On August 13, 2020, Final Guidance was issued in the Federal Register titled Guidance for Grants and Agreements which includes the much-anticipated changes to the Uniform Guidance from the Office of Management and Budget (OMB). The Final Guidance is a lengthy document located here.
A large portion of the document relates to defining or redefining terms and adding clarity to existing sections of the Uniform Guidance, but there are some changes incorporated that are noteworthy as follows:
Changes to the 10% De Minimus Indirect Rate
Previously, non-federal entities could utilize the 10% de minimus rate only if they had never had a Negotiated Indirect Cost Rate Agreement (NICRA). Effective November 12, 2020, all non-federal entities (excluding those described in Appendix VII, State and Local Government and Indian Tribe Indirect Cost Proposals) may use the de minimus rate, regardless of whether they previously had a NICRA. This will be useful for organizations that have negotiated rates that have expired due to breaks in federal funding or due to a lack of resources for preparing an indirect cost proposal. The OMB hopes this change will reduce the administrative burden for non-federal entities and federal agencies and shift more resources to the program objective.
Also, a new paragraph has been added to § 200.414 require that NICRAs are collected and published on a public website for transparency purposes.
Changes to Procurement Standards
The National Defense Authorization Act (NDAA) 18-18 raised the micropurchase threshold to $10,000 and the simplified acquisition threshold to $250,000 for all grant recipients but the Uniform Guidance and the Federal Acquisition Regulation (FAR) were not updated to match. The Final Guidance adopts this change for the Uniform Guidance. The FAR was also updated with an effective date of August 31, 2020.
Revisions to § 200.320 establish a process for all non-federal entities to establish a micropurchase threshold above the $10,000 threshold based on certain conditions.
The methods of procurement have been grouped into three categories as follows:
- Informal (micropurchase/small purchase)
- Formal (sealed bids/proposals)
- Non-competitive (sole source)
Addition of Domestic Preferences for Procurement
The OMB added a new section, 2 CFR 200.322 Domestic preferences for procurement, encouraging Federal award recipients, to the extent permitted by law, to maximize the use of goods, products, and materials produced in the United States when procuring goods and services under Federal awards following the Executive Order Buy American and Hire American.
Clarification on Period of Performance
The Final Guidance revised the definitions of period of performance, budget period, and renewal to better describe how the period of performance is modified if there is an extension or termination of the award.
The guidance states, “period of performance reflects the total estimated time interval between the start of an initial federal award and the planned end date. The period of performance may include one or more budget periods but the identification of the period of performance does not commit funding beyond the currently approved budget period.”
If you have any questions on this or other federal grant topics, reach out to Carol Barnard, CPA, CFE at email@example.com