New Subawards

    Preparing an Outgoing Subaward

    What is an Outgoing Subaward?

    An outgoing subaward is an agreement with a third-party organization performing a significant portion of a Yale research project or program. The terms of the relationship (subgrant/subcontract) are determined by the prime award received by the University. A subrecipient works collaboratively with the prime award recipient to carry out a significant portion of the prime award’s scope of work.

    Just because another entity is involved in a sponsored project does not mean that a subrecipient relationship exists. It is sometimes difficult to tell the difference between a subrecipient and a vendor and may be easy to confuse the two. Misclassifying the type of relationship 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.

    Determination of Subrecipient vs. Vendor

    It is important to differentiate between subrecipients and vendors before entering into an agreement with a third-party organization performing a portion of Yale’s research project. This classification will determine the type of legal agreement as well as the type of monitoring required for the relationship. Misclassification may result in delays in subaward processing, as well as inclusion of incorrect facilities and administrative (F&A) costs, leading to significant budgetary errors. Yale follows the requirements in the OMB Uniform Guidance (2 CFR 200), Section 200.330 to determine subrecipient or contractor status.

    The table below describes the characteristics typical of either a subrecipient relationship or a vendor relationship with Yale:

    Subrecipient Relationship Vendor Relationship
    The principal goal of engaging the entity is to carry out a public purpose authorized by Yale’s prime award The principal purpose is to acquire goods or services for the direct benefit of an award
    The performance of the entity is measured against the objectives of the prime award The entity provides the goods and services within normal business operations
    The entity has programmatic decision-making responsibility The entity provides similar goods or services to many different purchasers
    The entity receives prime award funds from Yale through a subaward to carry out its own program The entity normally operates in a competitive environment
    The entity exercises considerable discretionary judgment The entity provides goods or services that are ancillary to the operation of the prime award program
    The entity may be required to provide matching funds or cost sharing dollars The entity provides services of a repetitive nature or goods of a commonly available kind
    The entity has its performance measured in relation to whether objectives of sponsored award were met The entity is generally not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply based on the scope of work (e.g., IRB approval, COI).
    The entity is responsible for adherence to applicable federal program requirements specified in the federal award if under a federal prime award or the requirements of the non-federal sponsor, as appropriate

    The Uniform Guidance allows grantees to use judgment in determining whether a relationship is that of subrecipient or contractor. Not all characteristics listed above will be present. Conversely, the presence of many of the characteristics is not necessarily determinative. Thus, the substance of the relationship is more important than the form of the agreement.

    OSP has developed a Subrecipient vs. Vendor Checklist tool to assist in making the correct determination.

    Submitting a Proposal with a Subaward

    Yale PIs should alert their department business office (DBO) as early as possible of their intent to include a subrecipient in a proposal to allow time for the collection of required information and certifications from the subrecipient. If the PI has not identified a specific subrecipient at the time of proposal, the subrecipient will be identified as “TBD” (to be determined) in the budget and proposal.

    Subaward Documentation Required

    • Subrecipient Statement of Collaborative Intent
      • Yale is a participant in the Federal Demonstration Partnership (FDP) Expanded Clearinghouse.
      • If the subrecipient organization is an FDP participating institution, only the initial sections identified for all subrecipients on the Subrecipient Information and Compliance form (SIC) must be completed.
      • If the subrecipient is a non-participating institution, the entire Subrecipient Information and Compliance form must be completed by the subrecipient.
    • Scope of Work
    • Budget and Justification
    • Federally negotiated F&A Rate Agreement, if applicable
    • Any other documents required by sponsor (e.g., certifications, assurances, etc.)

    If the proposed subrecipient is a new Subrecipient to Yale:

    • A Subrecipient Questionnaire is required if the subrecipient is not subject to the Single Audit (this will be identified in the SIC)
    • A request for a new Workday Supplier must be sent to the Supplier Compliance Unit, per the instructions found at 3401 PR.01 Supplier Setup and Change (link accessible to internal Yale only.)

    Conflicts of Interest

    Proposals may not be submitted to a Public Health Service (“PHS”) agency, a PHS-like sponsor, or the National Science Foundation (“NSF”) without certification from the subrecipient that it has a compliant policy and has made all required disclosures.

    For a list of PHS agencies and PHS-like sponsors, visit the Frequently Asked Questions for COI website and select, “What are the PHS agencies and other sponsors that have adopted the PHS regulations?”.

    If the subrecipient does not have a compliant PHS policy, the DBO provides the subrecipient with the Yale model PHS compliant policy and model COI disclosure form for the subrecipient to adopt and complete.

    Subrecipient Cost in Yale’s Budget

    The PI must integrate the subrecipient’s scope of work into the proposal, and include the total amount of the subrecipient’s budget (including the subrecipient’s F&A) as a direct cost line item in the budget. When calculating the Yale budget, it is important to consider the prime sponsor’s written policy if it deviates from Yale’s standard practice of charging F&A on the first $25,000 of each subaward. Please note this formula only applies to federal sponsors. Application of this formula to a budget under any other type of award may require a cost share waiver (check with your Proposal Manager to determine if a cost share waiver is necessary.)Many non-profit foundations have written policies which assess lower indirect cost rates to awards, including subawards.

    Issuing subawards that were not proposed (after the fact)

    Throughout the life of an award, a situation may arise in which a portion of the research must be carried out by a subrecipient that was not part of the original proposal. If the prime award has been received by Yale, the sponsor’s requirements should be reviewed and the OSP Award/Contract Manager should be contacted to determine if prior sponsor approvals to add a subaward is required (especially for foreign subawards, whether first or second tier). The Award/Contract Manager will determine the necessary approval process according to the prime award and will advise accordingly.

    The DBO should obtain from the subrecipient a completed SIC form, scope of work, budget and budget justification and email them to the assigned GCAT mailbox. The email should contain the Yale PI’s name, IRES record number and grant/contract ID. An activity log will be opened to the Award/Contract Manager to review the subrecipient documents and if approved, will log the new subaward to the Subaward Manager for processing, including creating the new subaward grant lines and supplier contract in Workday.

    Subaward Initiation and Setup

    Prior to issuing a subaward, the Subaward Manager will review and confirm that all required subrecipient documents and certifications have been received. The Subaward Manager will contact the business office to secure any needed documents or information that is missing or incomplete, such as:

    • Confirmation of IRB/IACUC protocol approval, and
    • Certification that the subrecipient adopted its own PHS FCOI policy

    OSP will not issue a subaward until all compliance requirements are in place. In addition, the Subaward Manager will conduct a financial audit check based on OMB Uniform Guidance (2 CRF 200, Subpart F) or other financials if the subrecipient is not subject to the Single Audit. When all compliances are in place and financial documents have been received, the Subaward Manager will complete a risk assessment of the subrecipient entity.

    Risk Assessment

    The Uniform Guidance requires a risk analysis be completed by Yale to evaluate the likelihood that a subrecipient will fail to comply with the terms and conditions of the subaward. OSP assesses the subrecipient’s financial status and internal controls prior to issuing a subaward. This is completed during the issuance process, and it is monitored during the life of the subaward. The criteria used in evaluating risk can include the subrecipient’s audit experience; the prior oversight and monitoring the subrecipient has received; the size, nature, and complexity of the proposed research project; and the fiscal maturity of the subrecipient. If the subrecipient is not subject to the Uniform Guidance Single Audit requirement, the DBO will contact the subrecipient to obtain a copy of their audit or ask that they complete a financial questionnaire to complete the risk analysis.

    Based on our evaluation, OSP determines the appropriate monitoring strategy which is reflected in the terms and conditions of the subaward agreement. If the assessment identifies areas of concern, OSP in consultation with the PI and DBO, will determine an appropriate risk mitigation strategy/plan.

    The Subaward Manager will draft the subaward agreement determining the most appropriate type of agreement mechanism, flowing down all applicable prime award terms. Negotiation of the subaward terms may be necessary and may require PI and business office involvement. Upon final agreement between Yale and the subrecipient the subaward will move forward with full execution by the institutions.