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Panelists: Marti Preston, Administrator, Department of Pediatrics, University of Rochester and Brenda Kavanaugh, Senior Research Administrator, Office of
Research and Project Administration, University of Rochester
INTRODUCTION:What is a subrecipient (subawardee, subcontractor)?Per A-133: Any person or government department, agency,
establishment, or nonprofit organization that receives financial assistance to carry out a program through a primary recipient or other subrecipient, and– Has its performance measured against whether the objectives of
the project are met– Has responsibility for programmatic decision-making– Has responsibility for adherence to applicable federal program
compliance responsibilities– Uses federal funds to carry out a program of the organization as
compared to providing goods or services for a program of the passthrough entity
• Are publications anticipated from the lower tier entity? Will individuals at the lower-tier be co-authors on articles?
• Is the lower-tier organization providing cost sharing or matching funds?
• Is the activity to be performed a series of repetitive tests or activities requiring little or no discretionary judgment on behalf of the service provider?
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
What is needed from the subrecipient?
• Statement of work (SOW)• Project budget and justification (with all appropriate costs + F&A)• Written evidence that an authorized institutional official has endorsed
the subrecipient’s proposal• Other documents such as resources/facilities/equipment page,
checklist, biosketches, other support and a signed application face page
• All this should be received at prime institution in advance of agency deadline
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
What should you do?
• As a department administrator, work with your PI to make sure that the subrecipient budget makes sense, adds up and contains the appropriate information, such as:– Fringe benefit rates– Salary (NIH cap?)– F&A rate and costs– Equipment and supplies– Special needs – mandatory cost sharing , program income, etc.
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
What should you do?• You should be meeting with your PI as early as possible
(my department guidelines require a minimum of 1 ½ months prior!)
• Your PI will already have been in touch with Sub PI and will have discussed personnel and general budget items
• You, the department administrator will be filling in the blanks in the budget and collecting all the details
• Be sure to make contact with your equivalent at the Sub PI’s institution, explaining the project from your point of view and letting them know the documents will require – this is your collaborator
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
What should you do?• Let the Sub PI’s administrator know exactly who will be
working on their part of the proposal and obtain the following information:– Salary and FTE status of faculty and staff involved at Sub site– Benefit rate(s)– Institutional F&A rate
• What else? Screen dump the electronic form to be used for key personnel and site location and send it to the site DA
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
What should you do?• The information you generally need (varies by
agency) from the subrecipient DA’s are:– Face page– Subaward contacts page (FDP form)– Checklist and rate agreement– Resources and Environment information– Site location informaiton– Senior Key Personnel information
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
Foreign Subcontracts – Financial Considerations:1. How stable is the subrecipient’s currency? Some countries (e.g., Zimbabwe) have experienced bizarre currency fluctuations in recent years, so a proposal budget prepared now may be completely inadequate six months from now.
**Always request budgets in U.S. dollars**2. How do you intend to verify the subrecipient’s expenditures? Consider audit and subrecipient monitoring responsibilities.
**When in doubt, propose a Firm Fixed Price sub**3. Avoid asking a foreign subrecipient to cost-share. If the sponsor requires cost-sharing, you are better off shouldering it all yourself.
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
Foreign Subcontracts – More Financial Considerations:4. Will the subrecipient face cash-flow challenges? If you are working with developing countries, you may need to consider cash-advances, up front payments, and other similar approaches.
– You’ll need to balance the risk to your institution with the needs of the foreign subrecipient.
– You should establish reasonable caps for cash advances.– You should make sure this payment structure is explicit in your
proposal.– If the project is not fixed price, you’ll need to establish
mechanisms for reconciling cash advances with expenditures.
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
Foreign Subcontracts – Export Considerations:Physical exports – Does the proposed collaboration involve shipping anything abroad? Computers? Laptops? GPS equipment?Foreign travel – Will your researchers be travelling abroad? With whom will they be interacting?Deemed exports – Will your foreign collaborators be visiting you during the course of the project? What technology will they be exposed to?Defense services – Will your project involve training foreign personnel in the use of any technology included on the Munitions List?
PREPARATION: RESEARCH PROPOSAL SUBMISSION – GETTING OFF TO A GOOD START
Foreign Subcontracts – Other Considerations:
Human Subjects/Animal Subjects - If human or animal subject research will take place abroad, please consider what measures will be taken to ensure compliance. (The same standards of care are required regardless of whether the research is performed in the U.S. or abroad.)
F&A - Please check your sponsor guidelines to see if additional restrictions apply to foreign subrecipients. For example, NIH will only pay 8% F&A on foreign subs, even if the domestic organization is charging full F&A.
Congratulations, you got the award. What happens next?
• Check the prime award document – has the subaward been approved by the sponsor (or not specifically disapproved)?
• Is the budget intact or has it been reduced– Revised or detailed budgets will be needed
• Are the required assurances and certifications in hand for the subrecipient?– IRB and IACUC approvals– Certification on education in the use of humans in research
• If this is a foreign subaward, there may be additional hurdles to jump
Congratulations, you got the award. What happens next?
For the department administrator (DA), a lot!
• DA meets with prime PI to discuss account/budget setup and provides Request to Issue Subcontract form (http://www.rochester.edu/ORPA/Forms/– This form provides your sponsored programs office with the basic
information they need to set up the subaward• Statement of Work• Additional terms and conditions they may need in subaward• Budget information (including account number, not to exceed amount, etc)• Contact information• Prime PI’s cost assurance (he/she must sign!)
– Do you have all of your approvals and assurances from your sub in hand?
If subrecipient is a for-profit or small non-profit, you will need to know:• Are they qualified to receive Federal funds?• Do they have internal controls in place to manage and track the funds?• Have they every received Federal funds?
• Perhaps a pre-qualifying questionnaire to determine all this is
necessary (see http://www.rochester.edu/ORPA/Forms/ )
3. Terms and conditions– Federal Demonstration Partnership (FDP) Template
• Used for most Federal assistance subawards – NIH, NSF, DOE, AFOSR, AMRMC, ARO, EPA, NASA, ONR and USDA (AHRQ and HRSA are not participating agencies in FDP)
• Contain basic flow-down terms from Federal sponsors and consists of the following sections:
– Records and audit• Subrecipient must maintain acceptable financial systems and
accurate records to identify the expenditures of the sponsored funds
– Intellectual property: patents, inventions, and copyright• Rights granted in accordance with U.S. patent and copyright
law and additional sponsor requirements• Subrecipient maintains ownership rights to IP it develops• Exception: subrecipients under an industry initiated clinical
• Issues under Federal contracts– Flow-down Federal Acquisition Regulations (FARs)– Specific deliverables– Rebudgeting restrictions, etc.– Small business plans
Buy American Act. This Act requires that you purchase domestic products, unless doing so imposes an unreasonable cost or is not in the public interest. However, to avoid export control issues, it is generally better to purchase equipment abroad if it is available rather than shipping domestic products overseas.
Anti-terrorism requirements. Many foundations (Ford) and some federal agencies (USAID) require such provisions. You must complete denied party screenings of foreign persons involved in the project to comply.
Trafficking in Persons. This clause is found in contracts (FAR 52.222-50) and more recently in ONR grants. It is important to research foreign organizations to make sure they comply with this clause.
Foreign Corrupt Practices Act (FCPA). Bribery of foreign officials is illegal (obviously). However, corruption is widespread in many countries, and you may be asked to pay all sorts of “transaction fees” to make things happen. Check with your legal counsel before paying any cost that does not pass the smell test.
Anti-Boycott Laws. Certain countries participate in boycotts against Israel. If you receive documentation or invoices from a foreign organization that requires you to indicate your compliance with Israel boycotts, you are required (under U.S. law) to insist on deletion.
Choice of Law. U.S. law and venue are always preferred. Only agree to foreign law and venue if your legal counsel has indicated an interest in travelling abroad (and you are willing to pay). Please note that you are unlikely to win any disputes settled in a foreign venue.
Some public policy requirements may or may not apply:
Drug-free workplace can sometimes be eliminated, if the U.S. federal government judges that the inclusion of this provision is in conflict with foreign laws.
Some additional requirements may apply:
Foreign governments and government agencies are NOT subject to debarment and suspension requirements, but they may have to provide a certification that they are not delinquent on any debts owed to the U.S. (Other foreign entities ARE subject to debarment certification requirements.)
The terms and conditions of the subcontract may prove difficult to enforce, no matter how much time you spend negotiating them.
At the end of the day, establishing a good relationship with your foreign subrecipient is more important than anything else.
Avoid talking down to your foreign subrecipients, even if they seem confused or overwhelmed by the U.S. contracting process. Even a hint of condescension can undermine months of hard work.
• Verification of subrecipient F&A rate– Copy of current rate agreement at time of initial award– Rate should be fixed for life of award if under federal award
• Monitoring requirements– A-133 audit
• If subrecipient is not subject to A-133, other types of audits (as agreed to in the subaward) may be effective tools for monitoring
– Financial reports• Timeliness of reports or invoices• Content of reports
– Performance reports– Routine contact with subrecipient– Site visits
POSTAWARD – Keeping up and moving forwardDepartment Administrator (DA) will be responsible for:• Setting up a cumulative (project period) tracking
document for each subaward that indicates:– Name of Institution/PI– Total amount awarded– Total amount of current award– Invoices as received are ented into the worksheep so that a
cumulative (total invoiced” and cumulative “balance available” is obvious at all times
– Invoices are reviewed for accuracy by DA/accounting staff (dates of service, correct math, correct F&A calculation as awarded) and give to Prime PI for review and approval/signature. Then invoices are sent to Finance Department for payment
– If invoicing is not timely, get in contact with Sub DA or have Prime PI contact Sub PI
• What if anything (everything?) goes wrong?– No work done, but regular invoicing– No invoicing, no work done– Per subrecipient, work done, invoicing done, per prime PI, work
not done or done improperly– Monitor, monitor, monitor– Communicate with sponsored programs office about problems
Foreign Subcontracts• Foreign subrecipients are generally subject to the same audit
requirements as for-profit organizations (45 CFR 74.26(d)).• Foreign organizations are NOT subject to A-133, but an audit that
meets the standards of an A-133 audit will satisfy the 45 CFR 74.26(d) requirements.
• If a foreign organization spends less than $500K/year in U.S. federal funds, audits are not usually required. However, the U.S. Government reserves the right to request “grant-related records” for review.
• USAID sometimes requires independent audits.• Reporting and record retention requirements are generally the same