SUBCONTRACTING

1. SUBCONTRACTING CReATE Presented by: Marcy Friedle, Grants Compliance Analyst

2. What Is a Subcontract? • Assigning to another party some obligation of an existing contract, for which FSU is still ultimately responsible • Used for research collaborations or in cases where FSU does not have the resources or expertise to perform the work internally • FSU generally requires bilateral agreements (i.e., signed by both parties) • A purchase order in which subcontractor is subject only to FSU’s purchasing terms and conditions may be allowed in limited cases

3. FSU Subcontract Team SRS GRANTS ADMINISTRATOR PRINCIPAL INVESTIGATOR SRS SUBCONTRACT SRAS SUBCONTRACT TEAM COORDINATOR

4. Basic Subcontracting Stages • Pre-Award/Proposal: SRS submits proposal on behalf of PI • Award: After prime award received, PI requests subcontract and works with SRS Subcontracts Coordinator to issue it • Post-Award: SRAS pays invoices and monitors subrecipient for compliance with A-133 audit requirements • Close-out

5. Pre-Award/Proposal Stage • Ideally, the PI will identify the need for a subcontract at the proposal stage • If > 50% of award being subcontracted out, approval from Vice President for Research required • Inclusion of subcontract in proposal budget that gets awarded as proposed should serve as sponsor approval, unless specific post-award approval or approval of the actual subcontract document is required • SRS will make subrecipientversus vendor determination in order to determine FSU’s correct indirect cost base

6. What is the difference between a subrecipient and a vendor? Why do we care?

7. Subrecipient Factors • Has responsibility for programmatic decision-making • Uses the funds to play an integral role in the contracted research program, as opposed to only providing goods or services to FSU • Performance is measured against the objectives of the award • Has responsibility to comply with all applicable federal program requirements

8. Vendor Factors • Provides the goods or services within its normal business operations • Provides similar goods or services to many different purchasers • Operates in a competitive environment • Is responsible ONLY for meeting requirements of contractual services to FSU, not integral to programmatic work

9. Subrecipient vs. Vendor • This determination will affect the calculation of indirect costs – only the first $25,000 of a subcontract with a subrecipientis included in MTDC base • The entire amount of a subcontract with a vendor is included in MTDC base • Result: Lower indirect costs for subcontracts > $25,000 when subcontractor is a subrecipient

10. Pre-Award/Proposal Stage PI obtains from proposed subcontractor: • Budget • Scope of Work • Commitment Letter • Other items as required by sponsor (e.g., biographical sketches) SRS Grants Compliance Analyst reviews budget for the following: • Mathematical accuracy • Compliance with sponsor’s requirements • To ensure that proposed subcontractor’s costs have been included in FSU’s proposal budget correctly (e.g., only the first $25,000 of each subcontract with a subrecipient included in MTDC base)

11. Award Stage – PI Responsibilities PI sends the following items to SRS Subcontracts Coordinator: Required: • Subcontract Request Form • Subcontractor’s Scope of Work and Budget • Subcontractor’s Contact Information • Schedule of Deliverables and Payments Other: • Special Certifications (e.g., human subjects, animal subjects) • Sponsored Research Exemption Request(s) • Cost/Price Analysis

12. Sponsored Research Exemptions • SRE – Travel • Applicable to subcontracts with out-of-state entities who are unable to agree to using Florida travel regulations, or with entities located in Florida who have their own travel policies • Available only for awards with non-state funds • SRE – Competitive Bidding • Required for any subcontract > $50,000 with a non-university subcontractor who is not named specifically in the prime award • Sponsored Research Exemptions are approved by Betty Southard, Office of Research Legal Counsel

13. Cost/Price Analysis • Required for any subcontract > $6,000 • Used to determine whether the rate being charged by the subcontractor is fair and reasonable • Check that the rate is comparable to the rate normally charged by the subcontractor or to the rate of others who do similar work • PI should complete the Cost and Price Analysis Worksheet and return to SRS Subcontracts Coordinator for approval

14. Cost/Price Analysis, cont. • Cost Analysis: Element-by-element examination of estimated costs to determine whether they are in line with what reasonably economical and efficient performance should cost • Use cost analysis in those situations where price analysis does not yield a fair and reasonable price • Price Analysis: Process of deciding if the price being charged for a product or service is fair and reasonable without examining specific cost calculations

15. Award Stage – SRS Responsibilities • SRS Subcontracts Coordinator will work with the PI and proposed subcontractor to develop the subcontract document • Information needed includes: • Subcontractor’s legal name, mailing address, FEID number • Contact information for various subcontractor parties (e.g., PI, administrative contact, financial contact) • Amount of subcontract (prime award modification may be required if budget is insufficient) • Subcontract beginning and ending dates (make sure subcontract dates are within prime award dates) • Subcontract type – cost reimbursable or fixed price (most subcontracts are cost reimbursable due to inability to define the product and/or the cost thereof)

16. Subcontract Document When drafting subcontract document, SRS Subcontracts Coordinator confirms the following: • Agency approval received, if required • Award budget modification completed, if required • Sponsored research exemption approval(s) received, if required • Cost/price analysis received, if required • Flow-down clauses included, as required by prime award • Invoicing, technical and financial reporting requirements (normally, same as requirements of FSU) • CFDA title and number, award name, name of sponsor, and applicable compliance requirements, if Federal funds

17. Subcontract Document, cont. • SRS Subcontracts Coordinator requests PI’s approval of final subcontract document • SRS Subcontracts Coordinator sends final document to subcontractor, providing any clarification and negotiating any terms, as needed • Subcontractor signs and returns document for execution • Document signed internally and returned to subcontractor • Subcontract encumbered in OMNI

18. Post-Award Stage – SRAS Responsibilities • Verify that certification on invoice has been signed by authorized official of subcontractor • Compare actual costs to subcontractor budget • Verify completeness and mathematical accuracy of invoice • Determine that: • costs are allowable • sum of current invoice amount and amounts of previous invoices is within subcontract ceiling • period covered by invoice is within subcontract dates • Forward invoice to PI for review and approval • When signed invoice received back from PI, process invoice for payment and reduce encumbrance accordingly

19. Post-Award Stage – PI Responsibilities • Review progress reports and other communications to ascertain that work is being conducted in a timely manner • Conduct site visit, if warranted • Use other means, as necessary, to provide reasonable assurance that subrecipientadministering funds in compliance with laws and provisions of subcontract and that performance goals are being achieved • Review costs to determine appropriateness and reasonableness in relation to work performed • Sign invoice certifying that work being billed has been satisfactorily performed • Return invoice to SRAS

20. Post-Award Stage – Subcontract Amendments • PI must contact the SRS Subcontracts Coordinator to request an amendment to an existing subcontract • Reasons for amendments include changes to any of the following: • subcontract ending dates (e.g., NCTE) • scope of work • deliverables • funding (increase or decrease) • prime award terms

21. Close-out Stage – SRAS Responsibilities • Confirm subcontractor’s submission of final invoice • Ensure final deliverables have been received prior to approving payment • Complete disposition of property • Obtain statement of inventions and any other required reports per the terms and conditions of the subcontract

22. SubrecipientMonitoring • Annual monitoring for compliance with A-133 audit requirements • Required for subrecipients who receive $500,000 or more in Federal awards during a fiscal year • SRAS performs various procedures to ensure that subrecipients have met the audit requirements in A-133 • Annual Subrecipient Audit Verification • Subrecipient Site Visits/Further Review • Final Report on Monitoring Activities

23. Contact Juel Kamke, SRS Subcontracts Coordinator E-mail: jkamke@fsu.edu Phone: (850) 644-8654 Fax: (850) 644-1464 Address: 874 Traditions Way, SSB 3rd Floor Tallahassee, FL 32306-4166 www.research.fsu.edu/contractsgrants/intro.html • Overview of Procedures • Subrecipient vs. Vendor • Subrecipient Monitoring Policy • Forms • Request for New Subcontract or Amendment to Existing Subcontract • Subcontract Attachments • Subcontractor Contact Information • Formats for Scope of Work and Budget • Schedule of Deliverables and Invoicing • Cost/Price Analysis Worksheet and Explanation • Sponsored Research Exemption Request Form

24. General Policies and Procedures/Procurement of Serviceswww.research.fsu.edu/contractsgrants/intro.html

25. Questions?