Subaward Policy

EFFECTIVE DATE: May 1, 2009 |LAST UPDATED: August 29, 2016 | Policy Section: sponsored-research

Responsible Executive

Jeffrey Friedland

Responsible Office

Office of Research and Project Administration

Contact

Jeffrey Friedland, jfried@princeton.edu or (609) 258-3090

I. Policy StatementBACK TO TOP

As the prime recipient of a sponsored program or program award, the University is accountable to the federal or non-federal sponsor for the subrecipient’s actions with respect to compliance with Office of Management and Budget Cost Principles, 2 CFR 200 and administrative compliance matters. Therefore, the University must monitor the subrecipients' activities in order to provide reasonable assurance that subrecipients administer subaward funding in compliance with sponsor requirements.

II. Who is Affected by this PolicyBACK TO TOP

This policy applies to all sponsored projects and programs. It should be understood by Principal Investigators (PIs), Grant Managers, Department Managers, Department Chairs, Sponsored Research Accounting (SRA), and the Office of Research and Project Administration (ORPA).

III. Definitions

Pass-through entity - In accordance with Office of Management and Budget Uniform Guidance, a pass-through entity is a non-federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.

Subaward -In accordance with Office of Management and Budget Uniform Guidance, a Subaward is an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor 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 the pass-through entity considers a contract.

Subrecipient – In accordance with Office of Management and Budget Uniform Guidance, a Subrecipient is a non‐Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subreceipient may also be a recipient of other Federal awards directly from a Federal awarding agency.

Contract - In accordance with the Office of Management and Budget Uniform Guidance, a Contract is 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 in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward.

Contractor - In accordance with the Office of Management and Budget Uniform Guidance, a Contractor is an entity that receives a contract as defined in Section 200.22 Contract.

IV. PolicyBACK TO TOP

The University follows the requirements found in Office of Management and Budget Uniform Guidance, to distinguish subawards from other procurement actions. In determining whether an agreement between the University and another non-Federal entity cast the latter as a subrecipient or contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed below may not be present in all cases, and the University must use judgement in classifying each agreement as a subaward or a procurement contract.

Characteristics which support the classification of the non-Federal entity as a subrecipient
include when the non-Federal entity:

  1. Determines who is eligible to receive what 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

Characteristics indicative of a procurement relationship between the non-Federal entity and a Contractor are when the contractor:

  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 appropriate classification of a transaction as a subaward or other procurement action at the time it is proposed and funded is essential for ensuring proper accounting for costs and compliance requirements. Misclassification may result in delays in processing and inaccurate calculation of sponsored award costs, which may result in insufficient award funding available to the University’s PI.

Subawards issued by the University must be initiated, monitored, modified, and closed by ORPA when the subaward is issued under an externally-funded sponsored project or program. The University has the responsibility throughout the lifetime of the subaward agreement to monitor the activities of subrecipients in accordance with the terms and conditions of the prime sponsored award. The PI is responsible for the management and administration of the subaward in accordance with the sponsored award and University policy.

Contractor relationships may be initiated and monitored directly by the Department and the Purchasing Department.

V. Procedures BACK TO TOP

VI. Forms BACK TO TOP

VII. Contact Roles and Responsibilities BACK TO TOP

Department Administrator Determines contractor or subrecipient relationship
Principal Investigator Determines the need for third party participation in sponsored project or program
ORPA Determines contractor or subrecipient relationship

VIII. Update Log BACK TO TOP

5/1/2009

Approved

10/21/2011

Updated hyperlinks

4/24/2012

Reorganized sections to convert to University-approved policy template without alteration to policy content

8/29/16

Updated in accordance with OMB Uniform Guidance regulations.


 

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