A subaward is a binding legal agreement that is required when an institution or organization outside of the University is conducting a defined portion of the programmatic aspects of a sponsored project first awarded to the University. Key characteristics of a subaward include:

• The subrecipient’s performance is measured against whether the objectives of the overall sponsored program are met (subrecipient carries out a portion of the programmatic effort of the project).
• The subrecipient is responsible for programmatic decision making relative to the subrecipient’s portion of the work.
• The subrecipient must adhere to sponsored compliance requirements (IRB, IACUC, rebudgeting restrictions, publication, IP rights).
• The subrecipient must use the sponsored funds awarded under the subaward to carry out their portion of the programmatic effort of the project.

Subcontracting

Consult the Procurement Office when proposing subcontracts.

Services & Consultants

A service or consultant can be distinguished from a subaward by the nature of the work they will perform. An organization is considered a vendor service when it:

• Provides similar goods and services to different clients within normal business operations;
• Operates in a competitive environment; and
• Provides goods and services ancillary to the operation of the program at a set price per unit

Include all expenses to be incurred for services during the project period, such as: media services, computer services, lab analyzes, consulting, animal care, boat and air charters. Services also include both oral and written communication costs related to the project such as toll charges, fax, postage, and publication costs. When describing consultant costs in the budget justification, mention any consulting fees and address why the individual is required for the task.

Note: Current UA employees CANNOT be paid as consultants on UAA proposals. However, emeritus faculty can be paid as consultants on UAA proposals only if:

1. They have not been paid as a UA employee in the past 12 months;
2. They are not doing a service that would fall under the normal scope of work of any UA employee;
3. They are not using university resources such as office space, equipment, labs, etc. to perform the service(s);
4. They are not being supervised on a day-to-day basis; and
5. They are given a set task to complete with an expected deliverable.

All items deemed services will have full F&A charged against them, unless it can be demonstrated that the vendor can be treated as a subaward under the following policy:

Treating vendor services as subawards (from UA Statewide)

"If a department believes that it has a contract for allowable goods and services that should not recover F&A costs on the excess over $25,000, that department must be able to clearly demonstrate that the contract does not require the same level of F&A support as other contracts for goods and services. To qualify for the exclusion, the vendor contract must meet the following criteria:

• The contract must be in excess of $50,000.
• Normally, the primary administrative costs associated with the contract are only the initial costs incurred in the bidding process.
• Limited additional administrative costs will be incurred as a result of the short-term of the contract, few types of goods and/or services purchased, quantity of goods purchased is small, or the vendor will receive a small number of payments.

The unit should follow the same process used by their respective MAU for F&A waivers by providing a written request explaining the need and justification for exceptional treatment to their respective campus’s Chief Financial Officer or authorized designee for review and approval. MAU's that currently charge a penalty to departments for waivers have the option of treating these situations as exceptions to those penalties."

NOTE: In these cases, fill out the Request for Waiver to Treat Vendor Service Contract as Subaward form. Notice of intent to seek a waiver should be given to OSP as far in advance as possible. There are no guarantees that a waiver will be granted and it could require the budget to be changed, so lead time is key with these request. This form will be required for such requests and should be included with the proposal package to OSP. The memo is an internal document only for review and approval of a waiver.

Subawards

A subaward or subcontract can be distinguished from a service or consultant by the nature of the work they will perform. An organization is considered a subaward when it:

• Makes substantial contributions to the project that may not be reduced to a set price per unit;
• Has its performance measured against whether the objectives of the project are met; and
• Has responsibility for programmatic decision making.

UAA requires specific documentation to certify commitment of each subrecipient. Remember, the university claims F&A recovery on only the first $25,000 of each subaward, even if the project spans multiple years.

The FFATA Sub-award Reporting System (FSRS) will collect data from the Federal prime awardees on sub-awards they make: a prime grant awardee will be required to report on its sub-grants and a prime contract awardee will be required to report on its sub-contracts.

Contracts

In accordance with Federal Acquisition Regulation clause 52.204-10 (Reporting Executive Compensation and First-Tier Subcontract Awards), Prime Contractors awarded a federal contract or order are required to file a FFATA sub-award report by the end of the month following the month in which the prime contractor awards any subcontract greater than $25,000. This reporting requirement will be phased-in (see below):

Phase 1: Reporting subcontracts under federally-awarded contracts and orders valued greater than or equal to $20,000,000, reporting starts now.

Phase 2: Reporting subcontracts under federally-awarded contracts and orders valued greater than or equal to $550,000, reporting starts October 1, 2010.

Phase 3: Reporting subcontracts under federally-awarded contracts and orders valued greater than or equal to $25,000, reporting starts March 1, 2011.

Although the requirement to report sub-awards is being phased-in at certain dollar levels, if you would like to start reporting prior to the start date for your subcontracts, the system is available to you for reporting

Grants

Prime Grant Recipients awarded a new Federal grant greater than or equal to $25,000 as of October 1, 2010 are subject to FFATA sub-award reporting requirements as outlined in the Office of Management and Budgets guidance issued August 27, 2010. The prime awardee is required to file a FFATA sub-award report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $25,000. 

In accordance with 2 CFR Chapter 1, Part 170 REPORTING SUB-AWARD AND EXECUTIVE COMPENSATION INFORMATION, Prime Awardees awarded a federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $25,000. The reporting requirements are as follows:

1. This requirement is for both mandatory and discretionary grants awarded on or after October 1, 2010.


2. All sub-award information must be reported by the prime awardee.


3. For those new Federal grants as of October 1, 2010, if the initial award is equal to or over $25,000, reporting of sub-award and executive compensation data is required.


4. If the initial award is below $25,000 but subsequent grant modifications result in a total award equal to or over $25,000, the award will be subject to the reporting requirements, as of the date the award exceeds $25,000.


5. If the initial award equals or exceeds $25,000 but funding is subsequently de-obligated such that the total award amount falls below $25,000, the award continues to be subject to the reporting requirements of the Transparency Act and this Guidance.

Subaward Primer:  NCURA Federal Assistance Awards"

1. Introduction-What will be covered in this Primer
   

2. Lesson One -  Key Concepts and Terminology
   

3. Lesson Two  -Context of Subcontracting Programmatic Effort
   

4. Lesson Three - Overview of Flow of Activity
   

5. Lesson Four - Factors Prime Grantee Must Consider Before Issuing a Subaward
   

6. Lesson Five - Common Elements of a Subaward
   

7. Lesson Six -  Principles of Subaward Negotiation
   

8. Lesson Seven- What Terms and Conditions Flow Down to Subawardees
   

9. Lesson Eight- How to Administer a Subaward
   

10. Lesson Nine- Keeping Up-To-Date on Subcontracting Knowledge

Many federal grant agreements and sub agreements contain requirements that are not necessary for administering a particular grant award.  Federal agency officials, grant recipients and sub recipients should review their agreements for unnecessary terms and conditions.

Risk Analysis and Audit Review

As required under OMB A-133, UAA Procurement completes a risk analysis of the subrecipient prior to issuing the subaward.  If a subrecipient is found to be high-risk, the subaward may include additional terms such as:

• Corrective Action Plan
• On-site monitoring
• More detailed invoicing
• Receipt of technical progress reports tied to payments
• More stringent termination language for failure to comply with requirements

Subrecipient Monitoring:  Federal Policies and Sensible Practices

The University of Alaska Anchorage Principal Investigator is responsible for the following oversight:

• Ensures fully and timely compliance with all restrictions and obligations
• Monitors scientific progress and subrecipients adherence to terms
• Verifies that cost sharing commitments are met
• Verifies compliance approvals are current for subrecipient’s portion of statement of work (human subjects (IRB), animal subjects (IACUC), biosafety)
• Personally approves invoices for payment
  
    -ensure all costs are allowable, allocable and reasonable
    -ensure all costs were incurred within the period of performance of the subaward
    -confirm that expenses are aligned with the technical progress
    -confirm that cost sharing is appropriately reflected, if required

PI Invoice Approval

University PI's approval is required on all invoices prior to Accounts Payable processing the invoices for payment.  Approval is granted through completion of the Subrecipient Invoice Monitoring Checklist.   The terms of the agreement require subrecipients to forward the original invoice to the University PI and an informational copy of the invoice to Accounts Payable.  Once the PI receives the invoice, it is his/her responsibility to review the checklist checking off each item on the Subrecipient Invoice Monitoring Checklist , approve the invoice(s) and forward both the original invoice and the completed checklist to Accounts Payable for payment.

SUBAWARD CLOSEOUT

The University PI should contact the subrecipient 90 days prior to the end of the period of performance to confirm the status of the project.  To successfully close out the subaward, the University PI must:

• follow up on late or missing reports or deliverables
• obtain the final invoice – clearly marked “FINAL”
• send a copy of the approved final invoice to Accounts Payable for processing (NOTE: Any outstanding issues with the subrecipient should be resolved prior to approving the final invoice for processing.)

The Grants and Contracts Office's close out process includes:

• review of the Subaward Release of Claim Form submitted by subrecipient
• review and processing of the approved final invoice for payment
• de-obligation of commitment for subrecipient agreement (if necessary) in financial system
• conduct audit of the subaward (if necessary)