September 19, 2003 Francine Massey, MPA Policy & Planning Analyst

1. Understanding the Federal Demonstration Partnership (FDP) & the Expanded Authorities:A Primer for Research & Sponsored Programs Staff September 19, 2003 Francine Massey, MPA Policy & Planning Analyst

2. Applicability of FDP & Expanded Authorities • OMB Circular A-110 “Uniform Administrative Requirements for Grants & Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations” applies to grants & cooperative agreements (assistance mechanisms) made by Federal agencies to institutions of higher education, hospitals and other non-profits. Federal agencies have implemented A-110 in their own specific grant regulations in the CFR. • It does NOT apply to contracts for procurement. • FDP Terms & Conditions replace many of the standard provisions of A-110, and, therefore, apply only to grants & (some) cooperative agreements*. *Only NIH, EPA & AMRMC award cooperative agreements under FDP or Expanded Authorities.

3. Federal Demonstration Partnership History • The FDP is a cooperative effort among federal research agencies, universities and the National Academy of Science's Government-University-Industry Research Roundtable aimed at streamlining and improving the federal/university research support relationship and reducing administrative burden on Principal Investigators. • It began with the Florida Demonstration Project (Phase 1) from 1985-1988. • In 1988 it was expanded and renamed the Federal Demonstration Project II. • In 1996, it was again expanded and renamed the Federal Demonstration Partnership Phase III. • FDP Phase IV began in June 2002 with 90 member institutions and 10 participating Federal agencies.

4. Federal Agencies that Participate in FDP IV • National Science Foundation (NSF) • National Institutes of Health (NIH) • Office of Naval Research (ONR) • Department of Energy (DOE) • Department of Agriculture (USDA) • Air Force Office of Scientific Research (AFOSR) • Army Research Office (ARO) • Army Medical Research and Material Command (AMRMC) • National Aeronautics & Space Administration (NASA) • Environment Protection Agency (EPA)

5. Federal Demonstration Partnership Purpose Gives grantee institutions unilateral authority to: • Incur pre-award costs 90 calendar days prior to award. All pre-award costs are incurred at the recipient’s risk. • Initiate a one-time extension of the award expiration date of up to 12 months. The grantee must notify the Federal agency in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award! This one-time no cost extension may not be exercised merely for the purpose of using unobligated balances. • Carry forward unobligated balances to subsequent funding periods. • Rebudget funds across budget categories.

6. FDP IV General Terms & Conditions • FDP IV General Terms & Conditions are available at: http://www.nsf.gov/pubs/fdp/fdpIV.pdf • This document is dated October 2002 and shows the cross-walk between OMB Circular A-110 terms and FDP IV General Terms & Conditions.

7. Agency Specific FDP Terms • Each participating Federal agency has its own Agency Specific FDP Terms & Conditions. These terms vary from the General Terms & Conditions. • ALWAYS be familiar with the Agency Specific FDP Terms for the granting agency with which you are working! • They may be found at:http://www.nsf.gov/home/grants/grants_fdp.htm

8. Agency Specific FDP Terms (a) State which awards are covered by FDP terms and conditions. (If an agency wants to make a point of the fact that a particular class of awards is not covered, it should state these, too.) (b) State any additional prior approval requirements not included in the general T&C’s (c) State which categories of costs aside from those in A-21 are unallowable as direct charges (d) Provide contact information for technical matters (probably titles, not individuals) (e) Provide contact information for administrative matters (probably titles, not individuals). (f) Provide contact information for intellectual property (titles, not individuals). (g) State other agency-specific requirements, with reference to general requirements if possible. (h) State whether revised budgets must be submitted on agency forms (i) Specify format, content, and timing of technical reporting. (j) Specify form and timing of final financial reporting (k) State any additional documentationbesides progress reports needed to trigger incremental funding.

9. Agency Specific FDP Terms & Conditions • For example, NSF’s Agency Specific FDP Terms impose prior approval requirements on: 1) rebudgeting of funds from the trainee or participant support budget category and 2) any modification of the cost sharing amount listed on Line M of the awarded proposal budget. • The AFOSR, ARO and ONR all require agency prior approval of a first no cost extension (NCE)! AFOSR requires that the request be submitted 30 days prior to expiration of the grant, while ARO requires it at least 20 days prior to the expiration of the grant! However, AMRMC allows the grantee authority to do a one-time NCE. EPA allows one-time grantee approved NCE’s, except on awards for which the funds are restricted to use during that year or if the NCE would push the project over 5 years.

10. Agency Implementation of FDP Matrix • A matrix showing the particular agency-specific implementations of FDP may be found at:http://www.nsf.gov/home/grants/grants_fdp.htm • The document is under the header: “FDP Prior Approval and Other Requirements.”

11. Exceptions to the FDP Terms • Each grant award may carry exceptions to the standard andagency-specific FDP terms and conditions. • For example, you may receive an NIH award that says, “This award is made under the terms of the FDP. However, carryover of an unobligated balance requires NIH prior approval.” • ALWAYS read the specific grant award notice to be certain what institutional authorities UW-Madison has for that award!

12. Handy Tools in the FDP Operating Procedures • Appendix A of the FDP Operating Procedures offers guidance on provisions that apply to subgrants made under FDP: http://www.nsf.gov/pubs/fdp/fdpappa02.pdf • Appendix B is a National Policy Requirements Matrix listing many of the policies that apply to FDP grants.

13. FDP’s Pioneering Success Resulted in the Expanded Authorities • The FDP demonstrations of streamlined agency terms and conditions were so successful that, in 1993, OMB revised Circular A-110 and incorporated these “expanded authorities” into A-110 as the default terms for research grants.

14. Expanded Authorities • OMB Circular A-110 Section __.25(e) authorizes agencies to waive cost-related and administrative prior written approvals required by A-110 and A-21. • This is known as the “Expanded Authorities.”

15. Expanded Authorities • The Expanded Authorities authorize grant recipients to: • Incur pre-award costs 90 calendar days prior to award. All pre-award costs are incurred at the recipient’s risk. • Initiate a one-time extension of the award expiration date of up to 12 months. The grantee must notify the Federal agency in writing with the supporting reasons and revised expiration date at least 10 days before the expiration data specified in the award! This one-time no cost extension may not be exercised merely for the purpose of using unobligated balances. • Carry forward unobligated balances to subsequent funding periods.

16. Program Income Under Expanded Authorities • For awards that support research, OMB A-110 instructs that the additive method of accounting for program income shall apply automatically, unless the awarding agency indicates another alternative in the terms of the award. • “(_24.(b))…program income earned during the project period shall be retained by the recipient and…added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives.”

17. Expanded Budget & Administrative Authorities for Research Grants • “_25(e)(4) For awards that support research, unless the Federal awarding agency provides otherwise in the award or in the agency’s regulations, the prior approval requirements described in paragraph (e) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) applies.” • This means that agencies have the option to issue research grant awards under Expanded Authorities, thereby waiving cost-related (rebudgeting) and administrative prior approvals required by A-110 and A-21. • In practice, individual Federal agencies have implemented some orall of the Expanded Authorities for research grants. For example, NIH’s implementation of Expanded Authorities for research grants is identical to its implementation of the FDP terms and conditions. Always refer to the specific agency’s regulations and to the particular grant award notice for clarification of institutional authorities.

18. Know & Understand Institutional Authorities • Be sure you understand when UW-Madison has institutional authority to unilaterally take an action on a grant, such as issuing a first-time no cost extension. • If you inadvertently send a request to the granting agency for that action, you have potentially forfeited the institutional authority. Once you ask the agency, it has the right to deny the request, and RSP cannot then invoke the institutional authority!

19. Know & Understand Institutional Authorities • Remember that, during an institutionally granted first-time no cost extension period, the PI does not have to get agency prior approval in order to reduce his/her effort on the project. • Once the original project period is over, the PI has met his/her promised effort commitment and may adjust effort during the no cost extension without getting approval.

20. Notifying the Federal Agency • When exercising a first-time no cost extension on a grant under FDP or Expanded Authorities, RSP must notify the Federal agency in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award! • Requests for required agency prior approval must be submitted to the agency at least 30 days before the date of the proposed action! (NSF requires the request 45 days in advance for a 2nd no cost extension.) • Requests for prior approval must be submitted to the agency by RSP and must be signed by an authorized institutional official. (All NSF notifications and requests must be submitted via FastLane.)

21. Use the Correct Award Terms & Order of Precedence • Remember that agencies update their Agency Specific FDP Terms &Conditions periodically. The terms in effect at the time the award was issued govern the award. • Agency research grants are governed by the following in order of precedence: the Federal statute authorizing the award, a special condition of the award, the agency-specific FDP Requirements, and the FDP General Terms & Conditions