CReATEPresented by: Marcy Friedle, Grants Compliance Analyst

What Is a Subcontract?What Is a Subcontract? Assigning to another party some obligation of

an existing contract, for which FSU is still ultimately responsible

Used for research collaborations or in cases where FSU does not have the resources or expertise to perform the work internally

FSU generally requires bilateral agreements (i.e., signed by both parties)

A purchase order in which subcontractor is subject only to FSU’s purchasing terms and conditions may be allowed in limited cases

PRINCIPAL INVESTIGATOR

GRANTS ADMINISTRATOR

SRS SUBCONTRACT

COORDINATOR

SRAS SUBCONTRACTTEAM

SRS

FSU Subcontract TeamFSU Subcontract Team

Basic Subcontracting StagesBasic Subcontracting Stages Pre-Award/Proposal: SRS submits

proposal on behalf of PI

Award: After prime award received, PI requests subcontract and works with SRS Subcontracts Coordinator to issue it

Post-Award: SRAS pays invoices and monitors subrecipient for compliance with A-133 audit requirements

Close-out

Ideally, the PI will identify the need for a subcontract at the proposal stage

If > 50% of award being subcontracted out, approval from Vice President for Research required

Inclusion of subcontract in proposal budget that gets awarded as proposed should serve as sponsor approval, unless specific post-award approval or approval of the actual subcontract document is required

SRS will make subrecipient versus vendor determination in order to determine FSU’s correct indirect cost base

Pre-Award/Proposal StagePre-Award/Proposal Stage

What is the difference between a subrecipient and

a vendor?Why do we care?

Has responsibility for programmatic decision-making

Uses the funds to play an integral role in the contracted research program, as opposed to only providing goods or services to FSU

Performance is measured against the objectives of the award

Has responsibility to comply with all applicable federal program requirements

Subrecipient FactorsSubrecipient Factors

Provides the goods or services within its normal business operations

Provides similar goods or services to many different purchasers

Operates in a competitive environment

Is responsible ONLY for meeting requirements of contractual services to FSU, not integral to programmatic work

Vendor FactorsVendor Factors

Subrecipient vs. VendorSubrecipient vs. Vendor This determination will affect the calculation of

indirect costs – only the first $25,000 of a subcontract with a subrecipient is included in MTDC base

The entire amount of a subcontract with a vendor is included in MTDC base

Result: Lower indirect costs for subcontracts > $25,000 when subcontractor is a subrecipient

PI obtains from proposed subcontractor: Budget Scope of Work Commitment Letter Other items as required by sponsor (e.g., biographical

sketches)

SRS Grants Compliance Analyst reviews budget for the following: Mathematical accuracy Compliance with sponsor’s requirements To ensure that proposed subcontractor’s costs have been

included in FSU’s proposal budget correctly (e.g., only the first $25,000 of each subcontract with a subrecipient included in MTDC base)

Pre-Award/Proposal StagePre-Award/Proposal Stage

Award Stage – PI ResponsibilitiesAward Stage – PI Responsibilities

PI sends the following items to SRS Subcontracts Coordinator:

Required: Subcontract Request Form Subcontractor’s Scope of Work and Budget Subcontractor’s Contact Information Schedule of Deliverables and Payments

Other: Special Certifications (e.g., human subjects, animal

subjects) Sponsored Research Exemption Request(s) Cost/Price Analysis

Sponsored Research ExemptionsSponsored Research Exemptions SRE – Travel

Applicable to subcontracts with out-of-state entities who are unable to agree to using Florida travel regulations, or with entities located in Florida who have their own travel policies

Available only for awards with non-state funds SRE – Competitive Bidding

Required for any subcontract > $50,000 with a non-university subcontractor who is not named specifically in the prime award

Sponsored Research Exemptions are approved by Betty Southard, Office of Research Legal Counsel

Cost/Price AnalysisCost/Price Analysis

Required for any subcontract > $6,000 Used to determine whether the rate being

charged by the subcontractor is fair and reasonable

Check that the rate is comparable to the rate normally charged by the subcontractor or to the rate of others who do similar work

PI should complete the Cost and Price Analysis Worksheet and return to SRS Subcontracts Coordinator for approval

Cost/Price Analysis, cont.Cost/Price Analysis, cont. Cost Analysis: Element-by-element examination

of estimated costs to determine whether they are in line with what reasonably economical and efficient performance should cost

Use cost analysis in those situations where price analysis does not yield a fair and reasonable price

Price Analysis: Process of deciding if the price being charged for a product or service is fair and reasonable without examining specific cost calculations

SRS Subcontracts Coordinator will work with the PI and proposed subcontractor to develop the subcontract document

Information needed includes: Subcontractor’s legal name, mailing address, FEID number Contact information for various subcontractor parties (e.g., PI,

administrative contact, financial contact) Amount of subcontract (prime award modification may be

required if budget is insufficient) Subcontract beginning and ending dates (make sure

subcontract dates are within prime award dates) Subcontract type – cost reimbursable or fixed price (most

subcontracts are cost reimbursable due to inability to define the product and/or the cost thereof)

Award Stage – SRS ResponsibilitiesAward Stage – SRS Responsibilities

Subcontract DocumentSubcontract Document

When drafting subcontract document, SRS Subcontracts Coordinator confirms the following:

Agency approval received, if required Award budget modification completed, if required Sponsored research exemption approval(s) received, if required Cost/price analysis received, if required Flow-down clauses included, as required by prime award Invoicing, technical and financial reporting requirements

(normally, same as requirements of FSU) CFDA title and number, award name, name of sponsor, and

applicable compliance requirements, if Federal funds

SRS Subcontracts Coordinator requests PI’s approval of final subcontract document

SRS Subcontracts Coordinator sends final document to subcontractor, providing any clarification and negotiating any terms, as needed

Subcontractor signs and returns document for execution

Document signed internally and returned to subcontractor

Subcontract encumbered in OMNI 

Subcontract Document, cont.Subcontract Document, cont.

Verify that certification on invoice has been signed by authorized official of subcontractor

Compare actual costs to subcontractor budget Verify completeness and mathematical accuracy of

invoice Determine that:

costs are allowable sum of current invoice amount and amounts of previous

invoices is within subcontract ceiling period covered by invoice is within subcontract dates

Forward invoice to PI for review and approval When signed invoice received back from PI, process

invoice for payment and reduce encumbrance accordingly

Post-Award Stage – SRAS ResponsibilitiesPost-Award Stage – SRAS Responsibilities

Review progress reports and other communications to ascertain that work is being conducted in a timely manner

Conduct site visit, if warranted Use other means, as necessary, to provide reasonable

assurance that subrecipient administering funds in compliance with laws and provisions of subcontract and that performance goals are being achieved

Review costs to determine appropriateness and reasonableness in relation to work performed

Sign invoice certifying that work being billed has been satisfactorily performed

Return invoice to SRAS

Post-Award Stage – PI ResponsibilitiesPost-Award Stage – PI Responsibilities

PI must contact the SRS Subcontracts Coordinator to request an amendment to an existing subcontract

Reasons for amendments include changes to any of the following: subcontract ending dates (e.g., NCTE) scope of work deliverables funding (increase or decrease) prime award terms

Post-Award Stage – Subcontract Amendments

Post-Award Stage – Subcontract Amendments

Confirm subcontractor’s submission of final invoice

Ensure final deliverables have been received prior to approving payment

Complete disposition of property

Obtain statement of inventions and any other required reports per the terms and conditions of the subcontract

Close-out Stage – SRAS ResponsibilitiesClose-out Stage – SRAS Responsibilities

Subrecipient MonitoringSubrecipient Monitoring Annual monitoring for compliance with A-133

audit requirements Required for subrecipients who receive

$500,000 or more in Federal awards during a fiscal year

SRAS performs various procedures to ensure that subrecipients have met the audit requirements in A-133 Annual Subrecipient Audit Verification Subrecipient Site Visits/Further Review Final Report on Monitoring Activities

ContactContactJuel Kamke, SRS Subcontracts CoordinatorE-mail: jkamke@fsu.eduPhone: (850) 644-8654Fax: (850) 644-1464Address: 874 Traditions Way, SSB 3rd Floor

Tallahassee, FL 32306-4166

www.research.fsu.edu/contractsgrants/intro.html Overview of Procedures Subrecipient vs. Vendor Subrecipient Monitoring Policy Forms

Request for New Subcontract or Amendment to Existing Subcontract

Subcontract Attachments Subcontractor Contact Information Formats for Scope of Work and Budget Schedule of Deliverables and Invoicing

Cost/Price Analysis Worksheet and Explanation Sponsored Research Exemption Request Form

General Policies and Procedures/Procurement of Serviceswww.research.fsu.edu/contractsgrants/intro.html

Questions?Questions?