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POLICY

Managing Subawards Issued by NYU

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It is the policy of New York University (NYU, “the University”) to comply with the requirements of the Federal Office of Budget and Management (OMB) OMB Circular A-133, Audits of States, Local Governments and Non-profit Organizations (http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf) and other applicable regulations, pertaining to subawards.

Purpose of this Policy

The purpose of this policy is to provide guidance on proposing, developing, issuing, oversight and closeout of subawards.

Scope of this Policy

This policy is applicable to all schools, departments, units and personnel of the University involved in administering sponsored awards.

Procedures for Implementation

a. How Subawards Are Submitted and Awarded

i. Distinguishing Characteristics between Subawards and Other forms of sub-agreements
NYU follows the requirements in OMB Circular A-133 to distinguish subawards from other potential forms of sub-agreements such as consulting agreements or purchasing agreements. The table below (see also A-133) provides guidance to help differentiate between subawards and other vendor relationships.

Subaward (or Subrecipient)                     
a. Helps determine eligibility for assistance. 
b. Has its performance measured against meeting the objectives of the program.
c. Has responsibility for programmatic decision making.
d. Assumes responsibility for adherence to applicable sponsor program compliance requirements.
e. Uses sponsor funds to carry out a program of NYU as compared to providing goods or services.

Vendor                                                                                                                                a. Provides the goods and services within its normal business operations.
b. Provides similar goods or services to many different purchasers.
c. Operates in a competitive environment.
d. Provides goods or services that are ancillary to the operation of NYU’s sponsored project.
e. Is not subject to compliance requirements of NYU’s sponsor.

ii. Proposing a Subaward

A.    Determining the Need for a Subaward
The Principal Investigator (PI) is responsible for determining the need for a subaward and/or procurement action on a sponsored project, and for the initial determination of which mechanism is appropriate (See Section a.i above). In making these determinations, PI’s are typically assisted by their Departmental Administrators (DA’s) and/or Projects Officers in the Office of Sponsored Programs (OSP). PI’s generally outline this need (with appropriate rationale and authorization) in the grant proposal. PI’s should consult the Contract Office when issuing a consulting agreement on a sponsored project. However, all vendor relationships for the purchase of goods and services should be processed through the Purchasing Department.

B.    Required Elements to Include a Subaward in a Proposal
NYU requires that the following documents be completed for each Subaward that is included in a proposal to the sponsor. Proposals will not be signed by institutional officials until these items are completed and submitted to OSP.

The Subaward Statement of Work (SOW), include:

-a clear description of the work to be performed

-the proposed timelines and deliverables.

For guidance on scope development see: http://www.nyu.edu/content/dam/nyu/research/documents/Contracts/guidelinesforscopeofwork.pdf.

• Subaward Budget and Budget Justification, including the subaward direct and indirect costs, calculated using the Subaward approved Facilities and Administrative (F&A) cost rates and fringe benefit rates and verifying any committed cost sharing.

• A Fair and Reasonable Cost Analysis – Subawards Under Contract (See Appendix 1, Sole Source Justification and Cost/Price Analysis), as applicable, must be signed by NYU’s PI. The PI’s signature on this form certifies that the PI has selected the subawardee in accordance with this policy, and determined that their costs are reasonable with respect to the proposed SOW and that all proposed costs are allowable under the Sponsor’s anticipated terms and conditions.

• Any additional information that may be required by NYU’s sponsor (e.g., Certificate of Current Cost or Pricing data, Sole Source Justification, biographies of Subaward key personnel).

Subaward proposal elements are expected to comply with the sponsor requirements for NYU’s prime proposal. PI’s are responsible for ensuring that they obtain all materials from their subawardee in the correct format and that the information is complete.

iii.Issuance of a subaward

A.    Initial Spending by Subawardee
A subaward will not be issued, nor payments to a subawardee authorized, prior to NYU’s receipt and acceptance of a funding commitment from the prime sponsor which authorizes NYU to enter into the proposed contractual agreement. An NYU PI or designee may not authorize a subawardee to begin working without a fully executed subaward agreement in place. Proposed subawardees that commence work without a fully signed subaward agreement from the NYU Contract Office do so at their own risk and have no assurance of payment from NYU. In the event a subaward is subsequently issued to a subawardee, a subawardee may claim costs properly incurred under its own risk, provided that the costs are otherwise allowable. In such cases, the subawardee must furnish evidence to NYU that all required compliance approvals were in place at the time the costs were incurred.

B. Subaward Periods of Performance and Duration
The period of performance of a subaward (including any requested extensions) may not be outside of NYU’s own period of performance. Subawards may, however, be issued for shorter periods of time than NYU’s full period of performance. A new subaward may be issued whenever NYU’s sponsored project receives funding under a new competitive segment.

C.    Subaward Funding Mechanisms

NYU normally issues subawards on a cost-reimbursement basis.

D.    Requesting Issuance of a New Subaward

After an award has been accepted by New York University and a sponsored project is established, the PI or authorized administrator will submit a Request to Issue Subaward Form (RIS) to the Contract Office, along with all required documentation (such as copy of the Prime Award, detailed Scope of Work, and final Budget). In addition, the PI or the authorized administrator must provide the following items to the Contract Office, which must be kept on file before a subaward is issued:

1. Copies of the Subaward human subjects approval and approval to use animals, if applicable

2. Any special requirements the PI requests (e.g., prior approval requirements, report formats or due dates).

The Contract Office will consult with the PI and/or DA as needed to clarify requirements or to obtain additional information. Once a subaward request is complete, a draft subaward will be created and circulated to the PI and OSP for the review and written approval of both parties. When the Contract Office receives those approvals, the subaward will be issued to the subawardee for review and execution. The Contract Office will handle the negotiation of any terms and conditions in the subaward and, once the agreement is acceptable to both parties, will sign on behalf of the University.

E.    Applying Facilities and Administrative (F&A; Indirect Cost) Rates to Subawards
There are two types of F&A costs on subawards: those earned by the subawardee, and those earned by NYU. A subawardee is expected to apply its own Federally-negotiated F&A rates and bases when preparing its subaward budget unless a lower rate or base has been agreed to by the subawardee institutional official (e.g., to meet cost-sharing requirements, or to meet a sponsor’s F&A rate limitation.). If a subawardee does not have an approved F&A rate, it must either have its proposed indirect cost rate approved by NYU or elect not to recover indirect costs. NYU applies the OMB A-21 “life-of-the-award” policy with respect to its subawards and will use the approved F&A rates authorized at the time of issuance of the subaward.

NYU’s “life-of-the-award” policy applies to subawards under a sponsored project. The terms of the subawardee’s F&A rate agreement in effect when the subaward is issued will govern F&A charges throughout the performance of the subaward. The period of performance on a subaward will not exceed NYU’s competitive segment on its award. When a renewal subaward is issued under a NYU award that uses a modified total direct cost (MTDC) base for calculating F&A, NYU will recover its F&A on the first $25,000 of the renewal subaward.

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Notes
  1. Dates of official enactment and amendments: 09/01/13
  2. History: blank
  3. Cross References: blank

About This Policy

Effective Date: September 01, 2013
Supersedes: N/A
Issuing Authority: Sponsored Programs Administration
Responsible Officer: Assistant Vice President for Post-Awards Administration

Consultant - An individual, firm, company or institution which provides needed expertise to a project for a limited period of time. They function as independent contractors (with little or no day-to-day supervision by NYU staff) and they are not employees of the University. Consultants are typically paid on an hourly or daily fee including reimbursement for travel and other incidental expenses. Consultant agreements issued for sponsored projects are executed by the Contract Office.

Pass-through Entity - A non-Federal entity that provides an award to a subawardee to carry out a program through a Statement of Work on a sponsored project. The pass-through entity assumes many of the responsibilities typically assigned to a prime sponsor in issuance and oversight of an award to a grantee or contractor, including verification of the financial viability, adequacy of compliance controls, audit status and fulfillment of its portion of the programmatic effort.

Subaward (also referred to as a subgrant) - A formal written agreement made between NYU and a “Subawardee” (as defined below) to perform a portion of the Statement of Work under a NYU sponsored project.

Subawardee (also referred to as a subrecipient or a subgrantee) - An entity that expends award funds received from the prime grantee to carry out a portion of the prime’s programmatic effort under a sponsored project.

Federal Regulations


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Sponsored Programs Administration Post-Award Handbook

NYU Approach and application of this policy, related resources and more available in the Handbook.
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