Subawards

This section will consider the subaward process from start to finish and address the following macro questions:

  • What is a subaward?  When do you need a subaward?
  • What is the difference between subawardees, purchased service providers/vendor organizations, and consultants?
  • The PI’s proposal contains a subaward proposal. What do I do?
  • When is sponsor approval needed? How is a subaward developed?
  • How is a subaward managed?

What is a Subaward? When do you need a Subaward?

A subaward is a document between the award recipient and a secondary institution.  It contains the work specifications, approved budget, and the terms and conditions under which the work is to be accomplished.

A subaward is issued when a third party organization is needed to perform a scientific or programmatic portion of a (Harvard) sponsored project.

The awarding agency holds the award recipient responsible for the subaward’s proposal of work and its outcomes. Accordingly, the award recipient assumes the role of the sponsor/awarding agency with its subaward.

Various types of subawards are listed below. While all may be considered “subawards,” each has particular terms and conditions that reflect the terms and conditions of the prime award.

  • Subaward
  • Subgrant
  • Collaboration Agreement
  • Consortium Agreement
  • Subcontract

What is the difference between the Subaward process and the Procurement of Services?

A subawardee is an organization responsible for managing the technical and administrative aspects of a scope of work it is assigned to perform and making progress reports to the Harvard PI, as necessary.

A service provider is an organization/vendor from which Harvard procures consulting, technical services such as lab work, film editing etc., and/or general support services. The work does not involve scientific and/or programmatic collaboration. It is more like a buyer and seller relationship.

Characteristics of Service Provision Arrangements:

  • Organizations/companies rendering such services generally do so on a “work for hire” basis (assign all tangible and intangible property rights to Harvard).
  • These costs are generally placed in the “Other direct” cost budget category of the budget and will still carry their share of indirect costs.
  • These types of costs are typically charged to a services purchased object code in the general ledger and while they may sometimes colloquially be referred to as subawards or subscontracts; they are not considered subawards from a sponsored projects perspective.
  • A contract for purchased services does not generally require the inclusion (flow down) of the terms and conditions contained in Harvard’s prime award.

Contact your SPA representative (HMS/HSDM) (HSPH) for assistance with contract development.

What are the similarities and differences between a Subaward and the acquisition of Consultant Services?

A consultant is an individual (including individuals operating under a business name), usually an expert, working on a project as an independent contractor and therefore is not under the direction of Harvard and/or the Principal Investigator.

A subawardee is an organization that will carry out a portion of the project independently under the Subawardee’s Project Director using the resources and facilities of his/her place of employment but reports progress regularly to the Harvard PI.

Characteristics of a Consulting Arrangement:

  • Individuals generally render services on a “work for hire” basis (assign all tangible and intangible property rights to Harvard).
  • A contract for consultant services does not generally require the inclusion (flow down) of the terms and conditions contained in Harvard’s prime award.
  • Consultants are retained in accordance with Harvard’s Independent Contractor Policy. Under this standard, Harvard would not direct or retain control over a consultant. An employer-employee relationship exists when the business has a great deal of control over the work, including providing regular supervision, decision-making and guidance. In this situation, the person should be classified as an employee.
  • HSPH’s Independent Contractor Policy Procedures provides additional information for its faculty and staff.
  • Consultants  must agree to abide by the University’s Intellectual Property policiesby signing a Participation Agreement

The Application/Proposal should include a Subaward Proposal. What do I do?

The strength of the overall proposal is affected by the strength of the subawardee’s proposal. As a start, answer the following questions:

  • Who will the subawardee be?
  • What work will be subawarded?
  • When will the work be done?
  • Where will the work be done?
  • Why is the work being subawarded?
  • How will the subaward be written?

For additional guidance, see:

When is your sponsor’s prior written approval needed to issue or modify a Subaward?

Circumstances include but are not limited to those listed below. More information may be found in the Prior Approvals subsection of this Awards Management tab.

  • Depending on the sponsor, you may need approval if the subawardee was not included in original proposal.
  • Subaward will be issued to a foreign institution. For NIH, regardless if the subaward was included in the proposal or not, approval for each subawardee must be specified by name in the Award notice.
  • Proposed subaward is result of a change in scope or objectives for the overall project.
  • For NIH and some other sponsors, a change in subawardee’s personnel designated as “key personnel” in the Harvard’s Award notice.

Process:

  • Formal request for sponsor approval of a new subaward should include a justification, scope of work, budget, and biosketch of Subaward PI.  For NIH, active Other Support, biosketch and, if applicable, certification of human subjects training for Subaward PI and any Subaward Key Personnel.
  • SPA reviews and provides authorized institutional approval.
  • Request is submitted to sponsor.
  • Subaward is issued following receipt of sponsor approval.

How is a Subaward developed?

The subaward preparation process is carried out by SPA in consultation with the PI, Department Administrators, and as needed, other offices involved in policy and regulatory matters such Human and Animal Subjects, Biohazards or Stem Cell Research.

What does SPA staff need to assess or prepare in order to issue a subaward?

  • The mandatory terms and conditions of the prime award to be passed down to the subawardee (the “flow-down” clauses).
  • The standard Federal Demonstration Project (FDP) subaward template if applicable.  The Master Agreement in place between Harvard and specific affiliated Hospitals, if applicable.
  • Any additional or customized terms based on the requirements of the prime award and/or the work, the location of the work, capacity of the subawardee, and/or the assessment of relevant risks to be incorporated into the subaward.
  • The final scope of work and budget from the department.
  • Any special considerations that the PI may require such as stipulations regarding rights in intellectual property, his/her prior review of subaward publications, special technical reporting, etc.
  • Verification that the period of performance of the subaward falls within the prime award period.
  • Other compliance related subaward information and/or documentation e.g., IRB or Animal protocols; data security.
  • PI’s concurrence with the terms.

How is a Subaward Managed?

At the School level: SPA and Department Procedures

The PI has primary responsibility for monitoring subawardees to ensure compliance with federal regulations and both prime and subaward terms and conditions. Department administrators assist PIs in discharging their responsibilities.

The frequency and scope of departmental monitoring procedures of each subaward should be determined jointly by the responsible PI and department administrators.  In consultation with your SPA contact, as needed, consider the following:

Collection and Review of Technical Performance Reports on a timely basis
  • PI assesses and documents any unusual or unforeseen items or issues.
  • Retains notes in the department’s files for ready access by regulators.
  •  In some cases subaward terms may require specified deliverables in addition to, or in lieu of, technical reports. This is especially relevant under a “fixed price” type of subaward.
Approval of Invoices and Expenses-to-Budget for cost-reimbursement subaward
  • Administrator compares expenses to budget.
  • Requests explanations of unusual, miscellaneous, apparently excessive or other charges invoiced by the subawardee.
  • Evidence of the regular review of invoices by both the PI and the department grant administrator should be in place and retained on file.  (“Evidence” can be in the form of PI initials or authorizing signature on invoices, e-mail communications, notes of meetings with the department grant administrator, etc.
On-site Visits- (a discretionary monitoring procedure)
  • PI and or others to evaluate both compliance with the scientific objectives of the project and the appropriateness of the subawardees administrative systems, processes, and charges.
  • Documented via correspondence, meeting notes, trip reports, etc. and retained on file
Amendments and Close Out procedures with SPA and OSP
  • Administrator coordinates efforts with central offices and the PI.
  • HSPH is piloting a unilateral amendments process  with Partners, DFCI, BIDMC and CHB.  Please see the detailed process for more information.

 

At the University and School level: OSP and SPA procedures

OSP and the Longwood SPA offices are responsible for ensuring that University -wide subawardee monitoring procedures are compliant with federal and other regulations, and consistent with sound business practices.

Annually, OSP and SPA review all active subawards for which monitoring is mandated and inquire further into those that are deemed to require closer scrutiny in light of risk factors such as:

  • Size of the subawardee’s award or the award size relative to the subawardee’s sponsored research portfolio.
  • Percentage of Harvard’s award passed through: the larger the percentage of program award passed through, the greater the need for subawardee monitoring.
  • Award complexity, sensitivity of the work and/or extensiveness of the governing regulations.
  • Harvard’s prior experience with the subawardee, e.g. a new subawardee, an inexperienced subawardee, a history of non-compliance.
  • Subawardee location, for-profit status, or remoteness from Harvard may mandate more oversight, foreign and for-profit subawardees may dictate a greater degree of review, evaluation and attention.

See Subawardee Risk Factors for more complete listing of factors that are taken into consideration when identifying Subawardees for appropriate monitoring actions.

OSP and SPA will work with PIs and department administrators to establish channels of communication with these subawardees.

  • Administrators at such subawardees sites may be asked to complete a questionnaire that can be found in the Generic Follow Up Letter (to be filed at Harvard) documenting their internal controls and grants management procedures.
  • In addition, subawardees that are not subject to A-133 may be asked to submit supporting documentation in the form of copies of original receipts, payroll records, audits, etc. if circumstances warrant.

Additional Monitoring/Actions may include but are not limited to: 

Audits
  • Discretionary audits of subawardees are an acceptable monitoring procedure under federal regulations, and all of the University’s cost-reimbursement subawardee agreements contain “right-to-audit” clauses.
  • Formal audits are performed infrequently so please consult with SPA prior to taking such action.
  • SPA will coordinate with Harvard’s Risk Management & Audit Services (RMAS) before initiating audits.
Review A-133 audit reports available on-line
  • The A-133 audit requirement applies to institutions that expend $500,000 or more of federal funds during the fiscal year. Report may be viewed in the Federal Audit Clearinghouse (FAC) database.
  • This web site provides evidence to verify that the subawardee has completed an A-133 audit and to assess the presence of any audit findings.
  • In cases of continued inability or unwillingness of a subawardee to have the required audits, OSP and SPA may consider taking appropriate sanctions.
Subawardees not subject to A-133, including foreign and for-profit entities
  • Because A-133 does not apply to foreign or for-profit subawardees, Harvard may establish its own requirements, as necessary, to ensure compliance by such subawardees.