Sneak Preview: Treasury Proposes Guidance for Broadband Projects

(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Department of the Treasury is developing guidance for recipients of awards under the State and Local Fiscal Recovery Fund (SLFRF) and Capital Projects Fund (CPF) to help them comply with provisions within the Office of Management and Budget’s (OMB) uniform guidance and previous Treasury guidance when overseeing subrecipients/contractors participating in broadband infrastructure projects.

The agency recently released proposed guidance addressing this issue, noting that recipients may not fully rely on the guidance until it is finalized. The document essentially responds to two commonly asked questions from recipients and internet service providers (ISPs):

• Should ISPs that are selected by recipients to install broadband infrastructure be considered subrecipients or contractors?
• Which provisions of the uniform guidance (2 C.F.R. Part 200) apply to broadband projects?

In response to the first question, Treasury’s proposed guidance states that each recipient should make this determination based on uniform guidance language at §200.331, the nature of the established broadband program and the recipient’s relationship with ISPs. Treasury, as detailed in previous guidance, allows CPF and SLFRF recipients to provide subawards or contracts to other entities for the construction of eligible projects. “Treasury understands that in many cases, states have considered ISPs installing broadband infrastructure using SLFRF or CPF award funds to be subrecipients of the SLFRF or CPF award,” the agency explained. “Recipients may also consider ISPs to be contractors.” (For a table addressing the difference between subgrant and contracts, see ¶315-2 in the Federal Grants Management Module.)

The proposed guidance then explains that the terms and conditions for SLFRF and CPF awards provide that uniform guidance provisions apply to these programs unless Treasury notes otherwise. The proposal also clarifies that if a recipient treats an ISP as a subrecipient, it must follow the uniform guidance provisions relating to subrecipients, particularly noting provisions pertaining to program income, cost principles, procurement, audit and subrecipient monitoring. Recipients that characterize their ISPs as contractors must follow the provisions of the uniform guidance relating to contractors, including provisions pertaining to the selection of contractors (§§200.317-200.327) and the requirements in Appendix II of the uniform guidance.

(The full version of this story has now been made available to all for a limited time here.)

Join us for our following Thompson Grants events:
Thompson Grants Workshop: Subrecipient Monitoring | May 23, 2023 | Virtual Event
Federal Grants Forum | June 28-30, 2023 | Portland, Maine