pre-award phase
(CT:FIN-499; 04-07-2025)
(Office of Origin: CGFS/FPRA/FAFM)
4 FAM 621 pre-award information
(CT:FIN-499; 04-07-2025)
4 FAM 621.1 Assistance Listing
(CT:FIN-499; 04-07-2025)
An assistance listing (AL) is a publicly available listing of a given Federal assistance program and is required for all new and existing federal assistance programs via the Federal Government-wide system on SAM.gov. Briefly, SAM.gov is used by any entity that wants to do business with, including the receipt of federal assistance from, the U.S. Federal Government. SAM.gov consolidates the capabilities of Central Contractor Registration database (CCR/Fed-Reg), Online Representations and Certifications Application (ORCA), and the Excluded Parties Listing System (EPLS). An AL must exist for any program that intends to announce or publish a Notice of Funding Opportunity (NOFO) for a grant or grants program prior to that announcement/posting. This is where you can find approved assistance listings: SAM.gov | Assistance Listings. Within this website, the process for creating a new Assistance Listing is spelled out here: GSA Federal Service Desk Service Portal. For any new AL, the creator of an AL must have their supervisor and then A/GA/AP/FA/FAPD approval.
4 FAM 621.2 Notice of Funding Opportunity
(CT:FIN-499; 04-07-2025)
a. Per 2 CFR 200.204, Federal agencies must announce specific funding opportunities for Federal financial assistance, whether openly competed or not. The term "openly competed" means opportunities that are not directed to one or more specifically identified applicants. Specifically, a Notice of Funding Opportunities (NOFO) for a specific project must be posted publicly posted on Grants.Gov for a recommended 60 days, with a minimum of 30 days, to solicit project proposals from as wide a variety of potential award implementers before the issuing bureau or post can issue a Federal assistance award. NOFOs should align their specific goals, objectives, and performance indicators with the larger goals and indicators of the umbrella program, as well as those of the issuing bureau or post. NOFOs should communicate the overarching program goal, as well as the specific project’s goals and objectives in an Executive Summary.
b. The NOFO is critical in communicating to potential applicants and the public what the Department of State is supporting, how the Department hopes to achieve these objectives, and what the issuing post or bureau at State requires from potential recipients to be successful. Whether the award will be fully-and-openly competed or make use of limited (or no) competition, a NOFO should be drafted. NOFOs must contain:
(1) Federal Agency, Bureau, or Post name;
(2) Funding opportunity title;
(3) Announcement type;
(4) Funding opportunity number;
(5) Assistance Listing number;
(6) Funding details;
(7) Key dates;
(8) Executive summary; and
(9) Agency contact information.
c. The issuing post or bureau at State must include the information in 2 CFR 200 Appendix I (Program Information, Federal Award Information, Eligibility Criteria, etc.) for every funding opportunity. To the extent possible, the NOFO should be written clearly and in plain language to ensure the announcement is accessible to various communities of eligible applicants (including those overseas for whom English may not be their native language), and the Department should make every effort to limit the length and complexity of the NOFO.
4 FAM 621.3 Applications
(CT:FIN-499; 04-07-2025)
a. The Department of State requires that all Federal assistance applicants use Office of Management and Budget (OMB)-approved, government-wide standard information collection forms. No other forms, templates, or surveys may be required of the recipient for any Federal financial assistance, and this includes domestic and overseas awards.
b. Per 2 CFR 200.205, the Department is required to review all applications responding to a NOFO through a merit review panel. A merit review is intended to be an objective process for evaluating Federal award applications/proposals in accordance with the written standards of the Department, bureau, or post. These standards should identify the number of people required to participate in the merit review process and provide opportunities for various groups of participants (not just those managing the award process, per se). For example, a Public Diplomacy grants program run by an overseas Public Affairs Section could bring in officers from the Political, Economic, or Regional Security sections for review, or officers from other U.S. Government agencies stationed at the Embassy or Consulate as part of the merit review process.
4 FAM 621.4 Pre-Award Due Diligence for Audits
(CT:FIN-499; 04-07-2025)
a. When evaluating a potential recipient and their application during the due diligence process in the Pre-Award Phase, the GO must determine if previous audits have indicated any deficiencies, weaknesses, fraud or other problems in the management of other Federal assistance awards. Such findings are an excellent indicator of whether the organization:
(1) Has managed similar projects/activities in the past;
(2) Is financially stable;
(3) Has adequate management controls in place; and
(4) Has the organizational capacity for successfully implementing a grant or other Federal assistance activity.
b. If the organization’s applicable audits present audit findings, the GO is responsible to review the findings, requesting additional information from the applicant if needed and determine if the organization or individual is able to complete the award to the satisfaction of the Department. The GO may impose additional requirements, such as additional monitoring, Special Award Conditions, placing a recipient in “high risk” status, or adding prior approval requirements to lower or limit the risk identified by the audit finding.
4 FAM 621.5 Measuring Success
(CT:FIN-499; 04-07-2025)
a. Performance Goals, Indicators, and Targets: Federal assistance projects and programs issued by Department of State must be designed with clear goals and objectives intended to provide measurable results. To that end, performance goals, indicators, and targets must be included in the Federal award, where feasible. The issuing bureau or post must also specify how performance will be assessed in the terms and conditions of the Federal award, including the timing and scope of the expected performance on the award.
b. These performance measures (goals, indicators, etc.) must also align with the strategic goals and objectives of the issuing bureau or post (Integrated Country Strategy, Joint Regional Strategy, etc.), and should support or complement the issuing bureau or post's broader performance measurement, management, and/or customer service initiatives, including any Monitoring, Evaluation, and Learning (MEL) efforts.
c. The issuing bureau or post should develop program performance measures in consultation with the intended beneficiaries of the program, to the degree feasible, and should consider all data, evidence, and coordinate with other agencies if possible.
4 FAM 621.6 Indirect Cost Calculation and Negotiated Indirect Costs Rate Agreements
(CT:FIN-499; 04-07-2025)
a. Indirect Costs—Often called “overhead,” or facilities and administrative costs, are those costs that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. Indirect costs are not allowable costs for Federal financial assistance awarded directly to individuals. Costs for awards to individuals must be direct costs only. Indirect costs do not generally include the costs of personnel who work for the recipient organization and are working directly on the project. An indirect cost rate can be claimed by a recipient either through working with the Department to determine a Negotiated Indirect Cost Rate Agreement (NICRA), or by choosing a de-minimus flat rate of 15 percent of all Modified Total Direct Costs (MTDC). NICRA and de-minimus indirect cost rates are both allowable under Federal awards. See 2 CFR 200.1, 2 CFR 200 Subpart E.
b. Negotiated Indirect Costs Rate Agreement (NICRA):
(1) Organizations doing business with the Department, or the U.S. Government more generally, may be assigned their own NICRA to cover any indirect or overhead costs that cannot be assigned directly to specific awards. Each organization negotiates its indirect cost rates with one government agency that has been assigned cognizance, usually based upon their providing the organization with the largest dollar amount of assistance. The resulting NICRA is binding on the entire government. (See 2 CFR 200.414).
(2) The grants officer (GO) must accept an applicant’s NICRA and may not ask or require applicants to reduce their NICRA rates, unless required by Federal statute or regulation. However, organizations may choose to voluntarily reduce the amount of NICRA charged to the award. Documentation of this voluntary reduction should be recorded by the GO and uploaded to the official Federal award file in the Department's grants management system.
(3) The Department of State uses the Department of the Interior's Office of Indirect Cost Services to negotiate indirect cost rates for recipients that have the Department serving as their cognizant agency. A/GA/AMD/PAS is the liaison with the Department of Interior's Interior Business Center who manage these indirect cost rate agreement negotiations. Inquiries and questions should be sent to AQM-NICRA@state.gov.
c. The 15 percent De Minimis Rate: Per 2 CFR 400.414, a recipient that has never had a NICRA may elect to recover indirect costs by charging up to 15 percent of Modified Total Direct Costs (MTDC) under their budget. The recipient may use the 15 percent de minimis rate indefinitely. This rate may also be used by a recipient that previously had a NICRA but no longer has a current agreement. The GO must ensure that recipients are applying the 15 percent rate to the MTDC, as defined in 2 CFR 200.1 and not to the total budget amount. The MTDC base excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships (but does include honoraria), participant support costs and the portion of each subaward in excess of $50,000. The 15 percent of MTDC is the maximum allowable. The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. Federal agencies and pass-through entities (meaning, prime award recipients) may not require recipients and subrecipients to use a lower de minimis rate.
d. If an award has been issued utilizing the 15 percent de minimis rate, and the recipient subsequently negotiates a NICRA, the GO may consider amending the award to reflect the new NICRA rate. The recipient must inform the GO during the application period that they plan to negotiate a NICRA, or are in the process of doing so, and would like to amend the award in the future after a rate is finalized. Once the recipient obtains a rate, the GO must evaluate the NICRA and administer a budget realignment while only applying the new rate to those costs incurred during the effective period of the NICRA. The NICRA cannot be applied to costs incurred during a period of performance that is prior to the effective date of the new rate.
4 FAM 622 managing risk
(CT:FIN-499; 04-07-2025)
All Federal agencies are required to review risk posed by an applicant for any potential Federal assistance award, per 2 CFR 200.206. Managing risk means taking active steps to reduce or prevent waste, fraud, and abuse, and to prevent the inadvertent funding of malicious actors and/or terror-sponsoring organizations with Federal assistance funds. Risk assessment is also an ongoing process as new risks may arise over the course of the implementation of a project. Risk assessment may involve making use of the results of the evaluation of the applicant's eligibility or the quality of its application, as well as a review of recent audits and OMB-designated government-wide databases. If the issuing bureau or post determines an award will be made, special conditions related to the degree of risk assessed may be applied to the Federal award:
(1) Certification/Representation–SAM.gov: Per 2 CFR 200.209, recipients applying for funding must certify that they will comply with applicable laws and regulations when they apply. “Unless prohibited by the U.S. Constitution, Federal statutes, or regulations, an issuing bureau or post is authorized to require a recipient to submit annual certifications and representations." These certifications are part of the registration process established on SAM.gov to reduce recipient burden;
(2) Reviewing Audits: An issuing bureau or post grants officer must review all required audits, and any other available audits, for an organization as part of the risk assessment and due diligence process prior to issuing a Federal assistance award:
(a) For domestic-based non-profit recipients and subrecipients this should include checking the Federal Audit Clearinghouse (FAC) in the instance that the GO finds the organization meets the audit requirement in 2 CFR 200, Subpart F— Audit Requirements. Specifically, 2 CFR 200.501 requires domestic non-Federal entities that expend $1,000,000 or more in Federal financial assistance during their fiscal year to have a single or program-specific audit conducted for that year. In addition, the entity must report the collected audit data elements on the form SF-SAC and submit it to the FAC. Any findings such as material weaknesses, significant deficiencies, or material noncompliance are reported on the SF-SAC;
(b) For foreign-based recipients, whether for profit or not, 2 CFR 200, Subpart F—Audit Requirements are not applicable. However, all foreign recipient organizations that expend $1,000,000 or more in Department of State funds in the organization’s fiscal year, whether as a prime or a subrecipient, are required to undergo a recipient-contracted single or program-specific audit annually:
(i) The NOFO must alert potential applicants to this requirement;
(ii) The cost of required audits may be charged either as an allowable direct cost to the award or included in the organization’s Negotiated Indirect Cost Rate or de minimis indirect costs. Foreign organizations must submit their audits to the GO;
(iii) The GO is responsible for forwarding a copy of the audit to CGFS/FPRA/FAFM (FAFMGrantAudits@state.gov) which tracks the status of questioned cost and other audit findings in an annual matrix; and
(iv) As stated in the Department Standard Terms and Conditions: “The audit must be independently and professionally executed in accordance with Generally Accepted Government Auditing Standards either prescribed by a government’s Supreme Audit Institution with auditing standards approved by the Comptroller General of the United States, or in accordance with the host country’s laws or adopted by the host country’s public accountants or associations of public accountants, together with generally accepted international auditing standards. However, foreign entity audits consistent with International Standards for Auditing or other auditing standards are acceptable with the GO’s approval.”
(3) Leahy Law Vetting: The Leahy Law prohibits Department foreign assistance funds from supporting foreign security force units if the Secretary of State has credible information that the unit has committed a gross violation of human rights. A similar Leahy Law that applies to U.S. Department of Defense-funded assistance to foreign security forces is outside the scope of this subchapter:
(a) Per 22 U.S.C. 2378d(a) (2017), “No assistance shall be furnished under this chapter [FOREIGN ASSISTANCE] or the Arms Export Control Act [22 U.S.C. 2751 et seq.] to any unit of the security forces of a foreign country if the Secretary of State has credible information that such unit has committed a gross violation of human rights”;
(b) This covers all programs funded by the Foreign Assistance Act as well as all programs funded by the Arms Export Control Act. This includes Foreign Military Financing (, International Military Education and Training, Peacekeeping Operations, International Narcotics Control and Law Enforcement, Nonproliferation, Anti-Terrorism, Demining, and Related Programs, Economic Support Fund, and other foreign assistance accounts and;
(c) Contact State-Leahy@state.gov to determine if a specific program not listed is covered by the Leahy law.
(4) Terrorist-finance Risk: Consistent with Department guidance on State Funding and the Risks of Terrorist Financing (see 2 FAM 250 (SBU)), for all State Department funded programs and requirements, Department bureaus must check if the funds or activities could accidentally benefit terrorist organizations or their supporters. The Department bureaus must also put in place measures to reduce this risk:
(a) This requirement applies whether the programs are implemented directly by the Department, through contracts, grants, or cooperative agreements (collectively, “awards”), or through inter-agency transfers implemented by other U.S. Government departments and agencies; and
(b) The relevant bureau's Assistant Secretary is ultimately responsible for ensuring the bureau assesses these risks, as well as for the final decision about what mitigation measures are appropriate for any program. The Critical Environment Risk Management Division (A/LM/PMP/CERM) at the Bureau of Administration, does not conduct or oversee such risk assessments.
4 FAM 623 information sharing, restrictions, penalties, and prohibitions
(CT:FIN-499; 04-07-2025)
4 FAM 623.1 USASpending.gov
(CT:FIN-499; 04-07-2025)
Per 2 CFR 200.212, once the award is issued, the issuing bureau or post is required to publish the required Federal award information on USASpending.gov, per the Federal Funding Accountability and Transparency Act. This includes a detailed description of the award that clearly communicates the goals and objectives of the program. However, some information is exempt under the Freedom of Information Act (5 U.S.C. 552) or is controlled unclassified information, pursuant to Executive Order 13556:
(1) Information that is classified as secret to protect national defense or foreign policy;
(2) Information that is related to the internal personnel rules and practices of a recipient or sub-recipient;
(3) Information that is prohibited from disclosure by another Federal law;
(4) Awards funded by the Recovery and Reinvestment Act of 2009; and
(5) Subrecipients who reported less than $300,000 in gross income in the previous tax year.
4 FAM 623.2 Reporting Non-Qualified Status on SAM.gov
(CT:FIN-499; 04-07-2025)
A grants officer is only required to report a determination of non-qualified status for a given recipient or sub-recipient, through SAM.gov (per 2 CFR 200.213) if:
(1) The basis for the determination is the recipient's or subrecipient's prior record of executing programs or activities under Federal awards or its record of integrity and business ethics (per 2 CFR 200.206); and
(2) If the total Federal share of the Federal award would exceed the simplified acquisition threshold ($250,000) over the period of performance.
4 FAM 623.3 Unauthorized Commitments
(CT:FIN-499; 04-07-2025)
a. Per 4 FAM 040 and the Federal Managers’ Financial Integrity Act (FMFIA) of 1982, Public Law 97-255, codified at 31 U.S.C. 3512 and implemented by OMB Circular A-123, amended, the Department must ensure that for all federal funds, including federal assistance:
(1) Obligations and costs are in compliance with applicable law;
(2) Funds, property, financial information, and other assets are safeguarded against waste, loss, unauthorized use, and misappropriation; and
(3) Revenues and expenditures applicable to agency operations are properly recorded and accounted for to permit the preparation of accounts and reliable financial and statistical reports and to maintain accountability over the assets.
b. An unauthorized commitment constitutes an agreement that is not legally binding on the government of funds, per the requirements above, and occurs when a U.S. Government employee promises, implicitly or explicitly, to bind the Federal Government without appropriate authority to do so. Unauthorized commitments frequently occur due to simple error or a lack of understanding of the Department’s established roles and responsibilities in managing a Federal award. Issuing bureaus and posts must strive to prevent unauthorized commitments, to prevent unauthorized obligations and possible deficiencies in appropriations.
c. Unauthorized commitments may violate Federal law, are inconsistent with the Department’s Federal financial assistance policy, and can carry severe consequences, including revocation of the GO’s warrant authority. If the Department chooses not to ratify an unauthorized commitment, the entity or person that acted based on the commitment may seek to hold the employee personally liable. The responsible bureau/office/post management official and GO must inform program personnel not to make such commitments, actively seek to prevent unauthorized commitments by providing appropriate policy guidance on this subject, mitigate opportunities for violation, and address violations when they occur, including referring employees for administrative disciplinary actions. Department employees may be held personally liable for any unauthorized commitment if adequate justification does not exist to prove that there was an authorized award.
d. All responsible parties at domestic issuing bureaus or issuing posts overseas should seek to ratify unauthorized commitments, meaning to obtain legitimate authorization for the commitments otherwise made. Ratification cannot occur unless and until the U.S. Government official with authority to ratify an unauthorized commitment confirms enough funding is legally available for obligation.
e. Ratification process: A ratification is the official process that gives the appropriate authorities the ability to ratify unauthorized commitments and legally use government funds to pay for improperly purchased supplies and services, otherwise purchased illegally. It is a lengthy and tedious process that attracts negative attention to the individual, the bureau or post, and the entire department. If specific conditions were not met when the unauthorized commitment occurred, then the appropriate authorities cannot ratify the action. The process of ratifying unauthorized commitments are as follows:
(1) Post unauthorized commitments that do not exceed $10,000 must be signed by the GO, approved by the GO's supervisor, and ratified by the deputy chief of mission (DCM);
(2) Post unauthorized commitment that exceed $10,000 must be signed by the GO, approved by the GO's supervisor, DCM, and bureau executive director, and ratified by the senior procurement executive;
(3) Domestic bureau unauthorized commitments that do not exceed $10,000 must be signed by the GO, approved by the GO's supervisor, and ratified by the bureau executive director;
(4) Domestic unauthorized commitment that exceeds $10,000 must be signed by the GO, approved by the GO's supervisor and bureau executive director, and ratified by the senior procurement executive.
f. Conditions for Approving a Ratification
(1) The government received and accepted the supplies or services and obtained or will obtain a benefit resulting from performance of the unauthorized commitment;
(2) The ratifying official has the authority to enter into a contractual commitment;
(3) The resulting commitment would otherwise be proper if made by an appropriate funding means;
(4) The official review of the unauthorized commitment is determined the price to be fair and reasonable;
(5) The recommended payment and legal counsel concur with the recommendation unless Agency procedures expressly do not require such concurrence;
(6) Funds are available and were available at the time of the unauthorized commitment; and
(7) The ratification is in accordance with any other limitations prescribed under Agency procedures.
g. Potential Reasons for Non-Ratification:
(1) The employee made repeated unauthorized commitments;
(2) The employee failed to take responsibility for a deliberate unauthorized commitment; and
(3) The employee knowingly, willfully, and intentionally performed actions that would lead to an unauthorized commitment.
h. Per FAR 1.602, agencies should take positive action to preclude, to the maximum extent possible, the need for ratification actions. This can only be done through adequate planning and observation of the business rules. By working with all intended parties and taking a completely transparent approach in daily grant activities when working with outside vendors, the bureau and post could avoid making unauthorized commitments.
4 FAM 623.4 Suspension and Debarment of Recipient Organizations
(CT:FIN-499; 04-07-2025)
The Department of State cannot issue a grant to a potential recipient or subrecipient that has been suspended or debarred. These sanctions occur as penalties for serious violations such as fraud or failure to report criminal conduct. Suspension is an immediate action taken (for a maximum of 12 months), usually pending the outcome of a more thorough investigation into the matter. Debarment is the final action taken, usually after a conviction or formal end to the investigation. Debarment prevents the entity from applying for a Federal award (for typically up to three years). See 4 FAM 645 for more information on suspension and debarment.
4 FAM 623.5 Never Contract with the Enemy
(CT:FIN-499; 04-07-2025)
Per 2 CFR 200.215, State Department Federal assistance awards over $50,000 that are implemented outside the United States, and in support of a contingency operation in which members of the U.S. Armed Forces are actively engaged in hostilities, are subject to 2 CFR Part 183, Never Contract with the Enemy.
4 FAM 623.6 Prohibitions and Disclosures
(CT:FIN-499; 04-07-2025)
a. Prohibition of certain “covered” telecommunications and video recording equipment: Per 2 CFR 200.216, recipients and subrecipients are prohibited from obligating or expending loan or grant funds to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. (See 2 CFR 200.216 and Public Law 115-232, section 889 that define covered telecommunications equipment as telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation or any of their affiliates or subsidiaries). However, the Department has a waiver in place through 2028 that waives this prohibition for public diplomacy or foreign assistance funded awards.
b. Mandatory Disclosures: Per 2 CFR 200.113, an applicant, recipient, or subrecipient of a Federal award must promptly disclose whenever, in connection with the Federal award, it has credible evidence of the commission of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code or a violation of the civil False Claims Act.
c. Conflict of Interest
(1) Per 2 CFR 200.112, Recipient or subrecipient, must disclose in writing any potential conflict of interest to the issuing bureau or post or pass-through entity in accordance with applicable issuing bureau or post policy.
(2) Federal officers and staff involved with merits review for Federal awards must also certify no conflict of interest in review of potential award recipient applications.
4 FAM 624 through 629 unassigned