GIM 18
Attachment A
Part 2

CHANGES IN PROJECT [SUBPART OF CHAPTER - PHS GRANTS POLICY STATEMENT 4-1-94]

Beginning Date
Protocol or Scope
Status or Absence or Program Director, Project Director, or Principal Investigator
Change of Grantee Organization
Successor in Interest and Name Changes

This section covers policies on changes in approved PHS grant-supported activities initiated by grantees due to changes in personnel, changes in the status or organization of the grantee, or changes in the objectives or timeframe of the approved project. It also includes PHS-initiated changes other than those dealt with in "Suspension, Termination, and Withholding." These changes are permitted when accomplished according to the guidelines below.

Necessary changes in the beginning date of a grant- supported project should be requested before the issuance of an award document. Any costs incurred or resulting from obligations made before the beginning date of a budget period under a new award or competing continuation award and charged to that award are not allowable unless the costs involved are included in the approved budget and, if incurred more than 90 days prior to the effective date of the award, the costs are approved by the PHS awarding office as preaward costs. (See section 7, "Preaward (Preagreement).")

In general, the principal investigator or project director of an approved PHS project grant may make minor changes in methodology, approach, or other aspects of the project objectives. However, except as provided below, the grantee must obtain prior approval from the PHS awarding office for changes in scope, direction, type of service delivery or training, or other areas that constitute a significant change from the objectives or purposes of the approved project. Principal investigators on research grants may make significant changes in methods or procedures that need only be reported to the awarding office in the progress report for the applicable period.

Examples (or tests) of changes of scope or objectives include but are not limited to the following: transferring the performance of substantive programmatic work by contract or any other means; significant change in the use of human subjects, whether first-time use or substantial change in planned use; change in key personnel whose expertise is critical to the approved project; and a significant rebudgeting action, whether or not it requires approval under rules governing budget changes. This list is not all inclusive.

As a guideline, significant rebudgeting occurs when the cumulative amount of transfers among direct cost categories for the current budget period exceeds 25 percent of the total amount awarded, or $250,000, whichever is less. When this threshold is reached, the grantee shall consult with the GMO for a decision as to whether the rebudgeting constitutes a change of scope. If the GMO determines that the significant rebudgeting constitutes a change of scope, prior approval is required.

Whenever there is to be a significant change in the level of participation in the approved project by the project director, program director, or principal investigator, as named on the NGA, i.e., when the project will continue without any active direction of that individual during any continuous period of more than 3 months or when that individual either withdraws from the project entirely or proposes to devote substantially less effort to the project than was anticipated at the time of award, the grantee should notify the PHS awarding office as soon as such information is known but no later than 30 days before the expected date of departure or change in participation level. Since approval of a project has, to some extent, been based on the participation and/or qualifications of the named program director, project director, or principal investigator, grantee institutions are required to notify the PHS awarding office of the proposed alternative plans for conducting the activity.

In some cases, where required by law or regulation (including 45 CFR Part 92.30 and 45 CFR Part 74, Subpart L) or by a special provision of the award, PHS awarding office approval of these changes is required and must be requested before the actual change in status of the incumbent. Specific cases include the following:

• Research grants. Prior approval is required for replacement or significant change in responsibilities of the approved project director or principal investigator. If the PHS awarding office imposes the prior approval requirement on other project staff, those persons must be so named and expressly identified on an NGA as key project staff and subject to prior approval.

• Nonresearch grants. The NGA must specifically state a prior approval requirement for the replacement or significant change in responsibilities of the approved project director, principal investigator, or any other persons expressly identified on the award as key project staff.

• State and local agency grants. This prior approval requirement does not apply to any grants to State and local governments unless made applicable by a specific term or condition on the NGA.

Where prior approval is required, if the arrangements proposed by the grantee, including the qualifications of any proposed replacement, are not acceptable to PHS, the grant may be terminated. If the grantee wishes to terminate the project because it cannot make suitable alternate arrangements, it should notify the PHS awarding office of its intent and PHS will forward closeout instructions.

The legal and administrative responsibility for administering a grant-supported project or activity may be transferred from one legal entity to another before the expiration date of the approved project period for the grant being transferred. Such a change of grantee organization may be accomplished under most PHS discretionary grants (including construction grants), but only as indicated below.

1. 1. The grant to be transferred must have been terminated in accordance with 45 CFR Part 74, Subpart M, or 45 CFR Part 92.44 and "Suspension, Termination, and Withholding" below.

   2. A noncompeting continuation award that is within an approved project period for the grant to be transferred must have been withheld because of the grantee's actions and in accordance with the policies in "Suspension, Termination, and Withholding."

   3. The original grantee has agreed to transfer responsibility to a replacement grantee for an active project that is to be transferred before the expiration of the approved project period.

2. The need for the grant-supported project or activity that existed at the time of the award of the original grant must continue to exist at the time of the proposed award of the replacement grant, and there must be no significant change or reduction in the scope or objectives of that project or activity. If the objectives of the project are to be enlarged, there must be no diminution of services to any group that received services or benefits under the original award.

3. The change of grantee organization must be made in a timely manner. Any hiatus of more than 3 months between the original and the replacement grant must be justified and documented in the official grant file.

When these conditions have been met, funds withdrawn from the original grantee may be reawarded to the replacement grantee, even if the appropriation from which they came has expired.

A change of grantee organization may not take place where it involves an award to an individual. However, a transfer by an individual fellow to a different department or institution or a change in the fellow's sponsor is not considered a change of grantee organization and may be allowable with the prior approval of the PHS awarding office without regard to the conditions above. Administrative approval will not be given for a proposed transfer to a replacement grantee that does not meet PHS programmatic and administrative requirements.

A change of grantee may not take place where it will involve the transfer of a grant to or between foreign institutions or international organizations.

A change of grantee action for a training grant or a resource grant would normally be permitted only when all of the permanent benefits attributable to the original grant can be transferred, including applicable equipment and the curriculum developed under a training grant (see "Property Management and Accountability").

When the principal investigator on a research project transfers from one domestic institution to another domestic institution or from a foreign institution to a domestic institution, the project under the same principal investigator may be supported at the new institution for a period up to the remainder of the previously approved project period in an amount not to exceed that previously recommended for direct costs for the remaining period. The change may be made without competitive review provided that the original grantee institution agrees in writing to relinquish the project, the new institution submits a new application form for support of the project, the investigator plans no significant change in research objectives and level of funding for direct costs from that proposed for the project as originally approved, and the facilities and resources at the new location allow for successful performance of the project. If these conditions or other programmatic or administrative requirements are not met, the PHS awarding office may require a competitive review (see section 4, "Internal Review Process").

A change of grantee organization may also be accomplished noncompetitively in the following situations for nonresearch grants (other than training or resource grants as indicated above):

1. A change of the organizational entity with legal and financial responsibility for the grant without a change in the organizational segment actually performing the programmatic aspects of the approved project may be made for a period of time up to the end of the previously approved project period.

2. Where there is insufficient time to obtain a competitive review because disruption of project activities would either seriously jeopardize the success of the project or endanger the physical or mental health of the persons served by the project, a noncompeting award may be made for a single budget period of no more than 18 months duration, after which time the new recipient organization must compete for support.

When a grant is terminated either by mutual consent or unilaterally by the grantee, a written statement from the original grantee relinquishing its interests and rights to the grant must be provided in accordance with instructions from the PHS awarding office. Acceptance of a relinquishment statement by PHS does not guarantee PHS approval of a replacement application for the continued funding of a project.

Where PHS terminates a grant for cause, if the grantee does not provide a relinquishment statement pending the exercise of its appeal rights (see "Grant Appeals Procedures"), a replacement grant may only be awarded under the circumstances described in item 2 above. If this occurs, the NGA for the replacement grant will indicate that if the original grantee is successful in its appeal, the replacement grant may be terminated.

Eligible applicants for replacement grants under service programs will be limited to organizations serving, or proposing to serve, at a minimum, the same group(s) or community population served by the original grantee.

As a result of legislative or other action affecting the legal status of a grantee institution, such as a merger, divestiture, or other corporate change, PHS may recognize a new grantee organization as the successor in interest to the assets involved in PHS grant-supported activities. Such interest may be acquired incidentally to the transfer of all the assets of the grantee or all of that part of the assets involved in the performance of the grant-supported activities. The new organization must meet the grant program's eligibility requirements in order to be recognized as the successor in interest. The current recipient of PHS grant support is responsible for promptly notifying the affected PHS awarding office of the impending change. A successor-in-interest agreement must be executed by PHS, the transferor, and the transferee. This may be a single agreement for all affected PHS grants. Before the execution of such an agreement, the grantee must submit the following documents to the PHS awarding office affected, as applicable:

1. A properly authenticated copy of the instrument by which the transfer of assets was effected, e.g., a bill of sale, certificate of merger, or decree of court.

2. A certified copy of the resolution of the Board of Trustees of the grantee organization authorizing the transfer of assets.

3. A properly authenticated copy of the certificate and articles of incorporation of the transferee if such corporation was formed for the purpose of receiving the assets involved in the performance of the PHS grants.

4. An opinion of counsel for the transferor and the transferee that the transfer was properly effected in accordance with applicable law and the effective date of transfer.

5. A new application face page for each PHS grant showing the new name of the organization and new principal officers, if any change occurred, and signed by the appropriate grantee officials.

If only the grantee organization's name changes and the rights and obligations of the grantee are not affected, the grantee shall notify the PHS awarding office of the change and provide the following documents:

1. A copy of the instrument which effected the name change, authenticated by an appropriate official of the State having jurisdiction.

2. An opinion of counsel for the grantee that the change of name was properly effected in accordance with applicable law.

3. A list of all PHS grants awarded to that organization accompanied by a new application face page for each grant showing the new name of the organization and new principal officers, if any change occurred.

Neither successor-in-interest nor name change situations will be considered as change of grantee organization situations for purposes of applying the policies and procedures contained in that section.

1. In the case of awards from multiple PHS awarding offices, the required documents should be submitted to the Grants Policy Branch, OASH, Room 17A-45, Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857.