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On the basis of the Federal Grant and Cooperative Agreement Act (Public Law 95-224, 41 U.S.C. 501-509) and implementing guidance from the Office of Management and Budget, it has been determined that for-profit organizations are eligible to receive awards under all PHS financial assistance programs unless specifically excluded by legislation.

Except as noted in the paragraph below, no profit or fee will be provided to for-profit organizations through financial assistance awards. A profit or fee is considered to be an amount in excess of actual allowable, allocable, and reasonable direct and indirect costs which are incurred in conducting an assistance project.

Beginning July 1, 1992, PHS awarding offices shall negotiate fixed fees for competing grants awarded under the Small Business Innovation Research (SBIR) program when (1) requested by the grantee organization and (2) the amount of the fixed fee, together with the direct and indirect costs to be awarded, is within the Phase I and Phase II award limitations set by the program.

For-profit organizations will be subject to the same administrative requirements currently applicable to nonprofit institutions, except for the following:

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