Outgoing Subawards at Proposal Stage
Subawards transfer a portion of the programmatic work under a sponsored 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.
When USC submits a proposal with subawards, we are submitting scopes and budgets on behalf of another institution and USC must ensure that the authorized representative of the Subawardee Institution has approved the submission and the submission is consistent with sponsor guidelines. In order to ensure this, a Subaward Proposal Package is required for each named subawardee prior to submission of the Proposal.
Requirements for Subawards at Proposal Stage
A Subaward Proposal Package consists, at a minimum, of the below listed documents:
- Subaward Scope of Work (specific to the work being performed by the subrecipient).
- Subaward Budget
- Subaward Budget Justification
- Subawardee Letter of Commitment: This can consist of a letter or signed document from the subawardee institution signed by an authorized official of the subrecipient approving/endorsing the proposal or a complete and signed Subrecipient Certification Form signed by the authorized official of the subawardee institution.
- FCOI Confirmation (if PHS funding). This can be located on the FDP FCOI Clearinghouse or confirmed in the letter of commitment or can be confirmed in a letter of intent or on Subrecipient Certification Form.
- Any other documents required by the Solicitation from the Subawardee at Proposal Stage.
How Much Can a Subcontractor Charge for Indirect Costs?
It is critical to check and ensure that the F&A rate budgeted for Subawardees at proposal stage is correct as this can lead to delays later on in the process. Except if the Sponsor is subject to a reduced F&A rate, USC will honor the subrecipient’s approved indirect cost rate negotiated between the subrecipient and the federal government.
A federally negotiated rate agreement will be required at subaward stage to verify the accuracy of the rate. If no such rate exists, USC will approve indirect costs at the de minimis rate of 10% Modified Total Direct Costs for US institutions and 8% for International Institutions.
A subrecipient can voluntarily opt to forego F&A, but will need to document that they are choosing to forego their F&A voluntarily.
Can USC Issue a Subaward Before Receiving the Prime Award?
No. A subaward will not be issued prior to USC’s acceptance of an award from the prime sponsor. The University may not authorize a subrecipient to begin working without a fully executed subaward in place. Proposed subrecipients who commence work without a fully executed subaward do so at their own risk or at the risk of the school who authorized work to commence and have no assurance of payment from the Prime Award.
NIH Funding
Proposal Stage Requirements for Subawards off of NIH Funding
Prior to proposal submission with NIH funding, subawardees must fulfill several requirements. Firstly, they must confirm compliance with Financial Conflict of Interest (FCOI) regulations, ensuring transparency and integrity in research conduct. Additionally, for international subawardees, confirmation of compliance with NIH guidance NOT-OD-23-182 is necessary.
Can the USC PI also serve as PI on the Outgoing Subcontract?
The Principal Investigator (PI) on a Prime award cannot also serve as the PI on an incoming or outgoing subcontract due to a fundamental conflict of interest. As the Prime award PI, they are responsible for overseeing the subcontract, including approving invoices and deliverables to ensure compliance with the terms of the award.
If the same individual were also the PI of the subcontract, they would, in effect, be approving their own work and payments, undermining the necessary checks and balances in financial and programmatic oversight. This lack of independent review could compromise accountability, compliance, and the integrity of the award management process.
Financial Conflict of Interest (FCOI)
The HHS regulation 42 CFR Part 50 Subpart F , Promoting Objectivity in Research (FCOI regulation), establishes standards that provide a reasonable expectation that the design, conduct, or reporting of NIH-funded research (grants and cooperative agreements) will be free from bias resulting from any Investigator’s conflicting financial interest. NIH requires recipient institutions and their investigators to fully comply with all FCOI requirements.
If the Institution carries out the NIH-funded research through a subrecipient, the Institution must take reasonable steps to ensure that any subrecipient Investigator complies with FCOI requirements.
In order to ensure compliance please provide one of the following as part of your Subaward Package to confirm Subawardee Compliance:
- Letter of Commitment stating that the entity is FCOI compliant signed by an authorized rep of the Sub institution.
- Screen Shot of the institution in the FDP FCOI Clearinghouse .
- Completed Subaward Certification Form signed by an authorized rep of the Sub institution.
For more information about this policy, please feel free to review:
Requirements for International Subawards
The National Institutes of Health (NIH) have begun to implement new requirements for outgoing subawards, effective January 1st, as set forth in NOT-OD-23-182 .
The new policy requires that foreign subrecipients clearly commit (at time of proposal) to abide by all requirements set forth in the solicitation, including but not limited to, the requirement to provide the USC PI access to copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report, in alignment with the timing requirements for Research Performance Progress Report submission (but not less frequently than annually). In order to ensure compliance, PI’s and Research Administrators will need to take the following actions for any foreign subawards under NIH funding:
At Proposal Stage:
- A letter of commitment and/or a signed Subaward Certification Form signed by an authorized representative of the Subrecipient institution is required at the time of proposal for all named subrecipients. The Subaward Certification Form has been updated to collect the appropriate assurances in order to comply with the new NIH policy.
For all Letters of Commitment provided by foreign subrecipients, please ensure that a statement including the following is included in order to ensure compliance with the new NIH policy.
“Subrecipient has carefully reviewed the requirements set forth in the solicitation and is aware of these requirements and is willing to abide by all requirements, should an award be issued.
The Subrecipient understands that they shall be expected, not less frequently than once per year and/or upon request of the PTE or Prime Sponsor to provide access to copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report to the primary recipient, in alignment with the timing requirements for Research Performance Progress Report submission but with a frequency of no less than once per year.”