ments will be made either by Treasury Department check or under the Treasury Department Letter of Credit System. Eligibility for the Letter of Credit System is limited to nonprofit institutions with which NASA anticipates a continuing relationship of 1 year or longer, and whose aggregate annual volume of business with NASA equals or exceeds $250,000. It is the policy of NASA to utilize the Letter of Credit System to the maximum feasible extent.

§ 1260.505 Expenditure approvals.

(a) NASA believes that the principal investigator, operating within the established policies of the grantee, is the individual best qualified to determine the manner in which the grant funds may be used most effectively to accomplish the proposed research. Although NASA assumes no responsibility for overspent budgets, the investigator and the grantee institution are free to spend grant funds for the proposed research without strict adherence to individual allocations within total budgets, except as provided in §§ 1260.404 and 1260.408. Under no circumstances, however, may grant funds be used to acquire land or any interest therein, to acquire or construct facilities or to procure passenger carrying vehicles. Purchase of furniture, furnishings, office equipment or other items of a nontechnical nature require the prior approval of the NASA Grants Officer as provided in § 1260.408.

(b) Controls and limitations on expenditures for specific items under NASA grants shall be in accordance with the provisions of Exhibit B of this part.

(c) If any of the actions requiring approval in accordance with Exhibit B of this part have received specific NASA approval during the proposal and award process, a further approval shall not be required. Whenever practical, the approvals shall be given at the time of the project award or extension to avoid any delays during the course of the project.

(d) Approval requirements relating to expenditures under grants, in addition to those provided for in Exhibit B of this part, shall not be imposed

except in accordance with the deviation procedure of § 1260.106 or as specifically required by statute.

§ 1260.506 Vesting of title to research equipment.

(a) Background. (1) Support of research in educational institutions provides substantial long-term and indirect benefits as well as the immediate research results. In addition to the obvious academic advantages of such support, individual and institutional capabilities to perform relevant research are enhanced, and the number of scientists and graduates with research interests in areas of concern to the Nation generally, and to NASA in particular, is increased. Adequate modern research equipment in universities serves to maximize these direct and supplemental benefits.

(2) Every NASA-funded university research project represents an area of mutual interest in which the university has, and expects to maintain, a capacity for research and education. The research equipment that it acquires has, therefore, an especially high potential for continuing effective use at the acquiring institution. The legitimate interests of both NASA and the university, as well as the long-term national interest, require that any decision by the agency to take title for the purpose of transferring grantee equipment to another location reflect careful consideration of all relevant factors. This should include comparison of the expected beneficial use at the present location with that expected at the new location, possible deleterious effects of removal, and the administrative and relocation costs involved.

(b) Policy. The following policies will be reflected, as appropriate, in the negotiation and the documentation of NASA research grants and grant supplements and in related correspond

ence:

(1) Title to equipment purchased with grant funds vests in the grantee institution, and the equipment does not automatically follow the Principal Investigator when he leaves the institution. Title to Government-furnished equipment remains with the Government.

(2) NASA may require transfer to it of title to individual items or coherent systems (paragraph (b)(8) of this section) of major equipment (purchased at a cost of more than $1,000) at any time but no later than 180 days after receipt by NASA of the final equipment inventory report for the grant.

(3) Title to minor equipment items (costing individually $1,000 or less) is not subject to transfer to the agency, except under the conditions of this paragraph (b)(8).

(4) NASA procedure does not require a grantee to transfer title to grant-acquired equipment directly to another actual or potential grantee or contractor. Such transfers are accomplished by the Government taking title and issuing the equipment to the second institution as Government-furnished equipment.

(5) NASA normally will not recover equipment that a grantee desires to retain, for reissuance to another institution or to a NASA installation, unless it is specifically required for NASA work at the new location. Exceptions will be made only in highly unusual situations where title transfer is clearly in the best interests of the Government.

(6) Cost sharing by NASA and a grantee in the acquisition of individual items or coherent systems (paragraph (b)(8) of this section of equipment) in response to a statutory requirement for cost sharing or in any way that could result in joint ownership, shall normally be avoided.

(7) When cost sharing by NASA and a grantee in the acquisition of a major equipment item or coherent system cannot be avoided, and the NASA contribution will exceed $1,000, agreement regarding NASA retention of its option to take title and the conditions under which the option (if retained) will be exercised shall be reached and documented prior to purchase. NASA shall have no option to take title if its contribution is $1,000 or less.

(8) When two or more components are fabricated into a single coherent system, in such a way that the components lost their separate identities and their separation would render the system useless for its original purpose, the components will be considered as

integral parts of a single system. If such a system includes grantee-owned components (for cost sharing or other purposes), paragraph (b)(7) of this section applies. The requirement that NASA seek agreement to retain its option to take title shall further apply where it is expected that one or more grant-acquired components costing $1,000 or less will be fabricated into a single coherent system costing in excess of $1,000. However, an item that is used ancillary to a system, without loss of its separate identity and usefulness, will be considered as a separate item and not as an integral component of the system.

(c) Procedures. (1) When a decision is made to revoke or discontinue support of a grant, the Grants Officer shall notify the grantee in writing of the requirement under the grant for submission of a final inventory report of major purchased equipment (individual items or coherent systems costing more than $1,000) and Government furnished equipment.

(2) When the cognizant NASA Technical Officer or Program Manager desires that NASA take title to a major item or grantee purchased equipment, he shall request the Grants Officer to obtain information regarding the grantee's desire to retain the equipment, the use to which it would be put in the absence of further NASA support of the grant, and any substantial deleterious effects of removal of the equipment.

(3) The Grants Officer shall obtain the information, and provide copies to the Technical Officer and the Office of University Affairs for their coordinated review and recommendation regarding acquisition of title. The Technical Officer shall inform the Grants Officer of his recommendation by means of a memorandum concurred in by the Office of University Affairs.

(4) When NASA acquires title to major items of grantee purchased equipment, the Grants Officer shall notify the cognizant NASA Financial Management Office so that proper entries may be made in accounting records.

§ 1260.507 Revocation of grants.

(a) NASA grants may be revoked in whole or in part by NASA after consultation with the grantee, except that a revocation shall not affect any financial commitment which in the judgment of NASA had become firm prior to the effective date of the revocation and is otherwise appropriate. Upon revocation, the grantee shall reduce, insofar as is possible, the amount of outstanding commitments and repay to NASA, by check made payable to the National Aeronautics and Space Administration, the uncommitted balance of all funds that have been paid to the grantee by NASA under the terms of the particular grant concerned.

(b) The grantee shall communicate with NASA whenever he has reason to believe that circumstances may necessitate revocation of the grant. It is expected that the most common cause for revocation will be the inability of the grantee to carry out the research for which the grant is made or to adhere to the other conditions set forth in the grant instrument. As a general rule, the availability of the services of the principal investigator named in the grant instrument is a decisive factor in NASA's decision to award the grant. Consequently, NASA should be informed immediately whenever it appears that the principal investigator will find it impossible to continue to direct the research.

§ 1260.508 Transfer of grants to other institutions.

When the principal investigator changes his organizational affiliation and desires support for his research at his new location, he must submit a new proposal via the appropriate officials of the new institution. Although such proposal will be reviewed in the normal manner, every effort will be made to expedite a decision. Regardless of the action taken on the new proposal, final reports on the original grant, describing the scientific progress and expenditure to date, will be required if that grant is revoked.

§ 1260.509 Accounting procedures.

While no particular classification of accounts is required, it is expected that grantees will maintain records for each grant, in accordance with the principles enunciated in Exhibit B of this part, which will permit preparation of the required fiscal report and make possible the determination that grant funds were used for the general purpose for which the grant was made.

§ 1260.510 Travel.

(a) Domestic travel by grantee personnel, when necessary to the performance of a research grant, is an appropriate charge to the grant, and NASA authorization for specific trips is not required. Expenditures for domestic travel shall not exceed $500 or 125 percent of the amount allotted for such travel in the approved proposal budget, whichever is greater, without the prior authorization of the NASA Grants Officer.

(b) Pursuant to the "Travel” provision of 1260.404, foreign travel (any travel outside of Canada and the United States, its territories and possessions and Puerto Rico) by grantee personnel may be charged to a grant only when specifically approved in advance by the NASA Grants Officer. (Inclusion of foreign travel in an approved proposal budget is for cost estimating purposes only, and a grant award based on such a budget does not, in itself, constitute specific prior approval in the context of this paragraph (b).) The following criteria shall be applied:

(1) Foreign travel may be approved for:

(i) Participation in meetings, conferences or symposia by presentation of papers or as session chairmen or discussion leaders on subjects directly related to the participant's NASA work;

or

(ii) "On site" field work under the participant's NASA grant.

(2) Foreign travel ordinarily will not be approved for:

(i) The principal purpose of visiting or attending meetings;

(ii) Meetings of national (as distinguished from international) bodies,

unless the travel is primarily associated with other approved goals; or

(iii) Meetings that are predominantly American in attendance.

(3) Approval of individual requests for foreign travel under grants will be subject to such criteria, policies, and procedures as may be promulgated by the Office of University Affairs or other appropriate authority.

§ 1260.511 Audit. [Reserved]

§ 1260.512 Use of GSA supply sources by grantees. [Reserved]

Subpart F-Reports

§ 1260.600 General.

This subpart prescribes reports designed to provide records and statistics for mangement purposes and to comply with statutory requirements.

§ 1260.601 Reporting of grants.

Pursuant to section 3 of the Act of September 6, 1958 (Pub. L. 85-934; 42 U.S.C. 1891-1893), an annual report shall be made to the appropriate committees of both Houses of Congress on or before June 30th of each year. Such report shall be prepared by the Procurement Office, NASA Headquarters (Code KD-1) and shall set forth, for the preceding year:

(a) The number of grants made pursuant to section 1 of the Act;

(b) The dollar amount of such grants; and

(c) The institutions in which title to equipment was vested pursuant to section 2 of the Act.

§ 1260.602 Individual Procurement Action Report (NASA Form 507).

The Individual Procurement Action Report (NASA Form 507) is designed to provide essential procurement records and statistics through a single uniform reporting program as a basis for required recurring and special reports to the President, the Congress, the Department of Labor, the Office of Emergency Preparedness, the General Accounting Office, the Renegotiation Board, the Small Business Administration, and other Federal agencies. The preparation and utilization of NASA Form 507 has been made an

integral part of the

Agencywide system for the recording and reporting of financial and statistical data covering the status of contracts and grants (SCAG). Complete instructions covering the operation of this system are contained in the NASA Financial Management Manual 9332-1-9332-13.

§ 1260.603 Committee on Academic Science and Engineering (CASE) reports. NASA Form 1356, "Committee on Academic Science and Engineering (C.A.S.E.) Report on Support of Colleges and Universities", is either submitted with funded procurement requests pursuant to NMI 5101.12A, or, in the case of certain nonfunded actions, initiated by the procuring office. All NASA Forms 1356 will be completed, checked and promptly forwarded to the Office of University Affairs, NASA Headquarters (Code PY), in accordance with the instructions on the form.

§ 1260.604 Grantee Quarterly Cash Requirement Report (NASA Form 1031). The Grantee Quarterly Cash Requirement Report (NASA Form 1031) will be submitted quarterly by the grantee as a basis for payment.

§ 1260.605 Status and final reports.

(a) Five copies of a brief, informal, semiannual status report including a concise statement of the research accomplished during the report period shall be submitted.

(b) Upon completion of the research, the grantee shall submit five copies of a final technical report, which summarizes the results of the entire project. Citation of publications resulting from the research, or abstracts thereof, may serve as all or part of this final report. Research results not intended for publication in technical journals must be in the format prescribed for NASA technical notes. In addition, the grantee will report to NASA whether or not any inventions required to be reported under the grant have been made in the performance of work under the grant.

(c) A properly certified final fiscal report is required for each grant. Report forms for this purpose are forwarded to the business office of the

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grantee institution, together with the copy of the grant instrument; additional forms may be requested. Two copies of the final fiscal report should be forwarded to NASA after work under the grant has been completed.

APPENDIX-LISTING OF EXHIBITS

Exhibit A-Assurance of Compliance-Civil Rights Act (NASA Form 1206), Available from Procurement Office, NASA Headquarters (KDP-1).

Exhibit B-Cost Principles and Procedures (Part 18-15, Subparts 18-15.1, 18-15.2, 1815.3 and 18-15.8 of Title 41).

Exhibit C-Control of Property in Possession of Nonprofit Research and Development Contractors (Appendix C of Title 41, Chapter 18).

Exhibit D-Grant Document Provisions (NASA Forms 1463 and 1463A), Available from Procurement Office, NASA Headquarters (KDP-1).

Exhibit E-Restrictions on Data and Other Information § 18-1.304 of Title 41, Chapter 18).