Research Administration Office

University of California

Memo Operating Guidance

No. 88-19

November 8, 1988

Subject: Certification of Nondebarment Status for Federal Assistance

Background

On May 26, 1988, twenty-eight federal agencies, following OMB guidelines, issued a final common rule on "governmentwide nonprocurement debarment and suspension." (See Enclosure 1) This common rule effectively establishes a debarment and suspension system for federal grants and other assistance instruments (e.g. loans) that is in many respects similar to the system already in place for federal contracts. The basic intent is to prevent debarred and suspended companies and individuals from receiving federal money by way of contracts, grants, loans, etc. (Under the old system, a debarred contractor was not ineligible to receive other federal assistance.) The two systems (one for contracts and one for nonprocurement) are currently, running side-by-side but are expected to be merged in the near future. In addition, OMB is planning to clarify the certification requirements, in which case we may need to revise the guidelines offered below.

Scope

The new nonprocurement debarment rule will affect the University in five areas:

*proposals and awards for federal grants and cooperative agreements;

*contracting out of research under federal assistance awards;

*procurement contracts for goods and services under federal assistance awards where the amount of the contract exceeds $25,000;

*subgrants;

*federally-funded student aid programs; and

*federally-required audit services.

Contracting Out of Research

The rule covers, among other things, agreements under grants that provide for the sub-tier organization to do some of the work, i.e. research supported by the prime award, where there is a principal investigator who will perform and have a critical influence on (or substantial control over) the lower tier award. In these cases Contracts and Grants Offices will need to obtain a certification from the sub-tier organization, preferably at the proposal stage, but in any case before the sub-agreement is signed. The certification language is found in Appendix B of the common rule (Enclosure 1, p. 19211).

Procurement Contracts

With respect to procurement contracts for goods and services, the common rule requires the prime grantee to obtain a certification as to debarment status from prospective contractors when the amount of the contract is $25,000 or more. This certification can be made a part of the contract; no special signature is required. The Office of the President Materiel Management Office has already issued instructions to Materiel Managers regarding these certification requirements (see Enclosure 2).

Subgrants

Certifications must also be obtained from any individual or organization that is the recipient of a subgrant or other form of assistance (as opposed to procurement). As a practical matter, this is not likely to be of concern because we are not aware of any subgrants awarded by the University.

Student Aid

With respect to federal student aid, the applicant must certify as to debarment status as a condition of eligibility. The Office of the President Financial Aid and Loan Collection unit will inform campuses of the new requirement, and provide a model certification language. Campuses will be responsible for adding the certification requirement to their procedures for students applying for federal financial aid.

External Auditors

The Office of the President Coordinator for External Audit Relations will be responsible for implementing the rule with regard to obtaining the required certification from the University's outside audit firm (currently Peat, Marwick, Main). Campuses will be responsible for obtaining certifications from other audit firms for locally-provided and federally-required audits.

Proposals and Awards

With respect to proposals and awards, the rule requires agencies to obtain certifications from applicant organizations prior to award. The Office of the President Contracts and Grants Office has written to the major federal agencies asking them how they plan to implement this requirement. To date we have received responses from NEH, NSF, HHS, USDA, NASA, and Dept. of Education. Only NSF and NASA have finalized their plans.

Since many agencies have not yet decided how to implement the common rule, it is too soon to offer guidance applicable to all federal agencies. However, it is likely that most agencies will include a box to be checked on the cover page of the grant application that constitutes certification of nondebarred status, and that the certification statement will use or reference the certification language used in the common rule. This Memo offers preliminary guidance on checking such a box.

Certification of Nondebarred Status

The certification language that many agencies are expected to use is given in Appendix A of the common rule. The text of this certification is as follows:

l) The prospective primary participant certifies to the best of its knowledge and belief, that it and its principals:

a. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency;

b. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;

c. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and

d. Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default.

2) Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

The word "principals" as used in the certification is to be understood as meaning the following individuals:

The Regents of the University

The Officers of the Regents (President, Chairman, Vice Chairman,

General Counsel, Secretary, Treasurer) Senior Vice President--Academic Affairs Senior Vice President--Administration

Vice. President--Business and University Relations Vice President--Agriculture and Natural Resources Vice President--Health Affairs Chancellors

the principal investigator (or co-PIs)

With respect to all of the above with the exception of the PI, the Office of the President Contracts and Grants Office has checked the most recent list of debarred and suspended individuals and so the certification may be made for those individuals as far as paragraph (1)(a) of the certification is concerned. We do not know of any reason why the certification may not also be made with respect to paragraphs (1)(b) through (1)(d).

This office will subscribe to the list of debarred and suspended individuals and will inform campuses if we become aware of any reasons why the certification may not be made.

With respect to principal investigator or co-PI, campuses may rely on self-certification by the PI or co-PIs. Campuses may alternatively decide to check the list of debarred and suspended individuals and to rely on their knowledge of their PIs with respect to paragraphs (1)(b)-(1)(d) of the certification. Subscription to the "List of Parties Excluded from Federal Procurement or Nonprocurement Programs" is available from superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 (document #1988-203-038:80001; telephone # 202-783-3238) for $40/year. For the information of Contracts and Grants Officers, we are sending copies (Enclosure 3) of the nonprocurement section of the list to Contracts and Grants Offices. Others who wish to see what the list looks like should contact your campus C& G office or Bill Sellers.

Refer: Bill Sellers

(415) 642-3045

ATSS 8-582-3045

Subject Index: 19

Organizational Index: U-115

David F. Mears

University Contracts and Grants Coordinator

Enclosures (Encl. 3 only for C& G Officers)

cc:

Campus and Laboratory Accounting Officers

Don Alter

Nancy Coolidge

Linda Scheffer

Belle Cole