§ 4280.240 Application processing.

§ 4280.240 Application processing.

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.