Pre-Award Costs & the DHS -What You Need to Know

  • October 19, 2020

Each of the 11 government agencies has their own individual guidelines and policies with regard to allowable costs. Each of these is very specific with regard to pre-award costs. This includes services rendered for business consultation or proposal preparation.

What is a ‘pre award cost?’

Pre-award costs ( pre-agreement costs) are defined as costs that are considered necessary to the project but are incurred prior to the starting date of the award period. You may not settle these costs with any awarded funds. The ONLY exception to this rule is if the Office of Grants & Training (G&T) makes an exception.

Period of Availability

The award period is the time when Federal funding is available for obligation by the recipient. The recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period. Only pre-award costs that have been authorized by G&T can be settled from the award. Funds used in this manner are in violation of the guidelines, which may lead to disallowance of costs. This could also lead to the recovery of funds and/or suspension of funds and/or award.

Performance Based Pay for Proposal Preperation?

In addition to breaking the law and codes of ethics from premier organizations, the idea of performances based payments proposal preparation is pure madness. Grant professionals should put their best effort forth in every proposal with the aim that their client will win the award. Therefore a ‘try harder’option for a promised bonus if the award is made should not exist. The grant writer has no control over the outcome of the application as this decision rests in the hands of the reviewers alone.

It is crucial for applicants to read and understand all policy guidelines when applying for DHS or any other federal funding. Ignorance of the policy is no excuse for breaking the law. For those to whom ethics matter, it is advisable to always research popular ethical guidelines before entering any contract. E. B. Consulting LLC has a strong commitment to both ethics and knowledge. Our staff undergoes ongoing professional development to stay knowledgeable regarding federal guidelines and policies and adhere to a strict code of ethics.

This link to the DHS Grants & Financial Management Guide may prove helpful if you are considering applying for grants from DHS. https://www.dhs.gov/xlibrary/assets/Grants_FinancialManagementGuide.pdf

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