2018 Grant Terms and Conditions—Summary of Public Comments and LSC’s Resolution of the Issues Raised in the Comments

June 6, 2017

LSC proposed new Basic Field Grant Terms and Conditions for the 2018 grant year. We issued them for public comment on April 6 and received comments from ten organizations. We appreciate the time and thoughtfulness reflected in the comments, many of which resulted in modifications to the proposed Terms and Conditions. We have summarized the substantive comments received and LSC’s response to them below. The final 2018 Basic Field Grant Terms and Conditions have been incorporated into the Basic Field Grant Request for Proposals and are now posted on LSC’s Basic Field Grant webpage. 

Paragraph 3 (Restricted Activities)

  • Summary of Comments Received: Some commenters expressed concern that the chart in Paragraph 3 listing the LSC restrictions oversimplified the restrictions by excluding exceptions and key interpretations, and would cause more confusion than clarification. They also expressed concern that Paragraph 3 could be interpreted to require grantees to comply with the chart as drafted, not the underlying laws and regulations. Commenters identified purported inaccuracies with the chart’s summaries of the class action, criminal cases, fee-generating cases, non-citizen, and welfare restrictions.

  • LSC’s Response: The chart in Paragraph 3 was created as a quick-reference tool to enable grantees to issue-spot and follow up as appropriate, including by contacting LSC with questions or requests for technical assistance. In light of the comments, we revised Paragraph 3 in several respects, including making several of the restriction summaries more comprehensive, making clear that compliance with the underlying laws and regulations is required, and reiterating that, in the event that the chart is read to conflict with underlying laws and regulations, the underlying laws and regulations govern (as stated in Paragraph 14 of the Terms and Conditions).

Paragraph 6 (Grantee Reporting Requirements)

  • Summary of Comments Received: Some commenters objected to LSC’s decision to reduce the timeframe for reporting certain operational changes to LSC from 30 to 15 business days, believing it burdensome and unaccommodating of legitimate reasons for untimely notifications.

  • LSC’s Response: With the exception of personnel resignations, the operational changes covered by Paragraph 6 do not typically occur spontaneously or without advance planning. Moreover, no circumstances were identified that would reasonably preclude provision of a brief notice of operational changes. Accordingly, we do not believe it unreasonable to require grantees to notify LSC within 15 days of taking a covered action or that a “good-cause” exception for such notification is warranted.

Paragraph 8 (Statewide Website Obligations)

  • Summary of Comments Received: Commenters stated that the requirements in this Paragraph were outdated and overbroad, because some states do not have statewide websites or statewide website committees. Commenters also objected to being contractually responsible for performing activities that they do not control.

  • LSC’s Response: We agreed with the commenters and revised Paragraph 8 to address their concerns.

Paragraph 10 (Requests for Records)

  • Summary of Comments Received: Commenters expressed concern that there was no explicit exception or process for withholding attorney-client privileged records. They urged LSC to reinsert the requirement that they only have to comply with “reasonable” record requests. They also suggested that the term “other entities with oversight and investigative authority” be enumerated so that grantees know to whom they must produce records.

  • LSC’s Response: We clarified to whom grantees must produce records by defining “LSC, LSC OIG, their respective agents, and other entities with oversight or investigative authority,” collectively as “Authorized Entities” for purposes of Paragraphs 10-12. An enumeration of “other entities with oversight or investigative authority” is not feasible, because they will vary from grantee to grantee. The intent of this paragraph, however, is to require grantees, as a matter of good business practice, to timely respond to any entity that is legally authorized, by law or by contract, to request records.

    Paragraph 10 as drafted addresses withholding and redacting documents in two ways. First, it limits Authorized Entities’ access to only those records to which they are “legally entitled.” It follows that if a record is privileged or otherwise legally protected from disclosure, e.g., employee private medical information, then an Authorized Entity is not legally entitled to it, and a grantee can withhold or redact it. Second, it specifically contemplates that certain information will be withheld or redacted: “You must provide . . . withholding or redaction information through the process specified by the requestor.”

    Paragraph 10 already establishes a simple rule for the process of withholding or redacting records: grantees must comply with whatever process the Authorized Entity establishes. If none is provided, grantees should ask the Authorized Entity how privileged and confidential records should be handled. We have clarified, however, that LSC’s (but not the LSC OIG’s) process is memorialized in the Access to Records Protocol. We expect that grantees, as they have done previously, will raise reasonableness, overbreadth, and burden of production issues with LSC and other Authorized Entities and work cooperatively to address such issues as they arise.

Paragraph 11 (Requests for Information)

  • Summary of Comments Received: Commenters expressed the same concerns with Paragraph 11 as they did with Paragraph 10, with one addition: they suggested that we prescribe timeframes for responding to information requests.

  • LSC’s Response: We agree that including an explicit reference to withholding attorney-client privileged and confidential information is justifiable regarding the information requests covered by Paragraph 11, because LSC’s contractual ability to request information from grantees extends beyond information to which LSC would otherwise (absent the contract) be “legally entitled.” Accordingly, we have added such a reference.

    We do not believe that Authorized Entity or grantee interests would be well-served, however, by imposing a one-size-fits-all timeline for responding to information requests, which vary depending on the circumstances of each request. Moreover, LSC’s Access to Records Protocol already contains general timelines for responding to LSC requests.

Paragraph 12 (Oversight, Audits, and Investigations of Grantee Activities)

  • Summary of Comments Received: Commenters expressed largely the same concerns with Paragraph 12 as they did with Paragraphs 10 and 11, with the addition of objecting to Authorized Entities’ unlimited ability to oversee, audit, monitor, or investigate grantee activities after the end of the grant term.

  • LSC’s Response: We removed the timeframe reference, thereby permitting audit or oversight activities after the end of the grant term unless otherwise prohibited by law.

Paragraph 22 (Intellectual Property)

  • Summary of Comments Received: Commenters objected to the expanded scope of LSC’s proposed “ownership rights” in works developed or improved with LSC funds, and believed that the notification requirement could be burdensome. Commenters encouraged LSC to use the intellectual property provision currently included in the current Technology Initiative Grant (TIG) grant assurances.

  • LSC Response: We agreed that the proposed notification provision could be burdensome. We also agreed that LSC does not need an “ownership interest” to protect its intellectual property interests. We agreed that the TIG intellectual property provision is preferable and inserted it with some editorial modifications.

Paragraph 26 (Indemnification)

  • Summary of Comments Received: Commenters objected to this provision because they believe that: (1) LSC’s insurance should cover suits alleging grantee misconduct and that LSC is in a better financial position to absorb these costs; (2) Grantees should only indemnify LSC for “meritorious” third-party suits alleging grantee misconduct; and (3) Grantees’ insurance rates will increase because of LSC’s indemnification requirement. They also requested more detailed procedures for how LSC intends to exercise its indemnification rights.

  • LSC’s Response
    • LSC’s Response: It is reasonable to require grantees to indemnify LSC when LSC must pay defense costs or a judgment due to a grantee’s alleged misconduct. LSC is not legally affiliated with its grantees and does not become vicariously liable to third parties for alleged grantee misconduct by virtue of awarding a grant. That a third-party suit may be “frivolous” does not alter this conclusion: but for a grantee’s relationship with the plaintiff and alleged misconduct – verifiable or not – LSC would not be named in the suit. LSC should not have to use its scarce resources and insurance (and ultimately suffer higher premiums of its own) to defend such claims.

      Based on LSC’s business experience, we see no correlation between insurance policy prices/premiums and contracts containing indemnification clauses; insurance costs are primarily driven by claims history. Grantees are in the best position to reduce their insurance costs by acting reasonably, complying with applicable laws and regulations, and avoiding claims in the first place.

Global Change

We updated the Basic Field Grant Terms and Conditions to clarify that standard provisions (like governing law and indemnification) apply to all LSC grants, not just Basic Field. This is consistent with our Technology Initiative Grants and Pro Bono Innovation Fund Grant Terms and Conditions, which already incorporate the Basic Field Grant Terms and Conditions by reference.

The final 2018 Basic Field Grant Terms and Conditions have been incorporated into the Basic Field Grant Request for Proposals and are now posted on LSC’s Basic Field Grant webpage.