Outgoing Subaward Guidelines
A subaward transfers a portion of the research or substantive effort of the prime award to another institution or organization. It is a written agreement with a third party for the acquisition of goods or services, or for the conduct of prescribed activities for programmatic decision making and measurable performance requirements related directly to the prime award. A subaward is written under the authority of, is consistent with the terms and conditions of the prime award (a grant, contract, or cooperative agreement). Terms and Conditions from a Prime Award are typically imposed on the subrecipient to the same degree that they are imposed on UCF as the prime recipient.
Subaward at Proposal Stage
2 CFR § 200.331 requires that UCF make a case-by-case determination as to the nature of the legal relationship of between UCF and third-party entities. This determination will decide the type of legal agreement (subaward/subcontract, contract, consultant agreement) required to document the relationship. It is important that the correct agreement determination is made early in the process of preparing a proposal, as allocation of indirect costs and monitoring requirements for these types of agreements vary and will impact the proposal budget and, in some cases, the proposal narrative. In addition, if specified in the award terms and conditions, sponsor approval may be required prior to executing a subaward.
Subaward Predetermination Form
A Subaward Predetermination Form is a tool used by the Office of Research to assist in determining the legal relationship of a third party, as required by 2 CFR § 200.331.
Authorization from Subrecipient Entity
Authorization from the subrecipient’s representative that commits the resources and effort of that entity to the proposal and allows UCF to include the entity in the proposal submission to the sponsor. This commitment can come in the form of a Subaward Letter of Intent for subrecipient’s that are in the FDP Expanded Clearinghouse or a Subrecipient Commitment Form for subrecipient’s that are not in the FDP Expanded Clearinghouse.
Subaward Letter of Intent (LOI)
is required to be completed for each individual subrecipient on the project for subrecipients that are in the FDP Expanded Clearinghouse .
The LOI must be signed by the subrecipient authorized representative and should include an intent to accomplish the work as outlined in the scope of work, the project title, the period of performance, funds requested, and identify if the subrecipient will be carrying out Human or Animal Subject.
An organization may use their own format or LOI to provide institutional authorization, or they may use the UCF Subaward Letter of Intent.
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Subrecipient Commitment Form
A Subrecipient Commitment Form is required for each subrecipient on the project not in the FDP Expanded Clearinghouse and must be signed by the Subrecipient authorized representative.
Scope of Work (SOW)
provides sufficient detail of the technical and programmatic work to be conducted by the subrecipient, define the deliverables and milestones, and outline the time frame in which they are to be delivered. The SOW may also define all subrecipient personnel and their responsibilities.
The SOW should be unique to the subrecipient’s responsibilities and contain only the programmatic work that the subrecipient is tasked with completing. It should be accurate and concise as to what, when, and if appropriate, how the subrecipient will accomplish the work to be performed.
Budget
consists of Subrecipient total costs, which includes direct and F&A costs, if applicable. Direct Costs should be itemized by major cost categories, e.g. salary, fringe benefits, equipment, travel. If the sponsor has a specific template for budgets, the subrecipient budget should follow that template.
UCF will not issue subawards using loaded rates (i.e. $200/hour; $500/day). If an entity uses a loaded rate because it is the standard rate for the entity, that is an indicator that a vendor/procurement relationship is being established.
Facilities & Administrative (Indirect) Costs must be based on a valid current F&A Rate Agreement with the Federal government. The current F&A rate must be on file at OSP prior to issuance of the subaward. Subrecipients that do not have an approved indirect cost rate agreement can utilize a rate of 15% of modified total direct costs (MTDC) per OMB Uniform Guidance §200.332(a)(4).
Requirements for Pass-Through Entities. UCF does not negotiate IDC/F&A rates with subrecipients.
Budget Justification or budget narrative
that explains both the necessity and the basis for the proposed costs must accompany the budget.
Audit Certification and Financial Status Questionnaire
The Audit Certification and Financial Status Questionnaire Form is required for subrecipients that do not receive an annual audit in accordance with 2 CFR 200 Subpart F. Additional information will be gathered at the time of award or “Just-In-Time” notification, if needed.
Fixed Price vs. Cost Reimbursable Determination
Cost Reimbursable
Under a cost reimbursable Subaward, the Subrecipient invoices the PTE for expenses incurred under the Subaward and then is reimbursed. The expenses, as always, should be allowable, allocable, and reasonable and Subrecipient invoices should include sufficient detail for subrecipient monitoring and audit purposes.
Fixed Price
Prior approval from federal sponsors is required if the PTE wants to issue a fixed price subaward. By federal regulation outlined in 2 CFR § 200.333, the total cost of each fixed price subaward may not exceed $500,000.
Under a fixed price agreement, various milestones and/or deliverables are established along with a corresponding price for each milestone. Once a milestone is met or a deliverable received and accepted by the PTE’s PI, the Subrecipient may invoice for the corresponding amount due. Invoices for fixed price subawards need not include details of expenses. The first milestone/deliverable may be full execution of the subaward, which can be beneficial when dealing with entities that do not have the resources to incur expenses for later reimbursement.
All fixed price subawards must meet the requirements for fixed amount awards outlined in 2 CFR § 200.201.
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- Project’s scope needs to be clearly defined, and sufficient cost, historical, or unit pricing data must exist to establish a fixed price based on a reasonable estimate of actual costs; this fixed amount should be negotiated using cost principles as a guide, with payments tied to meeting specific project requirements, potentially including milestone-based or unit-priced partial payments.
- In order to establish and charge a Fixed Price Subaward to a sponsored program, the cost must be included and fully justified in the approved budget/budget justification at proposal or prior sponsor written approval is required.
The following language is recommended in the budget justification: “UCF anticipates the issuance of a fixed price subaward to [Name the subrecipient here] documented in this proposal and is requesting prior agency approval. This Subrecipient meets the criteria described in Subpart C- 200.201(b) and if this proposal is awarded, UCF will consider this subaward approved.”
A fixed price subaward may be appropriate when there is a very clear work scope, cost estimate & defined deliverables. However, the inherently unpredictable nature of research limits the ability to define specific research outcomes in advance. Most subawards do not meet the requirements of fixed price subawards. See Fixed Price vs. Cost Reimbursable Determination for additional guidance.
Subaward at Award Stage
When a new award with subaward(s) is made to the University of Central Florida (UCF), the Principal Investigator (PI) or Department Research Administrator (DRA) must request an outgoing subaward using the Create Agreement Activity in the Award workspace within HRS Grants. Select Outgoing Subaward (OS) as the agreement type and complete the OS Smart form. The PI/ DRA will upload the required subaward documents (refer to the ORC Subaward Checklist for reference) in the OS Smart Form. The Outgoing Subaward Request Form use as a tool. For detailed steps, see the How to Create and Submit and Agreement section of the Huron Reference Guide.
If the PI or DRA needs to modify or amend an outgoing subaward, they will access the current OS agreement by navigating to the Agreements or Dashboard page and searching by ID or name. After locating the agreement, click on its name and select the Create Amendment activity in the current OS workspace. Modify and add the necessary OS documentation as needed. For detailed steps, see the How to Create and Submit an Amendment section of the Huron Reference Guide.
Subrecipients Not Originally Proposed:
Prior approval from the sponsor is typically required to add a new subrecipient to the sponsored project. A complete subaward proposal package must be submitted as an outgoing subaward request in HRS, regardless of the approval requirement. The subaward will be issued once all necessary approvals are obtained.
Subrecipient Monitoring takes place throughout the life cycle of a sponsored project. Information is gathered at the proposal and award stages, as well as during an annual review process, to ensure Subcontractor performance of the work and compliance with regulatory requirements. The University is required to verify Subrecipient eligibility and manage high-risk Subrecipients.
“Subrecipient Monitoring” are formal procedures established by the University for awarding and administering subawards. The tasks of Subrecipient Monitoring are shared by the project’s Principal Investigator (PI), Department Research Administrators (DRA), and members of the Office of Research (OR).
A comprehensive risk assessment is completed by OR prior to issuing a subaward agreement. Elements of the review include inspection of the following:
- Subrecipient organization’s entity registration in SAM.gov;
- Current F&A (Indirect cost) Rate Agreement;
- Audit, Financial Report(s) and/or Tax Returns;
- A signed Subrecipient Audit Certification and Financial Questionnaire.
The Office of Research maintains the University’s data and registration information on the federal government website System for Award Management or SAM.gov. This registration is mandatory for UCF and all of UCF’s research subcontractors in order to do business with the federal government and to receive federal flow-through funding.
Screening of the subaward organization and subaward Principal Investigator is performed by Office of Research through the Visual Compliance database to determine if there are any restrictions on receiving federal funds or doing business with UCF. Additionally, the entity may be screened through FAPIIS (Federal Awardee Performance and Integrity System), which provides information about an organization’s past performance under federal awards.
Other factors may be considered on a case-by-case basis, including but not limited to:
- The location, size, and age of the organization;
- The location of the work being performed;
- The amount of the subcontract and the percentage of the prime award being subcontracted;
- The for-profit status of the organization; and
- The level of prior experience working with UCF.
If the Subrecipient is deemed as high risk, more frequent oversight is required throughout the life of the subaward. OR will work closely with the PI to learn in greater detail about the nature of the work being performed and the subrecipient’s technical and business capacity to perform. Corrective action plans for identified high-risk areas may be requested.
Monitor Performance, Progress Reports, Invoices/Financial Reports, Compliance
PI/DRA Responsibilities include:
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Reviewing the subrecipient’s Statement of Work (SOW) for technical feasibility, performing cost and price analysis, and providing competitive bid information or sole source justification
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Monitoring the subrecipient ‘s compliance with the terms of the subaward and overseeing the subrecipient’s performance of the technical work
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Submitting the Annual Subrecipient Performance Checklist for all continuing subrecipients
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Collecting and reviewing progress and invention reports, deliverables, and invoices/financial reports for consistency with the terms of the prime award
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Notifying your Subaward Specialist if there are concerns regarding the subrecipient’s performance
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Notifying your Grant Accountant if there are any financial concerns regarding the subrecipient
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Notifying your SET Finance Business Center to initiate the requisition/purchase order process
Subaward at Closeout
A Subaward is closed out when the period of performance in the Subaward agreement comes to an end, regardless of whether UCF’s research project is ending or continuing. Subaward closeouts are processed by Grants Accounting in the Office of Research.
The PI or DRA is responsible for submitting required technical, property, and invention reports and/or any other required deliverables specified in the subrecipient agreement to the awarding agency or prime sponsor. Typical subaward closeout activities can include receipt of the following:
Reconciliation of subaward finances followed by closing the purchase order
Contacts
Tameria C. Mace, MBA, CRA
Elena Andreeva, MA
Subaward Specialist III
Ritu Bhatia, BA
Subaward Specialist II
Ernest Bilinski
Subaward Specialist II