Guide to Services

Subaward Services

Subaward Help

Subawardees must follow specific terms and conditions for awards. Use the following guidelines and samples to help you through the process:

Policy: Subaward/Subcontract and Vendor Contract Accounting Classification Policy

Required Form: Subaward-Contract Determination Form Under an Assistance Agreement (HJF Form 407-Policy Attachment B)

Form 407 Guidance

Statement of Work:

Sample

The HJF Subawards Department can facilitate subaward agreements under an assistance agreement.

The Subcontracting Department can facilitate vendor agreements such as subcontracts, consulting agreements and other vendor contracts. Visit the Subcontract Services page for more information.

Differentiating Between a Subaward and a Vendor Contract Under an Assistance Agreement

To help distinguish between a subaward and a vendor agreement, use HJF Form 407 in the link below. This form must be completed and attached to a requisition in Oracle for contracted services.

A SUBRECIPIENT is distinguished from both a contractor and a consultant in that a Subrecipient:

  • Performs a substantive portion (specific objectives) of the Prime award Statement of Work;
  • Has designated key personnel who work collaboratively with the HJF PI as a co-investigator(s);
  • Has authority to make administrative and programmatic decisions and control of the methods used;
  • Is responsible for assisting the Prime in meeting the goals of the project;
  • Is responsible for adhering to applicable Federal compliance requirements;
  • Retains intellectual property and copyright to the work produced by the Subrecipient’s personnel; and
  • May co-author an article in a professional research journal.

[ORACLE Category – Subawards]

Note: HJF does not issue subawards to individual persons; only to a company or organization.

Policy Download Subaward/Subcontract and Vendor Contract Accounting Classification Policy

Form Download Subaward-Contract Determination Form Under an Assistance Agreement (HJF Form 407-Policy Attachment B)

Establishing a Subaward Agreement

If the subaward was included in the proposal, you can establish the agreement once the prime award is set up in the HJF accounting system (Oracle) by following these steps:

  • Enter a requisition in Oracle EBS iProcurement for a “Request for Services.”
  • Enter “SUBAWARDS/SUBCONTRACTS” as the category for the service request.
  • Attach the following documents to the requisition: a completed HJF Form 407 (described above), the statement of work, the budget and budget justification. If the statement of work included in the proposal is not sufficient to issue an agreement, then you can refer to the SOW template to assist you with completing the statement of work or contact the Subaward Department for assistance.

Subaward Terms and Conditions

HJF uses a template for each subaward agreement based largely in part on the templates developed by the Federal Demonstration Partnership (FDP). This agreement template was approved by HJF’s Legal Department and is used as a way to standardize subawards and expedite agreement execution.

Because of the nature of subrecipient agreements, the terms and conditions of the prime award are included in the subaward.

HJF must obtain sponsoring agency approval prior to executing a subaward if the specific subrecipient was not identified in the proposal or previously approved.

The HJF “Subaward/Subcontract Overhead Rate” is applied to all costs associated with subawards. No other overhead or “General and Administrative” rates are applied to expenses associated with subawards.

Extending the Term of a Subaward Agreement

HJF representatives in the Subawards Department will contact the original requestor prior to the expiration of a subaward agreement. If the intention is to extend the term of the subaward agreement beyond its expiration date, submit a requisition in Oracle iProcurement for a “Modification for Existing Services.” Request an extension, as well as the amount of additional funds, if any, to be added to the subaward agreement. Also attach a revised statement of work, budget and budget justification to the requisition if applicable.

Remember that the subaward agreement period of performance cannot extend beyond the end date of HJF’s prime award agreement from the sponsor.

Monitoring Process for Subawards

Monitoring of subrecipients is required by OMB's Uniform Guidance. At HJF, monitoring is conducted by several people at several levels.

Before issuing the subaward, the HJF subaward specialist requests information from the subrecipient entity regarding the entity’s accounting system and internal controls. In addition, if the subaward is funded under a federally sponsored prime award, HJF requires that the subrecipient confirm completion of an audit as dictated by OMB, which is required for all entities expending $500K or more of federal funds annually, either directly or through subawards. The audit focuses on an entity’s internal controls and adherence to compliance requirements that must be implemented to ensure appropriate management of federal funds. HJF reviews each entity’s audit report, and depending on the severity of any audit findings, HJF may include restrictive terms and conditions in the subaward agreement to ensure the subrecipient appropriately manages funds under the subaward.

If the subrecipient is a foreign entity or a for-profit company, HJF may conduct additional monitoring procedures. HJF may request the entity’s latest financial statements and/or perform additional procedures to sufficiently assess the entity’s ability to comply with the applicable Federal regulations.

Another important component of subrecipient monitoring is conducted by the Principal Investigator (PI). The PI monitors the subrecipient through a variety of methods, but typically by conferring with the subrecipient’s PI regarding ongoing progress and status of work or by reviewing progress reports that are obtained from the subrecipient.

SUBAWARD BEST PRACTICES

To effectively carry out the specific responsibilities, Principle Investigators should require and ensure timely submission of periodic progress reports and invoices; review to assess whether subrecipient is making satisfactory progress; and work with Research Administration and Program Management staff, as necessary, early in the process to implement satisfactory resolutions in instances where unsatisfactory progress is detected or invoicing inconsistencies are detected. The following techniques may be helpful in achieving this best practice:

  1. Assess whether the results delivered or achieved, as reflected in the progress reports, are in line with the performance goals included in the statement of work.
  2. Assess whether the subrecipient is being timely and/or delivery schedules are being met by evaluating whether the work reported as completed is proportionate to the performance time remaining in the subaward or in the case of a fixed price subaward, determine whether the milestones are being met.
  3. Assess whether the subrecipient’s progress reports, when compared to their invoices reflect expenses commensurate with the progress of the project.
  4. Assess whether the subrecipient’s invoice is proper for payment and fully substantiate and reject improper invoices while ensuring timely payments of proper invoices. The following include, but are not limited to, examples of instances that could raise concerns or may signify an improper invoice:
    1. A subrecipient consistently invoices HJF for one twelfth of the subaward budget each month; however, the progress reports do not support the level of expenses for which subrecipient is invoicing.
    2. A subrecipient is performing work as evidenced by its progress reports, but has not submitted invoices or has not submitted invoice in accordance with the terms of the subaward (e.g. invoice lists only the total costs claimed without providing any categorical breakdown/detail).
    3. Amount on a particular invoice (including previous payments) exceeds the total subaward amount.
    4. Invoice includes costs which are not allowable, allocable or reasonable for the work under the subaward.
    5. Costs included on the invoice differ materially from the subrecipient's approved budget and / or is not substantiated by a required prior approval.
    6. Invoice dates (including those reflected for expenses) are not in line with the budget period and / or subaward performance period.
  5. Approve and certify, in writing, all proper invoices received and forward to accounting to ensure timely payments, while retaining supporting documentation.
  6. Substantiate, reject and return all improper invoices received in a timely manner, while retaining documentation which adequately substantiates the rejection.
  7. Ensure final invoices are received timely, are clearly marked as “FINAL,” are approved and certified, when appropriate, and forwarded to accounting to ensure timely closeout of the prime award. In instances where a final invoice is received for a fixed price subaward, ensure all project deliverables have been received and all milestones tied to payments have been achieved before final invoice is approved and certified.
  8. Notify Research Administration promptly when instances of non-compliance with the subaward terms and conditions are detected or when questionable situations requiring further inquiry arise. Some examples of these situations include, but are not limited to, uncertainty:
    1. as to the subrecipient’s performance,
    2. if fraud or non-compliance of federal regulations exist; or
    3. as to whether the subrecipient is fulfilling the legal obligations of the subaward.

Payments to Subrecipients

As invoices are received, the assigned HJF subaward specialist reviews each invoice to ensure the costs billed are allowable and in line with the reported progress and the statement of work milestones and/or deliverables, and that all other required terms have been met.  Once approved by the subaward specialist, the invoice routes through electronic workflow to the PI, or their designee. The PI’s approval is to be based on a comparison of the subrecipient’s progress against the statement of work milestones and amount billed. Approval of the invoice designates that the expenses are in line with the work performed.

In the case of advance payment, financial reports are required detailing the actual allowable costs incurred against the advanced payment.

If during the review of invoices anomalies are identified questioning the accuracy and applicability of claims, HJF will initiate its own review. HJF may also conduct reviews or do site visits for more complex subrecipient agreements.