What is an Outgoing Subaward?
An outgoing subaward is a legally binding agreement between Florida Atlantic University (FAU) and a collaborating entity who will be performing a substantive portion of work on a prime award to FAU. When referring to an outgoing subaward, FAU is considered the pass-through entity (PTE) and the collaborating entity is the subrecipient. The subrecipient is expected to carry out a portion of the work on the sponsored project under the direction of the subrecipient’s principal investigator (PI). The subrecipient is responsible for complying with all rules and regulations, including reporting requirements and any terms and conditions that flow down from the prime award.
What is a Prime Sponsor or Prime Award?
A prime sponsor is the originating source of the project funding. This may be federal, state, local government, non-profit organizations including foundations and universities, or private organizations, including industry sponsors. The prime award is the agreement between the prime sponsor and FAU as the pass-through entity. The prime award agreement may include terms or conditions that are required to flow-down to the PTE and the subrecipient.
What is a Flow-down Term?
A flow-down term or condition is a-provision or requirement that originates in the prime award agreement. As the pass-through entity, FAU must incorporate applicable terms and conditions from the prime award agreement into the subaward agreement. Although the prime award agreement may mandate that certain clauses be flowed down into any subaward agreements, the subrecipient is bound to FAU as the pass-thru entity in the same manner as FAU is bound to the prime sponsor.
What is the Difference Between a Fixed-Fee and a Cost-Reimbursable Subaward?
A fixed-fee, or fixed-price subaward includes a scope of work (SOW) and a payment schedule instead of a detailed budget, with established deliverables or milestones. Once a milestone is met or a deliverable is received and accepted by the pass-through entity (FAU), the subrecipient may invoice for the corresponding amount due. Since a deliverable is required to obtain payment even if the cost to meet the deliverable exceeds the agreed-upon rate, the subrecipient bears the risk associated risk with this type of agreement. Payments are not tied to actual expenses or costs incurred and any residual balance remains with the subrecipient institution. However, the subrecipient must certify in writing (Certificate of Completion) to the PTE at the end of the award that the project, activity, or service was completed. For most fixed price agreements, this includes a statement that personnel service was received, or a product was delivered, as specified in the scope of work. If the required deliverables were not carried out, the amount of the subaward must be adjusted, as per Uniform Guidance 2 CFR 200.201(b)(3) or other applicable regulations.
The first deliverable/milestone may be established as full execution of the subaward under certain circumstances when advance payment is necessary to ensure timely performance of the work or the subrecipient is identified as “high risk”.
A cost-reimbursable subaward is used to pay for actual expenses incurred in the performance of the statement of work (SOW). The expenses must be allowable, allocable, and reasonable. The subrecipient will invoice, typically monthly or quarterly, for expenses incurred on the subaward project. Cost reimbursable agreements include a detailed line-item budget with a not-to-exceed amount, which the subrecipient must follow closely depending on the terms of the agreement. The risk associated with this type of agreement is typically borne by the passthrough entity (PTE), as there is no guarantee of an outcome or deliverable. In a cost reimbursable subaward agreement, any funds remaining at the end of the project cannot be invoiced by the subrecipient.
How is the Type of Outgoing Subaward Determined?
The subaward administrator will determine which type of subaward to issue based on varying factors including sponsor regulations, project type, entity preference (if possible), and other pertinent criteria. The subaward administrator will work with the Office of Research Accounting to ensure all appropriate invoicing terms and conditions are included.
What is a SAM Status Check, Visual Compliance Check, and Risk Assessment?
A SAM status check, Visual Compliance check and Risk Assessment is conducted on each subrecipient entity who will be collaborating with FAU to mitigate risk in carrying out project objectives, complying with regulations, and expending funds. The System for Award Management (SAM), is an official website for the U.S. Government. All U.S. entities seeking to collaborate with FAU must be registered in SAM and must not be debarred, suspended, or showing delinquent federal debt.
Visual Compliance checks are conducted on the principal investigator (PI) and any other listed personnel on the project at the subrecipient institution to ensure the safety and security of the sponsored research project and all participants.
A Risk Assessment is conducted by FAU in determining the level of monitoring required under a subaward. The assessment includes audit information, threshold questions, institution questions, project questions, and other considerations. The subaward administrator will work with the Office of Research Accounting to ensure all subawards are being appropriately set-up and monitored.
How Long Does it Take to Issue an Outgoing Subaward?
Due to the complexity and uniqueness of each subaward, the timeline to execution may vary. Subawards require correspondence between the technical and administrative representatives at the subrecipient institution and in some cases, the prime sponsor. The requirements for each subrecipient vary depending on the prime award agreement, the scope of work, and the type of entity. Please view the Subaward Workflow Chart
for a comprehensive understanding of the process for issuing subawards.
Is the Subaward Period of Performance (PoP) always the Same as the Prime Award’s PoP?
No. The subaward period of performance (PoP) must fall within the period of performance of the prime award, however it is often different. For instance, the subrecipient’s work may not be required until year two of the project and therefore, the subaward would have a later start date than the prime award. In some cases, reports or deliverables will need to be finalized prior to the pass-through entity’s end date so the subaward may have an earlier end date than the prime award.
Are there Subaward Templates that Could be Used to Expedite the Process?
Yes. FAU is a member institution of the Federal Demonstration Partnership (FDP), an association of federal agencies, academic research institutions, and research policy organizations that work to streamline the administration of federally sponsored research. The FDP provides subaward templates designed to expedite and streamline federal subaward review. More information may be found here: https://thefdp.org/default/subaward-forms/For subaward agreements issued under prime awards from sponsors other than the federal government, prime awards governed by the FAR, or prime awards with additional compliance requirements, the Office of Sponsored Programs (OSP) will use FAU templated subaward agreements. These templates include terms & conditions that are conforming to FAU as a state of Florida institution of higher education and can be issued on federal flow-thru subaward projects, cost-reimbursable non-federal flow-thru subaward projects, or fixed-price subawards.
Can Subawards be Issued to Foreign Entities and Do They Take Longer to Process?
Yes, a subrecipient on a prime award may be a foreign entity. In these cases, the Office of Sponsored Programs will work together with the foreign subrecipient to collect all required compliances and documentation. There are special considerations when issuing a subaward to a foreign entity, such as the need for language translation, currency and exchange rate, banking and payment, variations in regulatory oversight, export control, and potential for liability for the University. Additionally, the foreign entity must certify their Internal Revenue Service (IRS) status by submitting Form W-8BEN, which is available through the FAU Controller’s Office. Due to these special considerations, processing time for a foreign subaward may be longer as compared to domestic entities.