouping di-
rectly to the function benefitted, the alloca-
tion must be made in that manner. When the
expenses in a grouping are more general in
nature, the allocation should be made
through the use of a selected base which pro-
duces results that are equitable to both the
Federal Government and the governmental
unit. In general, any cost element or related
factor associated with the governmental
unit's activities is potentially adaptable for
use as an allocation base provided that: (1) it
can readily be expressed in terms of dollars
or other quantitative measures (total direct
costs, direct salaries and wages, staff hours
applied, square feet used, hours of usage,
number of documents processed, population
served, and the like), and (2) it is common to
the benefitted functions during the base pe-
riod.
d. Except where a special indirect cost
rate(s) is required in accordance with para-
graph (C)(4) of this Appendix, the separate
groupings of indirect costs allocated to each
major function must be aggregated and
treated as a common pool for that function.

The costs in the common pool must then be
distributed to individual Federal awards in-
cluded in that function by use of a single in-
direct cost rate.
2 CFR Ch. II (1-1-21 Edition)
e. The distribution base used in computing
the indirect cost rate for each function may
be (1) total direct costs (excluding capital ex-
penditures and other distorting items such
as pass -through funds, subawards in excess of
$25,000, participant support costs, etc.), (2)
direct salaries and wages, or (3) another base
which results in an equitable distribution.

An indirect cost rate should be developed for
each separate indirect cost pool developed.

The rate in each case should be stated as the
percentage relationship between the par-
ticular indirect cost pool and the distribu-
tion base identified with that pool.

4. Special Indirect Cost Rates
a. In some instances, a single indirect cost
rate for all activities of a non -Federal entity
or for each major function of the agency may
not be appropriate. It may not take into ac-
count those different factors which may sub-
stantially affect the indirect costs applicable
to a particular program or group of pro-
grams. The factors may include the physical
location of the work, the level of administra-
tive support required, the nature of the fa-
cilities or other resources employed, the or-
ganizational arrangements used, or any com-
bination thereof. When a particular Federal
award is carried out in an environment
which appears to generate a significantly
different level of indirect costs, provisions
should be made for a separate indirect cost
pool applicable to that Federal award. The
separate indirect cost pool should be devel-
oped during the course of the regular alloca-
tion process, and the separate indirect cost
rate resulting therefrom should be used, pro-
vided that: (1) The rate differs significantly
from the rate which would have been devel-
oped under paragraphs (C)(2) and (C)(3) of
this Appendix, and (2) the Federal award to
which the rate would apply is material in
amount.
b. Where Federal statutes restrict the re-
imbursement of certain indirect costs, it
may be necessary to develop a special rate
for the affected Federal award. Where a "re-
stricted rate" is required, the same proce-
dure for developing a non -restricted rate will
be used except for the additional step of the
elimination from the indirect cost pool those
costs for which the law prohibits reimburse-
ment.

D. SUBMISSION AND DOCUMENTATION OF

PROPOSALS

1. Submission of Indirect Cost Rate Proposals
a. All departments or agencies of the gov-
ernmental unit desiring to claim indirect
costs under Federal awards must prepare an
indirect cost rate proposal and related docu-
mentation to support those costs. The pro-
posal and related documentation must be re-
tained for audit in accordance with the
242

OMB Guidance
records retention requirements contained in
§200.334.
b. A governmental department or agency
unit that receives more than $35 million in
direct Federal funding must submit its indi-
rect cost rate proposal to its cognizant agen-
cy for indirect costs. Other governmental de-
partment or agency must develop an indirect
cost proposal in accordance with the require-
ments of this Part and maintain the proposal
and related supporting documentation for
audit. These governmental departments or
agencies are not required to submit their
proposals unless they are specifically re-
quested to do so by the cognizant agency for
indirect costs. Where a non -Federal entity
only receives funds as a subrecipient, the
pass -through entity will be responsible for
negotiating and/or monitoring the subrecipi-
ent's indirect costs.
c. Each Indian tribal government desiring
reimbursement of indirect costs must submit
its indirect cost proposal to the Department
of the Interior (its cognizant agency for indi-
rect costs).
d. Indirect cost proposals must be devel-
oped (and, when required, submitted) within
six months after the close of the govern-
mental unit's fiscal year, unless an exception
is approved by the cognizant agency for indi-
rect costs. If the proposed central service
cost allocation plan for the same period has
not been approved by that time, the indirect
cost proposal may be prepared including an
amount for central services that is based on
the latest federally -approved central service
cost allocation plan. The difference between
these central service amounts and the
amounts ultimately approved will be com-
pensated for by an adjustment in a subse-
quent period.

2. Documentation of Proposals
The following must be included with each
indirect cost proposal:
a. The rates proposed, including subsidiary
work sheets and other relevant data, cross
referenced and reconciled to the financial
data noted in subsection b. Allocated central
service costs will be supported by the sum-
mary table included in the approved central
service cost allocation plan. This summary
table is not required to be submitted with
the indirect cost proposal if the central serv-
ice cost allocation plan for the same fiscal
year has been approved by the cognizant
agency for indirect costs and is available to
the funding agency.
b. A copy of the financial data (financial
statements, comprehensive annual financial
report, executive budgets, accounting re-
ports, etc.) upon which the rate is based. Ad-
justments resulting from the use of
unaudited data will be recognized, where ap-
propriate, by the Federal cognizant agency
for indirect costs in a subsequent proposal.

Pt. 200, App. VII
c. The approximate amount of direct base
costs incurred under Federal awards. These
costs should be broken out between salaries
and wages and other direct costs.
d. A chart showing the organizational
structure of the agency during the period for
which the proposal applies, along with a
functional statement(s) noting the duties
and/or responsibilities of all units that com-
prise the agency. (Once this is submitted,
only revisions need be submitted with subse-
quent proposals.)

3. Required certification.

Each indirect cost rate proposal must be
accompanied by a certification in the fol-
lowing form:

CERTIFICATE OF INDIRECT COSTS
This is to certify that I have reviewed the
indirect cost rate proposal submitted here-
with and to the best of my knowledge and
belief:
(1) All costs included in this proposal [iden-
tify date] to establish billing or final indi-
rect costs rates for [identify period covered
by rate] are allowable in accordance with the
requirements of the Federal award(s) to
which they apply and the provisions of this
Part. Unallowable costs have been adjusted
for in allocating costs as indicated in the in-
direct cost proposal
(2) All costs included in this proposal are
properly allocable to Federal awards on the
basis of a beneficial or causal relationship
between the expenses incurred and the agree-
ments to which they are allocated in accord-
ance with applicable requirements. Further,
the same costs that have been treated as in-
direct costs have not been claimed as direct
costs. Similar types of costs have been ac-
counted for consistently and the Federal
Government will be notified of any account-
ing changes that would affect the predeter-
mined rate.

I declare that the foregoing is true and cor-
rect.

Governmental Unit:

Signature:

Name of Official:

Title:

Date of Execution:

E. NEGOTIATION AND APPROVAL OF RATES

1. Indirect cost rates will be reviewed, ne-
gotiated, and approved by the cognizant
agency on a timely basis. Once a rate has
been agreed upon, it will be accepted and
used by all Federal agencies unless prohib-
ited or limited by statute. Where a Federal
awarding agency has reason to believe that
special operating factors affecting its Fed-
eral awards necessitate special indirect cost
rates, the funding agency will, prior to the
time the rates are negotiated, notify the cog-
nizant agency for indirect costs.
243

Pt. 200, App. VIII

2. The use of predetermined rates, if al-
lowed, is encouraged where the cognizant
agency for indirect costs has reasonable as-
surance based on past experience and reli-
able projection of the non -Federal entity's
costs, that the rate is not likely to exceed a
rate based on actual costs. Long-term agree-
ments utilizing predetermined rates extend-
ing over two or more years are encouraged,
where appropriate.

3. The results of each negotiation must be
formalized in a written agreement between
the cognizant agency for indirect costs and
the governmental unit. This agreement will
be subject to re -opening if the agreement is
subsequently found to violate a statute, or
the information upon which the plan was ne-
gotiated is later found to be materially in-
complete or inaccurate. The agreed upon
rates must be made available to all Federal
agencies for their use.

4. Refunds must be made if proposals are
later found to have included costs that (a)
are unallowable (i) as specified by law or reg-
ulation, (ii) as identified in § 200.420, or (iii)
by the terms and conditions of Federal
awards, or (b) are unallowable because they
are clearly not allocable to Federal awards.

These adjustments or refunds will be made
regardless of the type of rate negotiated
(predetermined, final, fixed, or provisional).

F. OTHER POLICIES

1. Fringe Benefit Rates
If overall fringe benefit rates are not ap-
proved for the governmental unit as part of
the central service cost allocation plan,
these rates will be reviewed, negotiated and
approved for individual recipient agencies
during the indirect cost negotiation process.

In these cases, a proposed fringe benefit rate
computation should accompany the indirect
cost proposal. If fringe benefit rates are not
used at the recipient agency level (i.e., the
agency specifically identifies fringe benefit
costs to individual employees), the govern-
mental unit should so advise the cognizant
agency for indirect costs.

2. Billed Services Provided by the Recipient
Agency
In some cases, governmental departments
or agencies (components of the govern-
mental unit) provide and bill for services
similar to those covered by central service
cost allocation plans (e.g., computer cen-
ters). Where this occurs, the governmental
departments or agencies (components of the
governmental unit)should be guided by the
requirements in Appendix V relating to the
development of billing rates and documenta-
tion requirements, and should advise the
cognizant agency for indirect costs of any
billed services. Reviews of these types of
services (including reviews of costing/billing
methodology, profits or losses, etc.) will be
2 CFR Ch. II (1-1-21 Edition)
made on a case -by -case basis as warranted by
the circumstances involved.

3. Indirect Cost Allocations Not Using Rates
In certain situations, governmental de-
partments or agencies (components of the
governmental unit), because of the nature of
their Federal awards, may be required to de-
velop a cost allocation plan that distributes
indirect (and, in some cases, direct) costs to
the specific funding sources. In these cases, a
narrative cost allocation methodology
should be developed, documented, main-
tained for audit, or submitted, as appro-
priate, to the cognizant agency for indirect
costs for review, negotiation, and approval.

4. Appeals
If a dispute arises in a negotiation of an in-
direct cost rate (or other rate) between the
cognizant agency for indirect costs and the
governmental unit, the dispute must be re-
solved in accordance with the appeals proce-
dures of the cognizant agency for indirect
costs.

5. Collection of Unallowable Costs and
Erroneous Payments
Costs specifically identified as unallowable
and charged to Federal awards either di-
rectly or indirectly will be refunded (includ-
ing interest chargeable in accordance with
applicable Federal cognizant agency for indi-
rect costs regulations).

6. OMB Assistance
To the extent that problems are encoun-
tered among the Federal agencies or govern-
mental units in connection with the negotia-
tion and approval process, OMB will lend as-
sistance, as required, to resolve such prob-
lems in a timely manner.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75889, Dec. 19, 2014; 85 FR 49581, Aug. 13,
2020]
APPENDIX VIII TO PART 200— NON-

PROFIT ORGANIZATIONS EXEMPTED
FROM SUBPART E OF PART 200

1. Advance Technology Institute (ATI),
Charleston, South Carolina

2. Aerospace Corporation, El Segundo, Cali-
fornia

3. American Institutes of Research (AIR),
Washington, DC

4. Argonne National Laboratory, Chicago, Il-
linois

5. Atomic Casualty Commission, Wash-
ington, DC

6. Battelle Memorial Institute,
Headquartered in Columbus, Ohio

7. Brookhaven National Laboratory, Upton,
New York
244

OMB Guidance Pt. 200, App. XII

8. Charles Stark Draper Laboratory, Incor-
porated, Cambridge, Massachusetts

9. CNA Corporation (CNAC), Alexandria, Vir-
ginia

10. Environmental Institute of Michigan,
Ann Arbor, Michigan

11. Georgia Institute of Technology/Georgia
Tech Applied Research Corporation/Geor-
gia Tech Research Institute, Atlanta,
Georgia

12. Hanford Environmental Health Founda-
tion, Richland, Washington

13. IIT Research Institute, Chicago, Illinois

14. Institute of Gas Technology, Chicago, Il-
linois

15. Institute for Defense Analysis, Alexan-
dria, Virginia

16. LMI, McLean, Virginia

17. Mitre Corporation, Bedford, Massachu-
setts

18. Noblis, Inc., Falls Church, Virginia

19. National Radiological Astronomy Observ-
atory, Green Bank, West Virginia

20. National Renewable Energy Laboratory,
Golden, Colorado

21. Oak Ridge Associated Universities, Oak
Ridge, Tennessee

22. Rand Corporation, Santa Monica, Cali-
fornia

23. Research Triangle Institute, Research
Triangle Park, North Carolina

24. Riverside Research Institute, New York,
New York

25. South Carolina Research Authority
(SCRA), Charleston, South Carolina

26. Southern Research Institute, Bir-
mingham, Alabama

27. Southwest Research Institute, San Anto-
nio, Texas

28. SRI International, Menlo Park, California

29. Syracuse Research Corporation, Syra-
cuse, New York

30. Universities Research Association, Incor-
porated (National Acceleration Lab), Ar-
gonne, Illinois

31. Urban Institute, Washington DC

32. Nonprofit insurance companies, such as
Blue Cross and Blue Shield Organizations

33. Other nonprofit organizations as nego-
tiated with Federal awarding agencies
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49582, Aug. 13, 2020]
APPENDIX IX TO PART 200 —HOSPITAL

COST PRINCIPLES
Based on initial feedback, OMB proposes to
establish a review process to consider exist-
ing hospital cost determine how best to up-
date and align them with this Part. Until
such time as revised guidance is proposed
and implemented for hospitals, the existing
principles located at 45 CFR Part 75 Appen-
dix E, entitled "Principles for Determining
Cost Applicable to Research and Develop-
ment Under Grants and Contracts with Hos-
pitals," remain in effect.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75889, Dec. 19, 2014]
APPENDIX X TO PART 200 —DATA

COLLECTION FORM (FORM SF -SAC)
The Data Collection Form SF -SAC is
available on the FAC Web site.

APPENDIX XI TO PART 200 —COMPLIANCE

SUPPLEMENT
The compliance supplement is available on
the OMB website.
[85 FR 49582, Aug. 13, 2020]
APPENDIX XII TO PART 200 —AWARD

TERM AND CONDITION FOR RECIPIENT

INTEGRITY AND PERFORMANCE MAT-
TERS
A. REPORTING OF MATTERS RELATED TO

RECIPIENT INTEGRITY AND PERFORMANCE

1. General Reporting Requirement
If the total value of your currently active
grants, cooperative agreements, and procure-
ment contracts from all Federal awarding
agencies exceeds $10,000,000 for any period of
time during the period of performance of this
Federal award, then you as the recipient dur-
ing that period of time must maintain the
currency of information reported to the Sys-
tem for Award Management (SAM) that is
made available in the designated integrity
and performance system (currently the Fed-
eral Awardee Performance and Integrity In-
formation System (FAPIIS)) about civil,
criminal, or administrative proceedings de-
scribed in paragraph 2 of this award term
and condition. This is a statutory require-
ment under section 872 of Public Law 110-417,
as amended (41 U.S.C. 2313). As required by
section 3010 of Public Law 111-212, all infor-
mation posted in the designated integrity
and performance system on or after April 15,
2011, except past performance reviews re-
quired for Federal procurement contracts,
will be publicly available.

2. Proceedings About Which You Must Report
Submit the information required about
each proceeding that:
a. Is in connection with the award or per-
formance of a grant, cooperative agreement,
or procurement contract from the Federal
Government;
b. Reached its final disposition during the
most recent five-year period; and
c. Is one of the following:
(1) A criminal proceeding that resulted in a
conviction, as defined in paragraph 5 of this
award term and condition;
245

Pt. 200, App. XII
(2) A civil proceeding that resulted in a
finding of fault and liability and payment of
a monetary fine, penalty, reimbursement,
restitution, or damages of $5,000 or more;
(3) An administrative proceeding, as de-
fined in paragraph 5. of this award term and
condition, that resulted in a finding of fault
and liability and your payment of either a
monetary fine or penalty of $5,000 or more or
reimbursement, restitution, or damages in
excess of $100,000; or
(4) Any other criminal, civil, or adminis-
trative proceeding if:
(i) It could have led to an outcome de-
scribed in paragraph 2.c.(1), (2), or (3) of this
award term and condition;
(ii) It had a different disposition arrived at
by consent or compromise with an acknowl-
edgment of fault on your part; and
(iii) The requirement in this award term
and condition to disclose information about
the proceeding does not conflict with appli-
cable laws and regulations.

3. Reporting Procedures
Enter in the SAM Entity Management area
the information that SAM requires about
each proceeding described in paragraph 2 of
this award term and condition. You do not
need to submit the information a second
time under assistance awards that you re-
ceived if you already provided the informa-
tion through SAM because you were required
to do so under Federal procurement con-
tracts that you were awarded.

4. Reporting Frequency
During any period of time when you are
subject to the requirement in paragraph 1 of
this award term and condition, you must re-
port proceedings information through SAM
for the most recent five year period, either
to report new information about any pro-
ceeding(s) that you have not reported pre-
viously or affirm that there is no new infor-
2 CFR Ch. II (1-1-21 Edition)
mation to report. Recipients that have Fed-
eral contract, grant, and cooperative agree-
ment awards with a cumulative total value
greater than $10,000,000 must disclose semi-
annually any information about the crimi-
nal, civil, and administrative proceedings.

5. Definitions
For purposes of this award term and condi-
tion:
a. Administrative proceeding means a non -
judicial process that is adjudicatory in na-
ture in order to make a determination of
fault or liability (e.g., Securities and Ex-
change Commission Administrative pro-
ceedings, Civilian Board of Contract Appeals
proceedings, and Armed Services Board of
Contract Appeals proceedings). This includes
proceedings at the Federal and State level
but only in connection with performance of a
Federal contract or grant. It does not in-
clude audits, site visits, corrective plans, or
inspection of deliverables.
b. Conviction, for purposes of this award
term and condition, means a judgment or
conviction of a criminal offense by any court
of competent jurisdiction, whether entered
upon a verdict or a plea, and includes a con-
viction entered upon a plea of nolo
contendere.
c. Total value of currently active grants,
cooperative agreements, and procurement
contracts includes —
(1) Only the Federal share of the funding
under any Federal award with a recipient
cost share or match; and
(2) The value of all expected funding incre-
ments under a Federal award and options,
even if not yet exercised.

B. [Reserved]
[80 FR 43310, July 22, 2015, as amended at 85
FR 49582, Aug. 13, 2020]
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PARTS 201-299 [RESERVED]

ATTACHMENT C CONTINUED

FEDERAL PROVISIONS
Should funding be allocated through American Rescue Plan Act (ARPA; (Title VI of the Social Security Act Section 602 et seq.), the COUNTY will administer and distribute those funds in accordance with ARPA. ARPA requires that payments from the Coronavirus Fiscal Recovery Fund be used to respond to the public health emergency or its negative economic impacts, to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay, provide government services to the extent the reduction of revenue due to COVID-19 public health emergency, and to make necessary investments in water, sewer or broadband infrastructure. It is effective beginning May 17, 2021 and ends on December 31, 2026.

Subrecipient acknowledges and agrees that this Agreement is subject to the federal requirements, including but not limited to the federal provisions provided below:

1. NON-DISCRIMINATION. Subrecipient shall not be discriminate in the provision of services, allocation of benefits, accommodation in facilities, or employment of personnel on the basis of ethnic group identification, race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status or sex in the performance of this Agreement; and, to the extent they shall be found to be applicable hereto, shall comply with the provisions of the California Fair Employment and Housing Act (Gov. Code 12900 et. seq), the Federal Civil Rights Act of 1964 (P.L. 88-352), the Americans with Disabilities Act of 1990 (42 U.S.C. S1210 et seq.) and all other applicable laws or regulations.

2. EQUAL EMPLOYMENT OPPORTUNITY/ FAIR EMPLOYMENT PRACTICES/ FEDERAL PROVISIONS. During the performance of this Agreement, the Subrecipient shall not deny benefits to any person on the basis of religion, color, ethnic group identification, sex, age, physical or mental disability, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religion, color, national origin, ancestry, physical handicap, mental disability, medical condition, marital status, age, or sex. Subrecipient shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination.

A. Subrecipient shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.), the regulations promulgated thereunder (California Code of Regulations, Title 2, Section 11000 et seq.), the provisions of Executive Order 11246 of Sept. 23, 1965 and of the rules, regulations, and relevant orders of the Secretary of Labor, the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Government Code, Sections 11135-11139.8), and of the rules, regulations or standards adopted by the County to implement such article.

B. The Subrecipient shall comply with the provisions of the Copeland "Anti -Kickback" Act, 18 U.S.C. § 874, 40 U.S.C. § 3145, and the requirements of 29 C.F.R. pt. 3 as may be applicable, which are incorporated by reference into this Agreement.

3. CLEAN AIR ACT. The Subrecipient agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.

The Subrecipient agrees to report each violation to the County and understands and agrees that the County will, in turn, report each violation as required to assure notification to the California 13

Governor's Office of Emergency Services, Federal Emergency Management Agency (FEMA), and the appropriate Environmental Protection Agency Regional Office. The Subrecipient agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.

4. FEDERAL WATER POLLUTION CONTROL ACT
The Subrecipient agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. Sections 1251 et seq.

The Subrecipient agrees to report each violation to the County and understands and agrees that the County will, in turn, report each violation as required to assure notification to the Federal Emergency Management Agency (FEMA), and the appropriate Environmental Protection Agency Regional Office.

The Subrecipient agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.

5. DEBARMENT AND SUSPENSION CLAUSE
This Agreement is a covered transaction for purposes of 2 C.F.R. pt. 180 and 2 C.F.R. pt. 3000. As such the Subrecipient is required to verify that none of the Subrecipient, its principals (defined at 2 C.F.R. § 180.995), or its affiliates (defined at 2 C.F.R. § 180.905) are excluded (defined at 2 C.F.R. § 180.940) or disqualified (defined at 2 C.F.R. § 180.935).

The Subrecipient must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C and must include a requirement to comply with these regulations in any lower tier covered transaction it enters into.

This certification is a material representation of fact relied upon by the County. If it is later determined that the Subrecipient did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, in addition to remedies available to the County, the Federal Government may pursue available remedies, including but not limited to suspension and/or debarment.

The bidder or proposer agrees to comply with the requirements of 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C while this offer is valid and throughout the period of any contract that may arise from this offer. The bidder or proposer further agrees to include a provision requiring such compliance in its lower tier covered transactions.

6. BYRD ANTI- LOBBYING AMENDMENT, 31 U.S.C. § 1352 (AS AMENDED) Subrecipients who apply or bid for an award of $100,000 or more shall file the required certification.

Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, or any other award covered by 31 U.S.C. § 1352.

Each tier shall also disclose any lobbying with non -Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient who in turn will forward the certification(s) to the County.

APPENDIX A, 44 C.F.R. PART 18- CERTIFICATION REGARDING LOBBYING The undersigned [Subrecipient] certifies, to the best of his or her knowledge, that:

A. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection 14

with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

B. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.

C. The undersigned shall require that the language of this certification be included in the award documents for all sub -awards at all tiers (including subcontracts, sub -grants, and contracts under grants, loans, and cooperative agreements) and that all sub -recipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31, U.S.C. § 1352 (as amended by the Lobbying Disclosure Act of 1995). Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

The Subrecipient certifies or affirms the truthfulness and accuracy of each statement of its certification and disclosure, if any. In addition, the Subrecipient understands and agrees that the provisions of 31 U.S.C. § 3801 et seq., apply to this certification and disclosure, if any.

SUBRECIPIENT
By
Date

7. PROCUREMENT OF RECOVERED MATERIALS
In the performance of this Agreement, the Subrecipient shall make maximum use of products containing recovered materials that are EPA -designated items unless the product cannot be acquired A. Competitively within a timeframe providing for compliance with the contract performance schedule;
B. Meeting contract performance requirements; or
C. At a reasonable price.

Information about this requirement, along with the list of EPA -designated items, is available at EPA's Comprehensive Procurement Guidelines web site, https://www.epa.gov/smm/comprehensive- procurement-guideline-cpg-program
The Subrecipient also agrees to comply with all other applicable requirements of Section 6002 of the Solid Waste Disposal Act.

8. ACCESS TO RECORDS
The following access to records requirements apply to this Agreement:

A. The Subrecipient agrees to provide the County, the FEMA Administrator, the Comptroller General of the United States, or any of their authorized representatives access to any books, documents, papers, and records of the Subrecipient which are directly pertinent to this Agreement for the purposes of making audits, examinations, excerpts, and transcriptions B. The Subrecipient agrees to permit any of the foregoing parties to reproduce by any means whatsoever or to copy excerpts and transcriptions as reasonably needed. 15

C. The Subrecipient agrees to provide the FEMA Administrator or his or her authorized representatives access to construction or other work sites pertaining to the work being completed under the contract.

D. In compliance with the Disaster Recovery Act of 2018, the County and the Subrecipient acknowledge and agree that no language in this contract is intended to prohibit audits or internal reviews by the FEMA Administrator or the Comptroller General of the United States.

9. DEPARTMENT OF HOMELAND SECURITY SEAL, LOGO, FLAGS
The Subrecipient shall not use the DHS seal(s), logos, crests, or reproductions of flags or likenesses of DHS agency officials without specific FEMA pre -approval.

10. COMPLIANCE WITH FEDERAL LAW, REGULATIONS, AND EXECUTIVE ORDERS This is an acknowledgement that FEMA financial assistance will be used to fund all or a portion of the contract. The Subrecipient will comply with all applicable Federal law, regulations, executive orders, FEMA policies, procedures, and directives.

11. NO OBLIGATION BY FEDERAL GOVERNMENT
The Federal Government is not a party to this Agreement and is not subject to any obligations or liabilities to the non -Federal entity, contractor, or any other party pertaining to any matter resulting from the contract.

12. PROGRAM FRAUD AND FALSE OR FRAUDULENT STATEMENTS OR RELATED ACTS
The Subrecipient acknowledges that 31 U.S.C. Chapter 38 (Administrative Remedies for False Claims and Statements) applies to the Subrecipient's actions pertaining to this Agreement.

13. FEDERAL PREVAILING WAGE
DAVIS-BACON ACT COMPLIANCE (applicable to construction contracts in excess of $2,000 awarded by grantees and subgrantees when required by Federal grant program legislation) To the extent required by any Federal grant programs applicable to expected funding or reimbursement expenses incurred in connection with the services provided under this Agreement, Subrecipient agrees to comply with the Davis -Bacon Act (40 U.S.C. §§ 3141-3144 and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5) as set forth below.

A. The Subrecipient shall be bound to the provisions of the Davis -Bacon Act, and agrees to be bound by all the provisions of Labor Code section 1771 regarding prevailing wages. All labor on this project shall be paid neither less than the greater of the minimum wage rates established by the U.S. Secretary of Labor (Federal Wage Rates), or by the State of California Director of Department of Industrial Relations (State Wage Rates). Current DIR requirements may be found at http://www.dir.ca.gov/lcp.asp . Additionally, wages are required to be paid not less than once a week.

B. The general prevailing wage rates may be accessed at the Department of Labor Home Page at www.wdol.gov . Under the Davis Bacon heading, click on "Selecting DBA WDs." In the drop down menu 16

for State, select, "California." In the drop down menu for County, select "Riverside." In the drop down menu for Construction Type, make the appropriate selection. Then, click Search.

The Federal minimum wage rates for this project are predetermined by the United States Secretary of Labor. If there is a difference between the minimum wage rates predetermined by the Secretary of Labor and the general prevailing wage rates determined by the Director of the California DIR for similar classifications of labor, the Subrecipient and subcontractors shall pay not less than the higher wage rate. The County will not accept lower State wage rates not specifically included in the Federal minimum wage determinations. This includes "helper" (or other classifications based on hours of experience) or any other classification not appearing in the Federal wage determinations. Where Federal wage determinations do not contain the State wage rate determination otherwise available for use by the Subrecipient and subcontractors, the Subrecipient and subcontractors shall pay not less than the Federal minimum wage rate which most closely approximates the duties of the employees in question.

14. CONTRACT WORK HOURS AND SAFETY STANDARDS (applicable to all contracts in excess of $100,000 that involve the employment of mechanics or laborers, but not to purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence)
A. Compliance: Subrecipient agrees that it shall comply with Sections 3702 and 3704 of the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 3701-3708) as supplemented by Department of Labor regulations (29 CFR Part 5), which are incorporated herein.

B. Overtime: No contractor or subcontractor contracting for any part of the work under this Agreement which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.

C. Violation; liability for unpaid wages; liquidated damages: In the event of any violation of the provisions of paragraph B of this section, the Subrecipient and any subcontractor responsible therefore shall be liable for the unpaid wages. In addition, such Subrecipient and subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph B, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by paragraph B.

D. Withholding for unpaid wages and liquidated damages: Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally - assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set for in paragraph C of this section.

E. Subcontracts: The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraphs A through D of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs A through D of this section.
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15. RIGHTS TO INVENTIONS MADE UNDER A CONTRACT OR AGREEMENT— Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued by HUD.

16. RIGHTS TO DATA AND COPYRIGHTS — Subrecipients and consultants agree to comply with all applicable provisions pertaining to the use of data and copyrights pursuant to 48 CFR Part 27.4, Federal Acquisition Regulations (FAR).

17. PROHIBITION ON CONTRACTING FOR COVERED TELECOMMUNICATIONS

EQUIPMENT OR SERVICES
A. Definitions. As used in this clause, the terms backhaul; covered foreign country; covered telecommunications equipment or services; interconnection arrangements; roaming; substantial or essential component; and telecommunications equipment or services have the meaning as defined in FEMA Policy, #405-143-1 Prohibitions on Expending FEMA Award Funds for Covered Telecommunications Equipment or Services As used in this clause — B. Prohibitions.
(1) Section 889(b) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232, and 2 C.F.R. § 200.216 prohibit the head of an executive agency on or after Aug.13, 2020, from obligating or expending grant, cooperative agreement, loan, or loan guarantee funds on certain telecommunications products or from certain entities for national security reasons.
(2) Unless an exception in paragraph (c) of this clause applies, the contractor and its subcontractors may not use grant, cooperative agreement, loan, or loan guarantee funds from the Federal Emergency Management Agency to:
(i) Procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology of any system;
(ii) Enter into, extend, or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology of any system; (iii) Enter into, extend, or renew contracts with entities that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system; or (iv)Provide, as part of its performance of this contract, subcontract, or other contractual instrument, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

C. Exceptions.
(1) This clause does not prohibit contractors from providing — a. A service that connects to the facilities of a third -party, such as backhaul, roaming, or interconnection arrangements; or
b. Telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.
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(2) By necessary implication and regulation, the prohibitions also do not apply to:
a. Covered telecommunications equipment or services that:
i. Are not used as a substantial or essential component of any system; and ii. Are not used as critical technology of any system.
b. Other telecommunications equipment or services that are not considered covered telecommunications equipment or services.

D. Reporting requirement.
(1) In the event the contractor identifies covered telecommunications equipment or services used as a substantial or essential component of any system, or as critical technology as part of any system, during contract performance, or the contractor is notified of such by a subcontractor at any tier or by any other source, the contractor shall report the information in paragraph (d)(2) of this clause to the recipient or subrecipient, unless elsewhere in this contract are established procedures for reporting the information. (2) The Subrecipient shall report the following information pursuant to paragraph (d)(1) of this clause:
(i) Within one business day from the date of such identification or notification:

The contract number; the order number(s), if applicable; supplier name; supplier unique entity identifier (if known); supplier Commercial and Government Entity (CAGE) code (if known); brand; model number (original equipment manufacturer number, manufacturer part number, or wholesaler number); item description; and any readily available information about mitigation actions undertaken or recommended. ii) Within 10 business days of submitting the information in paragraph (d)(2)(i) of this clause: Any further available information about mitigation actions undertaken or recommended. In addition, the contractor shall describe the efforts it undertook to prevent use or submission of covered telecommunications equipment or services, and any additional efforts that will be incorporated to prevent future use or submission of covered telecommunications equipment or services. Page 10
E. Subcontracts. The Subrecipient shall insert the substance of this clause, including this paragraph (e), in all subcontracts and other contractual instruments.

18. REPORTING OF MATTERS RELATED TO RECIPIENT INTEGRITY AND PERFORMANCE A. General Reporting Requirement
If the total value of your currently active grants, cooperative agreements, and procurement contracts from all Federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this Federal award, then you as the recipient during that period of time must maintain the currency of information reported to the System for Award Management (SAM) that is made available in the designated integrity and performance system (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) about civil, criminal, or administrative proceedings described in paragraph 2 of this award term and condition. This is a statutory requirement under section 872 of Public Law 110-417, as amended (41 U.S.C. 2313). As required by section 3010 of Public Law 111- 212, all information posted in the designated integrity and performance system on or after April 15, 2011, except past performance reviews required for Federal procurement contracts, will be publicly available.

B. Proceedings About Which You Must Report
Submit the information required about each proceeding that:
a. Is in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the Federal Government;
b. Reached its final disposition during the most recent five-year period; and 19

c. Is one of the following:
(1) A criminal proceeding that resulted in a conviction, as defined in paragraph 5 of this award term and condition;
(2) A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more; (3) An administrative proceeding, as defined in paragraph 5. of this award term and condition, that resulted in a finding of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement, restitution, or damages in excess of $100,000; or (4) Any other criminal, civil, or administrative proceeding if:
(i) It could have led to an outcome described in paragraph 2.c.(1), (2), or (3) of this award term and condition;
(ii) It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part; and
(iii) The requirement in this award term and condition to disclose information about the proceeding does not conflict with applicable laws and regulations.

C. Reporting Procedures
Enter in the SAM Entity Management area the information that SAM requires about each proceeding described in paragraph 2 of this award term and condition. You do not need to submit the information a second time under assistance awards that you received if you already provided the information through SAM because you were required to do so under Federal procurement contracts that you were awarded.

D. Reporting Frequency
During any period of time when you are subject to the requirement in paragraph 1 of this award term and condition, you must report proceedings information through SAM for the most recent five year period, either to report new information about any proceeding(s) that you have not reported previously or affirm that there is no new information to report. Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 must disclose semiannually any information about the criminal, civil, and administrative proceedings.

E. Definitions
For purposes of this award term and condition:
a. Administrative proceeding means a non judicial process that is adjudicatory in nature in order to make a determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of Contract Appeals proceedings). This includes proceedings at the Federal and State level but only in connection with performance of a Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables.
b. Conviction, for purposes of this award term and condition, means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere. c. Total value of currently active grants, cooperative agreements, and procurement contracts includes - (1) Only the Federal share of the funding under any Federal award with a recipient cost share or match; and
(2) The value of all expected funding increments under a Federal award and options, even if not yet exercised.
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Attachment D — Indemnification and Insurance Requirements

INDEMNIFICATION
A. Basic Indemnity

1. To the fullest extent permitted by applicable law, Subrecipient agrees to indemnify, hold harmless and defend the County of Riverside, its Agencies, Districts, Departments and Special Districts, Board of Supervisors, elected and appointed officials, and each of their respective directors, members officers, employees, agents, volunteers and representatives ("Indemnitees") and each of them from any and all Losses that arise out of or relate to any act or omission constituting ordinary and not professional negligence (including, without limitation, negligent breach of contract), recklessness, or willful misconduct on the part of Subrecipient or its subconsultants or their respective employees, agents, representatives, or independent contractors.

2. "Losses" shall mean any and all economic and non -economic losses, costs, liabilities, claims, damages, actions, judgements, settlements and expenses, including, without limitation, full and actual attorney's fees (including, without limitation, attorney's fees for trial and on appeal), expert and non -expert witness fees, arbitrator and arbitration fees and mediator and mediation fees.

3. Subrecipient further agrees to and shall indemnify and hold harmless the Indemnitees from all liability arising from suits, claims, demands, actions, or proceedings made by agents, employees or subcontractors of Subrecipient for salary, wages, compensation, health benefits, insurance, retirement or any other benefit not explicitly set forth in this Agreement and arising out of work performed for County pursuant to this Agreement. The Indemnitees shall be entitled to the defense and indemnification provided for hereunder regardless of whether the Loss is in part caused or contributed to by the acts or omissions of an Indemnitee or any other person or entity; provided however, that nothing contained herein shall be construed as obligating Subrecipient to indemnify and hold harmless any Indemnitee to the extent not required under the provisions of Paragraph B below.

B. Indemnity for Design Professionals

1. To the fullest extent permitted by Applicable Law, Subrecipient agrees to defend (through legal counsel reasonably acceptable to County), indemnify and hold harmless the Indemnitees, and each of them, against any and all Losses that arise out of, pertain to, or relate to, any negligence, recklessness or willful misconduct constituting professional negligence on the part of Subrecipient or its Subconsultants, or their respective employees, agents, representatives, or independent contractors. The Indemnitees shall be entitled to the defense, and indemnification provided for hereunder regardless of whether the Loss is, in part, caused or contributed to by the acts or omissions of an Indemnitee or any other person or entity; provided, however, that nothing contained herein shall be construed as obligating Subrecipient to indemnify and hold harmless any Indemnitee to the extent not required under the provisions of this section. Subrecipient shall defend and pay, all costs and fees, including but not limited to attorney fees, cost of investigation, and defense, in any loss, suits, claims, demands, actions, or proceedings to the extent and in proportion to the percentage, such costs and fees arise out of, pertain to, or relate to the negligence, recklessness or willful misconduct of Subrecipient arising out of or from the performance of professional design services under this Agreement. The duty to defend applies to any alleged or actual negligence, recklessness, willful misconduct of Subrecipient. The cost for defense shall apply whether or not Subrecipient is a party to the lawsuit and shall apply whether or not Subrecipient is directly liable to the plaintiffs in the lawsuit. The duty to defend applies even if Indemnitees are alleged or found to be actively negligent, but only in proportion to the percentage of fault or negligence of Subrecipient.
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2. Without affecting the rights of County under any other provision of this Agreement, Subrecipient shall not be required to indemnify or hold harmless or provide defense or defense costs to an Indemnitee for a loss due to that Indemnitee's negligence, recklessness or willful misconduct; provided, however, that such negligence, recklessness or willful misconduct has been determined by agreement of Subrecipient and Indemnitee or has been adjudged by the findings of a court of competent jurisdiction.

C. Subrecipient agrees to obtain or cause to be obtained executed defense and indemnity agreements with provisions identical to those set forth in this section from each and every Subconsultant, of every Tier.

D. Subrecipient's indemnification obligations under this Agreement shall not be limited by the amount or type of damages, compensation or benefits payable under any policy of insurance, workers' compensation acts, disability benefit acts or other employee benefit acts.

E. The Indemnitees shall be entitled to recover their attorneys' fees, costs and expert and consultant costs in pursuing or enforcing their right to defense and/or indemnification under this Agreement.

INSURANCE REQUIREMENTS
Without limiting or diminishing the Subrecipient's obligation to indemnify or hold the County harmless, Subrecipient shall procure and maintain or cause to be maintained, at its sole cost and expense, the following insurance coverages during the term of this Agreement. As respects to the insurance section only, the County herein refers to the County of Riverside, its Agencies, Districts, Special Districts, and Departments, their respective directors, officers, Board of Supervisors, employees, elected or appointed officials, agents or representatives as Additional Insureds.

A. Workers' Compensation: If the Subrecipient has employees as defined by the State of California, the Subrecipient shall maintain statutory Workers Compensation Insurance (Coverage A) as prescribed by the laws of the State of California. Policy shall include Employers' Liability (Coverage B) including Occupational Disease with limits not less than $1,000,000 per person per accident. The policy shall be endorsed to waive subrogation in favor of The County of Riverside.

B. Commercial General Liability: Commercial General Liability insurance coverage, including but not limited to, premises liability, unmodified contractual liability, products and completed operations liability, personal and advertising injury, and cross liability coverage, covering claims which may arise from or out of Subrecipient's performance of its obligations hereunder. Policy shall name the County as Additional Insured. Policy's limit of liability shall not be less than $2,000,000 per occurrence combined single limit. If such insurance contains a general aggregate limit, it shall apply separately to this agreement or be no less than two (2) times the occurrence limit. Policy shall name the County as Additional Insureds.

C. Vehicle Liability: If vehicles or mobile equipment are used in the performance of the obligations under this Agreement, then Subrecipient shall maintain liability insurance for all owned, non -owned or hired vehicles so used in an amount not less than $1,000,000 per occurrence combined single limit. If such insurance contains a general aggregate limit, it shall apply separately to this agreement or be no less than two (2) times the occurrence limit. Policy shall name the County as Additional Insureds.
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D. Professional Liability: Subrecipient shall maintain Professional Liability Insurance providing coverage for the Subrecipient's performance of work included within this Agreement, with a limit of liability of not less than $1,000,000 per occurrence and $2,000,000 annual aggregate. If Contractor's Professional Liability Insurance is written on a claims made basis rather than an occurrence basis, such insurance shall continue through the term of this Agreement and Subrecipient shall purchase at his sole expense either 1) an Extended Reporting Endorsement (also, known as Tail Coverage); or 2) Prior Dates Coverage from new insurer with a retroactive date back to the date of, or prior to, the inception of this Agreement; or 3) demonstrate through Certificates of Insurance that Subrecipient has Maintained continuous coverage with the same or original insurer. Coverage provided under items 1), 2), or 3) will continue as long as the law allows. Policy shall name the County as Additional Insureds.

E. General Insurance Provisions - All lines:

1. Any insurance carrier providing insurance coverage hereunder shall be admitted to the State of California and have an A M BEST rating of not less than A: VIII (A:8) unless such requirements are waived, in writing, by the County Risk Manager. If the County's Risk Manager waives a requirement for a particular insurer such waiver is only valid for that specific insurer and only for one policy term.

2. The Subrecipient must declare its insurance self -insured retention for each coverage required herein. If any such self -insured retention exceed $500,000 per occurrence each such retention shall have the prior written consent of the County Risk Manager before the commencement of operations under this Agreement. Upon notification of self -insured retention unacceptable to the County, and at the election of the County's Risk Manager, Subrecipient's carriers shall either; 1) reduce or eliminate such self -insured retention as respects this Agreement with the County, or 2) procure a bond which guarantees payment of losses and related investigations, claims administration, and defense costs and expenses.

3. Subrecipient shall cause Subrecipient's insurance carrier(s) to furnish the County of Riverside with either 1) a properly executed original Certificate(s) of Insurance and certified original copies of Endorsements effecting coverage as required herein, and 2) if requested to do so orally or in writing by the County Risk Manager, provide original Certified copies of policies including all Endorsements and all attachments thereto, showing such insurance is in full force and effect. Further, said Certificate(s) and policies of insurance shall contain the covenant of the insurance carrier(s) that a minimum of thirty (30) days written notice shall be given to the County of Riverside prior to any material modification, cancellation, expiration or reduction in coverage of such insurance. If Subrecipient insurance carrier(s) policies does not meet the minimum notice requirement found herein, Subrecipient shall cause Subrecipient's insurance carrier(s) to furnish a 30 day Notice of Cancellation Endorsement.

4. In the event of a material modification, cancellation, expiration, or reduction in coverage, this Agreement shall terminate forthwith, unless the County of Riverside receives, prior to such effective date, another properly executed original Certificate of Insurance and 23

original copies of endorsements or certified original policies, including all endorsements and attachments thereto evidencing coverage's set forth herein and the insurance required herein is in full force and effect. Subrecipient shall not commence operations until the County has been furnished original Certificate (s) of Insurance and certified original copies of endorsements and if requested, certified original policies of insurance including all endorsements and any and all other attachments as required in this Section. An individual authorized by the insurance carrier to do so on its behalf shall sign the original endorsements for each policy and the Certificate of Insurance.

5. It is understood and agreed to by the parties hereto that the Subrecipient's insurance shall be construed as primary insurance, and the County's insurance and/or deductibles and/or self - insured retentions or self -insured programs shall not be construed as contributory.

6. If, during the term of this Agreement or any extension thereof, there is a material change in the scope of services; or, there is a material change in the equipment to be used in the performance of the scope of work; or, the term of this Agreement, including any extensions thereof, exceeds five (5) years; the County reserves the right to adjust the types of insurance and the monetary limits of liability required under this Agreement, if in the County Risk Management's reasonable judgment, the amount or type of insurance carried by the Subrecipient has become inadequate.

7. Subrecipient shall pass down the insurance obligations contained herein to all tiers of subcontractors working under this Agreement.

8. The insurance requirements contained in this Agreement may be met with a program(s) of self-insurance acceptable to the County.

9. Subrecipient agrees to notify County of any claim by a third party or any incident or event that may give rise to a claim arising from the performance of this Agreement 24

Attachment E - Project Monitoring Requirements
Quarterly Progress Reports shall be submitted on the 21St of the month following the previous quarter. Quarterly reports shall be sent via e-mail to [email protected]. The quarterly report shall include a brief description of the work performed during the reporting period, including photographs, construction status, milestones achieved, financial status report including cost incurred to date, cash flow projections, schedule updates, and any problems encountered in the performance of the work under this Agreement. The progress pay estimate for the reporting period shall be included as part of the quarterly progress report submittal.

In addition to the above, project schedule and cashflow projection updates shall be emailed to the County on a monthly basis.
25

Attachment F - Construction Requirements
SUBRECIPIENT shall:

1. Pursuant to the California Environmental Quality Act ("CEQA"), act as Lead Agency and assume responsibility for preparation, circulation and adoption of all necessary and appropriate CEQA documents pertaining to the construction, operation and maintenance of the Project.

2. To the extent that it has not already done so, the Subrecipient shall prepare or cause plans and specifications ("Plans") to be prepared for the Project prior to advertising the Project for construction bids.

3. Provide County a copy of the engineering design cost proposal and associated design schedule for the Project.

4. Advertise and award public works construction contracts for the Project and begin construction per the schedules included in Attachment A of this Agreement.

5. Prior to advertising the Project for public works construction contract, obtain all necessary permits, approvals, or agreements as may be required by any federal, state and local resource or regulatory agencies pertaining to the construction, operation and maintenance of the Project. Assume sole responsibility for compliance with the requirements of all regulatory permits, including any amendments thereto, pertaining to the construction, operation and maintenance of the Project.

6. Implement or cause to be implemented, all environmental mitigation required in association with the construction, operation and maintenance of the Project.

7. Prior to advertising the Project for public works construction contract, obtain all necessary permits, licenses, agreements, approvals, rights of way, rights of entry, encroachment permits, and temporary construction easements as may be needed to construct, operate and maintain the Project.

8. Advertise, award and administer a public works construction contract for the Project pursuant to the provisions of applicable laws for public works improvements, including but not limited to the California Public Contract Code, Government Code and Labor Code.

9. Certify and cause its contractor to certify, that it is not a target of economic sanctions imposed in response to Russia's actions in Ukraine imposed by the United States government or the State of California. The Subrecipient and its Contractor are required to comply with the economic sanctions imposed in response to Russia's actions in Ukraine, including with respect to, but not limited to, the federal executive orders identified in California Executive Order N-6-22, located at https://www.gov.ca.gov/wp- content/uploads/2022/03/3.4.22-Russia-Ukraine-Executive-Order.pdf and the sanctions identified on the United States Department of the Treasury website (https ://home.treasury. gov/policy-issues/financial-sanctions/sanctions-programs-and-country- information/ukraine-russia-related-sanctions). The Subrecipient and its Contractor are required to comply with all applicable reporting requirements regarding compliance with the economic sanctions, including, but not limited to, those reporting requirements set forth in California Executive Order N-6-22 for all parties with one or more agreements with the State of California, the County of Riverside, or any other local agency, with a value of Five Million Dollars ($5,000,000) or more. Notwithstanding any other provision in these documents, failure to comply with the economic sanctions and all applicable reporting requirements may result in 26

disqualification or termination of the Construction Agreement, if awarded.

For parties and contractors with an agreement value of Five Million Dollars ($5,000,000) or more with the State of California, the County of Riverside, or any other local agency, reporting requirements include, but are not limited to, information related to steps taken in response to Russia's actions in Ukraine, including but not limited to:
a. Desisting from making any new investments or engaging in financial transactions with Russian institutions or companies that are headquartered or have their principal place of business in Russia;
b. Not transferring technology to Russia or companies that are headquartered or have their principal place of business in Russia; and
c. Direct support to the government and people of Ukraine.

To comply with this requirement, Subrecipient and its contractors shall insert their name and Federal ID Number (if available) on the Certification Form attached hereto, execute by a duly authorized representative for the contractor and return to the County.

10. The Subrecipient shall require, and the specifications, bid and contract documents shall require all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such individuals or entities are engaged to perform work on the Project, to pay at least general prevailing wage rates to all workers employed in the execution of the contract, to post a copy of the general prevailing wage rates at the job -site in a conspicuous place available to all employees and applicants for employment, and to otherwise comply with applicable provisions of the California Labor Code and applicable laws relating to general prevailing wage rates.

11. Each contractor engaged to perform work on the Project shall be required to furnish (i) labor and material payment bonds, and (ii) contract performance bonds, each in an amount equal to 100% of the contract price naming the Recipient as obligee and issued by a California admitted surety which complies with the provisions of Section 995.660 of the California Code of Civil Procedure.

12. Provide COUNTY with written notice that Subrecipient has awarded a public works construction contract for the Project. The written notice shall include the Contractor's actual bid amounts for the Project, setting forth herein the lowest responsible bid contract amount.

13. Prior to commencing Project construction, provide to County:
a. A construction schedule which shall show the order and dates in which Subrecipient or Subrecipient's contractor proposes to carry on the various parts of work, including estimated start and completion dates, and
b. A confined space procedure specific to the Project. The procedure shall comply with requirements contained in California Code of Regulations, Title 8, Section 5156 et seq. and County's Confined Space Procedures, SOM-18.

14. Require its construction contractor(s) to comply with all Cal/OSHA safety regulations including regulations concerning confined space and maintain a safe working environment for all working on the site.
27

15. Order the relocation of all utilities within Subrecipient rights of way which conflict with the construction of the Project and which must be relocated at the expense of who may have superior property rights.

16. Procure or caused to be procured insurance coverages during the term of this Agreement. Subrecipient shall require its Project construction contractor(s) to furnish original certificate(s) of insurance and original certified copies of endorsements and if requested, certified original policies of insurance including all endorsements and any and all other attachments. Prior to Subrecipient issuing a Notice to Proceed to its construction contractor(s) to begin construction of the Project, an original certificate of insurance evidencing the required insurance coverage shall be provided to County. At minimum, the procured insurance coverages should adhere to the County's required insurance provided in Attachment D to this Agreement.

17. Construct, or cause to be constructed, the Project pursuant to a Subrecipient administered public works construction contract, in accordance with the Plans, and pay all costs associated therewith.

18. Inspect Project construction or cause Project's construction to be inspected by its construction manager and pay all costs associated therewith.

19. Provide County with a copy of the Subrecipient's received Certificate of Occupancy.

20. Keep an accurate accounting of the Project's cost and provide this accounting to County with Subrecipient's received Certificate of Occupancy. The final accounting of construction cost shall include a detailed breakdown of all costs, including, but not limited to, payment vouchers, Subrecipient approved change orders and other such construction contract documents as may be necessary to establish the actual cost of construction for the Plans.

Subrecipient shall be responsible to pay any amounts in excess of Award amount provided in this Agreement.

21. Refund to County, at the time of providing a received Certificate of Occupancy, any unexpended portions of Award amount within thirty (30) days of receipt of the Certificate of Occupancy.
28

COMPLIANCE WITH ECONOMIC SANCTIONS IN RESPONSE TO RUSSIA'S ACTIONS

IN UKRAINE
Prior to bidding on, submitting a proposal, or executing a contract, a party/contractor must certify: 1) it is not a target of economic sanctions and 2) in compliance with economic sanctions imposed by the U.S. government in response to Russia's actions in Ukraine, as well as any requirements related to the Russian sanctions imposed by the California Governor's Executive Order N-6-22 issued on March 4, 2022 and under state law, if any.

To comply with this requirement, please insert the party/contractor name and Federal ID Number (if available), complete the information described below and execute by an authorized representative of the contractor.

CERTIFICATION
I, the authorized representative for contractor named below, certify I am duly authorized to execute this certification on behalf of the contractor below, and the contractor identified below has conducted a good faith review of existing contracts. I attest that the contractor is not a target of economic sanctions, and that contractor is in compliance with the economic sanctions imposed by the U.S. government in response to Russia's actions in Ukraine, as well as any requirements related to the Russian sanctions imposed by the California Governor's Executive Order N-6-22 issued on March 4, 2022 and under state law, if any.

Party/Contractor Name (Printed)
By (Authorized Signature)
Federal ID Number (or n/a)
Printed Name and Title of Person Signing
Date
29

24'-93__16"

BUILDING A

BUILDING B

BUILDING C

BUILDING D

BUILDING E

BUILDING F

BUILDING G

EXISTING

PARKING

EXISTING

PARKING

EXISTING

PARKING

EXISTING

PARKING

EXISTING
PARKINGMAGNOLIA AVENUEORANGE AVENUEE 6TH AVENUE
7TH AVENUE
7TH AVENUE
A1.10
1 A2.10
1 DEMO REMODEL
A1.10
1 DEMO
A1.10
8 REMODEL
A2.01
PROJECT NUMBER:DATE:REVISION:DESCRIPTION:PROJECT STATUS:PROJECT ISSUED:© 2022 SGH ARCHITECTS INC. ALL RIGHTS RESERVEDSEALS:CONSULTANT:7/26/2023 5:04:30 PM21-60100-00SITE PLAN -OVERALLA1.01CITY HALL RENOVATION550 E. 6TH STREET, BEAUMONT, CA 92223THE BEAUMONT CITY HALLCITY OF BEAUMONT07/08/2022SCALE:1" = 30'-0"A1.01 1 SITE PLAN - OVERALL
NORTH

ACCESIBILITY/PATH OF TRAVEL UPGRADES OUTSIDE THE

REFERENCED AREA ARE PART OF THE DEFERRED
APPROVAL.

Red Shade Area is the area ofexisting ramp and landingremoval and replacement

ALIGN
ALIGN

DEMO (E) CONCRETE RAMP
DEMO (E) HANDRAIL, TYP.

DEMO (E) CONCRETE PAVING DEMO (E) CONCRETE RAMP

DEMO (E) CONCRETE PAVING
SLOPE: 8% MAX
5 A1.10
10 A1.10

EXPANSION
JOINT, TYP.

CONTROL
JOINT, TYP.
17 A1.10
48" X 60" CLR.EXPANSION
JOINT.
16 A1.10
16 A1.10
V.I.F.11' - 4"V.I.F.7' - 0"LEVEL LANDING WITH 2% MAX

SLOPE IN ANY DIRECTION
LEVEL LANDING WITH 2% MAX

SLOPE IN ANY DIRECTION
LEVEL LANDING WITH 2% MAX

SLOPE IN ANY DIRECTION
5' - 10"7' - 0"7' - 0"V.I.F.16' - 0"EXTENSION1' - 0" HANDRAILEQ EQ30' - 0" 5' - 0" 2' - 7"Slope: 1%Slope: 8% MAX Slope: 8% MAXLEVEL LANDING WITH 2% MAX

SLOPE IN ANY DIRECTION,
48" X 60" CLR.Slope: 8% MAXEQ EQ
16' - 0"13' - 6"1' - 0"16' - 0"13' - 0"9' - 0"

EXTENSION
1' - 0" HANDRAIL

45.00°7"6' - 5"EQ EQ
11 A1.10
EQEQEQEQ6' - 0"

EXPANSION
JOINT, TYP.

CONTROL
JOINT, TYP.
16 A1.10
17 A1.10
HANDRAIL13
A1.10

GUARDRAIL
18 A1.10

HANDRAIL
13 A1.10
15 A1.10
20 A1.10
10 A1.10
A1.10
11 5
A1.10
A1.10
13 1' - 3 1/2" V.I.F.A1.10
11 CONCRETE RAMP
R
2 1/2"36" TYP.HANDRAILT.O. HANDRAIL
1-1/2" O.D. GALV. STEEL

PIPE HANDRAIL, PTD

START OF RADIUS
12" MIN.

LEVEL
1-1/2" O.D. GALV.

STEEL GUIDE RAIL, PTD.R 2 1/2"T.O. HANDRAIL

START OF RADIUS
NOTES:

1. MIN. 12" EXTENSION AT TOP AND BOTTOM OF RAMP RUN. EXTENSION SHALL

BE IN THE DIRECTION OF RAMP RUN EXCEPT CONTINUOUS HANDRAIL AT INSIDE TURN OF SWITCH-BACK OR DOGLEG RAMP. (11B -505.10)

2. EXTENSION SHALL RETURN TO WALL, GUARD OR LANDING SURFACE. NOTE THAT THE 12" DIMENSION IS FOR THE STRAIGHT PORTION OF HANDRAIL AND DOES NOT INCLUDE CURVED PORTION. SEE CBC FIG. 11B-505.10.1 LEVEL
12" MIN.HANDRAIL36" TYP.1-1/2" O.D. GALV. STEEL
POST @ 4" O.C. MAX, PTD.1' - 6"1' - 6"4"A1.10
14 A1.10
14 MIN.3"MIN.9"MIN.
3"
MIN.
3"

SECTION 'A'

HANDRAIL

CORE AS REQUIRED,

FILL WITH NON-SHRINK

GROUT AND NON-

METALLIC

CONCRETE WALK / RAMP
/ STAIR

PROVIDE THICKENED

CONCRETE AT LOCATIONS

OF HANDRAIL POSTS
A
-
1"

REINFORCED CONCRETE PAVING

AGGREGATE BASE

WHERE OCCURS
CONT. 1/4" RADIUS

TOOLED EDGE
# 4 x 12" REBAR DOWEL DRILL

INTO (E) CONCRETE SET IN

SIMPSON SET-XP EPOXY
@ 18" O.C. AND 6" FROM EA. END.
(ICC ESR-2508)

PREFORMED COMPRESSIBLE

JOINT FILLER
ELASTOMERIC JOINT SEALANT1/2" MAX.

NEW EXISTING
5 3/4" EMBED
NOTE:

1. SEE PLAN FOR LOCATIONS

REINFORCED CONCRETE PAVING

AGGREGATE BASE

WHERE OCCURS
STL. TROWEL CONTROL JOINT
WITH 1/4" RADIUS
NOTE:

1. PLACE CONTROL JOINT AT 10'-0" EACH WAY MAX. U.N.O.

2. SEE PLAN FOR LOCATIONS 4"4" MIN.MIN.1' - 0"TO TOP OF GAURDRAIL3' - 6"3/4"TO TOP OF HANDRAIL3' - 0"1 1/2" MIN.REPLACE (E) ROOF DRAIN

PIPE WHERE OCCURS
8" CONC. RETAINING WALL

CORE GAURDRAIL HOLE, SEE DETAIL
3/4" CHAMFER, TYP.MIN.9"5"PAVING

ALL CONNECTIONS TO BE

WELDED/GRINDED SMOOTH WITH
NO ABRASIVE EDGES, TYP.4" MAX. TYP.1-1/2" DIA. SCH. GALV. STEEL PILE

VERTICAL SUPPORTS SPACED AT
48" O.C. MAX, PAINT FINISH TYP.
1-1/2" DIA. SCH. 40 GALV. STEEL

PIPE HANDRAIL, PAINT FINISHED
14 A1.10
NOTES:
• MAX 30" RISE FOR EACH RAMP RUN
• LANDINGS TO BE 2% MAX. SLOPE IN ALL DIRECTIONS
• MIN. 72" LONG BOTTOM IN THE DIRECTION OF RAMP RUN
• DOORS, WHEN FULLY OPEN, SHALL NOT REDUCE RAMP LANDING WIDTH BY MORE THAN 3". DOORS, IN ANY POSITION, SHALL NOT REDUCE LANDING TO LESS THAN 42".

NOTE:

GUARDRAIL REQUIRED AT ALL RAMP AND LANDING
LOCATIONS GREATER THAN 30" ABOVE GRADE≤ 4" TYP.SPACE EQUALLY UNO. 4' - 0" O.C. MAX

ALL CONNECTIONS TO

BE WELDED/GRINDED

SMOOTH WITH NO
ABRASIVE EDGES, TYP.
1-1/2" DIA. SCH. GALV.

STEEL PILE VERTICAL

SUPPORTS, PAINT
FINISH TYP.
1-1/2" DIA. SCH. 40
GALV. STEEL PIPE RAIL,
PAINT FINISHED, TYP.3' - 6"A1.10
13 A1.10
13 A1.10
11 PROJECT NUMBER:DATE:REVISION: DESCRIPTION:PROJECT STATUS:PROJECT ISSUED:© 2022 SGH ARCHITECTS INC. ALL RIGHTS RESERVEDSEALS:CONSULTANT:7/26/2023 5:04:33 PM21-60100-00ENLARGED SITE PLAN -DEMOLITION AND REMODEL & DETAILSA1.10CITY HALL RENOVATION550 E. 6TH STREET, BEAUMONT, CA 92223THE BEAUMONT CITY HALLCITY OF BEAUMONT07/08/2022SCALE:1/8" = 1'-0"A1.10 1 ENLARGED SITE PLAN - DEMOLITION
NORTH
SCALE:1/8" = 1'-0"A1.10
8 ENLARGED SITE PLAN - REMODEL
NORTH
SCALE:1/8" = 1'-0"A1.10
5 RAMP SECTION 1
SCALE:1/8" = 1'-0"A1.10
10 RAMP SECTION 2
SCALE:3/4" = 1'-0"A1.10
13 TYPICAL RAMP HANDRAIL
SCALE:3" = 1'-0"A1.10
14 HANDRAIL COIL
SCALE:3" = 1'-0"A1.10
16 CONCRETE PAVING EXPANSION JOINT
SCALE:3" = 1'-0"A1.10
17 CONCRETE PAVING CONTROL JOINT
NOTE: ACCESSIBILITY/PATH OF TRAVEL UPGRADES WITHIN

THE CLOUDED AREA ARE PART OF THE DEFERRED
APPROVAL.

NOTE: ACCESSIBILITY/PATH OF TRAVEL UPGRADES WITHIN

THE CLOUDED AREA ARE PART OF THE DEFERRED
APPROVAL.

SCALE:1" = 1'-0"A1.10
11 CONCRETE RAMP AND RETAINING WALL SECTION
SCALE:3/4" = 1'-0"A1.10
18 TYPICAL GUARDRAIL
SCALE:1/8" = 1'-0"A1.10
15 RAMP SECTION 3
SCALE:1/8" = 1'-0"A1.10
20 RAMP SECTION 4

BAUME ONTA -C A L I F O R N I
Staff Report
TO: City Council
FROM: Robert Vestal, Director of Public Works
DATE May 7, 2024
SUBJECT: Agreement for Environmental Consulting Services for the Oak Valley Parkway Expansion, Phase II
Description Award a Professional Services Agreement (PSA) to Jennings Environmental, LLC for Environmental Consulting Services for the Oak Valley Parkway Expansion, Phase II project.

Background and Analysis:

The Oak Valley Parkway Expansion, Phase II (Project) will widen the section of Oak Valley Parkway in the City's right-of-way between Desert Lawn Drive and the new eastbound exit ramp (formerly Desert Lawn Drive adjacent to Interstate 10) to accommodate four total lanes, two in each direction. Currently, the section has two lanes, one in each direction.

Figure 1- Vicinity Map of Oak Valley Parkway Expansion, Phase II

West of the Project, Oak Valley Parkway widens into four lanes, three westbound lanes and one eastbound. As part of the construction, the eastbound lanes, west of the project, will be restriped to accommodate two eastbound lanes for a total of five lanes.

The existing asphalt roadway is sufficiently sized to accommodate the additional eastbound lane.

East of the Project, the City of Beaumont is currently in the Project Approval and Environmental Document (PA&ED) phase of the 1-10 and Oak Valley Parkway Interchange project. This project will reconstruct the 1-10 and Oak Valley Parkway Interchange ramps and widen Oak Valley Parkway within the Caltrans right-of-way to increase the capacity of the general area to reduce local street congestion and accommodate projected growth in the area. The 1-10 and Oak Valley Parkway Interchange project, once completed, will eliminate the last bottleneck on Oak Valley Parkway.

The Project will require the preparation of an environmental document, jurisdictional coordination with state and federal agencies, and regulatory permits.

On February 12, 2024, the City published the request for proposals (RFP) for Environmental Consulting Services in the Public Purchase (City's Procurement System) and the Press Enterprise (local newspaper) for twenty-four (24) days. On March 1, 2024, the City also published answers to questions posted by interested proposers to the RFP.

On March 7, 2024, the City received only one proposal from Jennings Environmental, LLC for $124,802 to provide the requested environmental consulting services. Upon review and evaluation, this proposal is commensurate with the scope and fee for the services for this Project.

Fiscal Impact:

The cost to prepare this staff report is estimated to be $350.

Jennings Environmental, LLC's cost to prepare and complete the required environmental document is $124,802. The Project will be funded by Capital Improvement Plan (CIP) R-01 Oak Valley Expansion Project. The following table is an accounting summary of CIP R-01.

R-01 Oak Valley Expansion Project Accounting Summary
Funding Summary
Funding Year
Funding Source
Amount
20/21
Road & Bridge DIF
$600,000
Total Project Funding = $600,000
Budget Summary
Project Component
Budget
Encumbered
Paid to
Date
Remaining
Budget
Project Management
$0
$0
$0
$0
Preliminary Services
$5,000
($4,982)
($2,594)
$18
Environmental
$125,000
$0
$0
$125,000
Design
$0
$0
$0
$0
Construction
$470,000
$0
$0
$470,000
Construction Management
$0
$0
$0
$0
Permits
$0
$0
$0
$0
Equipment
$0
$0
$0
$0
Project Summary Totals
$600,000
($4,982)
($2,594)
$595,018
Recommended Action:

Award a Professional Services Agreement (PSA) to Jennings Environmental, LLC for Environmental Consulting Services for the Oak Valley Parkway Expansion, Phase II project for an amount not to exceed $124,802.

Attachments:

A. Proposal — Jennings Environmental, LLC
B. Professional Services Agreement — Jennings Environmental, LLC C. Levine Act Statement

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK

VALLEY PARKWAY EXPANSION PHASE II
Prepared For:

BEAUMONT
- C_ A 1. t F 0 g N 1 A. •
City of Beaumont
Attn: Vincent Lopez, Project Manager
550 E. Sixth Street
Beaumont, CA 92223
Prepared By:

JE
J�l`Ij'1Ifi .,
PI X11; t i` i I\d Ei E'17A� L
Jennings Environmental, LLC
35414 Acacia Ave.

Yucaipa, CA 92399
909-534-4547

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

PHASE II

TABLE OF CONTENTS
COVER LETTER 3
EXECUTIVE SUMMARY 3
PROJECT UNDERSTANDING 3
SUB -CONSULTANTS 4
QUALIFICATIONS 4

1.0 - ORGANIZATIONAL STRUCTURE 1

2.0 - CEQA INITIAL STUDY 4

2.1 -TASK 1: PROJECT MANAGEMENT 4

2.2 -TASK 2: DATA GATHERING AND ANALYSIS 4

2.3 -TASK 3: GEOTECHNICAL INVESTIGATION 5

2.4 -TASK 4: ENVIRONMENTAL SERVICES 5

2.5 - TASK 4.1: AIR QUALITY, GREENHOUSE GAS, AND ENERGY ANALYSIS, AND NOISE ANALYSIS 5

2.6 - TASK 4.2: PALEONTOLOGICAL AND CULTURAL STUDIES 6

2.7 - TASK 4.3: TRW GENERATION AND VEHICLE MILE TRAVELED ANALYSIS 8

2.8 - TASK 4.4: PHASE 1 ENVIRONMENTAL SITE ASSESSMENT 9

2.9 - TASK 4.5: BIOLOGICAL ASSESSMENT AND SPECIAL SPECIES TRAPPING 10

2.10 -TASK 4.6: INITIAL STUDY PROJECT DESCRIPTION 11

2.11 -TASK 4.7: ADMINISTRATIVE DRAFT INITIAL STUDY 12

2.12 -TASK 4.8: NEGATIVE DECLARATION/MITIGATED NEGATIVE DECLARATION 12

2.13 - TASK 4.9: FINAL INITIAL STUDY ND/MND AND RESPONSE TO COMMENTS 13

2.14 - TASK 5: JURISDICTIONAL COORDINATION 13

3.0 - ANTICIPATED WORK SCHEDULE 14

4.0 - EXPERIENCE AND PAST PERFORMANCE 15

5.0 - REFERENCES 15

6.0 - COST 16
ATTACHMENT 1- STATEMENT OF QUALIFICATIONS AND RESUMES 17

35414 Acacia Ave.

Yucaipa, CA 92399
(909) 534-4547
www.jennings-environmental.com
PIV1;iC. Ph'ILENTAL

COVER LETTER
March 6, 2024
City of Beaumont
Attn: Vincent Lopez, Project Manager
550 E. Sixth Street
Beaumont, CA 92223
RE: RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY

EXPANSION PHASE II

EXECUTIVE SUMMARY
Jennings Environmental, LLC (Jennings) is pleased to provide this proposal for the CEQA Services in relation to the RFP for Professional Environmental Services for the Oak Valley Parkway Expansion Phase II Project, for the City of Beaumont (City). Serving as an extension of City staff, our approach and scope include proactive communication with stakeholders, concurrent baseline surveys, and legally defensible environmental documents for future use.

Jennings has proven capabilities to effectively complete the environmental documentation on time and budget. We appreciate your consideration of Jennings and are available to begin immediately. The undersigned is an agent authorized to submit proposals on behalf of Jennings and is authorized to bind Jennings contractually. Also, there are no known conflicts of interest in providing services to the City on this project or conflicts with the sample agreement contained in the RFP.

PROJECT UNDERSTANDING
Based upon our review of available project information, we have developed a greater understanding of the issues involved with the project. Challenges include environmental issues, historical and cultural issues, and the goal to achieve proper compliance with the California Environmental Quality Act (CEQA). Additional issues include the necessity to have Caltrans approval on the environmental documents.

The City is seeking to obtain the services of a qualified consultant to provide the necessary CEQA documentation for the proposed Project. The proposed Project includes the reconstruction of the 1-10 and Oak Valley Parkway Interchange ramps and the widening of Oak Valley Parkway.

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

PHASE II
To support the City in their CEO.A findings, Jennings believes that the following technical reports will be required in addition to the reports provide by the City:
- Air Quality - Cultural Resources
- Greenhouse Gas Traffic
- Energy - Phase 1 ESA
- Noise Study
The detailed scope of work for each technical report is provided below in Section 2.4. Jennings believes that with the above technical reports and the technical reports provided, an Initial Study and Mitigated Negative Declaration will be sufficient for the Project.

SUB -CONSULTANTS
Depending on the scope of any proposed Project, Jennings will utilize the exceptional skills of our sub -consultants to provide the City with detailed technical reports that meet the requirements for Caltrans. The list of sub consultants and their expertise is described in Section 1 below.

QUALIFICATIONS
Jennings is a small California LLC located in the City of Yucaipa. Founded in 2020, Jennings is a certified Small Business by the California Small Business Administration. Although Jennings is a newer firm our Principal has extensive experience in preparing a wide variety of documents that comply with both NEPA, CEQA, and regulatory agency requirements. Prior to forming Jennings Environmental, LLC, our Principal worked for a private lake and managed all environmental permitting requirements, a private consulting firm in Redlands, CA (Jericho Systems, Inc), and was an environmental planner for the Riverside County Flood Control and Water Conservation District.

Jennings acknowledges the receipt of the addendums provided on the City's website.

Additionally, this Proposal is a firm offer and shall remain valid for a period of no less than 90 days from the date of submittal.

We believe that, although we are a new firm our past experience and dedication to our clients and projects is how we can provide the City with top-quality results at a more affordable price.

Sincerely,
Eugene Jennings, Principal/Regulatory Specialist
35414 Acacia Ave.

Yucaipa, CA 92399
909-534-4547
[email protected]

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

PHASE II

1.0 — ORGANIZATIONAL STRUCTURE
Jennings offers seasoned professionals for this project. Our unique team makeup serves as a complement and enables us to provide a unique approach and perspective. For this Project, Jennings will be acting as the Prime Consultant with three sub -consultants to assist with specialized technical reports. We have assembled an expert team of small businesses that are capable and ready to complete your project.

Our professionals for this project include the following. Summaries are provided in this section and the full resumes are provided in Attachment 1.

Gene Jennings, Principal/Requlatory Specialist. Mr. Jennings has over 10 years of experience in environmental planning, natural resource management, impact analysis, special status species survey, project risk analysis, and construction monitoring. He has prepared biological assessments, reports, and restoration plans in compliance with the Clean Water Act, Fish and Game Codes, Migratory Bird Treaty Act, federal and state Endangered Species Acts, Caltrans, Federal Highway Administration, California Coastal Commission, California Environmental Quality Act (CEQA), and the National Environmental Policy Act (NEPA).

Below is a list of sub -consultants that Jennings proposes to use for different aspects of this project.

Their individual cost assumptions are included in the Funding Proposal (Attachment 2).

Sub -Consultant Contact Information Service Provided
MD Acoustics, LLC Mike Dickerson Air/GHG/Energy/Noise
Principal
1197 Los Angeles Avenue, Ste C-256
Simi Valley, CA 93065
(805) 426-4477 or [email protected]
CRM Tech Michael Hogan Paleo/Archeo/Cultural
Principal Investigator Resources
1016 E. Cooley Dr., Suite A/B
Colton, CA 92324
(909) 824-6400 or [email protected]
TJW Engineering David Chew Trip Generation
Transportation Planning Manager Screening and VMT
TJW ENGINEERING, INC.
9841 Irvine Center Dr., Suite 200
Irvine, CA 92618
d: (949) 536-8450

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PHASE II
Roux Associates, Kasia Anderson Phase 1 ESA
Inc Project Geologist
5150 Pacific Coast Hwy *450
Long Beach, CA 90804
805-849-9338 or [email protected]
LGC Geotechnical, Kevin Colson Geotechnical Report
Inc Vice President Review
131 Calle lglesia, Suite 200
San Clemente, CA 92672
(949) 369-6141 or
[email protected]
MD Acoustics, LLC (Noise)
MD Acoustics, LLC (MD) provides acoustical consulting services for noise and vibration control.

Located in Phoenix, Arizona and Los Angeles, California our clients range from the aerospace industry to municipalities to private land developers. MD has completed numerous noise studies and noise evaluations, throughout California, Arizona, Nevada, New Mexico, Colorado, Utah, Idaho, Oregon, Washington, Georgia, Florida, Massachusetts, New York, Maryland, and Hawaii. In addition to noise and vibration engineering services, MD also offers audio engineering services, air quality, and greenhouse gas impact studies.

MD utilizes the latest equipment and a variety of computational measurement methods and analytical software to complete all work. MD's equipment is portable, cutting edge, and easy to use.

MD's technical resources allow the company to be extremely productive, organized, and thorough.

CRM Tech (Cultural Studies
CRM TECH is a full -service cultural resources management consulting firm that has been providing our services to a wide variety of public agencies, environmental firms, private developers, and individuals since 1993. CRM TECH has completed more than 3,000 cultural and paleontological resources studies throughout the State of California, the majority of them in southern California.

These jobs were completed according to guidelines of the California Environmental Quality Act (CEQA), the National Historic Preservation Act (NHPA), and/or the National Environmental Policy Act (NEPA), as well specific requirements of individual public agencies (e.g., County of San Bernardino, Caltrans, Bureau of Land Management, USACOE, FAA, etc.). During this time, CRM TECH has acquired a unique expertise in California architectural history, archaeology, history, ethnography, anthropology, and paleontology. At the same time, CRM TECH has developed efficient methods using up-to-date technologies to deal with the full spectrum of historical, archaeological, and paleontological resource issues. Services provided by CRM TECH comprise all aspects and phases of cultural resources investigations pertaining to architectural history, archaeology, history, and paleontology. CRM TECH utilizes our broad range of knowledge and experience to successfully complete required cultural/paleontological studies according to the appropriate guidelines. CRM TECH provides high -quality, legally defensible cultural resource compliance reports for a reasonable, 2I

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

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fair price. We take pride in completing projects in a timely manner and within the established budget.

TJW Engineering (Trip Generation Analysis and VMT)
TJW Engineering, Inc. (TJW) is a professional civil engineering consulting firm specializing in traffic engineering design and transportation planning services. Our team of professional engineers and certified experts has over 75 years of combined years of project management and design experience in traffic engineering and transportation planning. Since opening our doors in 2010, TJW has prepared and designed hundreds of traffic engineering design plans and transportation studies throughout California and neighboring states. As a certified small business firm in California, we provide sound and cost-effective design solutions and studies on projects large and small for engineers, architects, developers, contractors, and public sector clients.

Roux Associates, Inc (Phase 1 ESA)
Founded over 40 years ago, Roux was built upon management and cleanup of large, complex environmental remediation projects, including Superfund sites, chemical and manufacturing plants, and petroleum refineries and distribution terminals. Today, Roux offers a much broader array of consulting services as an employee -owned company with over 450 environmental, health & safety, and economic professionals in a variety of science, economic, and engineering disciplines. Roux's clients span sectors in Real Estate; Financial; Manufacturing/Industrial; Energy; Legal; Insurance; Government/Municipal; Environmental, Social, and Governance (ESG); and Water Resources.

While Roux remains a leading brand across the country for environmental remediation services, the interdisciplinary nature of many of the challenges our clients face is now mirrored by the expansion of Roux's services into areas such as human health and ecological risk, commercial economic damages, natural resources valuation, industrial hygiene, health & safety, and engineered natural/sustainable systems.

LGC Geotechnical, Inc (Geotechnical Report Review)
LGC Geotechnical, Inc. is a San Clemente based firm providing quality, full -service geotechnical consulting services to some of the largest and most highly regarded companies and organizations throughout Southern California. Our goal is simple: extraordinary product quality and superior customer service by observing our clients needs and utilizing our technical knowledge and extensive experience to address them with a prompt and efficient approach. LGC Geotechnical's corporate philosophy combines commitment, motivation, and teamwork to provide our clients with the highest quality work in a timely and professional manner. 31 Pa

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2.0— CEQA INITIAL STUDY

2.1 —TASK 1: PROJECT MANAGEMENT
Jennings has a different qualification for this project than other firms as our principal has worked in both the public and private sectors. He has experience in performing project management as a consultant working for a governmental agency and project management as an environmental planner for a governmental agency. This unique perspective provides an insight into how projects should be managed and how to move projects forward, all while monitoring the budget and timeline.

Jennings understands our role as a service organization and the fact that good communication will result in a successful project. Specific ways we will facilitate communication are:
- Weekly Scheduling Reports: Jennings has developed and implemented a process of weekly scheduling for all active projects and task orders. These reports are sent to the Project Managers and indicate tasks performed in the current week and planned activities for the following week.
- Filing: Jennings maintains an extensive filling system for each of our contracts. All incoming and outgoing correspondence is logged for ease of document retrieval. All deliverables are copied to disk and stored in the files along with a submitted original copy in word processing and portable document formats.

2.2 — TASK 2: DATA GATHERING AND ANALYSIS
Jennings will complete an extensive site visit and data collection effort related to the project. This will include, but limited to, reviewing all previous documentation provided by the City, conducting field visits and coordinating field work from sub -consultants, compile base mapping, and meet with the City to discuss standards.

As noted above we plan to use a well -qualified group of sub -consultants to perform the various tasks as outlined below:

Technical Report Preparation
MD Acoustics (Air-GHG-Energy-Noise Report)
CRM Tech (Cultural and Paleo Report)
TJW Engineering (Traffic)
- Roux Associates (Phase 1 ESA)
- Jennings Environmental (Biological-MHSCP Report)
4

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION PHASE 11

2.3 — TASK 3: GEOTECHNICAL INVESTIGATION
The City seeks to obtain a review of any previously prepared geotechnical reports for adjacent developments and the Preliminary Geotechnical Report prepared by the Engineering Design Consultants. Jennings will rely on the sub -consulting Geotechnical firm, LGC Geotechnical, Inc. (LGC), for the preparation of the technical review memo. This will include the following scope of work:
• Perform a site visit to observe the existing site and geotechnical conditions. • Review readily available geotechnical information pertinent to the site including in-house regional geologic maps and published geotechnical literature. • Review multiple existing geotechnical reports for the subject project and adjacent developments.
• Provide a technical memorandum summarizing the existing geotechnical reports and recommendations.
• Prepare an updated technical memorandum incorporating city comments.

LGC will summarize the results and recommendations into a Technical Memorandum as requested by the City. Results of the geotechnical investigation will be incorporated into the final CEQA documents.

2.4 —TASK 4: ENVIRONMENTAL SERVICES
Jennings will prepare a legally defensible environmental compliance document to address any potential environmental impacts that may occur as a result of project construction. The IS will be drafted using the most current Checklist form from the CEQA Guidelines, Section 15063. The analysis for each resource will include a description of the environmental setting and will corroborate impact conclusions with factual data from the appropriate report.

2.5 — TASK 4.1: AIR QUALITY, GREENHOUSE GAS, AND ENERGY ANALYSIS, AND NOISE

ANALYSIS
Jennings has retained MD Acoustics to prepare the following technical documents.

Air Quality, Greenhouse Gas, and Energy Analysis
This report will consist of the following scope of work:

1. Identify the existing air quality setting in the area and international, federal, state, SCAQMD's, and local rules and regulations, including the State greenhouse gas (GHG) regulations Assembly Bills (AB) 32 and 1493, Senate Bills (SB) 32, 97, 107, 375, 527, 1368, and 1771, and Executive Orders S-3-05 and S-14-08.
5IPa

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION PHASE 1I

2. Obtain existing air quality data from air quality monitoring stations within the study area utilizing California Air Resources Board (CARB) data sources. Data will be obtained for air pollutants, including ozone, carbon monoxide (CO), nitrogen dioxide (NO2), PM10, and PM2.5.

3. Identify greenhouse gases (GHGs) and their associated impacts to global climate change.

4. Identify thresholds of significance for the criteria pollutants and GHGs.

5. Evaluate and quantify regional criteria pollutant and GHG emissions associated with construction and operational activities for the proposed project utilizing the CaIEEMod Model. If significant emission levels developed and quantified.

6. Evaluate local NOx, CO, PM10, and PM2.5 construction and operational emissions at the nearest sensitive receptors to the project. The emissions will be compared against the SCAQMD Look -Up Tables and will follow the methodology described in Localized Significance Threshold Methodology, prepared by SCAQMD, July 2008.

7. Provide a qualitative odor analysis from the construction and operation of the proposed project.

8. Evaluate the operational GHG emissions using the latest CaIEEMod. Establishment of thresholds at the State and/or local level has been a point of discussion and analysis by various agencies and boards (i.e., OPR, CARB, CAPCOA [California Air Pollution Control Officers Association]). The project's emissions will be compared to significance thresholds established in the City's Climate Action Plan (CAP) or equivalent.

9. Evaluate the construction -related and operational related energy uses.

Deliverable: Prepare a Caltrans level AQ/GHG/Energy report following their template. The report will summarize the results of the previous work tasks.

Noise Analysis
This report will consist of the following scope of work:

1. Review the site plan and topography project from an acoustical standpoint.

2. Determine the existing noise environment at the project site. MD will perform up to two (2) 48 -hour noise level measurements to document the existing noise levels. MD will utilize Type 2 (or better) sound level meters for the baseline study.

3. Calculate the traffic noise level impact from the proposed expansion to the adjacent sensitive uses. Compare the traffic noise level impact in light of the City's General Plan Noise Element and Noise Compatibility Matrix. Provide noise abatement options if needed.

4. Calculate the construction noise impact and compare to the City's noise standards.

Deliverable: Prepare and submit a Caltrans level report following their template.

2.6 — TASK 4.2: PALEONTOLOGICAL AND CULTURAL STUDIES
Jennigs will rely on the expertise of CRM Tech to complete the Paleo and Cultural reports. To comply with Section 106 and Caltrans guidelines on the identification of historical and 61

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

PHASE II
archaeological resources for the undertaking, CRM TECH proposes to accomplish the following tasks:

1. Contact the City and the local Caltrans office to discuss any concerns, to review any records or documents that they may have regarding the property, and to ensure that we have the proper Area of Potential Effects (APE).

2. ***Request the required historical/archaeological resources records search of the subject property and immediate vicinity from the Eastern Information Center; this will provide us with information regarding the prehistoric and historic resources of the area (in terms of both density and types of resources) which will help us develop a preliminary assessment of the cultural sensitivity of the APE.

3. Pursue general prehistorical and historical background research using ethnographic, archaeological, and historical literature as well as early maps to develop the prehistorical and historical context of the area and for information about previous land uses and development trends within and near the APE.

4. Request a sacred lands file search from the Native American Heritage Commission and contact all of the Native American representatives on the list supplied by the Commission to see if they have any knowledge of Native American resources in and around the project area or have any concerns regarding the project; follow-up phone calls will be made to groups that do not reply in a reasonable time; this will be done according to Caltrans requirements.

5. As required by Caltrans guidelines, consult with local government officials regarding APE and potential historic importance.

6. Conduct site -specific historical studies, including archival research, interviews, and consultations with local historical societies, historic preservation groups, and/or other representatives of the local community concerning the APE, as necessary, to determine past land uses and owners and to explore historical associations or important historical events, as required by Caltrans.

7. Conduct an intensive -level field survey of the APE following standard professional archaeological procedures, which would include, among other standard procedures, systematically inspecting the APE, taking detailed notes, and recording the current condition by taking overview photographs.

8. Document the current condition of the previously recorded site, Site 33-015720, Oak Valley Parkway/San Timoteo Canyon Road, as required by the California State Office of Historic Preservation.

9. Prepare a site record update form and a site record and submit them (DPR 523) on any cultural resource that merits formal recordation under guidelines set forth by the California State Office of Historic Preservation.

10. Prepare a De Minimis statement per Section 4F guidelines for Oak Valley Parkway/San Timoteo Canyon Road, as appropriate.

11. Prepare a draft Historic Property Survey Report, an Archaeological Survey Report, and a Historic Resources Evaluation Report according to standard Caltrans format to document the findings of the procedures outlined above, identify known and potential historic properties within or adjacent to the APE, evaluate their integrity and historical significance under criteria for the National Register of Historic Places (to the extent 71

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION

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possible), incorporate comments and recommendations from the Tribe(s) (if any), and recommend subsequent courses of actions regarding cultural resources, as necessary.

12. Review any comments, plan, and organize responses to them, and prepare another draft version of the reports for submission to Caltrans.

13. Review comments from the same and/or different Caltrans personnel and plan and organize responses to comments.

Deliverable: Prepare and submit a Caltrans level report following their template.

2.7 — TASK 4.3: TRIP GENERATION AND VEHICLE MILE TRAVELED ANALYSIS Jennings will rely on the expertise of TJW Engineering, Inc. for the completion of the Traffic studies. The scope of the traffic studies includes:
1) Review the proposed project documents and files provided by the City and begin to coordinate traffic engineering tasks for the proposed project. TJW will participate in project meetings to discuss the following below. TJW will also participate in coordination meeting with other agencies as necessary.
a) Project background, goals, approach
b) Project scope and
c) Project schedule
2) TJW will conduct field review of the existing conditions at the project site. TJW will also review additional records and documents including the previously submitted PSR for Phase I of the project. Following initial field survey, TJW will participate in a meeting with Jennings to discuss standards, expectations, approach, and findings with the City of Beaumont. 3) TJW will prepare the Traffic and Circulation & Forecast Report that analyzes and compares Existing, Near -term and Build -out Year analysis of the project. As part of the analysis, TJW will obtain 24 -hour ADT and peak hour traffic data to analyze capacity and level of service along the project corridor. Additional and/or specific traffic data, such as FHWA classification counts, can be obtained following initial discussions with Jennings and City of Beaumont, as necessary. It is understood that a preferred alternative has already been determined, however, should additional analysis of alternatives be required, they can be accommodated for an additional cost.
4) TJW will submit the Traffic and Circulation Report to Jennings for their submittal to the City of Beaumont. It is assumed that Jennings will process TJW's plans in and out of the City of Beaumont.
5) TJW will respond to comments by the City and would revise the report as necessary. 6) Additional tasks may include attendance at PDT meetings, public hearing meetings, Public Works and City Council meetings to provide technical advice and response to traffic engineering related questions to project design and analysis.

Deliverable: Prepare and submit a Caltrans level report following their template. 81P

RFP FOR PROFESSIONAL ENVIRONMENTAL SERVICES FOR OAK VALLEY PARKWAY EXPANSION PHASE 1I

2.8 — TASK 4.4: PHASE 1 ENVIRONMENTAL SITE ASSESSMENT
Jennigs will rely on the expertise of Roux Associates, Inc. to complete the Phase 1 ESA. Roux will perform a Phase I ESA using ASTM International Standard Practice E1527-21 (referred to hereinafter as "ASTM E1527-21") based on Roux's understanding that User desires to complete "all appropriate inquiries into the previous ownership and uses of the Property" in order to qualify for liability protection under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Use of ASTM E1527-21 is consistent with the U.S.

Environmental Protection Agency (EPA) All Appropriate Inquiries (AAI) Rule (40 CFR Part 312, Amendment to Standards and Practices for All Appropriate Inquiries Under CERCLA; Final Rule), as amended effective February 13, 2023.

In accordance with ASTM E1527-21, the goal of the Phase I ESA is to identify any "recognized environmental conditions" that may exist at the Subject Property. Recognized environmental conditions are defined by ASTM E1527-21 as:
(1) the presence of hazardous substances or petroleum products, in, on, or at the subject property due a release to the environment; (2)the likely presence of hazardous substances or petroleum products in, or at the subject property due to a release of likely release to the environment; or (3) the presence of hazardous substances or petroleum products in, on, or at the subject property under conditions that pose a material threat of a future release to the environment. A de minimis condition is not a recognized environmental condition.

The Phase I ESA will also identify "historical recognized environmental conditions", and/or "controlled recognized environmental conditions" that may exist at the Subject Property in accordance with the definitions contained within ASTM E1527-21.

Recognized environmental conditions, historical recognized environmental conditions, controlled environmental conditions are collectively referred to as RECs/HRECs/CRECs. In order to identify RECs/HRECs/CRECs that may exist at the Property in accordance with ASTM E1527-21, the Phase 1 ESA conducted by Roux's Environmental Professional4 will include the following four elements:
• Records review;
• Visual Inspection of Subject Property and adjoining property; • Interviews; and
• Preparation of a Phase I ESA Report.

In addition, Roux will evaluate any information provided by the User pursuant to the User's responsibilities under ASTM E1527-21 (see section of Proposal titled "USER'S RESPONSIBILITIES UNDER ASTM E1527-21. Upon completion of the records review, site reconnaissance, and interviews, and after consideration of the information obtained thereby (as well as any information provided by User pursuant to User's responsibilities as the User of the Phase I ESA 91