A conflict of interest is generally understood as "a conflict between the private interests and the official responsibilities of a person in a position of trust."[1] Within financial assistance, both real and perceived conflicts must be properly mitigated.


This information applies to:

All grants and cooperative agreements


Contents

Overview


Non-Federal entities who apply for and receive Federal financial assistance awards are required to "establish safeguards to prohibit employees from using their positions for a purpose that constitutes or presents the appearance of personal or organizational conflict of interest, or personal gain." [2] Broadly, applicants (and recipients) need to address any relationship or matter which might put themselves, their employees, or their subrecipients in conflict with their responsibilities under the award and outside interests. During the application process, non-Federal entities must disclose in writing any potential conflicts of interest related to the funding opportunity.  If disclosed, the Federal agency or pass-through entity may elect to work with the applicant on a mitigation plan as part of the Federal awards terms and conditions.  

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Authorities


2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

§200.112 Conflict of interest.

The Federal awarding agency must establish conflict of interest policies for Federal awards.  The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy.

[80 FR 43308, July 22, 2015]

§200.318(c) 

(1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity.

(2) If the non-Federal entity has a parent, affiliate, or subsidiary organization that is not a state, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 43309, July 22, 2015]

The Council on Financial Assistance Reform's (COFAR) Frequently Asked Questions on 2 CFR 200 (July 2017 update)

200.112

.112-1 Conflict of Interest

Q: Section 200.112 states “The Federal awarding agency must establish conflict of interest policies for Federal awards. The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy.” Does this policy refer to scientific conflicts of interest that might arise in the research community?

A: No, however Federal agencies may have special policies or regulations specific to scientific conflicts of interest, such as HHS's policy at 42 CFR Part 50. The conflict of interest policy in 2 CFR 200.112 refers to conflicts that might arise around how a non-Federal entity expends funds under a Federal award. These types of decisions include, for example, selection of a subrecipient or procurements as described in section 200.318.

.112-2 Conflict of Interest – Scientific Collaborations

Q: Section 200.112 states “The Federal awarding agency must establish conflict of interest policies for Federal awards. The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy.”

A: FAQ 112-1 confirmed that this requirement does not refer to scientific conflicts of interest that may apply to projects supporting research. Scientific collaborations on research and development projects are generally the result of close collaboration prior to the submission of applications for support. Accordingly, virtually all of these collaborations might be considered to include a potential conflict of interest. The potential conflict is mitigated by the disclosure of these collaborations pursuant to agency requirements.

Q: Does Section 200.112 apply when a pass-through entity awards a subaward to support scientific collaboration on a research and development project?

A: Yes. When a subaward for scientific collaboration on a research and development project is included in the application for assistance or requested for prior approval and approved by the Federal awarding agency, the disclosure of any potential nonscientific conflict of interest, if required by the Federal awarding agency, provides sufficient information to the Federal awarding agency for the purpose of compliance with section 200.112.

Department of the Interior

§1402.112 What are the conflict of interest policies?

This section shall apply to all non-Federal entities. NOFOs and financial assistance awards must include the full text of the conflict of interest provisions in paragraphs (a) through (e) of this section.

(a) Applicability. (1) This section intends to ensure that non-Federal entities and their employees take appropriate steps to avoid conflicts of interest in their responsibilities under or with respect to Federal financial assistance agreements.

(2) In the procurement of supplies, equipment, construction, and services by recipients and by subrecipients, the conflict of interest provisions in 2 CFR 200.318 apply.

(b) Notification. (1) Non-Federal entities, including applicants for financial assistance awards, must disclose in writing any conflict of interest to the DOI awarding agency or pass-through entity in accordance with 2 CFR 200.112.

(2) Recipients must establish internal controls that include, at a minimum, procedures to identify, disclose, and mitigate or eliminate identified conflicts of interest. The recipient is responsible for notifying the Financial Assistance Officer in writing of any conflicts of interest that may arise during the life of the award, including those that have been reported by subrecipients.

(c) Restrictions on lobbying. Non-Federal entities are strictly prohibited from using funds under a grant or cooperative agreement for lobbying activities and must provide the required certifications and disclosures pursuant to 43 CFR part 18 and 31 U.S.C. 1352.

(d) Review procedures. The Financial Assistance Officer will examine each conflict of interest disclosure on the basis of its particular facts and the nature of the proposed grant or cooperative agreement, and will determine whether a significant potential conflict exists and, if it does, develop an appropriate means for resolving it.

(e) Enforcement. Failure to resolve conflicts of interest in a manner that satisfies the government may be cause for termination of the award. Failure to make required disclosures may result in any of the remedies described in 2 CFR 200.338, Remedies for noncompliance, including suspension or debarment (see also 2 CFR part 180).

[84 FR 45635 August 30, 2019]

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Frequently Asked Questions


As a recipient, how do I ensure I'm compliant with the Uniform Guidance and DOI policy on conflicts of interest?

In the application package, you must disclose any potential conflict of interest to the Service. See here for more information.

I plan to subaward Federal funds. What are my responsibilities as a pass-through entity regarding potential conflicts of interest by my subrecipient?

As a pass-through entity, you must communicate the Federal awarding agency's conflict of interest disclosure policy to your subrecipients, as stated in 2 CFR 200.112.

I have received a Federal subaward and may have a conflict of interest. Do I report this to the Service?

No. You must report this to the pass-through entity who will communicate, if needed, with the Service.

I know avoiding conflicts of interest is very important under Federal procurement rules. Are there conflict of interest requirements for contracts under Federal financial assistance awards?

Yes. 2 CFR 200.318(c)(1) requires non-Federal entities to maintain written conflict of interest standards for contractual activities under Federal awards. 

How does the Service inform applicants and recipients of conflict of interest requirements?

FWS funding opportunity announcements and Federal awards include conflict of interest disclosure requirements for applicants and recipients. Please refer to the applicable notice of funding opportunity announcement or your notice of award, or contact the U.S. Fish and Wildlife Service Technical Representative, for information regarding conflict of interest.

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Learning Aids


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Related Pages


Conflict of Interest (Federal awarding agencies)

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Resources


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References


1. "Conflict of Interest." Merriam-Webster.com. Merriam-Webster, n.d. Web. 29 Dec. 2017.

2. SF-424 Assurances Form (SF-424B/D).

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