NIH Grants Policy Statement
Revised October 2017. This document applies to all NIH grants and cooperative agreements for budget periods beginning on or after October 1, 2017.

10.1 General

The chapter uses the following definitions:

To provide support for these types of activities, an IC must have specific statutory authority allowing construction or modernization. Even if NIH has this authority, a recipient may not incur costs for any of these activities unless NIH specifically authorizes such costs.

NIH generally solicits applications, and makes awards, for construction or modernization under grants or cooperative agreements specifically for that purpose. The recipient retains the primary responsibility for the project as a whole, including all phases of design and construction. When needed, NIH staff provides technical assistance in designing, constructing, and commissioning the facility and coordinating collaboration with other IC-funded construction activities. Under cooperative agreements, there is substantial scientific/programmatic staff involvement during the performance of the activity.

In addition, an applicant/recipient may propose to undertake an A&R project(s) under a grant whose primary purpose is other than construction or modernization. NIH characterizes these A&R projects as "minor" or "major," depending on the type of activity proposed and the cost of the project. An A&R project under a grant whose purpose is other than construction or modernization that costs $500,000 or less in direct costs is generally treated as minor A&R. If a recipient believes a post-award change that would result in an A&R project of $500,000 or less in direct costs meets the definition of construction, it should notify the GMO in order for the IC to determine whether it is construction and whether the IC has the necessary statutory authority. The requirements that apply to minor A&R projects are addressed in IIA. Minor A&R projects are not required to satisfy all of the requirements of this chapter. Major A&R projects are subject to the requirements of this chapter as indicated.

Except where indicated, the requirements in this chapter apply to NIH grant-supported construction or modernization in lieu of the requirements in IIA. For major A&R projects, this chapter applies to the A&R activity only and IIA pertains to the other grant-supported activities under the same award, if any. However, there may be areas of overlap (e.g., a rebudgeting action that causes a minor A&R project to become a major A&R project). See Exhibit 11 for a summary of the requirements specified in this chapter and their potential applicability to construction, modernization, or major A&R.

This chapter addresses all aspects of grant-supported construction, modernization, and major A&R from application through closeout. Due to the size and complexity of these activities, this chapter describes in detail requirements and recipient responsibilities related to procurement of construction services (see Procurement Requirements for Construction Services below). Applicants and recipients also should refer to the construction grant program regulations (42 CFR 52b), which, by their terms, apply to construction and modernization grants as well as major A&R under a research grant mechanism; 45 CFR part 75; and program guidelines, as applicable. Questions concerning construction or modernization grants or major A&R requirements or policies should be directed to the GMO or other official designated in the NoA.

10.1.1 Eligibility

In addition to any program-specific eligibility criteria, only public or private non-profit entities located in the United States or in U.S. territories or possessions are eligible to apply for construction or modernization grants. For-profit organizations and foreign organizations are not eligible to receive NIH construction or modernization grants.

10.1.2 Funding Opportunity Announcements

Construction grant applicants are required to apply in response to a specific FOA. RFAs generally are used to solicit construction or modernization grant applications. PAs also may be issued to solicit construction or modernization grant applications for ongoing programs for which applications may be submitted under multiple cycles or years.

In addition to the FOA, NIH awarding ICs also may develop program guidelines that include detailed policy and procedural information applicable to specific construction and modernization grant programs/activities. Any program-specific requirements will be included in or referenced in the FOA and NoA. Applicants should consult the FOA and program guidelines, if any, when applying for construction or modernization grants.

10.1.3 Application Review and Award

Construction and modernization grant applications and applications requesting funding for a major A&R project are subject to peer review. Specific review criteria are included in the FOA.

Construction and modernization grants usually involve a single award, covering more than one year, made on the basis of an application for the entire project. Incremental funding (budget periods) within a project period normally is not used for construction or modernization grants and funding may be limited by the requirements of Federal appropriations law (31 U.S.C. §1552(a)) which may limit NIH's ability to approve no-cost extensions. Recipients must consult with the GMO if it is expected that the construction or modernization activity is unlikely to be concluded within the project period specified in the NoA.

Unlike other grants awarded by NIH, under which a recipient's signature is not required to indicate acceptance of an award, under construction and modernization grants, the AOR must sign the NoA and return it to the GMO to indicate acceptance of the terms and conditions of award.

10.1.4 Title to Site

NIH expects that the applicant holds (or will hold) fee simple title (i.e., absolute ownership of real property or absolute title to land, free of any claims against the title) to the property or other estate or interest in the site (e.g., leasehold interest) on which the construction, modernization, or major A&R is performed. NIH will determine whether an applicant meets this requirement as part of the administrative review of an application.

The applicant must include with the application a legal opinion describing the interest the applicant has in the performance site. The legal opinion should describe any mortgages or other foreclosable liens on the property, including the principal amount of the mortgage (and rate of interest); the dates of the mortgage; the terms and conditions of repayment; the appraised value of the property; and any provisions designed to protect the Federal interest in the property.

10.1.5 Matching Requirement

The requirements for recipients to share in the cost of the project are set forth in 42 CFR 52.b.6, What is the rate of federal financial participation? Unless otherwise specified by statute, the rate of federal financial participation in a construction project cannot be more than 50 percent of allowable construction or modernization costs. The NIH can waive this requirement; however, it is not automatic and must be requested from the IC prior to application submission.

Matching may be in the form of allowable costs incurred by the recipient or a contractor under the grant. NIH generally does not allow recipients to use the value of third party in-kind contributions as a source to meet a matching requirement; however, the GMO may allow third party in-kind contributions included in the application budget on an exception basis. Third party in-kind contributions are the value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property and the value of goods and services directly benefiting and specifically identifiable to the project or program. To be allowable as matching, costs and in-kind contributions (if authorized) must meet the allowability and documentation requirements of 45 CFR 75.306, as applicable. Costs and third party in-kind contributions claimed as matching also are subject to the requirements in IIA that apply to the expenditure of 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 also will be required to demonstrate that the funds are committed or available at the time of, and for the duration of, the award. Exception to "cash on hand" will require negotiation with the NIH prior to award. This may take the form of an assurance, as specified by the NIH 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 NoA. The prior approval and other dollar thresholds contained in this chapter are based on the total approved budget unless otherwise specified. Downward adjustments to the matching requirement after award are a prior approval action. If NIH approval is not received in advance it is considered a violation of the terms and conditions of the construction award and may warrant enforcement action.

In addition to sharing in the costs of a construction or modernization grant, the recipient must ensure the availability of sufficient funds for operation (or continued operation) of the facility when construction or modernization is completed to allow the effective use of the facility for the grant-supported purposes.