Under 2 CFR §200.92, Subaward (also referred to as subgrant if the prime Award is a Grant, subcontract if the prime Award is a Contract, or subagreement) means a formal, secondary agreement between the University and a qualified organization for the performance of a substantive portion of the program funded under an Award. There is often considerable confusion at the Proposal stage whether to treat a collaborator included in the SMU Budget as a Subcontractor, Contractor (Vendor), or Consultant. Please discuss this issue with your Grant Management Specialist (GMS). IDC rates apply only to the first $25,000 of a Subcontract, but applied to the total cost of goods and services provided by Contractors and Consultants. An incorrect determination may negatively affect the available dollars upon receipt of an Award. Additionally, Subcontractors that are not included in an original proposed Budget often require prior approval of the Sponsor before the project is awarded, which will delay the release of the Subcontract. 2 CFR §200.330, has identified the characteristics in the chart below to help determine if an participating organization is a subcontractor or vendor.
- Performs a substantive portion of the proposed Statement of Work incorporated into the Prime Contract.
- Has responsibility for internal programmatic decision-making and design.
- Is responsible for assisting the Pass-Through Entity (PTE) in meeting the goals of the project.
- Is responsible for adhering to applicable Federal programmatic compliance requirements.
- Retains Intellectual Property and Copyright to the work produced by the Subcontractor’s personnel.
- Provides similar goods and services to multiple customers as part of their routine business operations.
- Competes for customers with other like providers.
- Does not retain Intellectual Property or Copyright to the deliverables
- Cost Sharing is not required of a Conractor.
- Joint authorship of publications and Intellectual Property rights are not sought by a Contractor.
- The general terms of the Prime Contract do not flow down to the Contractor.
Contract Management Specialist (CMS) Role:
- The CMS will negotiate or draft the agreement according to documents received from GMS, Principal Investigator (PI) / Project Director (PD), Department, or Sponsor/Agency.
- The CMS will send agreement to third party for review and execution.
- If the third party is required to have insurance, the CMS will request the Certificate of Insurance (COI) during Step 2.
- After the CMS receives the partially executed agreement, the CMS will route for internal signatures via DocuSign.
Subrecipient Monitoring and Risk Assessment
A risk assessment is performed prior to the issuance of a Subaward or amendment to a Subaward. The purpose of the assessment is to evaluate each Subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the Subaward. Each Subrecipient is given an overall risk rating of Low to High. For purposes of determining the appropriate Subrecipient monitoring, the CMS will complete the Risk Assessment Questionnaire (RAQ) or the Continuation Assessment (CAT).
If deemed necessary, after review of the risk assessment, entities falling into the high range based on a list of factors outlined in the RAQ, may be required to provide additional technical and/or financial reporting throughout the course of the project period. Examples of High Risk Factors are:
If the Subrecipient issues cannot be resolved, the Associate Vice President of Integrity and Operations will evaluate if further actions such as; withholding payments, performing an audit or site visit, and termination of the Subaward is warranted.