On January 1, 2016, grantees and cooperative agreement holders become subject to new Federal Awardee Performance and Integrity Information System (“FAPIIS”) requirements.  80 Fed. Reg. 43301 (Jul. 22, 2015), 80 Fed. Reg. 45395 (Jul. 30, 2015).

Here are the basics on FAPIIS.

What is FAPIIS?

FAPIIS is a federal database intended to serve as a government-wide source of information about the prior performance of federal procurement contractors, grantees, and cooperative agreement holders.  In the federal procurement sector, agencies have been using FAPIIS since 2010.  See 75 Fed. Reg. 14059 (Mar. 23, 2010), Federal Acquisition Regulation § 9.104-6.

Do not confuse FAPIIS with the exclusions database in the System for Award Management (“SAM”).  FAPIIS is a different system and is intended to capture broader information than just suspensions and exclusions from federal awards.   The General Services Administration (“GSA”) plans to eventually incorporate FAPIIS into SAM.  You may access FAPIIS at: https://www.fapiis.gov/fapiis/index.action.

How will FAPIIS impact you in applying for awards?

Every agency will be required to check FAPIIS as part of its risk assessment under 2 C.F.R. § 200.205 prior to making an award.  Also, every agency will be required to enter information into FAPIIS about: (1) each decision not to award a grant or cooperative agreement to a particular entity when such decision is made on the basis of the agency’s risk assessment, and (2) information about each termination of a federal award.

With a few exceptions, this information will be publicly available.  It thus has the potential to impact your ability to compete for subawards.

Recipients and potential recipients have certain rights to comment on agency entries, contest erroneous entries, and seek protection of information that they believe may be proprietary.  It is important that you routinely examine your FAPIIS information as you would a credit report, and that you never pass up an opportunity afforded by an agency to review and comment upon a proposed entry.

For greater detail on these aspects of FAPIIS, see 2 C.F.R. §§ 200.205(b), 200.211(b), 200.212, 200.339(b), and 200.340(b).

How does FAPIIS impact you in performance of awards?

First, if you receive more than $10 million in aggregate federal awards (counting all potential project period funding and all potential contract option periods), you may be required to self-report the results of certain criminal, civil, and administrative proceedings in FAPIIS.  This requirement will be implemented by agencies expressly incorporating new terms and conditions (in the form of a new Appendix XII to 2 C.F.R. Part 200) into your award.  Agencies are required to incorporate such terms and conditions for each award of over $ 500,000.

Therefore, if you receive more than $ 10 million in aggregate federal awards, you should keep an eye out for Appendix XII.  When it appears in your notice of award (“NOA”), you will be required to self-report any of the following:

(a) Any criminal proceeding in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the federal government that resulted in a conviction in the past five (5) years.  “Conviction” means a judgment or conviction for a criminal offense, and includes convictions entered on pleas of “nolo contendere.”

(b) Any civil proceeding in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the federal government that resulted in “a finding of fault and liability and payment of a monetary fine, penalty, reimbursement, restitution, or damages of $ 5,000 or more” in the past five (5) years.

(c) Any administrative proceeding in connection with the award or performance of a grant, cooperative agreement, or procurement contract from the Federal Government that resulted in “a finding of fault and liability and . . . payment of either a monetary fine or penalty of $ 5,000 or more or reimbursement, restitution, or damages in excess of $ 100,000” in the past five (5) years.  “Administrative proceeding” means any “non-judicial process that is adjudicatory in nature . . .” and “does not include audits, site visits, corrective plans, or inspection of deliverables.”

Second, though there is no requirement that you check FAPIIS when entering into contracts or making subawards, doing so would be prudent.

For greater detail on these aspects of FAPIIS, see 2 C.F.R. §§ 200.113 and 200.210(b), and Appendix XII of 2 C.F.R. Part 200.

The references above are to 2 C.F.R. Part 200; what about 45 C.F.R. Part 75 for awards from the Department of Health and Human Services (“HHS”)?

HHS has not yet updated 45 C.F.R. Part 75 to reflect these new requirements.  However, in updating 2 C.F.R. Part 200, the Office of Management and Budget directed that such an update be accomplished “effective January 1, 2016.”  80 Fed. Reg. 43307.   Presumably, HHS will issue a similar amendment to Part 75 in the near future.

If you have questions or need a consultation about this ruling, please contact the Federal Grants Law group at Feldesman Tucker Leifer Fidell LLP, www.ftlf.com or 202-466-8960.