Questions and Answers Regarding 2 CFR Part 200Message from the Department of Education (the Department or ED):Welcome to the Uniform Guidance (also referred to as 2 CFR Part 200) FAQ. Please note that theUniform Guidance is evolutionary, not revolutionary. It includes changes to the way we do business withour grantees; however, only a few changes are significant.These FAQs are updated as we receive new questions. The original posting date and revision date(s) areidentified after each question. The topics are ordered based on where they are found in the UniformGuidance.In addition to the FAQs from the Department, we encourage you to review the FAQs from Office ofManagement and Budget (OMB).The New Regulations1. Question: Are the Uniform Guidance regulations final?(posted 3/9/2016)Answer: Yes, the Department adopted them as formal regulations in the Federal Register on11/2/2015 at 80 FR 67261, with minor technical changes. All amendments made to the UniformGuidance by the OMB are automatically incorporated into ED’s regulations.2. Question: Is the Uniform Guidance (2 CFR Part 200) published in the Federal Register on 12/26/2013the most recent version?(posted 2/5/15; updated 3/9/2016)Answer: No. Technical changes were made to that version on 12/19/2014, 7/22/2015, and9/10/2015, as published in the Federal Register. For the most recent version of the regulations, goto Electronic CFR - Uniform Guidance 2 CFR 200.3. Question: Is the Uniform Guidance or the revised EDGAR available in a pdf or printed version?(posted 6/25/15)Answer: Not at this time. For now, you can find all current regulations at The Department’s EDGARand Other Applicable Grant Regulations site.Subpart B – General ProvisionsApplicability1. Question: Does the Uniform Guidance apply to formula grants?(posted 2/5/15)Answer: Yes, the Uniform Guidance applies to both formula and discretionary grants in just thesame way that former EDGAR (34 CFR) Parts 74 and 80 did. The only difference is that theseregulations are now found in one place. There are some items, such as 2 CFR §§ 200.205 and1 PageDecember 1, 2016

205.206, that only apply to discretionary grants and cooperative agreements, not to formula grants.If the type of award is not specified in a particular section, subpart or group of sections, then therequirement applies to all awards.2. Question: Does the Uniform Guidance apply to Title IV of the HEA grants (e.g., Federal Pell Grants,Direct Loans, campus based aid, Federal Supplemental Education Opportunity Grant)? Are thereany audit implications for IHEs with regards to these grants?Answer: Student loans and Pell grants are provided to individual students. The Uniform Guidanceapplies to institutions receiving grant funds. The Uniform Guidance does not apply to theseprograms, since they are payouts to individuals. However, the Audit Requirements in Subpart Frequire that major programs must be included in an audit. These programs could be identified asmajor programs under the Single Audit requirements and may be subject to additional requirementsunder the Title IV HEA regulations. The Uniform Guidance audit requirements apply to the first fiscalyear of the non-Federal entity starting after 12/26/2014.Implementation Dates3. Question: What are the implementation dates for the new guidance?(posted 2/5/15; updated 6/25/15 and 3/9/2016)Answer: The Uniform Guidance applies to all new grant awards and non-competing continuations(NCCs) made on or after 12/26/2014 (see 2 CFR § 200.110). The Uniform Guidance also applies toany administrative actions or supplements made to those awards that were made on or after12/26/2014.The Uniform Guidance does not apply to grant awards made before 12/26/2014 (also see answer tonext question regarding grants made prior to this date). Similarly, it does not apply to administrativeactions and or any supplements made to such awards, even if those actions and supplements aremade after 12/26/2014. Funds that carry over to a non-competing continuation (NCC) on or after12/26/2014 are subject to the new Uniform Guidance. The new carryover rules in 2 CFR Part 200 areconsistent with the ED’s pre-existing regulations in EDGAR Parts 75 and 76. So there are nosubstantive changes to the carryover rules for the Department’s grantees and subgrantees.For examples of dates, see tables below.2 PageDecember 1, 2016

Table 1: Administrative Requirements and Cost Principles (Example Dates)Project PeriodStart Date ORstart of FY forformula grants1/1/20157/1/2014ActionNew awardAdministrative action (including atime extension) or mpeting continuation(NCC) or otherwise adding abudget period at the end of theproject period.Non-competing continuation(NCC) or otherwise adding abudget period at the end of theproject period.1Carry over of funds fromprevious budget period of adiscretionary grant or FY of aformula grantAction Date1/1/201512/30/20147/20/2015(or any datewithin the budgetperiod or FY)7/1/201510/1/201510/1/2015 forformula grants;any time after12/26/2014 fordiscretionarygrantsIndirect Cost Rates (ICRs)Grantees must manage their ICRs in compliance with the Uniform Guidance, starting at thebeginning of the first fiscal year following 12/26/2014. See Table 2. Indirect Costs.1EDGAR §76.710: Obligations made during a carryover period are subject to current statutes, regulations, andapplications. Once funds are carried over to the subsequent budget period, those funds are subject to therequirements of the NCC. This eases burden on a grantee because it won’t have to account separately forfunds made available in two fiscal years. Once the NCC is awarded, the new requirements apply to all fundsmade available under the grant, regardless of whether the funds are new or carried over from the prior budgetperiod.3 PageDecember 1, 2016

Table 2: Indirect costsBeginning ofUniform GuidanceGrantee’s FiscalIndirect CostsYearRequirements applyJanuary 1, 2015January 1, 2015July 1, 2015July 1, 2015October 1, 2015October 1, 2015Proposal due for newrate under newguidanceJune 30, 2015December 30, 2015April 30, 2016Request due forextension of currentrate for up to 4 yearsApril 30, 2015October 30, 2015February 28, 2016AuditsAuditors and grantees must comply with the Uniform Guidance, starting with the audit of therecipient’s first fiscal year starting on or after 12/26/2014.Table 3: AuditsBeginning of Grantee’sFiscal YearJanuary 1, 2015July 1, 2015October 1, 2015Uniform GuidanceAudit RequirementsapplyJanuary 1, 2015July 1, 2015October 1, 2015The First audit periodsubject to 2 CFR Part200, Subpart F, endsonDecember 31, 2015June 30, 2016September 30, 2016First Audit that issubject to the 2 CFRPart 200, Subpart F,must be submitted onSeptember 30, 2016March 31, 2017June 30, 2017ProcurementThe Uniform Guidance regulations authorize all non-Federal entities to delay implementation of theprocurement requirements in 2 CFR 200.317 to 200.326 for two fiscal years after the regulationswould otherwise apply to a grant (see Federal Register notice 80 FR 54407, published on9/10/2015). Therefore, if a non-Federal entity’s fiscal year begins on January first, that entity’sprocurement procedures will not have to comply with the Uniform Guidance until January 1, 2017.4. Question: We understand that the Uniform Guidance will apply to grants that will be awarded toStates in July 2015 under forwarded funded formula grant programs such as Title I of the Elementaryand Secondary Education Act and Part B of the Individuals with Disabilities Education Act. We alsounderstand that grants under those programs made prior to December 26, 2014, are subject to 34CFR Part 80 and OMB Circular A-87 (2 CFR Part 225) rather than the Uniform Guidance. Most States,however, will still, as of July 2015, have unobligated balances of funds awarded to them underforward funded formula grant programs in July 2014. Some States may still have unobligatedbalances of funds awarded to them under forward funded formula grant programs in July2013. Does this mean that States will have to apply the Uniform Guidance to forward fundedformula grants awarded on July 1, 2015, and 34 CFR Part 80 and OMB Circular A-87 to theunobligated funds from forwarded funded formula grants awarded on July 1, 2013 or July 1, 2014?(posted 6/25/15)Answer: You are correct that the Uniform Guidance applies to grants awarded on or after December26, 2014. Grantees, however, have flexibility to avoid the challenges of trying to apply two sets ofrules to funded activities that are supported by grant awards made prior to December 26, 2014,4 PageDecember 1, 2016

which are subject to the old rules, and grant awards made on or after that date, which are subject tothe Uniform Guidance. OMB has addressed this very issue:Q II-2: Will this apply only to awards made after the effective date, or does it apply to awardsmade earlier? Once the uniform guidance goes into effect for non-Federal entities, it will apply to awardsor funding increments after that date. It will not retroactively change the terms andconditions for funds a non-Federal entity has already received. We would anticipate that for many of the changes, non-Federal entities with both old andnew awards may make changes to their entity-wide policies (for example to payroll orprocurement systems). Practically speaking, these changes would impact their existing/olderawards. Non-Federal entities wishing to implement entity-wide system changes to complywith the uniform guidance after the effective date of December 26, 2014 will not bepenalized for doing so.Source: Frequently Asked Questions for the Uniform Guidance at 2 CFR Part 200 (February 12,2014) (emphasis supplied).States, therefore, have the flexibility to apply the Uniform Guidance to all of the grant funds itreceives from the Department under a forward funded formula grant program, those awardedin July 2015, and those awarded in July 2013 and July 2014, prior to the effective date of theUniform Guidance. We also note that, under 34 CFR 76.710, carryover funds are subject to theregulations in effect during the carryover period. As a result, even without the flexibilityprovided by OMB, forwarded funded formula grant program funds awarded prior to theapplicability of the Uniform Guidance would, once they became carryover funds on October 1,2015, be subject to the Uniform Guidance.In light of the flexibility noted above, however, States can begin to apply the Uniform Guidance toforward funded formula program funds in July 2015, and will thus be able to avoid having to applytwo sets of rules to funds awarded under a single grant program for any period of time. We notethat States, using this flexibility, could also apply the Uniform Guidance on July 1, 2015, to Stateadministered formula programs that are funded on a current year basis rather than forwardfunded. Finally, States that choose to apply the Uniform Guidance to grants awarded prior toDecember 26, 2014, should inform their subgrantees that they also should comply with the newrequirements in the Uniform Guidance.Subpart C – Pre-Federal Award Requirements and Contents of Federal AwardsGrantee Risk1. Question: Where is the reference to high risk designation?(posted 2/5/15; updated 3/12/15)Answer: The Uniform Guidance does not include the term “high risk.” However, under 2 CFR §3474.10, the Department may impose high risk conditions on a grantee or a particular grant inappropriate circumstances.5 PageDecember 1, 2016

Historically, the Department used EDGAR 74.14 and 80.12 to impose high risk designations tospecific grants and grantees. The requirements found in 2 CFR §§ 200.205 and 200.207 for reviewingrisk and assigning specific conditions, respectively, are very similar to those formerly found inEDGAR. In accordance with 2 CFR § 3474.10, the Department and pass-through entities, such asSEAs, will use the standards and requirements found in 2 CFR §§ 200.205 and 200.207 to identifyhigh risk conditions and assign specific conditions.2. Question: What is the purpose of a risk assessment on formula grantees, if it does not impactreceipt of an award or the amount of the award?(posted 2/5/15)Answer: Conducting risk assessments of grantees helps ensure that potential risks are identified andappropriate monitoring is established to mitigate those risks. If the identified risks are significant,the SEA can impose specific conditions under 2 CFR § 200.207 during the course of the award and, inappropriate circumstances, designate those conditions as “high risk” conditions under 2 CFR §3474.10.Subpart D – Post Federal Award RequirementsPerformance Measurements1. Question: Will the performance measures required by Department of Education program offices berevised to address the requirements of the Uniform Guidance?(posted 3/12/15)Answer: Program Offices are responsible for developing performance measures to effectivelyaddress their statutory requirements. The program measures currently used by the Departmentprogram offices comply with the Uniform Guidance requirements. In the future, the program officesmay revise and develop program measures to address 2 CFR § 200.301. Any new performancemeasures, or changes to existing performance measures, will be announced to the public prior tothe changes being implemented. As has been the case in the past, program office staff is the bestsource of information on performance measures for the specific grant programs that theyadminister.Procurement2. Question: Do the Procurement Standards in the Uniform Guidance, 2 CFR § § 200.218200.226, apply to all types of Federal grant awards, both formula and discretionary? And to goodsas well as services?(posted 3/9/2016)Answer: The procurement standards in the Uniform Guidance apply to procurement of goods andservices to all Federal grant funds awarded through both formula and discretionary grants. Thisincludes funds awarded by the Department as grants or funds awarded to a pass-through entity,such as a State educational agency, for subgrants. Grantees and subgrantees that are not Statesmust follow the procurement standards set out in the Uniform Guidance in 2 CFR § § 200.218200.226. See 2 CFR § 200.217.6 PageDecember 1, 2016

These grantees and subgrantees must also follow their “own documented procurement procedureswhich reflect applicable State, local, and tribal laws and regulations, provided that the procurementsconform to applicable Federal law and the standards” set out in the Uniform Guidance. See 2 CFR§ 200.218(a) and Question 3 under Implementation Dates, above.States must follow their own procurement procedures when procuring goods and services with nonFederal funds. See 2 CFR § 200.217. States, however, must also comply with 2 CFR §§ 200.222 and200.226.3. Question: There are significant new requirements for procurement. How much will this impact theprocurement practices of grantees?(posted 2/5/15; updated 2/19/16)Answer: Most of the procurement requirements in the Uniform Guidance are transplants from theformer regulations in EDGAR Part 80 and OMB Circular A-102; therefore, we do not expect thatStates or school districts will need to make significant changes to their procurement procedures.Nonprofit entities, institutes of higher education, and other organizations that were subject to formerEDGAR Part 74 may have to make more changes to their procurement practices; however, OMB hasestablished a two-year grace period before the new procurement procedures are required to beimplemented by all entities except States. We believe that this grace period will minimize the burdenon those entities that may have to make significant changes to their procurement practices. Thenew requirements are designed to ensure that all grantees meet very basic standards of integrity inthe procurement processes, including the same basic elements of competition and transparency thatapply to procurements by governmental entities.4. Question: The new requirements for procurement require negotiating profit levels for certaincontracts. How will this impact the procurement process?(posted 2/5/15)Answer: The requirement to negotiate profit levels only applies to procurement of contracts thatexceed the Simplified Acquisition Threshold of 150,000 (requiring the recipient to perform a cost orprice analysis) or where there was no price competition. The new procurement requirementsdiscourage procurement of contracts through procedures that do not result in price competition andcontracts in excess of 150,000 deserve cost or price analyses to ensure that the recipient does notpay excessive costs for big contracts.5. Question: To what extent do the new uniform administrative requirements align with the FederalAcquisition Regulation (FAR)? Can FAR be used as the prevailing guidance where there arequestions?(posted 2/5/15)Answer: The Federal Acquisition Regulation (FAR) establishes the rules and requirements thatFederal agencies must follow when procuring goods and services. The Uniform Guidance, bycontrast, establishes requirements that must be followed by grantees when procuring goods andservices needed to carry out a Federal grant or subgrant. The Uniform Guidance, like the FAR, is7 PageDecember 1, 2016

designed to ensure that procurements involving Federal funds are conducted with integrity, fairness,and openness. However, procurement issues that arise in carrying out Federal grants must beresolved on the basis of the requirements set out in the Uniform Guidance and the recipients’written procurement policies rather than the FAR.6. Question: How will companies that do business with school districts and SEAs be impacted by thechanges in the Uniform Guidance?(posted 2/5/15)Answer: The Uniform Guidance generally consolidates and streamlines grants administrationregulatory language from eight OMB circulars into one consolidated set of guidance in the Code ofFederal Regulations. The consolidation of guidance provides more efficient and consistentregulatory provisions for all types of grantees, including State or Local governments (SEAs and LEAs),non-profit organizations, and institutions of higher education.The provisions are almost identical to longstanding requirements in either EDGAR Part 74 or 80,depending upon which version of these regulations were used in 2 CFR Part 200 by the Council onFinancial Assistance Reform. Because there is so much consistency between the Uniform Guidanceand prior the Department regulations, we do not expect any dramatic changes in the waycompanies do business with LEAs and SEAs, except in the few places where substantive changeswere discussed in the interim final regulations published on December 19, 2014. The following linkprovides a side-by-side comparison of the prior and new guidance: Administrative RequirementsComparison Chart.7. Question: Please explain under what circumstances profit will be negotiated for contracts with K-12districts/states.(posted 2/5/15)Answer: Negotiating profits will be governed by contracting rules established by the non-Federalentity providing the contract, which at a minimum must meet the requirements of 2 CFR 200 §§200.317 – 200.326. In general, a State must follow the same policies and procedures it uses forprocurements from its non-Federal funds, but must include in contracts funded under Federalawards the standard contract clauses specified in § 200.326 and Appendix II to Part 200.8. Question: Will informal product and price comparisons be accepted as a competitive comparison(and therefore, not be subject to profit negotiations)?(posted 2/5/15)Answer: OMB created new flexibilities permitting grantees to establish more informal procurementprocedures for micro purchases. The other procurement methods are not significantly changed fromthe requirements in EDGAR Parts 74 and 80. See, for SEAs, 2 CFR § 200.317 and for all other nonFederal entities, including subrecipients, 2 CFR § 200.318.9. Question: Will contracts using federal funding require greater emphasis on outcomes andperformance than in the past? If so, will you be giving guidance on what "performance" means?(posted 2/5/15)8 PageDecember 1, 2016

Answer: The Uniform Guidance does place increased emphasis on the substantive outcomes andperformance of grants than has been the case in the past. See, for example, 2 CFR § 200.301.Grantees, in obtaining services from vendors needed to implement their grant, will need to ensurethat the timeliness and quality of the work provided by their contractors will allow the grantee tomeet the performance standards that apply to its grant. Contractors working with grantees,therefore, may see greater emphasis on outcomes and performance than they have in the past.ED will continue to effectively evaluate and measure the successful completion of federally fundedprojects, in accordance with performance and financial monitoring and reporting outlined in 2 CFRPart 200 and the regulations in the Education Department General Administrative Regulations intitle 34 of the CFR. If the Department establishes performance requirements for discretionary grantcompetition, those requirements will specify the performance elements that will be used tomeasure performance. As always, grantees are responsible for ensuring that contractors perform asrequired under their contracts.10. Question: Does the guidance impact vendors' ability to play a role in helping to draft specificationsfor Requests for Proposals (RFPs)?(posted 2/5/15; updated 3/9/2016)Answer: Contracts funded under a Department grant to an SEA must follow the requirements thatthe State uses for its non-Federal procurements, as stated in 2 CFR § 200.317, all other non-Federalentities, including subrecipients of a State, must follow the requirements 2 CFR § 200.318. For nonFederal entities, including subrecipients, 2 CFR §200.319 specifies the competition requirements forprocurements and § 200.220 specifies the procurement methods that recipients must incorporateinto their procurement procedures. A vendor that is a contractor involved in the development ordrafting of specifications requirements for an RFP has an organizational conflict of interest thatwould exclude the vendor from competing for the resulting procurements under the procurementrequirements in 2 CFR Part 200.Please note that the Department established new contract competition flexibilities for certainprocurements related to projects proposed for funding under the Department’s discretionary grantcompetitions. See EDGAR § 75.135. Under these procedures, an applicant can use the relativelysimple small purchase procedures authorized under 2 CFR § 200.320(b) to select in a singlecompetition a contractor to both help the applicant prepare its application and provide projectservices if the grantee is selected for funding. This flexibility is limited to cases where the contractorwould provide data collection, data analysis, or evaluation services, or another essential serviceneeded to meet a statutory, regulatory, or priority requirement related to the competition and thecontractor is identified in the application. Also, if the applicant is contracting for sites to conductproposed project activities, the applicant does not need to run a competition to select the sites.In addition, the Department understands that a grantee may need to inform itself about thecapacity and capability of potential contractors in order to prepare an RFP. In the course of doingso, the grantee may contact a number of vendors to collect information necessary for developingthe RFP, as long as the LEA poses its request for information broadly so that any potential vendorhas an opportunity to provide input. Soliciting input from one or two vendors would, in most cases,9 PageDecember 1, 2016

create an unfair competitive advantage.11. Question: What does the phrase “tangible personal benefit” in 2 CFR 200.318(c)(1) mean?(posted 3/9/2016)Answer: The phrase “tangible personal benefit” is new language added to the general conflict ofinterest section of the general procurement standards that existed previously under the EDGAR80.36(b)(3) and OMB Circular A-102. The language was expanded from just “financial or otherinterest in” to also include “or a tangible personal benefit from” a firm considered for a contract.This new language stresses the importance of ensuring that employees who select, award, andadminister contracts supported by a Federal award are free from any real or apparent conflict ofinterest, including financial interests and other non-financial benefits that result in a personalbenefit for the employee (such as improved employment opportunities, business referrals, politicalinfluence, etc.).12. Question: How will pricing transparency increase as a result of these changes?(posted 2/5/15)Answer: The Uniform Guidance does not appear to have an impact on “pricing transparency.”13. Question: Are companies’ variations in per-student pricing permissible, depending upon whetherthey are doing business with a large district or a small one?(posted 2/5/15)Answer: The Uniform Guidance does not appear to have an impact on the permissibility ofvariations in per-student pricing.14. Question: When are the model “terms of service” for education companies expected to bereleased?(posted 2/5/15)Answer: We are not clear about what is meant by “terms of service.” The Department does notplan to issue model requirements that recipients could use in contracts with education companies.As stated in the Uniform Guidance, each non-Federal entity is solely “responsible, in accordancewith good administrative practice and sound business judgment, for the settlement of allcontractual and administrative issues arising out of procurements. These issues include, but are notlimited to, source evaluation, protests, disputes, and claims.” See 2 CFR § 200.318(k).15. Question: Can you clarify what is allowed under 200.319(a)(6), regarding “an equal” product?(posted 3/9/2016)Answer: The request for proposals can identify a product by name and its specifications as anexample, but must consider any product that has the same specifications. For example, if a granteeis going to purchase activity monitors, the request can state it is looking for a monitor, similar tofitbit, which is worn on the wrist; measures heart rate; steps walked and ran; can sync to an app;and is programmable. All bids that achieve those specifications must be considered for purchase.10 P a g eDecember 1, 2016

16. Question: How can we fully comply with 200.319(a)(6), if we need to purchase a particular brandand a similar brand will not suffice? For instance, we need to purchase a specific brand of computerequipment so it can be integrated into our existing system.(posted 3/9/2016, updated 3/17/2016)Answer: The Uniform Guidance does not require a grantee to abandon a technology or instructionalapproach just because a similar technology or instructional approach would cost less. TheDepartment also understands that in some limited situations, specifying a “brand name” may notrestrict competition under 2 CFR 319(a). If a grantee has already invested in a particularinfrastructure or instructional framework, specifying a “brand name” compatible with theinfrastructure or framework may be appropriate. However, the procurement regulations in 2 CFR200.323 require the grantee to compete to find the lowest cost supplier of the technology orinstructional approach.Grantees that engage in pilot trials of educational technologies or instructional materials that thenwish to “scale up” are not exempted from competitive procurement. Procurement transactionsmust be conducted in a manner providing full and open competition, as described in 2 CFR 200.319.As such, the grantee must use a competitive process, as described in 2 CFR 200.320(d), unless theeducational technology or instructional materials is truly only available from one source.If a particular software or hardware is required because of the grantee’s existing technologyinfrastructure or instructional framework and the hardware or software is truly only available fromone source, noncompetitive procurement may be appropriate. The grantee must maintain recordsdocumenting the rationale for why sole sourcing was used (2 CFR 200.318(i)).In cases where a grantee selects a product supplier through a sole source contract because thatsupplier is the only contractor that can meet the requirements for the unique product, the granteeneeds to conduct a negotiate profit separately with the supplier because there was no pricecompetition for the product. If the procurement exceeds the simplified acquisition threshold, thegrantee must conduct either a price or cost analysis of the contract. See 2 CFR 200.323.17. Question: In order to satisfy the requirement for small purchases for which the purchaser must “getrate quotations from an adequate number of qualified sources,” can an organization use an internetmarketplace where individual sellers post their products and compete for purchasers, such, Ebay, Etsy, etc?(posted 3/9/2016)Answer: The suitability of these marketplaces depends on the organization’s institutionalpurchasing policy. If the organization is selecting a product or process that is offered over theinternet at a set price by a number of potential contractors that advertise on one or more of thesesites and the organization’s policy authorizes selection of products or services in thesecircumstances, the organization could select the product or service at the set price that offered thebest price. The organization would have to document that it considered an adequate number of11 P a g eDecember 1, 2016

internet sources for the product.18. Question: 2 CFR 200.318(k) provides as follows: “(k) The non-Federal entity alone must beresponsible, in accordance with good administrative practice and sound business judgment, for thesettlement of all contractual and administrative issu

Part 200 apply? 1/1/2015 New award 1/1/2015 2 CFR Part 200 7/1/2014 Administrative action (including a time extension) or supplement 12/30/2014 EDGAR Parts 74 and 80 10/1/2014 7/20/2015 (or any date within the budget period or FY) 7/1/2014 Non-competing continuation (NCC) or otherwise