Grant Terminology found on Grants.gov.
A SUBAWARD is a formal written agreement made between Vanderbilt University (VU) and another institution or organization to perform a significant portion of the Statement of Work (SOW) under a Vanderbilt sponsored project. A subaward must include a clearly defined SOW to be performed by the Subrecipient's personnel, using its own facilities and resources. The Subrecipient takes full responsibility for adhering to the terms and conditions of the subaward, including those flowed down from VU's prime sponsor, and assumes creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling the SOW within the Subrecipient's approved budget.
- Subawards differ from procurement/vendor contracts used to acquire goods or services.
Budget: The financial plan for the project or program that the Federal awarding agency or pass-through entity approves during the Federal award process or in subsequent amendments to the Federal award. It may include the Federal and non-Federal share or only the Federal share, as determined by the Federal awarding agency or pass-through entity.
Statement of Work (SOW) : the SOW should describe the work to be conducted by the Subrecipient, define the deliverables, if applicable, and outline the time frame in which they are to be delivered. The SOW may also define all personnel and their responsibilities. It should be accurate and concise as to what, when, and if appropriate, how your organization will accomplish the work to be performed.
Fringe benefits (FB) are employee associated costs such as health plan expenses, pension plan expenses and workman's compensation expenses, among others. These by employee class. The rate is the pooled costs of these benefits divided by the total salaries in each employee class. These rates are then applied to the applicable employee salary to represent the associated benefits for that type of employee.
The Facilities and Administrative Rate (F&A Rate) is the mechanism used to reimburse the University for the infrastructure support costs associated with sponsored research and other sponsored projects. The F&A rate is essentially an overhead rate. It is calculated as a percentage of overhead associated with, an allocable to, sponsored research and other activities, divided by the direct costs of sponsored research and other activities. To collect F&A, the University adds the negotiated F&A rate to invoices or other billing instruments submitted to sponsors.
F&A costs are defined in CFR 2 Part §200.420 as costs that are "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity." F&A costs are sometimes referred to as indirect costs. Examples of F&A costs include:
- Depreciation and interest cost associated with the University’s physical plant
- Operating and maintenance costs such as utility costs, security costs, and custodial costs
- Common administrative functions such as payroll and purchasing
Because it is impractical to account separately for such costs, F&A costs are normally not charged directly to sponsored agreements.
The Budget Justification is a categorical description of the proposed costs. Generally, it explains staffing and supply/service consumption patterns, the methods used to estimate/calculate (including escalation or inflation factors) and other details such as lists of items that make up the total costs for a category. The Budget Justification should address each of major cost categories (salaries, fringe benefits, equipment, travel, supplies, other direct costs and indirect costs), as well as any additional categories required by the sponsor.
A thorough written justification that explains both the necessity and the basis for the proposed costs must accompany the budget. The justification section is critical as it enables the principal investigator to emphasize the importance of essential project costs. A budget that is adequately and appropriately justified is the best way to assure a positive cost analysis by the sponsor.
DISTINGUISHING BETWEEN A SUBAWARD AND A PROCUREMENT/VENDOR ACTION
The agreement is likely a subaward if it has the following characteristics:
- Will perform substantive, programmatic work or an important or significant portion of the research program or project is being undertaken by the other subrecipient
- The research program or project is within the research objectives of the Subrecipient
- The Subrecipient participates in a creative way in designing and/or conducting the research
- The Subrecipient retains some element of programmatic control and discretion over how the work is carried out
- The Subrecipient commits to a good faith effort to complete the design or conduct of the research
- The Subrecipient makes independent decisions regarding how to implement the requested activities
- A Principal Investigator has been identified at the Subrecipient and functions as a "Co-Investigator"
- There is the expectation that the Subrecipient 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 Subrecipient
- The Subrecipient regards itself, and/or is regarded by VU as "engaged in research" involving human subjects under the Common Rule and therefore requires approval for its interactions with human subjects
PROCUREMENT/VENDOR ACTION INDICATORS
The agreement is like a Procurement Action/Vendor Relationship if it has the following characteristics:
- The vendor is providing specified services in support of the research program
- The vendor has not significantly participated in the design of the research itself, but is implementing the research plan of the VU investigator
- The vendor is not directly responsible to the sponsor for the research or for determining research results
- The vendor 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 vendor commits to deliverable goods or services, which if not satisfactorily completed will result in nonpayment or requirement to redo deliverables
- The vendor 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 vendor
SELECTING A SUBRECIPIENT
Once the potential Subrecipient is identified and it is determined that a subaward is the appropriate mechanism, the Pl, assisted by the Department Administrator, obtains the Subrecipient proposal elements from their Subrecipient.
The proposal should be compiled in the format required by the prime sponsor and VU and forwarded to the Subrecipient's institutional official for review.
A proposal must include the following elements :
- The Subrecipient's Statement of Work (SOW), including a clear description of the work to be performed, the proposed timelines, and deliverables.
- The Subrecipient's Budget and Budget Justification, including the Subrecipient's direct and indirect costs, calculated using both the Subrecipient's F&A and fringe benefit rates, and verifying any committed cost sharing.
- The Subrecipient Statement of Collaborative Intent form (SSCI) - completed and signed by the Subrecipient's institutional official.
- It is a possibility that a Fair and Reasonable Cost Analysis & Sole Source Justification could be requested at time of proposal.
- Additional elements that may be required by VU's prime sponsor.
INTEGRATING THE SUBRECIPIENT'S PROPOSAL INTO VANDERBILT'S PROPOSAL
- The Pl, assisted by the Department Administrator, integrates the Subrecipient's SOW into the proposal, and includes the full amount of the sub recipient's budget (including the sub recipient's F&A) as a direct cost line item in the VU budget. The Subrecipient's proposed costs must be separated from VU's costs.
- When calculating VU's budget, it is important to apply the F&A based on the sponsor's inclusion/exclusion criteria. While the federal government includes the first $25,000 of each subaward in the F&A base, other sponsors may have different criteria.
- Modified Total Direct Cost (MTDC) Base: Vanderbilt's indirect costs (F&A) are applied to the first $25,000 of each competitive segment of each subaward.
PRE-AWARD SPENDING FOR SUBAWARDS
A subaward will not be issued, nor payments to a Subrecipient authorized, prior to VU's receipt and acceptance of a funding commitment from the prime sponsor. A VU Pl or designee may not authorize a Subrecipient to begin working without a fully-executed subaward agreement in place. Proposed Subrecipients who commence work without a fully signed subaward agreement from VU's SPA office do so at their own risk and have no assurance of payment from VU. In the event a subaward is subsequently issued to a Subrecipient, the Subrecipient may claim costs properly incurred under its own risk, provided that the costs are otherwise allowable. In such cases, the Subrecipient must furnish evidence to VU that all required compliance approvals were in place at the time the costs were incurred.
SUBAWARDS PERIODS OF PERFORMANCE & DURATION
The Period of Performance of a subaward (including any requested extensions) must be within VU's Period of Performance under the prime award. Subawards may, however, be issued for shorter periods of time than VU's full Period of Performance.
SUBRECIPIENT PROPOSAL REVIEW AND SUBMISSION BY VANDERBILT
At the time of proposal review & submission, SPA is responsible for the following:
- Ensuring the Subrecipient SSCI is complete
- Reviewing the Subrecipient's Scope of Work to verify that a subaward is the appropriate vehicle to fund the work
- Reviewing the Subrecipient's budget and budget justification
- Reviewing the proposal for compliance with VU and prime sponsor policy
- Submitting the full proposal to the sponsor for consideration
SUBAWARD FUNDING MECHANISMS
Vanderbilt issues subawards on a cost-reimbursement basis. Rare exceptions may be made when it can be demonstrated that a fixed-price agreement is in the best interest of the University.
SUBMITTING A REQUEST FOR A NEW OUTGOING SUBAWARD
For subawards included in the original COEUS Proposal, when the Department wishes for SPA to prepare and issue a new Outgoing Subaward, a Contract Request (CR) should be prepared through the PEER system (through the G Log #).
Additionally, the following items must be submitted in the PEER Contract Request:
- Subrecipient SSCI
- Subrecipient SOW
- Subrecipient Budget & Budget Justification
- Copy of the NOGA/Prime award
NOTE: see pages 21-23 of the PEER Overview document.
SUBMITTING A REQUEST TO MODIFY AN EXISTING SUBAWARD
When the Department wishes for SPA to modify or amend an existing subaward, it is also done as a Contract Request (CR) via the PEER system (through the UNIV# assigned to the agreement).
NOTE: see pages 24-25 of the PEER Overview document.
INITIATING AN UNANTICIPATED SUBAWARD AFTER A PROPOSAL IS SUBMITTED [Log an Add-On Sub in PEER]
If a Subrecipient was not identified at Proposal stage, the Sponsor may require prior approval to add them to the sponsored project. All subaward paperwork should be completed at the time the Subrecipient is identified. Confer with your SPA grant specialist if you need guidance. All relevant documents are necessary at this stage.
- Subrecipient SSCI
- Subrecipient SOW
- Subrecipient Budget & Budget Justification
- Copy of the NOGA/Prime award
NOTE: see pages 12-13 of the PEER Overview document.
MONITORING A SUBAWARD
Vanderbilt is responsible for ensuring that sponsor funds, including those provided by VU to other entities, are spent in accordance with all applicable laws and regulations. The University is required to monitor its Subrecipients as if it were the sponsor. This monitoring requirement places VU in the same position as if it were a federal agency dealing with their own primary recipient.
Principal Investigator & Departmental Responsibilities for Monitoring Subawards
It is the Pl's responsibility to monitor Subrecipients so that there is reasonable assurance that the Subrecipient uses the award for authorized purposes; complies with laws, regulation, and the provisions of the agreement; invoices VU for allowable expenses in accordance with the agreement; and achieves its performance goals.
Invoice Review & Signature
The Pl must review the Subrecipient's invoices and indicate approval by personally signing each invoice for payment.
The following language is a sample of language that may be required to be included on each invoice:
“To the best of my knowledge, ........................... technical progress made on this research project."
PIs should ensure that the invoice was prepared in accordance with the directions of the agreement and that costs billed are:
- In accordance with the approved budget or permissible re-budgeting
- Incurred within the approved Period of Performance and overall cost limitations
- Aligned in terms of cost and type of expense with the scientific progress reported to date
- Allowable, allocable, and reasonable
The Subrecipient's invoices should reflect both current period and cumulative expenses to date. The Pl and Departmental Administrators should also verify that the Subrecipient is adequately meeting any cost-sharing commitments made for the subaward.
Clarification of Invoiced Charges: In the event the level of detail included on an invoice is not sufficient, or if it appears that some costs may be excessive or understated, the Pl or Departmental Administrator should contact OCGA for guidance on requesting further documentation or explanation prior to approving an invoice.
Technical Progress & Compliance
The Pl must be in contact with the Subrecipient regularly to discuss technical progress, receive and review required reports or deliverables, and verify that the Subrecipient maintains current Human and Animal Subjects’ approval when applicable. The subaward monitoring and compliance obligations of the Pl may be shared with Department Administrators or other VU employees; however, in no event may such monitoring and compliance obligations be delegated to a non-VU employee.
Regulations and Assurances
The federal regulations that describe Subrecipient monitoring are general, but contain the following core elements of compliance:
- Advising Subrecipients of all applicable federal laws and regulations, and all appropriate flow-down provisions from the prime agreement
- The routine receipt and review of technical performance reports
- The routine review of expenses-to-budget
- The periodic performance of on-site visits, or regular contact, if necessary
- The option to perform "audits" if necessary, review of A-133 audit reports filed by Subrecipients, and any audit findings review of corrective actions cited by Subrecipients in response to their audit findings
- Consideration of sanctions on Subrecipients in cases of continued inability or unwillingness to have required audits or to correct non-compliant actions
The above list is not exhaustive of all compliance requirements. In addition to the general elements of compliance noted above, there may be additional sponsor or program specific requirements that mandate collecting and documenting other assurances (e.g., on lab animals, human subjects, biohazards, etc.) during the course of a project. See also Vanderbilt's Subrecipient Monitoring Policy.
A subaward is closed out when its Period of Performance comes to an end, regardless of whether VU's research project is ending or continuing.
PIs are responsible for obtaining final technical reports from their Subrecipients, and retaining a copy in their project file. PIs are encouraged to remind Subrecipients of this need well in advance of the due date for such reports.
Other final reports, including property reports, patent reports, small disadvantaged business reports, and Assignment and Release documents may be required. PIs and Departments may be asked to assist SPA and OCGA in obtaining necessary closeout reports from the Subrecipient in a timely manner.