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GPD
Part 2.01: Pre-Award - Special Award Conditions, the Departmental Alert
List, and Debarment
HHS
Transmittal 99.04 (7/2/99)
Part 2 Pre-Award
Section
01 Special Award Conditions, the Departmental Alert List, and Debarment
A.
Principles
- Purpose.This
Grants Policy Directive (GPD) contains HHS policies for identifying
organizations that present a high risk for poor performance. In addition,
it specifies the policies related to the use of the Departmental Alert
List and the "GSA List of Parties Excluded from Federal Procurement
and Nonprocurement Programs."
- Scope.This
GPD supplements the requirements in 45 CFR 74.14 and 92.12 that outline
the HHS regulatory basis for designating a recipient as "high risk"
and imposing special conditions on HHS awards, hereafter referred to
as "high risk/special award conditions." It also references the suspension
and debarment provisions found at 45 CFR Part 76, Government-wide Debarment
and Suspension (Nonprocurement) and Government-wide Requirements for
Drug-Free Workplace (Grants).
B.
Policy
- Use
of Special Award Conditions.It is HHS policy to use special
award conditions as a means of protecting the Government's interests
and effecting positive change in grantees' performance or compliance,
including the quality of their management systems. Special award conditions
of a programmatic and/or administrative nature may be appropriate if
an organization has a history of poor programmatic performance, is financially
unstable, has inadequate management systems, or has not complied with
the terms of previous HHS awards. If special conditions are included
in an award, the awarding office will be required to designate the grantee
as "high risk/special award conditions" and to take the other related
actions specified in this GPD.
- Special
award conditions may include one or more of the following as appropriate
for the specific grant or grantee. The potentially adverse impact of
a particular special condition(s) on a grantee's ability to carry out
the program must be considered and be balanced with the need to protect
the Government's interests.
(1)
Use of a reimbursement payment method rather than advance funding. If
a special award condition relates to payment, the awarding office must
notify the Director, Division of Payment Management (PMS) (see paragraph
C.2.b. below).
(2)
Use of the deductive method for accounting for program income.
(3)
More frequent financial or progress reporting than otherwise required
under the program or allowed by 45 CFR Parts 74 or 92.
- Departmental
Alert List.In order to notify all HHS awarding offices of entities
considered "high risk/special award conditions" by one or more awarding
offices and/or those for which the Office of Inspector General (OIG)
has issued an Alert, HHS maintains the Departmental Alert List ("Alert
List" or "list" for purposes of this GPD).
- An
OPDIV should notify the Office of Grants Management (OGM) that an organization
should be placed on the Departmental Alert List only in relation to
a "high risk/special award conditions" designation based on the current
use of special conditions in an award(s) (see paragraph B.1 above).
The OIG may recommend that an organization should be placed on the list
based on adverse findings in an organization's most recent audit under
Office of Management and Budget (OMB) Circular A-133 (or other audits
affecting more than a single OPDIV's programs conducted by or on behalf
of the Government).
- Inclusion
on the Departmental Alert List does not automatically disqualify an
organization from receiving an HHS grant or cooperative agreement nor
should it be used as sole justification for not making an award. Rather,
the list serves as one indicator of the need for additional protections
for awards to the organization. However, the fact that an organization
is not on the Alert List does not relieve a Grants Management Officer
(GMO) from making appropriate pre-award determinations of the organization's
capability to carry out an award.
- Upon
review of the Alert List and consideration of the basis for the "high-
risk/special award conditions" designation or the issuance of an OIG
Alert, an awarding office must determine whether it will independently
designate the organization as "high risk/special award conditions" in
accordance with Part 74 or 92 and this GPD.
- A
"high risk/special award conditions" designation remains in effect until
it is removed by the awarding office. However, the OPDIV must take a
separate action to inform OGM of the need to remove the organization
from the Alert List. An organization will remain on the Departmental
Alert List until OGM receives such notification from the OPDIV's designated
Alert List point of contact (see paragraph C.2.a. below). OGM will consult
with all affected OPDIVs and the OIG, if appropriate, prior to removing
an organization from the list.
- Generally,
organizations should not remain on the Alert List for more than 2 years.
That period of time should be adequate for the grantee and the awarding
office(s) to complete and assess the effectiveness of required corrective
actions (see paragraph C.2.b. below for GMO/awarding office responsibilities).
OPDIVs or the OIG must provide justification to OGM for keeping an organization
on the list for more than 2 years.
-
List of Parties Excluded from Federal Procurement and Nonprocurement
Programs. This list is issued monthly by the General Services
Administration. The GMO must review the portions of the list dealing
with exclusion from nonprocurement programs to determine the eligibility
status of an applicant prior to award. At a minimum, this should occur
just prior to award. Information about the list and access to it are
available electronically at http://www.arnet.gov:8000/epls/owa/epls_
login.display_intro.
C.
Responsibilities
- Office
of Grants Management. OGM is the focal point for maintenance
of the Departmental Alert List. In that capacity, OGM serves a coordinating
role for information provided by the OPDIVs and by the OIG. OGM updates
the list at least quarterly and maintains it electronically at http://www.hhs.gov/progorg/gmotools/alertlist.html.
- OPDIV
Responsibilities.
- OPDIV
Chief Grants Management Officers.The OPDIV Chief GMO or designee
serves as a single point of contact with OGM and other OPDIVs on Alert
List matters. The OPDIV Chief GMO or designee also serves as the single
point of contact with OGM on suspension and debarment matters.
- Grants
Management Officers.GMOs are required to ensure that the Departmental
Alert List and the List of Parties Excluded from Federal Procurement
and Nonprocurement Programs have been consulted prior to making an
award. In consultation with Program Officials and, as necessary, with
the OPDIV Chief GMO, GMOs should ensure that appropriate actions are
taken based on their findings. They are also required to notify their
designated OPDIV point of contact when an organization is designated
as "high risk/special award conditions." This notification must provide
the specific reasons for the designation and may be accomplished by
sending a copy of the award and its transmittal letter to the OPDIV
point of contact. If a special condition relates to payment, the GMO
must also provide formal written notification to the Director, PMS.
If
an award contains special conditions, the GMO must ensure that the
grantee is aware of those conditions and understands the action
that is necessary to satisfy them. This includes developing a corrective
action plan with the affected grantee, monitoring improvement, and
assessing, at the conclusion of the corrective action period (generally
no more than 2 years), whether the special award conditions can
be removed.
The
GMO must maintain documentation of the corrective actions and the
awarding office's efforts to assist the grantee in eliminating the
deficiencies which resulted in the imposition of the special award
conditions.
Once
the special award conditions are satisfied, the GMO is responsible
for removal of the conditions and notification to the OPDIV's Alert
List point of contact and the Director, PMS, as appropriate. This
may be accomplished by providing a copy of correspondence sent to
the grantee.
- Office
of the Inspector General. The National External Audit Review
Center (NEARC) is the HHS focal point for receipt of OMB Circular A-133
audits and other cross-cutting audits. As part of its review of those
audits, NEARC may determine that audit findings should be brought to
the attention of the HHS OPDIVs for appropriate action. This is accomplished
by the issuance of NEARC Alerts, sent to OPDIV Audit Liaison contacts
and OGM, that indicate the nature of the problem, and inclusion of a
statement that the organizations will be considered for placement on
the Departmental Alert List.
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