Subawards & 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 provider 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:
- They have not been paid as a UA employee in the past 12 months;
- They are not doing a service that would fall under the normal scope of work of any UA employee;
- They are not using university resources such as office space, equipment, labs, etc. to perform the service(s);
- They are not being supervised on a day-to-day basis; and
- 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:
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 applies F&A to only the first $25,000 of each subaward, even if the project spans multiple years.
Each UAA subrecipient organization is required to provide OSP with a Subrecipient Commitment Form . This form should be completed and signed by the Authorized Organization Representative (AOR) and the PI for the subrecipient. Along with this form, the subrecipient is required to include at a minimum:
- A statement of work to be performed by the subrecipient organization/PI in the proposed project;
- An itemized budget and justification for the work to be performed by the subrecipient;
- Other documents as needed (i.e. CVs, C&Ps, copies of F&A or benefits agreements, copies of IRB or IACUC protocols, etc.)
UAA PI's who plan to be subrecipients on another institution's projects should check with the prime institution to determine what documentation is required. At a minimum, the Office of Sponsored Programs requires a statement of work, a budget and a budget justification(narrative).
Note regarding "Sub-subrecipients": Unless substantial justification can be made, a subrecipient should generally not request any further sub-awarding of their portion of work. Instead, the prime awardee should budget all subawards/subcontracts so that they fall under the prime's authority.
Consult the Procurement Office when proposing subcontracts, sole source purchases and large equipment purchases. Justification for sole source purchases should accompany the proposal packet sent to OSP for review.
Creating a Subaward
After determining you need to issue a subaward, please review the subaward routing process and submit the necessary forms below.
Subaward Routing Process
- Fill out subaward enterable forms and necessary attachments
- Enter subaward requisition on Banner with complete Document Text that answers the following questions:
a. Who requested the subaward (e.g. PI name)?
b. Who is entering the requisition and phone number?
c. What is the performance period?
d. How does this benefit/relate to the project?
e. Other pertinent information?
- Email enterable, not scanned, subaward document and attachments to your Grant Coordinator
and cc email@example.com; include the requisition and fund numbers on the email subject line
(e.g. R0XXXXXXX; 2XXXXXX; Subaward Agreement)
Grants & Contracts Personnel:
- Grant Coordinator will enter receipt of documents in Access Subaward Log and review subaward forms and attachments
- Grant Coordinator will print one copy for Director's review and signature
- Grant Coordinator will approve requisition and will email a scanned copy to Department Personnel and Procurement (firstname.lastname@example.org)
- Procurement will send signed agreement to subrecipient for signature(s)
- Procurement will assign PO once fully executed subaward is received
- Procurement will email a copy of fully executed subaward to department and G&C
FDP Subaward Templates - (Newly Updated Oct 2017!)
New templates for FDP Subawards have been issued. Please read the FAQs for guidance and contact OSP with any questions.
FAQs and Guidance FDP recorded webinar (coming soon)
Non-FDP Subaward Templates
- Non-FDP Main Subaward Agreement and Attachment 2
- Non-FDP Attachment 3 Recipient Contacts
- Non-FDP Attachment 4 Terms & Conditions
- Non-FDP Attachment 5 Scope of Work
- Non-FDP Attachment 6 Budget & Budget Justification
- Non-FDP Attachment 7 Sample Invoice
Subrecipient Risk Assessment
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 the following items:
- 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
The university has responsibilities for the use and reporting of federal funding when it enters into contractual arrangements with government or non-profit subrecipients to carry out a program.
This procedure documents the university's system for monitoring subrecipients and includes the following items:
Subrecipient characteristics and identification
- Notification of requirements to subrecipients
- Monitoring during the award
- Monitoring subrecipients (audits)
Subrecipient characteristics and identification:
The definition given in 2 CFR 200.92 is
Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency.
A “non-Federal entity” means a State, local government, Indian tribe, institution of higher education (IHE) or non-profit organization that carries out a Federal award as a recipient or subrecipient.
The wording "to carry out a program" is interpreted by the University of Alaska to mean the entity receiving the funding is conducting a substantive portion of the program for which the original agreement is awarded. Distinguishing characteristics of a subrecipient include responsibility to meet compliance requirements, performance measured against meeting the objectives of the program, responsibility for programmatic decision making, and determining eligibility for assistance (OMB Circular A-133, Subpart B, section .210).
A vendor means a dealer, distributor, merchant, or other seller providing goods or services for the conduct of the federal program. Distinguishing characteristics of a vendor include such items as providing goods and services within normal business operations, providing similar goods and services to many different purchasers, operating in a competitive environment, and not having responsibility for adherence to program compliance requirements (OMB Circular A-133, Subpart B, section .210). Audit requirements for vendors are covered by the terms and conditions of the contract and are not addressed in this document.
The information to support the subrecipient determination is forwarded to the procurement or contracting officer. If the procurement or contracting officer does not agree with the subrecipient determination, further discussion with the grants and contracts office must take place. The Controller, in conjunction with the Director of Internal Audit, will provide guidance if an impasse is reached. The information to support the subrecipient status should be filed with the federal grant documents.
Normally, if a subrecipient relationship exists, cost reimbursable contracts may be issued. Contracts with subrecipients must include the information listed in Section B below.
Notification of requirements to subrecipients:
The procurement officers, working in conjunction with the regional campus grants and contracts offices, must ensure that contracts with subrecipients cite:
- the federal source of funds, including the CFDA title and number, award name and number, award year, if the award is R&D, and name of Federal agency.
- all applicable flow down clause
- the cost principle references: OMB Circular A-21 (relocated to Title 2 in the Code of Federal Regulations (2 CFR), Part 220 (2 CFR, Part 220)), OMB Circular A-122 (relocated to 2 CFR, Part 230) and OMB Circular A-87 (relocated to 2 CFR, Part 225).
- the laws and regulations applicable to the program, including the federal and university fiscal and administrative requirements a clause stating subrecipients must meet the audit requirements of A-133 (OMB Circular A-133, Subpart D, section .400(d)(4)). (Entities expending more than $500,000 in federal awards in their fiscal year are subject to A-133 audit requirements). The clause should be included in all contracts, even those under $500,000, to ensure the subrecipient has been correctly advised.
- a clause stating the subrecipient is required to permit independent auditors to have access to the records and financial statements, as necessary, for the university to be in compliance with Circular A-133 (OMB Circular A-133, Subpart D, section .400(d)(7)).
An original of the subrecipient cost reimbursement contract/subcontract and all subsequent modifications are to be filed in the procurement or contracting office. Copies are provided to the Grants and Contracts Office or the Business Office for their project files.
Monitoring during the award:
The objective of monitoring during the award is to ensure that federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. (OMB Circular A-133, Subpart D, section .400(d)(3)). Monitoring can be done through site visits, reporting, regular contact and other means.
To ensure resources and personnel are best used, subrecipients should be evaluated according to their risk-level to determine the level of monitoring deemed necessary. Judgement is required. There is increased risk to the university with larger subawards or when the subaward is significant relative to the total federal award.
Negative risk factors include subrecipients with:
- constant staffing and/or organizational changes
- low-quality programmatic performance
- inadequate, inaccurate or late progress or financial reports
- lack of previous federal grant experience
- poor results from prior audits
Principal Investigators (PI’s) are primarily responsible for doing the during-the-award monitoring. Grants and contracts offices are responsible for informing PI’s of these requirements and ensuring the subrecipient’s risk has been evaluated and appropriate monitoring was performed. Through reporting and regular contact with subrecipients or site visits, PI’s are able to verify that program requirements are being met.
Monitoring Subrecipients (audits):
The subrecipient contracts are encumbered and accounted for using either account code 3021 or 3022. Two account codes are required to comply with relcoated to 2 CFR, Part 220 requirement of not recovering indirect costs on the portion of contracts over $25,000. Using two account codes enables the university to account for all expenditures made to the subrecipients in a fiscal year and to determine which subrecipients require monitoring.
At year end, the Statewide Fund Accounting office identifies subrecipients by reviewing activity in account codes 3021 and 3022. If necessary, the campuses may provide to the Statewide Fund Accounting office copies of source documents including the subrecipient agreement, checks, purchase orders, and vendor invoices to substantiate subrecipient status. The Statewide Fund Accounting office sends letters to subrecipients to verify completion of an A-133 audit and status of any current year or prior year findings. Source documents may be sent to the subrecipients to assist them with the identification process.
The A-133 audit reports are required to be completed within nine months of an entity’s year end, unless an approved extension is granted by an entity’s cognizant or oversight agency. Alternative procedures for verifying the completion of the audit include obtaining a copy from the entity’s website or from the Federal Audit Clearinghouse website.
Remedial action for non-compliance of the audit requirement:
The Statewide Fund Accounting office logs in the audit reports as they are received and determines which entities have failed to report. Second requests for audit information are then sent to the subrecipients.
When no audit report is received and alternative procedures fail, the Statewide Fund Accounting office consults with the regional campus grants and contracts office to consider the various facts and circumstances and to attempt a resolution with the subrecipient. The grants and contracts office reports the non-compliance to the responsible procurement or contracting officer for action. The university procurement or contracting officer, with advice from the regional campus grants and contracts office, will consider not issuing further contracts and/or freezing existing contracts. The procurement or contracting officer may request the return of the federal funding and institute collection activity if considered necessary by the university.
Review of audit report findings:
The audit reports are received and reviewed by the Statewide Fund Accounting office to determine if there are findings that relate to the University of Alaska's awards. If there are findings, the Office of Internal Audit, in conjunction with the regional campus grants and contracts office, will request the subrecipient give the university a plan of action to correct the situation cited in the audit report and that it give the university proof of the plan’s implementation. Appropriate corrective action is required within six months of the issue date of the audit report (OMB Circular A-133, Subpart D, section .400(d)(5)).
The procurement or contracting officer will be notified in writing of any findings regarding the contract. Formal notices may be issued to the subrecipient. The university procurement or contracting officer, with advice from the regional campus grants and contracts office, will consider not issuing further contracts and/or freezing existing contracts.
Adjustment of university accounting records:
The Statewide Fund Accounting office, in conjunction with the Office of Internal Audit, will consider whether an adjustment should be made on the university's records and will make any necessary entries (OMB Circular A-133, Subpart D, section .400(d)(6)). The consideration and subsequent action will be in writing and will be retained by the Statewide Fund Accounting office. Copies will be sent to the regional campus grants and contracts offices.
The audit reports are required to be on file in accordance with the university's retention provisions. Generally, contract/order records and related audit documents are retained three years after the date of the final payment, including any settlement payments. Please note: A-133 requires the audit reports be on file for at least three years from the date of receipt (OMB Circular A-133, Subpart C, section .320(g)).
Amending a Subaward
The Principal Investigator determines when a subaward is to be amended. Common reasons for amending a subaward include providing additional funding, extending the period of performance, or modifying the reporting schedule. It is important to note that some changes, such as scope of work changes, change in the subaward recipient's Principal Investigator or transferring the subaward from one recipient to another, may require the prior approval of the prime sponsor (funding agency).
Here are the steps in amending a subaward:
1. Fill out and email the Subaward Modification form and any attachments (i.e. new budget,
revised scope of work) to OSP Post Award. Any attachment needs to be on enterable forms/versions (i.e. Word, Excel). Scanned
forms will not be accepted.
FDP Subaward Bilateral Amendment
2. Email Procurement and cc your grant coordinator a change order request:
a. Subject line: P0xxxxxx; Gxxxx; subaward change request
b. State in the email what the change request is (i.e. increase/decrease budget, payment schedule)
3. After OSP approves the modification, your grant coordinator will forward the signed hardcopy modification and any attachments to Procurement Services; you will receive a scanned copy of the signed modification. Procurement Services will process your change request on Banner, contact you if additional procurement forms are required, and will forward subaward modification to the subrecipient.
FFATA Requirements for Amended Subawards
For Federal awards, the FFATA Subaward Reporting System (FSRS) will collect data from the Federal prime awardees on subawards they make: a prime grant awardee will be required to report on its subgrants and a prime contract awardee will be required to report on its sub-contracts.
For those new Federal grants as of October 1, 2010, if the initial award is equal to or over $25,000, reporting of subaward and executive compensation data is required.
- 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.
- 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.
Closeout of a Subaward
The Principal Investigator is the delegated individual with authority for the University of Alaska Anchorage to tell Accounts Payable when the final payment can be issued and the subaward should be closed. Until the Principal Investigator verifies that all elements of the subaward have been satisified, UAA cannot call the subaward "a wrap".
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 do the following:
- 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.)