Lifecycle of a Subaward

1. Proposing a Subaward

The principal investigator (PI) identifies the appropriate subrecipient(s) based on scientific considerations, performance capability and record, cost, technical resources and ability to accomplish the statement of work in the designated timeframe. The PI includes the subrecipient proposal(s) in the full proposal sent to the Office of Sponsored Projects and Research Compliance (SPARC).

SPARC reviews the proposal for completeness, accuracy and compliance with Rice and sponsor requirements. Additionally, for any proposed subaward(s), SPARC will determine if a subaward is the appropriate mechanism, as opposed to another form of procurement action, such as professional services agreement for consulting or other vendor purchase. SPARC forwards the proposal to the sponsor for consideration.

2. Assessing Risk

The frequency and intensity of monitoring are based on the risk assessment performed at the time of the initial subcontract and any changes to that assessment during the life of the subaward.

After Rice receives the award and prior to issuing a subaward, SPARC performs and documents a risk assessment of the subrecipient organization to determine the level of risk and the extent of monitoring during subaward period. Such assessment also occurs prior to issuing an amendment to a subcontract. Factors to be considered in making this assessment may include:

  • Prior audit report findings
  • Alternative means of assessing adequacy of internal controls for subrecipients not subject to the single audit requirement
  • Amount of subcontract/large percentage of pass-through funding
  • Type of prime award (e.g., contract or grant)
  • Program complexity

The Forms section of these procedures provides a link to the Risk Assessment Matrix form.

SPARC will assign a risk assessment of low, medium or high to each subaward. Generally, a low risk subaward will follow the FDP template for required technical and financial reporting by the subrecipient. For medium and high-risk subrecipients, SPARC will include in the subcontracts additional technical and reporting requirements as determined by the risk assessment factors. Such steps could include:

For subcontracts with medium risk subrecipients:

If due to technical-related risks:

  • Specified frequency for technical reports, e.g., monthly or quarterly instead of standard “as may be necessary to meet” prime agency reporting requirements; and/or
  • Extra contact between the PI and sub’s PI, including periodic site visits; and/or
  • Tie receipt of technical reports to payments.

If due to financial-related risks:

  • Specify minimum frequency, e.g., at least quarterly (rather than standard “not more often than monthly”); and/or
  • Require claimed cost amounts be supported by ledger report (i.e., report similar to Rice’s Project Summary or Budget Status report); and/or
  • Require expenditure backup support or information for specified types of costs. Examples could include: (1) expenditure support for travel costs; (2) information on salary amounts by individual per invoice period; or (3) information on equipment purchases, such as vendor, amount and name of equipment.

Note: RCA will sample invoice expenditure support for medium risk subrecipients; sample frequency to depend on type of entity, total dollar value of subcontract and length of project.

For subcontracts with high risk subrecipients:

If due to technical-related risks:

  • Same as above, plus
  • Add more stringent termination or stop-work language for failure to comply with requirements.

If due to financial-related risks:

  • Change from cost-reimbursement invoices to milestone/deliverable invoicing upon completion of specified tasks. (RCA sampling of invoice expenditure support is not needed with milestone/deliverable invoicing)

When subawards are amended, SPARC will perform a review of the assigned risk assessment and update the category if necessary. Review steps will include requesting updates from the PI and RCA on the status of the project, invoicing and compliance to terms and conditions. See Forms section of procedures for copies of these update requests.

3. Issuing and Amending a Subaward

The PI is expected to identify the need for a subcontract prior to the submission of the proposal and to provide appropriate documentation pertaining to the need for the subcontract. This documentation should be included in the proposal and delineated in the overall proposal budget.

Please note that these requests must also include, at the time of proposal submission, documentation of the selection criteria used for the subcontractor or consultant either as sole source or the process used to solicit competitive bids. This documentation must also provide for purchase of items costing more than $25,000. SPARC reviews subcontract and consultant requests at the proposal submission stage and makes a determination about what type agreement should be issued. In some cases, SPARC will recommend that the scope of work be handled as a purchased service (PO), or consultancy (PSA) rather than as a subcontract.

When subcontracts are appropriate, the other participating institutions will be subcontractors under the Rice (prime) award. If the Rice PI plans to apportion the work in this way, appropriate paperwork is needed at the time the proposal is submitted to confirm the proposed subcontractor’s eligibility and willingness to participate. When a subcontract has been prepared as part of a larger proposal, the total yearly cost for the subcontract is included as a line item in the Rice PI’s budget. The subcontractor may include his/her institution’s indirect costs in the subcontract. Additionally, the budget should include Rice F&A assessed on the first $25,000 of the anticipated subcontract. Subcontracts are, in effect, mini-proposals. They should therefore include essentially the same elements as proposals. At a minimum, each subcontract should contain the following:

  • Line-item budget in the same format and at the same level of detail as the budget in the prime proposal
  • Budget justification
  • Short statement of work
  • CV or biographical sketch and bibliography for the lead PI at the subcontracting institution
  • Letter of intent to collaborate signed by the Sponsored Programs Office at thesubcontracting institution
  • Cover sheet in the sponsor’s approved format, representation or certification forms, [as applicable]
  • Subcontract Cover Sheet or NIH Statement of Intent

Once an award is made, SPARC will contact the PI and Department Administrator to confirm the details of the subcontract. SPARC will work with the PI and Department to gather the information necessary to issue the subcontract including the following:

  • Federal agency name
  • Award name and number
  • CFDA title and number
  • DUNS number
  • Award year
  • Technical and administrative at the collaborating institution

Any subcontract shall include clauses requiring compliance with Uniform Guidance and/or the FAR clauses, as appropriate. SPARC may need to modify these standard clauses as required and any changes from the standard clauses will be brought to the attention of the RCA to ensure appropriate subcontract administration.

SPARC will issue a Notification to PIs of their responsibilities for monitoring the subaward. SPARC will also issue a Notification to PIs of information needed at the time of amendments to subawards. Examples are included in the Appendix.

4. Monitoring Subaward Activities

The frequency and intensity of monitoring are based on the risk assessment performed at the time of the initial subcontract and any changes to that assessment during the life of the subaward.

The PI is responsible for monitoring the activities and expenditures of subrecipients to confirm that performance goals articulated in the statement of work (SOW) are achieved and that any sponsor-specific compliance terms are met and that funding provided to the subrecipient is used for purposes authorized in the negotiated agreement. Monitoring will include, but is not limited to, regular review of technical performance including written progress reports as needed and review and approval of subrecipient invoices. DAs are expected to assist PIs in the review of subrecipient invoices.

The PI is responsible for alerting SPARC and RCA of any issues or changes related to the subcontract, including technical performance and budget/financial considerations. When a PI or DA notifies SPARC or RCA of such concerns, appropriate action will be taken, up to and including early termination of the subcontract.

5. Invoice Processing

Each subcontract contains terms related to requirements for invoices from the subrecipient, including format, frequency, level of detail and certification. At the time of issuing the subaward, SPARC sends a memorandum to the PI outlining the invoicing requirements of the specific subcontract agreement. For cost reimbursable subcontracts, the standard invoice requirements are:

  • Rice subaward # (R subfund #)
  • Period covered by the invoice
  • Current and cumulative costs
  • Certification as to truth and accuracy of invoice

Additional requirements may include current and cumulative cost sharing amounts and copies of supporting documentation, such as ledger reports or expenditure transaction support. When subcontract invoices are received in the department, departmental staff should review them to ensure they meet the invoice requirements of the subcontract. A checklist for reviewing subcontractor invoices is included in the appendices.

After reviewing the invoice, staff should sign, code* and forward it to the PI for approval. PI approval of a subrecipient invoice certifies that:

  • The invoice amount is commensurate with the work performed and the technical progress, and
  • A review of the invoice has been performed.

Please contact RCA if you have any questions on subcontract invoice processing or specific invoice costs.

Approved invoices should be forwarded to Payment Solutions for processing and payment. RCA electronically reviews and approves subcontract invoices to ensure they are consistent, within project period and that the cumulative amount of the invoice does not exceed the total amount of the subcontract.

*The correct account code used is determined by the cumulative amounts being paid:

  • 72155 for cumulative amounts up to and including $25,000.00, and
  • 72150 for cumulative amounts over $25,000.00.

6. Closeout of Subawards

Before approving a final invoice, the PI is responsible for ensuring that all required project deliverables and reports have been received. In addition to technical and patent/invention disclosure reports, subcontracts may also require other reports such as property and cost sharing reports. Please refer to the subcontract agreement for information on required reports or contact SPARC and RCA for assistance.