What Is a Subagreement?
According to OMB Uniform Requirements (2 CFR 200), a subaward is defined as "an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient." A subrecipient means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided.
By making a proper determination in the proposal stage, the appropriate relationship can be established from the start. Sponsor approval is required prior to entering into a subcontract. If it is a vendor relationship, no sponsor approval is required unless specified in the award terms and conditions.
Subrecipients vs. Vendors
It is not always clear when the pass-through entity should award federal funds to a subrecipient or a procurement contract to a vendor. A subrecipient is a state or local government, college, university, or nonprofit organization that expends federal awards received from a pass-through entity to carry out a federal program.
Under a subaward, a subrecipient generally has a specific scope of work to conduct in conjunction with the proposed research. The PI with the subaward is accountable for the subrecipient's course of study as well as for following federal guidelines.
In contrast, a vendor is a dealer, distributor, merchant, or other seller providing goods or services that are necessary for conducting a federal program. These goods or services may be for an organization's own use or for the use of beneficiaries of the federal program. Under a procurement contract, a vendor provides goods or services that are auxilliary to the proposed research.
Subagreements under Federal Contracts (Not Grants)
In order to establish a subrecipient relationship under federal contracts, the Federal Acquisition Regulation (FAR 35.009) states that "it is important that the contractor not subcontract technical or scientific work without the contracting officer's advance knowledge." The FAR goes on to state that "during the negotiation of a cost-reimbursement R&D contract, the contracting officer shall obtain complete information concerning the contractor's plans for subcontracting any portion of the experimental, research, or development effort." If a subrecipient relationship is not approved as part of a proposal submitted to the agency, written sponsor approval would be required before any unbudgeted subrecipient subcontract could be established.
What Is a Consultant?
Consultant agreements are issued to either a company or to an individual who is clearly a bona fide consultant (expert advisor) who pursues this line of business for him/herself. Consultants are paid for their time at the fixed daily (or hourly) rate of compensation specified in an agreement. Consulting effort is usually limited to the term, and the pay line is usually determined by a rate per day that includes travel, expenses, and any other overhead. Consultants set their own hours, use their own equipment and materials, choose their work methods, and are responsible for paying taxes on their earnings as consultants. They will receive Tax Form 1099 from Georgia Tech. Furthermore, a consultant is considered "work for hire," and therefore all intellectual property and copyrightable information is assigned to GTRC.
The primary difference is that a subcontract is almost invariably with another institution or with a company, and a consulting agreement is almost invariably with an individual (non–Georgia Tech employee).
The Subagreement Process
A subagreement may be required if part of the research effort under a grant or contract is to be performed by an outside organization or institution. Subcontracts should be set up as soon as possible after the receipt of an award.
To initiate one, you will need to log into GTCrossroads using your GT Account ID and Kerberos password. Under the OSP Contract Information System tab, you will find a section for Subagreement Management. All previous forms are not part of this online submission system.
As part of the online "Request for a Subagreement" process, have the following information ready:
- Detailed budget
- Statement of work (including any deliverables/reports)
- Short narrative as to why you selected the subcontractor
- Cost price analysis
Upon final submission in the online system, an email will be sent to the appropriate contracting officer for processing. Notifications on progress will be sent via the ICOL system.
Upon receipt of the returned subcontracts, an agreement will be issued to the subcontractor against which project related costs may be billed. The principal investigator will be responsible for monitoring the technical performance of the subcontractor, verifying that required cost sharing is properly documented, and approving the invoices for payment.
Please notify the Division Manager, Dana Simpson (404-894-6934) if any questions or concerns arise, including issues such as (1) subcontractor needs additional time or funds, (2) disputes over performance of the agreed statement of work, etc.
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.