Document 230745

4/24/13 Making the Subaward Process
Easier from Start to Finish
Objectives of the Session
—  Define basic subaward terms
—  Walk through the subaward process (pre-award,
award, and post award)
—  Identify troublesome areas and provide tips to
avoid/mitigate problems.
What is a Subaward?
—  According to the OMB Circular A-110, a Subaward
is defined as “an award of financial assistance in the
form of money, or property in lieu of money, made
under an award by a recipient to an eligible
subrecipient or by a subrecipient to a lower tier
The subrecipient carries out a portion of the programmatic
effort of the project
¡  The subrecipient must adhere to sponsored compliance
requirements (IRB, IACUC, rebudget restrictions, publication
rules, Intellectual Property rights)
1 4/24/13 Other Important Terms
—  Prime Award / Prime Grant / Prime Contract
—  Prime Recipient (aka Pass Through Entity)
—  Subrecipient / Subgrantee / Subawardee / Subcontractor
—  Subaward / Subgrant / Subcontract
—  Vendor
—  Consultant
—  Scope of Work (SOW)
—  Subaward Budget
—  Invoice
—  Progress Reports
—  Financial Reports
Purchased Service/
(i.e. NOT subawards)
—  Vendor
¡  an organization providing
goods or services that are
necessary for conducting a
—  Consultant
¡  an expert advisor who is
paid for his/her time at a
fixed rate of compensation
(hourly or daily and
includes travel, expenses
and overhead) specified in
the consultant agreement
Is the Sub a Vendor?
—  Questions to ask before including a subaward in a
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’s
specifications using standard operating procedures?
—  Yes to any?
2 4/24/13 Benefits of a Subaward
—  Collaboration
¡  Offers extension of researcher networks
¡  Allows research to be conducted at disparate locations
¡  Allows effective utilization of individual talents (subbing out
work to specialists)
¡  Provides more research opportunities (subset of RFPs require
¡  Provides opportunity for greater validity of project by
including more experienced investigators
—  See examples at NORDP (National Organization of Research Development Professionals
The Process- Pre-Award
—  Research Administrator:
Coordinate collection of proposal information (as per Sponsor
proposal guidelines)
subawardee information
¢  budget narrative
¢  SOW
¢  and official letter of collaboration
—  PI:
Collaborate with subrecipients on technical portions of proposal
Coordinate with Research Administrator to get this information from
recipient institution.
The Process- Pre-Award
—  Proposal Office (Institutional Official):
¡  Review proposal for completeness
¡  Facilitate collection of documents as needed
¡  Submit proposal to Sponsor
3 4/24/13 The Process – Award Stage
Once the prime award is received (or the contract is
executed), the PI and Administrator send a request to
the Contracts office to issue a new subaward.
At this point, the Contracts
office will initiate their process:
The Process- Award Stage
—  Prepare initial draft for negotiation
—  Route to PI and Departmental Admin for
—  Send draft to subrecipient
—  Negotiate any unacceptable terms
—  Receive partially executed copy from
—  Sign Contract and return Fully Executed Copy
The Process- Post Award
—  Financial Management
¡  Set up subaward in financial system (Encumber/draw down
¡  Process invoices and make payments to subrecipients
¡  Monitor financial reports
—  Closeout
¡  Verify status of final invoice
¡  Make final payments/adjustments
¡  Ensure receipt of required reports
¡  Prepare closeout reports to prime sponsor
4 4/24/13 Additional Responsibilities – Prime Recipient
—  Principal Investigator
¡  Majority of proposal work plus coordination of elements from
÷  Collect
subrecipient budget, scope of work, and other
Communicating with each subrecipient PI to monitor work
¡  Reviewing and approving invoices for appropriateness and
compliance with Sponsor rules
¡  Coordinating with subrecipients to collect required progress
reports to include with required reports to Sponsor
Additional Responsibilities – Prime Recipient
—  PI’s Departmental Administrator
¡  Helping PI with administrative management of all
subrecipients (so all the tasks on the previous slide and then…)
¡  Coordinating with central office (Contracts and Accounting)
¡  Coordinating with subrecipient administrators
Additional Responsibilities – Prime Recipient
Prime Recipient Additional Responsibilities:
—  Pre-award Office
Coordinate application info for accuracy and completion.
÷  General
items required:
of collaboration/commitment
¢  Budget
¢  Budget narrative
¢  Scope of work
¢  Cost share documentation (if applicable)
¢  Any other items required by sponsor (CV, COI, CP, etc.)
¢  Letter
—  Prime Recipient submits full package to Sponsor
5 4/24/13 Additional Responsibilities – Prime Recipient
—  Central Award / Contract Office
¡  Verify award details, review terms and conditions
¡  Verify that subaward is approved by prime sponsor
÷  If
÷  If
not approved, seek approval for subaward
the subawardee is foreign, seek additional approval regardless
Collect subawardee information (required for reporting)
Verify that PI/Admin has sent:
÷  Scope
of work
÷  Budget
Draft agreement
Negotiate with subrecipient
¡  Have agreement signed by authorized official
Additional Responsibilities – Prime Recipient
—  Post Award Office
Monitoring: OMB Compliance issues, A-133 audit compliance,
financial and technical
Financial compliance: track sub recipient allocations separately
Process for review and approval of invoices
÷  Research
Admin: financial
Reimbursement for disallowances
Verify cost share commitments
÷  PI: programmatic
¢  Scientific process
¢  Inventions report
¢  Timely submission of deliverables
¢  Final reports
Selecting a Subawardee
—  What will my subrecipient be responsible for?
¡  Performing their portion of the work, (detailed in their “scope
of work”)
¡  Ensuring that their expenditures follow the prime sponsor
guidelines (allocable, allowable, reasonable, and consistent)
¡  Managing the funds in an acceptable accounting system that
allows for tracking funds in separate cost accounts
¡  Submitting invoices, progress reports, and other required
6 4/24/13 Selecting a Subawardee
—  What should I be aware of about my potential
collaborator’s institution?
Previous negative experiences with the institution
—  What information do I need from my subrecipient
for my proposal?
Letter of commitment (signed by institutional official)
¡  Scope of work
Difficult Subawards
—  What makes collaboration “risky” for the prime
institution (or the subrecipient institution)?
Audit findings (or no annual audit)
Poor performance on either institution’s part
÷  Findings
related to similar work or financial management
÷  Failure
to perform work or poor communication
to submit required documentation timely (progress
reports, financial reports, invoices, etc.)
÷  Failure
Prime grant or contract includes restrictions
÷  NASA
grants exclude collaboration with China (this includes
Chinese graduate students at subrecipient institution)
Difficult Subawards
—  Some standard risk assessment factors:
•  Foreign subrecipient
•  Subrecipient Maturity • 
•  Award Type / Sponsor
•  Amount of subaward
•  Percentage of subaward • 
•  Accounting system
•  Procurement systems
•  Negotiated indirect
•  Audit findings
ITAR/EAR type of work • 
Intellectual Property
(IP) Issues
Potential for Conflict of
Scope of Work (abstract
deliverables) /
Deliverables required
for prime work
Poor documentation
Subrecipient cost share
Subrecipient does not
have financial COI
policy (PHS/NSF)
Subrecipient does not
have RCR program
7 4/24/13 Difficult Subawards
—  What makes contracts “risky” for the prime
institution (or the subrecipient institution)?
Difficult terms
÷  Publication
÷  Short turn-around time for financial reports
÷  Indemnification
Difficult Subawards
—  What will the contracts office do if the subrecipient is
deemed medium to high risk?
Very rare to refuse to issue subaward/subcontract
Contracts office will modify template to mitigate risk
÷  Fixed
price agreement
stringent reporting requirements
÷  On site visits
÷  Desk audits
÷  More
Improving the Experience
—  Pre-Award:
¡  Better collaboration between institutions
¡  Clear list of information communicated between institutions
¡  Files emails with appropriate file names and types
¡  Other Ideas?
8 4/24/13 Improving the Experience
—  Award Stage
¡  Make sure requests to central office include all necessary
¡  Communicate with your Central office (early and often)
¡  Speaking of early, make requests timely
Improving the Experience
—  Post Award/Financial Management
¡  Monitor expenses and performance
¡  Pay attention to invoice review
¡  Insist on good documentation
÷  Ask
questions if documentation or explanations seem thin
Good management helps spot problems early –
which allows you to address problems quickly!
Different Experiences/ Processes
We would love to hear about your
What do you do differently?
Ideas for improvement?
9 4/24/13 Questions?
Contact Us!
—  Trisha Priester Southergill
[email protected]
—  Pamela Watson
[email protected]