must specifically outline the method of allocating and disposing (other than patents and intellectual property) of real and personal property including any funds obtained therefrom and state the statutory authorities relied on for vesting of title in the participant(s).

(iii) When there is cost sharing by the participant(s) disposition of nonexpendable property (other than patents and other intellectual property) acquired in the performance of an agreement shall usually be effected by an equitable distribution of the fair market value of such property based on factors such as the proportion of the costs contributed by the parties, the risks undertaken, and the benefits received by the parties, and the overall purpose of the Cooperative Agreement. Normally, the participant will be allowed to acquire the Government's interest in the fair market value of such property at time of disposal, or at the project's conclusion (whichever comes first). Alternatively, with the permission of DOE, the participant(s) may dispose of the property and reimburse the Department an agreed amount which considers the factors set forth above as to any of the proceeds obtained by the participant(s). However, the participant(s) shall be permitted to deduct and retain from any proceeds the allowable costs incurred in selling the property.

§ 600.290 General and special provisions. (a) Introduction. This section provides guidance on general and special terms and conditions to be used in Cooperative

Agreements with participants other than those covered under OMB Circulars A-102 and A-110. Section 600.271(a)(1) contains the administrative requirements applicable to participants covered by OMB Circulars A-102 and A-110, except as provided in § 600.271(c).

(b) The general and special provisions. (1) In Federal procurement, the Government's need to acquire goods and services at fair value has led to highly developed procurement procedures. The operational rules for guiding DOE procurement transactions are contained in the Federal Procurement

Regulations (FPR), 41 CFR Chapter 1, and the Department of Energy Procurement Regulations (DOE-PR), 41 CFR Chapter 9. These regulations contain a panoply of standard, optional, and special provisions which spell out rights and obligations of the parties in detail. Although these regulations are not applicable per se to Cooperative Agreements, some of the provisions contained in these Regulations provide a reference point for negotiating Cooperative Agreement terms and conditions. Use of these provisions, modified as appropriate, should insure that the agreement reached by the parties is considered in the light of the experience gained in interpretation of these provisions based on established legal precedent in the procurement field. Hopefully, by avoiding many of the problems that have arisen in the procurement field, the parties will be able to negotiate an agreement that reflects the true nature of the Cooperative Agreement.

(2) Some FPR and DOE PR provisions which express basic federal policies that are equally applicable to procurement contracts and Cooperative Agreements. These provisions are contained in paragraph (c) of this section and constitute mandatory General Provisions for Cooperative Agreements under this regulation for certain classes of participants.

(3) Many other provisions in the FPR's and DOE PR's are normally suitable for Cooperative Agreements and should be utilized unless the context of the specific Agreement being negotiated calls for different provisions. These provisions are specified in paragraph (d) of this section. Finally, many of the provisions in the FPR and DOE PR might be appropriate and as a minimum, should be considered by DOE and the participant to insure the issues raised by the provisions have been considered. These provisions are contained in paragraph (e) of this section.

The provisions contained in paragraphs (d) and (e) constitute the Special Provisions of the Cooperative Agreement along with any provisions negotiated between the parties. When used, the Special Provisions in para

graphs (d) and (e) of this section should be modified to reflect the intent of the parties to the Cooperative Agreement. For example, the Government's rights of termination and change under paragraphs (d)(2) and (e)(20) of this section (which could constitute separate Article(s) in the Cooperative Agreement Schedule) are clearly appropriate where the Government bears all the costs but when there is an undertaking on a cooperative basis, the Participant who has a direct financial interest should have a voice regarding termination, and/or changes (recognizing DOE may need to retain final decision authority in these areas). Similarly, the Government property provision in paragraph (d)(3) of this section will usually have to be modified to recognize property rights where title is not vested in the Government. In the area of liability and indemnifications, provisions in the Cooperative Agreement should reflect the hazards, and risks, and respective responsibilities of the Government and the participant, especially in regard to liability to third parties.

(4) Cooperative Agreements entered into pursuant to this part are subject to patents, data, and copyrights regulations set forth in 41 CFR Part 9-9:

(i) The long form Patent Rights clause of 41 CFR 9-9.107-5(a) shall be used in all Cooperative Agreements having as a purpose the conduct of research, development, or demonstration work, except where a waiver of patent rights is granted or in agreements for which the short form patent rights clause of 41 CFR 9-9.107-6 is appropriate. Where waiver of patents rights is obtained, a special clause will be provided by DOE Patent Counsel. The short form Patent Rights clause shall be used in Cooperative Agreement with nonprofit or educational institutions. As more fully described in the policy discussion in 41 CFR 9-9.107-5, modifications to the Patent Rights clause may include changes in the license and sublicense rights and to the background patents provisions of the clause. Waiver of patent rights shall be subject to the provisions of 41 CFR 9-9.109-6;

(ii) The Rights in Technical Data Clause (long form) of 41 CFR 9-9.202

3(e)(2) shall be used in all Cooperative Agreements having as a purpose the conduct of research, development, or demonstration work, or in any other agreement where technical data are expected to be first produced under the Agreement, where technical data are specified to be delivered in the Agreement, or where the Agreement contains the Additional Technical Data Requirements clause of 41 CFR 9-9.202-3(c). As more fully explained in the policy discussion contained in 41 CFR 9-9.202-3, optional paragraph (g) "Limited Rights in Proprietary Data" of the Rights in Technical Data (long form) clause shall be used where DOE may have a need for delivery of proprietary data under the Agreement; optional paragraph (h) “Contractor Licensing” shall be used where licensing of proprietary data is necessary for the achievement of DOE's objectives relating to the purpose of the Agreement;

(iii) The other clauses relating to patents and technical data for Cooperative Agreements listed in paragraphs (c), (d), and (e) of this section are set forth in 41 CFR Part 9-9 together with policy discussions related to these clauses; and

(iv) Any modifications of the provisions of 41 CFR Part 9-9 shall be obtained from the DOE Assistant General Counsel for Patents.

(5) The citations in paragraphs (c), (d), and (e) of this section are all 41 CFR unless indicated otherwise.

(6) The provisions of paragraphs (c), (d), and (e) will be utilized under the conditions set forth in the cited FPR or DOE PR. For example, if for particular provisions there is a $100,000 threshold for applicability, the provisions should not be used below that threshold. [NOTE: Any applicable threshold means cost of the total project, including DOE and participant share and any later phases of the same project that may receive DOE support]. The provisions must always be revised to change "contract" to "Cooperative Agreement" or "agreement", and "contractor" to "participant." The use of the term "subcontractor" in any of the provisions means contractor to the participant and all tiers of subcontractor thereun

der unless the conditions for use of a provision as set forth in the FPR or DOE PR provides otherwise.

(c) Mandatory general provisions. These provisions are mandatory as to text in all Cooperative Agreements with participants other that those covered under OMB Circulars A-102 and A-110. Deviations, exceptions, or waivers to this requirement may not be made unless approved in accordance with § 600.9 except for non-substantive changes reflecting that a Cooperative Agreement rather than a procurement contract is being entered into.

(1) Order of precedence, 41 CFR 9-7.10250;

(2) Definitions, 41 CFR 9-7.102-1 ;

(3) Inspection, 41 CFR 1-7.402-5(c);

(4) Examination of records by Comptrol

ler General, 41 CFR 9-7.103-3;

(5) Convict labor, 41 CFR 1-7.402-14;

(6) Officials not to benefit, 41 CFR 17.102-17;

(7) Convenant against contingent fees, 41 CFR 1-1.503;

(8) Notice and assistance regarding patent and copyrights infringement, 41 CFR 99.104;

(10) Audit, 41 CFR 1-3.814-2(a); (11) Clean air and water, 41 CFR 11.2302-2;

(12) Preference for US Flag air carriers, 41 CFR 1-1.323-2;

(13) Use of US Flag commercial vessels, 41 CFR 1-19.108–2(b);

(14) Permits and licenses, 41 CFR 9-7.10451;

(15) Reporting of royalties, 41 CFR 99.110;

(16) Authorization and consent, 41 CFR 99.102-2;

(17) Nondiscrimination in federally-assisted programs, 10 CFR 600.39;

(18) Rights in technical data, long form, 41 CFR 9-9.202-3(e)(2);

(19) Contract Work Hours and Safety Standards Act, 41 CFR 1-12.303;

(20) Patent rights, 41 CFR 9-9.107-5(a); (21) Flood insurance, See paragraph (f) below;

(22) Utilization of labor surplus concerns, 41 CFR 1-1.805-3(a);

(23) Labor Surplus Area Subcontracting Program, 41 CFR 1-1.805-3(b);

(24) Disputes, See paragraph (g) below. (d) Mandatory special provisions and deviation requirements. The special provisions listed below are to be included in all Cooperative Agreements with participants other than

those covered by OMB Circulars A-102 and A-110. The specific required clauses may be waived, modified, or deviated from in whole, or in part by the Contracting Officer, however, a written justification must be placed in the file by the Contracting Officer. The justification for such waiver, modification, or deviation must contain the specific reasons the provision is not appropriate, and why a particular special provision must be waived or modified due to the circumstances of the Cooperative Agreement being negotiated.

(1) Subcontracts, 41 CFR 1-7.402-8 as modified by 41 CFR 9-7.402-8;

(2) Termination for convenience of the Government, 41 CFR 9-7.402-10;

(3) Government property, 41 CFR 9-7.40225;

(4) Patent indemnity, 41 CFR 9-9.1033(b);

(5) Limitation of cost or funds, 41 CFR 17.402-2;

(6) Allowable cost and payment, 41 CFR 9-7.402-3;

(7) Buy American Act, 41 CFR 1-6.104-5; (8) Price reduction for defective cost or pricing data, 41 CFR 1-3.814-1(a);

(9) Subcontractor cost or pricing data, 41 CFR 1-3.814-3;

(10) Additional technical data requirements, 41 CFR 9-9.202-3(c);

(11) Utilization of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals, FPR Temporary Regs. 50 Supplement 2, (45 FR 35809 May 28, 1980);

(12) Utilization of Women Owned Business Concerns, FPR Temporary Reg. 54 (45 FR 35814, May 28, 1980).

(e) Optional special provisions. The below listed clauses constitute special optional provisions which should be considered for use in Cooperative Agreements. They may be modified in any manner and no deviations procedure is required for such modification, or for a decision not to use any of these clauses. Contracting Officers should take special precautions to insure that the principles inherent in these clauses are considered for inclusion in any Agreement being prepared to the extent necessary to protect the Government's interest.

(1) Payment for overtime premiums, 41 CFR 1-7.402-28;

(2) Disabled veterans and veterans of the Vietnam era, 41 CFR 1-12.1102-2;

(3) Clauses for cost reimbursement type research and development contracts involving construction, 41 CFR 1-7.403-1;

(4) Excusable delays, 41 CFR 1-8.708; (5) Negotiated overhead rates, 41 CFR 97.203-9;

(6) Notice to the Government of labor disputes, 41 CFR 1-7.203-3;

(7) Make or Buy Program, 41 CFR 13.902-3;

(8) Advance payments, 41 CFR 1-7.403-20; (9) Workmen's compensation insurance, 41 CFR 1-10.402;

(10) Required source for jewel bearings, 41 CFR 1-1.319;

supply sources, 41 CFR 1-7.403-23;

(12) Interest, 41 CFR 1-7.203-15; (13) United States products and services, 41 CFR 1-7.403-36;

(14) Care of laboratory animals, 41 CFR 1-7.303-44 ;

(15) Cost accounting standards, 41 CFR 17.403-50;

(16) Alterations in contract, 41 CFR 17.204-1;

(17) Approval of contract, 41 CFR 1-7.2042;

(18) Date of incurrence of cost, 41 CFR 17.204-3;

(19) Notice regarding late delivery, 41 CFR 1-7.204-4;

(20) Changes, 41 CFR 1-7.404-5;

(21) Key personnel, 41 CFR 1-7.304-6; (22) Disposition of material, 41 CFR 17.304-8 ;

(23) Insurance-liability to third parties, 41 CFR 9-7.204-5;

(24) Printing, 41 CFR 9-7.302-57;

(25) Federal Reports Act, 41 CFR 9-7.30258;

(26) Foreign travel, 41 CFR 9-7.402-60; (27) Security, 41 CFR 9-7.403-51; (28) Privacy Act, 41 CFR 1-1.327-5; (29) Safety and health, 41 CFR 9-7.403-53; (30) Priorities, allocations and allotments, 41 CFR 9-7.104-50;

(31) Soviet-bloc controls, 41 CFR 9-7.30452;

(32) Nuclear hazards indemnity, 41 CFR 9-7.404-53;

(33) Reports of work, 41 CFR 1-7.304-9; (34) Stop work order, 41 CFR 9-7.402-59; (35) Standards of work, 41 CFR 1-7.302-3 ; (36) Walsh-Healy Public Contracts Act, 41 CFR 1-12.605;

(37) Preservation of individual occupational radiation exposure records, 41 CFR 97.403-54;

(38) Waiver of indemnity, 41 CFR 9-9.1034;

(39) Classified inventions, 41 CFR 9-9.106;

(40) Rights to proposal data, 10 CFR 600.231(c);

(41) Small Business and Small Disadvantaged Business Subcontracting Plan (Nego-. tiated), 41 CFR 9-1.710-3(c) (45 FR 24378, Apr. 9, 1980);

(42) Women Owned Business Concerns Subcontracting Program, FPR Temporary Reg. 54 (45 FR 35814 May 28, 1980).

(f) Flood insurance clause. Participant shall comply with the flood insurance purchase requirements of section 102(a) of the Flood Disaster Protection Act of 1973, Public Law 93-234, 87 Stat. 975, approved December 31, 1976. Section 102(a) requires the purchase of flood insurance in communities where such insurance is available as a condition for the receipt of any Federal financial assistance for construction or acquisition purposes for use in any area that has been identified by the Secretary of the Department of Housing and Urban Development as an area having special flood hazards and provisions prescribed by the Federal Insurance Administration in 24 CFR Chapter X, Subchapter B, will be complied with.

(g) Disputes. DOE has established a Financial Assistance Appeals Board to handle disputes under Cooperative Agreements (45 FR 29764, May 5, 1980.) All Cooperative Agreements shall incorporate the following Disputes Clause:

(1) Except as otherwise provided in this Agreement, any dispute concerning a question of fact arising under this Agreement which is not disposed of by Agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail, or otherwise furnish a copy thereof to the participant. The decision of the Contracting Officer shall be final and conclusive unless within 60 days from date of receipt of such copy, the participant mails, or delivers a written notice of appeal to the Department of Energy Financial Assistance Appeals Board in accordance with 10 CFR Part 1024 (See Rule 1). The decision of the Department of Energy Financial Assistance Appeals Board shall be final and conclusive unless determined by a court of competent jurisdiction to have been fradulent, or capricious, or arbitrary, or so

grossly erroneous as necessary to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, the participant shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the participant shall proceed diligently with the performance of the Agreement and in accordance with the Contracting Officer's decision.

(2) This "Disputes Clause" does not preclude consideration of law questions in connection with decisions provided for in paragraph (g)(1) above: Provided, That nothing in this Agreement shall be construed as making final the decision of any administrative official, representative, or board, based on a question of law.

Subpart D-Direct Loans-[Reserved]

Subpart E-Loan Guarantees-
[Reserved]

APPENDIX A-OMB GUIDANCE TO AGEN-
CIES FOR IMPLEMENTING THE FEDERAL
GRANT AND COOPERATIVE AGREEMENT
Аст

(Pub. L. 95-224)

Introduction. The Federal Grant and Cooperative Agreement Act of 1977 (Pub. L. 95-224), signed February 3, 1978, requires executive agencies to distinguish procurement relationships from assistance relationships. A major objective of the act is to achieve consistency in the use of legal instruments by agencies for procurement and assistance transactions. This is a preliminary step toward a broad review of the administration of Federal assistance programs and the relationships created by the terms and conditions of legal assistance instruments. Section 4 of the act requires the use of procurement contracts for all agency acquisition activity. Sections 5 and 6 require the use of grants or cooperative agreements for specified types of assistance relationships. Section 9 authorizes the Director of the Office of Management and Budget to issue supplementary interpretative guidelines to promote consistent and efficient implementation of sections 4, 5, and 6. Subsection 10(d) authorizes the Director to except individual transactions or programs from the act's provisions.

In addition, section 8 of the act requires OMB to conduct a study of Federal assistance relationships and submit a report to Congress in 2 years. The guidelines that follow are based on OMB authorizations under sections 8, 9, and 10(d).

CONTENTS

A. OMB interpretation of the Act.

B. Distinguishing between procurement and assistance.

C. Characterization of grants and cooperative agreements.

D. Agency decision structure for selection of instruments.

E. Administrative requirements for grants and cooperative agreements.

F. Specific guidelines for grants.

G. Specific guidelines for cooperative agreements.

H. Assistance transactions involving only non-monetary transfers.

I. OMB exception policy.

J. OMB exception procedures.

K. Joint funding under grants and cooperative agreements.

L. Agency records.

M. OMB reporting requirements.

GUIDANCE

A. OMB INTERPRETATION OF THE ACT

1. General purposes of the Act. OMB views the Federal Grant and Cooperative Agreement Act as an important opportunity to review, improve, and simplify the broad array of Federal assistance relationships. It sees the Act's objective of Federal consistency for various types of relationships coinciding with the President's goal of making Federal program actions more understandable and predictable. Agencies should give serious consideration to the policy implications of the Act's provisions, particularly Sections 4, 5, and 6, pertaining to the use of contracts, grants, and cooperative agreements as these involve the essence of the way agencies perform fundamental functions.

This Act does not cover all possible relationships that may exist between Federal agencies and others. For example, the sale, lease, license, and other authorizations to use Federal property, when not for the purpose of support or stimulation, are not within the scope and intent of Pub. L. 95224 or this guidance.

2. Orderly implementation of sections 4, 5, and 6. These sections of the Act require agencies to use contracts for all procurement actions, and grants or cooperative agreements to transfer money, property, services, or anything of value to recipients to accomplish a Federal purpose of stimulation or support authorized by statute. Subsection 10(b) says: