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ARCHIVED - NIH Grants Policy Statement (10/98)

Part III: Terms and Conditions for Specific Types of Grants, Grantees, and Activities-Part 1 of 6

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This Part includes terms and conditions that vary from the standard terms and conditions in Part II of this policy statement because of the type of grant, grantee, or grant-supported activity. There are separate sections for:

  • Construction grants, including large-scale alteration and renovation (A&R) activities under grants with specific statutory authority for construction or modernization activities. (This section also includes requirements for certain A&R activities under nonconstruction grants);
  • Individual and Institutional National Research Service Awards (NRSA) (also termed "fellowships" and "training grants");
  • Conference grants;
  • Consortium agreements;
  • Grants to foreign and international organizations and domestic grants with a substantial foreign component;
  • Grants to Federal institutions and payments to (or on behalf of) Federal employees under grants;
  • Grants to for-profit organizations; and
  • Research patient care activities.

These terms and conditions may apply in addition to, or in lieu of, those in Part II of this policy statement. Each section of this Part specifies how the coverage relates to that in Part II.

The following requirements apply to NIH construction grants and large-scale A&R activities under grants with statutory construction or modernization authority (hereafter, "construction grants") and, as specified, to A&R projects under nonconstruction grants. Construction grants are awarded under the C06 activity code or support mechanism.

Except as indicated below, for construction grants these requirements apply in lieu of the requirements in Part II. Applicants and grantees should also refer to the construction grant program regulations (at 42 CFR Part 52b), 45 CFR Part 74 or 92, and any applicable IC guidance. Any questions concerning the applicability of particular requirements or policies should be directed to the IC GMO or other official designated on the NGA.

For purposes of this section, "construction" and "modernization" are defined as follows:

"Construction" means the construction of new buildings or the modernization of, or completion of shell space in, existing buildings (including the installation of fixed equipment, but excluding the cost of land acquisition and off-site improvements).

"Modernization" means the alteration, renovation, remodeling, improvement, expansion, and repair of existing buildings and the provision of equipment necessary to make a building suitable for use for the purposes of a particular program.

In addition to any program-specific eligibility criteria, eligible applicants for construction grants must be public or private non-profit entities and must be located in the U.S., its territories or possessions. For-profit organizations and foreign organizations are not eligible for construction grants.

Construction grant applications are peer reviewed. NIH makes review and selection decisions using the following criteria/factors:

  • Scientific merit of the research program activities that will be carried out in the proposed facility;
  • NIH programmatic relevance;
  • Research and financial need for the project;
  • Scientific or professional standing or reputation of the applicant and of its existing or proposed officers and research staff;
  • Relationship to the applicant's overall research programs and impact on relevant research programs and facilities in the geographic area and nationwide;
  • The availability, by affiliation or other association, of other scientific or health personnel and facilities for carrying out the proposed research program, including, when warranted, the adequacy of a biohazard control and containment program; and
  • The project cost and design.

In addition to the public policy requirements and objectives specified in Part II, construction grants are subject to the following public policy requirements. Questions about whether a particular requirement applies to A&R activities under nonconstruction grants should be directed to the IC GMO. Grantees receiving construction grants must also require contractors and subcontractors providing construction services to comply with certain Federal labor standards. These labor standards are discussed in "Equal Employment Opportunity Labor Standards, and Other Contract Requirements" in this section.

The National Environmental Policy Act (NEPA), as amended (Public Law 91-190), establishes national policy goals and procedures to protect and enhance the environment, including protection against natural disasters. NEPA requires all Federal agencies to consider the probable environmental consequences of any major Federal activity, including grant-supported activities. To comply with NEPA for its grant-supported activities, NIH requires the environmental aspects of construction grants, and certain requests for financial assistance involving nonconstruction projects, to be reviewed and evaluated by NIH technical staff prior to final action on the application. With respect to earthquakes, structures will be evaluated in accordance with the lateral forces provisions of the Uniform Building Code.

Except as provided below, all applications for construction assistance shall be accompanied by the applicant's own separately bound environmental analysis to facilitate review and evaluation for environmental concerns prior to approval or other action on the application. An environmental analysis means a written review that lists the environmental effects that are expected to occur as a result of the proposed action, defines the current and future implications of these effects, and lists any proposed actions or safeguards to avoid or reduce any negative environmental effects. If NIH has not indicated that NEPA applies, no environmental analysis is necessary, unless, in an unusual situation, the applicant anticipates a significant environmental consequence or, following receipt of an application, an official of the NIH awarding office indicates the need for an environmental analysis. In these cases, an environmental analysis shall be provided with the application or as requested by NIH.

Section 102 of NEPA and Executive Order 11514 (March 5, 1970) provide for public comment and participation in the environmental impact review process. Applicants are required to publicly disclose the project by publication in a newspaper or other publicly available medium and to describe its environmental impact concurrent with notification to the State Single Point of Contact (see "Intergovernmental Review under Executive Order 12372" in this section). An example of a suitable disclosure statement follows:

"Notice is hereby given that the Uptown Medical School proposes to construct additional space, partially utilizing Federal funds. The proposed construction project is the addition of 2,700 square feet connected to the existing Allen Building, which is located at 5333 Main Street, Downtown, Ohio.

The Medical School has evaluated the environmental and community impact of the proposed construction. There will be construction noise and increased construction traffic during the construction period. No significant permanent environmental impacts are foreseen. All building permits and zoning approvals have been obtained. In accordance with Executive Order 11514 (March 5, 1970), which implements the National Environmental Policy Act of 1969, as amended, any individual or group may comment on, or request information concerning, the environmental implications of the proposed project. Communications should be addressed to the Office of Planning, Uptown Medical School, and be received by (date). The Federal grant application may be reviewed at the Office of the Dean, School of Medicine, 5333 Main Street, during normal working hours."

The Flood Disaster Protection Act of 1973, as amended (Public Law 93-234), provides that no Federal financial assistance to acquire, modernize, or construct property may be provided in identified flood-prone communities in the U.S. unless the community participates in the National Flood Insurance Program and flood insurance is purchased within 1 year of the identification. The flood insurance purchase requirement is applicable to both public and private applicants for NIH support. Listings of flood-prone areas that are eligible for flood insurance are published in the Federal Register by the Federal Emergency Management Agency (FEMA).

Under the provisions of section 106 of the National Historic Preservation Act, as amended, and the Historical and Archeological Preservation Act of 1960, as amended, the Secretary of the Interior has compiled a national register of sites and buildings of significant importance to U.S. history1. These requirements apply to all construction grants and may also apply to other NIH grant-supported activities, as specified by NIH.

The applicant must determine whether activities using NIH financial assistance will affect a property listed in the National Register. If a designated historic property is to be affected, the applicant must obtain clearance from the appropriate State Historic Preservation Office before submitting the application. Failure to obtain this clearance, if required, will delay NIH action on an application. The State Historic Preservation Liaison Officer or National Trust for Historic Preservation may be contacted for additional details.

Executive Order 12372, Intergovernmental Review of Federal Programs (July 14, 1982), requires consultation with State and local officials on certain proposed Federal assistance. NIH construction grants are subject to these requirements, as implemented by 45 CFR Part 100, Intergovernmental Review of Department of Health and Human Services Programs and Activities. Applicants (other than federally recognized Indian tribal governments) should contact their State Single Point of Contact (SPOC) as early as possible to alert the SPOC to the forthcoming application and to obtain necessary instructions on the State process (see application material or for a listing of the SPOCs). The SPOC is given 60 days to review the application. To accommodate this time frame and the NIH review process, an applicant must provide a copy of the application to the SPOC no later than the time the application is submitted to NIH. SPOC comments must be submitted with the application to NIH, or the application must indicate the date on which the application was provided to the SPOC for review. If SPOC comments are not submitted with the application, the applicant must provide them upon receipt and may include its reaction to the comments, or must notify NIH that no SPOC response was received.

Consistent with Executive Order 12770 (July 25, 1991), Metric Usage in Federal Government Programs, all construction projects supported by NIH grant funds shall be designed using the metric system.

The Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (the Uniform Act), 42 U.S.C. 4601 et seq., applies to all programs or projects undertaken by Federal agencies or with Federal financial assistance that cause the displacement of any person.

The HHS regulations and procedures for complying with the Uniform Act are set forth in 49 CFR Part 24. The rules at 49 CFR Part 24 provide uniform policies and procedures for the acquisition of real property, including acquisition by grantees, and require that displaced persons are treated fairly and equitably. The regulations encourage acquiring entities to negotiate with property owners in a prompt and amicable manner so that litigation can be avoided and property owners' interests are protected.

Recipients of NIH construction grants must comply with, or require their contractors to comply with, the design requirements set forth in the following:

Grantees may not advertise for bids or negotiate a contract for construction or A&R activities exceeding $500,000 until working drawings and specifications have been approved by the designated NIH official. One purpose of the NIH review is to apply program-specific design standards to the working drawings and specifications to ensure that program needs are met and the facility will suitably accommodate the activities to be carried out there. NIH will also determine whether the final plans and specifications conform to the minimum standards of construction and equipment specified in 42 CFR Part 52b, the NIH Design Policy and Guidelines issued by the Division of Engineering Services, NIH, and in the documents cited below. (The NIH Design Policy and Guidelines are available at These standards are subject to modification by the issuing organization. The grantee shall be subject to the standards in effect at the time of design or construction, as appropriate.

Where State or local codes are proposed to be used as a basis for facility design in lieu of the NIH design requirements, a prior determination must be made by NIH that the specific State or local code is equivalent to, or exceeds, NIH requirements. If State and local codes or requirements exceed the design requirements set forth in NIH regulations or incorporated in program guidance, the more stringent requirements will apply. NIH will also monitor compliance during the design phase of the project.

The Architectural Barriers Act of 1968, as amended, the Federal Property Management Regulations 101-19.6 (41 CFR 101-19.6), and the Uniform Federal Accessibility Standards issued by the General Services Administration (41 CFR 101-19.6, Appendix A) set forth requirements to make facilities accessible to, and usable by, the physically handicapped and include minimum design standards. All new facilities constructed with NIH grant support must comply with these requirements. These minimum standards must be included in the specifications for any NIH-funded new construction unless the grantee proposes to substitute standards that meet or exceed these standards. Where NIH assistance is provided for alteration or renovation (including modernization and expansion) of existing facilities, the altered facility (or part of the facility) must comply, including use of the minimum standards in the specifications. The grantee will be responsible for conducting inspections to ensure compliance with these specifications by any contractor performing construction services under the grant. See also "Public Policy Requirements and Objectives     Civil Rights     Rehabilitation Act of 1973" in Part II.

Available from the American Institute of Architects (AIA), Academy of Architecture for Health, AIA Rizzoli Catalogue Sales, 117 Post Street, San Francisco, CA 94108; telephone: 1-800-52-BOOKS; fax: (415) 984-0224.

Available from the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE), 1791 Tullie Circle, NE, Atlanta, GA 30329; telephone: (404) 636-8400 or, for order questions, 1-800-527-4723.

The Earthquake Hazards Reduction Act of 1977, as amended (Public Law 95-124), and Executive Order 12699, Seismic Safety of Federal and Federally Assisted or Regulated New Building Construction (January 5, 1990). The Executive Order requires that new federally assisted or regulated buildings are to be designed and constructed using appropriate seismic standards. State, county, or local jurisdictional building ordinances adopting and enforcing these model codes, in their entirety or without material revisions reducing the level of seismic safety, are also acceptable.

The latest editions of the model codes listed below provide a level of seismic safety considered appropriate for implementing Executive Order 12699 and apply to all federally assisted construction in the applicable geographic location.

  • Uniform Building Code, International Conference of Building Officials (ICBO) (5360 Workman Mill Road, Whittier, CA 90601-2298; telephone: (562) 699-0541 or 1-800-284-4406; fax: 1-888-329-4226).
  • 1998 Supplements to the National Building Code (1996) and National Fire Prevention Code (1996), Building Officials and Code Administrators International, Inc. (BOCA) (4051 West Fossmoor Road, Country Club Hills, IL 60478-5795; telephone: (708) 799-2300; fax: (708) 799-4981).
  • Southern Building Code Congress Standard Building Code (1997) Southern Building Code Congress International (SBCCI) (900 Montclair Road, Birmingham, AL 35213-1206; telephone: (205) 591-1853); fax: (205) 599-9845).
  • Recommended Lateral Force Requirements and Commentary (1996), Seismology Committee, Structural Engineers Association of California (available from ICBO as indicated above).

Where necessary, special structural and other features to protect life and minimize damage to facilities from tornadoes may also be required.

National Fire Protection Association (NFPA) Publication No. 101 and supplements that apply for the code classification and type of occupancy of the particular facility. This document is available from NFPA, 11 Tracy Drive, Avon, MA 2322; telephone: (617) 770-3000 or 1-800-735-0100.

National Fire Protection Association (NFPA) Publication No. 45. NPFA, 11 Tracy Drive, Avon, MA 02322; telephone: (617) 770-3000 or 1-800-735-0100.

National Research Council. National Academy Press, 2101 Constitution Avenue, NW, Lockbox 285, Washington, DC 20418; telephone: 1-800-624-6242.

National Sanitation Foundation (NSF), 3475 Plymouth Road, P.O. Box 1468, Ann Arbor, MI 48106; telephone: (313) 769-8010.

Southern Building Congress Code International (SBCCI), 900 Montclair Road, Birmingham, AL 35213-1206; telephone: (205) 591-1853; fax: (205) 599-9845.

American Conference of Government Industrial Hygienists (ACGIH), 1330 Kemper Meadow Drive, Cincinnati, OH 45240-1634; telephone: (513) 742-2020; fax: (513) 742-3355.

National Fire Protection Association (NFPA), 11 Tracy Drive, Avon, MA 02322; telephone: (617) 770-3000 or 1-800-735-0100.

National Fire Protection Association (NFPA) Publication No. 99 (at the address and telephone number above).

National Fire Protection Association (NFPA) Publication No. 70. (at the address and telephone number above).


D. Jeff Burton, American Industrial Hygiene Association (AIHA), 2700 Prosperity Avenue, Suite 250, Fairfax, VA 22031; telephone: (703) 849-8888; fax: (703) 207-3561.

Construction grants usually involve a single award, covering more than 1 year, made on the basis of an application for the entire construction project. The project period system of funding is not normally used for construction grants.

NIH construction grants generally require the grantee to share in the costs of the project. This requirement, if applicable, is stated as a matching percentage, and the grantee's match is usually at least 50 percent of the total allowable project costs. Any required non-Federal participation may be in the form of allowable costs incurred by the grantee or a contractor under the grant. Unless required by statute or regulation, NIH does not generally allow grantees to use the value of third party in-kind contributions as a source of matching. Matching funds and in-kind contributions (if authorized) must meet the allowability and documentation requirements of 45 CFR 74.23 or 92.24, as applicable. These costs/in-kind contributions are subject to the same requirements in 45 CFR Part 74 or 92, the applicable cost principles, and this policy statement, as if the grantee were spending NIH funds.

The source and amount of funds proposed by an applicant to meet a matching requirement must be identified in the application. The applicant will be required to demonstrate that the funds are committed or available prior to award. This may take the form of a certification as specified by the awarding IC. The amount of NIH (Federal) funds awarded, combined with the non-Federal share , will constitute the total approved budget as shown in the NGA. The prior approval and other dollar thresholds contained in this section are determined on the basis of the total approved budget unless otherwise specified.

Construction activity is allowable only when the program legislation includes specific authority for construction, modernization, or significant alteration and renovation of facilities, and NIH specifically authorizes such costs. The following listing indicates types of costs and activities generally allowable and unallowable under NIH construction grants. This list is not all-inclusive. Program guidelines and other terms and conditions of the award should be consulted for the specific costs allowable under a particular program or grant.

  • Acquisition and installation of fixed equipment.
  • Under programs that have statutory A&R, modernization, or facilities assistance authority, the costs of adapting any of the following interior building features to the needs of the grant-supported activity are allowable:
    • Physical characteristics of space, such as interior dimensions, surfaces, and finishes.
    • Internal environment, such as heating, ventilation, humidity, and acoustics.
    • Utility services, such as plumbing, electricity, gas, vacuum, or other laboratory piping.
    • Unfinished shell space to make it suitable for purposes other than human occupancy, such as the storage of pharmaceuticals.
    • Fixed equipment, such as casework, fume hoods, large autoclaves, or biological safety cabinets.

      A&R costs of this type associated with a building under construction or an otherwise incomplete structure may be allowed if:

    • The space is to be adapted to particular program needs,
    • It is cost-effective to perform the work while the building is being constructed or the structure is being completed, and
    • A&R costs are limited to the difference between the cost of completing the interior space for general use and the cost of adapting the space and utilities to meet specific program requirements.

      When the grantee's own construction and maintenance staff is used in carrying out the A&R (i.e., force account), the associated costs are allowable provided the grantee can document that force account is less expensive than contracting, and all costs are substantiated by appropriate receipts for the purchase of materials and certified pay records for the labor involved.

  • Architectural and engineering services.
  • Bid advertising.
  • Bid guarantees, performance and payment bonds (in accordance with 45 CFR 74.48 or 92.36(h)).
  • Contingency fund: Applicants for construction grants may include a project contingency fund in initial cost estimates to provide for unanticipated charges. These funds will be limited to 5 percent of construction and equipment costs before bids are received and must be reduced to 2 percent after a construction contract has been awarded.
  • Filing fees for recording the Notice of Federal Interest (see "Real Property Management Standards     Notice of Federal Interest" in this section).
  • Inspection fees.
  • Insurance: Costs of title insurance, physical destruction insurance, and liability insurance are generally allowable. Physical destruction and liability insurance are usually treated as F&A costs but may be treated as direct costs in accordance with the established policy of the grantee, consistently applied regardless of the source of funds. Title insurance, if required, may be charged to the grant in proportion to the amount of NIH (Federal) participation in the property (see "Real Property Management Standards     Insurance Requirements" in this section).
  • Legal fees related to obtaining a legal opinion regarding title to site.
  • Preaward costs: Costs incurred before an award for architect's fees and consultant's fees necessary to the planning and design of the project are allowable if the project is subsequently approved and funded.
  • Project management.
  • Relocation expenses.
  • Sidewalks necessary for use of facility.
  • Site survey and soil investigation.
  • Site clearance (as long as reflected in bid).

  • Bonus payments to contractors, including guaranteed maximum price contractors.
  • Construction of "shelled" space designed for completion at a future date.
  • Consultant fees not related to actual construction.
  • Damage judgment suits.
  • Equipment purchased through a conditional sales contract.
  • Fund-raising expenses.
  • Land acquisition.
  • Legal services not related to site acquisition.
  • Movable equipment.
  • Off-site improvements.
  • Relocation of utilities.

Construction activity is usually carried out through a contract(s) under the grant. Therefore, the circumstances of the procurement are critical to the successful completion of the grant-supported project. All construction work must be procured by the methods described in 45 CFR 74.40 through 74.48 or in 92.36, as applicable. Normally, this means a prime construction contract awarded following a competitive sealed-bidding (previously "formal advertising") process resulting in a lump sum, fixed-price contract. NIH may authorize other procurement methods and other types of contracts when sealed bidding or a fully competitive negotiated process is impractical. The specific requirements for contracting for construction management services and design-build services are described below.

In general, grantees must:

  • Ensure that all qualified contractors are given an opportunity to bid and have their bids fairly considered.
  • Guarantee, insofar as possible, that the contract(s) will result in the completion of a facility (ready for occupancy) that conforms to the design and specifications approved by the NIH awarding office (or any appropriate modification thereof with NIH awarding office approval, as required) at a cost that is within the owner's ability to pay (the term "owner" refers to the legal entity that holds (or will hold) title to the property on which the grant-supported construction is performed and is generally the applicant or grantee).
  • Obtain NIH awarding office approval of plans and specifications both before bids or proposals are solicited and before the award of a prime construction contract. The procurement methods to be employed must be reviewed and approved by the NIH awarding office. The grantee (owner) is responsible for ensuring that the project is constructed to completion in accordance with the approved plans or specifications and for obtaining necessary approvals for changes as specified in this section.
  • The grantee (owner), including the firms acting for it in a professional capacity, must take adequate steps to ensure that the total cost of all contracts, i.e., total cost of construction, awarded under a project will be within the amount of funds available for the project. This can be accomplished by accurate price estimating and/or the use of bid alternates. A precise description of the scope of work, specifications, materials, and construction techniques in the invitation for bids will facilitate accurate cost estimating by both the bidder and the grantee's (owner's) professional representatives. The description of work becomes especially important when multiple contracts will be let in support of the same project, since each contractor must know exactly what is involved in the portions of the job on which he or she is bidding. Invitations for bids must stipulate a time for completion of the project, expressed either in calendar days or as a fixed date, for each prime contract to be awarded under the project.

Where more than one NIH or HHS program will support a construction project, or where the NIH-supported project is less than the entire facility or construction to be bid, the grantee must obtain bids that provide, to the maximum extent possible, the costs for that portion of the total job that will be financed by NIH funds and any required grantee matching. This may be done by (1) showing the cost for each building or site in the project, if it consists of more than one building or construction site and can be divided for bidding and construction purposes, or (2) identifying, to the extent possible, or prorating the applicable costs when the project is a single site or contains common space and cannot be divided for bidding and construction purposes.

Where practical, the grantee (owner) may request, in the invitation for bids, alternates to the base bid that are keyed to specified and explicitly stated changes in the project scope, materials, or construction techniques. Alternates may be used when it is anticipated that the amount of the low bid will exceed the amount of funds available to the owner to award a contract, and the grantee (owner) must make adjustments to the project to reduce costs in order to award a contract within the funds available. "Add" alternates will make it possible to incorporate necessary features that otherwise would not have been included in the project. Alternates that are selected may be included in determining the low aggregate bid. The grantee must identify, in its bid schedule, whether the low bid will be determined inclusive or exclusive of alternates. If inclusive, then alternates shall be awarded in order, up to the amount of funds available. For example, Alternate #1 will be awarded first, Alternate #2 second, Alternate #3 third, etc. No alternate may be awarded out of sequence. If all bids exceed the funds available even after the steps described above have been taken, the grantee (owner) may:

  • Decline to award a contract and instead issue a revised invitation for bids containing changes in specifications or other factors affecting price that have been approved by the NIH awarding office.
  • Negotiate with the low bidder (this is an exception to sealed bidding), or, if that bidder should refuse, in writing, to negotiate, negotiate with the next lowest bidder. Any changes in design and specifications resulting from such negotiations must be approved by the NIH awarding office. If efforts to negotiate are unsuccessful, all bids shall be canceled and the project shall be rebid.
  • If a construction management firm is currently employed by the grantee (owner), authorize that firm to perform the construction work after obtaining NIH awarding office prior approval. The price for the work involved must not exceed the line-item prices stipulated in the construction management contract (guaranteed maximum price) as approved by the NIH awarding office (see " Construction Management Services" in this section for requirements for a construction management agreement).
  • Enter into a design-build contract (see "Design-Build Services" in this section) for a functionally equivalent facility.

Construction management services are management services that may be procured on a negotiated basis rather than by sealed bidding. These services include technical consultation during the design stage of a project and organization and direction of construction activities during the construction phase. In the negotiated procurement process, the request for proposal (RFP) shall be based on the technical qualifications of the offeror (possibly 75 percent of the evaluated score) and the business (cost) aspects of the proposal (possibly 25 percent of the evaluated score). The award shall be based on a combination of both the technical and business evaluations. The basis of the award, i.e., whether cost or technical qualifications will weigh more heavily in the award decision, must be stated in the RFP. The services of construction managers may also be procured by sealed bidding, in those cases where State or local governments prohibit the procurement of construction management services on a negotiated basis.

Contracting for construction work on a project covered by a construction management agreement is subject to all of the requirements otherwise applicable to the solicitation and award of contracts, except that bids may be obtained by prequalification and selective solicitation. When prequalification and selective solicitation are used, the construction manager must (1) prequalify all firms that respond to the announcement and are determined to meet the prequalification standards; (2) establish bidders lists for each of the invitations for bids, including, at least, all firms qualified in (1), and possibly including other known qualified firms; (3) solicit, in writing, bids from all firms on the bidders list; (4) consider bids from any contractor who requests permission to bid and who is determined by the grantee (owner) to meet the prequalification standards; and (5) prepare a bid abstract.

Guaranteed maximum price (GMP) is not the preferred method of award for construction management services under NIH grants. The grantee shall obtain NIH prior written approval to use this method. If use of this method is approved, the grantee must comply with the following requirements:

  • The construction management contract must place total financial responsibility on the construction manager to complete construction of the project at or below the GMP. If the contract exceeds $100,000, the construction manager shall be required to comply with the bid guarantee and bonding requirements as specified in 45 CFR 74.48(c) or 92.36(h).
  • The GMP must be obtained from the construction manager before NIH will authorize the solicitation and award of the first construction contract. This requirement shall apply whether or not phased construction techniques are employed. Each portion of the work for which a separate contract is expected to be let shall be separately priced as an individual line item in the GMP contract.

The grantee shall transmit all GMP bids to the IC GMO, with a recommendation for award to the lowest responsive responsible bidder.

After the competitive award of a GMP contract, the following shall apply:

  • All GMP subcontracts shall be bid on the open market, and there must be at least three bidders to allow for an award. In those instances where three bids cannot be obtained, the grantee must submit, in writing, to the IC GMO or other designated official, a detailed explanation of why the GMP contractor is unable to comply, along with supporting documentation for NIH consideration and approval or other action.
  • All GMP bids must be completely itemized by trade to include a separation of labor and materials, all markups, and no contingency other than that which will cover change order items as approved by the grantee.
  • All costs lower than the GMP line item bid as approved by the NIH awarding office shall be refunded or credited to the grantee by the contractor and by the grantee to NIH. All costs in excess of the GMP after all items have been bid are the responsibility of the GMP contractor.
  • All subcontract prices shall be approved by the NIH awarding office prior to individual awards. The awards shall be made to the lowest-priced responsible, responsive bidders.

In the event a contract with a GMP clause was awarded to a construction management firm prior to the NIH grant award, the firm's subcontractors must compete in an open competition for the subcontract work under the GMP contract. The GMP contractor must make available all pertinent information to the public that could influence bids and interpretation of the design intent.

Design-Build Services

In design-build contracting, construction firms respond to an RFP by submitting building designs to meet the grantee's (owner's) performance requirements within a guaranteed maximum price (see GMP requirements under "Construction Management Services" in this section) that covers all architectural, engineering, and construction services required. The design-build firm must be selected in a manner that will allow maximum feasible competition. The selection must be accomplished by a process that includes public announcement of RFPs, provided that at least one form of the announcement receives nationwide distribution; consideration of all proposals from firms that are determined to be qualified; and selection based on the firms' qualifications, responsiveness to the criteria in the RFP, and cost.

Because of the nature of design-build contracting, the following departures from sealed bidding are authorized:

  • Technical considerations as well as cost may be treated as competitive factors;
  • The grantee (owner) may negotiate cost or design with one or any number of firms.

On all design-build projects, the owner must ensure a firm total cost by including in the design-build contract a provision that extra costs resulting from errors or omissions in the drawings or estimates will be the design-build firm's responsibility.

Labor standards and equal employment opportunity requirements for federally assisted construction must be specified in the information provided to bidders on construction contracts under NIH grants and must be included in the contract documents for all such projects (see 45 CFR Part 74, Appendix A, and 45 CFR 92.36(i)). NIH construction grants are not subject to the requirements of the Davis-Bacon Act or the Copeland "Anti-Kickback" Act.

Construction contracts (and subcontracts) awarded under NIH grants are subject to the requirements of Executive Order 11246 (September 24, 1965), as amended, as implemented in 41 CFR Part 60-1 by the Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor. The grantee is required to include the "Equal Opportunity Clause" at 41 CFR 60-1.4(b) in any construction contract exceeding $10,000 under the grant. The contractor must be directed to include this clause in any applicable subcontracts.

In addition, grantees and construction contractors under NIH grants are required to comply with the solicitation and contract requirements for affirmative action specified in 41 CFR Part 60-4 for contracts that will exceed $10,000 in designated geographical areas. These requirements are specified in the "Notice of Requirement for Affirmative Action To Ensure Equal Employment Opportunity (Executive Order 11246)" and the "Standard Federal Equal Employment Opportunity Construction Contract Specifications (Executive Order 11246)."

The OFCCP regulations also require that the grantee notify the applicable OFCCP regional, area, or field office when it expects to award a construction contract(s) that will exceed $10,000.

Further information about these requirements and the full text of these regulations is available at

Pursuant to 41 CFR 60-1.8, the grantee shall require each prospective construction contractor for a contract that will exceed $10,000 to submit a certification that the contractor does not, and will not, maintain any facilities it provides for its employees in a segregated manner, or permit its employees to perform their services at any location, under the contractor's control, where segregated facilities are maintained, and the contractor will obtain a similar certification prior to the award of any covered subcontract.

Construction contractors and subcontractors with contracts/subcontracts exceeding $100,000 under NIH grants are subject to the requirements of the Contract Work Hours and Safety Standards Act, 40 U.S.C. 327-333, concerning the payment of overtime and the maintenance of healthful and safe working conditions.

Wages paid any laborer or mechanic employed by the contractor or subcontractor must be computed on the basis of a standard workweek of 40 hours. For all work in excess of the standard workweek, mechanics and laborers shall be compensated at a rate not less than one-and-a-half times the basic rate of pay. If this requirement is violated, the contractor or subcontractor is liable to the employee for the unpaid wages and may be liable to the Government for liquidated damages. NIH or the grantee may withhold otherwise payable funds to satisfy any such liability. The statute also specifies penalties for intentional violation of these requirements.

Further, no contractor or subcontractor under an NIH grant shall require any laborer or mechanic employed in the performance of the contract to work in surroundings or under working conditions that are unsanitary, hazardous, or dangerous to an individual's health or safety, pursuant to standards issued by the Secretary of Labor. Violation of these requirements may be cause for debarment from future Federal contracts or financial assistance.

Invitations for bids must stipulate a time for completion of the project, expressed either in calendar days or as a fixed date, for each prime contract to be awarded under the project.

At the option of the grantee (owner), a liquidated damages provision may be included in the construction contract, allowing for assessment of damages when the contractor has not completed construction by the date specified in the contract. Liquidated damages must be real and justified and must be approved by NIH prior to solicitation. Where there is an assessment of damages, any amounts paid belong to the owner.

If it is discovered, either during or after the period of performance of an NIH-assisted construction contract, that an employee is entitled to wages but cannot be located for the purposes of payment (or for some reason refuses to accept payment), the grantee may eventually have to repay the Federal Government. Therefore, NIH suggests that the contractor be required to turn over any unclaimed wages to the grantee.

The grantee should notify the GMO that an escrow account has been established in the affected employee's name and should maintain the account for a period of either 2 years following the completion of the contract or such longer period as may be required by State or local law. Upon the expiration of this period, any amounts still unclaimed will be disbursed by refunding to NIH either the entire amount, if the construction project was 100 percent funded by NIH, or an amount representing the percentage of NIH participation in the project. In the event the project was funded by more than one NIH or HHS program at differing rates, the percentage on which the refund is based should be an average percentage calculated by weighting each program's rate of participation by the dollar amount of that program's contribution.

If the contractor has made a reasonable effort to locate the employee by having mail forwarded and contacting the employee's union, the grantee need not repeat such attempts. If there is reason to believe that the contractor's efforts to locate employees that are due wages were not thorough, the grantee should attempt to locate the employees. Doing so will reduce the likelihood of future claims against the grantee.

If any wages held in escrow are paid to an employee or an employee's legal representative during the period in which the account is maintained, a complete report must be made to the IC GMO when the account is closed.

Grantees (owners) must obtain written prior approval from the IC GMO for grantee-initiated changes in project or budget as follows:

  • A revision that would result in a change in scope or objectives of the project, including proposed modifications that would materially alter the costs of the project, including unit costs, space utilization, or financial layout, and resulting changes in the previously approved solicitation or contract.
  • A revision that would increase the amount of Federal funds needed to complete the project.
  • Any other applicable change as specified in "Administrative Requirements     Changes in Project and Budget". Construction grants are not eligible for expanded authorities.

The request for approval shall include sufficient information to allow NIH review of the circumstances and need for the proposed change. After receipt of written prior approval from the IC GMO, the grantee may authorize the approved modification(s) of the construction contract. Other less-substantive modifications to construction contracts may be accomplished without the prior approval of the NIH awarding office. However, copies of all change orders to construction contracts must be retained as grant-related records (see "Administrative Requirements     Monitoring     Record Retention and Access").

Two copies of each of the following documents are to be submitted with each request for approval of A&R costs greater than $300,000, but not more than $500,000, (whether proposed in the application or as a postaward rebudgeting request):

  • A single line drawing of the existing space and proposed alterations.
  • A narrative description of the proposed functional utilization of the space and equipment requirements prepared by the program and administrative managers who will use and be responsible for the working space and, when appropriate, with input from architectural and engineering advisors. Final drawings and specifications will be based on this description.
  • The description shall include a detailed explanation of the need, character, and extent of the functions to be housed in the space proposed for A&R, using the following headings, as appropriate:
    • General information,
    • Description of the functions to be performed in the space,
    • Space schedule (detailed description of floor space),
    • List of fixed equipment proposed for the facility,
    • Cost estimate (see sample format in Exhibit 1),
    • Special design problems,
    • Description of the existing and proposed utility systems for the modified space,
    • Description of plans to provide accessibility for the physicallyhandicapped,
    • Provisions for meeting the requirements of the Life SafetyCode,
    • The length of the property lease if the space is rented, and
    • Other information required by program legislation or regulations.

When the proposed alteration is to occur in a building that is under construction or in an incomplete structure, two copies of the following documentation must also be provided:

  • A detailed justification for the need to perform the work before the building is completed,
  • A cost comparison between doing the work before and after the building is completed, and
  • A description of other specific benefits to be gained by doing the work before the building is completed.

Applicants/grantees undertaking A&R projects that will require NIH funding of more than $500,000 are subject to the review, approval and documentation requirements included or referenced in this section for construction grants.

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