Subawards - incoming and outgoing

Subawards

 

About

A subaward is an agreement with a third-party organization performing a portion of a funded  research project or program. The terms of the relationship (subgrant/subcontract) are influenced by the prime agreement, and all subawards must be monitored to ensure that the subrecipient complies with these terms. A subrecipient works collaboratively with the prime award recipient to carry out the scope of work as proposed. After an award is made, subrecipients are required to comply with flow down terms associated with the prime award, including any federal regulations and compliance requirements for federal funding sources.     

Not all third party work is a subaward, some third party work is considered services and is a vendor agreement. The information below explains in detail the differences between a subaward and a vendor agreement. 

There are two types of subawards: incoming and outgoing. An incoming subaward is funding coming to SBU and an outgoing subaward is funding going out of a SBU proposal.

1. Outgoing Subawards

When SBU receives funding from a sponsor (aka prime sponsor) and subawards a portion of the work to another institution, it’s called an outgoing subaward.

Preparation and Processing of Proposals with Outgoing Subawards

Outgoing subawards involve multiple individuals and offices, therefore it's important to start the process early.  Subrecipient institutions most likely have their own routing and approval policies and procedures.  Remember to communicate our 5/2 proposal deadline policy, to ensure that documents signed by the subrecipient’s institutional official are received in time to route and submit your proposal at SBU.

Note: PIs that initiate their myResearch proposal, budget and budget justification 14 days in advance can take advantage of OSP support in the preparation of the proposals, where OSP Specialists will contact and collaborate with partner subrecipient institutions to secure all necessary subrecipient documentation (14 days notice mandatory)

The general subrecipient proposal documentation required include:

• Letter of Intent (LOI) or Subrecipient Commitment Form signed by authorizing official
• Subaward Scope of Work (SOW) that includes background info/objectives and a clear description of the work to be performed
• Detailed budget on prime sponsor budget form or spreadsheet
• Budget Justification that ties specifically to the budget line items

These documents must be incorporated into the SBU proposal and routed through myResearch Grants.

Why is a Subrecipient Commitment Form necessary at proposal stage? 

The Subrecipient Commitment Form is created to collect information about each Subrecipient named in a SBU proposal at proposal stage. The information on the Form helps the Specialists in the Office of Sponsored Programs verify the eligibility of the Subrecipient and that the information about the Subrecipient contained in the SBU proposal has been reviewed and endorsed by the Subrecipient’s Authorized Organizational Representative (AOR).

At award stage, the information on the Subrecipient Commitment Form helps OSP Specialists conduct a risk assessment of the Subrecipient prior to entering into a Subaward Agreement. Subawards may not be issued to Subrecipients that pose a great or an unacceptable risk to our institution. A Subrecipient Pre-award Checklist is completed by the OSP Specialists and provided to the Office of Grants Management for further review and input. As of July 1, 2021, OSP Specialists will also be required to conduct and complete a Risk Analysis action in addition to the Checklist prior to processing a Subaward Agreement. 

Note: See below the information on how to determine the type of relationship involved (subaward vs. service/contractor).

Including a subaward in your award (Outgoing Subaward)

If your award involves subrecipients (subawardees or subcontractors), you should submit a RF Purchase Requisition to OSP Contracts. OSP will need a copy of the Subrecipient Commitment Form, subrecipient's statement of work and budget (if they were not previously submitted with your myResearch application) in order to develop a subrecipient agreement (either a subaward or a subcontract).

Principal Investigator Responsibilities on Outgoing Subawards

• At proposal stage, clearly determine the appropriate classification of costsl as either a subaward or service agreement (see below additional guidance).
• Monitor subrecipient to assure that invoices and progress reports are submitted in a timely manner.
• Review invoices received from the subrecipient for allocability, allowability and reasonableness of costs and that charges are within the period of performance of the prime award, and approve them. Ensure that invoices provide enough details to determine how funds are being utilized. Discuss any concerns with your departmental administrator or your designated Analyst in the Office of Grants Management. Note that payment can be withheld if explanations are needed, and until such satisfactory explanation is received from subrecipient.
  • Monitor subrecipient’s progress and determine whether payments are in alignment with progress and terms of the subaward.
  • Approved invoices must be submitted to the Office of Grants Management for processing.
• If the subrecipient is contributing to any mandatory cost sharing commitments, review the invoice for indications that the subrecipient is meeting commitments and has certified that all expenses are appropriate.
• Verify that  scientific progress reports and other material requested from the subrecipients have been collected and reviewed.
• Verify that project closeout requirements required by federal award terms are completed.

Subrecipient Responsibilities include:

• Submit appropriate invoices and reports in accordance with subaward.
• Submit required technical reports.
• A-133 / Audit compliance - completion of required audits and any adverse findings which impact the subaward.
• At closeout, submit accurate final invoice and submit final reports, including technical, inventory, and inventions.

Subaward Modification Requests - what is needed

All actions and documentation  outlined below must be submitted together with a RF Purchase Requisition to your OSP Specialist.

- Increase of funding 

A detailed budget from the subrecipient is required for an increase in funding, unless subject to SNAP. If the budget period is also extended, the Notice of Award must provide new end date.

- Decrease of funding

Substantial decreases (greater than 25% of total cost) require a revised budget and scope of work (SOW).  The new budget and SOW must reflect the revised total cost and the work performed. 

- No Cost Extension

Documentation of sponsor approval is always required, usually through a revised NOA.

- PI Change

Both parties must agree to this change, and documentation is required. In most cases, sponsor approval and a revised notice of award is required.

Annual modifications/renewals will be processed by OSP via amendments to the Subrecipient. At that time, Subrecipients will be required to complete and return an Annual Subrecipient Questionnaire.

2. Incoming Subawards

Incoming subawards, happen when another institution (pass through entity) receives funding from a sponsor (aka prime sponsor) and that institution subawards a portion of the work to SBU.

Preparation and Processing of Proposals

If you are going to be a subawardee on another organization’s proposal, submit a complete myResearch proposal that includes the following information specific to your role on the project:

• Statement of Work
• Budget
• Budget Justification
• Any other documents required by the pass through entity

Follow deadlines provided from the pass through entity NOT the prime sponsor. This allows the pass through entity to incorporate our proposal materials into their proposal to to the prime sponsor.​

Is it a subaward or a service? 

Just because another entity is involved in carrying out work on a sponsored project does not mean that a true subrecipient relationship exists. It is sometimes difficult to tell the difference between a subrecipient and a vendor, which could lead to problems managing a sponsored project. Therefore, it is important to ascertain if the work to be carried out meets the definition of a subaward at the proposal stage. 

Questions to ask before including a subaward in a proposal:

• Does the entity commonly provide these goods and/or services as part of their normal business operations?

• Does the entity provide similar goods and/or services to other purchasers?

• Does the entity compete with comparable entities to provide the same goods and/or services?

• Are the goods and services being provided by the entity secondary to the central purpose of the project?

• Is the entity's work carried out according to the prime sponsor's specifications using standard operating procedures?

If the answer to any of these questions is "yes," the work fits the profile of a vendor and a subaward will not be the best solution.

Subrecipient

A subrecipient relationship is appropriate when:

• Substantive, programmatic work or an important or significant portion of the research program or project is being undertaken by the other entity. 
• The research program or project is within the research objectives of the entity.
• The entity participates in a creative way in designing and/or conducting the research.
• The entity retains some element of programmatic control and discretion over how the work is carried out.
• The entity commits to a good faith effort to complete the design or conduct of the research.
• The entity makes independent decisions regarding how to implement the requested activities.
• A principal investigator has been identified at the entity and functions as a “Co-Investigator”.
• There is the expectation that the entity will retain ownership rights in potentially patentable or copyrightable technology or products that it produces in the course of fulfilling its scope of work.
• Publications may be created or co-authored at the entity.
• The entity provides cost sharing or matching funds for which it is not reimbursed by SBU.
• The entity regards itself, and/or is regarded by SBU, as “engaged in research” involving human subjects under the Common Rule and therefore requires approval for its interactions with human subjects.

Contractor/Vendor Relationships (Service Agreements) 

If a vendor relationship is required, indirect costs will need to be charged on the entire amount of the transaction and the researcher/vendor should work with Procurement to either develop requests for proposals, obtain bids, or, after the award is made, negotiate the university's purchase order terms as well as any federal flow down requirements if the source of funding is federal.

A contractor (vendor) relationship (including that of an individual acting as a vendor of consulting services) is appropriate when:

• The entity is providing specified services in support of the research program.
• The entity has not significantly participated in the design of the research itself, but is 
• implementing the research plan of the SBU investigator.
• The entity is not directly responsible to the sponsor for the research or for determining research results.
• The entity markets its services to a range of customers, including those in non-academic fields.
• Little or no independent decision-making is involved in the design and conduct of the research work being completed.
• The agreement only specifies the type of goods/services provided and the associated costs.
• The entity commits to deliverable goods or services, which if not satisfactorily completed will result in nonpayment or requirement to redo deliverables.
• The entity does not expect to have its employees or executives credited as co-authors on papers that emerge from the research.
• The expectation is that the work will not result in patentable or copyrightable technology or products that would be owned by the entity.
• In the case of an individual vendor of consulting services, the person has no employment relationship with SBU, either academic or administrative in nature. 

It is the responsibility of the principal investigator to determine whether the price is competitive and reasonable for agreements with both subrecipients and vendors. In either case; however, the agreed-upon cost is not relevant in determining whether the relationship is that of subrecipient or vendor. It is required by federal grant terms and conditions and by good business practices that competitive bids are sought for goods and services from multiple vendors, whenever possible and when the cost exceeds $5,000. Sole source contractor (vendor) relationships may be prohibited by the conditions of the prime award, and if allowed, are typically subject to specific conditions and procedural requirements. Contact Procurement for additional clarification for agreements with vendors.

If you are unsure which type of relationship is most appropriate, please contact your OSP Specialist or osp_contracts@stonybrook.edu.