hand holding compassOn August 13, 2020, the Office of Management and Budget (OMB) issued revisions to the Uniform Guidance in 2 CFR 200. These revisions are part of a required review of the Uniform Guidance performed every 5 years. While most of the revisions will go into effect on November 12, 2020, two sections are now applicable as of August 13, 2020. You can check out the full text of the federal register announcing this update here.

Immediate Effect

The two revisions that have now taken effect as of August 13, 2020, are in 2 CFR 200.216, Prohibition on certain telecommunication and video surveillance services or equipment, and 2 CFR 200.340, Termination. You can learn more about these provisions in the link above.

2 CFR 200.216 prohibits federal award recipients from using government funds to enter into contracts (or extend or renew contracts) with entities that use “covered telecommunications equipment or services,” even if the contract is not for the purchase of such equipment or services. Covered telecommunications equipment or services is defined as telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities). Federal awarding agencies will be required to work with OMB to assist entities that will be affected by this provision. If you are concerned that your organization may have entered into contracts that would be prohibited by this provision, be sure to reach out to your contacts at the federal awarding agency or pass-through entity for further information. It is likely that contracts in the future will need to include language addressing this prohibition as well.

2 CFR 200.340 allows federal awarding agencies, pass-through entities, and non-federal entity recipients to terminate awards or parts of an award for specific reasons, including noncompliance with the terms and conditions of a federal award and instances when the federal awarding agency determines that an award no longer effectuates the program goals or agency priorities. This provision also explains the required reporting and specific actions that will need to be taken by the parties of the terminated award. As other revisions to the Uniform Guidance become applicable and are implemented by federal awarding agencies, it is likely that performance reporting will become more important to a greater variety of awards, allowing federal agencies to evaluate the effectiveness of awards.

A key takeaway from this change is that the required content and format of performance reporting is likely to change, and that reported results may be expected to have a greater effect on termination and renewal determinations going forward.

Practical Advice

The largest burden for compliance with these requirements seems to be placed on federal awarding agencies administering the award. It’s important to always be on the lookout for communications from awarding agencies and pass-through entities. If your organization serves as a pass-through entity, it’s crucial to ensure that your records include information that will help you determine whether your sub-recipients have entered into contracts for goods or services that may be subject to the requirements in 2 CFR 200.216. If your organization has entered into such contracts, you should review the contracts and have them in an easily accessible location to prepare for the potential revision of contracts. Also, be prepared for potential changes to reporting timelines and content as federal awarding agencies adjust to a higher focus on performance reporting and evaluation.

As further guidance is released, CRI will continue to evaluate the information and communicate all relevant guidance to those who are affected. Please reach out to your CRI professional with any questions.