Overview information about subawards including details of choosing a subrecipient and what should be included in the proposal and budget.
Sponsored awards made to Cornell are usually conducted within the physical boundaries of the university. On occasion, a portion of the required effort may be provided by one or more other institutions or companies (third parties) who are made responsible for a discrete part of the project. When the portion of effort to be performed by a third party constitutes a substantive component of the “science” of the sponsored award the third party is required to provide the resources and personnel necessary to conduct that portion of the work as an independent contractor.
Costs normally associated with third-party effort could include any or all of the following:
- Employee benefits
- Materials and supplies
- Other direct costs
- Facilities and administrative costs (indirect costs)
Note: In the for-profit sector, it is common to include costs such as labor overhead, material overhead, general and administrative expense, and a profit or fee.
If a sponsored award involves issuing subawards for physical construction of facilities or renovation of existing facilities, the Facilities Services Division, Facilities Contracts Department (607) 255-3982 must be contacted prior to submission of the proposal to ensure compliance with the Board of Trustees and university administrative procedures and to ensure that necessary approvals are obtained.
The Office of Sponsored Programs (OSP) is available to assist departments in these procedures and would be involved in assisting Facilities Contracts in the preparation of any subaward. Contact your GCO if you have questions or need assistance related to the inclusion of a subaward in your proposal.
- Subaward agreement: The document that OSP generates to formalize a third party relationship with another organization to perform substantive work based upon an award made to Cornell.
- Subrecipient: The third party performing the effort under a subaward agreement.
What is NOT a Subaward
Activities performed by a third party that do not constitute a substantive portion of the work effort of the project, are not unique or may be obtained competitively in a commercial environment, or are not performed independently and with decisions making authority are not obtained using a subaward and should be contracted for using either a consulting agreement or a purchase order.
When such activities are performed by an individual under a sponsored award they are administered through a consulting agreement issued by Supply Management Services. A purchase order must be used when purchased services may involve an organizational entity. For example, a purchase order would be appropriate for the performance of repetitive tests or activities requiring little or no discretionary judgment on the part of the provider. In these instances, a consulting agreement or a purchase order may be issued through the normal Cornell Procurement process.
- Sponsor or peer-reviewed. If the subrecipient is specified in the proposal and the collaboration is funded, it is not necessary to comply with the procurement requirements for competitive bidding or sole source justification because the sponsor or peer review process already approved the selection.
- Non-sponsor or non-peer reviewed. It is the responsibility of the Cornell Principal Investigator (PI), along with OSP, to comply with procurement requirements of the sponsor in selecting a subrecipient. There are two methods of selecting a subrecipient: competitive bidding or sole source procurement. Competitive bidding is the preferred method of subrecipient selection. This method requires OSP, in conjunction with the PI, to solicit proposals from a number of sources and make a final selection of a subrecipient from those responding based on technical merit and cost objectives, normally the lowest price from a technically qualified respondent.
Sole source justification. When the procurement requires performance from a specific entity because services or expertise are unique or not available from other sources, the PI is required to provide sole source justification, identifying the need for the services and why the selected subrecipient is the only source available for the needed services.
Sole source selection is not justified simply by the fact that there has been an ongoing collaboration between the researchers and the potential subrecipient. It must be further justified with reasons for the unavailability of the services or expertise from other sources.
If a Cornell PI plans to include another institution in an upcoming proposal where such institution will be expected to perform a substantive portion of the effort, a number of documents must be obtained from the proposed subrecipient prior to submission of the proposal to the sponsor:
- Institutional letter of commitment to participate in the project and abide by all of the associated terms and conditions
- Statement of work
There must be adequate time provided between the receipt of a subrecipient's proposal and the sponsor's proposal due date, to allow Cornell's PI sufficient time to discuss and negotiate the statement of work, the unit administrator to review the subrecipient’s budget and letter of commitment and for the OSP to review all of the subrecipient’s documents.
The subrecipient's proposal must be accompanied with a letter of commitment signed by an Authorized Organization Official who is authorized to commit the subrecipient’s resources to the proposed project.
Including a Subaward in a Proposal Budget
The budget should be itemized by major budget category, such as salaries and wages, employee benefits, supplies, equipment, travel, consultants, and other direct costs, in a fashion similar to that required by the prime sponsor.
More specific itemization of budget categories may be needed if required by the sponsor.
Note: Facilities and administrative costs (F&A) must be included if it is to be charged, and should be calculated using the subrecipient’s applicable rate(s).
The subrecipient's budget is included in Cornell's budget as a direct cost. When calculating Cornell's F&A costs, the amount that exceeds $25,000 of each subaward should be excluded from the calculation, in accordance with 2 CFR 200 Uniform Guidance (UG). F&A costs on the first $25,000 is calculated using the on-campus rate applicable to the award.