[Federal Register Volume 63, Number 31 (Tuesday, February 17, 1998)]
[Proposed Rules]
[Pages 7734-7738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3720]
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DEPARTMENT OF AGRICULTURE
7 CFR Parts 3015, 3016 and 3019
RIN 0503-AA16
Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments and Uniform Administrative
Requirements for Grants and Agreements With Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations
AGENCY: Department of Agriculture, USDA.
ACTION: Notice of proposed rulemaking.
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SUMMARY: USDA is proposing to revise its grants management regulations
in order to bring the entitlement programs it administers under the
same regulations that already apply to nonentitlement programs; and to
identify exceptions to these general rules that apply only to
entitlement programs. The effect of the first change would be that only
one set of Federal administrative requirements would apply to awards
that a grantee or subgrantee organization receives under USDA programs.
That would be consistent with how most other Federal awarding agencies
handle their codifications of governmentwide rules for grantees and
subgrantees. In making the second change, this proposed rule would
establish the following exceptions for entitlement programs: States and
their governmental subgrantees would be required to conduct
procurements under USDA entitlement programs in accordance with the
specific procurement rules stated in the USDA regulations; the option
to use State rules that differed from these Federal rules would not be
available, as it is for procurements under nonentitlement programs;
States and their governmental subgrantees would be required to exclude
from consideration for a contract award any contractor that had
developed draft product specifications, requirements, statements of
work, invitations for bid, and/or requests for proposals for use by the
grantee or subgrantee in conducting procurements under USDA entitlement
programs; Financial reporting requirements under USDA entitlement
programs would continue to be provided in the program-specific
regulations rather than in the departmental regulations. This would not
affect the reporting requirements themselves.
DATES: Written comments must be submitted on or before May 19, 1998.
ADDRESSES: Comments must be mailed or faxed to Gerald Miske,
Supervisory Management Analyst, Fiscal Policy Division, Office of the
Chief Financial Officer, USDA, Room 3022 South Building, 1400
Independence Avenue, S.W., Washington, D.C. 20250; FAX (202) 690-1529.
Written comments may be inspected at the above address from 8:00 a.m.
to 5:00 p.m. A copy of the Regulatory Cost/Benefit Assessment
referenced in the Regulatory Impact Analysis section of this preamble
can be obtained from Gerald Miske, Supervisory Management Analyst,
Fiscal Policy Division, Office of the Chief Financial Officer, USDA,
Room 3022 South Building, 1400 Independence Avenue, S.W., Washington,
D.C. 20250. This assessment may be examined at the same address.
FOR FURTHER INFORMATION CONTACT: Gerald Miske, Supervisory Management
Analyst, Fiscal Policy Division, Office of the Chief Financial Officer,
USDA, at the above address; telephone (202) 720-1553.
SUPPLEMENTARY INFORMATION:
Background
The administrative requirements for awards and subawards under all
USDA entitlement programs are currently in 7 CFR Part 3015, ``Uniform
Federal Assistance Regulations.'' The corresponding requirements for
awards and subawards to State and local governmental organizations
under USDA nonentitlement programs are in Subparts A through D of 7 CFR
Part 3016, ``Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments;'' and the
administrative requirements for awards and subawards to
nongovernmental, nonprofit organizations are in 7 CFR Part 3019,
``Uniform Administrative Requirements for Grants and Agreements With
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations.'' This proposed rule would expand the scope of Parts
3016 and 3019 to include entitlement programs, and delete
administrative requirements for awards and subawards under such
programs from the scope of Part 3015. It would also establish, in
Subpart E to Part 3016, certain exceptions to the general
administrative requirements that would apply only to the entitlement
programs. The following text outlines the evolution of these proposed
changes.
On March 11, 1988, USDA joined other Federal agencies in publishing
a final grants management common rule applicable to assistance
relationships established by grants and cooperative agreements, and by
subawards thereunder, to State and local governments. Prior to that
date, administrative requirements for awards and subawards under all
USDA programs were codified at 7 CFR Part 3015. USDA implemented the
common rule at 7 CFR Part 3016. At that time, the common rule did not
apply to entitlement programs such as the Food Stamp and Child
Nutrition Programs administered by the Food and Nutrition Service,
USDA, and the public assistance programs administered by the Department
of Health and Human Services (DHHS). However, Subpart E was reserved in
the rule to subsequently address provisions specific to entitlement
programs. Pending the publication of Subpart E to Part 3016, the USDA
entitlement programs have remained under Part 3015. These programs
included:
(1) Entitlement grants under the following programs authorized by
the National School Lunch Act, as amended: (a) National School Lunch
Program, General and Special Meal Assistance (sections 4 and 11 of the
Act, respectively), (b) Commodity Assistance (section 6 of the Act),
(c) Summer Food Service Program for Children (section 13 of the Act),
and (d) Child and Adult Care Food Program (section 17 of the Act); (2)
Entitlement grants under the following programs authorized by the Child
Nutrition Act of 1966, as amended: (a) Special Milk Program for
Children (section 3 of the Act), (b) School Breakfast Program (section
4 of the Act), and (c) State Administrative Expense Funds (section 7 of
the Act); and (3) Entitlement grants for State Administrative Expenses
under the Food Stamp Act of 1977, as amended (section 16 of the Act).
The exclusion of these programs from the scope of Part 3016 made
that regulation apply only to USDA's nonentitlement programs. The
principal nonentitlement programs administered by the Food and
Nutrition Service include the Special Supplemental
[[Page 7735]]
Nutrition Program for Women, Infants and Children (WIC), the Commodity
Supplemental Food Program (CSFP), the WIC Farmers' Market Nutrition
Program (FMNP), the Nutrition Education and Training Program (NET), and
the Emergency Food Assistance Program (TEFAP).
On August 24, 1995 (60 FR 44122), USDA published an interim rule at
7 CFR Part 3019 in order to implement the revised OMB Circular A-110,
Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations. As with Part 3016, USDA did not include entitlement
programs in the scope of Part 3019. Accordingly, a nonprofit private
school operating the National School Lunch Program and the NET under
subgrants from a State educational agency must currently apply Part
3015 to the former and Part 3019 to the latter. In excluding
entitlements from the scope of Part 3019 at the time of its initial
publication, USDA anticipated issuing a document that would provide a
single set of grant and subgrant administrative rules for all types of
organizations operating USDA entitlement programs.
This Notice of Proposed Rulemaking is USDA's first step in
developing such a document. In publishing this proposed rule, USDA
solicits comments on: (1) applying the provisions of Part 3016 to USDA
entitlement program awards and subawards to State and local
governmental organizations; (2) adopting proposed exceptions to be
included in Subpart E of Part 3016; and (3) applying the provisions of
Part 3019 to USDA entitlement program awards and subawards to
nongovernmental, nonprofit organizations.
USDA is also making an editorial change in Part 3015 to correct the
name of the USDA office responsible for Federal assistance policy.
Finally, USDA is making a technical change to recognize the recent
reclassification of the Food Distribution Program on Indian
Reservations (FDPIR) from nonentitlement to entitlement. This
reclassification is based on the FDPIR's close relationship with the
Food Stamp Program. The FDPIR is authorized by section 4(b) of the Food
Stamp Act of 1977, as amended and, beginning in Fiscal Year 1997,
awards made to States and Indian Tribal Organizations (ITOs) under this
program have been funded from USDA's Food Stamp Program account. The
program's characteristics place it in the same class with the
entitlement programs, particularly the Food Stamp Program. The
President's Budget for Fiscal year 1998 represents it as such.
This proposed rule would not affect USDA nonentitlement programs.
As noted above, Part 3016 has covered grants and subgrants to State and
local governments under these programs since its publication. Likewise,
Part 3019 covers nonprofit organizations that operate nonentitlement
programs.
In this proposed rule, USDA proposes those exceptions deemed most
essential to establishing appropriate administrative requirements for
grants and agreements under entitlement programs while bringing these
programs under Parts 3016 and 3019. The promulgation of such rules
would not, however, preclude the subsequent identification of
additional exceptions for these programs.
In that regard, USDA has met with DHHS and the OMB to plan for the
synchronization of administrative requirements for all entitlement
programs. It was agreed that USDA would proceed with this limited scope
rule because of its responsiveness to specific needs of program
operators. The three agencies also agreed, however, that USDA and DHHS
would collaborate in further refining administrative policies for
entitlements programs. Such deliberations may lead to proposals for
additional exceptions in Subpart E to Part 3016 and DHHS's parallel
regulation.
At this time, USDA proposes the following specific exceptions for
entitlement programs:
1. Adoption of Standards for State and Subgrantee Procurements.
With certain qualifications discussed below, USDA proposes to adopt the
rules found in section 3016.36(b) through (i) for procurements by
States, and by local governments and ITOs operating as subgrantees of
States, under USDA entitlement programs. This would differ from the
general rules on State and subgrantee procurements under Federal
awards. The general rule for States is stated in section 3016.36(a),
which authorizes States to conduct procurements under Federal grants
using the same procedures they apply to their procurements from
nonfederal funds. Section 3016.37(a) extends this principle to States'
administration of subgrants. This section instructs a State to ``follow
State law and procedures when awarding and administering subgrants of
financial assistance (whether on a cost reimbursement or fixed amount
basis) to local and Indian tribal governments.'' A State may therefore
require its governmental subgrantees to conduct procurements under
their subgrants in accordance with sections 3016.36(b) through (i),
with State procurement rules, or with any combination of the two.
These general rules were included in the common rule codified at 7
CFR Part 3016 in keeping with Executive Order 12612, Federalism, dated
October 30, 1987. Under the Federalism principle, a Federal awarding
agency should rely to the maximum extent possible on State processes
rather than prescribe Federal ones. The preamble to the common rule
expressed this principle as follows: ``Federal agencies should refrain
from establishing uniform, national standards, and, where possible,
defer to the States to establish them.'' (53 FR 8035) With respect to
subgrantees, the preamble clarified that ``local governments and Indian
tribal governments will administer direct Federal grants according to
the standards in the common rule and Federal pass-through funds
subgranted from the State according to State laws and procedures.'' (53
FR 8036)(Emphasis in original.)
In publishing this proposed rule, USDA proposes to depart from this
principle by requiring both States and their governmental subgrantees
to use sections 3016.36(b) through (i) in conducting procurements under
USDA entitlement programs. The Federalism principle has never been
applied to grants under these programs because of their budget impact.
State and local governmental procurements under such programs are
currently subject to a modicum of Federal regulation; governmental
grantees and subgrantees follow their own procurement rules to the
extent they do not contravene those procurement requirements stated in
applicable Federal regulations. USDA believes the nature of the
entitlement programs warrants continuing this policy.
Federal liabilities to make payments to States under these programs
are created in a manner that gives USDA less control than is the case
with discretionary awards and other nonentitlement programs. The
following cases illustrate this concern:
Food Stamp Program. Under a Food Stamp Program administrative cost
grant, the Federal Government pays a statutorily prescribed share
(generally 50 percent) of the State's allowable costs. The program's
authorizing statute does not set a ceiling on the State administrative
costs for which USDA is required to fund its prescribed share.
Accordingly, USDA has sought supplemental appropriations whenever there
has been a possibility that existing appropriations would prove
insufficient to support cumulative grant levels.
[[Page 7736]]
National School Lunch Program. A State's grant award under the
National School Lunch Program is determined by applying a formula
consisting of the number of lunches of each authorized type served to
eligible children, multiplied by the applicable payment rate prescribed
by law. Once a State and its subgrantees have incurred the cost of
serving school lunches to eligible children, there is an obligation for
USDA to make the payments generated by this formula. If more eligible
meals are served than the Federal budget provided for, a funding
shortfall may result. Where information has indicated the possibility
that this may occur, USDA has sought supplemental appropriations or
taken other measures to ensure that the formula-generated amount would
be available.
Program size is another feature of most USDA entitlement programs
that necessitates more stringent Federal regulation of procurements
involving funds made available for them. In Fiscal Year 1996, USDA
disbursed approximately $1.9 billion for Food Stamp Program State
administrative costs and $5.4 billion in cash and commodity assistance
under the National School Lunch Program. Approximately 25,000 schools
and school districts operate the National School Lunch Program, most of
them as subgrantees of States. Moreover, many program operators are not
only purchasing goods and services for use in the program, but are also
engaging food service management companies to assume much of the
responsibility for program operations. If procurement rules are to
control how large numbers of program operators specify to contractors
their operational responsibilities for Federal programs, the rules
applicable to such actions must contain a core of minimum, uniform
requirements crafted to protect the public funds.
As discussed above, State and local governments administering
USDA's entitlement programs must currently follow the Federal
procurement rules stated in Part 3015, which had applied to all Federal
grants and subgrants to State and local governments before the
publication of Part 3016. (See 7 CFR Part 3015, Subpart S.) The
procurement requirements of section 3016.36(b) through (i), in effect,
comprise an updated version of these older rules. Accordingly, USDA
believes this proposal represents continuity in the administration of
entitlement programs. In any event, USDA's experience administering
grants to States under entitlement and nonentitlement programs suggests
that the procurement rules found at section 3016.36(b) through (i)
closely resemble the rules used by most States for their nonfederal
procurements.
USDA believes the principal effect of adopting the procurement
rules in section 3016.36(b) through (i) for procurements under USDA
entitlement programs would be the strengthening of competition in such
procurements. Existing rules at 7 CFR 3015.182 require States and other
governmental organizations to conduct procurements under entitlement
grants and subgrants in ways that maximize open and free competition.
However, some State and local procurement rules provide for
preference in source selection for bidders located within the State or
political subdivision, in order to promote the political entity's
economic development. For example, State or local procurement rules may
require that an outside bidder's bid be surcharged a prescribed
percentage for price comparison purposes. Such geographical preferences
are inherently noncompetitive because they can enable a local bidder to
receive a contract without having submitted the lowest responsive bid.
The old rules codified at 7 CFR Part 3015 proscribe certain practices
as anti-competitive, but are silent on geographical preferences. By
contrast, section 3016.36(c)(2) expressly prohibits them (except in
certain cases that involve contracting for architectural and
engineering services).
USDA is concerned that geographical preferences may have resulted
in State agencies and local program operators obtaining goods and
services for program purposes at more than the lowest available price.
This represents an inefficient use of scarce program funds.
The Comptroller General has found such practices' restraining
effects on competition acceptable only to the extent that their
operation presents no more than a negligible obstacle to outside
bidders' efforts to obtain contracts. Such determinations must be made
on a case-by-case basis. For example, the Comptroller General found
that a State rule requiring a two percent surcharge on outside bidders'
bids satisfied this standard. (Matter of the Eagle Construction
Company, B-191498, dated March 5, 1979) On the other hand, USDA has
been asked to determine whether geographical preferences ranging from
seven to 15 percent were consistent with the open and free competition
requirements of section 3015.182. Such cases have placed USDA in the
position of determining, on a case-by-case basis, ``how much preference
is too much.'' One State even asked USDA to disclose in advance the
preference level USDA would accept.
USDA believes that maximum open and free competition promotes the
most effective use of public funds made available for entitlement
programs. Accordingly, USDA's proposal to apply section 3016.36(b)
through (i) to States and their subgrantees includes the express
prohibition in section 3016.36(c)(2) against the use of in-State or
local geographical preferences in procurements conducted under USDA
entitlement programs. Commenters are requested to respond to this
proposal, whether they support or oppose it.
In addition to adopting the procurement rules of section 3016.36(b)
through (i), with their prohibition of geographical preferences, for
procurements under entitlement programs, USDA proposes to expressly
prohibit another practice that it believes restricts full and open
competition. A governmental grantee or subgrantee making a procurement
under a USDA entitlement program would be precluded from accepting an
offer from, or awarding the contract to, a contractor that had
developed or drafted specifications, requirements, statements of work,
invitations for bids or requests for proposals related to the
procurement. USDA believes that allowing contractors to participate in
procurements for which they had developed some or all of the
procurement documents would afford them an unfair competitive
advantage, to the detriment of full and open competition. This proposed
change would not prohibit governmental grantees and subgrantees from
using contractors to prepare any or all elements of a procurement. It
would only eliminate such contractors from consideration for the actual
award.
USDA believes this proposed prohibition is already implicit in the
text of section 3016.36(c)(1)(v), which identifies organizational
conflicts of interest as a situation considered to be restrictive of
competition. USDA has also considered the possibility that expressly
stating the prohibition with respect to entitlement programs may be
misconstrued to restrict its applicability to this class of program. On
the other hand, past experience in administering entitlement programs
suggests that stating the prohibition more explicitly would
significantly strengthen USDA's efforts to enforce it. In addition,
this proposal follows the language of a parallel requirement at section
3019.43. Part 3019 and its underlying circular, A-110, apply only to
nongovernmental,
[[Page 7737]]
nonprofit organizations, but they do represent the OMB's ``state of the
art'' pronouncement on grant and subgrant administrative requirements.
The fact that the OMB saw fit to express in A-110 both the broad
prohibition of organizational conflicts of interest, and the specific
case thereunder that USDA now proposes to include in Subpart E,
suggests that the need for clarification of this issue extends beyond
USDA.
Given the foregoing, USDA requests commenters to address the issues
of whether the proposed prohibition is necessary, and to recommend ways
to state it in Subpart E while avoiding misconstruction of its intent.
2. Financial Reporting Requirements. USDA also proposes to clarify
that the Food Stamp and Child Nutrition Programs are exempt from the
financial reporting requirements found in section 3016.41, but are
subject to financial reporting requirements stated in program-specific
regulations. This would not entail any change in existing financial
reporting requirements under these programs. Both programs use program-
specific financial reports approved by the OMB under the Paperwork
Reduction Act of 1995. The existing OMB clearances on these reports
would not require renewal before their stated expiration dates.
Regulatory Impact Analysis
Executive Order 12866
The Office of Management and Budget has reviewed this rule and has
determined the rule to be significant under Executive Order 12866. In
accordance with the provisions of Executive Order 12866, USDA has
prepared a cost benefit assessment which analyzes the economic impact
of this proposed rule on States, other grantees, and subgrantees
operating USDA entitlement programs. The economic impact has two
discrete dimensions: bringing these programs under the umbrella of
Parts 3016 and 3019, and establishing the deviations and exceptions
stated in Subpart E to Part 3016.
USDA believes that both dimensions would have a negligible economic
impact. The new administrative requirements would generally continue
the old rules that grantees and subgrantees have been using for USDA
entitlement programs since Part 3015 was first published in 1981.
Differences between the old and new rules are generally attributable to
the evolution of Federal grants policy since 1981, including the
``closing of loopholes.''
USDA's belief that adopting the rules stated in sections 3016.36(b)
through (i) for procurements by State and local governments under USDA
entitlement programs would entail negligible economic impact or
administrative burden is founded not only on the overall similarity
between the new and old grants administrative rules, but also on the
generic nature of procurement requirements themselves. USDA believes
the requirements stated in sections 3016.36(b) through (i) comprise the
minimum components of a sound procurement system. USDA's research on
this issue suggests that most of these provisions are already
universally applicable to grantee and subgrantee procurement systems.
Given the available evidence that State procurement rules generally
follow those procurement rules stated in section 3016.36(b) through
(i), USDA considered relying on State rules in accordance with section
3016.36(a). However, USDA decided to proceed with this aspect of the
proposed rule for several reasons. First, State rules often allow
geographical preference in source selection; the problems associated
with that practice have already been explained. Second, Part 3016
expresses a standard for the kind of procurement systems USDA considers
sufficient to protect the programs' interests. Without it, geographical
preference and other anti-competitive practices by grantees and
subgrantees would be more difficult to combat. Finally, Part 3016
contains a number of passages authorizing various aspects of awarding
agency oversight. USDA believes the magnitude and nature of the
entitlement programs necessitate retaining such explicit statements of
oversight authority.
USDA does not have the database needed to quantify the foregoing
generalizations about the costs and savings associated with this
proposed rule. For example, USDA does not know how many procurements
grantees and subgrantees currently make by the small purchase method
and by formal advertising, how their mix of procurement methods might
change under this proposed rule, how much they would save per
transaction, how many businesses would be affected, whether insular
territories and outlying areas would be disproportionately affected,
etc. Accordingly, USDA requests commenters to provide feedback on the
economic impact of this proposed rule.
As noted above, under this proposed rule financial reporting
requirements would continue to be contained in the program-specific
regulations rather than in Part 3016. Since the reporting requirements
themselves would remain unchanged, this provision of the proposed rule
would have no economic impact on grantees and subgrantees.
Civil Rights Impact Analysis
USDA does not believe that this rule will have a significant civil
rights impact and invites comments on this.
Paperwork Reduction Act of 1995
The information collection requirements of this rule have been
previously approved under # 0505-0008 for entitlement and
nonentitlement programs. USDA believes that adopting this proposed rule
would not impose additional information collection requirements on
grantees and subgrantees.
Regulatory Flexibility Act
In accordance with the requirements of the Regulatory Flexibility
Act (5 U.S.C. 605(b)), the USDA Acting Chief Financial Officer has
reviewed this rule and certifies that it does not have a significant
economic impact on a substantial number of small entities. The
potential economic impact is discussed above in connection with
Executive Order 12866.
List of Subjects
7 CFR Part 3015
Grant programs, Intergovernmental relations.
7 CFR Part 3016
Grant programs.
7 CFR Part 3019
Grant programs.
Issued at Washington, D.C.
Irwin T. David,
Acting Chief Financial Officer.
Approved:
Dan Glickman,
Secretary of Agriculture.
Accordingly, USDA is proposing to amend 7 CFR chapter XXX as set
forth below.
PART 3015--UNIFORM FEDERAL ASSISTANCE REGULATIONS
1. The authority citation for Part 3015 continues to read as
follows:
Authority: 5 U.S.C. 301, Subpart I; 31 U.S.C. 7505, unless
otherwise noted.
2. In Sec. 3015.1 revise paragraphs (a)(1), (a)(3), (a)(4) and (d)
to read as follows:
Sec. 3015.1 Purpose and scope of this part.
(a)(1) This part specifies the set of principles for determining
allowable costs under USDA grants and cooperative agreements to State
and local governments, universities, non-profit and for-profit
organizations as set
[[Page 7738]]
forth in OMB Circulars A-87, A-21, A-122, and 48 CFR 31.2,
respectively; and the general provisions that apply to all grants and
cooperative agreements made by USDA.
* * * * *
(3) Rules for grants and cooperative agreements to State and local
governments are found in Part 3016.
(4) Rules for grants and cooperative agreements to institutions of
higher education, hospitals, and other non-profit organizations are
found in part 3019.
* * * * *
(d) Responsibility for developing and interpreting the material for
this part and in keeping it up-to-date is assigned to the Office of the
Chief Financial Officer.
3. In Sec. 3015.2 revise paragraphs (d)(3), (d)(4), (d)(5), and
(d)(6) to read as follows:
Sec. 3015.2 Applicability.
* * * * *
(d) * * *
(3) Agencies or instrumentalities of the Federal government,
(4) Individuals,
(5) State and local governments, and
(6) Institutions of higher education, hospitals and other non-
profit organizations.
* * * * *
PART 3016--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS
4. The authority citation for Part 3016 continues to read as
follows:
Authority: 5 U.S.C. 301.
5. In Sec. 3016.4 remove paragraphs (a) (4) through (6),
redesignate paragraphs (a) (7) through (10) as (a) (4) through (7) and
revise paragraph (b) to read as follows:
Sec. 3016.4 Applicability.
* * * * *
(b) Entitlement programs. In USDA, the entitlement programs
enumerated below are subject to subparts A-D and the modifications in
subpart E.
(1) Entitlement grants under the following programs authorized by
The National School Lunch Act:
(i) National School Lunch Program, General Assistance (section 4 of
the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) National School Lunch Program, Special Meal Assistance
(section 11 of the Act),
(iv) Summer Food Service Program for Children (section 13 of the
Act), and
(v) Child and Adult Care Food Program (section 17 of the Act);
(2) Entitlement grants under the following programs authorized by
The Child Nutrition Act of 1966:
(i) Special Milk Program for Children (section 3 of the Act),
(ii) School Breakfast Program (section 4 of the Act), and
(iii) Entitlement grants for State Administrative Expense Funds
(section 7 of the Act); and
(3) Entitlement grants under the following programs authorized by
the Food Stamp Act of 1977:
(i) Food Distribution Program on Indian Reservations (section 4(b)
of the Act), and
(ii) State Administrative Expense Funds (section 16 of the Act).
6. Subpart E is added to read as follows:
Subpart E--Entitlement
Sec. 3016.60 Special procurement provisions.
(a) Notwithstanding Secs. 3016.36(a) and 3016.37(a) of this part,
States and subgrantees of States shall conduct procurements under the
USDA entitlement program grants or subgrants specified in
Sec. 3016.4(b) in accordance with Sec. 3016.36(b) through (i) of this
part.
(b) In order to ensure objective contractor performance and
eliminate unfair competitive advantage, contractors that develop or
draft specifications, requirements, statements of work, invitations for
bids, and/or requests for proposals for use by a grantee or subgrantee
in conducting procurements under the USDA entitlement program grants or
subgrants specified in Sec. 3016.4(b) shall be excluded from competing
for such procurements.
Sec. 3016.61 Financial reporting.
The financial reporting provisions found in Sec. 3016.41 do not
apply to any of the USDA entitlement programs listed in Sec. 3016.4(b)
except the Food Distribution Program on Indian Reservations. The
financial reporting requirements for these entitlement programs are
found in the following program regulations:
(a) For the National School Lunch Program, 7 CFR 210.20(a);
(b) For the Special Milk Program for Children, 7 CFR 215.11(c);
(c) For the School Breakfast Program, 7 CFR 220.13(b);
(d) For the Summer Food Service Program for Children, 7 CFR 225.8;
(e) For the Child and Adult Care Food Program, 7 CFR 226.7(d);
(f) For State Administrative Expense Funds under section 7 of the
Child Nutrition Act of 1966, 7 CFR 235.7(b); and
(g) For State Administrative Expenses under section 16 of the Food
Stamp Act of 1977, 7 CFR 277.11.
PART 3019--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND
OTHER NON-PROFIT ORGANIZATIONS
7. The authority citation for Part 3019 continues to read as
follows:
Authority: 5 U.S.C. 301.
8. In Sec. 3019.1 designate the existing text as paragraph (a) and
add paragraph (b) to read as follows:
Subpart A--General
Sec. 3019.1 Purpose.
(b) In USDA, this part also applies specifically to the grants,
agreements and subawards to institutions of higher education,
hospitals, and other non-profit organizations that are awarded to carry
out the entitlement programs identified below:
(1) Entitlement grants under the following programs authorized by
The National School Lunch Act:
(i) National School Lunch Program, General Assistance (section 4 of
the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) National School Lunch Program, Special Meal Assistance
(section 11 of the Act),
(iv) Summer Food Service Program for Children (section 13 of the
Act), and
(v) Child and Adult Care Food Program (section 17 of the Act).
(2) Entitlement grants under the following programs authorized by
The Child Nutrition Act of 1966:
(i) Special Milk Program for Children (section 3 of the Act), and
(ii) School Breakfast Program (section 4 of the Act).
(3) Entitlement grants for State Administrative expenses under The
Food Stamp Act of 1977 (section 16 of the Act).
[FR Doc. 98-3720 Filed 2-13-98; 8:45 am]
BILLING CODE 3410-90-P
