[Federal Register: November 30, 2001 (Volume 66, Number 231)]
[Rules and Regulations]               
[Page 60135-60138]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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Part VI

Department of Education


34 CFR Part 75

Direct Grant Programs; Final Rule

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34 CFR Part 75

RIN 1890-AA02

Direct Grant Programs

AGENCY: Office of the Chief Financial Officer, Department of Education.

ACTION: Final regulations.


SUMMARY: The Secretary amends the Education Department General 
Administrative Regulations (EDGAR) that govern discretionary grant 
programs. These amendments will implement new options for our 
application review process for discretionary grants. These changes will 
improve the quality of the review process and provide greater 
opportunities for inexperienced, ``novice applicants'' to receive 

DATES: These regulations are effective December 31, 2001.

FOR FURTHER INFORMATION CONTACT: Valerie Sinkovits, U.S. Department of 
Education, 400 Maryland Avenue, SW., room 3652, ROB-3, Washington, DC 
20202-4248. Telephone: (202) 708-7568.
    If you use a telecommunications device for the deaf (TDD), you may 
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 

SUPPLEMENTARY INFORMATION: On April 17, 2000 the Secretary published a 
notice of proposed rulemaking (NPRM) for this part in the Federal 
Register (65 FR 20698).
    In the preamble to the NPRM, the Secretary discussed on pages 20699 
through 20702 the major changes proposed in that document to increase 
the options available for reviewing and selecting discretionary grants. 
These included the following:
     Amending Sec. 75.217 to include the use of quality bands 
to evaluate applications and adding a new Sec. 75.223 to describe the 
procedures used under competitions that use quality bands.
     Adding a new Sec. 75.224 to address the practice that has 
evolved in some program offices of the Department of Education 
(Department) involving the use of more than one review of an 
application, otherwise known as ``multiple tier review.''
     Adding a new Sec. 75.225 to include procedures to use if 
the Secretary decides to give special consideration to novice 
    These final regulations contain one significant difference from the 
NPRM. As a result of public comments we received, we have decided not 
to make final the regulations regarding the use of quality bands in 
this document. We would like to do more work to consider fully the 
issues raised by commenters and to determine whether to issue final 
regulations for the quality band procedures. Rather than delay the 
implementation of the procedures for novice applicants, we have decided 
to publish as much of the NPRM as possible in final now and to notify 
the public of our decision regarding the quality band procedures at a 
later date.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, sixteen 
parties submitted comments on the proposed regulations. An analysis of 
the comments and of the changes in the regulations since publication of 
the NPRM follows.
    We discuss substantive issues under the section of the regulations 
to which they pertain. Generally, we do not address technical and other 
minor changes, as well as suggested changes that the law does not 
authorize the Secretary to make.
    A number of commenters supported these regulations while others 
raised concerns about them. As discussed earlier, the Secretary has 
decided to proceed with publishing these final regulations without the 
sections on quality bands. Therefore, these final regulations include 
only the sections on multiple tier review and novice procedures. All of 
the comments discussed below concern novice procedures, as none were 
received on multiple tier review. Before discussing the individual 
comments, we provide a general response to the comments we received on 
the novice procedures.
    The novice procedures were developed in response to the public 
perception that the barriers to receiving a grant are highest for those 
who have never received a grant before. These procedures are an 
additional option for Department staff--they are not required--and 
would be used only in those circumstances where they are 
programmatically appropriate.
    When determining the number of bonus points available to novice 
applicants under a particular program, the Secretary will carefully 
balance quality concerns with the goal of enabling new applicants to 
break into the grant award system. The Secretary will not fund projects 
under these procedures that are of poor quality or do not meet the 
requirements of the program under which they are funded.

Section 75.225  What Procedures Does the Secretary Use if the Secretary 
Decides To Give Special Consideration to Novice Applications?

    Comments: A number of commenters strongly supported the novice 
procedures, stating that it would be encouraging to first-time 
applicants to know that more experienced applicants would not 
necessarily win out over less experienced, yet highly qualified 
applicants. These commenters believed that this gave their 
organizations and their grants' intended beneficiaries a better chance 
of benefiting from Federal funding despite their inexperience in 
writing applications and managing grants.
    Discussion: These comments affirm the Secretary's intent to broaden 
the pool of applicants that apply for and ultimately receive funding 
under the Department's discretionary grant programs.
    Changes: None.
    Comments: Several commenters questioned the appropriateness of 
allowing programs to give novice applicants any preference in the 
selection process, stating that all applicants were novices at one time 
and were able to get funded by following the application procedures, 
studying funded applications, and submitting high quality proposals. 
These commenters were concerned that lower quality applications would 
be funded under these procedures. One commenter questioned the 
perception held by some unsuccessful applicants that an organization 
had to already have a grant to get a grant. Another questioned the need 
for a separate regulation to make the funding of novices a priority, 
since programs already have the ability to define priorities for 
    Discussion: During the Department's reengineering process a 
significant number of focus group participants from the applicant 
community voiced the opinion that it was very difficult to break into 
the grant funding system, particularly for small and inexperienced 
organizations that lack the resources to hire professional grant 
writers. Therefore, one of the goals of the reengineered grants process 
is to broaden the range of grant applicants and recipients who 
participate in our programs. Instituting special procedures for novice 
applicants is one way to achieve this goal and to address the 
perception that our grants process is unfairly weighted toward the 
larger institutions with greater resources. The

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Secretary will not fund poor quality applications or ones that do not 
address the program's requirements. Although programs may set funding 
priorities, the funding of novice applicants is generally not addressed 
in this fashion. In addition, this new procedure standardizes the 
procedures for programs that choose to open up a competition for 
novices, ensuring greater fairness in the process.
    Changes: None.
    Comments: A number of commenters recommended that the proposed 
definition of novice applicant be changed. One commenter suggested that 
the five-year period without a Federal discretionary grant be 
eliminated from the novice applicant definition and that the Secretary 
be given latitude in the final determination of which applicants 
qualify as novices. One commenter was concerned that under the proposed 
definition, a ``novice applicant'' may never have received a grant 
before simply because it did not have the need that would have made it 
eligible to apply for a particular grant competition, and not because 
it lacked the resources or capacity to apply. Another commenter was 
concerned about how the definition would be applied to groups of 
applicants, such as consortia and partnerships.
    Discussion: The definition was set at five years without a 
discretionary grant from any Federal program in order to ensure that 
the applicant was truly an inexperienced novice applicant. If the 
definition applied only to an applicant that had not received a grant 
or subgrant under the particular Department of Education program from 
which it seeks funding, then an applicant with extensive experience in 
receiving grants from other Federal programs could apply as a novice, 
which clearly it would not be.
    The Secretary recognizes that there is a slight possibility that an 
organization could qualify as a novice, despite the fact that it had 
the resources and capacity to apply earlier, but hadn't received a 
grant from the Federal government in the past five years merely because 
it hadn't had a legitimate reason to apply. However, the Secretary 
believes that the likelihood that this would happen is small, and that 
achieving the goal of broadening the pool of applicants who apply for, 
and ultimately receive, discretionary grant funding outweighs this 
    Moreover, the Secretary believes that reserving broad latitude to 
determine which applicants qualify as novices would not give all 
potential applicants clear notice of the rules by which the competition 
will be judged. Finally, the Secretary agrees that clarification is 
needed in these final regulations regarding how the novice applicant 
definition would apply to applications submitted by groups, such as 
partnerships or consortia. The Secretary believes that in order for an 
application submitted by a group to qualify as a novice application, 
all members of the group should meet the definition of novice 
applicant. The Secretary has also amended the novice applicant 
definition to clarify that any member of a group application that 
receives a grant under a Department program could not qualify in the 
future as a novice applicant for that program.
    Changes: In order to provide clarification on how the novice 
application procedures would apply to applications submitted by a 
group, the Secretary has amended the novice applicant definition in 
Sec. 75.225(a) to indicate that when a group submits a novice 
application each member of the group must meet the novice applicant 
definition. Further, we have amended the definition to preclude members 
of a group of eligible applicants that receives a grant from being 
considered as novice applicants under that particular program in the 
future. Section 75.225 (a) has also been renumbered accordingly.
    Comments: Several commenters supported the idea of separate 
competitions for novice applicants, but did not want standards to be 
lowered for these competitions; novice applicants should have to meet 
the same requirements as any other applicant. There was also support 
for keeping the size of the awards to novices relatively small. Others 
commented that the winners of novice competitions might require closer 
monitoring or additional technical support until the novice grantees 
develop more experience in grants administration. Another commenter 
thought it would be more prudent to give the additional assistance in 
advance of the competition, to ensure the submission of high quality 
    Discussion: We agree that novice applicants must meet the same 
requirements as other applicants. As discussed earlier, the purpose of 
this regulation is to increase the number of competent grantees, not to 
reward lower quality applications with funding. In addition, it has 
always been the policy of the Department to nurture successful projects 
by providing assistance to new grant recipients, particularly first-
time or relatively inexperienced grantees. This assistance is given in 
the form of technical assistance workshops, where training in basic 
grants administration is provided, as well as regular contact by phone 
or e-mail between Department staff and grant project staff. We expect 
that in the case of novice grantees, post-award support will be 
provided to a greater extent than normal, to help ensure the success of 
these projects. In fact, the use of special procedures for novice 
applicants will make it easier for program staff to identify those 
applicants that may need the most assistance. As we gain experience 
with novice applicants, the most effective ways of ensuring their 
success will in all likelihood become more evident.
    Changes: None.

Paperwork Reduction Act of 1995

    These regulations do not contain any information collection 

Intergovernmental Review

    These final regulations are not subject to the requirements of 
Executive Order 12372 and the regulations in 34 CFR part 79. However, 
many of the programs that these final regulations would apply to are 
subject to Executive Order 12372 and the regulations in 34 CFR part 79. 
The objective of the Executive order is to foster an intergovernmental 
partnership and a strengthened federalism by relying on processes 
developed by State and local governments for coordination and review of 
proposed Federal financial assistance.
    In accordance with the order, we intend this document to provide 
early notification of the Department's specific plans and actions for 
these programs.

Assessment of Educational Impact

    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and on our review, we have 
determined that these final regulations do not require transmission of 
information that any other agency or authority of the United States 
gathers or makes available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-

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888-293-6498; or in the Washington, D.C., area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://

(Catalog of Federal Domestic Assistance Number does not apply)

List of Subjects in 34 CFR Part 75

    Administrative practice and procedure, Education Department, Grant 
programs--education, Grant administration, Performance reports, 
Reporting and recordkeeping requirements, Unobligated funds.

    Dated: November 26, 2001.
Rod Paige,
Secretary of Education.
    For the reasons discussed in the preamble, the Secretary amends 
part 75 of title 34 of the Code of Federal Regulations as follows:


    1. The authority citation for Part 75 continues to read as follows:

    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

    2. Section 75.223 is added and reserved and new Secs. 75.224 and 
74.225 are added to subpart D under the undesignated center heading 
``Selection Procedures'' to read as follows:

Sec. 75.223  [Reserved]

Sec. 75.224  What are the procedures for using a multiple tier review 
process to evaluate applications?

    (a) The Secretary may use a multiple tier review process to 
evaluate applications.
    (b) The Secretary may refuse to review applications in any tier 
that do not meet a minimum cut-off score established for the prior 
    (c) The Secretary may establish the minimum cut-off score--
    (1) In the application notice published in the Federal Register; or
    (2) After reviewing the applications to determine the overall range 
in the quality of applications received.
    (d) The Secretary may, in any tier--
    (1) Use more than one group of experts to gain different 
perspectives on an application; and
    (2) Refuse to consider an application if the application is 
rejected under paragraph (b) of this section by any one of the groups 
used in the prior tier.

(Authority: 20 U.S.C. 1221e-3 and 3474)

Sec. 75.225  What procedures does the Secretary use if the Secretary 
decides to give special consideration to novice applications?

    (a) As used in this section, ``novice applicant'' means--
    (1) Any applicant for a grant from ED that--
    (i) Has never received a grant or subgrant under the program from 
which it seeks funding;
    (ii) Has never been a member of a group application, submitted in 
accordance with Secs. 75.127-75.129, that received a grant under the 
program from which it seeks funding; and
    (iii) Has not had an active discretionary grant from the Federal 
Government in the five years before the deadline date for applications 
under the program.
    (2) In the case of a group application submitted in accordance with 
Secs. 75.127-129, a group that includes only parties that meet the 
requirements of paragraph (a)(1) of this section.
    (b) For the purposes of paragraph (a)(1)(iii) of this section, a 
grant is active until the end of the grant's project or funding period, 
including any extensions of those periods that extend the grantee's 
authority to obligate funds.
    (c) If the Secretary determines that special consideration of 
novice applications is appropriate, the Secretary may either--
    (1) Establish a separate competition for novice applicants; or
    (2) Give competitive preference to novice applicants under the 
procedures in 34 CFR 75.105(c)(2).
    (d) Before making a grant to a novice applicant, the Secretary 
imposes special conditions, if necessary, to ensure the grant is 
managed effectively and project objectives are achieved.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[FR Doc. 01-29726 Filed 11-29-01; 8:45 am]