High-Level Outline of Some Notable Obligations

Cost Share

• At least 20% for Phases 1 and 2; 50% for Phase 3.
• Recipients can team with subrecipients or third parties (other than contractors) to reach the threshold.
• Contributions can be cash (e.g., personnel costs, fringe costs) and/or in-kind (e.g., donation of space or equipment).
• Expenditures must be allowable, allocable, and reasonable according to federal cost principles.
• Expenditures must be nonfederal (state and local funds are okay), verifiable from the recipient’s records, and necessary and reasonable for the proper and efficient accomplishment of project objectives.

Adequate Accounting System

• A grants officer will typically perform a budget review and related reviews, such as the adequacy of the applicant’s accounting system before funds are awarded.
• Financial system assessments, if any, are based on the standards in 2 CFR Part 200 and include a review of the following:
  • Applicant’s accounting system to determine whether it is adequate for the accumulation and segregation of costs on a project-by-project basis and whether its books of account are adequate for and suited to the organization’s business.
  • Applicant’s purchasing procedures to determine if they exist in written form and whether they result in effective, economical, and well-documented procurement.
  • Applicant’s personnel practices and procedures to determine if they exist in written form, whether they provide for adequate separation of responsibilities for hiring, dismissal, promotion, etc., and whether the organization can meet the cost principle standards for documenting its payroll.
  • The existence and adequacy of other written procedures governing travel, use of consultants, and property management.
  • The organizational structure and assignment of functional responsibilities to determine whether the organization can adequately safeguard its assets provide accurate and dependable financial and cost data and whether employees can adequately discharge their responsibilities and adhere to established policies, according to DOE Guide to Financial Assistance 2.5.2 (Oct 1, 2020).

Procurement of Supplies and Services From Contractors (2 CFR 200.319 and .320)

• The recipient must award contracts to contractors using competitive procedures. Exceptions include transactions below the micro-purchase level ($10,000) or when a sole source contract is properly justified.
• Contractors (as opposed to subrecipients) are suppliers and service providers not directly involved in program planning, performance, meeting program objectives, etc.
• Competition requirements will vary based on the value of the particular procurement.
  • Micro-purchases. Those at or below $10,000 in value may be awarded without soliciting competitive price or rate quotations if the recipient considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. 2 CFR 200.320(a)(1).
  • Small purchases. When the value of the procurement is above the micro-purchase threshold but at or below the simplified acquisition threshold (SAT), which is generally $250,000, the recipient must obtain price or rate quotations from an adequate number of qualified sources as the recipient deems appropriate. 2 CFR 200.320(a)(2).
  • Formal procurement methods. When the value of the procurement exceeds the SAT, the recipient must use formal procurement methods. 2 CFR 200.320(b). These are conducted in the form of sealed bids or proposals.

Performance in the United States

• Unless the recipient obtains a waiver, all work must be performed in the U.S.
• The recipient must flow this obligation down to subrecipients.

Buy America Requirements

• Projects that involve infrastructure work require the following:
  • All iron, steel, and manufactured products used in infrastructure work are produced in the United States.
  • All construction materials used in the infrastructure work are manufactured in the United States.
• “Infrastructure” must be publicly owned or must serve a public function. Privately owned infrastructure utilized for private use is not considered “infrastructure” for purposes of Buy America applicability.
• These requirements must be flowed down to all subrecipients and contractors.

Lobbying Restrictions

• Prime recipients and subrecipients are required to complete and submit SF-LLL, “Disclosure of Lobbying Activities.”
• This requirement aims to ensure that federally appropriated funds have not been paid and will not be paid to any person for influencing or attempting to influence agency employees, members of Congress, etc.

Reporting of Subject Inventions

• DOE may require that a recipient holding title to a subject invention submit annual reports for 10 years from the date the subject invention was disclosed to DOE.
• Reports must include information on efforts made “to stimulate such utilization.”
• Reports must include information “regarding the status of development, date of the first commercial sale or use, gross royalties received by the prime recipient, and such other data and information as EERE may specify.”
• “Subject invention” is any invention conceived or first actually reduced in performance of work under an award.

Domestic Manufacturing Commitment for Subject Inventions

• Generally, products derived from subject inventions must be made in the United States.
• There is a potential waiver if the recipient can show DOE that domestic manufacturing is not commercially feasible.

Prohibition on Certain Telecom and Video Equipment Made in China

• Recipients cannot use Huawei or ZTE Corporation equipment for any purpose.

Flow-Down Obligations

• To subrecipients. Recipients must flow down a multitude of obligations to subrecipients, a few of which have been mentioned herein. Generally, such requirements are stated in the FOA, the award instrument, and/or the applicable provision within 2 CFR Part 200.
• To contractors. Recipients must flow down a specific set of clauses, as applicable, to their contractors. These clauses are found at App. II, 2 CFR Part 200.

Risk Examples

Government Rights in Subject Inventions

• The federal government retains a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the U.S. any subject invention throughout the world. This license extends to contractors doing work on behalf of the government.
• In other words, the government can exercise this right, allowing competitors to utilize the invention for government purposes.
• In addition, the so-called “march-in-rights” allow the government to grant a subject invention license to a third party.
  • This is a right the government has threatened to exercise but never has.
  • The government would likely only exercise this right in extreme circumstances—e.g., to alleviate health or safety needs or rectify unauthorized overseas manufacturing.

Government Rights in Technical Data and Computer Software

• The general rule is that DOE will not require the delivery of proprietary data developed at private expense. In this context, “data” is recorded information regardless of form. There are two types of data: computer software and technical data.
• Therefore, it is generally important not to include proprietary data in deliverables such as white papers, reports, slide decks, etc.
• If DOE expresses a need for such data, recipients should work out identification and marking procedures within the grant terms.
• As a general matter, where the government requires delivery of technical data developed at private expense, the recipient should mark such information with a “Limited Rights Data” legend to help ensure its protection. Where the government requires delivery of computer software developed at private expense, the recipient should mark such information with a “Restricted Rights Data” legend.
  • See 2 CFR § 910.362 (“if the contracting officer, in consultation with DOE patent counsel and the DOE program official, determines that delivery of limited rights data or restricted computer software is necessary, the contracting officer, after negotiation with the applicant, may insert in the award the standard clause as modified by Alternates I and/or II set forth in appendix A to this subpart”).
• For data developed under the award (rather than at private expense), the recipient can seek to obtain “Protected Data” status, which essentially means that such data would be free from public disclosure for up to five years after the generation of the data. This is a type of “Government Purposes Rights” license.
• This is an area of strict compliance. Failure to properly identify and mark technical data or computer software can result in unlimited rights to the government.

False Claims Act (FCA) Liability

• The Department of Justice recovers billions of dollars each year from defendants under the FCA.
• The FCA imposes up to treble damages and penalties against companies and individuals who knowingly present, or cause to present, a false or fraudulent claim for payment to the government.
• The federal government has recouped more than $72 billion in FCA settlements and judgments since 1986.
• In 1986, Congress bolstered the FCA by increasing incentives for whistleblowers. Whistleblower actions (which may be pursued by the government or whistleblowers) make up a sizable portion of FCA cases.

Application Requirements and Evaluation Criteria

Threshold Requirements

• Register at SAM.gov.
• Provide a valid taxpayer identification number or other unique entity identifier.
• Continue to maintain an active SAM registration with current information.
• Register and create an EERE funding opportunity exchange (eXCHANGE) account.
• Register in FedConnect.
• Register at Grants.gov.

Application Formatting and Content Requirements

• Requires a concept paper and a full application.
• To avoid application rejection, address each FOA requirement without fail. Focus on “shall,” “must,” and similar words.
• See more proposal and application writing tips here.

Community Benefits Plan (CBP)

• The plan is made up of four major elements: Advancing Diversity, Equity, Inclusion, and Accessibility; Justice40 Initiative; Investing in the American Workforce; and Community and Labor Engagement.
• It must include milestones and metrics to measure success.
• DOE will look favorably at CBPs that are action- and goal-oriented: “Plans should be specific, actionable, and measurable: the idea is to move beyond vision or assessment into actionable goals, outcomes, and implementation steps.” Guidance for Creating a Community Benefits Plan for the Regional Clean Hydrogen Hubs (Oct. 2022), p. 1.

Award Evaluation Criteria

• Technical Merit, Innovation, and Impact (50%)
• Project Research and Market Transformation (25%)
• Team and Resources (15%)
• Diversity, Equity, and Inclusion (10%)