Sponsored Program Compliance
16. Administration of Subagreements
Basic Concepts
Sponsored research awards made to the University of Rochester (UR) are generally conducted within the physical boundaries of the UR. In the last decade, as federal agencies have emphasized collaborative research, it has become increasingly more common for the UR to engage outside entities to participate in its research activities. Therefore, on occasion, substantive programmatic work may be parceled out to one or several institution(s) that are made responsible for a discrete part of a project awarded to the UR.
These activities constitute a significant portion of the research program and require the leadership and direction of a responsible investigator located at the work site of the cooperating institution. The third parties providing the substantive work are referred to as subrecipients. For more information, see Section II A , page 3, Concept of Substantive Work, of the Subagreement Manual.
The most commonly used subagreements at the University of Rochester are those that are awarded under federal assistance grants.
The UR uses the federally-endorsed FDP Model Subagreement for these situations as the flow-down requirements are clearly delineated and the standard terms/wording facilitate the subagreement negotiation.
However, case-by-case revisions to the standard wording may be necessary depending upon the terms and conditions negotiated with the UR's prime sponsor and with the subrecipient organization (e.g., terms for a commercial organization will normally differ from terms to a non-profit, educational institution.)
There are primarily two documents associated with UR subagreements for sponsors other than those issued from federal assistance awards (e.g., commecial entities). These are the G-Subaward Agreement and the Terms and Conditions documents.
Proposal Stage
The proposal submitted by the subrecipient candidate includes, at minimum; the statement of work, the project budget, and the written evidence that an authorized organizational official has endorsed the subrecipient's proposal. Additional documents might include a resources/facilities page, checklist page, biosketch, other support, and a signed face page. The UR may, on occassion, request additional information.
It is the responsibility of the UR principal investigator (PI) to discuss and negotiate the scope of work to be performed by the subrecipient. The subrecipient submits a statement of work or subagreement proposal that outlines the procedures and methods to be employed in accordance with the goals of the project proposed by the UR PI. The statement of work should be submitted to the UR PI well in advance of the agency deadline to allow for review and negotiation. If the subagreement involves human or animal work, appropriate subrecipient approvals should be included in the proposal if required at the time of proposal.
A budget is also submitted by the proposed subrecipient. It is also the responsibility of the UR PI to evaluate the proposed budget for cost and price reasonableness against the proposed statement of work. The subcontracting institution's designated business representative who is authorized to commit the institution's resources should provide a signed letter of intent or a signed subagreement proposal.
Subagreement proposals submitted in response to a federal procurement services request (e.g., a contract) will have additional requirements at the proposal stage such as additional information and forms. The UR PI and ORPA Research Administrator (R.A.) should review the Request for Proposal (RFP) or Request for Quote (RFQ) carefully to identify the existence of any additional requirements (for example, completed Representations and Certifications).
Subrecipient costs are included in the UR budget as a direct cost to the UR. UR will assess indirects on the first $25,000 of each subagreement on all new awards, including competing renewal grants. Each new project period will generate a new Financial Activity Objet (FAO) (i.e. account) and subagreement number and once again, the assessment of the UR indirects on the first $25,000 of each subagreement. For projects that require a new FAO and a new Subagreement number on an annual basis, the UR will not assess indirects on the first $25,000 each year if the FAOs are all part of the same project period.
Subagreements budgeted on awards that assess UR F&A on a Total Direct Cost (TDC) basis (e.g. industry or foundation awards) are subject to UR F&A on the full amount of the subagreement, not just on the first $25,000. Any waiver of the UR F&A costs on the subagreement costs requires the approval of the appropriate Dean's office.
Time of Award Considerations
For more information, see Section IV D, page 9, Assessing Subrecipient Qualification and Risk of NonCompliance, of the Subagreement Manual.
The UR department or unit is responsible for ensuring that assurances, such as IRB approval if required, from the subrecipient have been obtained and forwarded to the ORPA RA. In addition, other UR Compliance Offices (such as RSRB or UCAR) may be required to review the protocol and provide approval or a secondary review of those approvals or assurances.
When the UR receives its prime award from the sponsoring agency, it is necessary to establish a subagreement with the subcontracting institution. ORPA prepares the subagreement documents, but needs to receive verification and approval from the PI to release the subagreement. ORPA also requires verification that the PI has evaluated the subrecipient's technical and cost proposal. This is done via a Request to Issue a Subcontract form, ORPA Form No. 122. This request must be completed for the first year only. PI approval to establish a subagreement for future budget periods should be sent to ORPA in an email request.
There is a different standard for cost review for subcontracts issued from federal contract awards, which are subject to both the procurement standards located in the Uniform Guidance (U.G.) and the Federal Acquisition Regulations. As such, these subcontractors are subject to the standards of "open and free competition" and sole source justification and documentation. Even if the approved technical and cost proposal identifies the subrecipient, do not take it for granted that the agency will not require additional action in order to issue the subcontract.
The subrecipient agreement serves as the legal, binding document that states the rights and responsibilities of both parties; protects the interest of the sponsor and the prime recipient and "flows-down" all necessary requirements, certifications, and assurances required by the sponsor, and demonstrates to the sponsor that the prime recipient (UR) has acted on its behalf and is demonstrating proper stewardship.
When ORPA receives the fully executed copy of the subagreement from the subrecipient, the PI and department administrator will be made aware of their responsibilities in an email attached to the copy of the subagreement.
Post-Award Considerations
Monitoring
As prime grantee, the UR bears the ultimate responsibility for the conduct and completion of a project, and has a responsibility to monitor the subrecipient's financial and technical progress. The PI is integral to the University's fulfillment of its monitoring responsibility. Specifically, the PI can fulfill the monitoring needs through:
- Financial reports review in conjunction with approval of the subrecipient's periodic invoices (the content and timeliness of on-going expenditure reports or invoices is a good indicator of the subrecipient's grant management system);
- Performance reporting (annual progress reports should provide information on any deviation or delay in the agreed upon scope of work);
- Ongoing, documented correspondence between the investigators; and
- Site visits (as a means of verifying information when the PI conducts a collaborative visit).
Contract Modifications and Early Termination
Normally, the terms and conditions for a subagreement remain fixed for the duration of the project period. Changes to the subagreement (such as time extension or additional funds) are implemented through issuance of a Change Order or Amendment.
Early termination of a subrecipient agreement may occur for a number of reasons, all of which may be problematic. Among the reasons for early termination are (1) failure of the subrecipient to perform; (2) relocation or illness of the subrecipient's principal investigator; or (3) termination by the project's sponsor.
UR and the subrecipient agreement must authorize early termination and specify the conditions. With regard to failure to perform, the UR's principal investigator and/or ORPA should have been documenting lack of progress by the subrecipient and recorded communications with and efforts to correct the situation. Even with ample documentation and clearly defined terms, this decision should be made carefully. Other solutions should be considered as well, such as requesting the sponsor to extend the project to allow for sufficient progress.
If the sponsor terminates the project, the UR has the responsibility to represent the subrecipient's interests towards a fair and orderly closeout and settlement. The subagreement provisions should allow for payment of all non-cancelable costs, if applicable, prior to the date of termination, if this is consistent with the prime award. In early termination, the sponsor usually still requires the submission of all reports.
Close-out Procedures for Grants and Contracts (does not include industry-sponsored clinical trials)
Before a subawardee's final invoice can be paid, the UR PI must certify that all technical reports and/or deliverables have been received and that the subrecipient has fulfilled its obligations. Depending on who the prime sponsor is, the subrecipient might also have to provide additional documentation, such as intellectual property or property reports.
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