Research Administration Office

University of California

Memo Operating Guidance

No. 90-2

February 9, 1990

Subject: OMB Implementation of Pub. L. 101-121, Sec. 319, Lobbying Restrictions: Interim Guidance

Section 319 of Pub. L. 101-121, known as the Byrd amendment, generally prohibits recipients of federal contacts, grants, and loans from using appropriated funds for lobbying the Executive or Legislative Branches of the Federal Government in connection with a specific contract, grant,-or loan. It also requires disclosure of lobbying activities when nonfederal funds are used to pay outside lobbying firms or other nonemployees. The statute directed that OMB issue implementing regulations by December 23, 1989.

In the December 20, 1989, Federal Register, OMB published an interim final rule that, for the most part, passed through verbatim the requirements of the statute (copy enclosed). The rule was effective December 23, although comments will be accepted until February 18, 1990. Federal cost principles (including OMB Circular A-21) will be revised to reference these new requirements.

The OMB rule, when finalized, will be accompanied by a FAR clause for contracts and a common rule for grants, cooperative agreements, and loans.

As called for in both the statute and the interim rule, federal agencies have been requiring Contract and Grant Officers to certify compliance in proposals and awards. The certification language is found in Appendix A of the enclosure to this Memo.

The purpose of this Memo is to advise Contract and Grant Officers on how to interpret the OMB rule so that the certification regarding lobbying may be signed in good faith.

Applicability

The OMB rule applies to proposals for and awards of federal contracts, grants, cooperative agreements, loans, and loan guarantees. The certification requirement applies to lobbying activities conducted after December 23, 1989 in connection with:

--proposals submitted after December 23, 1989, for awards over $100,000 ($150,000 in the case of loans);

--awards over $100,000 ($150,000 in the case of loans) made after December 23, 1989 when a certification was not submitted with the proposal (but note the period covered begins December 23, 1989, and does not go back to the time of proposal); and

--subawards over $100,000 under covered awards.

Issue

The problem with the certification is that it does not use the term "lobbying." Instead, it uses the word "influence" and the definition of "influence" as given in the OMB rule is vague, overly broad, and circular:

Influencing or attempting to influence means making, with the intent to influence, any communication to or appearance before an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.

Although preparation of proposals and negotiation of award terms are specifically exempted, this definition in its broadest sense would seem on its face to restrict many kinds of activities not normally thought of as lobbying. Thus the definition must be interpreted in a reasonable way that makes operational sense.

UC Interpretation

A careful review of the OMB interim rule, the statute itself, and remarks made in Congress at the time the Byrd amendment was proposed, lead to the conclusion that this is an anti-earmarking initiative as applied to higher education. The House of Representatives also added amendments to address Congressional concerns related to the HUD influence-peddling controversy. Earmarking may be defined primarily in terms of special legislation establishing a specific program in order to award federal funds outside of the regular agency review/approval process. The promotion of earmarking, either directly (through Congress) or indirectly (through the Executive Branch), is the focus of concern.

Accordingly, we interpret the OMB rule to be saying the following:

(a) Use of federal money to promote earmarking of appropriated funds for the University is prohibited;

(b) Use of nonfederal money to pay nonemployees (e.g. lobbying firms) to promote such earmarking must be disclosed with respect to the proposal or award that may result;

(c) Contract and Grant Officers will be required to sign a certification of compliance with respect to (a) and (b), above, that accompanies any proposal for a federal award over $100,000 (or at time of award if the certification did not accompany the proposal); and

(d) Similar certification requirements will need to be flowed down in all subawards over $100,000 at any tier.

This interpretation has been reviewed by General Counsel's Office and is regarded as reasonable subject to future OMB clarification.

Given this interpretation, then the rule will have the following impacts on the University:

Impact on Principal Investigators/Project Administrators

Principal Investigators/Project Administrators should be made aware of the University's obligation to comply with OMB requirements as restated in (a) and (b), above. Reportable lobbying activities by nonemployees with respect to a particular proposal for a federal award over $100,000 should be disclosed to the campus or laboratory Contract and Grant Office.

Impact on Indirect Cost Proposals

Lobbying activity costs must be excluded from federal indirect cost proposals. (Indirect cost agreements and proposals based on data collected before December 23, 1989, are not affected.)

Impact on Materiel Management

The Office of the President Materiel Management Office will advise its campus and Laboratory counterparts on how to ensure that the certification requirement is flowed down in accordance with OMB guidance.

Impact on Consulting Agreements

The Office of the President Materiel Management Office will advise designated officials responsible for consulting agreements of the new OMB requirements. The Office of the Vice President--Budget and University Relations is reviewing University policy on the hiring of outside lobbying firms.

Impact on the University's Washington Office

Salaries of staff for the University's Washington, DC, office are not included in the University's indirect cost proposals. In addition, that office does not employ outside lobbying firms. Thus there should be no impact on the activities of the Washington office.

Interim Guidance for Contract and Grant Officers

As noted above, the OMB rule issued December 20, 1989, is an interim rule with comments due February 18, 1990. (This office is coordinating University comments and will be submitting them through the University's Washington office.) Thus there is the possibility that the final OMB rule will be revised, and our guidance can only be issued at this time on an interim basis.

The measures outlined in this Memo (labeled "Impacts") should ensure that Contract and Grant Officers may sign the required certification in good faith, unless they are aware of specific violations. (Violations should be handled in accordance with Business and Finance Bulletin G-29, Procedures and Responsibilities Pertaining to Known or Suspected Losses Resulting from Misappropriation of University Assets.)

Any reportable lobbying activities should be disclosed to the agency, ordinarily along with the proposal, using the form found in Appendix B of the enclosure to this Memo. Please note that lobbying activities are reportable only when:

--at the propose stage: the lobbying activities are or were undertaken by nonemployees in connection with the particular solicitation (over $100,000) for which a proposal is being submitted, or

--at the award stage: the lobbying activities are or were undertaken by nonemployees (as above) and no disclosure was made at time of proposal, or

--after award: there has been a significant change in an activity previously disclosed (see enclosure, Subpart A, Section ---.110(c) for details).

Implementation With Respect to Federal Loans/Loan Guarantees

By copy of this Memo, the OMB rule is being sent to the Office of the President Financial Aid and Loan Collection Unit and the Business Operations Office, for appropriate implementation.

Refer: Bill Sellers ATSS 8-582-1638 (415) 642-1638

Subject Index: 02, 06, 19

Organization Index: U-115

David F. Mears

Director, Research

Administration Office

Enclosure

cc: Sue Spitz, Phil Spiekerman, Dave Haskins, Nancy Coolidge, Vivian Scrudder, Paul Sweet, Campus and OP Legislative Liaisons