How utilities can ensure compliance for IIJA Department of Energy GRIP grants

Federal funding awards introduce several net-new activities relative to a utility’s traditional project deployment model. Projects supported by federal funds are tied to specific agency requirements with contractually bound milestones and timelines put in place to ensure funds are deployed in a responsible and diligent manner.

The pre-award negotiation process

Following an award selection notification, a negotiation period with the Department of Energy (DOE) begins and can last for several months—often driven by the complexity of the project itself, number of partners and subrecipients, and individual legal considerations. The utility and DOE will engage in a series of negotiation discussions to assess and agree on the proposed project scope, risk assessments, and final cost/price of project components.

Post-award: Internal reporting compliance stand-up

Following negotiations and contracting with the DOE, organizations will need to establish compliance procedures that adhere to DOE-mandated reporting requirements, internal stakeholder needs, and project management specifications. Awarded utilities are contractually obligated to develop and maintain a series of unique grant compliance reports and documentation that are submitted at a regular cadence to the DOE throughout the project performance period.

This compliance reporting process ultimately yields accountability changes for an awardee as the DOE’s requirements get interfaced with existing utility project deployment processes—which are often different from one another. This can create a burden on an awardee’s program management office (PMO) that is executing the project and may necessitate additional training, resources, and internal policies. Accountability changes are needed as the introduction of federal oversight demands heightened scrutiny and transparency, potentially shifting responsibilities and requiring tighter internal controls. These adjustments can strain the utility's operational efficiency and necessitate a reevaluation of roles and processes to ensure compliance.

Taking into account the long-term nature of these grants, and that internal shifting of roles and responsibilities, organizational changes, and system and tool changes may occur during this period, consider how an awardee can ensure that from Year 1 until the final day of the grant’s performance period, they are measuring and reporting progress per DOE requirements in the exact same, consistent manner.

Project reporting requirements summary

Awarded utilities will need to establish reporting compliance framework for federal funds—documenting processes, managing reporting inputs, and establishing owners—and integrate this into established program management and deployment teams.

Tech and Project reporting requirements

• Performance report (Narrative): Recipients must submit DOE template detailing project progress. (Quarterly)
• Performance report (Quantitative): Recipients must submit DOE template capturing quantitative project progress. (Quarterly)
• Financial report (SF-425): Recipients must submit standard form on project finances. (Quarterly, Final)
• Invoicing (SF-270): Recipients will request reimbursement for the qualified expenditures made during the previous period. (Monthly)
• Cybersecurity plan (Topic Areas 2 & 3): The DOE has developed specific templates for high, medium, and low-risk projects for the project team to outline a plan for project cybersecurity. These templates help project teams outline and structure their cybersecurity plans and ensure comprehensive coverage and smooth implementation of cybersecurity measures. (During negotiation phase)
• Project management plan: Recipients must submit a PMP that defines the cost, schedule, and technical performance baselines. It will also formalize the processes such as risk management, change management, and communications management. This will be a living document, updated throughout the award period and revised as needed. (Negotiation phase, as needed)
• Special status report: Recipients must report any incidents to the DOE project lead by email. Incidents include fatalities, injuries, or illnesses, environmental contamination, property damage, cybersecurity incidents, project personnel changes, or compliance issues. (As needed)
• Final report: Recipients must submit an end-of-project report stating project outcomes, budget spent, and milestones achieved. (Final)

Community benefits and justice & equity reporting requirements

• Community benefits report: Recipients must report on progress toward meeting the objectives and milestones of its community benefits plan. (Annually, as needed, final)
• Quality jobs creation: Recipients are required to report on direct jobs, training outcomes, good jobs outcomes, and permanent jobs outcomes.
  • Direct jobs: Submissions of certified payrolls for direct jobs via LCPtracker—a third-party application the DOE has contracted to make tracking and submission of Davis-Bacon reporting as accessible as possible (Weekly)
  • Training outcomes: Reports on training outcomes, compliance with the Davis-Bacon Act, and workforce partnerships (Annually, as needed, final)
  • Good jobs outcomes: Report on jobs created, job quality, and facilitating access to jobs and training opportunities (Annually, as needed, final)
  • Permanent jobs: Report on ongoing operations, maintenance, and production jobs created (Quarterly)
• Equity and justice: Recipients must submit data on community engagement, events, technical assistance, and ownership, including diverse enterprises, partnerships, stakeholder events, consent-based siting, and other indicators from the community benefits plan. (Quarterly)
• Davis-Bacon Act labor compliance report: May require alignment with HR, payroll, and contractors to ensure weekly payroll and prevailing wage requirements are met and recorded. (Semi-annually)

Additional reporting needs

• Current and pending support: Recipients must disclose all current and pending support for principal investigators and senior/key personnel, including sponsored activities, awards, and appointments to identify potential duplication, overcommitment, or conflicts of interest. (As Needed)
• Demographic reporting: Submitting demographic information for significant contributors such as the principal investigator, program director, and business contact. (As needed)
• Financial conflict of interest report: Recipients must disclose any significant financial interests that could directly and significantly affect the funded work. (As needed)
• Personal property report—Disposition request (SF-428 & SF-428C): This standard form requires recipients to report inventories of equipment and supplies acquired by the recipient with award funds. (Annually, final)
• Uniform Commercial Code (UCC-1) financing statements: Applies to for-profit recipients purchasing equipment valued at $5,000 or more with federal funds, and if the federal share of the financial assistance agreement is more than $1 million. Recipients must file UCC financing statements to provide public notice of the federal government’s interest in the equipment, ensuring it cannot be sold or used as collateral. (As Needed)
• Federal subaward reporting system (FSRS): For any months in which the prime recipients award a sub-award greater than $30,000, recipients must file a FFATA sub-award report by the end of the following month. (As needed)
• Biennial report to Congress (Topic area 1 only): The DOE will submit a bi-annual report to Congress covering data on the cost of projects, the types of activities funded, and the extent to which the ability of the power grid to withstand disruptive events has increased. (Bi-annually)

Internal Policy Compliance

Federal agencies will expect organizations have the appropriate governance structure and policies in place to provide assurance that it can comply with the federal regulations that come with receiving federal dollars. This may mean changes to existing written policies and procedures, or creation of net new procedures such as:

• Accounting process, including how allowable and unallowable costs will be defined, tagged, and accumulated, how cost sharing will be tracked, claimed, and reported, and how the organization will make requests for payments.
• Defining a policy and procedure for procurement that aligns with the FOA requirements, such as processes for validating compliance with Buy American provisions.
• If subrecipients are part of the project, how these will be monitored and formally assigned as a subrecipient as required by the Code of Federal Regulations.
• Frameworks to provide the documentation and processes trail for any agency desktop and/or field audit reviews.
• Considerations on the impacts of NEPA compliance, project timing implications, and overall implementation (if a NEPA determination is made) for project deployments, as required for federally funded projects.

Grant deployment: Running the federal grant PMO

A successful award may require the awardee to modify its PMO approach and structure. Projects will need to be deployed according to firm milestones and deadlines, with completion dates tied to prescribed funding performance periods for the grant program. As such, a robust project management plan and the supporting financial management, risk management, vendor management, and schedule management will be required to deliver the project—and will need to be incorporated into a utility’s PMO:

Conclusion

Successfully navigating the complexities of a DOE GRIP grant requires utilities to adopt a multifaceted approach that integrates new processes, stringent compliance measures, and robust project management frameworks. From the pre-award negotiation phase to the final reporting requirements, utilities must ensure meticulous planning, execution, and continuous monitoring to meet DOE mandates and achieve project goals.

Here are five key takeaways for utilities to ensure successful grant execution:

1. Invest the time upfront to support compliance stand-up: By dedicating time and resources early on, utilities can ensure that all DOE-mandated reporting requirements are met consistently throughout the grant's performance period.
2. Build a federal grant governance playbook: Developing a comprehensive governance playbook tailored to federal grant requirements will streamline processes and provide clear guidelines for all stakeholders. This playbook should encompass things such as escalation procedures among prime and subrecipients, project management structures, financial oversight, risk management, and compliance protocols.
3. Accommodate appropriate changes to meet DOE delivery requirements: Utilities must be prepared to adjust their internal processes, roles, and responsibilities to align with DOE delivery requirements. This may involve additional training, resource allocation, and policy adjustments to ensure compliance and efficiency.
4. Perform annual refreshes on governance structure: Annual refreshes will help address any changes in project scope, regulatory requirements, or organizational dynamics—maintaining alignment with DOE expectations.
5. Invest in supplemental systems and tools: Leverage appropriate systems and tools to facilitate reporting completion workflows among prime and subrecipients, streamline project management, and affirm overall compliance. Investing in technology solutions tailored to federal grant management will support efficient data collection, reporting, and analysis.

By focusing on these key areas, utilities can not only meet the DOE's stringent requirements but also enhance their operational efficiency and project outcomes. The journey from award to execution is marked by a series of critical steps, each demanding a high level of diligence and adaptability. Establishing a compliance framework, aligning internal and federal reporting processes, and maintaining rigorous program governance are essential to mitigate risks and ensure accountability.