Notes on 2 CFR 700

Updated 17 SEP 2015 to incorporate notes on USAID's revised final rule published at 80 FR 55721 et seq.

2 CFR 700 is USAID's regulation adopting and augmenting 2 CFR 200 (links are to eCFR).

As noted in About 2 CFR 200, each federal awarding agency is required to implement the OMB's uniform guidance in its own regulation. In general, agencies have taken the approach of adopting the text of 2 CFR 200 by reference in their adopting regulation and modifying and/or augmenting the uniform guidance in accordance with each agency's statutory requirements. USAID takes this approach with 2 CFR 700.

Here's what else 2 CFR 700 does:

§ 700.1 Definitions.

  • adds 15 definitions of terms. The majority of these pertain exclusively to USAID’s Branding/Marking requirements (see § 700.16).
  • Notable additions:
    • Definition of Award duplicates the essential meaning of 2 CFR 200.28 Federal award and adds the clarification that this term does not include technical assistance and other non-monetary aid.
    • Definition of Suspension clarifies that this term refers to suspension of an award and, in this context, does not refer to the suspension of an organization from eligibility to receive federal awards.

§ 700.2 Adoption of 2 CFR 200.

  • does just that: adopts and gives regulatory effect to the uniform guidance as supplemented by 2 CFR 700.

§ 700.3 Applicability.

  • exercises USAID’s authority to make Subparts A through D of the uniform guidance applicable to for-profit entities (when they are recipients of assistance awards).
  • In harmony with similar actions by other agencies (DOS and HHS, for example), makes FAR Parts 30 and 31 the guiding cost principles for commercial entities when receiving assistance awards. This may appear to be a bigger deal than it really is: FAR Part 30 invokes CAS for very large entities; and Part 31 provides cost principles that are largely identical in meaning to those in 2 CFR 200 Subpart E, with some added detail that seems applicable mostly to large, sophisticated commercial entities. See About the FAR (Federal Acquisition Regulation).
  • Makes subpart E (only) applicable to foreign organizations and foreign public entities, except where doing so would be inconsistent with USG obligations or foreign statute/regulations. (Note that USAID conveys all the pertinent requirements of Subparts A-D to foreign recipients via its set of standard provisions. See USAID SPs for non-US Recipients.)

§ 700.4 Exceptions.

  • supplements 2 CFR 200.102 by specifying (by title) the USAID personnel with authority to grant exceptions, subject to statutory limitations or where OMB approval is expressly required.

§ 700.5 Supersession.

  • supersedes 22 CFR 226, effective 26DEC14.

§ 700.6 Metric system of measurement.

  • invokes 15 USC 205 and makes metric measurements mandatory unless otherwise authorized by the AO.

§ 700.7 Advance payment.

  • mostly duplicates the substantive language of 2 CFR 200.305(b)(2) and mandates the guidance at 31 CFR 205.

§ 700.8 Payment.

  • duplicates the language of 2 CFR 200.305 and adds (in subparagraph 8(a)) that the requirement to expend program income before requesting payment (at § 200.305(b)(5)) does not apply to income earned as foreign currency.

§ 700.9 Property standards.

  • reiterates (by reference) that title to real property and equipment vests with the recipient unless the agreement provides otherwise.

§ 700.10 Cost sharing or matching.

  • appears to extend USAID’s blanket approval for the use of unrecovered indirect costs as cost share.

§ 700.11 Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms.

  • Amplifies 2 CFR 200.32(b) by specifying the affirmative action steps to be taken by recipients, consistent with the provisions of the Foreign Assistance Act.

§ 700.12 Contract provisions.

  • reiterates the requirement at 2 CFR 200.326 and adds (subparagraph (b)) that all negotiated contracts greater than or equal to the simplified acquisition threshold must include a provision granting access by the entire food chain (NFE, USAID, Comptroller General or any other etc.) to any documents and records of the contractor for the purpose of making audits, etc.

§ 700.13 Additional provisions for awards to for-profit entities.

  • explicitly prohibits the payment of funds as profit to any NFE (recipient) that is a for-profit entity;
  • defines profit.
  • Requires that program income earned by a for-profit recipient may not be added to the award. (See About Program Income.)

§ 700.14 Termination.

  • invokes USAID’s prerogative to terminate or suspend an award when continuation would not be in the national interest of the US or would be in violation of law.

§ 700.15 Disputes.

  • provides that disputes are resolved by the AO and that the AO’s decision is final, but with the possibility of appeal to the Assistant Administrator, Bureau for Management, (or designee). No hearing will be provided, and the USAID decision is final.

§ 700.16 Marking.

  • Adds USAID’s marking regulation, formerly found at 22 CFR 226.91;
  • revised references to the uniform guidance and non-substantive renumbering of some paragraphs
  • See also About Branding and Marking.
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