OMB Seeks Public Input on Potential C.F.R. Title 2 Revisions

The Office of Management and Budget (OMB) is requesting that grants stakeholders offer suggestions for revisions to subtitle A of Title 2 of the Code of Regulations, which includes the uniform guidance (2 C.F.R. Part 200). In a request for information (RFI) notice in the Feb. 9 Federal Register, OMB explained that it anticipates publishing a final update to Title 2 by this December.

Comments received will assist OMB in drafting updates. Stakeholders should be aware that the comment window is brief. Comments must be submitted via Regulations.gov by March 13 by referring to Document No. 2023-02158. Commenters are requested to submit only one response, and feedback consisting of no more than seven pages or 2,500 words are requested; longer responses may not be considered. “A response to this RFI will not be viewed as a binding commitment to accept any proposals put forward,” OMB notes.

§200.109 of the uniform guidance states that OMB will review 2 C.F.R. Part 200 at least every five years after Dec. 26, 2013, the issue date of the original uniform guidance. Following its first review, OMB published widescale revisions to Title 2, OMB Guidance for Grants and Agreements, in August 2020 (see ¶101 in the Federal Grants Management Module). The current RFI would enable OMB to meet the five-year review intention of §200.109. The RFI only addresses the OMB governmentwide regulations under Title 2, subtitle A; it does not address federal agency regulations adopting the uniform guidance within subtitle B (see ¶317 in the Module).

Along with the uniform guidance (2 C.F.R. Part 200), subtitle A also includes regulations governing:

• Part 25: Universal Identifier and System for Award Management;
• Part 170: Reporting Subaward and Executive Compensation Information;
• Part 175: Award Term for Trafficking in Persons;
• Part 180: OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement);
• Part 182: Governmentwide Requirements for Drug-Free Workplace (Financial Assistance); and
• Part 183: Never Contract with the Enemy.

OMB is updating Title 2 with the goal of incorporating statutory requirements and administration priorities, and reducing agency and recipient burden. OMB also wants to clarify its guidance by addressing sections that recipients or agencies have interpreted in different ways, and to rewrite applicable sections in plain English, improve flow and address inconsistent use of terms. The revision will not represent a complete revision or restructuring of Title 2. OMB will strive to maintain the title’s current overall structure, including section numbers.

Proposed Rule

In another matter published on Feb. 9, OMB issued a proposed rule to revise Title 2 in the short run to add a new Part 184 that provides implementation guidance under the Build America, Buy America Act (BABA) provisions of the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58). The proposal also would add a new uniform guidance provision at §200.322(c), Domestic Preference for Procurement, which would state that “federal awarding agencies providing federal financial assistance for infrastructure projects must comply with the Buy America Preferences set forth in 2 C.F.R. Part 184.”

Comments on the proposed rule also must be submitted through Regulations.gov by March 13 by referring to Document No. 2023-02617.

The BABA provisions strengthened Made in America laws, requiring that no later than May 14, 2022, covered federal agencies must ensure that “none of the funds made available for a federal financial assistance program for infrastructure may be obligated for a project unless all of the iron, steel, manufactured products and construction materials used in the project are produced in the U.S.” The act affirmed, consistent with Executive Order (EO) 14005, Ensuring the Future Is Made in All of America by All of America’s Workers, the Biden administration’s priority to use the terms and conditions of federal financial assistance awards to maximize the use of U.S. goods, products and materials (see ¶446 in the Module).

Although OMB provided initial, nonbinding implementation guidance in April 2022 through OMB Memorandum M-22-11, a new Part 184 in Title 2, as proposed, would codify this guidance in federal regulations. By adding definitions and a common framework for applying Buy American preferences in federal financial assistance, Part 184 would “improve uniformity and consistency in the implementation of BABA requirements across the government,” according to OMB. The new part would generally align with OMB’s current guidance in M-22-11.

Part 184, as proposed, includes guidance for determining the cost of manufactured products, and proposes to use the current definition of “cost of components” in the Federal Acquisition Regulation (FAR) (49 C.F.R. §25.003) that is used for federal procurement. “Using this definition for determining the cost of manufactured products for federal financial assistance aims to provide consistent and clear market requirements for industry to meet one standard for determining the cost of components of manufactured products,” OMB explains.

Along with definitions, the proposed Part 184 includes provisions on applying the Buy America preference to a federal award; determining the costs of components for manufactured products; construction material standards; federal agency issuance of a Buy America preference waiver; and exemptions to the Buy America preference.

Specific Comments Sought

OMB particularly is seeking comments on whether it should:

• use the FAR definition for “cost of components;”
• add guidance on other types of construction materials (e.g., coatings, brick, engineered wood products);
• include additional guidance on the proposed definition of “construction materials;”
• adopt a definition of “predominantly” when discussing iron and steel products;
• include additional guidance on how to distinguish between steel or iron products, manufactured products and construction materials; and
• add guidance to define “composite building materials,” “fiber optic cable,” “optical fibers” and “optic glass.”

Because the BABA provision in IIJA, when defining construction materials, does not include cement or aggregates such as stone, sand or binding agents, OMB also requests comments on how it should treat such material in the context of manufactured products’ Buy America preference under the guidance. OMB also is seeking suggestions for reducing recipient burden.

For More Information

The RFI is available at https://tinyurl.com/2p9eb5nh.

The proposed rule is available at https://tinyurl.com/5n6kkjnr.