Outgoing Subawards

Defining Subawards

Subawards transfer a portion of the programmatic work under a USC prime award to another institution or organization, a subrecipient. To qualify as a subaward, the subrecipient must have responsibility for programmatic decision making and measurable performance requirements related directly to the USC prime award. A subaward is written under the authority of the USC prime award and is consistent with the USC prime award’s terms and conditions (a grant, contract or cooperative agreement).

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Unsure if You Have a Subaward?

The USC Research Administration Navigator can help you review the working relationship, understand the differences between a subaward and a vendor contract, organize relevant information, and prepare questions for your next step.

The Navigator provides advisory and educational guidance. Official determinations and approvals remain with the appropriate USC office.

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Subaward Requirements

What a Subaward Includes

A subaward must include a clearly defined, intellectually significant Statement of Work (SOW) to be performed by the subrecipient. The subrecipient’s SOW is performed by its personnel, using its own facilities and resources and usually at the subrecipient’s site.

The subrecipient is responsible for adhering to the terms and conditions of the subaward, including those flowed down from the prime award. By doing so, the subrecipient is assuming creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling its SOW within their approved budget.

Who Is a Subrecipient?

A subrecipient is a non-USC entity that expends awards received from USC to independently carry out a significant portion of USC’s programmatic effort under a sponsored project.

The subrecipient may be another educational institution, an independent laboratory, a foundation, a for-profit corporation, a non-profit corporation or other organization, and may be a domestic or foreign entity. Generally, USC does not issue subawards to individuals. A subrecipient can also be referred to as a subcontractor or subawardee.

Subaward or Vendor Contract

When Should I Use a Subaward Versus a Vendor Contract?

Before entering into a relationship with another entity under a sponsored award in which the other entity will provide goods or services or substantive, programmatic work to USC, a determination must be made as to the nature of the legal relationship between USC and the other entity, which in turn will determine the type of agreement required to document the relationship.

This is a significant decision because it determines the allocation of responsibilities and influences the appropriate application of indirect cost rates.

In the case of a subaward, it is incumbent upon USC to ensure that a subrecipient conducts its portion of the programmatic work in compliance with all applicable terms and conditions of the sponsored award and project costs incurred by a subrecipient are reasonable and allowable.

A subaward is likely appropriate under the following circumstances:

The entity performing the statement of work will use its own facilities, employees and resources.
The entity performing the statement of work will contribute substantively to the scholarly and scientific conduct of the project and will have responsibility for programmatic decision making.
Performance is measured against whether the objectives of the sponsored program are met (e.g. technical progress or final reports).
The entity performing the statement of work will provide unique knowledge and expertise to the project and conduct their work independent of USC’s direct supervision or control with only general technical direction and coordination from USC.
The entity does not provide the same goods and services as identified in the statement of work to others as part of its normal business operations.

Contractor or Vendor

In the case of a contractor or vendor, USC will be purchasing goods or services. Typically, contractors are not bound to the full set of sponsor terms and conditions, and are subject to competitive bidding procurement practices, to assure that funds paid to contractors or vendors do not exceed fair market value.

A contractor is likely appropriate under the following circumstances:

The entity is providing the same goods or services to USC as it provides to others as part of its normal business operations.
The entity provides similar goods or services to many different customers.
The entity operates in a competitive environment to provide the types of goods or services to be procured.
The goods or services being provided are ancillary to the operation of the sponsored program.
The entity is not subject to the compliance of the sponsored program terms and conditions.