Workshop Outline

1
Workshop Outline

• Building Blocks Definitions
• Proposal Stage
• Lunch Break
• Subawards
• Subcontracts

2
Workshop Outline

• Break
• FDP Subaward Agreement
• Monitoring, Invoicing, and Billing
• A-133, Closeouts and Audits

3
Definitions
4
Basic Concepts

• Financial Assistance Provides support or
  stimulation to accomplish a public purpose.
  Award is a grant or cooperative agreement.

5
Basic Concepts

• Procurement Purchase of goods and services to
  accomplish a government purpose services can
  include research. Award is a contract.

6
Definition of Award

• Financial assistance that provides support to
  accomplisha public purpose.
• Includes grants and other agreements in the form
  of money or property in lieu of money by the
  federal government

7
Definition of Award

• Award does not include
• Technical assistance
• Loans, loan guarantees, interest subsidies,
  insurance
• Direct payments of any kind to individuals, nor

8
Definition of Award

• Contracts, which are required to be entered into
  and administered under procurement laws and
  regulations

9
Definition of Subaward

• Financial assistance made by a recipient to an
  eligible subrecipient
• Includes any financial assistance when provided
  by legal agreement, even if the agreement is
  called a contract

10
Definition of Subaward

• Does not include the purchase of goods and
  services

11
Definition of Pass-Through Entity

• A non-federal entity that provides a federal
  award to a subrecipient to carry out a federal
  program

12
Definition of Recipient

• Organization receiving financial assistance from
  a federal agency to carry out a project or
  program

13
Definition of Recipient

• Term may include commercial, foreign or
  international organizations which are recipients
  and subrecipients

14
Definition of Subrecipient

• The legal entity to which a subaward is made and
  who is accountable to the recipient for the use
  of funds provided

15
Definition of Subrecipient

• See agency implementations of A-110 to determine
  what type of entity can be a subrecipient
• Note guidance on distinguishing between a
  subrecipient and a vendor

16
Subrecipient Agreements

• Funding from a prime recipient to a subrecipient
  to carry out specific program activities
• May be termed a subgrant from an assistance
  award, or

17
Subrecipient Agreements

• May be termed a subcontract from a procurement
  award

18
Reference Documents

• OMB Circular A-21
• OMB Circular A-110
• OMB Circular A-113
• FDP Subrecipient Template
• Code of Federal Domestic Assistance

19
Subrecipient vs. Vendor

• See OMB Circular A-133, __.210
• Subject to same audit standards as recipients

20
Subrecipient vs. Vendor

• Payments received for goods and services are
  vendor agreements and not subject to audit as
  subrecipient agreements

21
Characteristics of a Recipient

• Also applies to subrecipients
• Determines who is eligible to receive what
  federal financial assistance

22
Characteristics of a Recipient

• Has performance measured against whether
  objectives of federal program are met
• Has responsibilities for programmatic decisions

23
Characteristics of a Recipient

• Responsible for adherence to applicable federal
  program compliance requirements

24
Characteristics of a Recipient

• Uses federal funds to carry out a (research),
  compared to providing goods or services for a
  program

25
Characteristics of a Vendor

• Provides goods and services within normal
  business operations and to many purchasers

26
Characteristics of a Vendor

• Operates in a competitive environment
• Provides goods and services ancillary to the
  operation of the federal program

27
Characteristics of a Vendor

• Not subject to compliance requirements of the
  federal program

28
Both Subrecipientand Vendor

• Substance of the relationship governs need to
  know the detail of the relationship and desired
  outcomes
• Use judgement

29
In Practical Terms

• Use subaward when intent is to have another
  organization carry out the scope of work
  described in the proposal

30
In Practical Terms

• Generally, two or more qualified entities work
  collaboratively on a sponsored project, each with
  its own principle investigator

31
In Practical Terms

• Performance measured against scope of work
• Decides how to carry out own activities
• PI may be author/coauthor on publications

32
In Practical Terms

• Retention of title to intellectual property it
  develops is common

33
For-Profit Subrecipients

• A-133 does not apply
• Pass-through entity must establish requirements
  to ensure compliance by for profit subrecipient

34
For-Profit Subrecipients

• Include in agreement
• Applicable requirements and responsibilities
• May use pre- and post-award audits, ongoing
  monitoring, reporting, etc.

35
Todays Terminology

• Subaward Award to a subrecipient when prime
  award is assistance (grant or cooperative
  agreement)
• Subcontract Award to a subrecipient when prime
  award is procurement (contract)

36

• Case Studies 1 2

37
Proposal Stage
38
Reason For Subs

• Increasing emphasis on
• Big Science Big Solutions
• Multidisciplinary Research
• Inter-Institutional Research
• Shift Administrative Burden

39
Stages of Development

• Early Warning System
• Forging Partnerships
• Proposal Preparation

40
Early Warning System

• Pro-active Administration
• Office of big grants
• Dissemination of announcement

41
Early Warning System

• Pro-Active Faculty
• Tell the right people
• Inform them early on

42
Forging Partnerships

• Connected Faculty
• Connected Institutions
• Teaming Agreements

43
Teaming Agreements

• Address Relationship
• Address Responsibilities
• Lead or sub
• Address Timing

44
Proposal Preparation

• Lead Institution
• Provide schedule
• Coordinate writing
• Prepare complete budget

45
Proposal Preparation

• Subrecipient Institution
• Provide statement of work
• Provide budget
• Provide institutional approval

46
Budgets

• Prime Budget
• Your institutions costs
• Subrecipients budget as a line item

47
Budgets

• Sub Budget(s)
• Each subrecipient is separate
• Each with own FA and cost-sharing

48
Checklist

• Statement of Work
• Budget
• Authorized Officials Approval

49

• Case Studies 3 4

50
Subawards
51
Purpose of a Subaward

• Legal instrument
• Protects agencys and recipients interests
• Flow-down necessary requirements of prime award

52
Prior Approval

• Prior approval is required for transfer of any
  work under an award (A-110, __.25(c)(8))
• excludes supplies, material, equipment or general
  support services vendor agreement

53
Prior Approval

• Inclusion in proposal constitutes prior approval
• If for research, prior approval waived (A-110,
  __.25(e)(4))
• Some agencies have specific implementations.

54
Documentation

• Subawards are not subject to procurement
  requirements of OMB A-110 (__.40 to __.48), such
  as
• Open competition
• Cost/price analysis

55
Documentation

• Stewardship - documentation for subawards should
  be consistent with good management practices

56
Documentation

• Scope of Work
• Budget, consistent with federal sponsors
  requirements
• All required representations, certifications, and
  assurances

57
Documentation

• Signature by authorized official of subrecipient
  (not PI), indicating commitment to SOW, assuring
  reasonableness and accuracy of proposed costs,
  and agreeing to negotiate a subaward if
  proposal is awarded

58
Subrecipient Assessment

• Ability to perform successfully
• Integrity
• Past performance
• Technical/financial resources
• Debarment/Suspension

59
Types of Subawards

• Cost-Reimbursement
• Standard
• Fixed-Price
• Rarely used

60
Subaward Content

• Identifying information
• CFDA number
• Prime funding source
• Prime award number

61
Subaward Content

• Statement of Work
• Key Personnel
• Period of Performance
• Subaward Type (CR/FP)
• Amount

62
Subaward Content

• Invoicing/payment
• Prior approval requirements
• Cost-sharing requirements
• Reporting requirements
• Audit requirements

63
Subaward Content

• Intellectual property terms
• Equipment terms
• Indemnification
• Termination
• Applicable cost principles

64
Subaward Content

• Certs/Reps/Assurances
• Flow-down requirements

65
Flow-Downs

• Substitution of nomenclature
• Flow-downs must accurately reflect relationship
  between parties
• Can be implemented by introductory paragraph

66
Subrecipient Issues

• Foreign Subrecipients
• Public policy requirements (HS/AS, Assurances)
• Payment, accounting practices

67
Subrecipient Issues

• Commercial/Industrial
• Cost principles (FAR 31.2)
• Profit/Fee (unallowable under some awards)
• Intellectual Property

68
Subrecipient Issues

• Small Business
• Potential conflict of interest (PI/institutional)
• Cash flow/advance payments
• Intellectual property

69

• Case Studies 5 6

70
Subcontracts
71
Regulations

• Federal Acquisition Regulations (FAR)
• Title 48 of the Code of Federal Regulations

72
Documentation

• Basis for subcontract selection
• Open competition/sole-source
• Subcontractor Reliability
• Cost/Price Analysis

73
Documentation

• Difference between proposed and final amounts
• Contract Type
• Non-standard requirements

74
Prior Approval

• Addressed at FAR 52.244-2
• Required for all subcontracts
• Cost-Reimbursement
• Time Material
• Labor Hour

75
Prior Approval

• Or, are fixed-price and exceed
• greater of 100,000 or 5 (DoD, NASA, Coast
  Guard) or
• 100,000 or 5 (civilian)

76
Prior Approval

• Unless, purchasing system has been approved
  through CPSR
• Contractor Procurement System Review (FAR 44.3)

77
Types of Subcontracts

• Cost-Reimbursement normal for RD
• Fixed-Price normal for service supply
  contracting. May be used for greater control
  over subcontractor performance

78
Flow-Downs

• As written
• By content
• By operation of law
• That assist in compliance with requirements of
  prime

79
For-Profit Subcontractors

• Cost-Principles FAR 31.2
• Admin. Requirements FAR
• Verify rates with DCAA
• Profit/Fee needs scrutiny (7 is normal, 15 is
  maximum)

80
Subcontracting Plan

• If over 500,000, and required of contractor
• Review plan for completeness
• Incorporate into subcontract
• Incorporate their data into yours

81

• Case Study 7

82
FDP Subaward Agreement
83
Subaward Agreement Form

• Federal Demonstration Partner-ship Project
• Applicable to all A-110 institutions, not just
  FDP
• http//www.thefdp.org

84
OMB Circular A-110Remember Definitions

• Award financial assistance
• Contract procurement
• Subaward financial assistance, not procurement

85
Subaward Agreement Form

• Refer to Handout

86
ID Section

• Identify Parties
• Identify Prime and Sub Numbers
• Identify Sponsor and CFDA Number

87
ID Section

• Identify Period of Performance
• Identify Amount
• Identify Project Title
• Identify Non-Financial Reporting Requirements

88
Terms and Conditions

• Award Identification
• Cost reimbursable
• Identify statement of work

89
Terms and Conditions

• Financial Terms
• Notifications
• Liability
• Termination and Extensions
• Other Terms

90
Signatures

• Authorized Officials

91
Attachment 1

• Required Certifications
• Lobbying
• Debarment
• A-133

92
Attachment 2

• Agency Specific Terms
• Special Terms and Conditions
• Institutional Variations

93
Attachment 3

• Contacts Page

94
Attachment 4

• Reporting Requirements

95
Attachment 5

• Statement of Work
• Budget

96

• Case Studies 8, 9 10

97
Monitoring, Invoicing Billing
98
Basic Considerations

• Advance payment allowed in A-110 when prime gets
  advance payments

99
Basic Considerations

• Timing Issues
• Payments and invoices
• Financial status reports
• Expenditure rate issues

100
Format of Invoices

• Specify level of detail desired in subrecipient
  agreement, but it should normally include

101
Format of Invoice

• Current month and cumulative

• Salaries
• MS
• Travel
• Cost-Sharing

• Equipment
• FA (rate and amount
• Totals

102
Subaward Monitoring Financial

• Track subrecipient allocations separately
• Assessment of correct FA, first 25K

103
Subaward Monitoring Financial

• Process for review and approval of invoices
• PI for programmatic
• OSP for administrative/ financial

104
Subaward Monitoring Financial

• Reimbursement for disallowances
• Verify cost-sharing commitments

105
Subaward Monitoring Technical

• Scientific Progress
• Invention Reports
• Timely Submission of Deliverables
• Final Reports

106
Cost-Sharing Issues

• What did the proposal promise?
• What is in the subrecipient agreement?
• What documentation?
• Who monitors?

107
Closeout and Audit

• Close sub before closing prime
• Documentation
• Assistance awards
• Contract awards
• Audit

108
Assistance Awards Closeout

• Final Invoice
• Final Technical Report
• Final Invention Report
• Final Property Report

109
Assistance Awards Closeout

• PI Certification
• Technical aspects
• Expenditures reasonable

110
Contract Awards Closeout

• Subcontractors Certification
• Subcontractors Release
• Subcontractors Assignment of Rebates, Credits,
  Other Amounts

111
Contract Awards Closeout

• Small Business Contracting Report, if required

112
Audit Responsibilities

• Prime sets forth formal procedures for audit and
  monitoring
• Certificate of compliance with A-133 compliance
  supplement

113
Audit Responsibilities

• Documentation for subrecipients not subject to
  A-133
• Issue management decision/ follow up

114
Audit Responsibilities

• Determine whether repayment and adjustment to
  pass-through entitys records is appropriate

115
Cost/Price Analysis

• Assessment required of total costs
• Desk review
• Full audit of direct and FA costs
• Formal Audit over 500K

116
Cost/Price Analysis

• Risk Assessment
• Amount of agreement
• Subs performance under other awards
• Type of subrecipient organization

117
Audit Steps

• Verify FA Rate
• Review most recent A-133, where appropriate
• If not subject to A-133, may request assist
  audit, or perform audit yourself

118
Steps in Desk Review

• Compare and verify FA
• Within total cost of subrecipient agreement
• Reasonable and accurate
• Cost-sharing

119
Steps in Desk Review

• Confirm programmatic work completed
• Special requirements for other types of
  agreements, used sparingly for research

120

• Case Studies 11 12

121
Q A