(a) Within the limits of available funds, the Administrator may award grants to those applicants whose projects are being considered for funding, which in the judgment of the Administrator, will promote best the purposes of Title IX of the PHS Act and (if applicable) section 1142 of the Social Security Act, AHCPR priorities, and the regulations of this subpart.

(b) The Notice of Grant Award specifies how long the Administrator intends to support the project without requiring the project to recompete for funds. This period, called the project period, will usually be for 3-5 years, except for small grants, which usually are 1 year awards. The project period as specified in the Notice of Grant Award shall begin no later than 9 months following the date of the award, except that the project period must begin in the same fiscal year as that from which funds are being awarded.

(c) Upon request from the grantee, Department grants policy permits an extension of the project period for up to 12 months, without additional funds, when more time is needed to complete the research. The Administrator may approve a request for an additional extension of time based on unusual circumstances with written justification submitted by the grantee, prior to the completion of the project period. In no case will an additional extension of more than 12 months be approved.

(d) Generally, a grant award will be for 1 year, and subsequent continuation awards will be for 1 year at a time. A grantee must submit a separate continuation application to have the support continued for each subsequent year. Decisions regarding continuation awards and the funding level of such awards will be made after consideration of such factors as the grantee's progress and management practices and the availability of funds. In all cases, continuation awards require a determination by the Administrator that continuation is in the best interest of the Federal Government.

(e) Neither the approval of any application nor the award of any grant commits or obligates the Federal Government in any way to make any additional, supplemental, continuation, or other award with respect to any approved application.

(f) Small grants. For particular categories of small grants, such as dissertation research support, the Administrator may establish a limit on total direct costs to be awarded. Any categorical limits will be announced in advance of the deadline for receipt of applications for such small grants.

(g) Supplemental awards.

(1) Except for small grants, supplemental awards that would exceed 20 percent of the AHCPR approved direct costs of the project during the project period, or that request an increase in funds to support a change or a significant expansion of the scope of the project, will be reviewed as competing supplemental grants in accordance with §67.15(a). A supplemental award for preparation of data in suitable form for transmittal in accordance with §67.21 shall be excluded from the 20 percent aggregate.

(2) In the case of small grants, as defined in section 922(d)(2) of the PHS Act, the Administrator will not approve a supplemental award during the project period (excluding any supplemental award for preparation of data in suitable form for transmittal in accordance with §67.21) that will, in the aggregate, exceed 10 percent of the AHCPR approved direct costs of the project.

(h) Noncompeting continuation awards. Each project with a project period in excess of 2 years and with direct costs over the project period in excess of the amount specified in section 922(d)(2) may be reviewed during the second budget period and during each subsequent budget period by at least two members of the peer review group that reviewed the initial application, or individuals who participated in that review, to the extent practicable. Recommendations to the Administrator for continuation support will be based upon evaluation of:

(1) The progress of the project in meeting project objectives;

(2) The appropriateness of the management of the project and allocation of resources within the project;

(3) The adequacy and appropriateness of the plan for carrying out the project during the budget period in light of the accomplishments during previous budget periods; and

(4) The reasonableness of the proposed budget for the subsequent budget period.