Step 5: Award Negotiation & Issuance
When an agency awards a grant, it is formalizing its partnership with the recipient (institution) to ensure compliance with federal laws, regulations, and policies to protect the overall scientific endeavor. Once an application has been reviewed and accepted for funding, there are multiple pre-award activities that happen before the award can be made and accepted. Additional information must be collected and evaluated to determine the institution and research staff’s readiness, as well as compliance to policy requirements and the final determination of budget and award amount. Timely and effective communication between a recipient and NCI staff is critical throughout the pre-award process, award process, and post-award process.
After preliminary funding decisions are made, NCI program directors complete their programmatic, scientific, and/or technical review of each assigned application. As a result of this review, program directors may contact applicants to request additional or updated information regarding various issues, such as:
- Other support
- Overlap with other projects
- Resolution of scientific concerns expressed by the initial reviewers regarding the involvement of human subjects
- Use of live vertebrate animals
- Minority and gender representation
- Potential biohazard problems
- Public Access compliance
Grants management staff may contact applicants to request additional information regarding assurances and certifications or missing application documentation that was not received or is outdated from a Just in Time (JIT) submission.
Grants Management Review
After receiving notification from the program director and verifying selection for funding, the Office of Grants Administration staff (grants management specialists) begin the process of reviewing the application for their assigned institutions from a business/administrative management perspective. This includes a review of the application, peer review recommendations, all applicable material, and the programmatic comments and recommendations. The grants specialist is reviewing for conformity to laws, regulations, and policies, as well as determining if any special conditions are required prior to award. This review also involves a cost analysis of the proposed categorical budget, if applicable; a review for administrative compliance with the Department of Health & Human Services (HHS) and National Institutes of Health (NIH) policies, and negotiations with the applicant’s business official and/or the principal investigator.
The grants management specialist reviews applications that include categorical budgets for:
- Reasonableness of costs
- Adherence to cost principles
- Relationship of costs to the proposed project
- Financial management capabilities of new applicant institutions
- Similarity to or duplication of existing programs or projects being supported by other sources (to the extent that this can be ascertained)
- Specific requirements established by a particular program (e.g., conference or training grants)
The extent of this analysis is a matter of judgment, based on factors such as:
- The applicant’s previous experience in managing grant funds
- The NCI’s experience with the applicant organization
- The dollar amount of the grant
- The complexity of the grant
- The financial history of the project
- NCI program concerns
In addition to analyzing the budget, the grants management specialist determines that all necessary assurances and reporting requirements have been met and that the applicant is in compliance with all appropriate rules and policies as well as NIH and HHS requirements. The following is a brief itemization of some of the issues that must be addressed, when appropriate, before an award can be issued:
- Compliance with 45 CFR Part 46, “Protection of Human Subjects”
- Certification of required education in the Protection of Human Research Participants
- Compliance with HHS Policy on Humane Care and Use of Laboratory Animals by Awardee Institutions
- Civil rights, handicapped individuals, and sex and age discrimination assurances
- Compliance with Data and Safety Monitoring requirements
- Debarment, suspension, and voluntary exclusion certification
- Drug-free workplace certification
- HHS-approved entity identification number (EIN) for the applicant institution
- Facilities and Administrative (F&A) costs—also known as Indirect Costs
- Federal Financial Reports (FFRs)
- Invention statements
- Lobbying certification and disclosure
- Assessment of applicant institution’s management capability
- Appropriate choice of mechanism (grant/contract/cooperative agreement)
- Misconduct in science assurance
- No delinquency on federal debt certification
- Peer review recommendations
- Administrative notes from peer reviewers on the summary statement
- Program income
- Availability of proposed project staff
- Scientific and budgetary overlap with other support
- Time and effort over-commitment
- Involvement with human embryonic stem cells (hESC)
- Compliance with public access requirements
- Financial conflict of interest (FCOI)
The primary purpose of negotiating an award is to establish the appropriate funding level and period of performance, resolve identified problems, and agree on specialized terms and conditions of award, if needed. The degree and form of the negotiation depend on a variety of factors, such as the dollar amount and complexity of the project, nature of the problems identified, and fulfillment of new recipient requirements. The grants management specialist can usually complete negotiations and obtain needed information through correspondence with the applicant institution. However, it may become necessary for NCI staff to visit the applicant institution to address certain issues or problems.
Initial peer review recommendations, budget/programmatic modifications and determination of facilities and administrative (F&A) costs are all components of the pre-award negotiation process.
Preparation of Awards and Obligation of Funds
The Notice of Award (NoA) is the legal notification to the recipient that the project has been awarded and that funds may be requested from the HHS Payment Management System (PMS).
The NoA includes multiple sections related to terms of award. Section II includes reference to the NIH Grants Policy Statement (NIH GPS) as a term and condition for all awards. It contains the legally binding requirements for all grant recipients. Section III lists standard terms and Section IV contains special terms and conditions specific to the NCI and/or the particular grant. Recipients must pay careful attention to the terms and conditions of an award, particularly any specific to the grant. If recipients violate the terms and conditions of an award, NIH may place a restriction on the award, institute special monitoring procedures, or take other enforcement actions.
Once the NoA is signed by the grants management officer (GMO), it is transmitted via email and posted in the NIH eRA Commons.. In addition to the terms, the NoA includes:
- The name and address of the recipient institution
- The title of the project
- The name of the principal investigator
- The period of performance
- The amount recommended for future years of support
- Contact information for the assigned program director and grants management specialist
In addition, all competing/noncompeting award notices, except those in the modular Streamlined Noncompeting Award Process (SNAP) populations, show the authorized direct costs by budget category (e.g., personnel, supplies). The NoA provides approval for the expenditure of funds agreed upon during negotiations. Associated F&A costs are also included on the NoA.
If the awarding office has determined that a prospective recipient is financially unstable, has a history of poor performance, or has a management system that does not meet the agency’s standards, the awarding office may impose restrictive terms and conditions. The awarding office may also delay issuing the award until all the agency’s standards have been satisfied.
By signing the grant award, the grants management officer certifies that:
- The choice of the award mechanism is appropriate under applicable policy
- The application was properly peer reviewed
- The award amount is accurate and appropriate for the grant-supported activity
- The applicant institution is judged to have (or is expected to acquire) adequate business management capability to administer the grant and account for federal funds
- The award is being made consistent with the terms and conditions specified for the particular program and the appropriate review recommendations
- The award is consistent with governing legislation, regulations, and policies
- All review and award actions are clearly documented in the official grant file
The award amount is forwarded to the NIH Office of Financial Management where it is recorded as an obligation in the NIH official financial system.
The NoA is issued for the initial budget period. If subsequent budget periods are also approved, the NoA will include a reference to those budgetary commitments. Funding for subsequent budget periods are generally provided in annual increments following the annual assessment of progress. This funding is also contingent on the availability of funds.
For all new and competing continuation awards, Congress must be alerted at least 72 hours before the issuance of the award so the appropriate representatives have the opportunity to notify their constituents. If the award exceeds $1 million, the White House may also be informed. This requirement is fulfilled by forwarding the award information to the HHS Congressional Liaison Office (CLO).
Acceptance of Award
The recipient indicates acceptance of the terms and conditions of an award by drawing down or otherwise obtaining funds from the grant payment system. By accepting the award (i.e., by drawing funds from the grant payment system), every grant recipient agrees to comply with all terms and conditions of award incorporated by reference into the NoA.
To minimize the impact of cash withdrawals on the public debt level and to reduce related financing costs, the U.S. Department of the Treasury issued regulations governing the flow of cash to recipient organizations. Specifically, recipients should not request funds until actually needed for disbursement purposes.
Grant payments are administered by the HHS Payment Management System. Funds are deposited directly into the recipient’s bank account on the next business day.
Although a specific dollar amount is indicated on the NoA for each future year of recommended support, the amount awarded is subject to the availability of funds appropriated for the fiscal year, as well as other considerations related to scientific progress and the recipients rate of expenditure of grant funds. Grants may be negotiated and awarded for less than the recommended level. Conversely, when the recipient can justify the need for additional funds, the NCI has the authority to grant the increase as long as the approved scope of the project is not being expanded.
If the recipient wants to request additional funds to expand the scope of the project, a competing supplemental application must be submitted according to established deadlines. These applications undergo dual review and compete for funds with all other investigator-initiated competing applications.