Subaward

A subaward (or subcontract or subagreement) provides pass-through funds to a lower-tier entity.  We would issue a subaward when MSU receives an award and enlists another entity to complete a specific component or share responsibilities for the project’s design, conduct, and/or reporting.

Additional OSP review is needed if the subcontract budget is more than 50% of the total project budget.  

What F&A rate should the subrecipient use?

• If the sponsor has not restricted F&A in any way, use the subrecipient’s federally negotiated indirect cost rate and obtain a copy of that agreement (NICRA).
• Subrecipients who do not have a federally negotiated F&A Rate Agreement, may elect to charge a de minimis F&A rate of 10% of modified total direct cost (MTDC) if allowed by the prime.  If the subrecipient elects to charge the 10% MTDC rate, the methodology must be used consistently for all of their Federal awards.
• If the sponsor has restricted F&A, the subrecipient must follow the guidelines set forth by the sponsor.

Where do I include the subaward in the budget?

When preparing MSU’s budget that includes a subaward, use the line-item for Subawards/Consortium/Contractual costs. The line item may not be exclusive to subawards and may include consultants and price quotes from vendors.

What documents does MSU need from the Subrecipient?

At proposal stage:

• Budget (cannot contain fee or profit unless sponsor specifically allows in writing)
• Budget Justification
• Scope of Work
• Signed Subrecipient Commitment Form
  We have recently joined the FDP Expanded Clearinghouse. For additional information regarding the Subrecipient Commitment Form and our FDP participation, please expand the link below.
  Subrecipient Commitment Form Details

  If known at the time of proposal submission, the intent to enter into a subaward arrangement should be disclosed and approved by the organization (subrecipient) who will be performing the work needed for the project. To capture this approval, a signed MSU Subrecipient Commitment form should be provided for each subrecipient along with a description of the work to be performed, budget and budget justification (at a minimum).

  MSU has recently joined the FDP Expanded Clearinghouse Project. The idea behind this project is to utilize a central online repository of University information to reduce time and resources previously spent sending and collecting subaward entity information at proposal stage. With our participation, we will now only collect project specific information from the Universities that are participating in this initiative. Please visit the FDP's Participating Organizations webpage to see all participating institutions. Click here for template language that can be used if you receive a subrecipient monitoring form from an institution who is also participating in the Expanded Clearinghouse. It is anticipated that in the future, this will be expanded to all FDP organizations to reduce burden.

  As you will see in the commitment form, FDP Expanded Clearinghouse participants do not have to fill out Section B-Certifications. Additionally, these institutions can send a Letter of Intent in place of the Subrecipient Commitment Form that states the project specific information needed. In contrast, if MSU is the subrecipient and the Direct Sponsor is an Expanded Clearinghouse participant, we can use a Letter of Intent (Letter of Intent example) or fill out their project specific informational sheet.

  See the OSP's Subcontract Q&A webpage for additional information on subawards.

• Biographical Sketch – for senior personnel as required by sponsor
• Current and Pending Support – for senior personnel as required by sponsor
• Any other documentation required by sponsor

At award phase:

• Indirect Cost Agreement (NICRA)
• Single Audit as required by the Uniform Guidance, or similar financial audit/financial reports
• IRB approval - if project involves human subjects (Please contact MSU’s IRB Compliance Office for how to handle a subrecipient that doesn’t currently have a Federal Wide Assurance or an IRB compliance office.)
• Any other documentation required by sponsor

What is FDP?

FDP stands for Federal Demonstration Partnership, a cooperative endeavor to streamline agreements between government, universities, and industry partners.  Thanks to this partnership, subaward processing for FDP members is much faster because members agree to use a set of standardized terms and conditions.  At MSU, CGA will process subawards that fall under FDP and OSP or Business Connect will process all other subawards.