Researchers at UC Davis often find that their research and other projects can be enhanced by partnering with other institutions on extramurally funded projects. When the partnering institution provides a significant portion of the programmatic effort and exercises independent responsibility for programmatic decisions, this partnership usually takes the form of a subaward.
An outgoing subaward is an agreement with a third-party organization performing a portion of a UCD research project or program. The terms of the relationship (subgrant/subcontract) are influenced by the prime agreement, detailing the award to the University. A subrecipient works collaboratively with the prime award recipient to carry out a portion of the prime award’s scope of work.
Just because another entity is involved in carrying out a sponsored project does not mean that a true subrecipient relationship exists. Since it is sometimes difficult to tell the difference between a subrecipient and a vendor, it may be easy to confuse the two. This can lead to problems managing a sponsored project so it is important to ascertain if the work to be carried out meets the definition of a “subaward” at the proposal stage. Please see the helpful information included in SPO’s Subaward or Contractor/Vendor Guidance document.
If a vendor relationship is required remember that indirect costs will need to be charged on the entire amount of the transaction.
A subaward begins when the PI recognizes the need for expertise outside of UCD for project he/she is proposing. The PI typically identifies known, collaboration partners based on the potential of the entity to perform the proposed scope of work successfully.
Sponsored Programs requires that the following elements be included in order for each named subrecipient to be included as part of a PI’s proposal to the sponsor.
- Subrecipient Commitment Form. Note: if the subrecipient is another UC Campus the Multiple Campus Award (MCA) Commitment form must be completed instead of the UCD Subrecipient Commitment form.
- Subrecipient’s SOW, including a clear and detailed description of the work to be performed, the proposed timelines, and deliverables.
- Subrecipient’s Budget and Budget Justification, including the subrecipient’s direct and indirect costs, calculated in accordance with sponsor guidelines using the subrecipient’s approved F&A and fringe benefit rates, and verifying any committed cost sharing.
- If the subrecipient does not have a current federally negotiated F&A rate in place they have the following options:
- Use a de minimis F&A rate of 10% MTDC (***note: the 10% rate will apply to ANY subsequent subawards to this institution/organization until it obtains a Federally negotiated F&A rate or elects to negotiate an F&A rate with UCD); or
- Negotiate an F&A rate with their Cognizant Federal Agency; or
- Elect not to charge F&A; or
- Negotiate an F&A rate with UCD’s Costing Policy & Analysis Division. Please see UCD F&A Rate Negotiation section below for additional information.
- Any additional elements that may be required by UCD’s sponsor for inclusion in the proposal
Subrecipient proposal elements are expected to conform to the sponsor requirements for UCD’s prime proposal and should be in the format required by the sponsor.
In rare instances, a PI may recognize the need for outside involvement on a project but is either unable to identify the best subrecipient by the time of proposal submission, or is unable to acquire all of the required paperwork from that subrecipient. In these instances, proposals may be submitted with a subrecipient “To Be Named.” In these situations, PI is required to provide documentation of the basis for their subaward cost estimate for the work being performed. PIs will also be responsible for managing any budgetary shortfalls that may result from their inability to accurately predict a subrecipient’s costs. Subrecipients should not be asked to reduce their F&A recovery or to otherwise cost-share because of UCD’s failure to include appropriate costs in our proposal.
UCD F&A Rate Negotiation Requirements
UCD will, in rare circumstances, negotiate a rate with a proposed subrecipient when the subrecipient (1) does not qualify to receive a rate directly from the federal government (currently, this means the entity does not receive direct federal funding of $750K or more per year); (2) is expected to do at least $750,000 of business annually with UCD; and (3) there is reason to believe the F&A rate will be substantially higher than the de minimis10% MTDC.
If UCD agrees to negotiate a rate, 60 days advance notice (before the proposal is due to SPO) is required in order to review and negotiate the rate before the proposal is submitted. If a rate is not negotiated at the time of proposal, a subaward will not be issued until a rate has been negotiated. The following information must be submitted from the subrecipient to SPO to start the F&A rate negotiation:
- Audited financial statements for the year that the proposal is based on.
- If the total operating expenses differ from the financial expenses in the proposal, a reconciliation and justification is required.
- A breakdown, by job classification of the salaries included in the indirect cost pool.
- A breakdown of departments included in the indirect cost pool.
- Where an individuals salary is split between direct and indirect functions, provide an explanation as to how that split was determined.
- A certification of costs, signed by an officer of the organization that states all costs included herein are compliant with federal regulations.
- Contact information for the person who can answer questions on how the proposal was prepared.
A subaward will not be issued, nor payments to a Subrecipient authorized, prior to Sponsored Program’s receipt and acceptance of a funding commitment from the prime sponsor. A UCD PI or designee may not authorize a subrecipient to begin working without a fully executed subaward agreement in place. Proposed subrecipients who commence work without a fully signed subaward agreement from Sponsored Programs do so at their own risk and have no assurance of payment from UCD.
Prior to paying another institution or agency for services, a subaward request must be submitted to the Subaward Team. The process for setting up a subaward consists of the following steps:
Step 1: After receiving notification that the Prime Award has been awarded, the PI/Department Administrator requests a subaward by completing a Subaward Request Form.
Step 2: The PI/Department Administrator emails the Subaward Request Form and all relevant documents to the Subaward Team at firstname.lastname@example.org. The attached documents should be current or applicable to the period of performance for which you are subcontracting.
Step 3: The Subaward Team reviews the Subaward Request Form and its attached documents to determine whether additional documents or information are needed.
Step 4: The Subaward Team drafts and sends a subaward agreement or amendment to the subrecipient, along with any applicable compliance requests (typically within 2 weeks after the Subaward Analyst receives the completed Subaward Request Form including all relevant documents, however, turnaround time may vary depending upon volume of requests).
Step 5: The subrecipient returns documents to the Subaward Team. The Subaward Team sends a fully executable version of the subaward agreement and once fully executed the Subaward Team awards the subaward and routes the document fully-executed subaward to CGA and the department.
A PI may decide to engage the services of a Subrecipient after an award is made and the request was not included in the original to the prime sponsor. In this case, the PI must submit the required elements for a subaward to Sponsored Programs as described above. In most cases, sponsor prior approval will be required. PIs are responsible for initiating such requests for Sponsor approval by contacting their Sponsored Programs Award Analyst, and for obtaining the countersignature of their authorized institutional official as required. Subawards may not be issued until all necessary sponsor approvals are obtained.
The UCD Subrecipient Commitment Form (Section C) helps identify whether the subrecipient has a compliant conflict of interest policy. For subrecipients that have certified compliance through the FDP Clearinghouse, the signed Subrecipient Commitment Form will confirm the compliance. For subrecipients that do not have a PHS or NSF compliant conflict of interest policy, the subrecipient must either implement a compliant conflict of interest policy or agree to abide to follow UCD policies before a subaward can be issued:
- For PHS, UCD’ policy for Public Health Services Regulations on Objectivity in Research Policy #230-7 or
- For NSF, UCD’ Individual Conflicts of Interest Involving Research Policy #230-05.
Please note that many international subrecipients or small organizations may not be familiar with requirements under federal awards such as obtaining a DUNS number and registering in the federal System for Award Management (SAM). As such PIs who are expecting to receive federal funding and working with an international, and/ or a small organization subrecipient, should inform the subrecipient of the potential need to (a) obtain a DUNS and (b) register in the federal System for Award Management (SAM) at the time of proposal. UCD is prohibited by Federal law from releasing subaward funding until a DUNS number is provided.
Further, many international and small organizations do not have a federally negotiated indirect cost rate. If the subrecipient does not have a current federally negotiated rate in place they have the options detailed under “Required Elements”, above.
UCD is responsible for ensuring that sponsor funds, including those provided by UCD to other entities, are spent in accordance with all applicable laws and regulations. To fulfill that obligation to the prime sponsor, UCD is required to monitor its subrecipients as UCD were the sponsor of the subaward. This monitoring requirement places UCD in much the same position as if it were a federal agency dealing recipient of an award.
Principal Investigator & Departmental Responsibilities for Monitoring Subawards
It is the PI’s responsibility to monitor subrecipients so there is reasonable assurance that the subrecipient uses the award for authorized purposes, complies with laws, regulation, and the provisions of the agreement, invoices UCD for allowable expenses in accordance with the agreement, and achieves its performance goals.
Invoice Review and Signature
The PI has the obligation and responsibility to review the subrecipient’s invoices and indicate approval by personally signing each invoice for payment, after full review and concluding that all charges are appropriately made/invoiced.
As part of invoice review, the PI (typically with assistance from the departmental administrators, although PI is fully responsible for the entire process) is responsible to verify that the invoice was prepared in accordance with the subaward requirements and that invoiced costs are:
- In accordance with the approved budget or permissible rebudgeting
- Incurred within the approved period of performance and overall cost limitations
- Aligned in terms of cost and type of expense with the scientific progress reported to date
- Allowable, allocable, and reasonable
The PI (typically with assistance from the departmental administrators, although PI is fully responsible for the entire process) is responsible to also verify that the subrecipient is adequately meeting any cost-sharing commitments, if any, made for the subaward.
Clarification of Invoiced Charges
In the event the level of detail included on an invoice is not sufficient to fully understand the costs, or if it appears that some costs may be excessive or understated, the PI (typically (with the help of departmental administrator) needs to question the subrecipient’s expenditures by requesting further documentation or explanation prior to approving an invoice. If the explanations are not sufficient to render a prudent judgment on the allowability of the cost, and the terms of the subaward permit, PI/department grant administrators need to request further detailed justifications from subrecipient. PI/Department administrators may also periodically request, if the terms of the subaward permit, particularly from high-risk subrecipients, detailed support for selected invoiced charges to verify their appropriateness and reasonableness. Such inquiries must be done in a timely manner (e.g., within thirty days after receipt of an invoice) so that the subrecipient can be promptly paid for approved costs.
Examples of detailed justifications that may be requested from subrecipients include: payroll records, copies of paid invoices showing the cost of items purchased, descriptions of services rendered by consultants, including hourly rates and time reports; details of incurred travel charges stating the purpose, airfare, meals, ground transportation, unallowable costs, etc. Copies of all such documentation and the ultimate outcome of the investigation should be retained in the project file.
Technical Progress & Compliance
The PI is obligated to be in contact with the subrecipient regularly to discuss technical progress and receive and review required reports or deliverables. The subaward monitoring and compliance obligations of the PI may be shared with department administrators or other UCD employees, although the PI is ultimately responsible for all such monitoring.
Regulations and Assurances
The federal regulations that describe subrecipient monitoring are general, but contain the following core elements of compliance:
- Advising subrecipients of all applicable federal laws and regulations, and all appropriate flow-down provisions from the prime agreement
- The routine receipt and review of technical performance reports
- The routine review of expenses-to-budget
- The periodic performance of on-site visits, or regular contact, if necessary
- The option to perform “audits” if necessary, review of audit reports filed by subrecipients, and any audit findings review of corrective actions cited by subrecipients in response to their audit findings
- Consideration of sanctions on subrecipients in cases of continued inability or unwillingness to have required audits or to correct non-compliant actions
The above list is not exhaustive of all compliance requirements. In addition to the general elements of compliance noted above, there may be additional sponsor- or program-specific requirements that mandate collecting and documenting other assurances (e.g., on lab animals, human subjects, biohazards, etc.) during the course of a project.
A subaward is closed out when its period of performance comes to an end, regardless of whether UCD’ research project is ending or continuing.
PIs are responsible for obtaining final technical reports from their subrecipients, and retaining a copy in their project file. PIs are encouraged to remind subrecipients of this need well in advance of the due date for such reports.
Other final reports, including property reports, patent reports, small disadvantaged business reports, and Assignment and Release documents may be required. PIs and departments may be asked to assist SPO in obtaining necessary closeout reports from the subrecipient in a timely manner.
In order for UCD to comply with its financial report requirements, subrecipients are required to submit a final invoice, clearly marked “Final”, to UCD by the date that is required in the subaward agreement, typically no later than 60 days after the end of the Subrecipient’s period of performance.
Processed by Sponsored Programs Office
This office is responsible for the effective and timely handling of all research proposals, as well as preparing, interpreting, negotiating, and accepting awards/agreements on behalf of the Regents for projects funded by federal and state agencies, foundations, and other public and private sources. The office is also responsible for drafting, negotiating, and executing awards and subawards for collaborative research.
Processed by Materiel Management- Business Contracts
This office is responsible for business agreements including vendor services, equipment loans, and work which it not research (but may be a part of a larger research project originally facilitated by SPO). Business Contracts website is here:http://purchasing.ucdavis.edu/contracts/
Processed by UCDHS Contracts
The Health System Contracts office (http://www.ucdmc.ucdavis.edu/healthsystemcontracts/) is responsible for the health affairs and business contracting needs of the health system (hospital, School of Medicine, and School of Nursing). The types of agreements that we process include, but are not limited to:
- Service agreements, unrelated to research
- Independent consultant agreements, unrelated to research
- Independent contractor agreements, for professional services, unrelated to research. For School of Medicine Departments, all non-medical, professional independent contractor agreements should be processed through Campus Purchasing utilizing a DAFIS purchase requisition
- Affiliation agreements
- Training agreements
- Facility transfer agreements
- Intergovernmental Personnel Act (IPA) agreements (UC Davis Health System employee working at a federal government site under the auspices of the federal government at the federal government’s request)
- Task Orders on the Basic Ordering Agreement with the VA which involve medical services requested by VA at the VA Northern California Health Care System, UC Davis Health System VA Merit Award research support staff salary, benefits and indirect costs and UC Davis Health System shared personnel resources at the Clinical and Translational Science Center (“CTSC”) Clinical Research Center (“CCRC”)
- Expert witness agreements when primary to course and scope of faculty appointment.
- Rights and reimbursement of expenses affiliated with contracts and service agreements
- Facility use agreements and permits of less than one year in duration
- Data Use Agreements involving the disclosure of patient health information
- Confidential Disclosure Agreements
Note: The UC Davis Health System Purchasing office will continue to provide support for the equipment and supply purchases for UC Davis Medical Center. Campus Purchasing will continue to process all equipment and supply orders generated in DAFIS with School of Medicine campus funding.
In instances where there are competitive bidding requirements, the UC Davis Health System Purchasing office will be servicing these needs for both UC Davis Medical Center and the School of Medicine.
Clinical Trials Contracts negotiates industry funded clinical trial agreements for the health system. Clinical trial agreements handled in this office have all the following characteristics:
- They always involveProspective testing in Human Subjects and always require Institutional Review Board (IRB) review (this does not include cadaver or animal studies, nor does it include retrospective chart reviews)
- They examine theEfficacy, Safety or Benefits of a Food and Drug Administration (FDA) reviewed Medical Interventioninvolving a Drug, Device, Treatment or Diagnostic (this would typically not include studies which involve the effects of beverages, foods or exercise on health, for example)
- They are fully funded, directly or indirectly, by aFor-Profit Entity (agreements which are partially or fully funded by non-profit, state or federal entities cannot be reviewed by this office)
For the purposes of qualifying for the clinical trial indirect cost rate exception, the definition of a clinical trial is here.
Research agreements which do not meet all of the criteria above will be handled by the Office of Research Sponsored Programs Office.
Clinical Trials Contracts negotiates confidentiality agreements and service agreements directly related to industry funded Clinical Trial Agreements.