805

8.05.01
PURPOSE
This subchapter gives procedures for negotiation, acceptance, and management of federal government and non-federal government-sponsored work and for the financial management of CRADAs. For brevity in this subchapter, federal government and non-federal government sponsors are all labeled other-agency. Where a passage refers specifically to federal-government-sponsored work, it is delineated as such.

8.05.02
SCOPE
The procedures outlined in this subchapter apply to NIST-Gaithersburg and NIST-Boulder.

8.05.03
POLICY
a. In keeping with 15 U.S.C. 271 et seq. and other legislation, the National Institute of Standards and Technology (NIST) provides unique measurement services and makes available its technical competence for the benefit of other agencies. In requesting funds for appropriation by the Congress, NIST gives high priority to programs which also support important missions of other federal government agencies, especially regulatory agencies where mandatory measurement and test standards are embodied in regulations which may be essential to enforcement responsibilities, e.g., law enforcement, and fair and rational management of the nation's technology.

b. Acceptance of work funded by other agencies shall conform to NIST criteria for selection of programs. There should be a direct contribution to NIST objectives, as articulated by the Director and the Senior Management Board, from work performed for other agencies (see Section 8.05.07). This contribution may be in the form of improvements in a field of science or technology of national interest or technical advancement of another NIST program. NIST shall not accept work for other agencies that is more appropriately done by other organizations in or outside of government.

c. Long range NIST plans must be consistent with the NIST role in addressing national problems reflected in other-agency responsibilities whenever possible.

d. To provide a degree of stability, continuity, administrative efficiency, and an opportunity for planning generally not possible in negotiating a collection of year to year orders, the Senior Management Board and officials of an other agency may decide that it is in the best interest of both the other agency and NIST to establish a broad memorandum of understanding or statement of mutual purpose covering more than one year. Such memoranda of understanding are in addition to the usual other agency agreements as reflected in oneyear purchase orders and other contractual documents.

8.05.04
DEFINITIONS
a. Advance of Funds - Payment by the outside sponsor of the entire estimated cost of the effort at the initiation of the work or at predetermined intervals. NIST authority for an advance of funds is given under 15 U.S.C. 275a which states "... the Secretary may require advance payment [of charges for services performed] subject to such adjustment on completion of the work as may be agreed upon."

b. Anticipated Commitment - No written or verbal commitment by a federal government agency sponsor authorizing funding for NIST to do work but where the Operating Unit (OU), based on its experience, is confident that the sponsor will finance the project. (See Section 8.05.18 for further explanation.)

c. Carryover - Unobligated funds at the end of the fiscal year that may be used in the following fiscal year. Charges are not to be made beyond the specified termination date of the Interagency Agreement/Contract without the express approval of the sponsor (generally given in an amendment to the contract). If the period of performance ends before the funds have been fully expensed there are two options (1) a no cost time extension; or (2) return advance funds to the sponsor or Treasury.

d. Cooperative Research and Development Agreement (CRADA) - An agreement under which a CRADA partner works directly with NIST researchers to achieve joint goals in such areas as public health, safety, and the environment. (See Subchapter 5.08 for NIST policy on acceptance of CRADAs.)

e. Extramural Research - The amount of a federal government order which is to be performed outside NIST via either contracts or grants when technical expertise of NIST staff is required for supervision or management of the effort. This amount cannot exceed the authorized amount of the total contract/order.

f. Limited Release Work - Work for Other Federal Agencies that may not be broadly published due to For Official Use Only (FOUO), Controlled Unclassified Information (CUI), procurement, or other sensitivities.

g. Memorandum of Understanding - An agreement with an other agency which is broad in scope [covering a program(s) rather than project(s)] and is general, anticipating a series of implementing orders of more precisely defined scope and more detailed administrative provisions.

h. NoCost Time Extension - An amendment to an existing other-agency order that extends the period of completion without increasing the available funding.

i. Order - May be in the form of purchase order, letter order, contract, or interagency agreement requesting NIST to perform work and stating the amount of money authorized for the purpose. The order gives a termination date for the work and other requirements, such as frequency of financial and technical reports, desire to have title to equipment purchased with their funds, etc. The order constitutes a legal commitment to have the work done and to pay for it. In most cases, orders under $25,000 may be accepted at the OU/Division level and placed in the Expense and Income cost center series. See Subchapter 8.06 for details. All other orders are handled by the Financial Policy Division in consultation with the OU/Division doing the work. Within the blanket term other-agency order, there are:

(1) Other Federal Government Agency Order - An order received from another federal government agency.

(2) State or Local Government Order - An order received from a state or local government. These orders are handled in the same manner as other federal government agency orders with the exception of requests for calibrations.

(3) Non-Government Order - An order received from any scientific society, educational institution, firm, corporation, or individual within the United States engaged in manufacturing or other pursuits requiring the use of standards or standard measuring instruments. (See Subchapter 1.01.) These orders are handled in the same manner as other federal government agency orders with the exceptions noted in Subchapter 5.12.

j. Other-Agency Coordinator - An individual designated by the NIST Director, as needed, to serve as the principal NIST contact for a specific other agency.

k. Period of Performance - The period of time in which the performing agency agrees to complete the work for a reimbursable order.

l. Program Manager - An individual designated to handle or coordinate NIST work and responsibilities under a particular order. For orders involving more than one OU, the program manager is designated by the NIST Director, where necessary. For orders involving more than one organizational unit within an OU, the program manager is designated by the OU Director.

m. Proposal - A description of efforts that could be undertaken to address a stated need(s) of an other agency that typically includes a problem statement, objectives, methodology, deliverables, and budget.

n. Reimbursable Order - An order accepted for estimated cost; billing is done monthly for costs incurred in the previous month.

o. Reimbursements - Amounts earned by an agency for commodities, work, or services furnished to an individual, firm, corporation, state or local government, or other federal government agency, which may be credited to an appropriation or fund.

p. Valid Commitment - Written or oral assurance from a responsible official in another federal government agency of their intention to send NIST an order to cover work that the agency has requested NIST to undertake.

8.05.05
RESPONSIBILITIES
a. To be most responsive to requests for assistance, NIST has varied types of arrangements with other agencies that entail many different assignments of individual responsibilities within NIST. While some personnel have specific authorities with reference to other-agency-sponsored work, all staff are expected to further the best interests of both NIST and the other-agency sponsor in implementing this policy. In many cases, individual staff members with line authority serve in more than one of the roles described below.

b. The optimum response to other-agency problems, consistent with NIST resources and its many other varied services, requires the assignment of specific functions; however, management accountability of line executives (i.e., the NIST Director, OU Directors, and Division Chiefs) for other-agency work is the same as for work under directly appropriated funds.

c. Responsibilities of individuals involved in other-agency-sponsored work are outlined below:

(1) NIST Director

--when in the government interest, waives charges normally reimbursed based on recommendations by appropriate OU Directors and the Director for Administration and Chief Financial Officer; delegates this authority only in limited specified cases.

(2) Deputy Chief Financial Officer

--provides assistance to NIST staff in developing other agency programs by interpreting financial policy issues;

--reviews other agency orders for content and acceptance criteria;

--provides advice and assistance to the technical staff in negotiating orders with other agencies for reimbursable work, methods of obtaining payment, and related fiscal requirements;

--ensures that financial provisions of orders are appropriate;

--accepts orders for NIST; and

--establishes cost centers and authorizes funding.

(3) OU Director

--commits NIST to those services for which the OU has adequate personnel, space, and equipment and which are consistent with NIST policy;

--informs the Director for Administration and Chief Financial Officer of plans and negotiations for major other-agency work in the course of annual planning and during the course of the year when important new opportunities appear or the loss of significant other-agency support appears imminent;

--approves proposals for projects requiring increases in equipment, space, or staff;

--designates a manager for each OU other-agency order or agreement; and

--reviews potentially controversial or sensitive work before its acceptance and initiation, during its conduct, and after its completion – and informs and advises the NIST Director of issues as they arise; see Section 8.05.07.d.

(4) Division Chief

--negotiates, submits formal proposals, and commits to work with other-agency sponsors subject to OU guidance; and

--ensures the scientific and technical performance of the division staff on other-agency work regardless of the organizational location of the program or project manager within NIST.

(5) Group Leader or Scientific and Technical Staff

--develops contacts and conducts informal negotiations with representative of the sponsor; and

--prepares formal proposals.

(6) Program Manager (as designated by NIST or OU Director)

--satisfies NIST commitments to other agencies including technical performance;

--accounts for distribution and control of project funds within NIST and for technical reporting required by the order;

--advises line management and the Program Office of outstanding achievements or unusual problems which arise in the course of the work; and

--ensures that the amount authorized for cost centers is not exceeded.

(7) Other-Agency Coordinator (as designated by the NIST Director)

--serves as the NIST contact with the other agency;

--provides NIST with a source of information about the other-agency's needs and activities that might involve NIST expertise or influence NIST programs or policy;

--represents NIST in discussions of possible NIST responses to the other-agency's problems;

--participates in NIST negotiations with the other agency;

--ascertains the conformance of the proposals with NIST policy and long term goals; and

--coordinates and consolidates proposals including financial consistency checks.

(8) Counsel for NIST

--approves/disapproves any exceptions to the policy stated in paragraph 8.05.10a. of this subchapter;

--reviews and negotiates terms and conditions contained in other agency orders at the request of the Deputy Chief Financial Officer; and

--reviews and negotiates all terms and conditions involving intellectual property contained on other-agency orders.

(9) Coordinator from Other Agency

--Cases may arise when NIST may wish to establish a contact in the other agency. In these cases, NIST requests that a coordinator be named by the other agency.

8.05.06
FINANCIAL MANAGEMENT OF CRADAS
a. NIST policy on acceptance of CRADAs is provided in Subchapter 5.08 and is also referenced in Subchapter 8.02 Appendix B. The OU Director, the Counsel for NIST, and the Chief of the Technology Partnerships Division are signatories to a CRADA.

b. After a new CRADA is approved or a modification is made to an existing CRADA, the technical OU provides a copy of the official document along with Form NIST-630, Request for Cost Center Authorization or Change, to the Financial Policy Division to establish a cost center.

c. The Financial Policy Division bills the CRADA partner, in advance, for the amount indicated in the CRADA and authorizes financing by cost center for the specified duration of the CRADA using Form NIST-631A, Finance Notice B Advances and Reimbursements.

d. The responsible OU Director/Division Chief must ensure that charges to the CRADA cost center do not exceed the amount authorized on Form NIST-631A.

e. Only costs that are directly attributable to the CRADA are to be charged against the cost center.

f. Financial reports are provided by the Financial Policy Division on a monthly or quarterly basis, upon request.

g. A termination date is specified in each CRADA. Carryover is handled in the same manner as it is for a reimbursable agreement (refer to Section 8.05.04e).

h. CRADAs can have one or multiple cost centers and have one sponsor.

8.05.07
CRITERIA FOR NIST ACCEPTANCE OF OTHER-AGENCY WORK
a. Any proposed other-agency work must meet at least one of the following criteria before NIST can accept the work:

(l) Acceptance by NIST establishes traceability of measurements to national standards.

This criterion is intended to cover other-agency work that relates to the basic or "core" responsibility as stated in the NIST Organic Act of March 3, 1901, 15 U.S.C. 272(b), as amended. NIST is authorized "to develop, maintain, and retain custody of the national standards of measurement, and provide the means and methods for making measurements consistent with those standards" including comparing "standards used in scientific investigations, engineering, manufacturing, commerce, industry, and educational institutions with the standards adopted or recognized by the Federal Government."

(2) Private sector cannot or will not develop test methods for materials, mechanisms, and structures related to items purchased by the government or important to the public interest.

This criterion is intended to cover NIST authorizations as stated in the NIST Organic Act, 15 U.S.C. 272(b), as amended. Included are "to develop a fundamental basis and methods for testing materials, mechanisms, structures, equipment, and systems, including those used by the Federal Government" and "to cooperate with other departments and agencies of the Federal Government, with industry, with State and local governments, with the governments of other nations and international organizations, and with private organizations in establishing standard practices, codes, specifications, and voluntary consensus standards." NIST accepts other-agency work within this criterion under a number of conditions, including:

(a) Private sector interests cannot reach a consensus due to divergence of practice or tradition or are unable to undertake a research program because of the fragmented nature of the industry;

(b) Voluntary consensus system cannot react to needs in an acceptable time frame;

(d) Comprehensive NIST capability required for solution;

(3) Support services to other agencies authorized or mandated by specific legislation.

This criterion is intended to cover work accepted by NIST through specific legislative channels outside of the NIST Organic Act (15 U.S.C. 271 et seq.). Those having greatest weight are Public Laws directing NIST, either directly or through delegations from the Secretary of Commerce, to support mission agencies.

Interagency agreements are considered supportive under this criterion as are Executive Orders, Presidential Commission Citations, GAO Reports to the Congress, and similar evidence of recognition of the NIST role.

(4) A contract placed outside the federal government would result in an unavoidable conflict of interest.

This criterion covers work accepted by NIST where use of a private sector source would threaten credibility because of a conflict of interest. Much of the work performed for regulatory agencies falls under this category because available private sources also work for organizations which would be regulated by test methods and criteria established under the other-agency orders. Other activities having wide impact on the general public involving sampling for regulatory control, randomization of a selective process (e.g., Selective Service), and certain types of IRS processing activities are included.

(5) Requirements for accuracy of physical constants and properties of materials cannot be met by other sources.

This criterion is intended to cover other-agency work as stated in the NIST Organic Act, 15 U.S.C. 272(b), as amended. This section authorizes NIST to determine "...physical constants and the properties and performance of conventional and advanced materials when they are important to science, engineering, manufacturing, education, commerce, and industry and are not available with sufficient accuracy elsewhere."

In using this criterion as the sole basis for accepting other-agency work, the program manager should be satisfied that no private sector source is available to meet the accuracy conditions which the requesting agency can tolerate in carrying out its mission. A statement from the other agency may satisfy this requirement if the program manager does not have knowledge to the contrary.

(6) Unique capability of NIST required for support services to other agency.

This criterion is intended to cover other-agency work that requires a unique capability in the form of staff expertise, equipment, facility (e.g., NIST Center for Neutron Research), or a combination of these, which exists at NIST. It cannot be used to justify work for which legal authority is lacking or work which is in competition with the private sector.

(7) Use of a private sector source by the other agency would cause significant and intolerable delays in providing services and results.

This criterion covers other-agency work where there is a clear advantage to the government in timeliness to have other-agency work done at NIST rather than in the private sector. The case for acceptance under this criterion must be made in writing by the other agency.

(8) Use of a private sector source by the other agency would result in a higher cost to the government.

This criterion covers other-agency work where there is a clear and significant cost advantage to the government to have other-agency work done at NIST rather than in the private sector. Generally, work will not be accepted from a sponsor solely because it will be less costly to the sponsor. In the rare cases where it is felt that NIST should accept other-agency work with this criterion as the only basis, specific approval must be obtained in advance from the NIST Director and supported by a comparative cost analysis prepared by the OU and reviewed by the Budget Division.

b. All other agency work must be in compliance with OMB Circular A-76. In the process of governing, the government should not compete with its citizens. The competitive enterprise system, characterized by individual freedom and initiative, is the primary source of national economic strength. In recognition of this principle, it has been and continues to be the general policy of the government to rely on commercial sources to supply the products and services the government needs. Responsibility for determining whether NIST is performing a service or providing a product to another agency is in compliance with A-76 lies with the other agency.

c. The following checklist contains questions that must be considered in deciding whether the technical staff recommends NIST acceptance of the other-agency work.

(1) Can NIST fulfill a critical need of the other agency?

(2) Will the work supplement and foster NIST appropriated funds and missions?

(3) Is the other agency willing to carry its share of funding including the support of research required for performance of the service?

(4) Will there be joint planning by the other agency and NIST to develop relevant tasks of predictable duration and, in some cases, sustained programs with well-balanced exploratory and applied research along with services?

(5) Will public releases be made jointly by the other agency and NIST?

(6) Are the tasks of a "job shop" or routine testing nature or do they involve overinvestment of accompanying NIST appropriated funds and equipment? Such tasks should be undertaken only in cases of emergency and where NIST has unique capabilities, responsibilities, and obligations.

(7) Does NIST have adequate staff, relevant experience, and equipment to at least nucleate programs? Are there other reasons to expect effective working relations with other organizations such as standardizing bodies, evaluation panels, or interest groups that may become involved in the program direction and implementation?

(8) Is it anticipated that the release of the work will be unlimited? If not, does the nature of the work meet NIST guidelines for limited release work? (See Section 8.05.16.)

(9) Is there or can there be established a clear assignment of management responsibility within NIST and specific provision for quality control and output evaluation within NIST?

(10) If NIST performs well, will the problem be solved? For example, good physical measurements or analyses are usually only a part of the solution of a problem. Are the other aspects of the problem being adequately considered?

(11) Is NIST willing to continue the work long enough to satisfy the other agency's original requirements? There must be a joint commitment.

d. The following checklist contains questions that must be considered in deciding whether NIST management recommends NIST acceptance of the other-agency work. If all answers are in the affirmative, concurrence of the Division Chief and a representative of the funding agency must be documented in the proposal file. If all answers are not in the affirmative, approval of the Other Agency Coordinator (if any) and of the OU Director are required. In such cases, the Other Agency Coordinator (if any) and the OU Director should make a determination of whether to undertake the other-agency work based on consideration of questions such as those in Appendix I.

(1) Are interim results allowed to be widely published and/or presented at internal and external meetings?

(2) Are final results allowed to be widely published and/or presented for national and international audiences?

(3) Will NIST be able to distribute the results of the work without restrictions?

(4) Does the sponsor agree to being acknowledged on all publications or presentations of this work?

(5) Does the sponsor understand that NIST will publish the results of the work upon completion of the NIST review process, with no restriction on the timing or distribution of the publication?

(6) Is the proposed work unlikely to lead to controversial or sensitive results?

8.05.08
INFORMAL NEGOTIATIONS
Although in many instances a formal proposal is required, technical staff members may find it desirable to conduct informal negotiations with representatives of the sponsor. These informal negotiations may be followed by a formal proposal or in some cases may result in receipt of an order without a formal proposal. NIST cannot be officially committed by informal negotiations.

8.05.09
FINANCING GUIDELINES
a. Care should be taken in the development of resource estimates to ensure that all appropriate costs are included. Prospective sponsors not familiar with the statutory authority and financial system of NIST must be informed at an early point in discussions that NIST is authorized to charge for the full cost of services provided, including all overheads or indirect charges, and that the normal practice of NIST is to require an advance of funds for other- agency projects, although reimbursable work may be arranged. Large reimbursable orders create Working Capital Fund cash problems and should not be entered into without early consultation with the Deputy Chief Financial Officer and the Financial Policy Division.

b. Authority to waive charges for a sponsor under certain circumstances rests with the Director; however, the decision not to charge a bona fide cost to a sponsor does not eliminate that cost from the NIST accounting system. All waived charges must be accounted for, and any charges waived must be recovered by transferring the costs to the appropriate NIST appropriated funds cost center (see Appendix C on waiver of overhead charges to sponsors).

c. Charging for Development of Proposals -

(1) Proposals for extension or continuation of existing other agency contracts All costs, as they occur, related to the development of proposals for extensions or continuation of existing work should be charged to the cost center funded by the existing agreement.

(2) Proposals for new other-agency work Proposal development costs for new other agency agreements should be charged either to a local overhead funded cost center, where management costs are normally charged, or to a related NIST appropriated funds cost center. Determination of the appropriate funding source is at the discretion of the OU management.

8.05.10
PROPOSALS
a. When soliciting funding from other organizations using formal proposals, there are generally no legal prohibitions provided no other parties will receive funding except NIST. The only exception is responding to a Request for Proposals (RFP). NIST is not allowed to compete with the private sector. However, there are RFPs in which federal agencies are invited to respond. In that case, it is acceptable. Broad Area Announcements (BAAs) are not competitive, and NIST may respond to them.

When seeking funding from other organizations using unsolicited joint formal proposals, NIST or NIST personnel can be a co-principal investigator with another federal agency, a university, or a non-profit entity but generally should not be with a for-profit entity. NIST should not offer services in any proposal that are not reimbursed; that is, no in-kind contribution of services from NIST should be included as matching funds in the budget of any proposal. Exceptions require the approval of the OU Director in consultation with the Counsel for NIST.

NIST or NIST personnel, in general, should not appear as a co-Principal Investigator (PI) on any competitive proposal with a collaborator from a university or other non-profit organization that is made in response to a formal invitation for proposals from another federal agency, nor should NIST offer services that are not reimbursed. Exceptions require a written justification (e.g., to meet specific NIST or DOC policy objectives) and approval by the OU Director in consultation with the Counsel for NIST.

NIST may subcontract on research proposals submitted by any organization, profit or non-profit. In those instances where the organization names NIST as a subcontractor in a proposal to any funding source, NIST should provide a general letter of support, indicating that NIST participation in the project is:

--Contingent on the receipt of funding;

--Non-exclusive and not to be construed as an endorsement of any company, product, service or project; and

--Subject to applicable policies, regulations and federal laws.

Samples of general letters of support are available from the Counsel for NIST. NIST may only provide a general letter of support if NIST will be participating in the research and will receive funding should the proposal be funded.

b. The form and content of a proposal is generally dependent upon the requirements of the sponsor. However, the proposal normally includes a description of the technical work to be performed, a statement of the product or output of the effort, an estimate of the cost, and an indication of the time required for completion. The degree of technical detail is normally determined by the originator based upon knowledge of the sponsor's needs. Proposals are prepared and forwarded by the Division Chief after appropriate clearances by the OU except in the following cases.

(1) If the proposal involves an exception to NIST policy, it should be forwarded to the Financial Policy Division by the OU Director for proper coordination and necessary approvals prior to mailing. The proposal should be accompanied by a memorandum explaining the need for the exception.

(2) If acceptance of the proposal results in the need for additional space or personnel in another division, these additional requirements should be made known to the chief of the division involved. The division chief's estimate of the additional space or personnel required must be included in the background material submitted to the OU Director.

(3) In cases where the other objects estimate includes the acquisition of major items of equipment, particularly automotive (tractors, trailers, or trucks), or a requirement that a portion of the work be conducted at field sites where adequate existing buildings are not available, the required additional equipment or facilities must be listed in the memorandum to the OU Director with a copy to the Director for Administration and Chief Financial Officer.

(4) When travel ceilings have been implemented, requirements for travel which exceed or are a significant percentage of the performing organizational unit's travel ceiling must be identified and cleared through the OU Director so that adjustment of the organizational unit's ceiling can be made. Requirements for foreign travel must be stated, if known.

c. The fiscal presentation in the proposal should be simple and concise, and estimates should be rounded so as not to imply a greater degree of precision than is inherent in the estimate. Where feasible, a single dollar total should be used. If some detail is necessary, a breakdown by labor and benefits, overheads (including Institute overhead, OU overhead, and division overhead-equipment amortization, if applicable), and other objects is recommended.

d. In some proposals, total level of effort for a given time period is stated, but because of the existence of carryover funds, a request for new funds for the entire program is not required. In such cases, the proposal should indicate the estimated carryover and make clear the amount of additional funds being requested.

e. For proposals which involve oneyear money and in which the total level of effort extends over several years, the original proposal should contain a matching of effort for each specific year to funding requirements for each specific year.

f. When requesting the submission of a NIST proposal, prospective sponsors occasionally submit very detailed work descriptions. Often requests are in such detail that a regular proposal would merely restate the information found in the request. In such cases, it is usually sufficient to indicate in a letter to the sponsor that the scope of the work may or may not be undertaken by NIST. Such a reply should give NIST's cost estimates for the work to be done.

g. It is federal government policy not to place itself in competition with private industry. Therefore, when a prospective sponsor asks for the preparation of detailed forms normally used for proposals submitted by private contractors, the reply to the prospective sponsor must make this position clear.

8.05.11
GUIDES FOR PREPARATION OF LETTERS TRANSMITTING PROPOSALS
The format and content of formal transmittal letters should be as follows:

a. Reference to Previous Request - Reference should be made in the transmittal to any previous discussions or requests from the other agency for submission of the proposal.

b. Reference to Previous Orders - Where possible, reference should be made to previous orders concerning the work covered by or related to the proposal.

c. Submission to More than One Agency - Occasionally, more than one agency expresses interest in a particular area of research or development. If a proposal is being submitted to more than one agency for consideration, this fact should be noted in the letter together with the names of the other agencies.

d. Personal Comments Since the letter is to be official government business, personal comments to the intended recipient of the letter should not be included.

e. Standard Paragraphs One of the following standard paragraphs should normally be used as a closing paragraph in transmittal letters:

For a New Job -

"Work will not be performed on this project prior to the receipt of an order from your agency authorizing the work and specifying the appropriation to be charged."

For Continuing Work -

"If a continuation of this work is desired, the receipt of a formal order or an expression of the amount of fiscal support you intend to provide will permit NIST to continue the work. If the intended support is not confirmed by a formal order within 60 days, the work may be discontinued."

If the otheragency program/project manager feels that the work should not be continued on the basis of a valid commitment, the following paragraph should be used:

"Work will not be continued on this project prior to the receipt of an order from your agency authorizing a continuation of the work and specifying the appropriation to be charged."

For work being performed under a "valid commitment" (only where the Financial Policy Division has authorized continuation of work on the basis of an oral or written request from a federal government agency sponsor to continue work pending receipt of a formal order):

"Work is being continued on the basis of your informal commitment to provide support. If this intended support is not confirmed by a formal order within 60 days, the work may be discontinued."

Occasionally, NIST submits a proposal to a nongovernment laboratory or private company. The following paragraph should be used in lieu of what would normally be the last paragraph in these cases:

"Work will not be performed on this project prior to receipt of an order from your laboratory (company) authorizing the work."

f. Number of Copies - Unless otherwise requested by the potential sponsor, only the original of the proposal is sent to the sponsor. Copies must be forwarded to appropriate OU offices where required by internal OU policy. If the resulting contract is too brief to allow for adequate review, then a copy of the proposal must be provided to the Deputy Chief Financial Officer and the Financial Policy Division.

g. Clearance - Proposals being sent to certain agencies must be cleared through designated other-agency coordinators. At the present time, the only other-agency coordinator is in the Office of Law Enforcement Standards (OLES) at NIST for the Department of Justice's Domestic Counter Terrorism Program.

8.05.12
MEMORANDA OF UNDERSTANDING
a. Agreements with other agencies that meet the criteria set forth below are known as Memoranda of Understanding except when the other agency prefers a different title or another title is more appropriate.

b. Memoranda of Understanding may be entered into with other federal government agencies, state and local governments, agencies of foreign governments, universities, and other nonprofit organizations.

c. A Memorandum of Understanding (MOU) is used only if it accomplishes a purpose not served by the other-agency order procedure. An MOU is not necessary with most other agencies for which NIST does work. MOU's have proved to be useful when NIST is specifically mentioned in legislation for a program administered by another agency; when the other agency wishes an annual estimate of cost of work to be done by NIST under several of their otheragency orders; when NIST and a university wish to exchange personnel and/or use each other's facilities; and when an agreement is made by the United States with another country for NIST to provide services to an agency in that country. Even in these situations, it may be possible to document NIST's commitment to the other agency with a letter signed by the NIST Director rather than going through the negotiations involved in obtaining agreement on a Memorandum of Understanding.

d. A Memorandum of Understanding differs from a purchase order, letter order, or contract for services because it is broader in scope and covers a program(s) rather than a project(s). A Memorandum of Understanding does not include detailed specifications for the work to be done, costs, or completion time. These specifications are given in the other-agency orders.

8.05.13
OU REVIEW AND ACCEPTANCE OF OTHER- AGENCY ORDERS
a. OUs and divisions receive orders either directly from the sponsor or through the Financial Policy Division. Review of the order must include the items listed in Appendix E, Required Items for Interagency Agreement/Contract Acceptability.

b. If the other-agency program manager and the OU Director/Division Chief wish to accept an order, the documentation listed below must be submitted to the Deputy Chief Financial Officer/Financial Policy Division. (Note If the order is for less than $25,000, the OU Director/Division Chief may elect to handle it through a cost center in the expense and income series. For expense and income acceptance procedures, see Subchapter 8.06.)

(1) For New Contracts - The contract, a copy of the proposal (if it would facilitate review by the Deputy Chief Financial Officer/Financial Policy Division) and a properly executed Form NIST630, Request for Cost Center Authorization or Change.

(2) For Contract Changes (amendments, renewals, modifications, continuations, revisions, and cost overruns) - The contract amendment or other relevant documents and a properly executed Form NIST-630.

Completion of the remarks section of Form NIST-630 - For all orders, the remarks section should address the acceptance criteria and relationship to NIST mission. One sentence about each is sufficient.

c. If the proposed work is to be undertaken on behalf of a state or local government, policy clearance must be obtained from the appropriate OU Director.

d. For other-agency-sponsored work, where the sponsor requires NIST to certify that it will comply with stipulations that are already a part of all federal government workplace requirements, i.e., that federal funds will not be used for lobbying and that the work will be performed in a drug-free work environment, the following statement may be offered in lieu of the certification:

"Please note that the provisions of the "certification" section of thisagreementare null and void where inapplicable or redundant to the federal government and are hereby superseded by this paragraph. As an agency of the federal government, NIST is already bound to follow both statutory and regulatory authorities pertaining to the subject matter areas of this section and is prepared to comply with these authorities as is appropriate."

8.05.14
REJECTION OF OTHER-AGENCY ORDERS
If the order is rejected, a letter is written to the sponsor to explain the reason. The program manager writes the letter if the reason for the rejection is technical. The Program Office writes the letter if the reason for the rejection is that the order is not in compliance with NIST policy. The Deputy Chief Financial Officer/Financial Policy Division writes the letter if the reason for rejection is of a fiscal nature.

8.05.15
OFFICIAL ACCEPTANCE OF OTHER-AGENCY ORDERS
a. When appropriate documentation is approved by the Deputy Chief Financial Officer/Financial Policy Division, Form NIST-54, Acceptance Notification, is prepared and signed by the Chief of the Financial Policy Division, who officially commits NIST to perform the work.

b. The Acceptance Notification carries the statement "This order is accepted in accordance with NIST statutory authority (15 U.S.C. 271 et seq.). The amount stated is the estimated cost. Final charges will be based on actual costs incurred that include directly related expenses and appropriate charges for indirect and administrative expenses [15 U.S.C. 278b(e)] as determined through the NIST cost accounting system. In the event the estimated amount is not sufficient to complete the work or if excess funds appear to be available for return you will be advised as early as possible."

c. The Acceptance Notification specifies whether the work will be on a reimbursable basis or whether an advance of funds is requested. It is the normal NIST practice to require a full advance of funds.

d. The "Remarks" section of the Acceptance Notification may specify the frequency of billing, the frequency of fiscal reporting, and other conditions that the Deputy Chief Financial Officer/Financial Policy Division deems necessary in accepting the order. Some conditions, such as frequency and format of fiscal reports, are negotiated by the Financial Policy Division and the sponsoring organization.

e. In addition to Form NIST-54, Acceptance Notification, most agencies request acceptance on a copy of their order. In this case, the Chief of the Financial Policy Division signs the otheragency order as accepted and mails it with the NIST Acceptance Notification.

8.05.16
LIMITED RELEASE WORK
a. Limited release work should meet national needs to a very high degree, or require NIST’s unique competence to be satisfactorily completed, or be of vital importance to the mission of the other agency.

b. If limited release work is accepted, it is necessary to ensure that all line managers involved have appropriate authorizations. The NIST regulations described in Subchapter 13.01 and the other agency's guidelines must be followed.

8.05.17
VALID COMMITMENTS (limited to federal government only)
a. To enable NIST to respond quickly and without interruption to the needs of other federal government agencies, acceptance of work based on a valid commitment permits initiation or continuation of work pending the receipt of an official order or an amendment to an existing order. A valid commitment is a written or oral assurance from a responsible official in another federal government agency of the agency's intent to send NIST an order to cover work that it has requested NIST to undertake. Some inherent risk is entailed in beginning work before firm contract documents are received, and it is possible that some negotiations will fail. However, the benefit of being able to start new work promptly and to properly recognize it in the accounting system should outweigh the administrative problems encountered when transferring costs to related appropriated fund cost centers for work that is ultimately not funded by sponsors.

b. The following policies are designed to minimize the financial risks to NIST:

(1) New work may be initiated prior to the receipt of an official order on the basis of a written valid commitment after review and approval by the Deputy Chief Financial Officer/Financial Policy Division. Only in very unusual circumstances is new work authorized on the basis of an oral commitment.

(2) Continuing work may be authorized on the basis of either a written or oral valid commitment. Organizational units are encouraged to make every effort to obtain written commitments.

c. The Deputy Chief Financial Officer/Financial Policy Division reviews all valid commitment requests, confirming commitments over $100,000 or where special circumstances warrant.

d. A valid commitment that is older than three months for which a contract has not been received from the sponsor is reviewed by the Chief of the Financial Policy Division. The Chief of the Financial Policy Division asks the OU Director/Division Chief to verify the status of the commitment and to reaffirm that NIST appropriated funds are available to cover costs if the valid commitment should fail to materialize. If the OU Director/Division Chief cannot provide adequate assurance that a contract is forthcoming, then steps are taken to terminate the cost center and discontinue the work.

e. Financial responsibility for costs incurred under valid commitments rests with the management of the OU and division. In the event that an order is not forthcoming to cover charges incurred in a cost center established under a valid commitment, the procedures in Appendix D for collecting unfinanced costs must be followed. If a valid commitment fails where one or more OUs serves as "subcontractors" on a program, the OU performing the work is responsible for covering costs with NIST appropriated funds. However, agreements may be made which allow the managing division to assist in covering defaults if funds are available to do so.

f. Procedures for establishing a cost center on the basis of a valid commitment are described in Appendix B.

8.05.18
ANTICIPATED COMMITMENTS (limited to federal government only)
An anticipated commitment is permitted when there is no written or verbal commitment from the federal government agency sponsor authorizing funding for NIST to do the work, but based on its experience, the OU is confident that the sponsor will finance the project. The Deputy Chief Financial Officer/Financial Policy Division monitors costs charged against anticipated commitments and contacts the OUs periodically regarding the status of agreements. In cases where the costs exceed the authorization (25 percent of the anticipated commitment), without prior approval by the Deputy Chief Financial Officer/ Financial Policy Division, the cost center will be terminated.

The guidelines listed below must be followed when establishing cost centers based on an anticipated commitment

a. Sponsor must be a federal government agency;

b. Cost center must be in the federal government series (370-569);

c. A memorandum, along with Form NIST-630, must be sent to the Deputy Chief Financial Officer/Financial Policy Division requesting the establishment of each anticipated commitment. It must state the justification for the request and the total amount of the commitment. In addition, the following statement must be included and signed by the Division Chief: "If the anticipated commitment does not result in a funded agreement, I agree to fund all incurred costs from NIST appropriated funds."

d. The cost center cannot be authorized initially for more than 25 percent of the anticipated commitment;

e. Cost centers established based on anticipated commitments must cite a code 1 in the labor field. Only labor, personnel benefits, overhead, and minimal other objects charges will be accepted on these cost centers; and

f. Cost centers established based on anticipated commitments will only be authorized for the first quarter of the fiscal year and will terminate at the end of the first quarter of the fiscal year unless an extension is approved by the Financial Policy Division in late December.

8.05.19
FINANCIAL CONTROL
a. After an other-agency contract has been formally accepted, the Deputy Chief Financial Officer/Financial Policy Division authorizes financing by cost center for the specified duration of the contract using Form NIST-631A, Finance Notice--Advances and Reimbursements. The responsible OU Director/Division Chief must conduct operations within the amount authorized on Form NIST-631A or may be subject to administrative discipline. It is the responsibility of the OU Director and Division Chief to initiate contact with the sponsor when it is recognized that current funding for a cost center may be inadequate or if it is necessary to obtain a no-cost time extension of the termination date specified in the order. Although NIST acceptance of an other-agency order states that the funding amount is an estimate, overruns are to be avoided. The increase in funding must be received prior to the overrun of the existing contract to avoid unfinanced costs.

In cases where the sponsor is unwilling to provide the necessary funds to complete the project stated in the proposal, the manager must decrease the scope of work to match the funding that the sponsor will provide.

b. Only costs that are directly attributable to the other-agency order are to be charged against the cost center.

c. The Assistant General Counsel for Administration has concluded that when NIST has specific statutory authority to provide goods or services to another agency and has documentary evidence of a binding agreement to do so, advances or reimbursements of funds to NIST are not subject to the limitation on the availability of the monies cited in the appropriation of the agency from which the funds are obtained. This means that NIST will not return September 30 unobligated balances for contracts funded with one-year money if the termination date extends into the next fiscal year.

d. It is the responsibility of the Deputy Chief Financial Officer/Financial Policy Division to provide all financial reporting to sponsors. Upon request, the Financial Policy Division provides to the sponsor a financial statement in one of several standard formats if the sponsor pays in advance (see Appendix F). The report contains four elementsthe amount of the advance of funds, costs incurred, unliquidated obligations, and the unobligated balance as of the date cited in the report. For orders not involving an advance of funds, the Financial Policy Division can provide a computerized report that breaks out costs by object class to accompany the monthly reimbursable invoice.

Financial reporting requirements that cannot be met by any of the standardized reports are to be negotiated with the sponsor prior to the acceptance of the contract/agreement. If an exception is granted, the reports are prepared by the Deputy Chief Financial Officer/Financial Policy Division. If additional information (other than financial) is required, the OU will be required to furnish the information.

e. Cost centers with termination dates other than September 30 which are not supported by a Valid Commitment should be terminated in the title file by the OU by the end of the pay period after the termination occurs (example termination date in pay period 14; should be terminated in pay period 15). To facilitate this task, the Deputy Chief Financial Officer/Financial Policy Division will send a monthly listing to the Senior Management Advisor/administrative officer indicating those cost centers due to expire in the succeeding 60 days. In the absence of appropriate documentation of a later termination date, the cost center will be terminated by the Deputy Chief Financial Officer/Financial Policy Division at the appropriate time.

A cost center may be financed by two or more financing orders from the same sponsor for the same purpose with different termination dates. When the termination date of one of the orders is reached, the unobligated balance for that order is to be withdrawn by the Financial Policy Division as soon as the balance can be determined. A subsequent order does not automatically extend the availability of the balance on a terminated order without specific reference to the previous financing.

f. On continuing orders, the balance of financing carried forward into a new fiscal year is the unobligated balance of the order. When prior-year unliquidated obligations accrue, they may accrue for other than the amount obligated. If the accrual is for a lower amount, the additional funds made available are added to the current-year authorization by the Financial Policy Division. If the accrual is for a greater amount, additional funds are withdrawn from the current year to cover the prior-year over-accrual. Before assigning funds to either the current or prior year, the Financial Policy Division ensures that the funds are available for obligation in the year to which they are being assigned.

Administrative officers and those who track other-agency cost centers should monitor the prior-year accruals and prior-year unliquidated obligations on the cost center statements. During the year, if the total of these prior-year amounts varies by more than $1,000 from the previous end-of-year amount of total unliquidated obligations, the accruals should be verified and the Financial Policy Division notified so that funds can be assigned or obtained, if necessary, to cover the balance.

8.05.20
MANAGEMENT OF OTHER-AGENCY- SPONSORED WORK
a. Once an order or agreement is in effect, the program/project manager of the other-agency program assumes responsibility for ensuring that necessary agreements within NIST have been reached concerning the provision of the resource requirements. If problems arise that cannot be handled by the principal OUs involved, then NIST-level assistance should be sought by contacting the Deputy Chief Financial Officer/Financial Policy Division.

b. If, in the progress of other-agency-sponsored work, it becomes clear that certain elements of the original agreement were insufficient, e.g., target date, scheduled milestones, the experimental procedure, then the other-agency program manager should discuss these elements with the other-agency representatives so that revision to the agreement can be made at the earliest possible point. For example, formal requests for extension of a termination date are initiated by the program/project manager.

8.05.21
REFERENCES
a. 15 U.S.C. 275a and 15 U.S.C. 278b are the basic authorities for the National Institute of Standards and Technology to charge for its services and deposit receipts to the Working Capital Fund. These authorities provide that the Secretary shall charge for services performed under the authority of 15 U.S.C. 273; that the appropriation or fund bearing the cost of the service may be reimbursed; and that the fund may be credited with advances and reimbursements, including receipts from non-federal government sources.

b. 31 U.S.C. 1535 provides that the head of a federal agency or major organizational unit may place an order with another agency or major organizational unit for goods and services if amounts are available, the order is in the best interest of the U.S. Government, the goods or services can be provided by the order recipient, and the goods and services cannot be provided as conveniently or cheaply by a commercial enterprise.

c. Federal Activities Inventory Reform (FAIR) Act of 1998, Pub. L. 105-270 sets forth procedures by which federal agencies annually report activities they have performed that are not inherently governmental functions.

d. OMB Circular No. A-25 on user charges requires that user charges be sufficient to recover the full cost to the federal government and that such charges be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the general public.

e. OMB Circular No. A-76 on Performance of Commercial Activities establishes federal policy regarding the performance of commercial activities and implements statutory requirements of the FAIR Act. The supplement to the Circular sets forth the procedures for determining whether commercial activities should be performed under contract with commercial sources or in-house using U.S. Government facilities and personnel.

f. Accounting Principles and Standards Handbook, Chapter 11 prescribes Department of Commerce policies and procedures for establishing and imposing user fees for services or products which the Department of Commerce provides to non-federal recipients and establishes guidelines for work provided to other federal, state, and local governments.

g. Department Administrative Order 201-41 prescribes policies and procedures to be followed for implementation and general administration of the provisions of OMB Circular No. A-76. The Department of Commerce shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source.

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7/08