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Planning Considerations

Objectives

1. Understand the principle of acquisition vs. assistance, grant vs. cooperative agreement as derived from the Federal Grant and Cooperative Agreement Act of 1977.

2. Understand the importance of beginning to build your assistance file now and the importance of documentation.

3. Know how the Competition Order applies to project officers and be able to identify the differences in managing solicited and unsolicited applications.

4. Describe the relationship between the Catalog of Federal Domestic Assistance and the Competition Order.

5. Understand the difference between a Performance Partnership Grant (PPG), a discretionary grant and a non-discretionary grant.

6. Identify ethics concerns and conflicts of interest.

7. Understand how the "Best Practices Guide for Conferences" will help when funding an assistance agreement with a conference included in the scope of work.

8. Identify and define the hierarchy of the different governing rules/laws involved with grants.

9. Identify and differentiate between statutory authority and delegation of authority.

10. Identify needs for environmental review/environmental impact statements.

11. Become aware of the rules involving Lobbying and Litigation by grantees.

12. Understand the difference between a survey, study and investigation and a research assistance agreement including Federal Demonstration Partnership (FDP) agreements through NCER.

The information in this chapter will guide you in the process of selecting the appropriate funding instrument. The chapter explains procedures governing specific issues in assistance. Additionally, this chapter describes the sources of requirements affecting assistance programs -- Federal statutes, Delegations of Authority, Executive Orders, OMB Circulars, Federal regulations, EPA Orders, and policies -- and which requirements take precedence over the others.

Several issues regarding assistance management cut across the different types of agreements used. For example, similar conflict of interest issues may arise in the management of a contract, grant, cooperative agreement, or interagency agreement. Consult with your offices Deputy Ethics Official (DEO) on a case-by-case basis regarding your specific issues and concerns.

EPA assistance programs are governed by requirements which apply to all Federal agencies and requirements which are specific to EPA programs. Even though the Grants Management Office (GMO) has the overall responsibility for ensuring that the administrative requirements are met, the Program offices and laboratories are responsible for implementing many of these requirements. Therefore, POs must understand what the requirements are and should be familiar with the source of these requirements.

Complying with the Federal Grants and Cooperative Agreement Act (FGCAA)

In 1977 Congress passed the FGCAA to establish government-wide standards for agencies to use in selecting the most appropriate funding instrument-a procurement contract, a grant, or a cooperative agreement. This act stipulates that an assistance agreement (either a grant or a cooperative agreement) is appropriate for use whenever:

"The principal purpose of the relationship is the transfer of money, property, services, or anything of value to the State or local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by Federal statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal government..."

The key elements of this provision are discussed below:

The principal purpose . . .

If your office needs goods or services for the direct use of EPA, then you would acquire those goods or services by means of a contract or possibly an Interagency Agreement (IAG). If you wish to support or stimulate another entity's project for the good of the public, use of an assistance agreement might be appropriate. EPA Order 5700.1, Policy for Distinguishing Between Assistance and Acquisition provides guidance on how to identify the principal purpose. The Order notes that any funds spent on an extramural agreement can be said to further the Agency's goals or mission, but not all expenditures are for the direct use of the Agency. How do you decide?

A strong indicator of principal purpose is the extent to which EPA feels it needs to control the planning and conduct of the work because our use is "immediate," "uninterrupted," or "specific." Direct use or benefit is implied if EPA:

First, review EPA Order 5700.1 "Policy for Distinguishing Between Assistance and Acquisition" before selecting a funding instrument. It provides more information on this issue and includes examples where assistance is justified.

Second, ensure your solicitation includes a requirement that the applicant discuss how their proposed project will benefit the applicant's mission and how the benefits will flow from the applicant to the public. The evidence might include scientific journal publications making the information available to other researchers, direct use of the results by state/local agencies or other researchers in programs of use to the public. A demonstration of public benefits in the proposal will help convince the Approval Official that the principal purpose is to support and stimulate despite incidental benefits to EPA.

"Transfer . . . of something of value . . ."

Transferring something of value is a prerequisite for an assistance agreement. Without the transfer, the agreement between the Agency and the other entity probably would be described as either a Memorandum of Understanding (MOU) or a policy agreement.

The "thing of value" in most cases is money, but, depending on the program guidance, may include property or services. If it is more efficient for EPA rather than the recipient to purchase equipment or services, EPA may do so and provide the equipment or services to the recipient. This purchase is called an "in-kind contribution." See Chapter 4 for a more in-depth discussion.

Exercise

Acquisition vs Assistance

Read the following narrative and address the question of acquisition vs. assistance. Describe why or why not this project can be awarded as assistance.

Recipient: Coordinating Research Council, Inc - Non-profit Organization
Title: "Validation of the US EPA MOBILE6 Highway Vehicle Emissions Model"

Project Budget - $50,000
Statement of Work - Abstract

To conduct an assessment of the new EPA MOBILE6 highway vehicle emissions model. MOBILE6 is a software tool for predicting HC, CO, and NOx emissions from passenger cars, trucks, and motorcycles under various conditions. The model takes into account the calendar year in question, the fuel type used, local vehicle activity parameters, and inspection and maintenance programs that may be in place. MOBILE6 is used for state implementation plans, conformity with air quality requirements, National Environmental Policy Act (NEPA) assessments, identifying trends in vehicle emissions, and other applications.

MOBLIE6 will replace the current MOBILE5 model following approval of the current draft version. The existing draft version of MOBILE6 model has been released to states and local governments for review.

MOBILE6 contains new and improved data, such as in-use deterioration of new technologies and updated understanding of vehicle emissio performance. MOBILE6 takes into account new regulations promulgated since 1992 and includes additional user options over its predecessor.

There has been a thorough stakeholder and peer review of the draft MOBILE6 model. Early pilot testing of the model was conducted within EPA national and regional offices, at the US Department of Transportation, by EPA contractors, and in limited state runs.

The objective of the Validation of the US EPA MOBILE6 Emission Factor Model study is to conduct a limited top-down assessment of the MOBILE6 model by comparing model output data against literature values of composite highway vehicle emission concentrations. To meet the study objectives, the literature emissions data selected for model validation must have been collected in a controlled manner such that the vehicle sources are well-characterized and can be attributed to a test fleet that can also be reasonable duplicated using MOBILE6.

Justification for Assistance:

"Real World" data generated under this study will be compared to the output of scenarios generated under EPA's new MOBILE6 model. The results of this investigation, the degree of similarity between data and model output, will be
of benefit to those in the general public who use air quality models. In particular, public interest groups, local, state, and regional air quality planners and other public and academic air pollution investigators will have third-party confirmation of the quality of EPA's MOBILE6 model and validation of the results of their use of EPA's model.

Assistance in the form of a grant is proposed to support this project because extensive planning has already preceded EPA involvement and most of CRC's members involved in the planning of this project have long histories of completing successful projects in the areas of vehicle emission determinations. EPA will provide its in-house expertise, when called upon, receive progress reports and will be a recipient of the validation results when they become available.

Deciding Between Grants and Cooperative Agreements

After deciding that you may provide assistance, you must decide whether to use a grant or a cooperative agreement. The FGCAA clarifies the distinction between the two. If the recipient is responsible for performance with little Agency involvement, a grant is appropriate. If the recipient is responsible for performance with substantial Agency involvement, a cooperative agreement is appropriate. However, whether a cooperative agreement or a grant is used, EPA must:

1. Approve the scope of work/ research narrative before recommending awarding the agreement.
2. Perform a technical budget cost review.
3. Address deficiencies in ongoing performance.
4. Review progress/outputs during and after completion of the work.
5. Ensure the recipient's compliance with all applicable statutes, regulations, policies, and all terms and conditions in the agreement through monitoring.
6. If substantial involvement results in increased costs to the recipient, these costs must be included in the budget.

Requirements for Justifications

To ensure that proposed assistance agreements comply with the FGCAA, program offices must provide a justification for assistance as required under Question #6 of the Integrated Grants Management System (IGMS) Electronic Funding Recommendation Document.

Specifically, justifications must address the criteria identified in Section 6 of EPA Order 5700.1. These criteria include the principal purpose of the relationship, direct benefit or use, support or stimulation, and the legislative authority to enter into an assistance relationship. Merely stating that there is no direct use by, or benefit to, EPA from the activities funded by the assistance agreement, quoting EPA Order 5700.1, or noting that the project has been reviewed under the criteria contained in EPA Order 5700.1, do not provide adequate justification for an award of financial assistance. Similarly, because all of EPA's assistance programs are intended to benefit the public, a statement that a project will benefit the public is insufficient by itself to justify an assistance relationship. Grants and cooperative agreements may be used only to assist a non-Federal recipient in carrying out its own project for a purpose that EPA has statutory authority to support. The justification must describe how the specific activities the recipient will conduct with EPA financial assistance further the recipient's own efforts to protect the environment rather than assist EPA in implementing its Federal responsibilities.

In addition, justifications must clearly address the basis for using a grant or a cooperative agreement. Cooperative agreements are appropriate when EPA anticipates "substantial involvement" of Agency personnel to assist the recipient in carrying out its project. Please note that cooperative agreements provide financial assistance to the recipient under the same "principal public purpose" legal standard as grants and may not be used to obtain goods or services for the "mutual benefit" of the Agency and the recipient. As indicated in the instructions in the IGMS Electronic Funding Recommendation, for cooperative agreements, project officers must identify EPA's responsibilities for the project (e.g. tasks and activities) in the Programmatic Terms and Conditions Section of the Funding Recommendation. Section 7 of EPA Order 5700.1 provides examples of EPA substantial involvement with the recipient.

EXAMPLES OF ACCEPTABLE JUSTIFICATIONS

CATEGORY OF ASSISTANCE

LEVEL OF EPA INVOLVEMENT

TYPE OF AGREEMENT

ACCEPTABLE JUSTIFICATION

 

 

 

 

Continuing Environmental Program

Substantial

Cooperative Agreement

This instrument is an assistance agreement because it will provide support to the State of Kentucky to assist them in attaining and maintaining National Ambient Air Quality Standards, address air toxics, and support the State's air quality compliance, enforcement, and permitting efforts. This a cooperative agreement because the activities will require substantial federal involvement in the form of programmatic oversight, and review and comment of all agreement activities and products.

  

 

 

 

Continuing Environmental Program Grant

Substantial

Cooperative Agreement

In accordance with EPA Order 5700.1, funds should be awarded as an assistance agreement to provide resources for the State's Water Quality Management Planning program. Funds will be for the direct benefit of the State agency and accomplish a public purpose authorized by statute. The assistance agreement should be a cooperative agreement since the Agency will have significant involvement with the recipient by reviewing the phases of the work.

  

 

 

 

State Revolving Fund

Limited

Grant

This instrument is an assistance agreement because it will benefit the State of Ohio in their efforts to address wastewater treatment needs. The funds will be used to issue low cost loans to Ohio communities to enable them to construct wastewater treatment facilities. The assistance agreement should be a grant since there will be no substantial involvement by EPA.

    

 

 

 

Discretionary Project

Substantial

Project Cooperative Agreement

This instrument is an assistance agreement because it provides financial assistance to the State of Pennsylvania to expand, collect and analyze data, and maintain and operate the State's PM 2.5 Monitoring Network and to examine the health effect of PM2.5 fine particles. This a cooperative agreement because the activities will require substantial federal involvement in the form of programmatic oversight, and review and comment on all agreement activities and products

               

 

 

 

Discretionary Project

Limited

Project Grant

This action is offered as an assistance agreement to enhance the effectiveness of State enforcement and compliance assurance programs by funding State outreach activities to the regulated community. The instrument is a grant because this office does not anticipate substantial involvement with the recipient.

       

 

 

 

Research Project

Substantial

Cooperative Agreement

The primary purpose of this project is to support the accomplishment of a public purpose in the subject area rather than to acquire property or services for the EPA. Specifically, this project will advance the overall scientific knowledge in the area of green building design focusing on passive cooling in hot and humid climates. The primary audience for the research results is industry, State, Tribal and local governments, non-governmental organizations, community groups and the academic community. The statement of work indicates joint collaboration with EPA and meets the criteria for "substantial involvement". Therefore, a cooperative agreement is appropriate.

     

 

 

 

Research Project

Limited

Research Grant

The primary purpose of this project it to support the accomplishment of a public purpose to promote research in the subject area rather than to acquire property or services for the EPA. Specifically, the principal purpose of the research is to improve the general understanding of the circumstances under which economic and other incentives are appropriate tools to achieve environmental quality. The primary audience for the research results is industry, State, Tribal and local governments, non-governmental organizations, community groups and the academic community. EPA will not be substantially involved in this project. Therefore, a grant has been chosen as the appropriate type of assistance.

      

 

 

 

Study/Investigation

Limited

Project Grant

This grant provides financial assistance to the recipient to conduct a study for a public purpose. The study will examine the impact of water pollution on the Delaware River Basin and make recommendations to the State on actions it can take to address this pollution. There is no direct benefit to EPA. The assistance agreement should be a grant since there will be no substantial involvement by EPA.

      

 

 

 

Training

Substantial

Cooperative Agreement

This cooperative agreement will provide financial assistance to the University of ____ to enable it to design and deliver training courses for State and local officials, and members of non-governmental organizations on the heath effects of air pollution. This project furthers the University's educational mission and directly benefits the non-Federal participants in the training courses. EPA will be substantially involved by providing technical assistance in developing the curriculum for the training and Agency personnel may participate in the training as instructors at the University's request. However, the University will select training participants and make the final decisions on curriculum content and instructors. Cooperative agreement funds will not be used to train Federal personnel.

     

 

 

 

Conference or Workshop

Substantial

Cooperative Agreement

This is an assistance agreement because the conference is designed to meet the needs of a non-Federal audience and the recipient controls the planning for that portion of the agenda that will be funded under the agreement. This is a cooperative agreement because EPA will be substantially involved as a co-sponsor of the conference.

   

 

 

 

Co-regulator or Co-implementer

Substantial

Cooperative Agreement

This is an assistance agreement because it will support [name of recipient], an organization comprised of Tribal environmental officials, in facilitating Tribal representation in the development and implementation of policies, guidance and programs for joint EPA and Tribal efforts to assess and cleanup open dumps on Tribal lands. It will also assist Tribal environmental officials in obtaining information and tools the Tribes need to carry out their responsibilities in connection with solving the open dump problem in Indian Country. This is a cooperative agreement because EPA will be substantially involved with the recipient in establishing a dialogue with Tribal officials.

 

 

 

 

"Authorized by Federal statute..."

The FGCAA does not establish the authority for an Agency to enter into an assistance agreement. The authority is found in the Agency's appropriation legislation or in the statutes. EPA must have specific statutory authority to award grants.

EPA has several statutory authorities that allow the Agency to enter into assistance agreements. . The chart below summarizes some of the statutes that authorize EPA to support assistance and lists the eligible applicants. Consult your program for assistance in identifying the appropriate statute.

Authorized by Federal statute

The legislation authorizing the Agency to enter into an assistance agreement stipulates the type of entity that may receive the agreement. For example, in Section 103(b)(3) of the Clean Air Act, the Administrator is authorized to "make grants to air pollution control agencies, to other public or nonprofit private agencies, institutions, and organizations, and to individuals, . . ." . Profit-making organizations are excluded.

Exercise

It is critical to the grants process that Project Officers understand their statutory authority. The below exercise will help you develop the skills to apply statutory authority to grant work-plans.

Statutory Authority

CAA Section 103 authorizes EPA to "conduct, and promote the coordination and acceleration of, research, investigations, experiments, demonstrations, surveys, and studies relating to the causes, effects (including health and welfare effects), extent, prevention, and control of air pollution." (While not specifically contained in the statute, OGC has determined this authority also allows for projects involving education/training and outreach activities.

Review the following examples of proposed projects to determine if they are consistent with CAA 103 authority.

Case Study 1:

Background: These projects address carbon monoxide, a pollutant in which the Fairbanks North Star Borough (FNSB), has been declared a non-attainment area. Beginning in 1985, the FNSB has utilized the Inspection and Maintenance (I/M) program as the primary CO control strategy. Although levels of CO have been significantly reduced and no violations of the NAAQS have been recorded since November 1999, Fairbanks remains susceptible to further violations due to severe meteorological conditions. Therefore, additional CO control measures are required to ensure future compliance with NAAQS.

Project Elements:

Case Study 2:

ANCHORAGE AIR QUALITY PROJECTS

$600,000 to maintain and improve computer hardware and software required for the Inspection and Maintenance (I/M) program vehicle tracking system. Maintenance of this system is critical to the assessment and administration of the program over the next four years when Anchorage is most vulnerable to violations of the CO standard.

$500,000 for a study of indoor exposures to CO and volatile organic compounds (VOCs). Previous studies have suggested that attached garages are a significant source of personal exposure to CO and toxic VOCs. This study will help identify ways to reduce exposures through architectural and mechanical modification to houses.

$400,000 for sweepers, dust palliative application equipment and supplies for reducing dust emissions along major roadways in the Municipality of Anchorage.

$200,000 for modifications to the Anchorage air quality monitoring network and the development of a new web-based, real time air quality reporting system. Additional monitoring equipment will be purchased to supplement the existing Municipality of Anchorage monitoring network. System will provide real-time information on levels of carbon monoxide (CO), coarse (PM-10) and fine (PM-2.5) particulate in various representative neighborhoods in Anchorage, Chugiak-Eagle River and Girdwood. Information provided would also provide useful information in developing appropriate public health advisories during volcanic ash fall, windblown glacial dust, and wild fire smoke intrusion events.

$100,000 for ambient monitoring of diesel particulate in areas where citizen complaints have been lodged. We are planning to do some baseline monitoring of PM-2.5 in one area where multiple complaints about diesel have lodged in past winters using another source of funding. If this monitoring indicates a problem, we would like to follow-up with more diesel-specific monitoring (e.g. using polyurethane foam samplers) during the winter of 2005-2005. We believe that these complaints occur under the same winter stagnation conditions that have been associated with our persistent CO problem in Anchorage.

Enhanced Enforcement of PM-10 BMPs and Local Codes

The MOA DHHS anticipates that the municipality will initiate round-the-clock enforcement during periods when violations of the code are likely to occur outside of the normal workday. Funding will cover these costs for the three-year project period


Case Study 3:

ADOPT-A-SCHOOL BUS PROGRAM

EPA is willing to provide grant funds to states/localities interested in participating in the development of an adopt-a-school bus program. The goal for this program is to find a grant recipient to serve as the fundraiser and administrator of an adopt-a-school-bus program designed to retrofit or convert school buses in targeted school districts to more energy-efficient and less polluting alternative fuel sources. Activities will include:

Case Study 4:

COMMUNITY-BASED SHARE-A-RIDE PILOT PROGRAM

It is not economically feasible for buses to service outlying areas so residents use their own vehicles to commute into the downtown area. This two-year pilot program will attempt to establish a self-administering local "share-a-ride" carpool program. This program will create a marketing plan and media advertising to build public awareness of the program; travelers/commuters would contact the local newspaper to place classified ads. The recipient will collaborate with the newspaper to provide a new "Share-a-Ride" classification and create a classified ad template. Ads would run for a defined period. Both riders and drivers would be encouraged to run ads. Recipient plans to target approximately 500 connections in the first year. These participants would make the contacts and arrangements between riders and those with vehicles. Additional incentives for larger employers and users of the program, such as a preferred parking in the non-attainment area, will be explored.

Conferences

Conferences (including workshops, symposia, etc.) bring together various groups to share information, educate the public, work with state and local government partners, train employees, and learn from non-governmental stakeholders. The Agency may decide to help non-Federal entities hold conferences to carry out environmentally related work. As a PO you must be sure to use the right instrument.

Various types of extramural agreements can be used to support a conference. The numerous issues related to conference support are discussed in the "Best Practices Guide for Conferences".

The Guide notes that the first question to answer is -

" Whose conference is it?"
" Ours, an EPA conference or one that EPA sponsors with other Federal agencies
" Theirs, one held by a non-Federal sponsor that EPA supports with financial assistance
" Jointly sponsored, benefiting both the Agency and a non-Federal agency

Once you answer this question, you can decide on which type of extramural agreement to use. As a general rule, an assistance agreement may not be used to support a conference or other services if the principal purpose is to provide advice, recommendations, or other information for EPA's direct use in developing or changing guidance or regulations. For example, an office or laboratory cannot award an assistance agreement to a trade association or consulting firm to arrange and conduct a conference of EPA officials and members of the regulated community if the principal purpose is to enable EPA to obtain the views of the regulated community on a proposed new policy or changes in an existing one. If the office or laboratory needs help in putting on such a conference, it should use a contract to acquire the services.

Refer to the Guide for detailed guidance on these and other issues associated with sponsoring a conference.

Logo Usage

"Best Practices Guide for Conferences" also addresses the common question of logo usage. Chapter three, page 3-4 D states, "Use of the Agency's logo in connection with promotion or sale of non-government produced goods or services is forbidden, (see EPA Order 1015.2A.)

Promotional material for conferences conducted under grants and cooperative agreements may acknowledge that the conference receives financial support from the Agency under an assistance agreement, but cannot use the logo on a conference brochure in a manner that implies that the conference is being conducted by EPA. These conferences should be described as the recipient's event, not EPA's." EPA Order 1015.2A explains when and how the EPA logo can be used. Project Officers should consult with their Office of General Counsel / Office of Regional Counsel, if needed.

Using Congressionally Earmarked Funds

An earmark is a portion of an appropriation that is to be spent on a particular project. It is often referred to as a "line item" with respect to EPA's appropriation Acts or related reports. Agency policy provides that EPA will generally honor directions to make assistance awards for earmarks if it has the statutory authority to award the financial assistance. It is important to note that Earmarks in committee reports do not, in and of themselves, provide the Agency with the statutory authority to award the assistance agreement. Awards made as a result of earmarks are subject to the applicable assistance regulations, OMB cost principles and Agency policies. They must be managed as any other assistance agreement. Agency policy states that EPA "will generally act in accordance with the views expressed in Conference Reports, Appropriation Committees Reports and other documents that reflect legislative history." (RMD, Administrative Control of Appropriated Funds - July 1, 1997) However, earmarks contained only in a Committee's report are not legally binding and do not provide the statutory authority required for award of a financial assistance agreement unless they are incorporated expressly or by reference in the Appropriations Acts. An example is EPA's State and Tribal Assistance Grants (STAG) Appropriation. In FY2000, the Appropriations Act contained the following language, "...$263,500,000 for making grants for the construction of wastewater and water treatment facilities and groundwater protection infrastructure in accordance with the terms and conditions specified for such grants in the report accompanying this Act (H.R. 2684)." Reference to the Committee Report incorporates the earmarks in that report into statute and is thus the Approval Authority for the financial assistance award.

If the Appropriations Act does not provide the statutory authority for the award, EPA must have the authority to make the award in one of its organic statutes. For example, the Committee report states " $500,000 for the development of a water quality monitoring plan for X River Basin." This activity is eligible under the Clean Water Act §104(b)(3). Therefore, EPA has the authority to provide financial assistance for this line item. However, for a line item that reads, "$500,000 to a County for implementation of Best Management Practices (BMPs) in the X Watershed," EPA does not have the authority to award this financial assistance, since it does not have the authority to provide direct funding to a County to implement BMPs.

If a program office believes it does not have the statutory authority to make an award, it should consult with Counsel. If it is determined that the Agency lacks the authority to award the financial assistance, the Office of the Chief Financial Officer (OCFO) should be contacted, so Congress can be notified.
Building your Assistance File and the Importance of Documentation

The technical, administrative, and financial files for each assistance agreement constitute the Agency's official files. These are held by the PO, GMD, and the Financial Management Office (FMO) respectively. As a PO, you are responsible for establishing and maintaining the technical files. Your file must be complete even though the GMO is responsible for
certain elements. The Official EPA Project File List in the Appendix will assist in building your file.

Additional information on EPA's National Records Management Program can be found at http://www.epa.gov/nrmp/. You will find guidance on records management including:

" What is a record
" What every staffer should know
" Policy Schedules

What is a record?

The Agency uses two definitions for records: one defined in the Federal Records Act (FRA) and incorporated into 44 U.S.C. 3301 and one defined in the Freedom of Information Act (FOIA). For day-to-day records management, use the FRA definition; for responding to a FOIA request, use the FOIA definition.

The FRA has an intentionally broad definition to ensure that the Federal government has an adequate record of its activities to protect its legal and financial interests and to protect the people directly affected by the activities.

It defines as a record "all books, papers, maps, photographs, machine readable materials, or other documentary materials, regardless of physical form or characteristic, made or received by an agency of the United States Government under Federal law or in connection with the transaction of public business and preserved or appropriate for preservation by the agency or its legitimate successor as evidence of the organization, functions, policies, and decisions, procedures, operations, or other activities of the Government or because of the informational value of the data in them."

Generally speaking, documentary materials are records when they meet both the following criteria (Note: While the majority of the documents in the Agency meet the first criterion, many will not meet the second):

a. They are made or received under Federal law or in connection with the transaction of Agency business.

b. They are appropriate for preservation as evidence of Agency activities because of the value of the information they contain.

These criteria should be applied to:

" Working files
" Drafts
" Electronic mail messages
" Data and spreadsheet
" Paper documents
" Data from test equipment files
" Computer output
" Results of the computer modeling
" Other "non traditional" records
" Internet postings

In addressing the second criterion, remember that Official Agency records include both outputs (e.g., memoranda, reports, publications, permits, etc.) and all of the documentation that supports the decision trail.

You as the PO need to remember that proper documentation is essential. A complete and accurate official grant file will help in:

" Providing an audit trail that documents decisions
" Monitoring the technical and financial progress of the assistance or interagency agreement
" Responding to inquiries from within and outside the Agency concerning the assistance or interagency agreement
" Complying with Federal and Agency record keeping requirements

Competition Order 5700.5A1

The FGCAA encourages competition in assistance programs to identify and fund the best possible projects based on merit and cost effectiveness. On September 30, 2002 EPA issued Competition Order 5700.5. This Order establishes EPA's policy for competition in the award of EPA assistance agreements. The Order was revised and reissued on January 1, 2005. EPA policy is that the competitive process be fair and open and that no applicant receives an unfair competitive advantage. Chapters 3 and 4 cover competition in greater detail.

Unsolicited Applications

Unsolicited applications may be received by the agency, and these are exempt from the requirements of EPA Order 5700.5A1, Assistance Competition. However, in order for an application to qualify it must be an unsolicited proposal that is unique or innovative and does not resemble the substance of a pending or contemplated competitive solicitation. An unsolicited proposal is a written application for assistance agreement funding that is not prompted by either an official Agency Request for Applications or Initial Proposal or an explicit or implicit request by an EPA employee that the applicant submit the proposal. The unique or innovative ideas contained in the proposal must come from the applicant rather than EPA. The proposal must include sufficient detail to permit an evaluation regarding the offer's technical merit or program value, accomplishment of a public purpose, and to decide on the merits for funding. No EPA employee may take action to directly or indirectly encourage the submission of unsolicited proposals in order to avoid competition. If a program believes they have an unsolicited proposal that would qualify for non-competition, the PO should discuss the proposal with the Competition Advocate.

Catalog of Federal Domestic Assistance (CFDA)

The CFDA is a government-wide compendium of Federal programs, projects, services and activities that provide assistance or benefits to the American public. Each year, EPA Program Offices work with the headquarters grants policy office to update existing CFDA descriptions and provide descriptions for new programs. All competitive solicitations from the EPA will need to reference the appropriate CFDA number.

Non-Discretionary Grants, Discretionary Grants, and Performance Partnership Grants (PPGs)
Non-Discretionary grants are assistance awards the EPA is mandated to award in compliance with either by Congress or Federal Statute. Discretionary grants are the assistance agreements that EPA awards based on each Program Offices' and Regional Offices' freedom of choice - funds that are not mandated.

PPGs were authorized by Congress in 1996 to allow State and Tribal recipients to combine funds from at least two of seventeen environmental Program grants into a single award, workplan and budget. The regulations governing PPGs can be found at 40 CFR 35, Subparts A and B, (http://www.epa.gov/epahome/cfr40.htm). The primary purpose of a PPG is to permit EPA's partners greater flexibility in addressing their environmental priorities.

A work plan for the PPG is negotiated between the applicant and Regional office, and will cover each program included in the PPG. This work plan will address program requirements prescribed by the National Program Manager. If an applicant proposes a work plan significantly different from national guidance the Regional Administrator must consult with the National Program Manager before approving it.

A PPG differs from a traditional categorical program grant in that applicants and Regional Offices may:

" Negotiate work plans that target Federal and State funds where the States need them in order to address their highest priority environmental and public health problems, while fostering joint EPA/State planning and priority-setting.

" Integrate environmental programs in a common sense way by allowing use of funds for multimedia initiatives, such as children's health protection programs, multimedia inspections, compliance assistance programs, and ecosystem management-all activities that were difficult to fund under EPA's traditional categorical environmental program grants.

" Achieve cost and administrative savings by reducing the amount of grant paperwork and simplifying accounting requirements. Recipients need not account for expenditures in accordance with their original funding sources.

" Strengthen the Federal and State ability to respond to environmental problems.
This flexibility and ability to leverage funds provide a distinct advantage for recipients. While the general process for negotiating and awarding a PPG is similar nationally, Regional organization and processes may differ. Please contact your Regional GMO for specific procedures.

It is important to remember that PPGs are still grants and are therefore subject to all EPA's grant policies and requirements, including Post-Award management.

Conflicts of Interest

Public service is a public trust. Federal employees must avoid circumstances that may result in a conflict of interest or the appearance of a conflict of interest, or any prejudices or biases. To ensure that every citizen can have complete confidence in the integrity of the Federal government, employees must comply with the principles of ethical service in the regulation entitled "Standards of Ethical Conduct for Employees of the Executive Branch" published on August 7, 1992, by the Office of Government Ethics (5 CFR 2635).

(http://www.usoge.gov/pages/forms_pubs_otherdocs/fpo_files/reference/rfsoc_99.pdf )

EPA's supplementing (40 CFR Part 3) regulations state that EPA employees may not take actions which would create the appearance of:

" Using a public office for private gain
" Giving preferential treatment to any organization or person
" Losing independence or impartiality of action

The EPA has Deputy Ethics Officials (DEO) who are able to help you with ethics and conflict of interest questions. Each Regional Office has two persons designated as DEO - the Regional Counsel and either the Regional Administrator or the Deputy Regional Administrator.

In Headquarters, the DEO's are generally the Office Directors and Deputy Assistant Administrators. In the EPA Laboratories, the DEO's are the Lab or Division Directors. Disciplinary action for violating governmental ethics rules will not be taken against an employee who has engaged in conduct based on advice of an EPA ethics official, provided that employee has made full disclosure of all relevant circumstances.

Hierarchy of Laws Governing Assistant Agreements

As a Project Officer knowing both the hierarchy of and the different governing laws and regulations that apply to assistant agreements are important. Hierarchy means, if there is a conflict between two or more documents, those documents that have the full force and effect of law take precedence over those that do not. The hierarchy is as follows:

" Statutes
" Executive Orders
" Federal Regulations
" OMB Circulars (Implemented through the regulations)
" EPA Orders & Policies
" EPA Guidance

Federal Statutes form the legal basis for all EPA assistance programs and may establish administrative requirements for specific programs. Without a legal statute EPA would not have the authority to award funds. Each Project Officer is responsible for knowing the statutes which apply to their assistance programs. For example if you were part of the Indoor Air Division you would need to be familiar with Clean Air Act, Section 103 (b)(3) which is your discretionary grant making authority.

Executive Orders are requirements issued and signed by the President of the United States. They pertain to the business of Federal agencies and hold the full force and effect of law. In other words, EPA and our recipients must follow the requirements in an Executive Order. Some examples of Executive Orders are:

1. Socio-Economics Activities: Executive Orders 11625 "National Minority Business Enterprise Program", 12138 "National Women's Business Enterprise Policy", and 12432 "Minority Business Enterprise Development"

2. Executive Order 13101: Greening the Government through Waste Prevention, Recycling, and Federal Acquisition

RECYCLING TERM AND CONDITION

ALL RECIPIENTS:

In accordance with EPA Order 1000.25 and Executive Order 13101, Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition, the recipient agrees to use recycled paper for all reports which are prepared as a part of this agreement and delivered to EPA. This requirement does not apply to reports prepared on forms supplied by EPA, or to Standard Forms, which are printed on recycled paper and are available through the General Services Administration. Please note that Section 901 of E.O. 13101, dated September 14, 1998, revoked E.O. 12873, Federal Acquisition, Recycling, and Waste Prevention in its entirety.

STATE AGENCIES AND POLITICAL SUBDIVISIONS:

Any State agency or agency of a political subdivision of a State which is using appropriated Federal funds shall comply with the requirements set forth in Section 6002 of the Resource Conservation and Recovery Act (RCRA) (42 U.S.C. 6962). Regulations issued under RCRA Section 6002 apply to any acquisition of an item where the purchase price exceeds $10,000 or where the quantity of such items acquired in the course of the preceding fiscal year was $10,000 or more. RCRA Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials identified in guidelines developed by EPA. These guidelines are listed in 40 CFR 247.

STATE AND LOCAL INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND NON-PROFIT ORGANIZATIONS:

Pursuant to 40 CFR 30.16, State and local institutions of higher education, hospitals, and non-profit organizations that receive direct Federal funds shall give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to EPA's guidelines.

EPA's Code of Federal Regulations is 40 CFR. Our regulations are derived through OMB Circulars. OMB Circulars are binding to Federal agencies but do not hold the full force and effect of law on the recipient. In other words, the OMB circulars are made enforceable on the recipient because there are referenced in our Code of Federal Regulations.

OMB has three types of circulars that apply to assistance awards: administrative, cost, and audit. Administrative circulars provide the requirements for managing pre-award, award, and post-award phase. Cost Principles establish the requirements for determining whether assistance agreement costs are allowable or unallowable. The Single Audit circular provides policy guidance to Federal agencies for establishing uniform requirements for audits.

Below is a table which indicates the correct EPA 40 CFR reference with the corresponding implemented OMB circular/regulation.

Below is a table which indicates the correct EPA 40 CFR reference with the corresponding implemented OMB circular/regulation.

EPA Orders and Policies are agency requirements issued by EPA Headquarters. Regions may also issue regional policies and guidance consistent with Headquarters policies and guidance issued by EPA's National Program Managers (NPM). Regions may also issue guidance to implement EPA Orders, policies or guidance. Some examples of major EPA orders are:

1. Acquisition vs. Assistance - EPA Order 5700.1
2. Grants Competition Order - EPA Order 5700.5A1
3. Compliance, Review and Monitoring - EPA Order 5700.6A1

An example of an EPA Policy is: Disadvantaged Business Enterprises - implements statutory, executive order, and regulatory requirements for the DBE program

Finally, EPA issues guidance in correlation with EPA Orders and Policies. For example, EPA Order 5700.7 on Environmental Results has several corresponding guidance documents explaining how to implement the Order.

Statutory Authority verses Delegation of Authority

An Agency must have specific statutory authority for funding various programs. Statutory authorities to approve assistance agreements are assigned to EPA's Administrator and implemented through delegation to the Regional Administrators, National Program Managers or their delegates. Delegation of authority is the official directive to senior Headquarters and Regional management officials to exercise authority for the Administrator. The Agency's Delegation Manual identifies each delegation of authority by a specific number. EPA's Organization and Management Consulting Services records all delegations of authority, except emergency/letter delegations, in the Delegation Manual and distributes them to Regional and Headquarters offices.

Confidential Business Information

Program offices should inform potential applicants (in the guidance or other information they send out about the program), that, if an applicant wants to claim some information as Confidential Business Information (CBI), they must mark the information as CBI or similar claim of confidentially in the application. The Office of General Counsel/ Office of Regional Counsel then decides whether a CBI claim is valid.

If the recipient claims information is CBI, EPA cannot release that information under the Freedom of Information Act. If EPA does not ask the applicant to identify CBI in its application, and there is a FOIA request, the EPA will have to go back to the recipient and ask them to identify any CBI.

POs must make sure any information they furnish the public is consistent with program objectives and guidance, as well as releasable under the Freedom of Information Act (FOIA). If you have any questions whether or not information is releasable under FOIA, contact the Office of General Counsel/ Office of Regional Counsel, or your local FOIA Officer.

Lobbying and Litigation/ Eligible Non-Profits

A number of statutes and OMB Circulars prohibit recipients from using assistance funds for lobbying or for suing the United States. These authorities include:

" The Lobbying Disclosure Act of 1995, which prohibits awards to 501(c)(4) organizations that engage in lobbying;
" 31 U.S.C. 1352 (known as the Byrd Amendment), which prohibits recipients from using appropriated funds to lobby with regard to the award or amendment of a grant or cooperative agreement;
" OMB Circulars A-21 and A-122, which prohibit non-profit and educational organizations from using Federal grant funds to engage in various forms of lobbying activities, including grassroots lobbying and electioneering.
" EPA's Appropriations Acts, which require a certification by the chief executive officer of any entity receiving funds. The certification states, that no grant funds "...have been used to engage in lobbying of the Federal Government or in litigation against the United States unless authorized under existing law."
" OMB Circulars A-87, A-21 and A-122, which prohibit Federal grant recipients from using grant funds for litigation against the United States.
" EPA includes special conditions in all of its assistance agreements to enforce these restrictions. In addition, during administrative on-site reviews of grantees, EPA conducts transaction testing of grantee expenditures to identify any unallowable lobbying or litigation costs.
" Project Officers should notify their respective Award Official immediately if they believe that a recipient has used, or may have used, assistance funds for prohibited lobbying/litigation activities.
The 3 most common non-profit IRS codes...

Section of 1986 Code Description of Organization General Nature of Activities

501 (c) (3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster Certain National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organization Activities of nature implied by description of class of organization

501 (c) (6) Business Leagues, Chambers of Commerce, Real Estate Boards, etc. Improvement of business conditions of one or more lines of business

501 (c) (4) Civil Leagues, Social Welfare, Organizations, and Local Associations of Employees Promotion of community welfare; Charitable, educational or recreational

i The Lobbying Disclosure Act of 1995 provides that organizations described in Section 501(c)(4) of the Internal Revenue Code of 1986 which engage in lobbying activities are not eligible to receive Federal grants, cooperative agreements or loans.

Environmental Review / Environmental Impact Statements

The National Environmental Policy Act (NEPA) requires Federal agencies to prepare a detailed Environmental Impact Statement (EIS) for major Federal actions significantly affecting the quality of the human environment. EISs are not required if an agency : 1) issues a Finding of No Significant Impact (FNSI) that is based on an environmental assessment; or 2) concludes that a project falls within categories of actions that have been determined not to have significant impacts (categorical exclusions).

Many EPA grant programs are not subject to the EIS requirement because of statutory exemptions. However, as outlined in EPA's NEPA regulations at 40 C.F.R. Part 6, EPA does conduct an environmental review of environmental research assistance agreements. As part of this review, the ORD project officer completes EPA Form 5300-23 to assist higher level officials, usually the authorized decision official, in determining the appropriateness of a categorical exclusion/ FNSI or the need for an EIS. The recipient's principal investigator may help the project officer in obtaining documentation for the review. EPA also conducts environmental reviews of Congressional earmark grants for wastewater treatment infrastructure to determine whether an EIS is necessary. Project officers should address questions regarding the applicability of NEPA and related environmental laws, such as the Endangered Species Act or the National Historic Preservation Act, to the Office of General Counsel/Regional Counsel.

Research/Development and Federal Demonstration Partnership (FDP) Awards
"Research" is defined as a systematic study directed toward fuller technical knowledge or understanding of the subject studied. "Development" is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function. (40 CFR Part 30.2 (dd))

The Federal Demonstration Partnership (FDP) is an association of Federal agencies, academic research institutions with administrative, faculty and technical representation, and research policy organizations that work to streamline the administration of Federally sponsored research. FDP's are awarded through the Office of Research and Development's National Center for Environmental Research (NCER) only. If the assistance recipient has grants from other programs, the FDP terms and conditions do not apply to the other programs' assistance agreements, only the NCER assistance.

SUMMARY

At the beginning of the chapter, we identified several objectives you would accomplish after reading the chapter. The objectives are listed below, each followed by a brief summary of the key points the chapter covered.

1. Understand the principle of acquisition vs. assistance and grant vs. cooperative agreement as derived from the Federal Grant and Cooperative Agreement Act of 1977. The FGCAA provides the basic definitions for acquisition and assistance. Remember that acquisition is appropriate when the principal purpose is to provide services to the government. Assistance is appropriate when the principal purpose of the project is to provide state and local governments and other recipients the ability to accomplish works for public purpose.

2. Understand the importance of beginning to build your assistance file now and the importance of documentation. Documentation is key to a complete official file! The Project Officer has the responsibility to maintain an assistance file on every award which includes: working files, drafts, electronic mail messages, data and spreadsheets, paper documents, data from test equipment files, computer output, results of computer modeling, other "non traditional" records and internet postings.

3. Know how the Competition Order applies to project officers and be able to identify the difference between solicited and unsolicited applications. The Order establishes EPA's policy for competition in the award of EPA assistance agreements. EPA policy is that the competitive process be fair and open and that no applicant receive an unfair competitive
advantage. The order does provide the ability for recipients to submit unsolicited applications. However, if you as a Project Office receive an unsolicited application you must first make sure that it does not currently fit under an ongoing competition.

4. Describe the relationship between the Catalog of Federal Domestic Assistance and the Competition Order. The CFDA is a government-wide compendium of Federal programs, projects, services and activities that provide assistance or benefits to the American public. All competitive solicitations from the EPA will need to have a CFDA number.

5. Be able to identify the difference between a Performance Partnership Grant (PPG), a discretionary grant and a non-discretionary grant. Non-Discretionary grants are assistance awards that the EPA is mandated to comply with either by Congress or Federal Statute. Discretionary grants those awards that EPA awards based on each Program and Regional Offices' freedom of choice. PPG's are awards that allow states and tribes to combine funds from at least two of seventeen environmental program grants into a single award, work plan and budget.

6. Identify ethics concerns and conflicts of interest. Federal employees must avoid circumstances that may result in a conflict of interest or the appearance of a conflict of interest, or any prejudices or biases. If you have ethics or possible conflict of interest concerns contact your Deputy Ethics Official.

7. Understand how the "Best Guide for Conferences" will help when funding an assistance agreement with a conference included in the scope of work. The Agency may decide to help non-Federal entities hold conferences to carry out environmentally related work. If this occurs one of the first steps will be to decide whose conference it is - theirs, ours, or joint. As a general rule, an assistance agreement may not be used to support a conference or other service if the principal purpose is to provide advice, recommendations, or other information for EPA's direct use in developing or changing guidance or regulations. Refer to the Guide for detailed guidance on these and other issues associated with sponsoring a conference.

8. Identify and know the hierarchy of the different laws and regulations governing assistance awards. The hierarchy is: Federal Statutes, Executive Orders, Federal Regulations, OMB Circulars/Regulations (implemented through Federal Regulations), EPA Orders and Polices, and EPA Guidance.

9. Identify and differentiate between statutory authority and delegation of authority. Statutory authority is EPA's legal basis for funding various programs. Statutory authorities to approve assistance agreements are assigned to EPA's Administrator and implemented through delegation to the Regional Administrators, National Program Managers or
their delegates. Delegation of authority is the official directive to senior Headquarters and Regional management officials to exercise authority for the Administrator.

10. Become aware of the rules involving Lobbying and Litigation by grantees. A number of statutes and OMB Circulars prohibit recipients from using grant funds for lobbying or for suing the United States. Project Officers should notify their respective Award Official immediately if they believe that a recipient has used, or may have used, assistance funds for prohibited lobbying/litigation activities.

11. Understand the difference between a survey, study and investigation and a research assistance agreement including Federal Demonstration Partnership (FDP) agreements through NCER. "Research" is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. FDPs are awarded out of NCER and allow academic research institutions with administrative, faculty and technical representation, and research policy organizations the ability to streamline the administration of federally sponsored research.

12. Identify needs for environmental review/environmental impact statements. To ensure compliance with NEPA, each extramural research project supported under an assistance or interagency agreement must be reviewed using EPA Form 5300-23. This form and supporting documentation will institute the environmental assessment (EA) and finding of no significant impact (FNSI).

QUESTIONS

1. What is the definition of assistance, and where is it found?
2. Are electronic mail messages considered part of the official file?
3. What is the Catalog of Federal Domestic Assistance
4. Can a non-profit entity participate in Performance Partnership Grants?
5. Who should you contact if you have a question about conflicts of interest?
6. Are recipients allowed to use the EPA logo on their conference material?
7. Does every award need to have a statutory authority?
8. If you are funding a survey under a cooperative agreement would information collection requirements apply?
9. When do you need an environmental review/environmental impact statement?
10. Are recipients permitted to lobby Congress with Federal funding?
11. Are all programs able to participate in the Federal Demonstration Partnership program?
12. Why is it important to know the hierarchy?
13. Why should a Project Officer know which parts of the regulations apply to their recipient?

HIERARCHY OF REQUIREMENTS PART 31 EXERCISE

40 CFR Part 31, establishes the requirements for awarding and managing all grants and cooperative agreements with State, Local and Indian Tribal Governments. In this exercise you will look through your copy of Part 31 to find the answers to the following questions, referencing the section(s) where the answer is located.

1. Who is responsible for approving the following revisions to a recipient's budget and program plan?
- Change in key personnel
- Additional funding
- Change in the scope or the objective of the project

2. How long is a recipient required to retain all records pertinent to an award?

3. Who holds the title to equipment acquired by a recipient with Federal funds?

4. Part 31 lists revisions to the budget and program plans recipients are allowed to make without prior federal approval. Where in Part 31 is this found and what are the three examples listed?

5. How often is a recipient required to submit progress reports?

6. What section in Part 31 explains the payment methods available to the recipient?

7. Can a recipient copyright a work product developed at government expense (intangible property)?

8. What procurement records must a recipient maintain at a minimum?

9. What section of Part 31 lists the five conditions under which EPA can review a recipient's procurement process?

10. What section of Part 31 covers what's required after the completion of an award?

HIERARCHY OF REQUIREMENTS PART 30 EXERCISE

40 CFR Part 30, revised February 15, 1996, establishes the requirements for awarding and managing all grants and cooperative agreements with institutions of higher education, hospitals, and other non-profit organizations. In this exercise you will look through your copy of Part 30 to find the answers to the following questions, referencing the section(s) where the answer is located.

1. Who is responsible for approving the following revisions to a recipient's budget and program plan?
- Change in key personnel
- Additional funding
- Change in the scope or the objective of the project

2. How long is a recipient required to retain all records pertinent to an award?

3. Who holds the title to equipment acquired by a recipient with Federal funds?

4. Part 30 lists revisions to the budget and program plans recipients are allowed to make without prior federal approval. Where in Part 30 is this found and what are the three examples listed?

5. How often is a recipient required to submit progress reports?

6. What section in Part 30 explains the payment methods available to the recipient?

7. Can a recipient copyright a work product developed at government expense (intangible property)?

8. What procurement records must a recipient maintain at a minimum?

9. What section of Part 30 lists the five conditions under which EPA can review a recipient's procurement process?

10. What section of Part 30 covers what's required after the completion of an award?

OPTIONAL EXERCISE #1

The recipient indicates that they are having a conference. They plan on advertising for the conference on their web site, with a mailings, and flyers. They send you a draft copy of the flyer for your information and you see that the recipient is using the EPA logo. Is this allowable? If so are there limits to EPA logo usage and what are they? If unallowable how would you the PO handle the situation?

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