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FY 2015 Defense Spending By State report now available for download.

DIA Frequently Asked Questions

General

What does this program do?

The Defense Industry Adjustment (DIA) Program assists communities in planning community adjustments and resiliency required by the cancellation or termination of a Department of Defense (DoD) contract, the failure to proceed with an approved major weapon system program, or by a publicly announced planned major reduction in DoD spending that would directly and adversely affect a community.

What is the authority for this program?

Statutory authority for this program may be found in 10 United States Code, §2391.

Is this program competitive?

No. All Office of Economic Adjustment (OEA) grant programs are eligibility-based. However, the eligibility requirements depend on the type of grant assistance being sought. You can find those requirements in the Catalog of Federal Domestic Assistance (CFDA). For this OEA business line, the relevant programs in the CFDA are 12.611, 12.614, and 12.617.

Who can I contact to get more information on this program?

Contact the Program Director, Mr. Michael Gilroy, at (703) 697-2130.

How much funding is available?

The funding level for this program is subject to Congressional appropriation and will vary.

Is there a floor or a ceiling for OEA grant funds?

Due to the uniqueness of each local situation, there are no pre-established amounts for grant awards. OEA operates an eligibility-based and needs-based program. If you are eligible and can document the need, OEA will consider your application. The range of available funding for past projects can be found by searching for the program in which you are interested in the Catalog of Federal Domestic Assistance (www.cfda.gov). The relevant programs are: 12.611, 12.614, and 12.617.

What is the deadline for grant applications?

There is no deadline. Applications are accepted on a rolling basis, ushered through a consideration process and awarded subject to availability of funds and demonstrated need.

We are an Investing in a Manufacturing Communities Partnership (IMCP) designated community. Do we have preferential consideration for OEA grant funds?

No. OEA grant programs are strictly eligibility-based. If an IMCP community meets eligibility criteria then it may apply for OEA assistance. The key to consideration is first meeting the initial eligibility criteria which is derived from statute (10 USC, §2391). See the FAQs in the “Eligibility” section below.

Is there any type of activity that OEA is prohibited from funding?

Yes. OEA cannot fund any type of construction activity without special legislation.

Eligibility

How do we know if we are eligible for a DIA grant?

Eligibility criteria for the various assistance programs under the DIA business line are found online. The relevant programs are: 12.611, 12.614, and 12.617.

We are not really sure if we meet eligibility criteria, can OEA help us to determine our eligibility?

Yes. In fact, we encourage potential applicants to contact OEA as soon as they believe they have a local impact caused by a defense program change.

Who is an eligible recipient?

Eligible recipients are states, counties, municipalities, tribal nations, and other political subdivisions of state, special purpose units of a state or local government, or other instrumentalities of a state or local government.

How do I determine which type of DIA program is best suited for our local needs?

In this case we encourage you to contact OEA for a discussion pertaining to your particular situation. OEA will assign a Project Manager to help you determine eligibility and program fit, and, if warranted, will assist you in developing a grant application.

Can non-profits apply for an OEA grant?

No. The only eligible applicants for OEA assistance are states, counties, municipalities, tribal nations, or other instrumentalities of a state or local government (see also 2 CFR §200.330).

Can non-profits still participate in work under a grant?

Yes. This will be at the discretion of the actual grantee. Non-profits may work on grant projects as contractors or subawardees.

What does OEA consider when determining whether to award a grant?

First, the grantee must be eligible for OEA assistance under statute. Second, there must be funding available for the program in that fiscal year. Finally, the request for assistance must be well-justified. All grant applications must also meet tests for allowability, allocability, and reasonability under 2 CFR, Part 200. See www.ecfr.gov for a further discussion of these elements of grant administration.

What types of documentation are necessary to establish eligibility for the CFDA 12.611 program of assistance?

The most reliable source would be notices by companies to the state Rapid Response Director under the Worker Adjustment and Retraining Notification Act (WARN). OEA can also accept certifications from companies that validate layoffs due to defense program changes. There are also other sources, which may be used subject to a determination by OEA. Press accounts may not be used to establish eligibility for CFDA 12.611. We urge potential grantees to contact OEA early in their eligibility determination process so that we may assist.

What types of documentation are necessary to establish eligibility for the CFDA 12.614 program of assistance?

Grantees do not have to provide documentation to establish eligibility for this program. OEA will establish eligibility based on existing economic data. Contact OEA to begin this process.

What types of documentation are necessary to establish eligibility for the CFDA 12.617 program of assistance?

If the grantee is a state government or state government agency with a DUNS number and registered in the System for Award Management (www.sam.gov), no further documentation is required. If the potential grantee is a public instrumentality of the state then some documentation may be required. Contact OEA for guidance as to what documentation would be needed in your specific case.

Grant Applications

How do I apply for a grant?

OEA uses its own proprietary system to manage the grant application and administration process for its programs. In order to gain access to the system, a potential grantee must first have an eligibility determination made by OEA. Contact OEA to begin this process.

What is the application process timeline?

Applications are accepted on a rolling basis subject to availability of funds.

How long does it take to draft an application?

The time required for application development varies by applicant, but it takes most applicants from three to five months. This includes the eligibility determination phase of the application process.

How long does it take OEA to process our application?

Timelines vary according to existing workload, but in general you can expect a final decision from OEA approximately 30 days after the submission of a final draft application.

What is an “Authorizing Official”?

The OEA EADSII system requires at least two persons at the grantee level be given permission to submit and revise grants documents with OEA. The Authorizing Official (AO) is the person at the grantee level who is empowered to submit grant documents and accept Federal funding. Normally, the AO reviews and approves grant documents prepared by the Grant Point of Contact (GPOC) in the EADSII system. The grantee determines who the AO is for their agency.

What is a “Grant Point of Contact”?

The OEA EADSII system requires at least two persons at the grantee level be given permission to submit and revise grants documents with OEA. The Grant Point of Contact (GPOC) is the person at the grantee level who works with OEA on more of a day-to-day basis. Normally, the GPOC prepares grant documents, and the Authorizing Official (AO) reviews and approves them in the EADSII system. The grantee determines who the GPOC is for their agency.

Is there an “OEA preferred” approach to addressing our local defense contracting/program impact?

No. OEA strongly believes that local issues are best solved locally. Only local stakeholders understand the regional dynamics in an area which would drive an economic development program.

Are there any guidelines for grant periods of performance?

There are no fixed periods of performance for OEA grants.

How long do these grants usually run?

While there is no one-size-fits all answer, experience with many grantees has shown that those grants with an initial short period of performance (about six to ten months), followed by a separate grant of another 12 months’ work best. This short initial grant period allows local stakeholders enough time to get completely organized, do some initial data analysis to help fully appreciate the problem, and propose some solution sets with complete stakeholder buy-in. Those proposed solution sets then establish the stage for follow-on grant application to either OEA, or other Federal agencies with more relevant assistance programs.

What should go in an application?

The application content is at the discretion of the applicant. However, most successful applications have had the following basic content in common: Abstract, Executive Summary, Program Narrative, Scope of Work (e.g. tasks to be performed), Expected Results/Outcomes, Budget Justification, Budget Spreadsheet, and any necessary appendices. Also required are the U.S. Government Standard Form 424 and Standard Form 424A.

Is there a page limit for the application?

No. However, experience has shown that applications of between 10-20 pages (exclusive of any needed appendices) usually contain enough data to make a funding decision.

Is there specific software to use to create an application?

Yes. OEA is equipped with the Microsoft Office suite of products and submission in these formats will allow for a faster processing of your application. You will also need access to both the Internet and a web browser to submit your application once completed.

What is an Abstract?

An Abstract is a short synopsis of your project which will appear in USASpending.gov along with other basic data on your grant award. It is not synonymous with the “Executive Summary” (below).

What should go in an Abstract?

The only fixed requirement for Abstract content is that it does not exceed 4,000 characters. One approach in writing an abstract can be to briefly state the problem which the grant is designed to address, a short description of the high level tasks in the project to address that problem, and the expected outcome of the grant.

What is an Executive Summary?

Usually the first page of your application, the Executive Summary is a one to two page description of the entirety of your project. It is not synonymous with an “Abstract” (above).

What should go in an Executive Summary?

Executive Summaries should succinctly capture the problem to be addressed, the approach that the grantee will take to solve the problem, the stakeholders in the project, and the expected results.

What should go into a Narrative?

This is the most free-form part of your application. It is the “problem definition” section of the application. Here you should set the stage as to why you are seeking OEA assistance and how your locality will benefit from the grant. The narrative should describe regional demographics, economic conditions, and the region’s history with aerospace and defense manufacturing services. This section is also an opportunity to describe management structure, organization, and project time line. Visuals are frequently helpful in this section, including the use of Gantt charts, maps, and graphics which convey as much economic data as you feel is relevant to depict local economic impact.

What should go in a Scope of Work (SOW)?

The SOW is the “meat” of the application. Here you will layout and describe each task, along with each subtask which you expect to perform under the grant, as well as the deliverables. Some grantees find it helpful to build out this section in some type of project management software first, before going into a narrative description of each task and subtask.

What should go into a Budget Justification?

A Budget Justification is simply a narrative description of what is contained in the budget. It should itemize and describe costs across each object class category, including personnel, fringe benefits, travel, supplies, equipment, contractual, and indirect costs. The budget justification should identify the source and amount of any non-Federal match, and should include cost estimation methodology (see FAQ on “rational costs basis” below).

How much detail do I need to supply regarding personnel?

If you know the personnel whom you wish to assign to the project, you should provide resumes as Appendices to the application. If you intend to hire for positions under the grant, you should provide position descriptions for those grant-funded positions.

How much detail do I need to supply regarding personnel costs?

Provide the annual salary or hourly wage base and percentage of time devoted for each person funded with Federal or non-Federal resources. The description must contain sufficient detail to allow OEA to compare the position and the compensation to comparable Federal or local positions, and compensation paid for employees engaged in federally assisted activities must be consistent with that of similar work for other applicant activities.

Is there a salary cap for personnel funded under the grant?

No. However, all costs must be reasonable per 2 CFR, Part 200. Usually this means what a similar position in the local economy would be worth (see also 2 CFR §200.404).

What kinds of activities are permitted in an OEA-funded DIA grant?

Information on allowable activities (also called allowable costs) is found in 2 CFR, Part 200 (see www.ecfr.gov). All grant applications must also meet tests for allowability, allocability, and reasonability (also found in 2 CFR, Part 200). Not all costs may be considered reasonable for a given type of response effort in a given area. Your assigned OEA Project Manager will work directly with you to ensure your proposed grant activities meet the requirements of both 2 CFR, Part 200 and 10 USC §2391.

Can I contract out pieces of work that my office does not have the expertise to complete?

Yes.

What are the rules for contracting out work on the grant?

The grantee must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified 2 CFR §200.318.

What are “key personnel”?

2 CFR, Part 200 does not specify a definition of “key personnel.” However, a short working definition might be, “those persons without whom the completion of grant activities would be materially affected.” Usually there is no more than one “key person” on a grant.

Are there any requirements for grantee key personnel?

The grantee itself establishes the criteria what constitutes a key person on their grant. In general, a key person is one who has the requisite education and the experience to perform the work on the grant for which they have been designated.

Do I need to identify “key personnel”?

2 CFR §200.308 requires pre-approval of budget and program plans in several scenarios, one of which is a change in “key personnel.” Therefore, key personnel – if any – must be identified in the original grant application in the event that a change in key personnel may be needed later.

Does identifying “key personnel” mean OEA has approval over our hiring decisions during the grant?

No. Grantees may hire whomever they wish to work on their grant. However, if a new hire is deemed by the grantee to be “key personnel,” then OEA has the right to deny any disbarred, suspended, or patently unqualified person from working on the grant as a key person.

Can we provide services to defense-oriented manufacturing and services firms?

Yes. However, there must be entry criteria for those firms and the criteria must be stated in your initial application for grant assistance.

Can we provide direct services to defense contractors affected by DoD procurement cuts?

Yes. However, the grantee must ensure criteria for defense-impacted firms to receive such services are stated in the grant application.

What are the criteria that would make a company eligible to receive assistance from OEA-funded grant activities?

Because of local and regional variability in number of firms and density of concentration of defense manufacturing and services firms the grantee – and not OEA – must establish such criteria since the grantee has the best perspective on what make makes sense locally. OEA will then consider the methodology used to set defense firm participation criteria in the application itself.

Can we provide services to manufacturing and services firms which are not primarily defense-oriented?

No, not under this grant program. However, other Federal agencies such as the Small Business Administration, the Department of Labor’s Employment and Training Administration, and the Department of Commerce’s Economic Development Administration may have assistance programs for those firms.

What is a subaward?

A subaward is an award provided by a pass-through entity (e.g. the OEA direct grantee) to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract (see 2 CFR §200.92).

What is a subrecipient?

A subrecipient is a non-Federal entity that receives a subaward from a pass-through entity (e.g. the OEA direct grantee) to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program (see 2 CFR §200.93).

What is the difference between a grantee and a subrecipient?

In short, the subrecipient is the beneficiary of a subaward from the original grantee. A contractor is not a subrecipient. Example: The City of Smallville receives an OEA grant and subawards a portion of it to the Smallville Chamber of Commerce. The Chamber then contracts for data analysis to Acme Consulting. In this example, the city is the grantee (also known as a pass-though entity), the Chamber is the subrecipient, and Acme Consulting is a contractor (see also 2 CFR §200.330 at www.ecfr.gov).

What is a pass-through entity?

A pass-through entity is a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal grant program. In other words, the pass-through entity is the direct OEA grantee (see 2 CFR §200.74).

Grant Application Budget Issues

Is there a local match requirement?

Yes. The grantee must match 10 percent or greater of the total program cost. For example, if you requested a grant of $100,000 your match must be $11,105, and not merely $10,000. ($11,105 = 10% of $100,000 plus $11,105).

What is in-kind match and what documentation is required to use it?

In-kind match is any non-cash contribution from the non-Federal entity, which is used to produce the non-Federal share of the grant. Because the types of documentation which might be required to validate the in-kind service/activity are as varied as a grantee’s approach, your OEA Project Manager will work with you directly to establish what type of documentation can be used to validate your in-kind contribution.

What can OEA accept for us to fulfill the local match requirement?

OEA may accept as an in-kind match those features of your grant which meet cost principles guidance contained in 2 CFR, Part 200. The most common methods of meeting the match requirement by past OEA grantees have been staff time (in-kind) and cash.

What is program income?

Program income means gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (see 2 CFR §200.80 at www.ecfr.gov). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under Federal awards, the sale of commodities or items fabricated under a Federal award, and license fees and royalties on patents and copyrights.

What are the options for how program income may be treated?

Any program income in your grant may be treated either as non-Federal match, or used to reduce the Federal share of the grant. Unless you specifically request in the application that program income be used as non-Federal match, the default will be to use program income to reduce the Federal share of the grant.

What is a fringe rate and how do I calculate it?

Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages (see 2 CFR §200.431). Fringe benefits include, but are not limited to, the costs of leave (vacation, family-related, sick or military), employee insurance, pensions, and unemployment benefit plans. Often these compensation related costs are all rolled together and added to a compensation package as a single rate. Typically, you will have to involve those in your organization who handle human resource issues to make sure your fringe rate is correct.

Can I charge fringe costs to the grant?

Yes. The costs of fringe benefits are allowable, provided such benefits are granted under established written policies. If you opt to charge fringe benefits to the grant, they must be allocated to the grant in a manner consistent with your normal practices of how salaries and wages are chargeable to Federal grants. You may charge the fringe benefits to the grant as either direct or indirect costs in accordance with your existing accounting practices (see 2 CFR §200.431(c)).

What is an indirect rate and what is typically used to calculate it?

Indirect (also called Facilities and Administration) costs are those costs incurred for a common or joint purpose benefitting more than one cost objective. See Appendices III-VII in 2 CFR, Part 200 for more guidance on developing indirect cost rate proposals (www.ecfr.gov).

I have a certified indirect rate from the Commerce Department, can OEA accept this?

Yes. OEA will accept a certified indirect rate from any Federal agency.

I don’t have a certified indirect rate, does this mean I cannot charge indirect costs to the grant?

Not necessarily. If you do not have a certified indirect rate, and you have never had a certified indirect rate from any Federal agency, then you may request to charge a flat 10 percent de minimus rate to the grant (see 2 CFR §200.414(f)).

Do I have to do an RFP for any contractual services I intend to charge to the grant prior to applying for the grant?

No. However, you must have a good faith estimate based on some rational process in order to estimate those costs for the purpose of including them in your OEA grant application (see FAQ on “rational cost basis” below).

What is a “rational cost basis”?

For any project elements presented to OEA for funding, there must be some basis upon which to estimate the cost of that project element (e.g. “How do I know XX costs $YY.YY?”). There are several ways to do this, from a full Request for Qualification or Request for Proposal process, to informal quotes from vendors. Each grantee will have its own method of projecting costs. However, it must be based on some rational process – not merely a guess. Local procurement policies are usually the best source for guidance here.

Post-Grant Award

We need to reprogram funding on the grant. How do we do this?

Grantees may submit amendments in EADSII to reprogram funding after an award has been made. Your OEA Project Manager will assist you with this process.

Can my grant period be extended for any reason?

Requests for extensions may be granted. The most common reason grantees extend their grant period of performance is due to delays in procurement of contractual services in the initial stages of a grant. This is often the case if local procurement policies specify a fixed amount of time a Request for Proposal must remain advertised. Your OEA Project Manager will work with you in developing a grant amendment should you need an extension.

How do we receive payments?

Payment requests are submitted via OEA’s grant administration system. Grantees will enter payment requests electronically which generate a Standard Form 270 within the EADSII system for submission to OEA.

What do we need to include in progress reports?

Progress reports should document progress on tasks in the Scope of Work, explain any slippage from expected completion dates, and note any issues with grant administration which require management attention. Your OEA Project Manager will also provide you guidance on progress report content which may be specific to your project.