November 9, 2016

Department of Defense Proposes New Uniform Grant and Cooperative Agreement Regulations

Holland & Knight Government Contracts Blog
Mary Beth Bosco

On November 7, 2016, the Department of Defense (DoD) published six Notices of Proposed Rulemakings that collectively update the agency's existing interim regulations governing awards of grants and cooperative agreements. 81 Fed. Reg. 78356. Interested parties have until February 6, 2017 to comment on the proposals.

The Office of Management and Budget (OMB) updated its government-wide guidance on grants and cooperative agreements in 2013.  2 C.F.R. Part 200. The updated OMB guidance, contained in Title 2 of the Code of Federal Regulations (CFR), merged content previously contained in OMB Circulars A-110, A-102, A-21, A-87, A-122 and A-133. In 2014, DoD adopted revised grant regulations – the DoDGARs -- to conform with the new OMB guidance. The November 7, 2016 proposal further adjusts the DoD grant regulations to match those of OMB, removing portions of the DoDGARs  (32 C.F.R. Parts 32, 33 and 34), and replacing them with seven subchapters in CFR Title 2.  (2 C.F.R. Parts 1126, 1128, 1130, 1132, 1134, 1136 and 1138.) 

More specifically, the notice of proposed rulemaking aims to standardize grant and cooperative agreement formats and requirements among all DoD components' awards to institutions of higher education, nonprofit organizations, States, local governments and Indian tribes. For example, DoD grant agreements now can vary from DoD component to DoD component, with contradictory terms and requirements. Another key change is the clarification of which requirements apply to the DoD components and which apply to the recipients. DoD's current proposal addresses these issues by incorporation of the requirements already contained in 2 C.F.R. Part 200. These regulations establish standards for, among other items, financial controls, cost allowability and internal controls. 

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