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Substituting Grantees
By Anonymous on Tuesday, December 03, 2002 - 09:55 am:

Contracting Officers in our agency sometimes substitute one grantee for another (who may be no longer interested in performing the grant) midway in the grant period. This is sometimes done to avoid losing funds that have passed their obligation deadline. It doesn't strike me as quite proper, but I haven't been able to find anything on this subject in our agency grant regs or in the OMB Circulars. Does anyone know of any OMB guidance on the subject? Or any regs from other agencies that address this?

By Anon on Tuesday, December 03, 2002 - 10:20 am:

If you can get your hands on the GAO red book, Principles of Federal Appropriation Law, Vol II, Chap 10, pp10-72 to 10-73, the concept of a replacement grant and substitution of grantees is addressed there.

From what you've described, I believe the practice is improper, and may be considered illegal.

See especially page 10-72 on substitute grantees:

"As a general rule, when the recipient of a grant is unable to implement the grant as originally contemplated, and an alternative grantee is designated subsequent to the expiration of the period of availability for obligation of the grant funds, the awarde to the alternative grantee must be treated as a new obligation and is not properly chargeable to the appropriation current at the time the original grant was made. B-164031(5), June 25, 1976; B-114876/A44014, January 21, 1960"

Note that this is described as a "general rule", there are limited exceptions. The Principle Investigator may transfer from one institution to another, GAO has allowed the use of the original funds and the substitution was funded by the original obligation.

By bob antonio on Tuesday, December 03, 2002 - 07:13 pm:

You can find the online Red Book on the page below.