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Subaward

A subaward (or subcontract or subagreement) provides pass-through funds to a lower-tier entity.  We would issue a subaward when MSU receives an award and enlists another entity to complete a specific component or share responsibilities for the project’s design, conduct, and/or reporting.

Before Proposal Submission - Gather budget, justification, scope of work, and signed subrecipient commitment form from each subrecipient.
 
MSU RECEIVES AWARD! OSP cannot issue any subawards until the award from the prime funder is fully signed.
 
Prepare Compliance Documents - In addition to the documents from proposal submission, OSP needs copies of the subrecipient’s indirect cost agreement and financial audit.
 
Subaccount Setup - After the subaward is signed, OSP will request that CGA set up a subaccount.

 

Recipient MSU Collects F&A For: Attributes
Subaward first $25,000
  • Performs programmatic portion of project activities
  • Must follow all applicable guidelines and compliance requirements
  • Jointly responsible for project design, conduct, or reporting with MSU
Consultant entire amount
  • Provides services
  • Not responsible for project design, conduct, or reporting
  • MSU owns all resulting intellectual property
Contractor (formerly known as "Vendor") entire amount
  • Acts as dealer, distributor, merchant, or other seller
  • Usually has published rates and operates in competitive environment
  • Not responsible for project design, conduct, or reporting

Additional OSP review is needed if the subcontracting is budgeted for more than 50% of the total project.  

What F&A rate should the subrecipient use?

  • If the sponsor has not restricted F&A in any way, use the subrecipient’s federally negotiated indirect cost rate and obtain a copy of that agreement (NICRA).
  • Subrecipients who do not have a federally negotiated F&A Rate Agreement, may elect to charge a de minimis F&A rate of 10% of modified total direct cost (MTDC) if allowed by the prime to use the 10% F&A rate, this methodology must be used consistently for all Federal awards.
  • If the sponsor has restricted F&A, the subrecipient must follow the guidelines set forth by the sponsor.
  • For projects under consideration, a rate other than the 10% de minimis could be evaluated for subrecipients that don't have a NICRA when the subrecipient's project direct costs are greater than $500,000. Questions or comments should be directed to the Contract and Grant Administration (CGA) Director or Assistant Director.

Where do I include the subaward in the budget?

When preparing MSU’s budget that includes a subaward, use the line-item labeled “contractual” if the sponsor did not provide a specific category. Usually this category is not exclusive to subawards and may include consultants and price quotes from vendors.

What documents does MSU need from the Subrecipient?

At proposal phase:

  • Budget (cannot contain fee or profit unless sponsor specifically allows in writing)
  • Budget Justification
  • Scope of Work
  • Signed Subrecipient Commitment Form
  • Biographical Sketch – for senior personnel as required by sponsor
  • Current and Pending Support – for senior personnel as required by sponsor
  • Conflict of Interest list – as required by sponsor (MSU can process COI disclosures if a subrecipient does not have a policy to manage financial conflicts.)
  • Any other documentation required by sponsor

At award phase:

  • Indirect Cost Agreement (NICRA)
  • A-133 or similar financial audit or financial reports
  • IRB approval - if project involves human subjects (Please contact MSU’s IRB Compliance Office for how to handle a subrecipient that doesn’t currently have a Federal Wide Assurance or an IRB compliance office.)
  • Any other documentation required by sponsor

What is FDP?

FDP stands for Federal Demonstration Partnership, a cooperative endeavor to streamline agreements between government, universities, and industry partners.  Thanks to this partnership, subaward processing for members is much faster because members agree to use a set of standardized terms and conditions.  At MSU, CGA will process subawards that fall under FDP and OSP will process all other subawards.

 

Category: Award Negotiation & Acceptance    Subcategories: none

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