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National Science Foundation
Grant Policy Manual
Table of Contents
I. Basic Information
II. NSF Awards
III. Grant Administration
IV. Financial Requirements and Payments
V. Grantee Standards
VI. Allowability of Costs
VII. Other Grant Requirements
VIII. Other Proposal and Award Considerations
IX. Reconsideration / Suspension and Termination / Disputes / Research Misconduct
Subject Index
PDF Version
 


NSF 02-151 July 2002
Chapter V - Grantee Standards

This chapter discusses various grantee management standards with which recipients are expected to comply. It consists of the following topics:

500 BACKGROUND
510 CONFLICT OF INTEREST POLICIES
520 FINANCIAL MANAGEMENT SYSTEMS STANDARDS
530 PROCUREMENT STANDARDS
540 PROPERTY MANAGEMENT STANDARDS

500 BACKGROUND

  1. NSF requires prospective grantees to furnish, upon request by DGA, basic organization and management information to assist the NSF Grants Officer in assessing the prospective grantee's financial and managerial responsibility. GPM 501 describes NSF requirements for the furnishing of organization and management information.

  2. NSF encourages the increased involvement of academic researchers and educators with industry and private entrepreneurial ventures, but recognizes that such interactions carry with them an increased risk of conflict of interests. GPM 510 contains NSF's policy on conflict of interest.

  3. OMB Circular A-110 prescribes three sets of standards for academic and other non-profit recipients of Federal grants. These govern financial management systems, procurement policies and procedures and property management. GPM sections 520-540 implement the OMB standards, and extend their applicability to all types of recipients of NSF grants, including commercial firms.

501 Prospective Grantee Organization and Management Data

Each proposing organization that has not received an NSF grant within the previous two years should be prepared to submit basic organization and management information and certifications, when requested, to DGA. The information required is contained in the NSF Prospective New Awardee Guide, available electronically on the NSF website at: http://www.nsf.gov/pubsys/ods/getpub.cfm?pnag. The information contained in this Guide will assist the organization in preparing documents which the National Science Foundation requires to conduct administrative and financial reviews of the organization. This Guide also serves as a means of highlighting the accountability requirements associated with Federal awards.

510 CONFLICT OF INTEREST POLICIES

  1. NSF requires each grantee institution5 employing more than fifty persons to maintain an appropriate written and enforced policy on conflict of interest. Guidance for such policies has been issued by university associations and scientific societies.6

  2. An institutional conflict of interest policy should require that each investigator disclose to a responsible representative of the institution all significant financial interests of the investigator (including those of the investigator's spouse and dependent children) (i) that would reasonably appear to be affected by the research or educational activities funded or proposed for funding by NSF; or (ii) in entities whose financial interests would reasonably appear to be affected by such activities.

The term "investigator" means the principal investigator, co-principal investigators, and any other person at the institution who is responsible for the design, conduct, or reporting of research or educational activities funded or proposed for funding by NSF.

The term "significant financial interest" means anything of monetary value, including, but not limited to, salary or other payments for services (e.g., consulting fees or honoraria); equity interest (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights).

The term does not include:

    1. salary, royalties or other remuneration from the applicant institution;

    2. any ownership interests in the institution, if the institution is an applicant under the Small Business Innovation Research Program or Small Business Technology Transfer Program;

    3. income from seminars, lectures, or teaching engagements sponsored by public or non-profit entities;

    4. income from service on advisory committees or review panels for public or nonprofit entities;

    5. an equity interest that, when aggregated for the investigator and the investigator's spouse and dependent children, meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not represent more than a 5% ownership interest in any single entity; or

    6. salary, royalties or other payments that, when aggregated for the investigator and the investigator's spouse and dependent children, are not expected to exceed $10,000 during the twelve month period.

  1. An institutional policy must ensure that investigators have provided all required financial disclosures at the time the proposal is submitted to NSF. It must also require that those financial disclosures are updated during the period of the award, either on an annual basis, or as new reportable significant financial interests are obtained.

  2. An institutional policy must designate one or more persons to review financial disclosures, determine whether a conflict of interest exists, and determine what conditions or restrictions, if any, should be imposed by the institution to manage, reduce or eliminate such conflict of interest. A conflict of interest exists when the reviewer(s) reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, or reporting of NSF-funded research or educational activities.

Examples of conditions or restrictions that might be imposed to manage, reduce or eliminate conflicts of interest include, but are not limited to:

    1. public disclosure of significant financial interests;

    2. monitoring of research by independent reviewers;

    3. modification of the research plan;

    4. disqualification from participation in the portion of the NSF-funded research that would be affected by significant financial interests;

    5. divestiture of significant financial interests; or

    6. severance of relationships that create conflicts.

If the reviewer(s) determines that imposing conditions or restrictions would be either ineffective or inequitable, and that the potential negative impacts that may arise from a significant financial interest are outweighed by interests of scientific progress, technology transfer, or the public health and welfare, then the reviewer(s) may allow the research to go forward without imposing such conditions or restrictions.

  1. The institutional policy must include adequate enforcement mechanisms, and provide for sanctions where appropriate.

  2. The institutional policy must include arrangements for keeping NSF's Office of the General Counsel appropriately informed if the institution finds that it is unable to satisfactorily manage a conflict of interest. 7

  3. Institutions must maintain records of all financial disclosures and of all actions taken to resolve conflicts of interest for at least three years beyond the termination or completion of the grant to which they relate, or until the resolution of any NSF action involving those records, whichever is longer.

520 FINANCIAL MANAGEMENT SYSTEMS STANDARDS

NSF grantees are required to have financial management systems which meet the requirements of Section .21 of OMB Circular A-110.

530 PROCUREMENT STANDARDS

NSF grantees shall adhere to the requirements of Sections .41 through .48 of OMB Circular A-110 which prescribe standards for use by recipients in establishing procedures for the procurement of supplies and other expendable property, equipment, real property and other services with Federal funds.

540 PROPERTY MANAGEMENT STANDARDS

541 Background

  1. Sections .31 through .37 of OMB Circular A-110 prescribe standards governing the management and disposition of property furnished by the Federal government or whose cost was charged to a project supported by a Federal grant.

  2. In the rare instances where NSF grants might involve the acquisition of real property and unless otherwise specified in the grant document, the real property standards of OMB Circular A-110 are applicable to such NSF grants.

  3. NSF implementation of the OMB standards on intellectual property is contained in GPM 730, "Intellectual Property."

  4. Title to materials developed and supplies purchased under an NSF grant will vest in the grantee.

  5. Section .33(b) of OMB Circular A-110 contains a special category of "exempt property." Under that provision, any Federal agency which has statutory authority (such as NSF) may vest title in an institution of higher education, hospital or other non-profit organization without further obligation to the Federal Government and under conditions the agency considers appropriate.

542 Title to Equipment

542.1 Title to Equipment - Non-Profit Organizations

  1. Normal Situations. Unless otherwise specified in the grant, title to equipment purchased or fabricated with NSF grant funds by a college or university or other non-profit organization will vest in the grantee organization upon acquisition. Such equipment is considered "exempt property" (see GPM 541, "Background") and subject to the conditions of GPM 543, "Conditions for Acquisition and Use of Equipment."

  2. Special Situations. In special situations the grant may require that title to equipment purchased, acquired or fabricated by the grantee with NSF funds pass directly to the government from the vendor.

542.2 Title to Equipment - Commercial Organizations

Unless otherwise specified in the grant, title to equipment purchased or fabricated with NSF grant funds by a small business or other commercial firm will vest in the government. Such equipment will be acquired and used in accordance with GPM 543, "Conditions for Acquisition and Use of Equipment," and managed in accordance with GPM 545, "Property Management Standards When Title Retained by NSF."

543 Conditions for Acquisition and Use of Equipment

  1. Grantee Assurance. The grantee will assure that for each purchase of equipment, it is:

    1. necessary for the research or activity supported by the grant;

    2. not otherwise reasonably available and accessible;

    3. of the type normally charged as a direct cost to sponsored agreements; and

    4. acquired in accordance with organizational practice.

  2. General Purpose Equipment. Expenditures for general purpose equipment (see GPM 612.2c, "Definitions") are unallowable unless the equipment is primarily or exclusively used in the actual conduct of research.

  3. Equipment Usage. The equipment must remain in use for the specific project for which it was obtained in accordance with OMB Circular A-110 Section .34c., unless the provision in Section .34e. applies.

  4. Equipment Sharing. The equipment must be shared on other projects or programs in accordance with OMB Circular A-110 Section .34d.

  5. Property Management Standards. The grantee shall maintain a property management system which, at a minimum, meets the requirements of OMB Circular A-110 Section .34f.

  6. Competition. Grantees shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by statute, for as long as the Federal Government retains an interest in the equipment.

  7. Right to Transfer Title.

    1. NSF may identify items of equipment having a unit acquisition cost of $5,000 or more where NSF reserves the right to transfer the title to the Federal government or to a third party named by the Federal government.

    2. In such cases where NSF elects to transfer the title, disposition instructions will be issued no later than 120 calendar days after the expiration date of the NSF-supported project for which it was acquired.

544 Principles Relating to the Use of NSF-Supported Research Instrumentation and Facilities

The following principles on use of NSF-supported instrumentation and facilities were adopted by the National Science Board:

The National Science Foundation seeks the maximum productive use of the Nation's scientific instrumentation and research expertise. Ensuring that the highest quality instrumentation, facilities, and services are available to scientific users, both academic and industrial, is a key requirement, as are harmonious relations and cooperation between industry and universities. Private research and testing laboratories, as well as university, government, and industrial laboratories, have a contribution to make.

The National Science Board recognizes that there may be circumstances where NSF grantees use NSF-supported research instrumentation to provide services in commerce for a fee, to an extent that such practice, (1) detracts from the performance of their obligation under the grant, and/or (2) may have a material and deleterious effect on the success of private companies engaged in the provision of equivalent services. It is contrary to the NSF's intent for grantees to use NSF-supported research instrumentation or facilities to provide services for a fee in competition with private companies in a manner that is prohibited by OMB Circular A-110.

Grantees should implement the above principles and related grant conditions in a reasonable manner. Grantees are expected to provide fair and adequate consideration of any complaints about use of instrumentation and facilities.

545 Property Management Standards When Title Retained by NSF

In the event that title to equipment or property is vested in the Federal Government, such property shall be marked, tagged or segregated in such a manner as to indicate clearly its ownership by the government. Unless otherwise provided in the grant, such government property shall be used only for the performance of the project. The grantee shall submit an annual inventory report by NSF grant number of such property having an original acquisition cost of $5,000 or more, to the NSF Property Administrator, Division of Administrative Services (DAS). A physical inventory of Government-Owned Equipment (GOE) shall be conducted every two years pursuant to Section .34f of OMB Circular A-110. Upon expiration of the grant, the grantee shall report the property to the Property Section for further agency utilization. (See GPM 546, "Excess Government Personal Property.")

546 Excess Government Personal Property

546.1 Policy

  1. As a means of expanding the ability of grantees to accomplish NSF objectives while conserving supply and equipment funds, NSF will continue to sponsor the transfer of excess government personal property to NSF grantees.

  2. Excess government personal property includes all types of personal equipment and materials (except consumable items such as drugs, paint, etc.), new or used, owned by the Federal Government and no longer needed by the holding agency, but having additional useful life. Under regulations established by the General Services Administration (GSA), the agency charged with operating this program, excess government personal property may be reported to, or requested from, GSA by other Federal agencies, including NSF.

  3. NSF will sponsor the transfer of excess government personal property to eligible organizations under one of the following conditions:

    1. the use of the property significantly furthers an NSF grant-supported activity;

    2. the property is such that it would have been procured under the grant for which property is being requested if additional grant funds had been available;

    3. the property is used as part of the grant activity and subsequently for research or science education purposes; or

    4. the property is classified by GSA as scientific or engineering research equipment and has a unit acquisition cost of $1,000 or more. (See GPM 546.6, "Restrictions".)

546.2 Eligibility

Eligible organizations are NSF grantees that are public or private institutions of higher education or non-profit organizations whose primary purpose is the conduct of research or science education activities. State and municipal governments, public health units, hospitals, profit-making firms and individual PI/PDs are not eligible for excess government personal property under NSF sponsorship.

546.3 Procedures

  1. To receive information concerning the availability of property, an eligible grantee should contact the Property Administrator, DAS. The Foundation will place the grantee on the list of eligible NSF grantees with the GSA and will provide the grantee with the names, addresses and telephone numbers of GSA Area Utilization Officers (AUO) located near the organization. The grantee should contact an AUO to set up a "needs" list of the research equipment required for the NSF grant. It is important that the NSF grant number and the name of the PI/PD be communicated in all conversations and correspondence regarding excess property acquisitions, transfers and disposals.

  2. When GSA information on available excess government personal property is received, the grantee should ascertain whether any items that are necessary to accomplish the supported project are included.

  3. Materials and equipment so selected should be inspected whenever possible (see GPM 546.4, "Visiting Holding Agency Facilities"), or the holding Federal agency should be contacted by the grantee to verify the condition of the items, because interpretation of condition codes varies among agencies.

  4. If the condition of the item is acceptable, the grantee should freeze (reserve) items by calling the GSA office identified in the catalog. The verbal reservation should then be followed up by a letter. Items are usually allocated on a first come, first served basis. Since GSA may have several freezes on a piece of equipment, first come, first served is interpreted as the first approved written request received by the GSA office. However, preference will be given by GSA to agencies which do not grant title to equipment.

  5. The grantee should next prepare and submit to the Property Administrator, DAS, a property request in six copies. A property request consists of SF 122, Transfer Order Excess Personal Property, and a separate written justification statement. The justification will explain why the property is needed to reduce the cost or enhance the performance under the specific grant for which the property is requested.

  6. The SF 122 should be signed by both the PI/PD and the Authorized Organizational Representative. The following information should also be provided on each SF 122:

    1. name of grantee organization;

    2. grant number;

    3. expiration date;

    4. the statement "The above equipment is requested for use by the grantee in support of research or education as outlined in the grant"; and

    5. the statement "Transfer is in accordance with the provisions of 41 CFR 101.43." The transfer order should also identify the automatic release date (from the GSA catalog) to preclude loss of property before the transaction is processed.

  7. The written justification should detail the scientific need for the equipment as it relates to the particular grant under which the equipment is to be used, and should cite the conditions of this section as being binding upon the grantee, should the property be acquired.

  8. Upon receipt by NSF, the property request will be reviewed. As confirmation of approval, the grantee will receive copies of the SF 122 from NSF and, subsequently, from GSA. If the request is disapproved, it will be returned to the grantee with an appropriate explanation.

  9. Upon receipt of the requested property, the grantee should immediately return a copy of the SF 122 to NSF as evidence of delivery. Cancellations by GSA, or nonreceipt within a reasonable period of time, should also be reported to NSF after follow-up inquiries have been made to GSA.

546.4 Visiting Holding Agency Facilities

  1. Under current GSA regulations all non-Federal grantee representatives wishing to visit holding agency facilities to screen or freeze government excess personal property must receive prior certification from GSA. This certification is not required for those grantees who do their selecting from GSA catalogs and who freeze property only via telephone requests.

  2. The number of screeners on a grant should be limited to no more than two persons. The primary screener should be the PI/PD. However, if the PI/PD finds it impossible to screen, he/she may designate, in writing, a substitute.

  3. Normally, certification will be on a regional basis; however, NSF will, under certain circumstances, sponsor grantee representatives who need to make interregional visits in order to secure equipment not readily available within their region. Each person who plans to visit holding agency facilities must submit to NSF a completed GSA Form 2946, Authorization Certificate to Select/Freeze Excess Personal Property. This form may be obtained from the Property Administrator, DAS. The GSA Regional Office in which the grantee or organization is located will authorize all regional certifications and serve as principal coordinator on interregional requests. The authorization will be forwarded to the grantee via NSF.

546.5 Dollar Limitation

To ensure equitable distribution of excess government personal property, grantees may be authorized to acquire property under each NSF project grant up to a total acquisition cost equal to the dollar value of that particular grant. Any request for excess property which causes the total to exceed the value of the grant will require additional justification beyond that requested in GPM 546.3, "Procedures." A higher percentage of excess property requested under a particular grant by a grantee must be approved by an administrative level in NSF which is higher than the Program Officer who normally administers the grant. NSF will give full consideration to all factors in determining whether to approve transfers of excess property above the dollar value of a given grant. Grantees are therefore urged to be selective in their requests for excess government personal property to limit quantities of each item where possible and to avoid stockpiling items for future use.

546.6 Restrictions

  1. NSF will sponsor the transfer of excess government personal equipment to eligible organizations only under project grants. As defined in the GSA regulations, "project grants" refers to grants made for specific purposes with established termination dates, e.g., grants made to specific organizations to perform specific tasks within set time frames and costs. No excess property may be acquired on behalf of conference grants, publication-support grants or travel grants. In addition, on "summer-type training grants," no property may be acquired after the training period has terminated. Further, grantees should exercise careful judgment on the appropriateness of requesting excess personal property when only a short period of time exists between the date of the property request and the completion or successful accomplishment of the NSF-supported activity. GSA will consider items of personal property as research equipment for transfer without reimbursement to NSF for use by a grantee when the property requested has a unit acquisition cost of $1,000 or more and is within Federal Supply Classification Groups:

    1. 14 Guided Missiles;

    2. 43 Pumps and Compressors;

    3. 48 Valves;

    4. 58 Communication, Detection and Coherent Radiation Equipment;

    5. 59 Electrical and Electronic Equipment Components;

    6. 66 Instruments and Laboratory Equipment;

    7. 67 Photographic Equipment;

    8. 70 General Purpose Automatic Data Processing Equipment, Software, Supplies and Support Equipment; or

    9. 74 Office Machines and Visible Record Equipment.

Automatic data processing equipment must be acquired under the provisions in 41 CFR 201.23.

  1. GSA will give consideration to the transfer without reimbursement of items of excess property in other Federal supply classification groups and items with a unit acquisition cost of less than $1,000, when NSF certifies that the item requested is a component part of or related to a piece of research equipment or is an otherwise difficult to acquire item needed for scientific or engineering research. Items of property determined by GSA to be common-use or general purpose property, regardless of classification or unit acquisition cost, shall not be transferred to a grantee for the purpose of cannibalization, unless the granting agency sends with the transfer request a supporting statement which clearly indicates that disassembly of the requested item for secondary use of its component parts, or for repair and maintenance of a similar item, has greater potential benefit than utilization of the item in its existing form and that a clear cost savings to the government will result, subject to final determination by GSA.

546.7 Costs

Excess government personal property is usually secured without cost. However, the recipient grantee should specify the method of shipment and must pay all costs of packing, transportation and subsequent installation, rehabilitation and maintenance if required. Grant funds may be used to pay such costs.

546.8 Title

Title to excess government personal property obtained by academic and other non-profit grantees through NSF sponsorship remains with the government until the property is delivered to the grantee organization. Upon delivery, the grantee should forward to NSF a receipted SF 122 which clearly lists the items of property actually obtained by the grantee. Unless NSF informs the grantee to the contrary, when this SF 122 is received at NSF, title to all property acquired will automatically pass to and be vested in the grantee organization, subject to the understanding that the property will be used for research or for science education purposes as long as it has a useful life. At such time as the property is no longer useful for such purposes, it may be disposed of in accordance with organizational practices, but any proceeds therefrom shall be used by the grantee solely for research or science education purposes. Under certain conditions, such as when highly specialized equipment is involved, NSF may retain title to ex-cess property. When such a condition exists, NSF will inform the grantee. Excess government personal property may not be transferred to a foreign country without the express written approval of DGA.

546.9 Accountability and Recordkeeping

  1. While no particular type of classification of accounts or inventory system is required, NSF expects that the responsible officials of the grantee organization will exercise careful stewardship of excess government personal property acquired in support of projects undertaken with NSF's financial assistance. In accordance with GPM 546.5, "Dollar Limitation," relating to the dollar limitation on the amount of excess government personal property provided by NSF, grantees should maintain appropriate inventory procedures that will enable them to identify those requests which require more extensive administrative and scientific justification. In those cases where title to excess government personal property remains with the government, the grantee must maintain suitable records to identify its location, description, utilization and value. The use of excess government personal property under an NSF grant is subject to in-spection and audit by representatives of NSF at all reasonable times during the life of the grant under which the property was acquired.

  2. Further details may be obtained from the Property Administrator, Division of Administrative Services, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230.


5 For consistency with the DHHS conflict of interest policy, in lieu of "organization", NSF is using the term "institution" which includes all categories of proposers. Back to Text

6 See On Preventing Conflicts of Interest in Government-Sponsored Research at Universities, a Joint Statement of the Council of the American Association of University Professors and the American Council on Education (1964); Managing Externally Funded Programs at Colleges and Universities, especially "Principle X. Research Ethics and Conflicts", issued by the Council on Government Relations (1989); Guidelines for Dealing with Faculty Conflicts of Commitment and Conflicts of Interest in Research, issued by the Association of American Medical Colleges (1990); and Framework Document for Managing Financial Conflicts of Interest, issued by the Association of American Universities (1993). Back to Text

7 Grantee notifications of conflict of interest that cannot be managed, reduced, or eliminated must be submitted electronically via the NSF FastLane system. Back to Text

 

 
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