Reference Guide: Federal Terminations and Stop Work Orders (SWO)

This Reference Guide, provided by Grants and Contracts Accounting (GCA), outlines key procedures and responsibilities when a sponsor issues a termination notice or a stop work order. The processes, for the most part, apply to all sponsored awards and emphasize the importance of coordinating with OSP and GCA to ensure compliance with federal regulations and institutional policy.

GCA is also providing an Orderly Closeout Workbook. This companion tool is designed to help departments and PIs think through potential costs and credits during closeout of terminated/stopped awards, including when pending appeal. During final reconciliation, GCA will use the workbook to true-up what was ultimately posted to the project. Any refund due to the sponsor will be the responsibility of the department, so please ensure entries are made carefully and judiciously. 

OSP is actively reviewing and updating its related procedures to align with this guidance and evolving sponsor requirements. We appreciate your patience and partnership as we work to streamline processes and provide greater clarity for the research community. 

Reference Guide: Federal Terminations and Stop Work Orders (SWO)

This guide is designed to provide University of Utah Principal Investigators (PIs) and Department Liaisons (DLs)/support units with instructions for managing sponsored awards when notified of an award termination or a stop work order (SWO).

If the Office of Sponsored Projects (OSP) directly receives a termination notice or SWO, OSP will inform internal stakeholders about the termination and, in cases where the termination or SWO is effective immediately, will initiate eAward. If a PI/DL/support unit receives a termination notice or SWO directly from the sponsor, the PI/DL/support unit must immediately forward the notification to OSP at ospawards@osp.utah.edu and Grant and Contract Accounting (GCA) at gcahelp@utah.edu, as well as initiate eAward. A PI/DL/support unit should not independently address the notice or contact the sponsor agency without OSP's guidance.

 

Termination Process

I. Spending: Upon receipt of a termination notice, the PI must cease new grant-related activities and new expenditures, unless necessary for patient safety/animal welfare. This includes halting new purchases, contracts, personnel efforts and other costs where feasible. Generally, a grantee will be reimbursed for costs properly incurred before the termination effective date, such as completed work or non-cancelable commitments as further described below.

II. Subaward/Subcontract Closeout (if applicable): If a federal award is terminated, both the University of Utah and any subrecipients on the award must immediately cease new grant-related activities and new expenditures, unless necessary for patient safety/animal welfare. OSP’s Sponsored Projects Officers (SPO) will be responsible for formally notifying subrecipient administrative contacts to immediately cease work supported by the award. Concurrently, the PI should communicate with their subrecipient counterpart to facilitate efficient financial reconciliation. Note: Federal action may shorten the University of Utah’s final financial reporting deadlines, requiring proportional adjustment of the subrecipient’s final invoice and progress report to the U. Direct all inquiries to your assigned OSP SPO.

III. Orderly Close Out Costs (OCC) and Non-Cancellable Commitments (NCCs)

Typically, costs incurred up to the date of termination, plus reasonable costs necessary for orderly closeout, referred to as orderly close out costs or OCCs may be reimbursable. For more information see: eCFR: 2 CFR 200.472 - Termination and Standard Closeout Costs. The federal government generally allows non-cancellable commitment costs or NCCs if the recipient or subrecipient cannot discontinue certain costs immediately after the termination date, despite making all reasonable efforts to cancel. Consider utilizing the OCC and NCC Form (linked below under Additional Resources) to itemize/document these costs, and working with your ADR, SPO and GCO for guidance. Note: the University of Utah cannot guarantee that the sponsor will reimburse all requested OCCs and NCCs. Costs not reimbursed by the sponsor will be the responsibility of the PI and the department. As part of the closeout process, GCA will work with the department’s grant team to ensure reasonableness of all included costs.

IV. Final Expense & Final Reporting Reconciliation: Spending, unless related to closeout costs or expenses incurred prior to the effective termination date, should cease, unless necessary for patient safety/animal welfare. GCA will work directly with the PI and DL/support unit to prepare and submit the final financial report per the required terms dictated by the termination notice.

V. Final Reports: Generally, as part of the orderly closeout process, the PI/institution will need to submit the necessary closeout documents (i.e., Final Research Performance Progress Report (RPPR), and Final Invention Statement, etc.). Further, as applicable, the Final NIH Policy for Data Management and Sharing may apply and may require submission of a Data Management and Sharing Plan. See NIH Grants Policy Statement Section 8.2.3 for more information on data management and sharing expectations. If the terminated grant is subject to a pending appeal, please consult with OSP regarding whether final reports should be submitted while the appeal is pending.

VI. Project Funded Faculty, Staff, and Students: Please work with your department’s HR representative, and your Dean/ADR to determine appropriate next steps in managing personnel/students that are funded on the project that is being terminated/stopped.

VII. Retroactive Terminations: In some cases, sponsors have provided a termination with an award end-date that is months in the past. Please work with OSP and GCA to coordinate closeout activities as these types of terminations require special handling.

VIII. Appeal Process: An appeal of an award termination is a collaborative decision involving the PI, OSP, and the Office of General Counsel (OGC). If the sponsor grants the appeal, OSP will notify the PI, lead administrator, and GCA to reinstate the award. However, if the appeal is denied, OSP will inform the above stakeholders, and the initial termination date will stand as the effective award end date. Understand the risks: expenses incurred on the grant after the original termination date likely will not be reimbursed by the agency if the appeal fails. Such expenses will be the award PI and the department's responsibility.

Note: The University of Utah will continue to monitor and update these guidance documents and related policies as needed to reflect current sponsor guidance, which continues to evolve. Non-cancelable obligations and costs incurred on a terminated grant may be denied by the sponsor agency. The relevant University of Utah PI and department will be responsible for covering any costs not allowed by a sponsor.

 

Stop Work Order (SWO) Process

I. Spending: Upon receipt of a SWO, the PI must cease new grant-related activities and new expenditures, unless necessary for patient safety/animal welfare. This includes halting new purchases, contracts, personnel efforts and other costs where feasible. Generally, the grantee will be reimbursed for costs properly incurred before the stop work order's effective date, such as completed work or non-cancelable commitments.

II. Additional Communication: When a decision is made by the sponsor regarding whether to lift the SWO or terminate the award, OSP will inform the internal stakeholders. If a PI/DL/support unit receives this notification, they must immediately forward the notification to OSP at ospawards@osp.utah.edu and Grant and Contract Accounting (GCA) at gcahelp@utah.edu, as well as initiate eAward activity.

III. Subaward/Subcontract Closeout (if applicable): Please consult with OSP/GCA if invoices need to be paid post the SWO effective date.

 

Additional Information

Bridge Funding: In the event of a termination or a stop work order, the Principal Investigator (PI) may seek bridge funding which will be granted according to the bridge funding policies and procedures of each University of Utah school/college. This bridge funding can provide a temporary financial solution to sustain ongoing research activities while exploring alternative funding sources.

For additional guidance, please contact:

• Brent Brown: brent.brown@osp.utah.edu

• Todd Bjorklund: todd.bjorklund@osp.utah.edu

Special Circumstances – Research Involving Human Subjects or Animals: Prompt attention and special care must be taken when research projects involve human subjects or animals. For information on managing these populations under a termination or SWO, consult “Additional Resources” below.

Special Circumstances – Disposition of Property: Review the Research Handbook, section 10.4 to understand sponsor specific rules and treatment of property and equipment procured during the lifespan of the award.

Financial Compliance and Documentation of Costs: As a recipient of sponsored funding from federal sources, the University of Utah is required to provide accurate, timely, and complete disclosure of financial information, as required by each sponsored award and ensure compliance with applicable federal regulations and institutional policy. It is critically important to meticulously track and document all costs incurred both before and after an award termination or SWO. Follow all sponsor agency and/or University of Utah record retention policies.

 

Additional Resources:

University of Utah Webpage: Executive Actions and Federal Agency Updates