Federal Register: April 23, 2009 (Volume 74, Number 77)

DOCID: fr23ap09-1 FR Doc E9-9073

OFFICE OF MANAGEMENT AND BUDGET

Management and Budget Office

CFR Citation: 2 CFR Part 176

NOTICE: RULES

DOCID: fr23ap09-1

DOCUMENT ACTION: Interim final guidance.

SUBJECT CATEGORY:

Requirements for Implementing Sections 1512, 1605, and 1606 of the American Recovery and Reinvestment Act of 2009 for Financial Assistance Awards

DATES: This document is effective April 23, 2009. To be considered in preparation of the final guidance, comments on the interim final guidance must be received by no later than June 22, 2009.

DOCUMENT SUMMARY:

The Office of Federal Financial Management (OFFM) is establishing Governmentwide guidance and standard award terms for agencies to include in financial assistance awards (namely, grants, cooperative agreements, and loans) as part of their implementation of sections 1512, and 1605, and 1606 of the American Recovery and Reinvestment Act of 2009 (Pub. L. 1115). This guidance does not cover all award terms that may be needed on financial assistance awards funded directly or assisted by the Federal Government under the Recovery Act. The focus of this guidance is on implementing Recovery Act provisions that may require greater clarification in order to foster consistent application across the Federal Government. Under the interim final guidance, agencies would use the standard award terms in their financial assistance awards to require recipients and subrecipients (firsttier that are not individuals) to maintain current registrations in the Central Contractor Registration (CCR) database; to require recipients to report quarterly on project or activity status, subgrant and subcontract information; to notify recipients of the domestic sourcing (``Buy American'') requirements that apply to certain iron, steel and manufactured goods; to notify recipients of the wage rate requirements that apply to certain projects; and to ensure proper accounting and reporting of Recovery Act expenditures in single audits.

SUMMARY:

Requirements for Implementing Sections of the American Recovery and Reinvestment Act of 2009 for Financial Assistance Awards,

SUPPLEMENTAL INFORMATION

I. Background

A. Section 1512(c) of the American Recovery and Reinvestment Act of 2009 (Pub. L. 1115, hereafter referred to as ``the Recovery Act'' or ``the Act'') requires, as a condition of receipt of funds, quarterly reporting on the use of funds. The data elements proposed for reporting the information described in section 1512(c) were published in the Federal Register on April 1, 2009 [74 FR 14824]. An entity that receives assistance funding under the Recovery Act must report information including, but not limited to,

i. The total amount of recovery funds received from that agency;

ii. The amount of recovery funds received that were expended or obligated to projects or activities; and

iii. A detailed list of all projects or activities for which recovery funds were expended or obligated, including

1. The name of the project or activity;

2. A description of the project or activity;

3. An evaluation of the completion status of the project or activity;

4. An estimate of the number of jobs created and the number of jobs retained by the project or activity; and

5. For infrastructure investments made by State and local governments, the purpose, total cost, and rationale of the agency for funding the infrastructure investment with funds made available under this Act, and name of the person to contact at the agency if there are concerns with the infrastructure investment.

iv. Detailed information on any subcontracts or subgrants awarded by the recipient to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006, as amended (Pub. L. 109282, hereafter referred to as ``the Transparency Act''), allowing aggregate reporting on awards below $25,000 or to individuals, as prescribed by the Director of the Office of Management and Budget. The Transparency Act identifies specific data elements that the Web site (USAspending.gov) must include for each Federal award and authorizes OMB to specify additional elements for other relevant information. A 2008 amendment to the Transparency Act called the ``Government Funding Transparency Act of 2008'' (Pub. L. 110252) added a requirement to collect
[[Page 18450]]
compensation information on certain chief executive officers (CEOs) of the recipient and subrecipient entity. An entity that receives assistance funding under the Recovery Act must report information required under the Transparency Act including, but not limited to,

1. The name of the entity receiving the award;

2. The amount of the award;

3. The transaction type;

4. The funding agency;

5. The Catalog of Federal Domestic Assistance number;

6. The program source;

7. The location of the entity receiving the award, including four data elements for the city, State, Congressional district, and country;

8. The location of the primary place of performance under the award, including four data elements for the city, State, Congressional district, and country;

9. A unique identifier of the entity receiving the award;

10. A unique identifier of the parent entity of the recipient, should the recipient be owned by another entity; and

11. The names and total compensation of the five most highly compensated officers of the company if it received (1) 80% or more of its annual gross revenues in Federal awards; and (2) $25M or more in annual gross revenue from Federal awards.

B. Section 1512(h) of the Recovery Act requires recipients of Recovery Act funds, including those receiving funds directly from the Federal Government, to register in the Central Contractor Registration (CCR) database at http://www.ccr.gov. Because recipients must report information on their firsttier contracts and awards, 2 CFR part 176 would establish a requirement for subrecipient registration in the CCR as a way to help ensure consistent reporting of data about each entity and thereby make the data more useful to the public. Without the requirement, multiple recipients doing business with the same entity may use different variations of the entity's name, address, or parent organization when they each report on their awards to the entity. It should be noted that in order to register in CCR, a valid Data Universal Numbering System (DUNS) Number is required.

C. Section 1605 of the Recovery Act requires that projects, funded by the Recovery Act, for the construction, alteration, maintenance, or repair of a public building or public work use American iron, steel, and manufactured goods in the project unless one of the specified exemptions applies. The Act provides that this requirement be applied in a manner consistent with U.S. obligations under international agreements. Definitions of ``manufactured good,'' ``public building and public work,'' and other terms as they pertain to the Buy American guidance in 2 CFR part 176 are found in Sec. 176.140 and Sec. 176.160.

D. Section 1606 of the Recovery Act requires the payment of Davis Bacon Act (40 U.S.C. 31) wage rates to ``laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government'' pursuant to the Recovery Act.

E. To maximize the transparency and accountability of funds authorized under the Recovery Act as required by Congress and in accordance with 2 CFR 215.21, ``Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and other NonProfit Organizations'' and OMB Circular A102 Common Rules provisions, recipients agree to maintain records that identify adequately the source and application of Recovery Act funds. Guidance and an award term are provided in part 176 to help ensure that recipients understand their responsibilities with respect to tracking, accounting and reporting transactions during the award and in preparing audit documentation and reports in accordance with OMB Circular A133, if applicable.

II. Next Steps

We will consider all comments received on the interim final version of the OMB guidance as we develop the final guidance. Federal agencies that award grants, cooperative agreements, and other financial assistance awards will immediately implement this interim final guidance through the appropriate award terms. The award terms on awards made while this interim final version of this guidance is in effect do not need to be modified to reflect any modified award terms in the final guidance unless specifically required in the final guidance. List of Subjects in 2 CFR Part 176

Assistance awards, Authorized agency action official, Award officials, Buy American, Classified, DavisBacon Act, Grants, Cooperative agreements, Loans, Recovery Act, Wage rate.
Danny Werfel,
Deputy Controller.
For the reasons set forth above, the Office of Management and Budget amends 2 CFR chapter I by adding part 176 to read as follows: PART 176AWARD TERMS FOR ASSISTANCE AGREEMENTS THAT INCLUDE FUNDS UNDER THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009, PUBLIC LAW 1115
Sec.
176.10 Purpose of this part.
176.20 Agency responsibilities (general).
176.30 Definitions.
Subpart AReporting and Registration Requirements under Section 1512 of the American Recovery and Reinvestment Act of 2009
176.40 Procedure.
176.50 Award termReporting and registration requirements under section 1512 of the Recovery Act.
Subpart BBuy American Requirement Under Section 1605 of the American Recovery and Reinvestment Act of 2009
176.60 Statutory requirement.
176.70 Policy.
176.80 Exceptions.
176.90 Nonapplication to acquisitions covered under international agreements.
176.100 Timely determination concerning the inapplicability of section 1605 of the Recovery Act.
176.110 Evaluating proposals of foreign iron, steel, and/or manufactured goods.
176.120 Determinations on late requests.
176.130 Noncompliance.
176.140 Award termRequired Use of American Iron, Steel, and Manufactured GoodsSection 1605 of the American Recovery and Reinvestment Act of 2009.
176.150 Notice of Required Use of American Iron, Steel, and Manufactured GoodsSection 1605 of the American Recovery and Reinvestment Act of 2009.
176.160 Award termRequired Use of American Iron, Steel, and Manufactured Goods (covered under International Agreements)Section 1605 of the American Recovery and Reinvestment Act of 2009. 176.170 Notice of Required Use of American Iron, Steel, and Manufactured Goods (covered under International Agreements)Section 1605 of the American Recovery and Reinvestment Act of 2009. Appendix to Subpart B of Part 176U.S. States, Other SubFederal Entities, and Other Entities Subject to U.S. Obligations Under International Agreements
Subpart CWage Rate Requirements Under Section 1606 of the American Recovery and Reinvestment Act of 2009
176.180 Procedure.
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176.190 Award termWage Rate Requirements under Section 1606 of the American Recovery and Reinvestment Act of 2009.
Subpart DSingle Audit Information for Recipients of Recovery Act Funds
176.200 Procedure.
176.210 Award termRecovery Act Transactions listed in Schedule of Expenditures of Federal Awards and Recipient Responsibilities for Informing Subrecipients.

Authority: American Recovery and Reinvestment Act of 2009, Public Law 1115; Federal Funding Accountability and Transparency Act of 2006, (Pub. L. 109282), as amended.

Sec. 176.10 Purpose of this part.

This part establishes Federal Governmentwide award terms for financial assistance awards, namely, grants, cooperative agreements, and loans, to implement the crosscutting requirements of the American Recovery and Reinvestment Act of 2009, Public Law 1115 (Recovery Act). These requirements are crosscutting in that they apply to more than one agency's awards.
Sec. 176.20 Agency responsibilities (general).
(a) In any assistance award funded in whole or in part by the Recovery Act, the award official shall indicate that the award is being made under the Recovery Act, and indicate what projects and/or activities are being funded under the Recovery Act. This requirement applies whenever Recovery Act funds are used, regardless of the assistance type.
(b) To maximize transparency of Recovery Act funds required for reporting by the assistance recipient, the award official shall consider structuring assistance awards to allow for separately tracking Recovery Act funds.
(c) Award officials shall ensure that recipients comply with the Recovery Act requirements of Subpart A. If the recipient fails to comply with the reporting requirements or other award terms, the award official or other authorized agency action official shall take the appropriate enforcement or termination action in accordance with 2 CFR 215.62 or the agency's implementation of the OMB Circular A102 grants management common rule. OMB Circular A102 is available at http:// www.whitehouse.gov/omb/circulars/a102/a102.html.
(d) The award official shall make the recipient's failure to comply with the reporting requirements a part of the recipient's performance record.
Sec. 176.30 Definitions.

As used in this part

Award means any grant, cooperative agreement or loan made with Recovery Act funds. Award official means a person with the authority to enter into, administer, and/or terminate financial assistance awards and make related determinations and findings.

Classified or ``classified information'' means any knowledge that can be communicated or any documentary material, regardless of its physical form or characteristics, that
(1)(i) Is owned by, is produced by or for, or is under the control of the United States Government; or
(ii) Has been classified by the Department of Energy as privately generated restricted data following the procedures in 10 CFR 1045.21; and
(2) Must be protected against unauthorized disclosure according to Executive Order 12958, Classified National Security Information, April 17, 1995, or classified in accordance with the Atomic Energy Act of 1954.

Recipient means any entity other than an individual that receives Recovery Act funds in the form of a grant, cooperative agreement or loan directly from the Federal Government.

Recovery funds or Recovery Act funds are funds made available through the appropriations of the American Recovery and Reinvestment Act of 2009, Public Law 1115.

Subaward means
(1) A legal instrument to provide support for the performance of any portion of the substantive project or program for which the recipient received this award and that the recipient awards to an eligible subrecipient;
(2) The term does not include the recipient's procurement of property and services needed to carry out the project or program (for further explanation, see Sec. .210 of the attachment to OMB Circular A133, ``Audits of States, Local Governments, and NonProfit Organizations''). OMB Circular A133 is available at http:// www.whitehouse.gov/omb/circulars/a133/a133.html.
(3) A subaward may be provided through any legal agreement, including an agreement that the recipient or a subrecipient considers a contract.

Subcontract means a legal instrument used by a recipient for procurement of property and services needed to carry out the project or program.

Subrecipient or Subawardee means a nonFederal entity that expends Federal awards received from a passthrough entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. Guidance on distinguishing between a subrecipient and a vendor is provided in Sec. .210 of OMB Circular A133.
Subpart AReporting and Registration Requirements Under Section 1512 of the American Recovery and Reinvestment Act of 2009

Sec. 176.40 Procedure.

The award official shall insert the standard award term in this Subpart in all awards funded in whole or in part with Recovery Act funds, except for those that are classified, awarded to individuals, or awarded under mandatory and entitlement programs, except as specifically required by OMB, or expressly exempted from the reporting requirement in the Recovery Act.
Sec. 176.50 Award termReporting and registration requirements under section 1512 of the Recovery Act.

Agencies are responsible for ensuring that their recipients report information required under the Recovery Act in a timely manner. The following award term shall be used by agencies to implement the recipient reporting and registration requirements in section 1512: (a) This award requires the recipient to complete projects or activities which are funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act) and to report on use of Recovery Act funds provided through this award. Information from these reports will be made available to the public.
(b) The reports are due no later than ten calendar days after each calendar quarter in which the recipient receives the assistance award funded in whole or in part by the Recovery Act.
(c) Recipients and their firsttier recipients must maintain current registrations in the Central Contractor Registration (http:// www.ccr.gov) at all times during which they have active federal awards funded with Recovery Act funds. A Dun and Bradstreet Data Universal Numbering System (DUNS) Number (http://www.dnb.com) is one of the requirements for registration in the Central Contractor Registration. (d) The recipient shall report the information described in section 1512(c) of the Recovery Act using the reporting instructions and data elements that will be provided online at http:// www.FederalReporting.gov and ensure that any information that is pre filled is corrected or updated as needed.
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Subpart BBuy American Requirement Under Section 1605 of the American Recovery and Reinvestment Act of 2009

Sec. 176.60 Statutory requirement.

Section 1605 of the Recovery Act prohibits use of recovery funds for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. The law requires that this prohibition be applied in a manner consistent with U.S. obligations under international agreements, and it provides for waiver under three circumstances:
(a) Iron, steel, or relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality;
(b) Inclusion of iron, steel, or manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent; or
(c) Applying the domestic preference would be inconsistent with the public interest.

Sec. 176.70 Policy.

Except as provided in Sec. 176.80 or Sec. 176.90 (a) None of the funds appropriated or otherwise made available by the Recovery Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work (see definitions at Sec. Sec. 176.140 and 176.160) unless
(1) The public building or public work is located in the United States; and
(2) All of the iron, steel, and manufactured goods used in the project are produced or manufactured in the United States.
(i) Production in the United States of the iron or steel used in the project requires that all manufacturing processes must take place in the United States, except metallurgical processes involving refinement of steel additives. These requirements do not apply to iron or steel used as components or subcomponents of manufactured goods used in the project.
(ii) There is no requirement with regard to the origin of components or subcomponents in manufactured goods used in the project, as long as the manufacturing occurs in the United States.
(b) Paragraph (a) of this section shall not apply where the Recovery Act requires the application of alternative Buy American requirements for iron, steel, and manufactured goods.
Sec. 176.80 Exceptions.
(a) When one of the following exceptions applies in a case or category of cases, the award official may allow the recipient to use foreign iron, steel and/or manufactured goods in the project without regard to the restrictions of section 1605 of the Recovery Act: (1) Nonavailability. The head of the Federal department or agency may determine that the iron, steel or relevant manufactured good is not produced or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. The determinations of nonavailability of the articles listed at 48 CFR 25.104(a) and the procedures at 48 CFR 25.103(b)(1) also apply if any of those articles are manufactured goods needed in the project. (2) Unreasonable cost. The head of the Federal department or agency may determine that the cost of domestic iron, steel, or relevant manufactured goods will increase the cost of the overall project by more than 25 percent in accordance with Sec. 176.110.
(3) Inconsistent with public interest. The head of the Federal department or agency may determine that application of the restrictions of section 1605 of the Recovery Act would be inconsistent with the public interest.
(b) When a determination is made for any of the reasons stated in this section that certain foreign iron, steel, and/or manufactured goods may be used
(1) The award official shall list the excepted materials in the award; and
(2) The head of the Federal department or agency shall publish a notice in the Federal Register within two weeks after the determination is made, unless the item has already been determined to be domestically nonavailable. A list of items that are not domestically available is at 48 CFR 25.104(a). The Federal Register notice or information from the notice may be posted by OMB to Recovery.gov. The notice shall include (i) The title ``Buy American Exception under the American Recovery and Reinvestment Act of 2009'';
(ii) The dollar value and brief description of the project; and (iii) A detailed written justification as to why the restriction is being waived.
Sec. 176.90 Nonapplication to acquisitions covered under international agreements.

Acquisitions covered by international agreements. Section 1605(d) of the Recovery Act provides that the Buy American requirement in section 1605 shall be applied in a manner consistent with U.S. obligations under international agreements.
(a) The Buy American requirement set out in Sec. 176.70 shall not be applied where the iron, steel, or manufactured goods used in the project are from a Party to an international agreement, listed in paragraph (b)(2) of this section, and the recipient is required under an international agreement, described in the appendix to this subpart, to treat the goods and services of that Party the same as domestic goods and services. This obligation shall only apply to projects with an estimated value of $7,443,000 or more and projects that are not specifically excluded from the application of those agreements. (b) The international agreements that obligate recipients that are covered under an international agreement to treat the goods and services of a Party the same as domestic goods and services and the respective Parties to the agreements are:
(1) The World Trade Organization Government Procurement Agreement (Aruba, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and United Kingdom);
(2) The following Free Trade Agreements:
(i) Dominican RepublicCentral AmericaUnited States Free Trade Agreement (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua);
(ii) North American Free Trade Agreement (NAFTA) (Canada and Mexico);
(iii) United StatesAustralia Free Trade Agreement;
(iv) United StatesBahrain Free Trade Agreement;
(v) United StatesChile Free Trade Agreement;
(vi) United StatesIsrael Free Trade Agreement;
(vii) United StatesMorocco Free Trade Agreement;
(viii) United StatesOman Free Trade Agreement;
(ix) United StatesPeru Trade Promotion Agreement; and
(x) United StatesSingapore Free Trade Agreement.
(3) United StatesEuropean Communities Exchange of Letters (May 15, 1995): Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, [[Page 18453]]
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom. Sec. 176.100 Timely determination concerning the inapplicability of section 1605 of the Recovery Act.
(a) The head of the Federal department or agency involved may make a determination regarding inapplicability of section 1605 to a particular case or to a category of cases.
(b) Before Recovery Act funds are awarded by the Federal agency or obligated by the recipient for a project for the construction, alteration, maintenance, or repair of a public building or public work, an applicant or recipient may request from the award official a determination concerning the inapplicability of section 1605 of the Recovery Act for specifically identified items.
(c) The time for submitting the request and the information and supporting data that must be included in the request are to be specified in the agency's and recipient's request for applications and/ or proposals, and as appropriate, in other written communications. The content of those communications should be consistent with the notice in Sec. 176.150 or Sec. 176.170, whichever applies.
(d) The award official must evaluate all requests based on the information provided and may supplement this information with other readily available information.
(e) In making a determination based on the increased cost to the project of using domestic iron, steel, and/or manufactured goods, the award official must compare the total estimated cost of the project using foreign iron, steel and/or relevant manufactured goods to the estimated cost if all domestic iron, steel, and/or relevant manufactured goods were used. If use of domestic iron, steel, and/or relevant manufactured goods would increase the cost of the overall project by more than 25 percent, then the award official shall determine that the cost of the domestic iron, steel, and/or relevant manufactured goods is unreasonable.
Sec. 176.110 Evaluating proposals of foreign iron, steel, and/or manufactured goods.
(a) If the award official receives a request for an exception based on the cost of certain domestic iron, steel, and/or manufactured goods being unreasonable, in accordance with Sec. 176.80, then the award official shall apply evaluation factors to the proposal to use such foreign iron, steel, and/or manufactured goods as follows:
(1) Use an evaluation factor of 25 percent, applied to the total estimated cost of the project, if the foreign iron, steel, and/or manufactured goods are to be used in the project based on an exception for unreasonable cost requested by the applicant.
(2) Total evaluated cost = project cost estimate + (.25 x project cost estimate, if paragraph (a)(1) of this section applies). (b) Applicants or recipients also may submit alternate proposals based on use of equivalent domestic iron, steel, and/or manufactured goods to avoid possible denial of Recovery Act funding for the proposal if the Federal Government determines that an exception permitting use of the foreign item(s) does not apply.
(c) If the award official makes an award to an applicant that proposed foreign iron, steel, and/or manufactured goods not listed in the applicable notice in the request for applications or proposals, then the award official must add the excepted materials to the list in the award term.
Sec. 176.120 Determinations on late requests.
(a) If a recipient requests a determination regarding the inapplicability of section 1605 of the Recovery Act after obligating Recovery Act funds for a project for construction, alteration, maintenance, or repair (late request), the recipient must explain why it could not request the determination before making the obligation or why the need for such determination otherwise was not reasonably foreseeable. If the award official concludes that the recipient should have made the request before making the obligation, the award official may deny the request.
(b) The award official must base evaluation of any late request for a determination regarding the inapplicability of section 1605 of the Recovery Act on information required by Sec. 176.150(c) and (d) or Sec. 176.170(c) and (d) and/or other readily available information. (c) If a determination, under Sec. 176.80 is made after Recovery Act funds were obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official must amend the award to allow use of the foreign iron, steel, and/or relevant manufactured goods. When the basis of the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other appropriate actions taken to cover costs associated with acquiring or using the foreign iron, steel, and/or manufactured goods. When the basis for the exception is the unreasonable cost of domestic iron, steel, and/or manufactured goods the award official shall adjust the award amount or the budget, as appropriate, by at least the differential established in Sec. 176.110(a).
Sec. 176.130 Noncompliance.

The award official must
(a) Review allegations of violations of section 1605 of the Recovery Act;
(b) Unless fraud is suspected, notify the recipient of the apparent unauthorized use of foreign iron, steel, and/or manufactured goods and request a reply, to include proposed corrective action; and (c) If the review reveals that a recipient or subrecipient has used foreign iron, steel, and/or manufactured goods without authorization, take appropriate action, including one or more of the following: (1) Process a determination concerning the inapplicability of section 1605 of the Recovery Act in accordance with Sec. 176.120. (2) Consider requiring the removal and replacement of the unauthorized foreign iron, steel, and/or manufactured goods. (3) If removal and replacement of foreign iron, steel, and/or manufactured goods used in a public building or a public work would be impracticable, cause undue delay, or otherwise be detrimental to the interests of the Federal Government, the award official may determine in writing that the foreign iron, steel, and/or manufactured goods need not be removed and replaced. A determination to retain foreign iron, steel, and/or manufactured goods does not constitute a determination that an exception to section 1605 of the Recovery Act applies, and this should be stated in the determination. Further, a determination to retain foreign iron, steel, and/or manufactured goods does not affect the Federal Government's right to reduce the amount of the award by the cost of the steel, iron, or manufactured goods that are used in the project or to take enforcement or termination action in accordance with the agency's grants management regulations.
(4) If the noncompliance is sufficiently serious, consider exercising appropriate remedies, such as withholding cash payments pending correction of the deficiency, suspending or terminating the award, and withholding further awards for the project. Also consider preparing and
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forwarding a report to the agency suspending or debarring official in accordance with the agency's debarment rule implementing 2 CFR part 180. If the noncompliance appears to be fraudulent, refer the matter to other appropriate agency officials, such as the officer responsible for criminal investigation.
Sec. 176.140 Award termRequired Use of American Iron, Steel, and Manufactured GoodsSection 1605 of the American Recovery and Reinvestment Act of 2009.

When awarding Recovery Act funds for construction, alteration, maintenance, or repair of a public building or public work that does not involve iron, steel, and/or manufactured goods covered under international agreements, the agency shall use the award term described in the following paragraphs:
(a) Definitions. As used in this award term and condition (1) Manufactured good means a good brought to the construction site for incorporation into the building or work that has been
(i) Processed into a specific form and shape; or
(ii) Combined with other raw material to create a material that has different properties than the properties of the individual raw materials.
(2) Public building and public work means a public building of, and a public work of, a governmental entity (the United States; the District of Columbia; commonwealths, territories, and minor outlying islands of the United States; State and local governments; and multi State, regional, or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, and canals, and the construction, alteration, maintenance, or repair of such buildings and works.
(3) Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. (b) Domestic preference. (1) This award term and condition implements Section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act) (Pub. L. 1115), by requiring that all iron, steel, and manufactured goods used in the project are produced in the United States except as provided in paragraph (b)(3) and (b)(4) of this section and condition.
(2) This requirement does not apply to the material listed by the Federal Government as follows:
[Award official to list applicable excepted materials or indicate ``none'']
(3) The award official may add other iron, steel, and/or manufactured goods to the list in paragraph (b)(2) of this section and condition if the Federal Government determines that
(i) The cost of the domestic iron, steel, and/or manufactured goods would be unreasonable. The cost of domestic iron, steel, or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the cost of the overall project by more than 25 percent;
(ii) The iron, steel, and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or
(iii) The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest. (c) Request for determination of inapplicability of Section 1605 of the Recovery Act. (1)(i) Any recipient request to use foreign iron, steel, and/or manufactured goods in accordance with paragraph (b)(3) of this section shall include adequate information for Federal Government evaluation of the request, including
(A) A description of the foreign and domestic iron, steel, and/or manufactured goods;
(B) Unit of measure;
(C) Quantity;
(D) Cost;
(E) Time of delivery or availability;
(F) Location of the project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason for use of foreign iron, steel, and/or manufactured goods cited in accordance with paragraph (b)(3) of this section.
(ii) A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph (d) of this section.
(iii) The cost of iron, steel, and/or manufactured goods material shall include all delivery costs to the construction site and any applicable duty.
(iv) Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination.
(2) If the Federal Government determines after funds have been obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other actions taken to cover costs associated with acquiring or using the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is the unreasonable cost of the domestic iron, steel, or manufactured goods, the award official shall adjust the award amount or redistribute budgeted funds by at least the differential established in 2 CFR 176.110(a).
(3) Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies, use of foreign iron, steel, and/or manufactured goods is noncompliant with section 1605 of the American Recovery and Reinvestment Act.
(d) Data. To permit evaluation of requests under paragraph (b) of this section based on unreasonable cost, the Recipient shall include the following information and any applicable supporting data based on the survey of suppliers:
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Foreign and Domestic Items Cost Comparison
Unit of Cost Description measure Quantity (dollars)* Item 1:

Foreign steel, iron, or
manufactured good........

Domestic steel, iron, or
manufactured good........
Item 2:

Foreign steel, iron, or
manufactured good........

Domestic steel, iron, or
manufactured good........
[List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.] [Include other applicable supporting information.]
[*Include all delivery costs to the construction site.]
Sec. 176.150 Notice of Required Use of American Iron, Steel, and Manufactured GoodsSection 1605 of the American Recovery and Reinvestment Act of 2009.

When awarding Recovery Act funds for construction, alteration, maintenance, or repair of a public building or public work that involves iron, steel, and/or manufactured goods materials covered under international agreements, the agency shall use the award term described in the following paragraphs:
(a) Definitions. As used in this award term and condition

Designated country(1) A World Trade Organization Government Procurement Agreement country (Aruba, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and United Kingdom;
(2) A Free Trade Agreement (FTA) country (Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Mexico, Morocco, Nicaragua, Oman, Peru, or Singapore); or
(3) A United StatesEuropean Communities Exchange of Letters (May 15, 1995) country: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and United Kingdom.

Designated country iron, steel, and/or manufactured goods(1) Is wholly the growth, product, or manufacture of a designated country; or (2) In the case of a manufactured good that consist in whole or in part of materials from another country, has been substantially transformed in a designated country into a new and different manufactured good distinct from the materials from which it was transformed.

Domestic iron, steel, and/or manufactured good(1) Is wholly the growth, product, or manufacture of the United States; or
(2) In the case of a manufactured good that consists in whole or in part of materials from another country, has been substantially transformed in the United States into a new and different manufactured good distinct from the materials from which it was transformed. There is no requirement with regard to the origin of components or subcomponents in manufactured goods or products, as long as the manufacture of the goods occurs in the United States.

Foreign iron, steel, and/or manufactured good means iron, steel [[Page 18456]]
and/or manufactured good that is not domestic or designated country iron, steel, and/or manufactured good.

Manufactured good means a good brought to the construction site for incorporation into the building or work that has been
(1) Processed into a specific form and shape; or
(2) Combined with other raw material to create a material that has different properties than the properties of the individual raw materials.

Public building and public work means a public building of, and a public work of, a governmental entity (the United States; the District of Columbia; commonwealths, territories, and minor outlying islands of the United States; State and local governments; and multiState, regional, or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, and canals, and the construction, alteration, maintenance, or repair of such buildings and works.

Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. (b) Iron, steel, and manufactured goods. (1) The award term and condition described in this section implements
(i) Section 1605(a) of the American Recovery and Reinvestment Act of 2009 (Pub. L. 1115) (Recovery Act), by requiring that all iron, steel, and manufactured goods used in the project are produced in the United States; and
(ii) Section 1605(d), which requires application of the Buy American requirement in a manner consistent with U.S. obligations under international agreements. The restrictions of section 1605 of the Recovery Act do not apply to designated country iron, steel, and/or manufactured goods. The Buy American requirement in section 1605 shall not be applied where the iron, steel or manufactured goods used in the project are from a Party to an international agreement that obligates the recipient to treat the goods and services of that Party the same as domestic goods and services. This obligation shall only apply to projects with an estimated value of $7,443,000 or more.
(2) The recipient shall use only domestic or designated country iron, steel, and manufactured goods in performing the work funded in whole or part with this award, except as provided in paragraphs (b)(3) and (b)(4) of this section.
(3) The requirement in paragraph (b)(2) of this section does not apply to the iron, steel, and manufactured goods listed by the Federal Government as follows:
[Award official to list applicable excepted materials or indicate ``none'']
(4) The award official may add other iron, steel, and manufactured goods to the list in paragraph (b)(3) of this section if the Federal Government determines that
(i) The cost of domestic iron, steel, and/or manufactured goods would be unreasonable. The cost of domestic iron, steel, and/or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the overall cost of the project by more than 25 percent;
(ii) The iron, steel, and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality; or (iii) The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest. (c) Request for determination of inapplicability of section 1605 of the Recovery Act or the Buy American Act. (1)(i) Any recipient request to use foreign iron, steel, and/or manufactured goods in accordance with paragraph (b)(4) of this section shall include adequate information for Federal Government evaluation of the request, including
(A) A description of the foreign and domestic iron, steel, and/or manufactured goods;
(B) Unit of measure;
(C) Quantity;
(D) Cost;
(E) Time of delivery or availability;
(F) Location of the project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason for use of foreign iron, steel, and/or manufactured goods cited in accordance with paragraph (b)(4) of this section.
(ii) A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph (d) of this section.
(iii) The cost of iron, steel, or manufactured goods shall include all delivery costs to the construction site and any applicable duty. (iv) Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination.
(2) If the Federal Government determines after funds have been obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel, and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other appropriate actions taken to cover costs associated with acquiring or using the foreign iron, steel, and/or relevant manufactured goods.. When the basis for the exception is the unreasonable cost of the domestic iron, steel, or manufactured goods, the award official shall adjust the award amount or redistribute budgeted funds, as appropriate, by at least the differential established in 2 CFR 176.110(a).
(3) Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies, use of foreign iron, steel, and/or manufactured goods other than designated country iron, steel, and/or manufactured goods is noncompliant with the applicable Act. (d) Data. To permit evaluation of requests under paragraph (b) of this section based on unreasonable cost, the applicant shall include the following information and any applicable supporting data based on the survey of suppliers:
[[Page 18457]]
Foreign and Domestic Items Cost Comparison
Unit of Cost Description measure Quantity (dollars)* Item 1:

Foreign steel, iron, or
manufactured good........

Domestic steel, iron, or
manufactured good........
Item 2:

Foreign steel, iron, or
manufactured good........

Domestic steel, iron, or
manufactured good........
[List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.] [Include other applicable supporting information.]
[*Include all delivery costs to the construction site.]
Sec. 176.170 Notice of Required Use of American Iron, Steel, and Manufactured Goods (covered under International Agreements)Section 1605 of the American Recovery and Reinvestment Act of 2009.

When requesting applications or proposals for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair of a public building or public work, and involve iron, steel, and/or manufactured goods covered under international agreements, the agency shall use the notice described in the following paragraphs in the solicitation:
(a) Definitions. Designated country iron, steel, and/or manufactured goods, foreign iron, steel, and/or manufactured good, manufactured good, public building and public work, and steel, as used in this provision, are defined in 2 CFR 176.160(a).
(b) Requests for determinations of inapplicability. A prospective applicant requesting a determination regarding the inapplicability of section 1605 of the American Recovery and Reinvestment Act of 2009 (Pub. L. 1115) (Recovery Act) should submit the request to the award official in time to allow a determination before submission of applications or proposals. The prospective applicant shall include the information and applicable supporting data required by 2 CFR 176.160 (c) and (d) in the request. If an applicant has not requested a determination regarding the inapplicability of section 1605 of the Recovery Act before submitting its application or proposal, or has not received a response to a previous request, the applicant shall include the information and supporting data in the application or proposal. (c) Evaluation of project proposals. If the Federal Government determines that an exception based on unreasonable cost of domestic iron, steel, and/or manufactured goods applies, the Federal Government will evaluate a project requesting exception to the requirements of section 1605 of the Recovery Act by adding to the estimated total cost of the project 25 percent of the project cost if foreign iron, steel, or manufactured goods are used based on unreasonable cost of comparable domestic iron, steel, or manufactured goods.
(d) Alternate project proposals. (1) When a project proposal includes foreign iron, steel, and/or manufactured goods, other than designated country iron, steel, and/or manufactured goods, that are not listed by the Federal Government in this Buy American notice in the request for applications or proposals, the applicant may submit an alternate proposal based on use of equivalent domestic or designated country iron, steel, and/or manufactured goods.
(2) If an alternate proposal is submitted, the applicant shall submit a separate cost comparison table prepared in accordance with paragraphs 2 CFR 176.160(c) and (d) for the proposal that is based on the use of any foreign iron, steel, and/or manufactured goods for which the Federal Government has not yet determined an exception applies. (3) If the Federal Government determines that a particular exception requested in accordance with 2 CFR 176.160(b) does not apply, the Federal Government will evaluate only those proposals based on use of the equivalent domestic or designated country iron, steel, and/or manufactured goods, and the applicant shall be required to furnish such domestic or designated country items.
Appendix to Subpart B of Part 176U.S. States, Other SubFederal Entities, and Other Entities Subject to U.S. Obligations Under International Agreements
Relevant international States Entities covered Exclusions agreements Arizona.............................. Executive branch ....................... WTO GPA (except agencies. Canada). U.S.Chile FTA. U.S.Singapore FTA. Arkansas............................. Executive branch construction services.. WTO GPA (except agencies, including Canada). universities but DRCAFTA. excluding the Office U.S.Australia FTA. of Fish and Game. U.S.Chile FTA. U.S.Morocco FTA. US.Peru TPA. U.S.Singapore FTA. California........................... Executive branch ....................... WTO GPA (except agencies. Canada). U.S.Australia FTA. U.S.Chile FTA. U.S.Singapore FTA. Colorado............................. Executive branch ....................... WTO GPA (except agencies. Canada). DRCAFTA. U.S.Australia FTA. U.S.Chile FTA. U.S.Morocco FTA. U.S.Peru TPA. [[Page 18458]]
U.S.Singapore FTA. Connecticut.......................... Department of ....................... WTO GPA (except Administrative Canada). Services. DRCAFTA. U.S.Australia FTA. U.S.Chile FTA. U.S.Morocco FTA. U.S.Singapore FTA. Department of
Transportation.
Department of Public Works.
Constituent Units of Higher Education.
Delaware............................. Administrative constructiongrade WTO GPA (except Services (Central steel (including Canada). Procurement Agency). requirements on DRCAFTA (except subcontracts); motor Honduras). vehicles; coal. U.S.Australia FTA. U.S.Chile FTA. U.S.Morocco FTA. U.S.Singapore FTA. State Universities.
State Colleges.
Florida.............................. Executive branch constructiongrade WTO GPA (except agencies. steel (including Canada). requirements on DRCAFTA. subcontracts); motor U.S.Australia FTA. vehicles; coal. U.S.Chile FTA. U.S.Morocco FTA. U.S.Peru TPA. U.S.Singapore FTA. Georgia.............................. Department of beef; compost; mulch... U.S.Australia FTA. Administrative
Services
Georgia Technology
Authority..
Hawaii............................... Department of software developed in WTO GPA (except Accounting and General the state; Canada). Services. construction. DRCAFTA (except Honduras). U.S.Australia FTA. U.S.Chile FTA. U.S.Morocco FTA. U.S.Singapore FTA. Idaho................................ Central Procurement ....................... WTO GPA (except Agency (including all Canada). colleges and DRCAFTA (except universities subject Honduras). to central purchasing U.S.Australia FTA. oversight). U.S.Chile FTA. U.S.Morocco FTA. U.S.Singapore FTA. Illinois............................. Department of Central constructiongrade WTO GPA (except Management Services. steel (including Canada). requirements on U.S.Australia FTA. subcontracts); motor U.S.Chile FTA. vehicles; coal. U.S.Peru TPA. U.S.Singapore FTA. U.S.EC Exchange of Letters (applies to EC Member States for procurement not covered by WTO GPA and only where the state considers outofstate suppliers). Iowa................................. Department of General constructiongrade WTO GPA (except Services steel (including Canada). Department of requirements on U.S.Chile FTA. Transportation.. subcontracts); motor U.S.Singapore FTA. Board of Regents' vehicles; coal. Institutions
(universities).
Kansas............................... Executive branch construction services; WTO GPA (except agencies. automobiles; aircraft. Canada). U.S.Australia F

FOR FURTHER INFORMATION CONTACT

Marguerite Pridgen, Office of Federal Financial Management, Office of Management and Budget, telephone (202) 3957844 (direct) or (202) 3953993 (main office) and email: Marguerite_E._Pridgen@omb.eop.gov.

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Federal Register: April 23, 2009 (Volume 74, Number 77)

DOCID: fr23ap09-1 FR Doc E9-9073

OFFICE OF MANAGEMENT AND BUDGET

Management and Budget Office

CFR Citation: 2 CFR Part 176

NOTICE: RULES

DOCID: fr23ap09-1

DOCUMENT ACTION: Interim final guidance.

SUBJECT CATEGORY:

DATES: This document is effective April 23, 2009. To be considered in preparation of the final guidance, comments on the interim final guidance must be received by no later than June 22, 2009.

DOCUMENT SUMMARY:

SUMMARY:

SUPPLEMENTAL INFORMATION

II. Next Steps

Sec. 176.10 Purpose of this part.

Sec. 176.40 Procedure.

Sec. 176.60 Statutory requirement.

Sec. 176.70 Policy.

FOR FURTHER INFORMATION CONTACT