Reimbursable Agreements - Policies and Procedures

TABLE OF CONTENTS

OVERVIEW

2.1 What is the purpose of this chapter? This chapter establishes guidance and procedures for U.S. Fish and Wildlife Service (Service) employees who prepare and approve reimbursable agreements.

2.2 What is the scope of this chapter?

A. This chapter covers most reimbursable agreements where a non-Service entity pays the Service to provide products or services.

B. The chapter does not cover:

(1) Memorandums of Understanding (MOU) or other agreements where the Service does not transfer funds or property (see Part 301 of the Service Manual);

(2) Donation agreements where people and organizations give funds, property, or volunteer services to the Service (see 212 FW 8 and 150 FW 1);

(3) Funding and participation agreements with potentially responsible parties for natural resource damage assessment and restoration activities (see 573 FW 3); or

(4) Reimbursable agreements for oil spill response activities (see 264 FW 3).

2.3 What is a reimbursable agreement? A reimbursable agreement is a contractual relationship where the Service provides a product or service to a non-Service entity and is paid by the recipient for the product or service.

2.4 What are the authorities for this chapter?

A. Appropriations, Application (also known as the Purpose Statute) (31 U.S.C. 1301).

B. The Economy Act of 1932, as amended (31 U.S.C. 1535).

C. Government Accountability Office (GAO) Principles of Federal Appropriations Law (the Red Book).

D. House Report 106-222 and Senate Report 106-99.

E. Intergovernmental Cooperation (31 U.S.C. Subtitle V, Chapter 65, Sections 6501-6508).

F. Office of Management and Budget (OMB) Circular A-11, Preparation, Submission, and Execution of the Budget.

G. OMB Circular A-25, User Charges.

H. OMB Circular A-45, Rental and Construction of Government Quarters.

I. OMB Circular A-97, Rules and Regulations Permitting Federal Agencies to Provide Specialized or Technical Services to State and Local Units of Government under Title III of the Intergovernmental Cooperation Act of 1968.

J. Statement of Federal Financial Accounting Standard (SFFAS) #4, Managerial Cost Accounting Standards and Concepts.

RESPONSIBILITIES

2.5 Who is responsible for reimbursable agreements? See Table 2-1.

Table 2-1: Responsibilities and Approvals for Reimbursable Agreements

AGREEMENT DEVELOPMENT AND REQUIRED ELEMENTS

2.6 How does the Service determine how much to charge for a reimbursable project?

A. The Service must estimate and document the direct costs associated with completing the work the paying entity wants performed.

B. The responsible Service office can use FWS Form 3-2377, Independent Government Cost Estimate, as a tool for developing and documenting the estimate. Other methods may be used for developing cost estimates if the methodology is documented. Offices must retain documentation that the preparer has signed and dated about how the cost estimate was developed. 

C. Once direct costs are identified, the responsible Service office applies the appropriate indirect cost recovery rate to determine the total estimated cost of the project (see 264 FW 1, Exhibit 3).

2.7 Why is it necessary to develop an independent cost estimate for a reimbursable project? In accordance with OMB Circular A-25, Memorandum for Heads of Executive Departments and Establishments, User Charges, Federal agencies must recover full costs (direct and indirect). If the Service does not develop an independent cost estimate, there is no basis to determine if a project can be completed within the time frame and cost limits in the statement of work. This could result in the Service receiving significantly less than the actual cost to provide the goods and services in the agreement, which would not be in accordance with Service policy or OMB Circular A-25. Any difference between the project funded amount and actual cost will be charged to the responsible Service office’s primary fund source.

2.8 What if the paying entity cannot afford to provide the amount of funding that the Service estimates the project will cost? If the paying entity cannot provide the full cost of the project as originally described, the responsible Service office must work with them to adjust the scope of work so that the work is commensurate with the amount of funding available or decide not to take on the project.

2.9 May the Service agree to fund some of the work itself? While programs may use appropriated funds to perform mission-related activities identified in a reimbursable agreement, those activities should not be in the agreement’s statement of work. The agreement should only identify the work that the paying entity is funding. Any additional work that the Service is funding should be described in an MOU with the paying entity.

2.10 What format does the Service use for reimbursable agreements? For reimbursable agreements (when the Service is the seller), the paying entity determines the format of the written contractual agreement. When the reimbursable agreement is with another Federal agency, they will use their own format. Regardless of the format, the responsible Service office must ensure the elements in section 2.11 and Exhibit 1 are included in the agreement prior to Service approval.

2.11 Are there specific clauses that the Service must include in reimbursable agreements? Yes. The following must be in all reimbursable agreements:

A. Method for Settlement of Disputes. The agreement must include a method for settling disputes that is consistent with the Treasury Financial Manual (TFM) Intragovernmental Transaction Guide. Following is suggested language:

(1) We intend for nothing in this document to conflict with current Service or “other agency” directives. If the terms of this agreement are inconsistent with existing directives of either of the agencies entering into the agreement, then those portions of the agreement that are inconsistent must be renegotiated. We will complete a modification to the agreement to provide those corrections and directive compliance. All other terms and conditions not affected by the inconsistency must remain in full force and effect.

(2) Should disagreement arise on the interpretation of the provisions of this agreement, or modifications or revisions to it, that cannot be resolved at the operating level, each party must state the area(s) of disagreement in writing and present the matter to the other party for consideration. If agreement on interpretation is not reached within 30 days, the agencies must send a written presentation describing the disagreement to respective higher officials for resolution.

(3) The agencies under this agreement are also responsible for resolving any billing/payment disputes that may arise within 120 business days of the billing date. If the agencies cannot resolve the dispute within this period, the matter will be referred to the Department of the Interior’s Office of Financial Management the following business day.

B. Effective Date, Review, Modification, and Termination/Cancellation Clause. The Service should generally include provisions regarding the effective date and the process for terminating the agreement within a specified time if written notice is provided to all agencies. The language may include further specifics regarding the rights and liabilities of the agencies if there is a termination. Following is suggested language:

(1) This agreement iseffective on the date of the final signature, and it will remain in effect through (date)/(for a period of # years). Both agencies must review the agreement to determine its suitability for modification to provide for revision, renewal, extension, or termination. Any modifications must be in writing. Both agencies must approve and sign them.

(2) Either agency may terminate this instrument in whole or in part, in writing, at any time before the date of expiration upon 30 days written notice of such termination. Neither party mayincur any new obligations for the terminated portion of the Inter/Intra-Agency Agreement (IAA) after the effective date and must cancel as many obligations as possible. Full credit must be allowable for each party’s expense and all obligations that cannot be cancelled, but were properly incurred, up to the effective date of termination.

C. Liability Issues, if any. Liability applies to the potential for damage or injury to people or property. An agreement may include indemnification language to protect the Service from such lawsuits. Add clauses that require the other party in the agreement to assist or cooperate in the Service’s defense. The Service may not indemnify an outside party.

D. Indirect Cost Recovery Rates. We review our indirect cost recovery rates every 2 years (see 264 FW 1). When negotiating long-term agreements, there must be a contract variation clause included to accommodate any potential rate change.

2.12 How do Service employees determine the statutory authority for reimbursable agreements? It is imperative that the correct statutory authority is included in every reimbursable agreement. The statutory authority is what authorizes the Service to perform the work and deposit and credit funding to Service accounts in lieu of Treasury general receipts. Employees must carefully analyze each proposed reimbursable agreement to ensure that the correct statutory authority is used (see Exhibit 1, 264 FW 1). Employees should consult the Reimbursable and Federal Agreements team or Budget and Performance Division if they are uncertain about the statutory authority. In some instances, the Budget and Performance Division may consult the SOL to confirm an agreement is valid and to obtain recommendations about how to comply with appropriations law.

2.13 Who reviews and signs agreements? In addition to the information below, see section 2.5 for information about signature authorities.

A. The Project Leader or supervisor responsible for delivering the goods or services in the reimbursable agreement:

(1) Must review and ensure the terms, conditions, and statutory authority are complete, but not sign the agreement;

(2) May request a review for completeness from the Reimbursable and Federal Agreements team; and

(3) May request a Contracting Officer to review the agreement for its contractual content before Service officials described in section 2.5 and below in 2.13B approve the document.

B. Directorate members (e.g., Assistant Directors; Regional Directors; Director, NCTC; Chief, NWRS) may sign reimbursable agreements with:

(1) Other Federal Government agencies and States for any amount, and

(2) Local and Tribal governments and private entities when the agreement is for no more than $250,000, subject to the restrictions in sections 2.16 and 2.18.

C. The Director must sign reimbursable agreements with local and Tribal governments and private entities that are for more than $250,000.

D. In addition:

(1) The person signing the reimbursable agreement must have the authority to enter into contractual agreements as outlined in section 2.5; and

(2) The agreement must comply with Federal appropriations law, including the bona fide need rule (see 260 FW 1). The Project Leader/supervisor should consult with the reviewer from the Reimbursable and Federal Agreements team or Budget and Performance Division if there are any questions about complying with appropriations law.

2.14 Where does the office responsible for the agreement send it after it’s signed? Within 30 days of the date the reimbursable agreement is signed by both parties, the responsible Service office should submit the agreement and a signed Reimbursable Agreement Data Form (FWS Form 3-2058) to the Reimbursable and Federal Agreements team through the mySupport portal. The Reimbursable and Federal Agreements team:

A. Reviews the package for completeness,

B. Signs the FWS Form 3-2058,

C. Enters the agreement and form data into FBMS, and

D. Notifies the responsible Service office that the agreement has been established.

IMPACTS OF THE ECONOMY ACT

2.15 What is the impact of the Economy Act (31 U.S.C. Sec. 1535) on the funds we receive through a reimbursable agreement? The Economy Act authorizes agencies to purchase goods or services from other Federal agencies:

A. The Economy Act:

(1) Stipulates that the seller (the Service) must obligate funds within the period of availability of the buyer’s (the one paying the Service) appropriation. That means we must either properly obligate the funds against a procurement contract (i.e., purchase order, IAA, etc.) or complete the work internally (i.e., payroll, travel, etc.) before the funds expire. The buying agency is required to de-obligate unexpended funds, which are then no longer available to reimburse the Service for any future work performed unless accounting or computer errors occurred that caused the de-obligation.

     (a) As a result, using the Economy Act as the authority for providing reimbursement requires the Service to incur all costs (by either obligating costs to a contract or incurring payroll costs) before the buying agency’s funds expire.

     (b) Because payroll costs cannot be obligated, all costs for employee salaries must be incurred (i.e., pay-period 19 is the last pay-period to post in a fiscal year) by the date the buying agency’s funds expire.

(2) Imposes restrictions on the Service as to when the responsible Service office must complete the reimbursable work, separate from the period of performance in the statement of work. If the buying entity cites the Economy Act as their authority to pay the Service, and the funds they are using to reimburse the Service expire at the end of the current fiscal year (the funds citation listed on the agreement will indicate when the funds expire), the responsible Service office must either:

     (a) Properly obligate the funds against a procurement contract, or

     (b) Complete the work before the buying agency’s funds expire.

(3) Mandates full cost recovery.

B. An exchange of funds under the Economy Act does not extend the availability of funds beyond the amount Congress provided in the applicable Appropriations Act.

C. If you are unsure of when funds will expire, consult the buying agency.

ADVANCE PAYMENT REQUIREMENTS

2.16 May the Service waive advance payment for reimbursable agreements with State, local, Tribal, and foreign governments, and private entities?

A. The supervising Directorate member (e.g., Assistant Directors; Regional Directors; Director, NCTC; Chief, NWRS) may approve waivers of advance payment for reimbursable agreements in certain circumstances. The Directorate member may redelegate this authority within the organization, but no lower than their Deputy or an Assistant Regional Director. Their authority to approve waivers of advance payment is limited to reimbursable agreements with:

(1) States (no limit on the dollar amount), and

(2) Local and Tribal governments if the agreement is for no more than $250,000.

B. The Director must approve or deny requests to waive advance payment for reimbursable agreements with:

(1) Local and Tribal governments when the agreement is for more than $250,000, and

(2) Foreign governments.

C. We may not waive advance payment of reimbursable agreements with private entities.

D. For waivers of advance payment:

(1) For more than $250,000, the supervising Directorate member sends a memorandum (see Exhibit 2) to the Director.

(2) For $250,000 and below, the Assistant Regional Director or the supervising Directorate member’s Deputy should prepare a memorandum to their supervising Directorate member (if signature is delegated to them, then the supervising program representative prepares the memorandum).

E. The memorandum must include the following information:

(1) How this agreement will benefit the mission of the Service;

(2) Why the recipient cannot make advance payment(s) for the services or products that the Service will provide; and

(3) A history of timely payments by the recipient that demonstrates credit worthiness, or other evidence of financial stability of the organization as demonstrated by:

     (a) Prompt payment history with the Service. An FBMS Customer Account Analysis shows whether a recipient has a history of prompt payments with the Service. Per the Department’s Cash Management Handbook, payments are considered delinquent if not paid within 30 days from the date of the invoice or if the payment is not received by the due date prescribed on the invoice.

     (b) Dun and Bradstreet (D&B) report. A D&B report shows whether a recipient has a   D&B composite credit appraisal rating of “high” or “good.”

F. Attach a draft copy of the agreement to the memorandum.

2.17 How does the Service process advance payments for reimbursable agreements?

A. When a payment is received at the responsible Service office, a Collection Officer must process the payment according to the collections guidelines in 261 FW 1, Cash Accountability.

B. If the full agreement amount is not provided in the initial advance payment, only the amount we receive will be established in FBMS as spending authority. The Service office doing the reimbursable work is responsible for monitoring expenditures and requesting future advance payments from the paying entity.

C. We must never expend funds in excess of the amount of the advance payment received.

PRIVATE ENTITY AGREEMENTS

2.18 What are the requirements for approval of reimbursable agreements with private entities?

A. For $250,000 or less: Supervising Directorate members or their designees as listed in section 2.5) may sign reimbursable agreements with private entities when the agreement is for $250,000 or less (including modifications).

(1) The Project Leader/supervisor at the responsible Service office drafts an approval memorandum for the supervising Directorate member to sign. The Project Leader/supervisor should send the memorandum to the appropriate program office for processing.

(2) The memorandum should include the following information:

     (a) How the agreement will benefit the mission of the Service,

     (b) Why the private entity needs the Service’s expertise,

     (c) Summary of the scope of work and cost of agreement, and

     (d) Assurance that working with the private entity will not cause a conflict of interest (see section 2.19).

(3) After the memorandum is approved, the Project Leader/supervisor should send a copy of it to the Reimbursable and Federal Agreements team.

(4) After both parties sign the agreement and we receive advance payment, the responsible Service office may begin to perform reimbursable work.

(5) Federal appropriations law prohibits the Service from waiving advance payment for a private entity.

B. For more than $250,000: The Director must sign agreements with private entities that exceed $250,000 (including modifications), and are not for spill response actions (see 264 FW 3 for information about oil spill response and other hazardous substance release actions).

(1) The Project Leader/supervisor at the responsible Service office drafts an approval memorandum for the Director to sign. See Exhibit 3 for a template. The Project Leader/supervisor should send the memorandum to the appropriate program office for processing.

(2) The program office sends the memorandum to the Director. The memorandum should include the information we describe in section 2.18A(2) above.

(3) After both parties sign the agreement and we receive advance payment, the responsible Service office may begin to perform reimbursable work.

(4) Federal appropriations law prohibits the Service from waiving advance payment for a private entity.

2.19 What factors should the Service consider when entering into a reimbursable agreement with a private entity? The factors below describe what we should consider when determining whether to enter into a reimbursable agreement with a private entity. The presence or absence of each factor does not force a decision, but illustrates what we must consider when evaluating the circumstances.

A. Would the agreement maintain the integrity of the Department’s and Service’s programs and operations?

(1) Does the agreement appear to be (by its size or circumstance) an attempt to influence regulatory or other Departmental or Service authority?

(2) Does the agreement meet a legitimate Department or Service need?

(3) Is the agreement consistent with, and does not circumvent, law, regulation, and policy?

(4) Could the private entity use the agreement to state or imply the Department’s or the Service’s endorsement of the private entity or its products or services?

B. Does the agreement maintain the impartiality, and appearance of impartiality, of Departmental and Service employees?

(1) Is the agreement made to a program or in an amount that would influence or appear to influence any significant pending Department or Service decision or action involving the private entity’s interests?

(2) Could someone construe the agreement as an actual or an implied commitment by the Department or the Service to take an action favorable to the private entity in exchange for doing work for the private entity?

C. Does the agreement maintain public confidence in the Department’s and Service’s programs and personnel?

(1) Will the agreement likely result in public controversy?

(2) Are conditions of the agreement consistent with the Department’s and Service’s policy, goals, and programs?

(3) Does the private entity have any significant known history of violations, whether criminal or civil in nature?

2.20 How long is an approval valid for a reimbursable agreement with a private entity? Approvals to enter into a reimbursable agreement with a private entity are valid for 2 fiscal years—the fiscal year it is originally requested and the following fiscal year—unless otherwise noted on the approval.

GRANTS

2.21 Must the Service process all incoming grant funding as reimbursable agreements?

A. We must process grants we receive from a Federal source as reimbursable agreements and they are subject to applicable indirect cost recovery requirements.

B. We must process grants we receive from the National Fish and Wildlife Foundation (NFWF) as reimbursable agreements, but they are not subject to applicable indirect cost recovery requirements (0% indirect cost recovery rate).

C. We may process grants we receive from non-Federal sources as either donations (which we may deposit in the Contributed Funds account) or as reimbursable agreements based on their administrative requirements.

(1) Non-Federal grants processed as donations and deposited into the Contributed Funds account are not subject to indirect cost recovery requirements, so indirect cost recovery rates are not applicable. There are limits on Directorate members’ authority for accepting donations (see 212 FW 8).

(2) Non-Federal grants awarded to the Service and processed as reimbursable agreements are subject to applicable indirect cost recovery rates.

D. Generally, it’s more advantageous to the Service to process incoming grant funding with significant administrative requirements as reimbursable agreements to recover full costs associated with carrying out the grant. This also allows for automatic system controls on billing and availability of funds. The factors below describe what we should consider when deciding whether to process a grant as a reimbursable agreement or a donation. If the answers to these questions are predominantly “yes,” then a reimbursable agreement is the most appropriate route:

(1) Does the work associated with carrying out the grant require complex billing and reporting requirements?

(2) Are there recurring costs associated with carrying out the grant, such as maintenance of land or equipment?

(3) Does the grant work require significant management oversight?

(4) Does the grant work involve coordination with multiple field, Regional, State, local, or Tribal offices?

(5) Does the responsible Service office have sufficient administrative staff to adequately monitor grant spending, reporting, and billing?

AGREEMENT PERFORMANCE

2.22 Who is responsible for reviewing new or modified reimbursable agreements entered into FBMS? The Reimbursable and Federal Agreements team is responsible for the review of new or modified reimbursable agreements posted in FBMS to ensure that entries are accurate. They must conduct this review within 30 days of the establishment of the sales order in FBMS. Team members must document this review by signing and dating the review report. We also recommend that the preparer review data in FBMS for accuracy.

2.23 When can the Service begin work under a reimbursable agreement?

A. Agreements with other Federal agencies and State, local, and Tribal governments.

(1) The Service office should avoid beginning work (incurring costs) until both the Service and the other party have signed a reimbursable agreement. The reimbursable agreement should be in place to ensure that we can properly record and account for all transactions (see 31 U.S.C. 3512 and OMB Circular A-11).

(2) If we incur costs before signing an agreement with a State, local, or Tribal government, and we cannot recover the charges in some other way, the responsible Service office’s current resource management appropriation will be charged.

(3) If a Service office must incur costs before completing an agreement because they are fully funded by the agreement and funding is certain from a Federal, State, local, or Tribal government, the Project Leader/supervisor must take the following steps:

     (a) Request a Work Breakdown Structure (WBS) from the Reimbursable and Federal Agreements team. Provide the date that the reimbursable agreement will be available to load into FBMS.

     (b) The Service may allow organizations 90 calendar days to finalize agreements. After this 90-day period, the Reimbursable and Federal Agreements team must remove from FBMS all projects not supported by a signed agreement. If the Service office intends to continue to perform work, there must be a legally available direct funding source that can be charged.

     (c) Regional and program offices are responsible for monitoring the progress of reimbursable agreements that have not been signed.

     (d) If the Service does not obtain a signed agreement within the 90-day period and payment is not received in an additional 90 days, the responsible Service office will be charged for all outstanding expenditures and any applicable indirect costs.

     (e) At the close of each fiscal year, the Service must have signed agreements for all reimbursable projects. If a signed agreement is not in place at the end of the fiscal year, costs incurred to date will be charged against the responsible Service office’s primary resource management funding source.

B. Agreements with private entities. We must not incur any costs until the advance payment has been received and deposited (see sections 2.18 and 2.19).

2.24 Who is accountable for ensuring the accuracy of obligations and expenditures charged to a reimbursable agreement?

A. The Service office responsible for the reimbursable activity must ensure on a monthly basis that the obligations and expenditures incurred against the agreement are accurate and necessary to complete the work. The monthly review must be documented on:

(1) The Monthly Review of Reimbursable Project Charges form (FWS Form 3-2390) with the signature and date of the person performing the review, or

(2) Equivalent documentation.

B. If an agreement requires additional or specialized expenditure reporting requirements, the Service office responsible must provide those additional requirements to the other entity.

TRAVEL FUNDED BY ANOTHER AGENCY

2.25 How does the Service handle employee travel funded by another bureau/agency?

A. We use the Inter/Intra-Agency Travel Agreement Form (FWS Form 3-2368) as our reimbursable agreement to document when another bureau/agency funds the travel expenses of a Service employee. This form also ensures the bureau/agency has the necessary information to process reimbursement.

(1) If the paying bureau/agency has a different form, they may use it if it provides the same information as FWS Form 3-2368.

(2) For travel for job interviews, the interviewing bureau/agency must book and fund the travel in its own travel system (see 265 FW 8).

(3) International Technical Assistance Program (ITAP) travel does NOT fall under the procedures in section 2.25A above.

(4) Under 5 U.S.C. 5703, the reimbursement of travel expenses for employees from another bureau/agency are not considered invitational travel (excluding job interviewees and congressional and OMB staff).

B. The Service must charge all travel expenses to the fiscal year in which the costs were incurred.

C. Inter/intra-agency travel is subject to the standard indirect cost recovery rates.

PAYMENT AND CLOSEOUT

2.26 How does the Service close out reimbursable agreements?

A. The Service office responsible for the reimbursable activity must notify the requesting agency (buyer) when work and billing is complete. Although the Department recommends that we use the Intra-Governmental Agreement Completion Report form (FWS Form 3-2367) for the notification, it is not a requirement.

B. The responsible Service office should prepare FWS Form 3-2058 with the final amounts and send it to the Reimbursable and Federal Agreements team to close out the reimbursable agreement in FBMS if the amounts are not already reduced to actual costs during year-end close.

C. Final billing should occur within 90 days, and must not exceed 120 days, of completion of the work.

2.27 What happens if there is an outstanding unpaid invoice on a reimbursable agreement? If an invoice is not paid within 180 days past the final billing on an expired agreement, the outstanding expenditures will be moved to the responsible Service office’s primary resource management fund source account, and we will follow the debt recovery procedures we describe in Part 263 of the Service Manual. If the responsible Service office’s primary fund source is a reimbursable account or does not have adequate funding, the expenditures will default one level up to the programmatic Assistant Director’s or Assistant Regional Director’s primary resource management fund source.