Guide section list
Comprehensive reference guide
Subawards
Subawards: Subrecipient and contractor determination
Subpart A: Acronyms and Definitions /
Subpart D: Post Federal Award Requirements
Definitions Accordion Closed
200.92 Subaward
Subaward means an award provided by the University to a subrecipient for the subrecipient to carry out part of a Federal award. It does not include payments to a contractor (“vendor”) or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that is considered or entitled a subcontract.
200.93 Subrecipient
Subrecipient means a non-Federal entity that receives a subaward from a University to carry out part of a Federal program, but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from an awarding agency.
200.22 Contract
Contract means a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used here does not include a legal instrument, even if it is considered a contract, when the substance of the transaction meets the definition of a Federal award or subaward
200.23 Contractor
Contractor means an entity that receives a contract as defined in 200.22 Contract.
Text Accordion Closed
200.330 Subrecipient and contractor determinations
NAU may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor. Therefore, the University must make case-by-case determinations whether each agreement it makes for the disbursement of Federal funds casts the party receiving the funds in the role of a subrecipient or a contractor.
Subrecipients. A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the subrecipient:
(1) Determines who is eligible to receive Federal assistance;
(2) Has its performance measured in relation to whether objectives of a Federal program were met;
(3) Has responsibility for programmatic decision making;
(4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
(5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.
Contractors. A contract is for the purpose of obtaining goods and services for the University’s own use and creates a procurement relationship with the contractor. Characteristics indicative of a procurement relationship between the University and a contractor are when the contractor receiving the Federal funds:
(1) Provides the goods and services within normal business operations;
(2) Provides similar goods or services to many different purchasers;
(3) Normally operates in a competitive environment;
(4) Provides goods or services that are ancillary to the operation of the Federal program; and
(5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons.
The substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the University must use judgment in classifying each agreement as a subaward or a procurement contract.
Explanation Accordion Closed
The Uniform Guidance requires increased documentation of the subrecipient at proposal, increases emphasis on risk analysis when issuing a subaward, and increased scrutiny during the period of performance.
Awarding agencies may require recipients to comply with additional guidance to support these determinations.
Application Accordion Closed
Agency prior written approval is required if the subaward is not included in the awarded budget or if the need for a subaward is determined after award.
Ensure that the process and rationale for deciding to issue either a subaward (subrecipient agreement) or subcontract (vendor agreement) is well documented. This is particularly important when sole sourcing.
Until further notice, follow current NAU policies and procedures.
Comments on agency implementation policies/procedures Accordion Closed
No updates at this time.
Related NAU policies/procedures: Accordion Closed
- OGCS Request to Issue a Subcontract
- OGCS Subrecipient Commitment Form
- OGCS Fair and Reasonable Cost Analysis Form – Subawards under Federal Contracts
- OGCS Audit Certification
- PUR 303-04: Independent Contractors and Consultants
Subawards: Requirements for pass-through entities
Subpart D: Post Federal Award Requirements
Text Accordion Closed
200.331 Requirements for pass-through entities
The University must ensure that every subaward is clearly identified to the subrecipient as a subaward and include the following information at the time of the subaward. If any of these data elements change, the changes must be identified in a subsequent subaward modification.
Required information includes:
(1) Federal Award Identification (including if the de minimis rate is charged).
(2) All requirements imposed by the University entity on the subrecipient so that the award is used in accordance with Federal statutes, regulations and the terms and conditions of the award.
(3) Any additional requirements that the University imposes on the subrecipient in order to meet its own responsibility to the Federal awarding agency, including identification of any required financial and performance reports;
(4) An approved Federally recognized indirect cost rate negotiated between the subrecipient and the Federal government or, if no such rate exists, either a rate negotiated between the University and the subrecipient or a de minimis indirect cost rate of 10%.
(5) A requirement that the subrecipient permit the University and auditors to have access to their records and financial statements as necessary to ensure compliance with the requirements of this section.
(6) Appropriate terms and conditions concerning closeout of the subaward.
Explanation Accordion Closed
A subrecipient budget, scope of work, and justification should be included in the proposal.
Ensure that the all of the required information about the prime award and the expectations for the subaward are included in the proposed and executed agreement.
Ensure that the process and rationale for determining the indirect cost rate is well documented. This particularly important if offering a de minimis rate or negotiating another rate with the prospective subrecipient.
If the subrecipient does not have a Federally negotiated indirect cost rate, then a “de minimus” rate of 10% should be used or a mutually acceptable rate negotiated.
If a Federal agency or program has a published, statutory F&A cap, then that rate should be used by NAU and any subrecipients.
Application Accordion Closed
A subrecipient budget, scope of work, and justification should be included in the proposal. If the subaward is not included in the awarded budget or if the need for a subaward is determined after award, then prior written approval from the funding agency is required.
Until further notice, follow current NAU policies and procedures.
Comments on agency implementation policies/procedures Accordion Closed
No updates at this time.
Related NAU policies/procedures Accordion Closed
- OGCS Request to Issue a Subcontract
- OGCS Subrecipient Commitment Form
- OGCS Fair and Reasonable Cost Analysis Form – Subawards under Federal Contracts
- OGCS Audit Certification
- PUR 303-04: Independent Contractors and Consultants
Subawards: Requirements for pass-through entities
Subpart D: Post Federal Award Requirements
Text Accordion Closed
200.331 Requirements for pass-through entities
The University must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring plan. The factors to be considered include:
- prior experience with the same or similar subawards
- results of previous audits
- new personnel or systems
- results of awarding agency monitoring.
Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in §200.207 Specific conditions.
Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Monitoring of the subrecipient must include:
- reviewing financial and programmatic reports
- ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award
- issuing a management decision for audit findings pertaining to the Federal award.
If the subrecipient is considered a higher risk, then the following monitoring tools may be useful to ensure accountability and compliance with project requirements and achievement of performance goals:
- training and technical assistance on project-related matters
- on-site reviews of the subrecipient’s operations
- engagement of audit services.
Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this Part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold of $750,000.
Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the University’s own records.
Consider taking enforcement action against noncompliant subrecipients.
Explanation Accordion Closed
A subrecipient budget, scope of work, and justification should be included in the proposal.
Develop a methodology for determining risk prior to issuing the subaward and monitoring performance during the period of performance.
Application Accordion Closed
Agency prior written approval is required if the subaward is not included in the awarded budget or if the need for a subaward is determined after award.
Until further notice, follow current NAU policies and procedures.
Comments on agency implementation policies/procedures Accordion Closed
No updates at this time.
Related NAU policies/procedures: Accordion Closed
- OGCS Request to Issue a Subcontract
- OGCS Subrecipient Commitment Form
- OGCS Fair and Reasonable Cost Analysis Form – Subawards under Federal Contracts
- OGCS Audit Certification
- PUR 303-04: Independent Contractors and Consultants
Subawards: Fixed amount awards
Subpart A: Acronyms and Definitions
Subpart C: Pre-Federal Award Requirements and Contents of Federal Awards Subpart D: Post Federal Award Requirements
Definitions Accordion Closed
200.45 Fixed Amount Awards
Fixed-amount award means a type of grant agreement under which the Federal awarding agency or University provides a specific level of support without regard to actual costs incurred under the Federal award.
Text Accordion Closed
200.332 Fixed Amount Awards
With prior written approval from the Federal awarding agency, the University may provide subawards based on fixed amounts up to the Simplified Acquisition Threshold ($150,000).
200.201 Use of grant agreements (including fixed amount awards, cooperative agreements, and contracts)
Fixed Amount Awards. The following conditions apply to fixed-amount awards:
(1) Payments are based on meeting specific requirements of the Federal award. Accountability is based on performance and results. Fixed-amount awards may be used if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount award with assurance that the subrecipient will realize no increment above actual cost.
(2) A fixed amount award cannot be used in programs which require mandatory cost sharing or match.
(3) The University must certify in writing to the Federal awarding agency or pass-through entity at the end of the award that the project or activity was completed or the level of effort was expended. If the required level of activity or effort was not carried out, the amount of the award must be adjusted.
(4) Periodic reports may be established for each award.
(5) Changes in principal investigator, project leader, project partner, or scope of effort must receive the prior written approval of the University.
Explanation Accordion Closed
With prior approval, fixed price subawards of up to $150,000, total of direct and indirect costs, are permissible under the Uniform Guidance. The use of fixed amount awards may be most appropriate for foreign subrecipients because the requirement to document and monitor accounting practices is eliminated in favor of measuring performance and results or for smaller organizations that require advanced payments in order to start work. In general, however, the use of fixed price awards is problematic because of the requirement to certify that the project was completed or that the budgeted level of effort was expended. Otherwise, the amount of the Federal award must be adjusted. This requirement is a significant departure from the requirements for fixed price contracts issued under the FAR because project evaluation is based on both process (expenditure of funds) and product (deliverables) and, effectively, no residuals are allowed.
Important! A fixed-amount award is not the same as a fixed-price contract issued under the FAR. Essentially, no residuals are allowed.
Application Accordion Closed
Agency prior written approval is required to issue a fixed-amount subaward.
Ensure that the scope of work and estimated costs for the fixed-amount subaward are justified in the University’s scope of work and included in the proposed budget.
Comments on agency implementation policies/procedures Accordion Closed
No updates at this time.
Related NAU policies/procedures: Accordion Closed
- OGCS Request to Issue a Subcontract
- OGCS Subrecipient Commitment Form
- OGCS Fair and Reasonable Cost Analysis Form – Subawards under Federal Contracts
- OGCS Audit Certification
- PUR 303-04: Independent Contractors and Consultants