[Federal Register: December 9, 1997 (Volume 62, Number 236)]
[Rules and Regulations]
[Page 64682-64687]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09de97-3]
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DEPARTMENT OF COMMERCE
National Institute of Standards and Technology
15 CFR Part 295
[Docket No. 970822200-7272-02]
RIN 0693-AB44
Advanced Technology Program
AGENCY: National Institute of Standards and Technology, Technology
Administration, Commerce.
ACTION: Final rule.
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SUMMARY: The National Institute of Standards and Technology (NIST) is
issuing a final rule which amends the implementing regulations for the
Advanced Technology Program (ATP). Major changes include an increase in
the cost-sharing requirement for large companies applying as single
proposers in future competitions; modification of the ATP evaluation
criteria for project selection to place greater emphasis on joint
ventures and consortia with a broad range of participants; and a new
rule for the valuation of transfers between separately-owned joint
venture members which applies to transfers of goods, including computer
software, and services provided by the transferor related to the
maintenance of those goods, when those goods or services are
transferred from one joint venture member to other separately-owned
joint venture members.
EFFECTIVE DATE: This rule is effective December 9, 1997.
FOR FURTHER INFORMATION CONTACT:
To receive additional program information, contact Barbara Lambis at
(301) 975-4447.
SUPPLEMENTARY INFORMATION: The National Institute of Standards and
Technology is issuing a final rule which amends regulations found at
part 295 of title 15 of the Code of Federal Regulations, which
implements the Advanced Technology Program (ATP). In a statement to
Congress in March of 1997, Secretary of Commerce William M. Daley
announced a Departmental study of several issues raised by Members of
Congress and others concerning the policies and procedures of the ATP.
The study was designed to make recommendations for possible changes to
improve the effectiveness of the program. Following issuance of a 30-
day notice of opportunity for public comment on ways to improve the
operation of the ATP, recommendations for possible changes were made to
improve the effectiveness of the program.
In order to implement the recommendations and the decisions of
Secretary Daley, the National Institute of Standards and Technology is
today issuing changes to the operating procedures of the Advanced
Technology Program found at part 295 of title 15 of the Code of Federal
Regulations. These changes strengthen the fundamental mission of the
ATP: for Government to work in partnership with industry to foster the
development and broad dissemination of challenging, high-risk
technologies that offer the potential for significant, broad-based
economic benefits for the nation. Such a unique government-industry
research partnership fosters the acceleration not only of dramatic
gains in existing industries, but also acceleration of the development
of emerging or enabling technologies leading to revolutionary new
products, industrial processes and services for the world's markets and
work to spawn industries of the 21st century. Furthermore, the changes
also ensure that the fundamental strengths of the ATP remain unchanged,
especially the requirement that the ATP continue to be a wholly merit-
driven program based on peer review.
Description of the Changes
Changes to part 295 include revisions on the following topics
(please see the analysis of comments below for additional details):
<bullet> Revised section 295.32(b) increases the cost-sharing
requirement for large companies applying as single proposers in future
competitions. ``Large businesses,'' as the term is defined in the
revised Sec. 295.2(k), are required to cost-share at a minimum of 60
percent.
<bullet> The term ``large business'' is defined as including any
business, including any parent company plus related subsidiaries,
having annual revenues in excess of the amount published by ATP in the
relevant annual notice of availability of funds. In establishing this
amount, ATP may consider the dollar value of the total revenues of the
500th company in Fortune Magazine's Fortune 500 listing.
<bullet> The ATP evaluation criteria for project selection are
modified to: (1) place greater emphasis on joint ventures and consortia
with a broad range of participants; and (2) better define the multi-
step selection process based on all of the criteria in Sec. 295.6.
<bullet> A new rule is established in Sec. 295.25 regarding the
valuation of transfers between separately-owned joint venture members.
The rule applies to transfers of goods, including computer software,
and services provided by the transferor related to the maintenance of
those goods, when those goods or services are transferred from one
joint venture member to other separately-owned venture members.
<bullet> Also, a number of administrative and clerical changes are
proposed to be implemented to part 295 for consistency and clarity.
Summary of Comments
On September 17, 1997, NIST published a notice of proposed
rulemaking in the Federal Register (62 FR 48802). In response to this
notice three letters were received; one from a not-for-profit research
organization, one from a U.S.-owned for-profit company, and one from an
individual. An analysis of the comments follows.
Section 295.2 Definitions--(1 Comment)
One commenter stated that the definition of ``matching funds''
under Section 295.2(1) eliminates reference to in-kind contribution of
personnel and requested clarification on whether NIST considers
personnel costs to be a cash contribution that would not be subject to
the 30 percent limitation on in-kind.
NIST Response: Under the ATP program, personnel contributions are
[[Page 64683]]
considered as ``cash'' contributions when made by funding recipients
and, therefore, would not be subject to the 30 percent limitation.
Section 295.3 Eligibility of United States and Foreign-Owned
Businesses--(1 Comment)
One commenter stated that Section 295.3, ``Eligibility of United
States and foreign-owned business'', is unfair to U.S. citizens and
makes the goal outlined in Section 295.1 ``Purpose'', nearly impossible
to achieve. The commenter believes that we should use the best
technology in the world to achieve the ATP goals of ``high pay-off.''
The commenter suggests that the ownership rule be changed to that of
individual representatives who must be U.S. citizens regardless of
employer, and believes this would be fair to all U.S. citizens, who
have a right to be employed in the U.S. by any legal entity. The
commenter concludes that change would make it possible for
participating coalitions to consider the best technology in the world
to help the U.S. develop the best economic growth in a competitive,
global economy.
NIST Response: The statutory authority for the ATP, Section 28 of
the NIST Act (15 U.S.C. 278n), stipulates ATP eligibility requirements.
Only Congress has the authority to amend this statute. We therefore
cannot make any changes based on these comments.
Section 295.6 Criteria for Selection--(1 Comment)
One commenter requested clarification of what it meant by ``cost-
sharing'' in section 295.6(d)(1), Level of commitment of proposer,
which refers to contributions of personnel, equipment, facilities, and
cost-sharing.
NIST Response: The ``level of commitment'' criterion reflects the
extent to which a proposer has demonstrated a commitment to the project
with, for example, cash, personnel, scientific equipment, and research
facilities. Cost-sharing as used in this selection criteria includes
cash and in-kind contributions and the level of the total contribution,
i.e., low, average, or high.
Section 295.12 Special Reporting and Auditing Requirements--(2
Comments)
One commenter suggested that the ATP award stipulate the reporting
requirements needed and stated that the audit requirements are a
duplication of government surveillance and are not in the spirit of
contractor self governance programs. Companies which have resident
cognizant Federal auditors should be allowed to utilize such auditors
to conduct the audits rather that having to incur additional expenses
to hire an outside Certified Public Account (CPA). The commenter
recommends that the audit requirement apply on an as-needed basis for
firms who do not have systems to support government contracting.
NIST Response: Each ATP award includes guidance on the financial,
business, and technical reporting requirements. The audit requirement
is not meant to be duplicative of existing government audit surveys.
Resident cognizant Federal auditors may conduct the required audits in
lieu of a private CPA firm.
A second commenter noted that 295.12 is noted as being revised and
then removed.
NIST Response: This is a typographical error. Section 295.12 is
being revised; however, section 295.14 is being removed.
Section 295.25 Special Rule for the Valuation of Transfers Between
Separately-Owned Joint Venture Members--(1 Comment)
One commenter stated that section 295.25 will serve as a
disincentive for small companies to become joint venture partners and
they will likely only provide products and services as subcontractors.
The commenter further stated that the proposed special rule is not
mandated under the ATP statute and further appears to be at odds with
the ATP objective and with all other government pricing principles. The
commenter supports the use of GSA schedule price as a method of valuing
products and services and asserts that the use of other pricing methods
for the ATP program could jeopardize preexisting agreements. He also
disagrees that transferred services should be included in the 30
percent restriction on in-kind contributions.
NIST Response: The ATP is a cost-shared, high-risk research and
development program and, therefore, it is expected that participants
share in risk taking. The issues related to an equitable valuation of
transfers among joint venture participants appear to be unique to this
program, therefore, guidelines from other Federal programs would not
necessarily apply. In the ATP, reimbursement of the government's share
of the costs is based on actual costs incurred during the period of
cost sharing rather than on recovering sunk costs (previously incurred
R&D costs). The Department of Commerce deems this approach to be a
reasonable compromise between a very strict interpretation of the
intent of the ATP legislation and the more traditional policy of using
GSA Schedule pricing as the basis for valuation. The strict
interpretation would, for example, result in a transfer of previously-
developed software from one joint venture participant to another being
valued for matching funds purposes essentially at zero. We recognize
that such an interpretation would cause hardship for many ATP
proposers, hence the compromise. ATP recognizes that some small
companies may not have the resources to contribute a significant
portion of the cost-sharing, however, joint ventures often have a mix
of other medium and/or large businesses that, in the aggregate, can
provide the required cost-sharing.
Section 295.32 Limitations on Assistance--(1 Comment)
Section 295.32(b), which raises the cost sharing of a single
company to 60 percent, and Section 295.6, regarding the evaluation
criteria, will make it more difficult for single companies to
participate. The commenter further states that no rationale is given
for the changes.
NIST Response: ATP agrees that the change could make it more
difficult for some large businesses to participate in ATP as single
company proposers. There has been much heated debate in the Congress
and elsewhere concerning cost sharing in ATP and the role of large
firms applying as single company proposers. Many people have expressed
the viewpoint that large businesses should be expected to support more
than 50 percent of the total project cost. (Under the previous rule,
large companies with very low indirect costs could recover more than 50
percent of total project costs.) DOC believes that the change will
result in a broader consensus that the ATP's policies for large
businesses are fair and appropriate.
Additional Information
Effective Date of the Final Rule
This final rule relating to grants, benefits, and contracts is
exempt from the delayed effective date requirement, and accordingly,
under section 553(a)(2) of the Administrative Procedure Act (5 U.S.C.
553), is therefore being made effective immediately without a 30 day
delay in effective date.
Executive Order 12866
This rule has been determined not to be significant under section
3(f) of Executive Order 12866.
Executive Order 12612
This rule does not contain policies with Federalism implications
sufficient
[[Page 64684]]
to warrant preparation of a Federalism assessment under Executive Order
12612.
Regulatory Flexibility Act
The Assistant General Counsel for Legislation and Regulation of the
Department of Commerce certified to the Chief Counsel for Advocacy,
Small Business Administration, that this rule will not have a
significant economic effect on a substantial number of small entities.
(5 U.S.C. 605(b)). This is because there are only a small number of
awardees and thus only a small number of awards will be given to small
businesses. Specifically, based on past experience and currently
foreseen budges, the ATP would expect to receive only a few hundred
proposals annually from small businesses, and from these, to make under
100 awards. The program is entirely voluntary for the participants that
seek funding.
Paperwork Reduction Act
Notwithstanding any other provisions of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with a collection-of-information, subject to the
requirements of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.,
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) control number.
This rule contains collection of information requirements subject
to review and approval by the Office of Management and Budget under the
Paperwork Reduction Act (PRA). The collection of information
requirements have been approved under OMB Control Number 0693-0009. The
public reporting burden per respondent is estimated to range between 20
and 30 hours per submission of the proposal and 3 hours annually for
recipients of financial assistance to provide monitoring reports. This
estimate includes the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collections of information. Comments on
the burden estimates, or any other aspect of the information
requirements, should be addressed to Barbara Lambis, Room A333,
Administration Building National Institute of Standards and Technology,
Gaithersburg, MD 20899.
National Environmental Policy Act
This rule will not significantly affect the quality of the human
environment. Therefore, an environmental assessment or Environmental
Impact Statement is not required to be prepared under the National
Environmental Policy Act of 1969.
Executive Order 12372
Executive Order 12372 ``Intergovernmental Review of Federal
Programs'' does not apply to this program.
List of Subjects in 15 CFR Part 295
Inventions and patents, Laboratories, Research, Science and
technology, Scientists.
Dated: December 3, 1997.
Elaine Bunten-Mines,
Director, Program Office.
For reasons set forth in the preamble, Title 15, part 295 of the
Code of Federal Regulations is amended as follows:
PART 295--ADVANCED TECHNOLOGY PROGRAM
1. The authority citation for Part 295 continues to read as
follows:
Authority: 15 U.S.C. 278n.
2. Section 295.1 is revised to read as follows:
Sec. 295.1 Purpose.
(a) The purpose of the Advanced Technology Program (ATP) is to
assisted United States businesses to carry out research and development
on high risk, high pay-off, emerging and enabling technologies. These
technologies are:
(1) High risk, because the technical challenges make success
uncertain;
(2) High pay-off, because when applied they offer significant
benefits to the U.S. economy; and
(3) Emerging and enabling, because they offer wide breadth of
potential application and form an important technical basis for future
commercial applications.
(b) The rules in this part prescribe policies and procedures for
the award of cooperative agreements under the Advanced Technology
Program in order to ensure the fair treatment of all proposals. While
the Advanced Technology Program is authorized to enter into grants,
cooperative agreements, and contracts to carry out its mission, the
rules in this part address only the award of cooperative agreements.
The Program employs cooperative agreements rather than grants because
such agreements allow ATP to exercise appropriate management oversight
of projects and also to link ATP-funded projects to ongoing R&D at the
National Institute of Standards and Technology wherever such linkage
would increase the likelihood of success of the project.
(c) In carrying out the rules in this part, the Program endeavors
to put more emphasis on joint ventures and consortia with a broad range
of participants, including large companies, and less emphasis on
support of individual large companies.
3. Section 295.2(c) is revised to read as follows:
Sec. 295.2 Definitions.
* * * * *
(c) The term direct costs means costs that can be identified
readily with activities carried out in support of a particular final
objective. A cost may not be allocated to an award as a direct cost if
any other cost incurred for the same purpose in like circumstances has
been assigned to an award as an indirect cost. Because of the diverse
characteristics and accounting practices of different organizations, it
is not possible to specify the types of costs which may be classified
as direct costs in all situations. However, typical direct costs could
include salaries of personnel working on the ATP project and associated
reasonable fringe benefits such as medical insurance. Direct costs
might also include supplies and materials, special equipment required
specifically for the ATP project, and travel associated with the ATP
project. ATP shall determine the allowability of direct costs in
accordance with applicable Federal cost principles.
* * * * *
4. Section 295.2 is further amended by revising the reference
``Sec. 295.2(r)'' in paragraph (d) to read ``Sec. 295.2(q)'' and by
removing paragraph (e), redesignating paragraphs (f) through (k) as
paragraphs (e) and through (j), removing paragraph (n), redesignating
paragraphs (o) through (r) as paragraphs (n) through (q), and adding
new paragraph (k) to read as follows:
Sec. 295.2 Definitions.
* * * * *
(k) The term large business for a particular ATP competition means
any business, including any parent company plus related subsidiaries,
having annual revenues in excess of the amount published by ATP in the
relevant annual notice of availability of funds required by
Sec. 295.7(a). In establishing this amount, ATP may consider the dollar
value of the total revenues of the 500th company in Fortune Magazine's
Fortune 500 listing.
* * * * *
5. The newly designated Sec. 295.2(g) is revised to read as
follows:
Sec. 295.2 Definitions.
* * * * *
[[Page 64685]]
(g) The term indirect costs means those costs incurred for common
or joint objectives that cannot be readily identified with activities
carried out in support of a particular final objective. A cost may not
be allocated to an award as an indirect cost if any other cost incurred
for the same purpose in like circumstances has been assigned to an
award as a direct cost. Because of diverse characteristics and
accounting practices it is not possible to specify the types of costs
which may be classified as indirect costs in all situations. However,
typical examples of indirect costs include general administration
expenses, such as the salaries and expenses of executive officers,
personnel administration, maintenance, library expenses, and
accounting. ATP shall determine the allowability of indirect costs in
accordance with applicable Federal cost principles.
* * * * *
6. The newly designated Sec. 295.2(h) is revised to read as
follows:
Sec. 295.2 Definitions.
* * * * *
(h) The term industry-led joint research and development venture
means a joint research and development venture that consists of two or
more separately-owned, for-profit businesses that perform research and
development in the project; control the venture's membership, research
directions, and funding priorities; and share total project costs with
the Federal government. The venture may include additional companies,
independent research organizations, universities, and/or governmental
laboratories (other than NIST) which may or may not contribute funds
(other than Federal funds) to the project and perform research and
development. An independent research organization may perform
administrative tasks on behalf of an industry-led joint research and
development venture, such as handling receipts and disbursements of
funds and making antitrust filings.
* * * * *
7. Redesignated Sec. 295.2(j)(1)(vi) is revised to read as follows:
Sec. 295.2 Definitions.
* * * * *
(j) * * *
(1) * * *
(vi) Any combination of the purposes specified in paragraphs (j)(1)
(i), (ii), (iii), (iv) and (v) of this section, and may include the
establishment and operation of facilities for the conducting of
research, the conducting of such venture on a protected and proprietary
basis, and the prosecuting of applications for patents and the granting
of licenses for the results of such venture, but does not include any
activity specified in paragraph (j)(2) of this section.
* * * * *
8. Section 295.2(l) is revised to read as follows:
Sec. 295.2 Definitions.
* * * * *
(l) The term matching funds or cost sharing means that portion of
project costs not borne by the Federal government. Sources of revenue
to satisfy the required cost share include cash and in-kind
contributions. Cash contributions can be from recipient, state, county,
city, or other non-federal sources. In-kind contributions can be made
by recipients or non-federal third parties (except subcontractors
working on an ATP project) and include but are not limited to
equipment, research tools, software, and supplies. Except as specified
at Sec. 295.25, the value of in-kind contributions shall be determined
in accordance with OMB Circular A-110, Subpart C, Section 23. The value
of in-kind contributions will be prorated according to the share of
total use dedicated to the ATP program. ATP restricts the total value
of in-kind contributions that can be used to satisfy the cost share by
requiring that such contributions not exceed 30 percent of the non-
federal share of the total project costs. ATP shall determine the
allowability of matching share costs in accordance with applicable
federal cost principles.
* * * * *
9. Section 295.3(c) is added as follows:
Sec. 295.3 Eligibility of United States and foreign-owned businesses.
* * * * *
(c) Companies owned by legal residents (green card holders) may
apply to the Program, but before an award can be given, the owner(s)
must either become a citizen or ownership must be transferred to a U.S.
citizen(s).
10. Section 295.4 is revised to read as follows:
Sec. 295.4 The selection process.
(a) The selection process for awards is a multi-step process based
on the criteria listed in Sec. 295.6. A source evaluation board (SEB)
is established to ensure that all proposals receive careful
consideration. In the first step, called ``preliminary screening,''
proposals are eliminated that do not meet the requirements of this part
or the Program announcement. Typical but not exclusive of the reasons
for eliminating a proposal at this stage is that the proposal: is
deemed to have serious deficiencies in either the technical or business
plan; involves product development rather than high risk R&D; is not
industry-led; is significantly overpriced or underpriced given the
scope of the work; does not meet the requirements set out in the notice
of availability of funds issued pursuant to Sec. 295.7; or, in the case
of joint ventures, requests more than a minority share of funding. NIST
will also examine proposals that have been submitted to a previous
competition to determine whether substantive revisions have been made
to the earlier proposal, and, if not, may reject the proposal or
forward it to a later stage in the review process based upon the
earlier review.
(b) In the second step, referred to as the ``technical and business
review,'' proposals are evaluated under the criteria found in
Sec. 295.6. Proposals judged to have the highest merit based on the
selection criteria receive further consideration and are referred to as
``semifinalists.''
(c) In the third step, referred to as ``selection of finalists,''
the Program prepares a final scoring and ranking of semifinalist
proposals. During this step, the semifinalist proposers may be asked to
make oral presentations on their proposals at NIST, and in some cases
site visits may be required. Subject to the provisions of Sec. 295.6, a
list of ranked finalists is submitted to the Selecting Official.
(d) In the final step, referred to as ``selection of awardees,''
the Selecting Official selects funding recipients from among the
finalists, based upon: (1) The rank order of the proposals on the basis
of all selection criteria (Sec. 295.6);
(2) Assuring an appropriate distribution of funds among
technologies and their applications; and
(3) The availability of funds. The Selecting Official is
responsible for ensuring that only proposals that meet the Program
selection criteria receive awards. The Program reserves the right to
withhold awards in any case where a search of Federal records discloses
information that raises a reasonable doubt as to the responsibility of
the proposer. The decision of the Selecting Official is final.
(e) If a joint venture is ranked as a finalist, but the Program
determines that the joint venture contains weaknesses in its structure
or cohesiveness that may substantially lessen the probability of the
proposed program being completed successfully, the Program may inform
the proposer of the deficiencies and enter into negotiations with the
proposer in an effort to remedy the deficiencies. If appropriate,
funding up
[[Page 64686]]
to 10 percent of the amount originally requested by the proposer may be
awarded by the Program to the proposer to assist in overcoming the
organizational deficiencies. If the Program determines within six
months of this award that the organizational deficiencies have been
corrected, the Program may award the remaining funds requested by the
proposer to that proposer.
(f) NIST reserves the right to negotiate with proposers selected to
receive awards the cost and scope of the proposed work, e.g., to add or
delete a task(s) to improve the probability of success or to make the
proposal more consistent with ATP's mission.
11. Section 295.6 is revised to read as follows:
Sec. 295.6 Criteria for selection.
The evaluation criteria to be used in selecting any proposal for
funding under this Program, and their respective weights, are listed in
this section. No proposal will be funded unless the Program determines
that it has high scientific and technical merit, no matter how
meritorious the proposal might be with respect to the other selection
criteria. Similarly, no proposal will be funded that does not require
Federal support or that is product development rather than high risk
R&D. Each of the subfactors within a selection criterion shall be
weighted equally.
(a) Scientific and technical merit (30 percent).
(1) Quality, innovativeness, and cost-effectiveness of the proposed
technical program, that is, uniqueness with respect to current industry
practice. Proposers shall compare and contrast their approaches with
those taken by other domestic and foreign companies working in the same
field.
(2) Appropriateness of the technical risk and feasibility of the
project, that is, is there a sufficient knowledge base to justify the
level of technical risk involved, and is the risk commensurate with the
potential payoff. Projects should press the state of the art while
still having credibility with regard to technical approach.
(3) Coherency of the technical plan and clarity of vision of the
technical objectives, and the degree to which the technical plan meets
the project and, in the case of focused program competitions, program
goals.
(4) Integrated, forward-looking, team approach to the project. This
factor includes the extent to which the R&D team will take into account
aspects such as research and raw material suppliers and considerations
of manufacturability and requirements of customers, regulatory
concerns, safety issues, and environmental impacts. It also includes
the extent to which all of the necessary technical disciplines will be
brought into the R&D and how R&D, manufacturing, and marketing will
work together in an integrated fashion.
(5) Potential broad impact on U.S. technology and knowledge base.
(b) Potential net broad-based economic benefits (20 percent).
Potential to improve U.S. economic growth, taking into account the
timeliness of the proposal; that is, the potential project results will
not occur too late or too early to be competitively useful, and the
degree to which ATP support is essential for the achievement of the
broad-based benefits from the proposed R&D and appropriateness of
proposed R&D for ATP support. This criterion takes into consideration
the likelihood of the results being achieved in the same general time
frame by the proposer or by other U.S. researchers without ATP support,
and whether other Federal agencies or other sponsors are already
funding very similar kinds of work. Projects will not be selected if
the Program judges that Federal support is not needed. In assessing the
potential for broad-based economic benefits, emphasis is placed on a
strong potential for spillover benefits extending well beyond those
accruing to the awardee(s). Benefits are compared against the costs of
the proposal to determine cost-effectiveness of the proposal.
(c) Adequacy of plans for eventual commercialization (20 percent).
(1) Evidence that if the project is successful, the proposers will
pursue further development of the technology toward commercial
application, either through their own organization(s) or through
others.
(2) Degree to which proposal identifies potential applications of
the technology and provides evidence that the proposer has credible
plans to assure prompt and widespread use of the technology if the R&D
is successful and to ensure adequate protection of the intellectual
property by the participant(s) and, as appropriate, by other U.S.
businesses.
(d) Level of commitment and organization structure (20 percent).
(1) Level of commitment of proposer as demonstrated by contribution
of personnel, equipment, facilities, and cost-sharing. Extent to which
the proposer assigns the company's best people to the project. Priority
given to this work in relation to other company activities.
(2) For joint ventures, the extent to which the joint venture has
been structured (vertical integration, horizontal integration, or both)
so as to include sufficient participants possessing all of the skills
required to complete successfully the proposed work.
(3) For joint ventures, the extent to which participation by small
businesses is encouraged and is a key component of the proposal.
(4) Appropriateness of subcontractor/supplier/collaborator
participation and relationships (where applicable). For large company
single proposers, the extent to which subcontractor teaming
arrangements are featured and are a key component of the proposal.
(5) Clarify and appropriateness of management plan. Extent to which
the proposers have clarified who is responsible for each task, and the
chain of command. Extent to which those responsible for the work have
adequate authority and access to higher level management.
(e) Experience and qualifications (10 percent).
(1) Adequacy of proposer's facilities, equipment, and other
technical, financial, and administrative resources to accomplish the
proposed program objectives. This factor includes consideration of
resources possessed by subcontractors to the proposer or other
collaborators.
(2) Quality and appropriateness of the technical staff to carry out
the proposed work program and to identify and overcome barriers to
meeting project objectives.
(3) Past performance of the company or joint venture members in
carrying out similar kinds of efforts successfully, including
technology application. Consideration of this factor in the case of a
start-up company or new joint venture, will take into account the past
performance of the key people in carrying out similar kinds of efforts.
12. Section 295.12 is revised to read as follows:
Sec. 295.12 Special reporting and auditing requirements.
Each award by the Program shall contain procedures regarding
technical, business, and financial reporting and auditing requirements
to ensure that awards are being used in accordance with the Program's
objectives and applicable Federal cost principles. The purpose of the
technical reporting is to monitor ``best effort'' progress toward
overall project goals. The purpose of the business reporting system is
to monitor project performance against the Program's mission as
required by the Government Performance and Results Act (GPRA) mandate
for program
[[Page 64687]]
evaluation. The audit standards to be applied to ATP awards are the
``Government Auditing Standards'' (GAS) issued by the Comptroller
General of the United States (also known as yellow book standards) and
the ATP program-specified audit guidelines. The ATP program-specific
audit guidelines include guidance on the number of audits required
under an award. In the interest of efficiency, the recipients are
encouraged to retain their own independent CPA firm to perform these
audits. The Department of Commerce's Office of Inspector General (OIG)
reserves the right to conduct audits as deemed necessary and
appropriate.
13. Section 295.14 is removed.
14. Section 295.22 is revised to read as follows:
Sec. 295.22 Limitations on assistance.
(a) An award will be made under this subpart only if the award will
facilitate the formation of a joint venture or the initiation of a new
research and development project by an existing joint venture.
(b) The total value of any in-kind contributions used to satisfy
the cost sharing requirement may not exceed 30 percent of the non-
federal share of the total project costs.
15. Section 295.25 is added to subpart B as follows:
Sec. 295.25 Special rule for the valuation of transfers between
separately-owned joint venture members.
(a) Applicability. This section applies to transfers of goods,
including computer software, and services provided by the transferor
related to the maintenance of those goods, when those goods or services
are transferred from one joint venture member to other separately-owned
joint venture members.
(b) Rule. The greater amount of the actual cost of the transferred
goods and services as determined in accordance with applicable Federal
cost principles, or 75 percent of the best customer price of the
transferred goods and services, shall be deemed to be allowable costs;
provided, however, that in no event shall the aggregate of these
allowable costs exceed 30 percent of the non-Federal share of the total
cost of the joint research and development program.
(c) Definition. The term ``best customer price'' shall mean the GSA
schedule price, or if such price is unavailable, the lowest price at
which a sale was made during the last twelve months prior to the
transfer of the particular good or service.
16. Sections 295.31 and 295.32 are revised to read as follows:
Sec. 295.31 Qualification of proposers.
Awards under this subpart will be available to all businesses,
subject to the limitations set out in Secs. 295.3 and 295.32.
Sec. 295.32 Limitations on assistance.
(a) The Program will not directly provide funding under this
subpart to any governmental entity, academic institution or independent
research organization.
(b) For proposals submitted to ATP after December 31, 1997, awards
to large businesses made under this subpart shall not exceed 40 percent
of the total project costs of those awards in any year of the award.
(c) Awards under this subpart may not exceed $2,000,000, or be for
more than three years, unless the Secretary provides a written
explanation to the authorizing committees of both Houses of Congress
and then, only after thirty days during which both Houses of Congress
are in session. No funding for indirect costs, profits, or management
fees shall be available for awards made under this subpart.
(d) The total value of any in-kind contributions used to satisfy a
cost sharing requirement may not exceed 30 percent of the non-federal
share of the total project costs.
17. In part 295 remove the word ``applicants'' or ``applicant'' and
add in its place the word ``proposers'' or ``proposer'' in the
following places: Sec. 295.7(a), (b) and (c); Sec. 295.21 section
heading; subpart C heading; and Sec. 295.31 section heading.
[FR Doc. 97-32215 Filed 12-8-97; 8:45 am]
BILLING CODE 3510-13-M
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