L 92-500). This list will be distributed periodically by EPA to all Federal agencies and published in the FEDERAL REGISTER.

(b) When the Administrator determines that the paramount interest of the United States so requires, the Administrator may exempt for a period not to exceed 1 year any individual grant, or any subgrant or subcontract thereunder, from the requirements of this section, and, by rule or regulation following consultation with the Administrator of the EPA, any class of grants or subgrants or subcontracts thereunder. The Administrator shall promptly notify the Administrator of the EPA of any of the exemptions authorized by the foregoing, and the justification therefore, which shall fully describe the purpose of the grant, subgrant, or subcontract and indicate the manner in which the paramount interest of the United States requires that the exemption be made.

(c) Requests for exemptions or renewals thereof shall be made to the Assistant Administrator for Procurement (Attn: Code HP), NASA Headquarters. Requests for individual exemptions shall list the recipient and the amount of the proposed grant, subgrant or subcontract and the title and name of the principal investigator. All requests, whether for individual or class exemptions, shall provide a complete justification as required in paragraph (b) of this section.

§ 1260.209 Property rights in inventions.

(a) The disposition of rights in inventions made by small business firms and nonprofit organizations under contracts, grants and cooperative agreements (including subcontracts thereunder) for the performance of experimental, developmental or research work funded in whole or in part by NASA is governed by chapter 18 of title 35, United States Code (Pub. L. 95-517, Pub. L. 98-620). The disposition of rights to inventions made by other than a small business firm or nonprofit organization under contracts, grants or cooperative agreements (including subcontracts thereunder) in the performance of experimental, developmental,

research,

design or engineering work for NASA

is governed by section 305 of the National Aeronautics and Space Act of 1958, as amended (42 U.S.C. 2457), and to the extent consistent with that law the Presidential Memorandum on Government Patent Policy to the Heads of Executive Departments and Agencies dated February 18, 1983, and section 1(b)(4) of Executive Order 12591, dated April 10, 1987. The implementation of the requirements of Chapter 18 of title 35, United States Code for grants and cooperative agreements is set forth in 37 CFR 401. The implementation of the National Aeronautics and Space Act of 1956, as amended, is set forth in NASA FAR Supplement 18-27.373 (48 CFR 1827.373).

(b) In accordance with paragraph (a) of this section, exhibit G, which is the clause required by 37 CFR 401.414 customized for NASA pursuant to 37 CFR 401.5, shall apply to all grants and cooperative agreements entered into under this Handbook unless either:

(1) The grantee is not located in the United States or does not have a place of business located in the United States or is subject to the control of a foreign government; or

(2) The grantee is not a nonprofit organization or an alternate provision is to be used in accordance with 37 CFR 401.3.

If the circumstances in paragraph (b)(1) of this section exist, the clause "Invention Reporting and RightsForeign" in NASA FAR Supplement 18-52.227-85 (48 CFR 1852.227-85) (suitably tailored to identify the parties and the instrument) may be used as a special condition unless in consultation with installation Patent Counsel, a different provision would be more appropriate. A deviation is not required in this situation. If, in accordance with paragraph (b)(2) of this section, the grantee is not a nonprofit organization or an alternate provision is to be used, a deviation, including concurrence by installation Patent Counsel, is required.

(c) Reports required pursuant to § 1260.409(b) of this Handbook shall be submitted to the grants officer, with a copy to the installation Patent Counsel.

[54 FR 43051, Oct. 20, 1989]

§ 1260.210 Debarment and suspension; and drug-free workplace.

Grants officers shall follow the procedures in NMI 5101.31, Delegation of Authority-Debarment and Suspen

sion Under Grants, Cooperative Agreements and Other Nonprocurement Transactions; and Requirements for a Drug-Free Workplace (Grants), in implementation of 14 CFR part 1265. Before making an award, the grants officer shall ensure that the participant's status has been verified (14 CFR 1265.505 (d) and (e)) and the certification requirements at 14 CFR 1265.510 and 14 CFR 1265.630 have been met. If the required certifications have not been submitted with the proposal, the grants officer shall obtain them before proceeding. However, NASA shall not require any particular form or format. Installations shall not impose local requirements for general submission of certifications with solicited or unsolicited proposals (except as may be otherwise authorized by this Handbook).

[54 FR 43051, Oct. 20, 1989]

(a) The grant or cooperative agreement instrument shall be brief in format, containing only those provisions necessary to protect the fundamental interests of the Government. To ease compliance problems within universities and nonprofit institutions, grants issued by all NASA installations are identical in format and printed content, and changes in grant requirements are made as infrequently as possible.

(b) In order to maintain the distinction between transactions entered into pursuant to section 203(c)(5) and other provisions of the Space Act of 1958 (such as patent licenses, out-bailments, reimbursable launch agreements, and international agreements) and cooperative agreements entered into pursuant to Pub. L. 97-258, the term "cooperative agreement" shall not be used to designate those agree

ments entered into under the Space Act but shall be used only to designate those cooperative agreements entered into pursuant to Pub. L. 97-258. Loans of Government personal property not associated with a contract, grant, or cooperative agreement under Pub. L. 97-258, and made under the Space Act of 1958, should be consummated as loan agreements under paragraph 1.211 and Part 3.400 of NHB 4200.1, “Equipment Management Manual.”

(c) As set forth in § 1260.203(b), an initial determination shall be made by the technical office sponsoring the requirement of the appropriate instrument. Where that technical office recommends that a grant or cooperative agreement be used as the research instrument for supporting an unsolicited proposal, it shall prepare a “Justification for Acceptance of an Unsolicited Proposal". (See § 1260.202(b)(5).) The justification shall be in reasonable detail, shall adequately support the recommendation to award either a grant or cooperative agreement, and shall be approved by a responsible official designated for this purpose by the head of the program office concerned at Headquarters or field installation. In those instances where the transaction does not arise from an unsolicited proposal, the technical office involved shall, in the procurement request, justify any recommendation to the grants officer for award of a grant or cooperative agreement, subject to the approval required above. The grants officer shall review the recommendations of the cognizant technical office and, upon concurrence therein, shall prepare and sign a statement prior to the award of each grant or cooperative agreement which justifies the use of such instrument under Pub. L. 97-258. The statement shall be placed in the official file maintained for the transaction. General Counsel should be consulted on questions of unique requirements and where additional assistance is otherwise determined to be necessary.

(d) Grants and cooperative agreements subject to Pub. L. 97-258 shall cite 31 U.S.C. 6304 or 31 U.S.C. 6305, as applicable, as the authority for their placement. Contracts shall cite

the applicable authority contained in the FAR or the NFS.

(e) Exception and deviations. (1) 31 U.S.C. 6303 allows the use of contracts "whenever an executive agency determines in a specific instance that the use of a type of procurement contract is appropriate." This provision accommodates situations in which an agency determines that specific public needs can be satisfied best using the procurement process. However, because the provision, if misused, could allow agencies to circumvent the criteria for use of procurement or assistance instruments, use of this authority is restricted to extraordinary circumstances, and only with prior approval of the Assistant Administrator for Procurement. (Deviations from policies and procedures shall be processed under NFS, 48 CFR 1801.4 or § 1260.106 of this part, as appropriate.)

(2) It is NASA's policy that nonmonetary (zero dollar) grants or cooperative agreements shall not be used (except for no-cost time extensions).

NASA Form 1463, "Research Grant Award," NASA Form 1562, "Cooperative Agreement," and NASA Form 1463A, "Provisions for Research Grants and Cooperative Agreements,' shall be used for the award of all NASA research grants and cooperative agreements pursuant to Pub. L. 97258. Special conditions, if required by § 1260.420, shall be placed on the reverse of Form 1463, Form 1562 or on a separate page. In all instances, the heading, "Special Condition(s), Grant (Cooperative Agreement) N

shall be used, followed by only the applicable special condition(s). Use of pre-printed checklists containing all special conditions or a separate page for each special condition is not authorized.

[51 FR 2626, Jan. 17, 1986, as amended at 54 FR 43051, Oct. 20, 1989]

Education,

Hospitals, and

Higher other Nonprofit Organizations" govern the allowability of costs chargeable to research supported by NASA under grants and cooperative agreements. Regulations governing procurement contracts generally are not appropriate for application to grants and cooperative agreements.

(b) NASA normally allows full recovery of indirect expenses, but in no case shall an overhead rate used for determining grant or cooperative agreement amounts exceed, in equivalence, the most recent overhead rate at the recipient institution for comparable research contracts of the Government.

(c) Grant amounts determined at the time of the award shall not be reduced other than in case of revocation or in the event grant funds are not committed by the grantee prior to completion of the research involved.

(d) It is the responsibility of the recipient to manage the granted funds in such a manner that they cover the full period of the grant or cooperative agreement. NASA is not obligated to reimburse over-expenditures. However, this stricture does not preclude acceptance of a proposal requesting supplemental funding to extend the research.

§ 1260.304 Cost sharing.

(a) General. (1) In implementing the statutory requirement appearing in various NASA Appropriations Acts for cost sharing of research resulting from unsolicited proposals, NASA has, in the past, generally required that educational institutions share in the cost of such research. This requirement was derived from the understanding that there was generally extant a “mutuality of interest" (as that phrase appears in the statutes) in such relationships thereby bringing into play the cost-sharing requirement.

(2) Subsequent to Congressional concern on overly strict application of the cost sharing requirement, a NASA reevaluation resulted in a determination that the activities of educational institutions under NASA research grants, cooperative agreements and contracts do not generally produce benefits that can be measured as having signifi

cance apart from the benefit intrinsic in the conducting of research for NASA. Therefore, in such instances, these agreements should not be subject to the cost-sharing requirement.

(3) If, in an individual case, costsharing is determined to be applicable pursuant to the NASA policy set forth in NFS, 48 CFR 1816.303, the procedures therein shall be followed, and the special condition clause for cost sharing set forth below shall be used. (b) Clause. In grants and cooperative agreements to which cost sharing is applicable, the following clause shall be appended as a special condition:

COST SHARING (JANUARY 1981)

The Grantee agrees to share in the cost of the research by charging to the Government not more than per cent of the

costs of performance determined to be allowable in accordance with paragraph 405 of the NASA Grant and Cooperative Agreement Handbook. The remaining per cent, or more, of the allowable costs of performance so determined will constitute the Grantee's share and will not be charged to the Government under this grant or under any other grant or contract (including allocation to other grants or contracts as part of an independent research and development program). The Grantee will maintain records of all grant costs claimed by the Grantee as constituting part of its share and such records shall be subject to audit by the Government.

§ 1260.305 Long term stability.

(a) General. Research performed under grants and cooperative agreements tends to be long term. Stability of support is an important factor in achieving the most effective use of resources. Therefore, it is NASA policy to provide stability for research projects of a continuing nature by suitable long-term funding arrangements and timely renewal. Techniques for promoting stability follow.

(b) Continuing awards—(1) Definition. A continuing award is a grant or cooperative agreement for which NASA obligates funds to support an effort for a 1-year period, and states an intention to support approximate levels of effort for an additional period of time provided funds are available and the results achieved warrant further support within the context of agency programs.

(2) Duration and funding. Continuing awards will normally be approved by the relevant Headquarters Program Office or center for periods not in excess of 3 years. Legal, along with concomitant fiscal obligations, however, will be entered into for periods of 1 year. The award instrument will contain the following special condition which provides an estimate of an approximate level of funding for each of the following years:

CONTINUING AWARD (JULY 1984)

This is a continuing award. Contingent on the availability of funds, scientific progress of the project, and continued relevance to NASA programs, NASA anticipates continuing support at approximately the following levels:

It is the responsibility of the awardee to request such continued support by submitting a brief proposal.

(The phrase "Third year" will be omitted if inapplicable)

The above special condition is not to be used in multiple-year, including step-funded, awards.

(3) Proposals and review. The original proposal and its scientific evaluation is applicable to the entire period. Thus, neither an extensive new proposal nor new reviews are required for subsequent funding in the approved period, unless a special need for new reviews is indicated by monitoring of the project and of its reports, by major changes in the project or senior investigators, by the introduction of work outside the scope of the approved proposal, or by the need for substantial additional funding than that initially anticipated.

(4) Requests for continued support. A brief renewal proposal is required, as described in the special conditions of the award instrument for additional funding. Investigators shall be encouraged to contact the NASA technical officer for the project prior to proposal preparation to determine the amount of information required. An additional extended period may be proposed, upon the expiration of the approved period. A complete, new proposal, subject to full review, must be submitted for this purpose. If otherwise acceptable, NASA, at its option,

may fund the proposal through a further continuing award or by a standard year-to-year agreement, if longterm effort is no longer anticipated.

(5) Levels of continued support. Normally, each year of a continuing award will be funded at the approximate level indicated in the original award instrument, subject to satisfactory scientific progress, availability of funds, and continued relevance to NASA programs. This is not, however, a binding commitment as changing NASA program constraints and developments within the project itself may dictate adjustments in the originally anticipated level.

(6) Programmatic procedures. Procurement request initiators who desire to use the continuing award technique should include in their procurement justification packages a brief statement requesting the use of the continuing award, including the expected levels for future periods.

(7) Other conditions. Except as noted above, all regulations, terms, and guidelines applicable to regular grants and cooperative agreements apply to continuing awards.

(c) Step funding-(1) Description of step funding. A step funded research project is one for which funds are obligated over a 3-year period. In addition to full support for the first year's effort, funds are also obligated for a second year's operation at approximately two-thirds of the first year level, and for third year's effort at approximately one-third of the first year level. The typical funding schedule anticipates a continuation of the initially established levels in subsequent years, but this is not always the planned increases or decreases in level may be projected in advance. In any event, the full amount required to establish the desired steps must be obligated. (See Step Funding IllustrationExhibit E.)

case

(2) Procedures. The documentation will clearly indicate that the step funding is appropriate and provide a suggested step schedule accommodating both the previously obligated and the new funding. Annual levels should be rounded to the nearest $1,000, where feasible. Annual continuation proposals should project the contem

plated effort for 3 years in advance. Wherever possible, renewal or notification to the grantee that further support will not be forthcoming will be issued before the authorized level drops to the next lower step. Normally, step funded grants should not be allowed to expire if the total period of performance is less than 5 years. Except in cases of revocation, funds should not be de-obligated from the steps. Do not make "No Cost-time Ex

tensions" to step-funded awards, except when they are in the last year and no additional obligations are planned. Annual funding dates may be changed, if necessary, by appropriately rescheduling the steps. The award instrument shall contain the following special condition for step funding.

STEP FUNDING (JULY 1984)

This is a step funded grant. If the total amount allowed by the schedule on the face of the grant is not expended during the applicable period, the residual funds may be expended during the succeeding period. This carryover shall be brought to the attention of the Grants Officer when the Grantee submits its budget for the subsequent period.

(d) Continuity-(1) Period. Το the reduce paperwork burdens on public and to ensure maximum continuity, successive short periods of funding for less than 12 months should not be used except when absolutely necessary (e.g., when the alternative is disruption or cessation of the effort).

(2) Continuations. Grants and Cooperative Agreements will be renewed, if appropriate, prior to the instrument expiration date whenever possible. Although the procuring office has little control over the timely receipt of purchase requests, the procuring office is responsible for informing the technical officers on a timely basis of current lead-time requirements and for timely processing continuation agreements. Alternatively, if a grant is not to be renewed, the grantee should be given a minimum of 4 months advance notice of pending close-out (see § 1260.514(a)).

(3) Instrument usage. To eliminate the paperwork burdens associated with the close-out of a grant and negotiation of a new award for continuing