Subawards and Consultants

Subawards

Subrecipients are entities that contribute to the programmatic portion of the project. Their performance is measured against whether the objectives of the project are being met. Subrecipients are subject to project compliance. As such, subrecipients must adhere to the prime award’s terms and conditions. Moreover, subrecipients should provide a detailed budget similar to NC State’s budgeted categories (i.e., salary, fringe benefits, travel, equipment, materials and supplies, consultants, indirect costs, etc.). Please note — if there is a sponsor restriction on indirect costs then our subcontractors must also adhere to said restriction in their budgets.

The Uniform Guidance (§200.331 and §200.414) requires subrecipients to use their federally negotiated indirect costs (F&A) rate unless the program has a published indirect costs rate cap. The cap would be applied to both the pass-through entity and the subrecipient. If there is no cap and the subrecipient does not have an officially federally negotiated indirect costs rate agreement, the UG allows subrecipients to apply a de minimis indirect cost rate of 10% Modified Total Direct Cost (MTDC). Essentially, the de minimis rate is a modest amount that the federal government will agree to pay subrecipients to cover their organization’s indirect costs without them having to negotiate a formal rate with the government.

NC State’s business practice is not to negotiate separate indirect cost rates with subrecipients who do not have a federally negotiated rate agreement; they must apply the 10% MTDC de minimis.

Subawards are issued to entities outside of NC State when the subrecipient will collaborate with our investigator in a scholarly effort. A subrecipient must adhere to applicable federal program compliance requirements. The subrecipient PI may also be identified as a co-investigator. Subawards made to foreign entities will be issued in U.S. dollars at the time of the award. Keep in mind that wire-transfer fees may be applicable and, therefore, should be added to the terms of the award.

For federal grants, contracts and cooperative agreements, the sponsor must approve all subawards. The easiest way to gain that approval is to incorporate a complete stand-alone proposal from each subrecipient’s institution or business in the original proposal to the sponsor. Obtain a Letter of Intent signed by an authorized official of the subrecipient, a statement of work, a detailed budget and budget justification. Review these proposal documents to ensure that they are accurate and that the costs proposed are fair and reasonable. The sponsor will conduct a similar review for fair-and-reasonable budget entries.

Requests for new subawards (not included in the original proposal and approved by the sponsor) must be submitted with the same documentation as above through the Project Modification Request (PMR) system. The request will be forwarded to the sponsor as required.

Subaward actions (initial issuance or modification) are initiated through the PMR system. This applies to both subawards included in the proposal and additional subawards approved by the sponsor as described above. SPARCS will not issue subawards without written direction from the PI.

PIs must monitor subrecipients’ performance through direct contact with the subrecipient’s PI and interim technical reporting. PIs must approve all invoices submitted by subrecipients before they can be paid. The department and college must retain all documentation relating to each subaward for a minimum of three years following the end date.
Subrecipient vs. Contractor Subaward Process

Consultants

Consultants are classified as contractors. Consultants on a sponsored project are individuals or entities that provide services within normal business operations to many different customers. These services are secondary to the operation of the project. For example, a project may need to hire an evaluator in order to receive an unbiased analysis of the project’s results. Consultants will be budgeted as “Contracted Services.” When budgeting for a consultant, it is important to incorporate all of their or their company’s charges. Therefore, we should include the consultant’s hourly rate, number of hours estimated, travel costs, and materials and supplies costs, etc. in this cost category. Federal agencies often have limitations on a consultant’s daily rate. Please note that consultants are not subject to project compliance. Therefore, the university’s awarded terms and conditions will not flow down to the individual or company.

Please visit NC State Purchasing for additional information regarding the selection of and accounting for consultants.