Except as provided in subsection (b), the Department of State shall work to achieve full and open competition in the award of grants for carrying out its overseas public diplomacy functions.

The Department of State may award an overseas public diplomacy grant under procedures other than competitive procedures when—

(1) such a grant is made under the Mutual Educational and Cultural Exchange Act of 1961 (commonly known as the Fulbright-Hays Act) [22 U.S.C. 2451 et seq.] or any statute which expressly authorizes or requires that a grant be made with a specified entity;

(2) the terms of an international agreement or treaty between the United States Government and a foreign government or international organization have the effect of requiring the use of procedures other than competitive procedures;

(3) a recipient organization has developed particular expertise in the planning and administration of longstanding exchange programs important to United States foreign policy; or

(4) introducing competition would increase costs.

After October 1, 1991, overseas public diplomacy grants awarded by the Department of State shall substantially comply with Department of State grant guidelines and applicable circulars of the Office of Management and Budget.

(1) After October 1, 1991, overseas public diplomacy grants awarded by the Department of State shall substantially comply with Department of State grant guidelines and applicable circulars of the Office of Management and Budget.

(2) If the Agency [1] determines that a grantee has not satisfied the requirement of paragraph (1), the Department of State shall notify the grantee of the suspension of payments under a grant unless compliance is achieved within 90 days of such notice.

(3) The Agency 1 shall suspend payments under any such grant which remains in noncompliance 90 days after notification under paragraph (2).

(Pub. L. 102–138, title II, § 212, Oct. 28, 1991, 105 Stat. 695; Pub. L. 105–277, div. G, subdiv. A, title XIII, § 1335(b), Oct. 21, 1998, 112 Stat. 2681–787.)