Part II: Terms and Conditions of NIH Grant Awards

Subpart A: General

Following the peer review process, applications that an IC may fund are reviewed for a number of other considerations. These include, as applicable, alignment with NIH’s funding principles, review of the project budget, assessment of the applicant’s management systems, determination of applicant eligibility, and compliance with public policy requirements. The applicant may be asked to submit additional information (such as other support or verification of IACUC review) or to undertake certain activities (such as negotiation of an F&A cost rate) in anticipation of an award. However, such requests by NIH do not guarantee that an award will be made. Following review of all applicable information, the IC will determine whether an award can be made, if special conditions are required, and what level of funding is appropriate.

Although these reviews and determinations occur before NIH makes a new award, grantees must continue to comply with eligibility and public policy requirements and maintain adequate management systems throughout the period of support. The pre-award process for non-competing continuation awards is a streamlined version of this process, including an assessment of progress (see “Administrative Requirements—Monitoring—Reporting—Non-Competing Grant Progress Reports”).

Just-in-Time Procedures

NIH uses just-in-time procedures for certain programs and award mechanisms. These procedures call for limited information (e.g., a budget justification and a biographical sketch) to be submitted with investigator-initiated applications and allow for a possible NIH request for additional information, including information concerning other support, when the application is under consideration for funding. Just-in-time procedures also allow an applicant to defer certification of IRB approval of the project’s proposed use of human subjects, verification of IACUC approval of the project’s proposed use of live vertebrate animals, and evidence of compliance with the education in the protection of human research participants requirement until after completion of the peer review and just prior to funding. (Applications in response to RFAs also may be subject to these procedures. The RFA will specify the timing and nature of required submissions.)

Information on other support will be requested as part of the just-in-time procedures. IC scientific program and grants management staff will review this information before award to ensure the following:

l      Sufficient levels of effort are committed to the project.

l      There is no scientific, budgetary, or commitment overlap.

Ø      Scientific overlap occurs when (1) substantially the same research is proposed in more than one application or is submitted to two or more funding sources for review and funding consideration or (2) a specific research objective and the research design for accomplishing the objective are the same or closely related in two or more applications or awards, regardless of the funding source.

Ø      Budgetary overlap occurs when duplicate or equivalent budgetary items (e.g., equipment, salaries) are requested in an application but already are provided by another source.

Ø      Commitment overlap occurs when an individual’s time commitment exceeds 100 percent, whether or not salary support is requested in the application.

Overlap, whether scientific, budgetary, or commitment of an individual’s effort greater than 100 percent, is not permitted. Any overlap will be resolved by the IC with the applicant and the PI at the time of award.

l      Only funds necessary to the approved project are included in the award.

For modular applications, the applicant is not required to submit detailed budget information in the application. In lieu of the standard budget forms, the applicant requests total direct costs for each year of support requested. The request must be accompanied by budget narrative for all personnel (by position, title, and level of effort), including consultants and “to be appointed” positions, and, when applicable, for consortium/contractual costs. NIH will request additional budget information in exceptional circumstances only. Other support information will be requested only for modular applications likely to result in an award. (See Subpart B of this part for more detailed coverage of modular applications and awards.)

Funding Principles

The amount of NIH funding is based on reasonable and allowable costs consistent with the principles of sound cost management, considering IC priorities (e.g., program relevance), constraints on the growth of average grant costs, and available funds. NIH also has adopted the following core funding principles specifically for research project grants:

l      NIH generally will award non-competing continuation research project grants at committed levels.

l      When determining commitments for future years, NIH will consider stability of support for investigators, optimum portfolio balance, and opportunities to address emerging problems.

NIH awards may be made only to eligible applicants. Continued funding is dependent on the grantee’s maintaining eligibility. In general, domestic or foreign, public or private, non-profit or for-profit organizations are eligible to receive NIH grants. However, on the basis of statutory, regulatory, or published policy limitations, under certain programs or types of awards, NIH may limit eligibility to, or exclude from eligibility, classes or types of entities. Examples are limitations on the participation of foreign entities, and programs under which only small businesses are eligible applicants. The determination of eligibility includes verification of the applicant’s status. The applicant may be required to provide proof of its status by submitting documentation; otherwise the AOO’s signature on the application certifies that the applicant is eligible to apply for and receive an award (e.g., a small business applying under the SBIR or STTR programs).

In addition to reviewing organizational eligibility, NIH may consider other factors relating to the applicant’s ability to responsibly handle and account for Federal funds and to carry out the project. These factors include the applicant’s intended role in the project, the location where the project will be performed, the role of the PI in the project, and the PI’s employment and citizenship status. Although some of these same considerations are reviewed as part of the peer review, NIH’s concern at this stage in the process is making an award to a legal entity that will be accountable for both the performance of the approved project or activity and the appropriate expenditure of funds. NIH will not make an award to an applicant that does not have a substantive role in the project and would simply serve as a conduit for another entity.

The GMO also will verify whether the applicant, proposed PI, or other key personnel are debarred or suspended from participation in Federal assistance programs (see “Public Policy Requirements and Objectives—Ethical and Safe Conduct in Science and Organizational Operations” for certification requirements).

Generally, PIs and other personnel supported by NIH research grants are not required to be U.S. citizens. However, some NIH programs/mechanisms have a citizenship requirement. Any citizenship requirement will be stated in the PA or RFA. In these cases, individuals are required to have the appropriate citizenship status when the award is made rather than when the application is submitted. For example, under K awards or Kirschstein-NRSA individual fellowships, the individual to be trained must be a citizen or a non-citizen national of the United States or have been lawfully admitted for permanent residence at the time of award.

NIH requires the applicant to determine that individuals’ visas will allow them to remain in this country long enough for them to be productive on the research project, but NIH does not provide guidance on or assess the different types of visas. NIH expects grantee organizations to have policies, consistently applied regardless of the source of funds, to address this area. If a grant is awarded and an individual’s visa will not allow a long enough stay to be productive on the project, NIH may terminate the grant (see “Administrative Requirements—Changes in Project and Budget” and “Administrative Requirements—Enforcement Actions—Suspension, Termination, and Withholding of Support”).

The eligibility requirements for trainees and additional eligibility requirements for fellows are addressed in “Ruth L. Kirschstein National Research Service Awards” in Subpart B of this part of the NIHGPS.

In the post-award phase, NIH monitors changes in grantee and project status to ensure they meet legal and programmatic requirements and takes actions necessary to protect the Federal government’s interests.

The GMO will ensure that a cost analysis is performed on any application that requires a detailed budget. Cost analysis involves obtaining cost breakdowns, validating cost data, evaluating specific elements of cost, and examining data to determine the necessity for, and the reasonableness and allowability of, the costs included in the application budget. The extent of cost analysis will depend on the type of funding instrument and award mechanism, the complexity of the project, prior experience with the applicant, and other factors. Information on the applicable cost principles and on allowable and unallowable costs under NIH grants is provided in “Cost Considerations.”

In addition to considering the specific information provided in the application, the GMO determines the adequacy of the applicant’s financial and business management systems that will support the expenditure of and accountability for NIH funds. When an applicant has had no prior Federal grants or cost-reimbursement contracts, the GMO may review the applicant’s financial management and other management systems before award, or within a reasonable time after award, to determine their adequacy and acceptability. For an applicant with prior NIH or other Federal cost-reimbursement awards, the GMO may review recent audit reports and other available information to determine whether the applicant’s management systems meet the standards established in 45 CFR Part 74 or 45 CFR Part 92, as appropriate. The GMO will advise the applicant if additional information is required. On the basis of the review results, the GMO will determine the need for any corrective action and may impose special conditions on the award.

The remainder of Part II serves as the terms and conditions of NIH grants and cooperative agreements and is incorporated by reference in all NIH grant and cooperative agreement awards. Subpart A includes those terms and conditions that apply, in general, to NIH awards. Subpart B either expands on Subpart A coverage or specifies additional or alternate terms and conditions for particular types of awards, recipients, or activities.

These terms and conditions are not intended to be all-inclusive. In addition to the requirements in the NIHGPS, some of which repeat or highlight requirements found in the following, NIH grants are subject to all of the applicable requirements of the following:

l      Authorizing program legislation

l      Program regulations, including those in 42 CFR Part 52

l      Other statutory requirements, such as those included in appropriations acts

l      HHS requirements in 45 CFR Part 74 or 45 CFR Part 92, as appropriate for the type of recipient organization and the type of activity (e.g., research).

Notice of requirements not specified in the NIHGPS generally will be provided in the NGA, but such notice is not required for the award to be subject to the requirements of pertinent statutes and regulations. An individual award also may contain award-specific terms and conditions. For example, the GMO may include terms or conditions necessary to address concerns about an applicant’s management systems.

Program and administrative policies and the terms and conditions of individual awards are intended to supplement, rather than substitute for, governing statutory and regulatory requirements. Thus, the requirements of the NIHGPS apply in addition to governing statutory and regulatory requirements not cited herein, and award-specific terms apply in addition to the requirements of the NIHGPS.

This NIHGPS is written in “plain language” and is meant to be an aid to the interpretation of statutory and regulatory requirements. These terms and conditions are intended to be compliant with governing statutes and the requirements of 45 CFR Parts 74 and 92, as modified by previously approved waivers and deviations. However, in the case of a conflict, the statutes and regulations govern.

If there is a perceived conflict between or among these three categories of requirements—statutory and regulatory requirements, the terms and conditions in the NIHGPS, and award-specific terms and conditions—or if the grantee has other questions concerning award terms and conditions, the grantee should request written clarification from the GMO. This may be done at any time; however, if the inclusion of the term or condition would cause the grantee not to accept the award or to be unable to comply, the question should be raised before funds are requested from the HHS payment system. By drawing funds from the HHS payment system, the grantee agrees to the terms and conditions of the award.

This section addresses public policy requirements and objectives applicable to NIH awards. The term “public policy” indicates that the requirement is based on social, economic, or other objectives or considerations that may be attached to the expenditure of Federal funds by grantees, consortium participants, and contractors, in general, or may relate to the expenditure of Federal funds for research or other specified activities. In addition to cross-cutting requirements that some or all Federal agencies must apply to their grant programs, NIH grantees are subject to requirements contained in HHS’s annual appropriations acts that apply to the use of NIH grant funds, applicable provisions in other Federal agencies’ appropriations acts, including Treasury, and other Federal statutes. Some of those requirements are included here since they have been included in the appropriations acts for several years without change, but those requirements may be changed or other requirements may be added in the future.

NIH intends to uphold high ethical, health, and safety standards in both the conduct of the research it funds and the expenditure of public funds by its grantees. The public policy requirements specified in this section set many of those standards. The signature of the AOO on the application certifies that the organization complies, or intends to comply, with all applicable certifications and assurances referenced (and, in some cases, included) in the application instructions.

Instructions for applications submitted on the PHS 398 include the following topics, which also are discussed in this section of the NIHGPS:

l      Debarment and Suspension (specific certification language included in application instructions)

l      Drug-Free Workplace

l      Lobbying (specific certification language included in application instructions)

l      Financial Conflict of Interest

l      Research Misconduct

l      Nondelinquency on Federal Debt

l      Human Embryonic Stem Cell Research

l      Human Subjects

l      Research on Transplantation of Fetal Tissue

l      Recombinant DNA Molecules and Human Gene Transfer Research

l      Vertebrate Animals

l      Women and Minority Inclusion Policy

l      Inclusion of Children Policy

l      Age Discrimination

l      Civil Rights

l      Sex Discrimination

l      Handicapped Individuals.

Public policy requirements under Kirschstein-NRSA individual fellowships are specified in the application instructions for the PHS 416-1 and are discussed in “Ruth L. Kirschstein National Research Service Awards—Individual Fellowships” in Subpart B of this part.

As noted in this section, some certifications and assurances may require submission of a separate document (e.g., human subjects assurance, IRB certification, civil rights assurance). Applicants and grantees should take particular note of these requirements (for example, see “Human Subjects” and “Civil Rights”), the absence or inadequacy of which may delay an award or make an applicant ineligible for award.

The grantee is responsible for establishing and maintaining the necessary processes to monitor its compliance and that of its employees, consortium participants, and contractors with these requirements; taking appropriate action to meet the stated objectives; and informing NIH of any problems or concerns.

If a grant is awarded on the basis of false or misrepresented information, or if a grantee does not comply with these public policy requirements, NIH may take any necessary and appropriate action, including using any of the remedies described in “Administrative Requirements—Enforcement Actions” or other available legal remedies.

Exhibit 2 contains information to help the grantee determine what public policy requirements and objectives apply to its activities and whether a requirement should be included in a consortium agreement or a contract for routine goods or services under the grant (see “Glossary” for definitions). The exhibit distinguishes between these types of transactions under a grant and indicates (by “Y” for Yes or “NA” for Not Applicable) whether a given public policy requirement normally would apply. However, even if the exhibit indicates that a requirement is not applicable that public policy requirement potentially could be applicable in a specific situation, e.g., if a contract under a grant involves research activity. Therefore, this exhibit should be used as general guidance only. The grantee should consult the terms and conditions of its award and should contact the GMO if it has any question concerning the applicability of a particular public policy requirement or objective.

Exhibit 2 also indicates where, in the NIHGPS, the individual public policy requirements and objectives are covered in more detail. The grantee should consult the governing statute, regulations, or other cited policies or documents for complete information.

NIH grants are subject to requirements intended to ensure that recipient organizations handle their Federal awards responsibly. Grantees are required to adopt and enforce policies that minimize the opportunity for improper financial gain on the part of the organization, its employees, and organizations and individuals with whom they may collaborate, and that limit the potential for research results to be tainted by possible personal financial or other gain.

In addition, NIH grantees are expected to provide safe and healthful working conditions for their employees and foster work environments conducive to high-quality research.

NIH requires grantees to establish safeguards to prevent employees, consultants, members of governing bodies, and others who may be involved in grant-supported activities from using their positions for purposes that are, or give the appearance of being, motivated by a desire for private financial gain for themselves or others, such as those with whom they have family, business, or other ties. These safeguards must be reflected in written standards of conduct. Except as provided below, NIH does not require a grantee to establish separate standards of conduct if it maintains such standards for its non-grant-supported activities, as long as those standards are consistent with State and local laws and cover, at a minimum, expected conduct in regard to financial interests, gifts, gratuities and favors, nepotism, and such other areas as political participation and bribery. The standards also must do the following:

l      Address the conditions under which outside activities, relationships, or financial interests are proper or improper.

l      Provide for advance notification of outside activities, relationships, or financial interests to a responsible organizational official.

l      Include a process for notification and review by the responsible official of potential or actual violations of the standards.

l      Specify the nature of penalties that the grantee may impose. These penalties would be in addition to any penalties that NIH or a cognizant Federal agency may impose for infractions that also violate the terms or conditions of award.

The grantee is not required to submit its general standards of conduct to NIH for review or approval. However, a copy must be made available to each of its officers, each employee and consultant working on the grant-supported project or activity, each member of the governing board, if applicable, and, upon request, to NIH. The grantee is responsible for enforcing its standards of conduct, taking appropriate action on individual infractions, and, in the case of financial conflict of interest, informing the IC CGMO if the infraction is related to an NIH award. (A listing of the NIH CGMOs is available at http://grants.nih.gov/grants/stafflist_gmos.htm.) If a suspension or separation action is taken by a grantee against a PI or other key personnel under an NIH grant, the grantee must request prior approval of the proposed replacement as specified in “Administrative Requirements—Changes in Project and Budget—Prior-Approval Requirements.”

Financial Conflict of Interest

NIH requires grantees and investigators to comply with the requirements of 42 CFR Part 50, Subpart F, “Responsibility of Applicants for Promoting Objectivity in Research for Which PHS Funding is Sought.” That subpart promotes objectivity in research by establishing standards to ensure that the design, conduct, and reporting of research funded under PHS grants or cooperative agreements will not be biased by any conflicting financial interest of an investigator. These requirements do not apply to Phase I of the SBIR/STTR programs.

The signature of the AOO on the face page of the application serves as certification of compliance with the requirements of 42 CFR Part 50, Subpart F. Under those requirements the organization must do the following:

l      Have a written and enforced administrative process to identify and manage, reduce, or eliminate conflicting financial interests with respect to research projects for which NIH funding is sought

l      Before spending any NIH funds awarded under a new award, inform the CGMO of the existence of any conflicting financial interests it identified of the type covered by 42 CFR 50.605

l      When informing the CGMO that a financial conflict of interest has been identified, ensure that the interest has been addressed in accordance with the regulations by indicating whether the conflict has either been managed, reduced, or eliminated

l      Continue to make similar reports on subsequently identified conflicts within 60 days of identifying them

l      Make additional information available to NIH, upon request, as to how it handled conflicting interests in accordance with the regulations.

As described in the regulations, examples of how financial conflicts of interest might be addressed include the following:

l      Public disclosure of significant financial interests

l      Monitoring of research by independent reviewers

l      Modification of the research plan

l      Disqualification from participation in all or a portion of the research funded by PHS

l      Divestiture of significant financial interests

l      Severance of relationships that create actual or potential conflicts.

Grantees also must ensure that consortium agreements address whether the consortium participant’s employees will be subject to the financial conflict of interest requirements of the consortium participant or to those of the grantee (see “Consortium Agreements” in Subpart B of this part).

Some IRBs also consider investigator financial conflict of interest in their deliberations, although they are not required to do so (see “Public Policy Requirements and Objectives—Requirements Affecting the Rights and Welfare of Individuals as Research Subjects, Patients, or Recipients of Services—Human Subjects”).

Following are some strategies used by IRBs:

l      Make IRB members aware of the organization’s conflict of interest policies and procedures.

l      Include a statement in the informed consent form that all clinical investigators comply with the organizational guidelines.

l      Ask investigators to complete a short questionnaire about whether they—or any person responsible for the design, conduct, or reporting of research—have an economic interest in or act as an officer or a director of any outside entity whose financial interest could reasonably appear to be affected by the research.

l      Instruct IRB members during their orientation on how to identify and respond to a perceived financial, academic, or other conflict of interest.

Suggestions for grantees to consider when implementing the requirements of this regulation are available in the NIH publication, Financial Conflict of Interest–Objectivity in Research: Institutional Policy Review, available on the NIH website at http://grants.nih.gov/grants/policy/coi/nih_review.htm.

HHS regulations published in 45 CFR Part 76 implement the government-wide debarment and suspension system for HHS’ non-procurement transactions. “Non-procurement transactions” include grants, cooperative agreements, scholarships, fellowships, and loans. Accordingly, applicants for NIH grants (“primary covered transactions”), including applicants for Kirschstein-NRSA individual fellowships, are required to certify^[6] that, to the best of their knowledge and belief, they and their principals (including PIs and other key personnel)

l      are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency;

l      have not, within the 3-year period preceding the application, been convicted of, or had a civil judgment rendered against them for

Ø      committing fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction;

Ø      violating a Federal or State antitrust statute;

Ø      embezzlement, theft, forgery, bribery, falsification or destruction of records; or

Ø