Revised Part 25 Clarifies Requirements for Obtaining UEIs

Other Administrative Changes to Various Parts of Title 2 Also Undertaken
Jerry Ashworth
May 13, 2024 at 05:50:47 ET

Along with amending the uniform guidance (2 C.F.R. Part 200), the Office of Management and Budget (OMB) in April made numerous revisions to the other parts of Title 2 of the Code of Federal Regulations that relate to receipt of federal financial assistance. Of note, OMB updated 2 C.F.R Part 25 to better clarify that it applies to applicants for and recipients of federal financial assistance unless exempted by federal statutes, as well as first-tier subrecipients.

These Title 2 sections, other than the uniform guidance, are:

  • Part 1 — About Title 2 of the Code of Federal Regulations and Subtitle A;
  • 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 176 — Award Terms for Assistance Agreements that Include Funds Under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5;
  • Part 180 — OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement);
  • Part 182 — Governmentwide Requirements for Drug-Free Workplace (Financial Assistance);
  • Part 183 — Never Contract with the Enemy; and
  • Part 184 — Buy America Preferences for Infrastructure Projects.

In October 2023, OMB proposed numerous revisions to these sections. While OMB has maintained many of the proposed revisions within the final version released April 22, some provisions were amended in light of stakeholder comments to the proposal. The final revisions become effective for awards issued on or after Oct. 1, unless the federal agency elects to implement them as early as June 21.

In §25.105, OMB adds new language to clarify that applicants, recipients and first-tier subrecipients are required to obtain a unique entity identifier (UEI) in accordance with Subpart C of Part 25. Subpart C states that a recipient may not make a subaward to a subrecipient that has not obtained a UEI and provided it to the recipient, although subrecipients are not required to complete full registration in SAM.gov to obtain a UEI. Together with stating that the requirement to obtain a UEI does not apply to an individual who applies for and receives assistance, OMB adds that it also does not apply to second-tier subrecipients or contractors under federal awards.

Further, OMB adds new language under §25.105(d) stating that “because this [requirement] applies to loan guarantees and other guaranteed programs, recipients of the guarantee from the federal agency (e.g., lenders of guaranteed loans) are required to complete entity validations and acquire a UEI. Additionally, at the federal agency’s discretion, nonindividual beneficiary borrowers (for example, small businesses or corporations) may be required by the federal agency to obtain a UEI or register in SAM.gov.”

Exemptions

Although provisions in §25.110 allow federal agencies to exempt an applicant or recipient from the requirement to obtain a UEI, register in SAM.gov or both, new language clarifies that even if a federal agency grants such an exception, it is still responsible for reporting under the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. 109-282), as amended, except that it may use a generic entity identifier in such a circumstance.

Compared to the October 2023 proposed version, OMB added new language at §25.110(a)(2)(iii) stating that a federal agency may exempt applicants and recipients that are “foreign organizations or foreign public entities from completing full registration in SAM.gov for a federal award less than $500,000. Foreign organizations or foreign public entities exempted from registering in SAM.gov under this provision must still obtain a UEI. The federal agency must determine this exemption on a case-by-case basis while utilizing a risk-based approach.”

In §25.205(a), OMB adds language to state that “unless an entity is exempt under §25.110, a federal agency may not issue a federal award or amend an existing federal award to provide additional federal funds if the entity [fails to obtain a UEI or register in SAM.gov]. This does not apply to amendments to terminate or close out a federal award.”

OMB also is relocating all definitions of Part 25 to a single §25.400. Consistent with its changes to Subpart A of the uniform guidance, OMB in Part 25, as well as in Part 170, is deleting the term “federal awarding agency,” along with several other terms now defined in the uniform guidance. It also adds a new term for “entity,” which would include either a for-profit or nonprofit corporation, association, partnership, limited liability company, limited liability partnership or sole proprietorship; any other legal business entity; another grantee or contractor that is not excluded; and any state or locality. The definition does not include an individual recipient of federal financial assistance or a federal employee.

Of note, the April revisions change the language in Appendices in Parts 25, 170 and 175 to use the third person, such that OMB now refers to “the recipient” rather than “you.” For example, Appendix A.1.a.1 of Part 25 now states “unless exempt from this requirement under 2 C.F.R. 25.110, the recipient must maintain a current and active registration in SAM.gov,” rather than “unless exempt from this requirement under 2 C.F.R. §25.110, you must maintain a current and active registration in SAM.gov.”

Title 2 Administrative Changes

OMB’s revisions changed the introductory language of Title 2. OMB has changed the name of the title, referring to it as “Title 2 — Federal Financial Assistance,” rather than the existing “Title 2 — Grants and Agreements,” to ensure that the uniform guidance is applicable beyond just grants and cooperative agreements, unless noted differently at §200.101.

In the introductory Part 1 language, OMB revises §1.200 to state that Chapters I and II of Subtitle A provide OMB guidance to federal agencies that helps ensure consistent and uniform governmentwide policies and procedures for the management of the agencies’ federal financial assistance. It deletes current language at §§1.200(b) and (c) because it is no longer accurate.

In §1.205 on the applicability to federal financial assistance, OMB has simplified the language to state, “The types of instruments that are subject to the guidance in this subtitle vary from one portion of the guidance to another. All portions of the guidance apply to grants and cooperative agreements, and some portions also apply to other types of federal financial assistance.”

In §1.215 discussing previous issuances, OMB states that because Title 2 has now existed for almost 20 years in its current format, it no longer believes it necessary to continue to include the current table showing earlier sources of certain elements of the OMB guidance, including outdated OMB circulars.

OMB adds a new section on severability at §1.231, which would state that “the provisions of this subtitle are separate and severable from one another. If any provision of this subtitle is held invalid or unenforceable as applied to a particular person or circumstance, the provision should be construed so as to continue to give the maximum effect permitted by law as applied to other persons not similarly situated or to dissimilar circumstances. If any provision is determined to be wholly invalid and unenforceable, it should be severed from the remaining provisions of this part, which should remain in effect.”

Concerning Part 170, OMB makes a key update at §170.200(a), noting that federal agencies “must publicly report federal awards that equal or exceed the micropurchase threshold (see §200.1). Federal agencies must publish the required federal award information on USAspending.gov in accordance with the guidance provided by OMB and the U.S. Department of the Treasury’s Government-wide Spending Data Model (GSDM).” It also simplifies language at §170.200(b) to state that federal agencies “should ensure that their agency-specific requirements do not require recipients to submit data that is the same as or similar to data required by the Transparency Act during a given reporting period.”

In Part 175, OMB is reordering the existing part numbers, currently at §§175.5, 175.10, 175.15, 175.20 and 175.25. The new order is §175.100 — purpose; §175.105 — statutory requirements; §175.200 — use of award term; §175.205 — referral; and §175.300 — definitions. It now also includes an Appendix A to address award terms. The provision at §170.205 states that federal agencies “are required to include in each federal grant or cooperative agreement a condition that authorizes [it] to terminate the award or take any remedial actions authorized by 22 U.S.C. 7104b(c), without penalty, if a private entity receiving funds under the award as a recipient or subrecipient engages in” human trafficking, the procurement of a commercial sex act during the period of time that the grant or cooperative agreement is in effect, or other listed crimes.

Changes to Part 180

Among the revisions at Part 180, which is in a question-and-answer format, OMB has deleted the question and response at §180.35 asking when a federal agency must implement guidance at Part 180. It also has reworded the questions and answers at §180.635 and §180.640 to now read as follows:

  • §180.635 May a federal agency resolve an administrative action in lieu of debarment or suspension? Yes. A federal agency may resolve an administrative action in lieu of debarment or suspension by entering into an agreement at any time if it is in the federal government’s best interest.
  • §180.640 May an agreement to resolve an administrative action include a voluntary exclusion? Yes. If a federal agency enters into an agreement to resolve an administrative action with you in which you agree to be excluded, it is called a voluntary exclusion and has a governmentwide effect.

OMB also added extra language to §180.655, which asks how other federal agencies will know about an administrative agreement that is the result of a settlement, by stating that “the suspending or debarring official who enters into an administrative agreement with you must report information about the agreement in SAM.gov within three business days after entering into the agreement. The suspending and debarring official must use the Contractor Performance Assessment Reporting System (CPARS) to enter or amend information in SAM.gov.”

In the revised §180.730, along with the list of information an entity must provide to a suspending official to contest the suspension at §180.730(a), OMB now also includes language at §180.730(b) that the entity must also identify any of the items on this list that do not apply to the entity.

For More Information

The final revisions are available at https://www.federalregister.gov/documents/2024/04/22/2024-07496/guidance-for-federal-financial-assistance.