What Is a Subagreement?
According to Georgia Tech Policy 5.1, a subaward is "an award provided by the Institute to a Subrecipient for the Subrecipient to carry out part of the Institute’s Sponsored Award".
Pre-Award Stage
By making a proper determination at the proposal stage, the appropriate relationship can be established from the start. Relationships that are incorrectly identified at the proposal stage could have post-award financial impacts (i.e. indirect costs charged on the first $25k of the subaward vs. the full amount of vendor costs).
If requesting bids from Subrecipients: If a Subaward exceeding $ 2 million is issued under a government contract prime award, OSP must be in compliance with Public Law 87-653, the Truth in Negotiations Act (TINA). [The Public Law has been implemented in the United States Code of Federal Regulations 10 U.S.C. 2306a (Armed Forces) and 41 U.S.C. 254b (Public Contracts) and in the Federal Acquisition Regulation Part 15 and Clause No. 52.215-12.]
Subrecipients vs. Vendors vs. Consultants
The Determination Tool provides guidance in determining the appropriate type of relationship: subrecipient, vendor, or consultant.
There are two types of consulting agreements.
OSP handles consultant agreements where the consultant will be working directly on a specific project and their cost are directly charged to the project. These consultants work independently (not under direct supervision from GT employee) and provide their own resources (i.e. tools, equipment, workspace, personnel, etc.). The subaward team will check the prime award to determine if sponsor consent is required and, if required, obtain consent before award.
GIT Procurement handles Consultant Agreements where the consultant is used to augment GTRI’s staff by providing expertise in a subject area and are charged as an indirect cost. If you are hiring a consultant to add to your pool of knowledgeable resources (staff augmentation) then, the cost is not directly billed to the contract, but covered via overhead or other types of funds (e.g. fee). In this case, consent from the prime sponsor is not required.
Preparing the Statement of Work (SOW)
The SOW is a document that lists and describes all essential and technical requirements for the effort to be performed, including standards to be used to determine whether the requirements have been met. This document may include the following items where appropriate:
- Objective or purpose
- Period of performance
- A list of detailed work requirements
- Workload requirements
- Personnel requirements
- Resources (if any) to be furnished to the subcontractor
- Reporting requirement and/or other deliverables
Sole Source Justification
It is necessary to include documentation that you have obtained quotes from alternative vendors or completed a Sole Source Justification form. The PI is required to provide information of the technical competence of the sole source selection.
Budgeting Issues
Budget subrecipient and independent contractor relationships appropriately by applying Facilities & Administration (F&A) subrecipient costs to the first $25K of the award. Contractors are fully burdened. Consultants are burdened like materials and supplies, unlike subcontractors/subrecipients. The budget justification statement may serve as official documentation to clarify for sponsors any budget calculations for items such as staff salaries, special equipment, and subawards. See OSP's direct costs guidelines for additional budgeting details. Note: this only applies to Resident Instruction (RI) projects since GTRI calculates subawards differently.
Regarding the post-award stage, in addition to the budgeting guidelines above, researchers should obtain sponsor approval to proceed. Guidelines for sponsor consent are found in the research award.
Risk Assessment
PI/PDs and Unit Financial Officers share in the responsibility for monitoring subrecipients. Please refer to Policy 5.3 for the delegation of duties.
Next Steps
It is important that you read the terms of the award to determine the level of authorization needed prior to engaging subcontractors, even if they were originally proposed. Upon award, a request for a subaward should be made by the PD/PI or their designated team members. For more information, visit our Requesting a Subaward page.