This subpart contains the procedures and requirements for providing financial assistance under the Rural Energy for America Program (REAP) through grants to eligible entities to assist Agricultural Producers and Rural Small Businesses to become more energy efficient and to use Renewable Energy technologies and resources.

The information in this subpart is organized into six main topics.

(a) General information. Sections 4280.201 through 4280.219 discuss the purpose of the program, definitions, exception authority, conflict of interest, and compliance with other laws and regulations.

(b) Eligibility information. Sections 4280.220 through 4280.229 discuss the eligibility requirements for the program. These sections include information on Applicant eligibility, project eligibility, and the use of funds. See § 4280.222 for information about award amounts, Period of Performance, and Cost Sharing requirements.

(c) Application requirements information. Sections 4280.230 through 4280.239 discuss the requirements for submitting an application. These sections include information on what forms and other information are required for a complete application as well as the format of the application, the application submission deadline, and how to submit the application.

(d) Application processing information. Sections 4280.240 through 4280.249 discuss how the Agency will process applications. These sections include information on how applications will be reviewed for eligibility, how applications will be evaluated for merit, and how an Applicant can withdraw an application from consideration.

(e) Award information. Sections 4280.250 through 4280.259 discuss how the Agency will make awards. These sections include information about how applications will be selected for funding, how Applicants will be notified whether their applications have been selected for funding, how Applicants can resolve disputes regarding funding selections, and the requirements for an Applicant to accept an award and be approved as a Recipient of an award.

(f) Post-award information. Sections 4280.260 through 4280.261 discuss the reporting requirements for Recipients after an award is approved as well as monitoring procedures that the Agency will use.

(g) Other. (1) Sections 4280.262 through 4280.298 are reserved.

(2) Section 4280.299 includes the Office of Management and Budget (OMB) control number for reporting and recordkeeping requirements under this subpart.

(a) BESS—Battery Energy Storage System.

(b) CFR—Code of Federal Regulations.

(c) COI—Conflict of Interest.

(d) EA—Energy Audit.

(e) EEI—Energy Efficiency Improvement.

(f) FAA—Financial Assistance Agreement.

(g) LOC—Letter of Conditions.

(h) REDA—Renewable Energy Development Assistance.

(i) RES—Renewable Energy System.

(j) SAM—System for Award Management.

(k) UEI—Unique Entity Identifier.

(l) U.S.C.—United States Code.

(m) USDA—United States Department of Agriculture.

These are the definitions for terms used in this subpart. See also the defined terms located at 7 CFR 4280.104. All defined terms used in this subpart are capitalized.

Council has the meaning located under the Resource Conservation and Development Program, at 16 U.S.C. 3451.

Institution of Higher Education (IHE) has the meaning given the term in section 1002(a) of Title 20.

Instrumentality means an organization recognized, established, and controlled by a State, Indian Tribal, or Local Government, for a public purpose or to carry out a special purpose.

Key personnel means the owners, employees, new hires, consultants, and/or contractors who will be overseeing and/or completing the tasks in the work plan.

Nonprofit organization has the meaning located at 2 CFR 200.1.

Period of performance has the meaning located at 2 CFR 200.1.

Public power entity has the meaning located at 16 U.S.C. 824q(a)(4).

Renewable Energy site assessment means a structured and methodical evaluation process designed to determine the feasibility and potential of Renewable Energy resources within a defined scope, particularly with respect to sustainability. This assessment examines resource availability, technological maturity, economic viability, and environmental implications. It is site specific and considers historical energy consumption of the Agricultural Producer or Rural Small Business. It investigates how a Renewable Energy System could replace the historical energy use or how the RES could generate an increase in revenue to support the sustainability of the operation.

Renewable energy development assistance (REDA) means technical assistance provided to Agricultural Producers and Rural Small Businesses on how to use Renewable Energy technologies and resources in their operations through conducting a Renewable Energy Site Assessment, Resource Assessment, and Feasibility Studies.

Ultimate beneficiary means an entity that on whose behalf the Energy Audit or Renewable Energy Development Assistance is conducted.

No conflict of interest will be allowed.

(a) Description. A conflict of interest (COI) occurs when an individual or entity has a competing personal, professional, or financial interest that makes it difficult for the individual or entity to act impartially

(b) Recipient conflicts of interest. Recipients must comply with 2 CFR 400.2, regarding written disclosure, employee and organizational conflicts of interest, and internal controls.

(c) Assistance to employees, relatives, and associates. The Agency will process any requests for financial assistance under this subpart in accordance with 7 CFR part 1900, subpart D.

(d) Member/delegate clause. No member of or delegate to Congress shall receive any share or part of the financial assistance awarded through this subpart or any benefit that may arise therefrom; provided, however, that this provision shall not be construed to bar, as a contractor under the Federal Award, a publicly held corporation whose ownership might include a member of Congress.

Applicants and Recipients must comply with all applicable laws and regulations.

Applicants must meet the following requirements to be eligible for financial assistance through this program.

(a) Eligible entities. Entities are eligible for financial assistance through this program if all the following requirements are met.

(1) System for Award Management (SAM) registration and Unique Entity Identifier (UEI). An Applicant and a Recipient must have an active registration in SAM. This registration must remain current, accurate, and complete at the time of application, while the application is under consideration for funding, and while the Recipient has an active Federal Award. This registration includes obtaining a UEI, or its successor, and completing the process for Federal Assistance registration through SAM.gov.

(2) Legal authority. An Applicant must have the legal authority necessary to apply for and carry out the purpose of the Federal Award.

(3) Entity type. An Applicant must be one of the following entity types:

(i) A unit of State government, Indian Tribal government, or Local Government;

(ii) An Institution of Higher Education; including land grant colleges and universities;

(iii) A Rural electric cooperative;

(iv) A Public Power Entity;

(v) An Instrumentality; or

(vi) A Council.

(4) Number of Awards. An Applicant is only eligible for one award per Federal Fiscal Year.

(b) Ineligible entities. Entities are ineligible for financial assistance through this program if any of the following occurs:

(1) Outstanding judgment. An outstanding judgement has been obtained against the entity by the United States in a Federal Court (other than in the United States Tax Court). The entity is ineligible for assistance until the judgment is paid in full or otherwise satisfied. Funds from this program may not be used to satisfy the judgment.

(2) Federal income tax delinquency. The entity is delinquent on the payment of Federal income taxes.

(3) Federal debt delinquency. The entity is delinquent on a Federal debt.

(4) Debarment or suspension. The entity is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension.” (See 2 CFR part 417.)

(5) Felony criminal violation. The entity has been convicted of a felony criminal violation under any Federal law within the past 24 months.

(6) Unpaid Federal tax liability. The entity has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, unless a Federal agency has considered suspension or debarment of the organization and has made a determination that this further action is not necessary to protect the interests of the Government.

(7) Active REAP EA/REDA or REAP TAG Award. The entity has an award through the REAP EA/REDA program in this subpart or the REAP Technical Assistance Grant (TAG) program for which the Period of Performance is scheduled to end after September 30 of the Federal Fiscal Year in which the application is submitted.

(8) Nonprofit Organization. The entity is a Nonprofit Organization of a type not listed in § 4280.220(a)(3).

(9) Individual. The entity is an individual.

(10) Foreign ownership. If the entity has foreign investment or ownership, the Agency will evaluate the entity's ability to participate in the Rural Energy for America Program consistent with applicable law. Entities that are headquartered in countries determined to be foreign adversaries as defined by 15 CFR 791.4, are not eligible to participate in the program.

Ultimate Beneficiaries must meet all of the following requirements to receive assistance through Recipients of this program.

(a) Type of entity. Ultimate Beneficiaries must be Agricultural Producers or Rural Small Businesses.

(b) Location. Ultimate Beneficiaries must have a place of business located in a State, and the assistance must be provided to them at that location.

(c) Cost Sharing. Ultimate Beneficiaries must provide at least 25 percent of the cost of an Energy Audit.

Projects must meet the following requirements to be considered for financial assistance through this program.

(a) Eligible Projects. Eligible Projects must meet all of the following requirements. Failure to meet one or more of these requirements means the application is not eligible for funding.

(1) Project purpose. The purpose of the Project must be to assist Agricultural Producers or Rural Small Businesses by conducting Energy Audits, Renewable Energy Site Assessments, Resource Assessments, and Feasibility Studies.

(2) Project location. The project location is required to be in a Rural area, as defined in 7 CFR 4280.104, within a State.

(3) Amount requested. The maximum amount that can be requested is $100,000.

(4) Cost Sharing. No Cost Sharing is required from the Recipient, although the contribution of Cost Sharing is part of the merit evaluation process. See § 4280.240(d) for more information on the merit evaluation process. See § 4280.221(c) for the requirement for Ultimate Beneficiaries. The Cost Sharing obtained under § 4280.221(c) shall be retained by the Recipient to cover part of the cost of the Energy Audit. It is considered program income and must be used to further the objectives of the Project during the Period of Performance. If it cannot be used in this manner, it must be applied to the Federal Award under this subpart in accordance with 2 CFR 200.307(b)(1). Unrecovered indirect costs are not allowed as Cost Sharing.

(5) Allowable use of funds. The Project must use award funds and Cost Sharing for allowable purposes. See § 4280.225 for additional information.

(6) Period of Performance. The Period of Performance is one year.

(b) Ineligible Projects. The following types of projects are not eligible for financial assistance through this program.

(1) Amount requested. Requests more than the maximum grant amount;

(2) Research and development. Projects including theoretical and/or applied research;

(3) Feasibility Studies. Projects involving state-wide or non-site-specific Feasibility Studies.

(4) Ineligible Entities. Projects providing assistance to entities other than Agricultural Producers or Rural Small Businesses.

(5) Computer software. Projects including developing computer software or programs.

(6) Residential. Projects providing EA or REDA for residential purposes.

(7) Unallowable costs. Projects including unallowable costs exceeding 10 percent of the Federal Award Amount requested. If 10 percent or less of the Project budget includes unallowable costs, the unallowable costs will be removed. If the Agency cannot identify what percentage of costs are unallowable, the application will be considered ineligible for funding.

(8) Conflict of interest. Projects including a conflict of interest. See § 4280.206 for more information on conflict of interest.

See the Cost Principles located at 2 CFR part 200, subpart E. Additional information about allowable and unallowable uses of funds are described as follows.

(a) Allowable uses of funds. The following categories of expense are allowable, provided that they are incurred after a Federal Award has been approved under this subpart.

(1) Salaries;

(2) Fringe benefits;

(3) Travel expenses;

(4) Office supplies;

(5) Contractual expenses for qualified contractors to perform EA and REDA; and

(6) Indirect costs up to five percent of the Federal Award made under this subpart. Note that this limitation is statutory and is in effect regardless of whether the Applicant has a Negotiated Indirect Cost Rate Agreement with the Federal government.

(b) Unallowable uses of funds. The following categories of expense are not allowable.

(1) Real Property purchase or improvements;

(2) Building or facility planning, developing, repair, rehabilitation, or acquisition;

(3) Equipment purchase, lease, or installation, that is not part of the RES or EEI;

(4) Vehicle purchase or repair;

(5) Construction and construction-related activities;

(6) Cost of preparing the application for financial assistance under this subpart;

(7) Any expenses not directly related to the funded Project;

(8) Payment or waiver of student tuition, including for graduate students;

(9) Costs associated with training individuals to become qualified to conduct EA or REDA;

(10) Promotional items including, but not limited to, pens, cups, apparel, magnets, and decorations.

(11) Raffles;

(12) More than 10 percent of Project Costs for outreach and marketing of the Recipient's available services under the proposed work plan;

(13) More than 5 percent of the Federal Award amount requested for indirect costs;

(14) Goods and services provided by an individual or entity that has a conflict of interest, as described in § 4280.206;

(15) Payment of any judgment or debt owed to the United States;

(16) Political or lobbying activities, consistent with 31 U.S.C. 1352 (g)(1); and

(17) Activities considered unallowable by the applicable cost principles, mostly of which are included in 2 CFR part 200, subpart E.

This section identifies the items required for a complete application. Each Applicant can only submit one application for EA or for REDA.

(a) Applicant Eligibility. The following requirements must be submitted to support Applicant eligibility:

(1) Form SF-424. The Applicant must submit the Form SF-424, “Application for Federal Assistance.”

(2) Entity Type. Applicant must demonstrate how they qualify as one of the following entity types:

(i) A unit of State government, Indian Tribal government, or Local Government;

(ii) An Institution of Higher Education; including land grant colleges and universities;

(iii) A Rural electric cooperative;

(iv) A Public Power Entity;

(v) An Instrumentality; or

(vi) A Council.

(3) Conflict of interest. The Applicant must identify whether or not the Applicant or its individual owners has a known relationship or association with an Agency or Rural Development employee. If there is a known relationship, the Applicant must identify each Agency or Rural Development employee with whom the Applicant has a known relationship. The Applicant must also certify that there is no conflict of interest, as described in § 4280.206.

(4) Summary of REAP awards. The Applicant must describe any current or previous awards received through the REAP EA REDA and REAP TAG programs. The description must include the Period of Performance, the amount, and a summary of the Project.

(b) Project Eligibility. The following requirements must be submitted to support Project eligibility.

(1) Work plan. A proposed work plan for the proposed Project, including the following items:

(i) Project title. Provide a title for the proposed Project.

(ii) Project description. The Project description must include a brief summary of the type of service(s) to be provided, the service area, and the type and number of Ultimate Beneficiaries to be served.

(iii) Goals. Provide a description of the goals of the Project.

(iv) Service area. Provide the following information about the proposed service area:

(A) Description of the service area, including the State(s) served, the total number of counties in the State(s), as well as the number of counties served in each State;

(B) The reason(s) the service area was selected; and

(C) The needs of the service area.

(v) Ultimate Beneficiaries. Provide the following information about the Ultimate Beneficiaries:

(A) If selected at the time of application, a list of Agricultural Producers and Rural Small Businesses to be served, including which type of Ultimate Beneficiary they are and the names and locations (city, state) of the Ultimate Beneficiaries;

(B) The methodology used or that will be used to select the Ultimate Beneficiaries; and

(C) Written commitments from Ultimate Beneficiaries, if selected at the time of application.

(vi) Services. Provide the following information for each proposed service.

(A) A description of the service;

(B) The time period during which the service is expected to be accomplished;

(C) The Key Personnel who will be responsible for completing the service; and

(D) The potential environmental benefits from the proposed services.

(vii) Outreach plan. Provide an outreach plan that describes the actions the Applicant plans to take to ensure that the proposed services are marketed to Agricultural Producers and/or Rural Small Businesses in the service area. This must include the marketing and outreach strategies and goals. The Applicant must provide data that supports these strategies and goals. If the Ultimate Beneficiaries are already selected, describe how the services were marketed to select those entities.

(viii) Applicant experience. Provide the following information regarding the Applicant's experience.

(A) Past services. Provide a description of similar services completed in the past, including the following:

(1) The number of commercial EA or REDA provided directly to Agricultural Producers and/or Rural Small Businesses in the past;

(2) A description of the energy savings or energy generation resulting from previous EA or REDA activities with Agricultural Producers and/or Rural Small Businesses. The energy savings or energy generation must be quantified in units of the appropriate energy measurement;

(3) The time period that the Applicant performed the similar services.

(B) Example of past service. Provide a copy of at least one EA, Renewable Energy Site Assessment, Resource Assessment, or Feasibility Studies that the Applicant has completed within the last year. If the example provided does not meet one of the definitions identified in the previous sentence, the application will be considered incomplete and not eligible for funding. See § 4280.240 for how these examples will be used for the merit evaluation.

(ix) Budget. The Applicant must provide a detailed breakdown of all estimated Project Costs including the Federal Award and Cost Sharing, including the following:

(A) The names of Key Personnel and each individual's salaries and fringe benefits, including hourly rate/annual salary and what is included in fringe benefits;

(B) Descriptions of trips to be taken, including who is traveling, the purpose of the travel, and the cost of each trip;

(C) An itemized list of office supplies to be purchased and their purpose; and

(D) An itemized list of contracts, including vendor, purpose, and amount.

(2) Cost Sharing. Cost Sharing is not required for the program, but it is considered as part of the merit evaluation process (see § 4280.240(d) for more information). Cost Sharing must be in cash from the Applicant or from a third-party and must be committed in writing to the Project at the time of application. The commitment must demonstrate that funds will be available during the proposed Period of Performance, can be used for allowable costs identified in the proposed scope of work, and be signed by an authorized representative of the source of the funding.

(3) Financial statements. The Applicant must provide the following business-level financial statements: income statement, balance sheet, and statement of cash flows, from the Applicant's most recent completed fiscal year prior to the date of application.

The following information identifies when applications can be submitted, where applications must be submitted, and the format of the applications.

(a) Submission period. The application period will be published by the agency and will close at 5:00 p.m. Eastern time on the published deadline. Applications received prior to the opening date or after the closing date will not be considered for funding.

(b) Submission address. Applications must be submitted electronically through Grants.gov, unless otherwise stated in the annual Notice.

(c) Submission format. All items required for the application must be submitted in a single application. No attachments other than the required items will be considered.

(d) Number of applications. No more than one application from each Applicant will be accepted.

The following information describes the way the Agency will process applications. Applications will be evaluated for completeness, eligibility, risk, and merit.

(a) Completeness evaluation. The Agency will review all submitted applications for completeness. Applications must include all information needed to assess eligibility, risk, and merit, including all of the requirements identified in § 4280.231, to be further processed for eligibility, risk, and merit evaluations. The Agency will notify Applicants who submitted incomplete applications in accordance with § 4280.252.

(b) Eligibility evaluation. The Agency will review all complete applications to determine if they are eligible for assistance based on the requirements in this subpart and other applicable laws and regulations. As part of this process, the Agency will check the OMB-designated repository of government information, and Applicants that are excluded from Federal financial assistance will be determined ineligible (see 2 CFR 200.206 for more information). Applications that do not meet one or more eligibility requirements will not be further processed for risk and merit evaluations. The Agency will notify Applicants who submitted ineligible applications in accordance with § 4280.252.

(c) Risk evaluation. The Agency will review all eligible applications for risk based on the financial and performance factors described in paragraphs (c)(1) and (2) of this section. Principals for the Applicant and Project will be evaluated for risk based on paragraph (c)(3) of this section.

(1) Financial risk. The Agency will review the Applicant's most recent independent audit (if available) and financial statements. The Applicant's financial solvency, internal controls, and any audit findings will be assessed. Applicants whose, ratio of current assets to current liabilities, is not at least 1:1 will be considered too high of a risk to fund and will be notified that the application cannot be funded and will issue a written notification in accordance with § 4280.252. Other types of deficiencies or risks will be assessed on a case-by-case basis. The Agency will consider reasonable options to mitigate identified risks, such as payment by reimbursement and more frequent reporting requirements. However, for deficiencies and risks that are significant or cannot be reasonably mitigated, the Agency will determine that the application cannot be funded and will issue a written notification in accordance with § 4280.252.

(2) Performance risk evaluation. The Agency will review any Federal Awards received during the five years prior to the application deadline through SAM (or its successor system), the Do Not Pay system (or its successor system), any other available Federal or Departmental level award or performance systems, and the Agency's internal financial record-keeping systems and files. The Applicant's ability to submit required reports and documents, complete approved tasks on time, meet approved budget requirements, and proper use of Project funds will be evaluated.

(i) Performance deficiencies. Applicants with more than two Federal Awards with performance deficiencies will be considered too high of a risk to be funded and will be notified in accordance with § 4280.252. Examples of performance deficiencies include, but are not limited to, reports that are more than 60 days overdue, failure to execute the approved work plan and budget by the end of an approved Period of Performance, deliverables that do not meet Agency definitions and standards, and submission of more than 10 percent of the approved budget for unallowable costs. Other types of deficiencies or risks will be assessed on a case-by-case basis.

(ii) Mitigation of risk. The Agency will consider reasonable options to mitigate identified risks, such as payment by reimbursement and more frequent reporting requirements. However, for deficiencies and risks that are significant or cannot be reasonably mitigated, the Agency will determine that the application cannot be funded and will issue a written notification in accordance with § 4280.252.

(3) Principals. The Agency will review any available records in SAM, DNP, other Federal or Departmental systems, and the Agency's systems for financial risks and performance deficiencies on Federal Awards. If the Agency determines that a Principal is an excluded party or poses a significant risk to the performance under the proposed Project, it will determine that the application cannot be funded and will issue a written notification in accordance with § 4280.252.

(d) Merit evaluation. The Agency will conduct a merit evaluation for those applications that are determined eligible for the program, unless a risk evaluation determines that the application cannot be funded (see § 4280.240(c)). The merit evaluation will be conducted by USDA employees, who will score the application based on the criteria below. The total points available are 100. The application must score at least 40 points to be eligible for funding.

(1) Applicant experience (0-15 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(viii)(B) to evaluate this criterion. The Agency will award points based on the quality of the EA or REDA work products that are submitted. A quality work product is one that meets the definition of EA, Renewable Energy Site Assessment, Resource Assessment, or Feasibility Study. If the Applicant is applying for an EA award, the work product submitted must be one or more EAs. If the Applicant is applying for a REDA award, the work product submitted must be one or more Renewable Energy Site Assessments, Resource Assessments, or Feasibility Studies.

(i) One quality work product (0 points). The Agency will award zero points if the Applicant submits only one EA or REDA quality work product in providing the proposed services because this is the baseline for eligibility for the program.

(ii) Two quality work products (5 points). The Agency will award five points if the Applicant submits two quality work products that meet the definition of either an EA, Renewable Energy Site Assessment, Resource Assessment, or Feasibility Study, as applicable.

(iii) Three quality work products (10 points). The Agency will award 10 points if the Applicant submits three quality work products that meet the definition of either an EA, Renewable Energy Site Assessment, Resource Assessment, or Feasibility Study, as applicable.

(iv) Four quality work products (15 points). The Agency will award 15 points if Applicant submits four quality work products that meet the definition of either an EA, Renewable Energy Site Assessment, Resource Assessment, or Feasibility Study, as applicable.

(2) Service area (0-25 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(iv) to evaluate this criterion. The Agency will award points based on the identified need of the Ultimate Beneficiaries and the area of the State covered as follows:

(i) Identified need (0-5 points). The Agency will award 0—5 points, with more points for those applications that describe how the service area was determined, based on the identified need(s) of the Ultimate Beneficiaries.

(ii) Fewer than 10 percent of counties (0 points). The Agency will award 0 points for Projects with a proposed service area that includes less than 10 percent of the counties in a single State.

(iii) 10-24 percent of counties (5 points). The Agency will award 5 points for Projects with a proposed service area that includes more than 10 percent, but less than 25 percent, of the counties in a single State.

(iv) 25-49 percent of counties (10 points). The Agency will award 10 points for Projects with a proposed service area that includes at least 25 percent, but less than 50 percent, of the counties in a single State.

(v) 50-74 percent of counties (15 points). The Agency will award 15 points for Projects with a proposed service area that includes at least 50 percent, but less than 75 percent, of the counties in a single State.

(vi) 75-100 percent of counties or multi-state (20 points). The Agency will award 20 points for Projects with a proposed service area that includes at least 75 percent of the counties in a single State or when in more than one State, includes at least 50 percent of counties in each State.

(3) Number of Ultimate Beneficiaries to be served (0-10 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(v) to evaluate this criterion. The Agency will award points as follows:

(i) Less than 5 Ultimate Beneficiaries (0 points). The Agency will award zero points for applications that propose to assist less than five Ultimate Beneficiaries.

(ii) 5-9 Ultimate Beneficiaries (2 points). The Agency will award two points for applications that propose to assist less than 10 Ultimate Beneficiaries.

(iii) 10-25 Ultimate Beneficiaries (5 points). The Agency will award five points for Projects that propose to assist at least 10 and no more than 25 Ultimate Beneficiaries.

(iv) More than 25 Ultimate Beneficiaries (10 points). The Agency will award 10 points for Projects that propose to assist more than 25 Ultimate Beneficiaries.

(4) Commitment of Ultimate Beneficiaries (0-10 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(v)(C) to evaluate this criterion. The Agency will award points as follows:

(i) Less than 5 commitments (0 points). The Agency will award zero points for applications that provide written commitments from less than five of the Ultimate Beneficiaries that are identified in the proposed work plan.

(ii) 5-10 commitments (2 points). The Agency will award two points for applications that provide written commitments from five to ten of the Ultimate Beneficiaries that are identified in the proposed work plan.

(iii) 11-15 commitments (5 points). The Agency will award five points for applications that provide written commitments from 11 to 15 of the Ultimate Beneficiaries that are identified in the proposed work plan.

(iv) 16-20 commitments (8 points). The Agency will award eight points for applications that provide written commitments from 16 to 20 of the Ultimate Beneficiaries that are identified in the proposed work plan.

(v) 21 or more commitments (10 points). The Agency will award 10 points for applications that provide written commitments from 21 or more of the Ultimate Beneficiaries that are identified in the proposed work plan.

(5) Potential of project to produce energy savings or generation and environmental benefits (0-10 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(viii)(B) to evaluate this criterion. The Agency will award points based on the potential of the proposed Project to produce energy savings and environmental benefits as follows:

(i) Energy savings or energy generation (0-5 points). The Agency will award zero to five points for Projects that demonstrate a clear potential for energy savings or energy generation based on services provided. Zero points will be awarded if the application does not include energy information on energy savings for the proposed services.

(A) EA.

(1) 0 points will be awarded if the application does not address § 4280.231(b)(1)(viii)(A)(2) or properly meet the definition of EA.

(2) Up to 5 points will be awarded if the Applicant's work product meets the definition of EA.

(B) REDA.

(1) 0 points will be awarded if the application does not address § 4280.231(b)(1)(viii)(A)(2) or properly meet the definition of Feasibility Study, Renewable Energy Site Assessment or Resource Assessment as applicable.

(2) Up to 5 points will be awarded if the Applicant's work product meets the definition of Feasibility Study, Renewable Energy Site Assessment or Resource Assessment as applicable.

(ii) Environmental benefits (0-5 points). The Agency will award zero to five points for Projects that demonstrate potential for environmental benefits based on the proposed services. Examples of environmental benefits are conserving Cropland, forests, and water; improving air and water quality; and meeting renewable fuel standards. Zero points will be awarded if the application does not include information on environmental benefits for the proposed services. One to two points will be awarded if the application includes general information about the potential environmental benefits for the proposed services. Three to four points will be awarded if the application includes quantitative measures for the potential environmental benefits for less than 75 percent of the proposed services. Five points will be awarded if the application includes quantitative measures for the potential environmental benefits for at least 75 percent of the proposed services.

(6) Outreach and information (0-10 points). The Agency will use the information provided in the application under § 4280.231(b)(1)(vii) to evaluate this criterion. The Agency will award points based on the plan of the Applicant for performing outreach and providing information and assistance to Agricultural Producers and Rural Small Businesses on the benefits of energy efficiency and Renewable Energy development. Points will be awarded as follows:

(i) Strategies (0-5 points). The Agency will award zero to five points for the strategies that the Applicant proposes to use to perform outreach and provide information and assistance. Strategies that are more comprehensive and better targeted to eligible Ultimate Beneficiaries in the service area will receive more points. Strategies include methods and frequency of communication, technology, locations, and timing. Zero points will be awarded if the application does not include at least one strategy. One or two points will be awarded if the application has at least one strategy identified. Three or four points will be awarded if the application identifies at least two strategies that are well-targeted to the service area and intended Ultimate Beneficiaries. Five points will be awarded if the application identifies at least three strategies that are well-targeted to the service area and the intended Ultimate Beneficiaries.

(ii) Goals (0-5 points). The Agency will award zero to five points for the goals the Applicant proposes to use for its outreach. Goals that are clear and include a way to measure the success of the outreach plan in a quantitative way, including a baseline and target for the measurement will receive more points. Zero points will be awarded if the application does not include at least one goal, performance measurement, baseline of the metric, and target for the metric. One or two points will be awarded if the application has at least one goal, one metric, the baseline of the metric, and a target for the metric. Three or four points will be awarded to applications that exceed this threshold. Five points will be awarded to applications that exceed the threshold and have exceptional goals, metrics, baselines, and targets.

(7) Cost sharing (0-20 points). The Agency will use the information provided in the application under § 4280.231(b)(2) to evaluate this criterion. The Agency will award points based on the ability of the Applicant to leverage other sources of funding as Cost Sharing for the Project. To be awarded points for this criterion, Cost Sharing must be in cash from the Applicant or from a Third-Party and must be committed in writing to the Project at the time of application. Unrecovered indirect costs cannot be used as Cost Sharing. The commitment must demonstrate that funds will be available during the proposed Period of Performance, can be used for allowable costs identified in the proposed scope of work, and be signed by an authorized representative of the source of the funding. Note that Cost Sharing provided by an Ultimate Beneficiary for the purpose of an Energy Audit is not considered for this criterion because it is required by statute. Points will be awarded as follows. Note that the Agency will use normal rounding procedures, where 4 and below is rounded down and 5 and above is rounded up.

During the period between the submission of an application and award approval, the Applicant must notify the Agency in writing if the Project is no longer viable or the Applicant no longer is requesting financial assistance for the Project. When the Applicant notifies the Agency, the application will be withdrawn from consideration for funding.

Applications that have been fully processed and are determined to be complete, eligible for funding, and are not removed from consideration due to high risk will be evaluated based on the merit evaluation criteria and priority criteria (see § 4280.240). The points awarded for merit evaluation and priority criteria will be added for each application. Applications will then be ranked solely based on the points awarded. The Agency will first select the top two highest-scoring applications from each State (where Puerto Rico, the Virgin Islands, and the Western Pacific are each considered a State), as long as the top two highest-scoring applications score at least 40 points. Applications that score below 40 points will not be selected for funding, regardless of their ranking. Then the Agency will select applications for funding based on rank order until available funds have been expended or a minimum score of 40 points is reached. If funding still remains the Agency may select the next highest scoring applications from the field.

The following process will be used to notify Applicants whose applications are selected for funding.

(a) Notification. The Agency will notify the Applicants whose applications can be funded using available funds with a Letter of Conditions (LOC). The LOC will provide the conditions under which an award can be approved as well as a copy of the terms of the award.

(b) Meeting the conditions of the Federal Award. An Applicant receiving an LOC will have 60 calendar days to meet the conditions of the Federal Award, unless otherwise specified in the LOC. If the Applicant does not meet the conditions within the specified time frame, the Agency will discontinue processing the application.

(c) Standard award terms and conditions. The standard award terms and conditions are available on the program website.

Applicants whose applications are not eligible for financial assistance through this program, who are removed from funding consideration due to a high level of risk, or whose applications did not score high enough to be funded will be notified as soon as it is practicable. No further processing of the application will occur.

The Agency will approve a Federal Award once the Applicant has met all the conditions specified in the LOC. The approval will be conveyed through the execution of a Form RD 4280-2, which is the FAA, and provides all the terms of the Federal Award. Once the Federal Award has been approved, the Recipient must begin work on the Project and incur costs as described in the approved work plan and budget, which are attached to Form RD 4280-2. Costs must be allowable and be incurred during the approved Period of Performance.

Recipients are required to submit reports on financial status and performance, as described below.

(a) Financial reports. Financial reports must be submitted using Form SF-425 and any additional information specified in the Financial Assistance Agreement (FAA).

(1) Semi-annual. Semi-annual financial reports are due 30 calendar days after the reporting period ends, or as directed by 2 CFR 200.328(c). The reporting periods are October 1-March 31 and April 1-September 30.

(2) Final. A final financial report is due 120 calendar days after the Period of Performance ends, or the Project is completed, whichever occurs sooner, or as directed by 2 CFR 200.328(c).

(b) Performance report. Performance reports must include the information specified in the FAA. Typically, performance reports are required to include a description of the objective(s) for the reporting period; whether the objective(s) were met and if not, what action is being taken to ensure the objective(s) is met during the next reporting period; and all written work product(s) such as copies of Energy Audits, Renewable Energy Site Assessments, Resource Assessments, and Feasibility Studies to demonstrate that the objective was carried out.

(1) Semi-annual. Semi-annual performance reports are due 30 calendar days after the reporting period ends, or as directed by 2 CFR 200.329(c). The reporting periods are October 1-March 31 and April 1-September 30.

(2) Final. A final performance report is due 120 calendar days after the Period of Performance ends, or the Project is completed, whichever occurs sooner, or as directed by 2 CFR 200.329(c).

Awards will be monitored by Agency personnel in accordance with applicable laws, regulations, and policies. The Agency may terminate or suspend the award for lack of adequate or timely progress, reporting, documentation, or for failure to comply with Agency or award requirements.

The reporting and recordkeeping requirements contained in this subpart have been approved by OMB and have been assigned OMB control number 0570-0067 in accordance with the Paperwork Reduction Act of 1995.