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Office of Research and Innovation
Research Administration and Compliance

Pre-Award Spending

Overview

Pre-Award accounts can sometimes be established before the fully executed award arrives.

Here are some important facts to keep in mind:

  • Pre-award spending under these accounts can be risky.
  • If the pre-award account is established but the award is not granted, any pre-award expenditures become the responsibility of the PI’s department or college.
  • If the official award date is later than expected, some pre-award expenditures may be deemed unallowable. For example, if the pre-award account is effective June 1st, but the final start date is actually July 1st, the June expenditures are not allowed.

Pre-Award Guidance

Some standard federal awards contain a clause allowing 90-day pre-award costs, but other awards not containing this assurance should be “handled with care.”

If the award meets the following criteria, the risk is minimized:

  • The award is imminent.
  • The PI or College Research Office has something in writing from the sponsor that the award is forthcoming.
  • The pre-award spending is necessary for the effective and economical conduct of the project for reasons such as:
    • Payroll deadline is approaching
    • Need to order specialized equipment and supplies
    • Pricing quote for required equipment is expiring
    • The nature of the research is time sensitive – e.g., plant growing season

Considerations when requesting a Pre-Award Account

  • What is our prior experience with the sponsor? Have we worked with them previously?
  • Do we have a relatively good chance of finding mutually agreeable terms?
  • What non-standard terms are present within the agreement being negotiated?
  • Does the agreement require the use of foreign currency?
  • Is the period of performance sufficient to ensure negotiations are completed and invoices generated as required by the agreement?

Pre-Award Risk Assessment

No Pre-Award Allowed without exceptions approved by Director of Sponsored Programs, Director of Research Compliance

  • Agreements that explicitly disallow pre-award costs or require pre-authorization for pre-award costs, if no written authorization is provided. 
  • Listed investigators do not have an up-to-date COI disclosure on file.
  • Projects likely to involve controlled research:
    • Department of Defense Contracts (or Prime Contracts) which include or anticipate inclusion of DFARS 252.204-7000 and/or 252.204-7012.
    • Any request for proposal (RFP) or agreement with language restricting publication. 
    • Projects where the scope of work contains export controlled information or technology that needs to be properly protected. (e.g. reference to inputs involving technology subject to the EAR or the ITAR or references to a ECCN or ITAR category)
    •  Projects requiring management through the SURE environment. (E.g. references to NIST SP 800-171 compliance)
    • Any request for proposal (RFP) or agreement with language suggesting the work will involve classified information. (e.g. reference to NISPOM or inclusion of a DD254,  DOD Contract Security Classification Specification)
  • U.S. Federal Contracts (or Prime Contracts). These contracts are typically issued with the performance period beginning concurrent with the effective date and subject to the FAR without pre-award provisions.
  • Agreements which indicate that effective date/performance period will be effective as of the date of last signature.
  • Agreements containing a term stating that the university unequivocally accepts all terms offered if it begins work on the project before the agreement is signed.
  • Department of Defense projects involving either Human Subject Research (IRB requirement) or Animal Subject Research (IACUC).  To mitigate the financial risk, Consult with the IRB or IACUC prior to submitting the request.

Please contact sps@ncsu.edu if you would like a subject matter expert in SPARCS  to complete an informal risk assessment of the project and/or an anticipated agreement’s terms prior to submitting a pre-award request.