Section 3 - Begin the Subaward Process at the Proposal Stage

Most funding agencies require written approval before a subaward is issued. So, the UM PI should determine the potential need for a subaward at the proposal stage. The following information is normally requested from the potential subrecipient. Depending on the proposal guidelines from the sponsor, other information may also be required, such as letter of intent, biographical sketches, current and pending other support, and available facilities information.

  • A scope of work to be completed by the subrecipient;
  • A budget that meets the requirements of the sponsor and UM;
  • A letter of intent with an authorized signature indicating the potential subaward institution’s commitment to perform the proposed scope of work, assuring the accuracy and reasonableness of the budget, and agreeing to enter into a subaward if the proposal is funded;
  • All required representations, certifications and assurances (e.g. human subjects assurance).

If the organization is a for-profit, complete and submit the Checklist for Determination of Vendor/Subrecipient on Sponsored Programs form along with the proposal in order to make accurate determination for budgeting purposes. F&A is charged on only the first $25,000 of a subcontract but on the entire amount of a vendor contractual arrangement.

The UM PI is encouraged to solicit statements of work and budgets from several organizations. When selecting a potential subrecipient, the PI should be aware of the ‘Codes of Conduct’ of Subpart C.42 of OMB Circular A-110, which states:

“The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.”

The budget consists of a categorical breakdown of subrecipient costs, which could include both direct and facilities and administrative (F&A) costs, if allowed by the funding agency. If F&A costs are included in the potential subrecipient budget, a copy of their most current F&A Cost Agreement must be provided to the UM ORSP for verification of the F&A rate used in the budget. The budget should also show a categorical breakdown of subrecipient cost sharing, if cost sharing is required.

The scope of work outlines the work to be accomplished by the subrecipient.

It is not uncommon for the sponsor to request revised information, e.g., budget after the initial review of the proposal by the sponsor. This revision may or may not impact a potential subrecipient. If it does, the UM PI would contact the subaward PI for the required revisions. All revised documentation from the subrecipient would once again require an institutional/organizational authorized representative signature.