EPA Implements 2024 Uniform Guidance's Termination Provision Early

Let the election season begin, and this time we’re not talking about presidential or congressional races. We’re referring to a provision that the Office of Management and Budget (OMB) included April 22 in its 2024 revisions to the uniform guidance (2 C.F.R. Part 200). OMB stated that the effective date for these revisions is Oct. 1, although “federal agencies may elect to apply the final guidance to federal awards issued prior to Oct. 1, 2024, but they are not required to do so.” The Environmental Protection Agency (EPA) has essentially “put a toe in the water” and is electing to implement one provision — the termination provision (§200.340) — included in the 2024 revisions early, effective for new awards or amendments to existing awards issued on or after July 3.

EPA has codified the uniform guidance at 2 C.F.R. 1500.2, including any amendments. OMB’s 2024 revisions amended the termination provision at §200.340, particularly clarifying in §200.340(a)(4) that an agency may terminate a federal award if it no longer effectuates the program goals or agency priorities (e.g. unilateral termination), but only when such language is clearly and unambiguously included in the terms and conditions of the award. OMB also revised §200.340(b) to require agencies to “clearly and unambiguously specify all termination provisions in the terms and conditions of the federal award.”

EPA, in a July 3 Federal Register notice, explained that “in an effort to provide clarity on termination of its awards as expeditiously as possible,” it is electing to apply these provisions in the 2024 revisions to the uniform guidance early. “This will allow EPA to implement the revised version of §200.340 through the terms and conditions of awards, as determined by EPA on or after that date.”

The agency noted that it will clearly and unambiguously specify all termination provisions in the terms and conditions of applicable awards, including an express authorization for unilateral termination when dictated by case- or program-specific needs. Any subsequent changes to the grounds for unilateral termination of an assistance agreement must be agreed to by both EPA and the financial assistance agreement recipient and authorized by §200.340 or a successor regulation in effect at the time of award or the amendment adding additional funding.

EPA added that intended to implement all other revisions of the 2024 uniform guidance as of Oct. 1.

Although we fully understand EPA’s reasoning for taking this action, it initally seems like a piecemeal approach. It will be interesting to see if other federal agencies take a similar approach and implement the provision at §200.340 — or any other singular provision within the 2024 uniform guidance — prior to Oct. 1. If we hear of other agencies implementing the 2024 uniform guidance early, or portions of it, we at Thompson Grants will be sure to let you know.

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