Subcontracts - UM Lead

Definition:  generally a subcontract or subrecipient, as compared to a consultant or fee for service vendor, is defined as an entity, often another university, who helps the grantee carry out the activities of the award by performing a portion of the research using their own institution’s facilities.

Submit to OGCA with your proposal:

1)  A letter of intent signed by the subcontractor’s business official (OGCA equivalent) supporting the work referenced in an attached statement of work and budget.  The letter must include the following language as well: 

“The appropriate programmatic and administrative personnel at the University are aware of the PHS consortium grant policy and are prepared to establish the necessary inter-institutional agreements consistent with that policy."

2)  Statement of work

  • Subcontractor’s specific aims - typically no longer than a page
  • Detailed enough to legally define the subcontractor’s role and responsibilities in the research
  • Does not include UMass effort

3)  Subcontractor budget

  • Use NIH budget forms or an Excel spreadsheet if modular;
  • Use the Adobe subcontract budget extract if not modular - available from the R&R Subaward Budget Attachment(s) Form in the Adobe application package.

4)  Subcontractor budget justification; and in addition, if modular, a Consortium Justification following NIH format.

5)  Additional forms:  PHS 398 Face Page and Checklist (optional, but useful). If not using the Face Page, provide same data must be provided in another format, especially addressing regulatory items like Animal use and Human subjects.

6)  Indirect Cost Rate Agreement (if charging indirects) – subcontractors must have a federally approved indirect cost rate agreement in order to budget indirect costs.

Items 1-6 should be assembled by the subcontractor and approved by their OGCA.

The subcontract materials should be forwarded to the UMass PI for review, and, if in keeping with PI expectations, PI should forward contents to OGCA along with the completed proposal.

The subcontractor should also provide the UM PI with the following for incorporation into the UM proposal: 

7. Biosketches of key personnel (no headers or footers

8. Resources page (see SF 424 application guide for format)

9. Letter of support from subcontractor’s PI (optional)

Please submit the above to OGCA in advance of the deadline, preferably with your completed proposal 5-7 days before the deadline.

Subcontracts - other important considerations

  • Consortium/contractual indirect costs exempt from direct cost limits

NIH typically excludes subcontractor indirect costs from the direct cost limitations.  Given that the R01 modular direct cost limit is $250K for example, if the UMass budget includes $285,000 for direct costs each year which includes subcontractor total costs, and subcontractor indirect costs amounts to $15,000 per year, the budget still qualifies for the modular ($285,000 less $15,000 = $250,000).  For details, see NOT-OD-05-004.

  • Subcontract vs. standard procurement:

If the individual or company in question provides a service for which an established (published) flat fee is routinely charged for the work to be done and they are not involved in the research effort per se but simply provide a fee for service, this transaction is classified as a standard procurement rather than a subcontract. As such, no statement of work, budget, or letter of intent is needed. Standard procurements are budgeted as "Other".  Provide OGCA with a copy of the published rate sheet for these services.

  • Subcontract vs. consultant:

This is hotly contested terrain and closely analyzed for compliance.  A consultant is not directly responsible for the completion of the project’s “aims”.  They do not conduct research but rather act in an advisory role lending their expertise.  For more information, see “Proposal Preparation Guide: Consultant”.  If in doubt, contact the OGCA pre-award administrator responsible for NIH.

  • The subcontract and indirect costs:

Indirect costs (F&A) are assessed on the first $25,000 of each and every subcontract. For example, if your subcontractor is budgeted at $30,000 over two years with $15,000 budgeted each year, then indirect costs are assessed on the total amount in year 1 and only on $10,000 in year 2.  Thus $5,000 is exempt from indirect costs in year 2.

  • Sole Source:

Any federal procurement over $1,000 must be put out to bid. If it’s a subcontract and bids were not solicited, sole source justification is required and must be kept on file at OGCA for auditing purposes.

A sole source justification will explain why the chosen subcontractor is uniquely qualified entity to perform the work in question, and how its selection will benefit the government. This should be provided at award stage.

Samples and forms