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American Rescue Plan Build Back Better Regional Challenge – Phase 2 Frequently Asked Questions

Contents

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  1. Application/Submission Process

    1. Where do I submit application forms for BBB Phase 2?
    2. How and where do I update or change the Authorized Representative for my coalition?
    3. How and where do I update or change any other points of contact for my coalition?
    4. The NOFO states that the Project Narrative may not exceed 6 single-sided, 8.5x11-inch pages, with a minimum 12-point font and 1-inch margins. So, for each component project do applicants get 6 pages to address the information or for ALL components do applicants only get 6 pages total? If the coalition has 7 component projects, they could have (in theory) 42 pages associated with that work; correct?
  2. Business Incubators

    1. For business incubator projects, the NOFO requires a feasibility study. What types of information should we consider including? Who can perform a feasibility study?
  3. Non-construction questions, including Revolving Loan Fund (RLF) questions

    1. A region has two existing RLFs and is proposing a multi-county regional RLF to support a cluster. Is this allowable, or is it a non-starter because there are existing EDA funded programs in the region?
  4. Coalition Structure

    1. Can the geographic footprint of the region change between Phase 1 and Phase 2?
    2. Can a recipient add a coalition member after Phase 1 and if so, can the new coalition member be eligible to lead a component project for Phase 2?
    3. Can a coalition member be the component lead for multiple or all components of Phase 2?
    4. Can we include multiple subprojects as part of a component? If so, how should this be structured?
    5. Is a governing body an appropriate use of funding and can it be a specific component project?
  5. Compliance and Budget

    1. How will reimbursement be handled for Phase 2?
    2. Does the matching share have to be documented separately for each component application? For purposes of assessing the merit of the overall proposal, will the match rate be assessed on each component applications separately or will all of a coalition’s component applications be assessed together?
    3. Are there requirements for recipients to fund project costs prior to receiving disbursements from EDA?
    4. Does construction of the shell of the building (recently completed) qualify as matching funds for the installation of the clean rooms?
    5. Can Phase 2 funding capitalize a venture capital fund which will utilize the funds to invest in start-ups?
    6. Is workforce training an allowable project and expense under BBBRC Phase 2?
    7. Will EDA cover wraparound services such as childcare, travel stipends for students to go to classes, or tuition stipends as part of a Phase 2 project?
    8. Will the component project lead(s) for Phase 2 conduct individual reporting/pay requests or will it all be funneled through the primary applicant?
    9. Can we use funds from another federal grant to meet our matching share requirement?
  6. Subawards and Co-Recipients

    1. What is a subaward?
    2. Are subawards allowed for non-construction projects in the Build Back Better Regional Challenge?
    3. Are subawards allowed for construction projects in the Build Back Better Regional Challenge?
    4. What is a co-recipient?

A. Application/Submission Process

1. Where do I submit application forms for BBB Phase 2?

The coalition lead (Authorized Representative in Phase 1) received a custom link to Grants.gov to apply through the workspace for the coalition. Your coalition will need to submit its applications via the custom Grants.gov link (unless specified otherwise). This link will NOT be searchable on Grants.gov. If you do not have your custom link, or you lose it, please reach out to BuildBackBetter@eda.gov.

2. How and where do I update or change the Authorized Representative for my coalition?

For current communications related to Phase 1 awards, this should be updated in Grants Online. Please work with your assigned EDA Program Officer to update or change this information.

3. How and where do I update or change any other points of contact for my coalition?

Please share any updates to your main coalition point of contact (other than your Authorized Representative) with your Economic Development Representative and BuildBackBetter@eda.gov.

4. The NOFO states that the Project Narrative may not exceed 6 single-sided, 8.5x11-inch pages, with a minimum 12-point font and 1-inch margins. So, for each component project do applicants get 6 pages to address the information or for ALL components do applicants only get 6 pages total? If the coalition has 7 component projects, they could have (in theory) 42 pages associated with that work; correct?

Each component application will be submitted separately so the six-page limit corresponds to each individual component project. To take the example given in the original question above, the applicant could submit an up-to six-page project narrative for each component project (a max of 42 total pages across all seven component projects). If a single project is comprised of multiple applications (for example, an entrepreneurship program that includes a construction application to build an entrepreneurship center and a non-construction application to provide technical assistance to entrepreneurs) the applicant may use a similar project narrative, but briefly tailor narrative depending on the application type.

The Phase 2 Overarching Narrative is designed to allow the applicant to show how the proposed component projects fit together to support the regional growth cluster (see section D.2.b.i; pg. 20 of the BBBRC NOFO).

B. Business Incubators

1. For business incubator projects, the NOFO requires a feasibility study. What types of information should we consider including? Who can perform a feasibility study?

Please see the Applicant Bundle Checklist for additional information on business incubator application requirements. Note that business incubator construction applications require a full feasibility study while business incubator non-construction applications require an abbreviated feasibility study. Very briefly, the following is required:

    Business incubator construction applications

    • Full Incubator Feasibility Study - Establishes the market demand for the specific start-up companies proposed for incubation. A feasibility study should establish the presence of a critical mass of support factors, entrepreneurial demand for use, and community support for the facility. This full study, including appendices and other attachments, typically does not exceed 30 pages in length.
    • Documentation on Financial Capacity - Documentation (typically pro-forma statements) with detailed demonstration that the applicant has the financial capacity to operate the incubator facility and reach a positive cash flow within a reasonable period of time, which EDA generally expects to be three years.
    • Incubator Management Plan - Should include a tenant/client selection policy, tenant lease or license agreement (if applicable), business assistance policy, staffing plan, tenant graduation policy, and incubator performance plan. This plan does not typically exceed 15 pages in length.

    Business incubator non-construction applications

    • Abbreviated Incubator Feasibility Study - Establishes the market demand for the specific start-up companies proposed for incubation. A feasibility study should establish the presence of a critical mass of support factors, entrepreneurial demand for use, and community support for the facility. This abbreviated study should be approximately one page and indicate the demand and capacity for the incubator in the cluster.
    • Documentation on Financial Capacity - Documentation (typically pro-forma statements) with detailed demonstration that the applicant has the financial capacity to operate the incubator facility and reach a positive cash flow within a reasonable period of time, which EDA generally expects to be three years.
    • Incubator Management Plan - Should include a tenant/client selection policy, tenant lease or license agreement (if applicable), business assistance policy, staffing plan, tenant graduation policy, and incubator performance plan. This plan does not typically exceed 15 pages in length.

A third party with relevant experience should be engaged to conduct the feasibility study.

C. Non-construction questions, including Revolving Loan Fund (RLF) questions

1. A region has two existing RLFs and is proposing a multi-county regional RLF to support a cluster. Is this allowable, or is it a non-starter because there are existing EDA funded programs in the region?

The applicant should clearly justify why the existing RLF resources do not serve the cluster and why the additional resources are needed.

D. Coalition Structure

1. Can the geographic footprint of the region change between Phase 1 and Phase 2?

Yes, applicants should justify the change in the Overarching Narrative to the Phase 2 application.

2. Can a recipient add a coalition member after Phase 1 and if so, can the new coalition member be eligible to lead a component project for Phase 2?

Yes, so long as that entity is an eligible EDA recipient. The applicant should justify the change in the Overarching Narrative to the Phase 2 application.

3. Can a coalition member be the component lead for multiple or all components of Phase 2?

Yes; however, the coalition member should demonstrate capacity to manage multiple components.

4. Can we include multiple subprojects as part of a component? If so, how should this be structured?

Projects from Phase 1 may be split into multiple component applications for Phase 2 for administrative purposes. This will not impact the overall number of projects or the competitiveness of the overall coalition, which will be evaluated holistically. Your Economic Development Representative (EDR) is the best source of advice on the potential need for multiple applications for a single project. Multiple applications for a single project can use a similar project narrative (see also FAQ A.4).

5. Is a governing body an appropriate use of funding and can it be a specific component project?

Yes. Resources for staff, including the Regional Economic Competitiveness Officer (RECO) are appropriate expenses, as are the necessary support structures needed for coalition governance, management and project evaluation. In some instances, a separate component application may be needed to support these activities, which is completely acceptable.

E. Compliance and Budget

1. How will reimbursement be handled for Phase 2?

All Phase 2 construction projects will be paid on a reimbursement basis unless EDA approves a request for advance payment. Requests for advance payment will only be granted in rare and compelling circumstances. Once the phase 2 recipient has cleared all preconditions for reimbursement (e.g., demonstrating proof of title, recording a statement of the federal interest), the recipient may submit contractor invoices along with form SF-271, Outlay Report and Request for Reimbursement for Construction Programs. EDA will determine the allowable share of the invoiced costs and then reimburse the recipient for the federal share of those costs. Please note that regardless of the costs incurred, EDA will retain 10% of the federal award amount until project closeout to ensure compliance with all grant requirements.

For nonconstruction projects, EDA’s usual practice is to disburse grant funds on a reimbursement basis, as described above. EDA will consider requests for advance payment of nonconstruction awards on a case-by-case basis, however.

2. Does the matching share have to be documented separately for each component application? Will the match rate be assessed on each component applications separately or will all of a coalition’s component applications be assessed together?

Local match, regardless of the amount, must be documented for each component project separately. All matching funds allocated to a component project must be applied to costs within the scope of work of that component project. EDA will use the grant rate for a given component application to determine the federal share of costs on that project for disbursement and project close-out purposes.

EDA expects, as a baseline, that the total match across all component projects in a coalition proposal will be 20%. Individual projects may have a lower matching share, so long as the total match rate across all projects is 20%, as shown in this coalition example:

Component Project Total Project Cost Local Share Match Rate
1 $10 million $2.3 million 23%
2 $3 million $600,000 20%
3 $5 million $2 million 40%
4 $12 million $1.2 million 10%
5 $500,000 $0 0%
Total $30.5 million $6.1 million 20%

In this example, component projects with a match rate lower than 20% do not need special justification since the total match rate is still 20%.

EDA may consider funding a coalition proposal with less than 20% match overall, provided the coalition demonstrates extraordinary need that would justify a higher grant rate.

Finally, EDA expects to fund projects of Indian Tribes at a 100% federal grant rate. These projects should not be included in any calculations of overall match rate for a coalition’s application.

3. Are there requirements for recipients to fund project costs prior to receiving disbursements from EDA?

Yes. Grants for construction projects will be disbursed on a reimbursement basis only. That means that recipients must have sufficient cash on hand to pay contractor invoices before being reimbursed by EDA. Applicants proposing to provide in-kind match for construction projects, e.g., land required for the project, should bear in mind that they will still need to be able to meet the project’s cash needs pending reimbursement.

It is also EDA’s normal practice to disburse nonconstruction grants on a reimbursement basis. In those cases, recipients will also need to be able to advance project costs until receiving a reimbursement. Recipients may request that nonconstruction costs be paid on an advance basis, and EDA will consider those requests on a case-by-case basis. For grants paid on advance, EDA will ordinarily advance the recipient’s anticipated cash needs for a 30 to 90-day period following the advance request.

For RLF grants, EDA will disburse funds for RLF loans within 30 days of anticipated loan closing.

4. Does construction of the shell of the building (recently completed) qualify as matching funds for the installation of the clean rooms?

If the building shell is required for the project, then this type of donation could be considered an in-kind donation of property by the recipient. The value of the donation would be determined by 2 CFR 200.306(d). If EDA’s project includes just a portion of the building, EDA would only be able to consider the value of the relevant portion of the building as match.

5. Can Phase 2 funding capitalize a venture capital fund which will utilize the funds to invest in start-ups?

No. This is not an allowable expense. EDA funds cannot be used to capitalize a fund or for other investment purposes.

6. Is workforce training an allowable project and expense under BBBRC Phase 2?

Yes, workforce training projects are allowable under the BBBRC (see example projects starting on pg. 5 of the BBBRC NOFO). All projects should be strategically linked to the applicant’s regional growth cluster.

7. Will EDA cover wraparound services such as childcare, travel stipends for students to go to classes, or tuition stipends as part of a Phase 2 project?

EDA is committed to removing barriers for workers, particularly from underserved populations, to access quality training. In general, these types of costs may be allowable as part of a workforce development project, provided they meet the definition of “participant support costs.” See 2 C.F.R. § 200.1. The applicant must document that these costs are necessary and reasonable for participants to be able to participate in the program.

EDA’s preference is to cover these costs through a contracted service provider (for example, a childcare provider or a transportation provider) procured in accordance with the procurement standards of 2 CFR part 200. However, in some cases it may not be possible or cost effective to do so. In these cases, EDA can approve providing stipends directly to participants for certain costs such as travel costs. The applicant must justify why the provision of stipends is the most cost-effective and reasonable method of covering these costs. Additionally, the applicant must have a method to estimate that the costs are closely related to the actual costs a participant incurs to participate in the program (for example, if the applicant’s proposed program is two days a week, EDA funds cannot be used to cover a participant’s travel for five days a week, etc.)

With respect to tuition costs, funds cannot be paid directly to individuals. Award funds should be used to offset the costs of tuition and training and should be managed by the grantee.

From a competitiveness perspective, strong projects will deploy resources to activities that have little opportunity to be funded through other sources (e.g. other federal programs). Strong applications will also leverage additional external resources to achieve the coalition’s goals.

8. Will the component project lead(s) for Phase 2 conduct individual reporting/pay requests or will it all be funneled through the primary applicant?

Component project leads will be required to submit pay requests and financial reports for their projects. For construction projects, the component project lead will also be required to submit quarterly progress reports. For non-construction projects, it may be possible to combine or coordinate project progress reports. Each component project lead will remain responsible for ensuring that the progress reporting requirements for its award are met. Any such arrangement would need to be approved by EDA.

9. Can we use funds from another federal grant to meet our matching share requirement?

In general, funds from other federal grants may not be used to meet matching share requirements. Funds from other federal financial assistance awards may be considered matching share funds only if authorized by statute, which may be determined by EDA’s reasonable interpretation of the statute. If so authorized, the use of funds must be eligible under the respective programs.

F. Subawards and Co-Recipients

1. What is a subaward?

An award provided by the recipient of an EDA award to a subrecipient for the subrecipient to carry out part of the EDA project. It does not include payments to a contractor. A subaward requires the recipient and the subrecipient to enter into a subaward agreement.

2. Are subawards allowed for non-construction projects in the Build Back Better Regional Challenge?

Yes. Subawards are allowed for nonconstruction projects. For example, the recipient of an award to fund operations of a business incubator might make a subaward to another organization to provide a portion of the incubator curriculum.

The subrecipient must be an entity eligible to receive EDA assistance (i.e., a state, an Indian Tribe, a District Organization, a political subdivision of a state, an institution of higher education, or a non-profit organization acting in cooperation with a political subdivision of a state).

3. Are subawards allowed for construction projects in the Build Back Better Regional Challenge?

No. If a construction project is being proposed, the entity that will be responsible for carrying out and maintaining the project must be an award recipient. This requirement is to facilitate EDA’s ongoing oversight obligations with respect to the finished project.

4. What is a co-recipient?

A co-recipient arrangement exists when two or more eligible entities jointly apply for and receive an EDA grant. Co-recipient arrangements are permitted when doing so would facilitate the involvement of multiple eligible entities in a project. Co-recipient arrangements may be required in certain circumstances, including for construction projects in which one eligible entity will perform the work and a second entity will own all or a part of the finished work.

Note that in any co-recipient arrangement, a single recipient must be designated as the lead recipient. The lead recipient is responsible for submitting all required progress reports and is the only entity that receives grant disbursements from EDA.

Each co-recipient must be an eligible entity (i.e., a state, an Indian Tribe, a District Organization, a political subdivision of a state, an institution of higher education, or a non-profit organization acting in cooperation with a political subdivision of a state.)

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