5.0 Subcontracts, Subawards, and Subrecipient Administration
5.0 Subcontracts, Subawards, and Subrecipient Administration s1polics Thu, 04/21/2016 - 09:26It is the policy of Georgia Tech’s Office of Sponsored Programs that, in issuing and administering subawards, the office is in compliance with:
- Georgia Institute of Technology Policies and Procedures
- Applicable sponsor regulations
- Terms and conditions of the prime award
The ultimate goal of the following policies is to guarantee that the subaward activities satisfy Institute and governmental reviews as well as government audit requirements while protecting the Institute’s best interest.
5.1 Subawards and Subcontracts Under Sponsored Awards Policy
5.1 Subawards and Subcontracts Under Sponsored Awards PolicyThe Georgia Institute of Technology (the Institute) is responsible for implementing and maintaining internal controls that provide reasonable assurance of Institute compliance with sponsor requirements for management and monitoring of the Subawards and Subcontracts it issues under its Sponsored Awards. Federal regulations require accurate classification between subawards and procurement actions as the federal regulations applicable to management of subawards are different from those applicable to procurement actions. State laws, however, address both as contracts. This policy addresses the federal requirement to distinguish between subawards and procurement actions and supports compliance with state laws applicable to contracts.
The Institute must fulfill its Pass-Through Entity responsibilities when including Subawards in proposed Sponsored Awards. PI/PDs and unit administrators must identify Subawards, as defined in this Policy, in proposed budgets and budget revisions, to ensure that costs are calculated correctly, sponsor approval is obtained, and appropriate documentation is included in the Institute’s proposal.
When it is the Pass-Through Entity, the Institute is responsible for:
- Assessing the substance of the relationship between the Institute and the entity to which it is flowing through Sponsored Award funding;
- Based on the above assessment, following federal guidelines for accurate classification of Subawards (2 CFR 200.331 Subrecipient and contractor determinations); and
- For identified Subawards, complying with federal and sponsor-specific requirements for Subrecipient management and monitoring, including:
- 2 CFR 200 Subpart D - Subrecipient Monitoring and Management
- Terms and conditions of prime awards including applicable sponsor regulations (e.g. Federal Acquisition Regulation (FAR)) and requirements.
For purposes of this policy, Subawards include Subcontracts the Institute issues under its sponsored Contracts if they meet the Institute’s criteria for accurate classification of Subawards. Such agreements issued under federal Contracts are subject, also, to the FAR and any applicable funding agency supplemental regulations. The State of Georgia considers all agreements for goods and services to be contracts and, therefore, the Institute must also comply with state procurement requirements in issuing and managing Subawards.
The Institute’s procurement Contracts and other purchases of supplies and service that do not meet the Institute’s criteria for accurate classification of Subawards are not subject to this policy.
This policy applies to all Georgia Tech Faculty and Staff engaged in research or administration of research.
| Contract | An instrument to acquire property or services for the direct benefit or use of the funder. The Institute receives Contracts that are Sponsored Awards and issues Contracts to acquire property or services. |
| Contract/Vendor | An entity that provides property or services for the direct benefit or use of the Institute. Contractor/Vendor agreements must comply with Institute procurement policies. |
| Pass-Through Entity | An entity that provides a Subaward to a Subrecipient to carry out part of a Sponsored Award. |
| Sponsored Award | Grant, Contract or other incoming sponsored agreement. |
| Subaward | An award provided by the Institute to a Subrecipient for the Subrecipient to carry out part of the Institute’s Sponsored Award. For purposes of this policy, a Subaward includes Subcontracts issued by the Institute under its sponsored Contracts when they meet the criteria for a Subaward. It does not include Institute payments to a Contractor (Vendor). |
| Subcontract | All agreements issued under FAR-based Contracts are Subcontracts. For purposes of this policy, those meeting the criteria for a Subaward are classified as Subawards and others are classified as procurement Contracts. |
| Subrecipient | An entity that receives a Subaward from a PassThrough Entity to carry out part of a Sponsored Award. |
The Office of Sponsored Programs (OSP)
OSP is responsible for ensuring the Institute’s Subrecipient Monitoring and Management policies are sufficient for the Institute to fulfill its responsibilities for compliance with sponsor requirements, including definitions and guidelines to accurately distinguish between Subawards and procurement agreements.
OSP, Grants and Contracts Accounting, Principal Investigators/Project Directors, unit administrators and other research administrators and personnel are responsible for following this policy and related guidance to accurately classify Subawards and identify them in the Institute’s proposal budgets.
Noncompliance may result in disallowed Subaward costs, suspension or termination of the Sponsored Award, withholding of other Sponsored Awards to the principal investigator or the Institute, and debarment of the PI or the Institute from receiving future Sponsored Awards.
| Revision Date | Author | Description |
|---|---|---|
| 12-31-2013 | Office of Sponsored Programs | New Policy |
| 07-08-2024 | Office of Sponsored Programs | Policy was updated to remove procedures, clarify roles and responsibilities. |
5.2 Requesting a Subaward
5.2 Requesting a SubawardA SubAgreement may be required if part of the research effort under a grant or contract is to be performed by an outside organization or institution.
Subcontracts should be set up as soon as possible after the receipt of an award. To initiate one, you or an authorized representative will need to make a request for subcontract agreement using Georgia Tech’s web-based OSP Contract System - https://webwise.gtri.gatech.edu/osp/sub/sitemap
Upon final submission through the on-line system you will need to forward a signed copy of the request form to OSP. A notification of acceptance, as well as other progress notifications will be sent via the ICOL system. Upon receipt of the returned subcontracts, an agreement will be issued to the subcontractor against which project-related costs may be billed. The Principal Investigator will be responsible for monitoring the technical performance of the subcontractor, verifying that required cost-sharing is properly documented and approving the invoices for payment. Please notify a contracting officer in OSP’s Subagreement Division promptly with any questions or concerns. A request for modification will be needed in order to add additional funds or time to the existing subcontract.
This policy applies to all Georgia Tech Faculty and Staff.
| 4.1 Requesting a Subaward | |
|---|---|
| As part of the on-line “Request for a Sub-Agreement” process you will want to have the following information ready: |
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| On-line “Request for a Sub-Agreement” |
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5.1 Principal Investigators
The Principal Investigator will be responsible for providing oversight of the subcontract including:
- monitoring the technical performance of the subcontractor,
- verifying that required cost-sharing is properly documented,
- and approving the invoices for payment.
| Revision Date | Author | Description |
|---|---|---|
| 01-02-2014 | GTRC-IE | Rev 1.0 |
5.2.1 Statement of Work
5.2.1 Statement of Work s1polics Thu, 04/21/2016 - 09:36Preparing the Statement of Work - The Statement of Work (SOW) is a document that lists and describes all essential and technical requirements for the effort to be performed, including standards to be used to determine whether the requirements have been met. This document may include the following items where appropriate:
- Objective or Purpose
- Period of Performance
- A list of detailed work requirements
- Workload requirements
- Personnel requirements
- Resources (if any) to be furnished to the subcontractor.
- Reporting requirement/Other deliverables
5.2.2 Sole Source Justification
5.2.2 Sole Source Justification s1polics Thu, 04/21/2016 - 09:375.2.3 Cost Price Analysis
5.2.3 Cost Price Analysis s1polics Thu, 04/21/2016 - 09:33The PI is also required to provide a technical assessment of the subaward budget. The assessment would include verification that the costs are reasonable and necessary to carry out the proposed project. The cost elements within the subaward budget must be necessary to accomplish the proposed activity.
The Government is responsible for insuring that Georgia Tech maintains adequate policies and procedures governing subcontracting activities on federally sponsored grants and contracts. These activities are monitored through the periodic Contractor Purchasing Systems Review (CPSR) conducted on campus by the Office of Naval Research every three years. The cost price analysis form is a key component in the Government’s review of our purchasing system.
One of the Government’s principal procurement objectives is to obtain fair and reasonable contract prices. Sub-award pricing is a critical element in the pricing of prime contracts and a major consideration in receiving Government consent to sub-awards and approval for contractor purchasing systems. Sub-awards can sometimes represent a major portion of the total dollars spent under a prime contract. Contracting officers cannot ensure the fairness and reasonableness of prime contract prices without evaluating the prices of critical sub-awards.
In accordance with the Federal Acquisition Regulation (FAR), the contracting officer is responsible for the determination of price reasonableness for the prime contract. To make this determination, the contracting officer must conduct an analysis of the relevant facts and data including subcontractor cost or pricing data. In all cases, a main consideration is to assure that the price to be paid for these goods and services is fair and reasonable. This is essential to insure that both University and Government funds are utilized in a cost effective manner and to conserve funding where resources are limited. To accomplish this, some form of cost or price analysis must be made and documented in connection with every procurement action.
A price analysis is an examination of the price proposed by the anticipated subcontractor and an assessment or evaluation as to whether or not it is fair and reasonable. A cost analysis however, actually examines the individual cost elements that comprise the total proposed estimated cost. These elements generally include such things as labor rates, material costs, overhead or indirect rates, a cost of money factor, general and administrative expenses (G&A), and a profit or fee.
It is not possible for personnel in the Office of Sponsored Programs (OSP) to determine if the price is fair and reasonable without input from others. OSP can evaluate costs, but assistance will be required from the responsible Project Director/Principal Investigator to evaluate the appropriateness of the total price.
If a sub-award exceeding $700,000 is to be issued under a Government contract prime award, OSP must be in compliance with Public Law 87-653, Truth in Negotiations. [The Public Law has been implemented in the United States Code of Federal Regulations 10 U.S.C. 2306a (Armed Forces) and 41 U.S.C. 254b (Public Contracts) and in the Federal Acquisition Regulation Part 15 and Clause No. 52.215-12.]. Public Law 87-653, Truth in Negotiations (TINA) is a requirement for cost or pricing data and certification for any sub-award expected to exceed $700,000. The sub-awardee is required to submit cost or pricing data prior to placement of the sub-award unless one of the following exceptions applies:
- When the sub-award administrator determines that prices agreed upon are based on adequate price competition.
- When the sub-award administrator determines that prices agreed upon are based on prices set by law or regulation.
- When a commercial item is being acquired.
- When a waiver for cost or pricing data has been granted by the Government contracting officer under the prime award.
- When modifying a contract or sub-award for commercial items.
Cost or pricing data shall be obtained if the sub-award administrator concludes that none of the exceptions above applies. When cost or pricing data are required, the sub-award administrator shall require the sub-awardee to submit the following in support of any proposal:
- Cost or pricing data (See FAR 15.408, Table 15-2 for guidance).
- A certificate of current cost or pricing data, certifying that to the best of its knowledge and belief, the cost and pricing data were accurate, complete, and current as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price. (See FAR 15.406-2 for format.)
- For sub-awards under the TINA threshold the guidelines of FAR 15.403-3, Requiring Information Other than Cost or Pricing Data, should be utilized in certain cases. This would also include thorough documentation of cost or price reasonableness in accordance with FAR 15.406-3, documenting the negotiation.
5.3 Subrecipient Monitoring
5.3 Subrecipient MonitoringThe Institute is responsible for monitoring its federal and other Sponsored Award supported activities to ensure compliance with applicable sponsor requirements and achievement of performance expectations
The Institute will comply with federal and other sponsor requirements for monitoring its Subrecipients. The Institute’s monitoring activities will be based on an evaluation of the Subrecipient’s risk of noncompliance with applicable laws, regulations, and the terms and conditions of the Subaward. When monitoring identifies a Subrecipient’s noncompliance, the Institute will take action to address the noncompliance, including considering enforcement action such as imposing additional conditions, disallowing the cost of the activity not in compliance, or suspending or terminating the Subaward.
This Policy delineates faculty and staff roles and responsibilities in monitoring Subrecipients to ensure Subrecipients use sponsored funds for authorized purposes, in compliance with applicable laws, regulations, and the terms and conditions of the Subawards and achieve performance goals.
This policy applies to all Georgia Tech faculty and staff members engaged in research or administration of research.
See 5.1 Subawards and Subcontracts Under Sponsored Awards
Principal Investigator (PI) / Project Director (PD)
PI/PDs have primary responsibility for monitoring Subrecipient technical and financial performance to ensure Subrecipients use sponsored funds for authorized purposes in compliance with applicable federal regulations and the terms and conditions of the Subaward and achieve performance goals. This includes:
- If required, performing a cost price analysis.
- Reviewing financial and performance reports required in the Subaward and maintaining contact and coordination with Subrecipient technical personnel.
- Verifying the Subrecipient’s work is conducted in a timely manner and that the results delivered are in line with the proposed statement of work.
- Reviewing Subrecipient invoices and approving for payment only if charges are for authorized purposes. This consists of ensuring charges are reasonable in comparison to performance and performance is consistent with the proposed statement of work.
- Notifying the Office of Sponsored Program of any Subrecipient Risk factors, including any actual or potential conflict of interest, and ensuring the Subrecipient has complied with any additional conditions of the Subaward.
- Complying with the Institute’s Project Close Out Policy.
Unit Financial Officers (Departmental Administrators)
- Assisting PI/PDs with their responsibilities listed above, including maintaining documentation of monitoring actions (evidence of technical, financial, and invoice review, copies of email, notes from phone conversations, etc.). Documentation of monitoring actions must be kept in accordance with the Institute’s document retention policy.
- Reviewing invoices from Subrecipients to ensure they are within the parameters of the Subaward budget and period of performance.
- If expenditure details are a requirement of the Subaward, reviewing for reasonableness and requesting and reviewing additional information if questionable expenditures are identified.
- Assisting PI/PDs in determining whether invoices should be approved.
- Ensuring invoices that are approved by the PI or his/her designee are submitted to Accounts Payable on a timely basis.
- Complying with the Institute's Project Close Out Policy.
Office of Sponsored Programs (OSP)
OSP is responsible for ensuring that the Institute’s Subrecipient Monitoring and Management policies are sufficient for the Institute to fulfill its responsibilities for compliance with federal, state and other sponsor requirements. Related OSP responsibilities include:
- Identifying to the Subrecipient the Federal award information as required in section 2 CFR 200.332 (Federal Award Identification Number, etc.) and applicable compliance requirements, including any appropriate flow-down provisions from the prime agreement.
- Ensuring the selection of subrecipient is documented and, if required, that the PI/PD and Unit performed a cost price analysis.
- Determining, as applicable and in compliance with 2 CFR 200.206(d), whether or not the subrecipient or its PIs are debarred or suspended from receiving Federal funds.
- Evaluating each Subrecipient’s risk of noncompliance with applicable Federal statutes, regulations, and the terms and conditions of their Subawards.
- Determining, based on the above evaluation, appropriate Institute Subrecipient Monitoring, including tools listed in 2 CFR 200.332(e), and whether to impose additional conditions, such as those listed in 2 CFR 200.208 (c), to mitigate risk.
- Verifying that every Subrecipient meeting the criteria in 2 CFR 200 Subpart F – Audit Requirements is audited as required.
- Assisting Grants and Contracts Accounting in considering whether the results of any Subrecipient's audits, on-site review, or other monitoring indicate the need for an adjustment to the Institute’s records.
- For Federally funded Subawards, ensuring that the Subrecipient takes timely and appropriate action on any deficiencies pertaining to the Subaward detected through audits, on-site reviews, and/or written confirmation from the subrecipient, highlighting the status of actions planned or taken to address findings related to the particular Subaward.
- For Federally funded Subawards, issuing a management decision for applicable audit findings pertaining only to the particular Subaward, as required by 2 CFR 200.521.
- Coordinating compliance with the Institute’s Project Close Out Policy.
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, export controls, financial conflicts of interest, etc.) during the course of a project. PI/PDs and department administrators will have additional roles and responsibilities, as applicable, to ensure compliance with any additional requirements of a sponsor- or program-specific requirement.
Noncompliance may result in disallowed Subaward costs, suspension or termination of the Sponsored Award, withholding of other Sponsored Awards to the principal investigator or the Institute, and debarment of the PI or the Institute from receiving future Sponsored Awards.
| Revision Date | Author | Description |
| July 8, 2024 | Office of Sponsored Programs | Policy was updated to align with internal controls and comply with federal and state law. |