Transcript Slide 1

SUBAWARDS: CONTRACTING FOR
SPECIAL CASES AND COMPLEXITIES
April 28, 2008
NCURA Region VI & VII 2008 – Portland, OR
Panelists:
Derrick Lin, Senior Contract & Grant Officer
Stephanie Tramz, Subrecipient Monitoring Coordinator
and Contract & Grant Officer
Moderator: Michiko Taniguchi Pane, Associate Director
Office of Sponsored Research
Stanford University
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Federal Demonstration Partnership (FDP)
Subaward Templates approved by Federal
Agencies allow for streamlined subawarding
http://www.thefdp.org/Subawards_Forms.html
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Versions for FDP members and nonFDP members
Ideal for use between U.S. institutions
covered under A-110 when:
– the prime award is a standard Federal
grant or cooperative agreement
– there are no other risk factors
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Customizing the agreement
Examples of Risk Factors
• Prime award type & nature of the deliverables
– Federal contracts
– Foundation awards
– Clinical trials
• Audit status
– Significant findings that relate to research and
development
• Location, nature and maturity of the
subrecipient
– International subrecipient
– Start-up or small commercial entity
different risk profiles may impact the choice
of subaward instrument or language
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Customizing the agreement
When the Prime is a Federal Contract
• Government is buying a product,
tangible or intangible (e.g., scientific
instrument or data). Depending on the
nature of the deliverables, it may make
sense to:
– Tie subrecipient payments to deliverables
to assure delivery to the Prime
– Consider a different type of agreement than
your Prime
• Cost reimbursement –vs- fixed price
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Customizing the agreement
When the Prime is a Federal Contract, cont.
• Spell out particular FAR Clauses that
need to be highlighted, e.g.:
– FAR 52.232-22 Limitation of Funds requires
advance notice to Government when 75% of
funding will be exceeded within next 60 days
• Flow down FAR Clauses that are
applicable to subrecipient or to protect
your institution, e.g.:
– Reporting and Deliverables, including data
deliverables (CDRLs – Contract Data
Requirements List) where the Government
owns unlimited rights, FAR 52.227-14
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Customizing the agreement
When the Prime is a Federal Contract, cont.
• Flow down FAR Clauses, e.g., cont.:
– Intellectual property governed by the BayhDole Act, or other?
– Property purchased by Subrecipient is
owned by Government
– Change order, Stop work or Termination for
convenience clauses
– Subaward totals over $550,000
Subcontracting Plan is required
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Customizing the agreement
When the Prime is a Federal Contract, cont.
• Special Terms and Conditions, e.g.:
– Agency prior review and comment period on
publications
– Agency credit/acknowledgement for research
• Other issues to consider:
– sole source justification
– cost-price analysis
– certificate of current cost or pricing
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Customizing the agreement
When the Prime is a Private Foundation
• Special reporting requirements:
– Special formats for reports
– Special timing, due dates for reports
• Require Subrecipient’s report before your
Institution’s report is due
• May be necessary to shorten Subrecipient’s
period of performance to meet deadlines
• Ownership of intellectual property
– Some foundations may want to own the IP
• Publicity (giving public credit to
foundation, or not)
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Customizing the agreement
When the Prime is a Private Foundation, cont.
• Special accounting requirements and
record retention requirements
• Other Issues that may intrude into
fundamental research exclusion and
institutions’ varied sensitivities:
–Anti-terrorism
–Limitations on foreign nationals
–Limitations on publication
These issues are sensitive, and each
institution may have its own distinctive
policies and principles on these issues
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Customizing the agreement
When the Prime Agreement is a Clinical Trial
• Is this government or industry
sponsored?
• Is this a PI Initiated Study?
• Can the Sponsor contract directly with
the other Institution?
• Is there a Clinical Research
Organization (CRO) involved?
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Customizing the agreement
When the Prime Agreement is a Clinical Trial
Industry sponsor approval of subaward
• Negotiation points with subrecipients:
– Confidentiality
– Audit
– Ownership of Intellectual Property Rights
and Data
– Ownership of Tissue and Specimens
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Customizing the agreement
When the Prime Agreement is a Clinical Trial
Negotiation points with subrecipients:
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Publication of CTA Results
Disclaimer of warranties
Indemnification
Insurance
Adverse Event Reporting
Subject injury payment
Subrecipient’s Record Retention
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Customizing the agreement
When Subrecipient has Special Risk Factors
• Subrecipient is U.S. university, but has audit
findings
– Review A-133 audit report for detail of findings
and corrective action plan:
• A-21 Allowable Costs
• Time and Effort Reporting
• Certification of Effort
• Cost-Sharing
• Cost Transfers
• Late Technical, Financial Reports
• Property and Equipment Inventories
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Customizing the agreement
When Subrecipient has Special Risk Factors
• Subrecipient is U.S. university, but has
audit findings, cont.
Interpreting OMB Circular A-133,
sections ___.400(d)(5) and ___.405
http://www.whitehouse.gov/omb/circulars/a133/a133.pdf
– Do findings “relate to” your Institution’s
subaward to the Subrecipient, or to the same
CFDA number?
– Do findings “relate to” the Research and
Development Cluster of funding? Variation in
Institutional sensitivities, policies.
– Write management decision letter
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Customizing the agreement
When Subrecipient has Special Risk Factors
• Subrecipient is U.S. university, but has
audit findings, cont.
– Depending upon finding and nature of
subaward research, develop special terms
and conditions in Subaward Agreement
• Progress reports from subrecipient on
performing corrective action plan
• Special post-performance review and
verification of invoices by subrecipient
• Subrecipient provides back-up
documentation for invoices
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Customizing the agreement
When Subrecipient has Special Risk Factors
Subrecipient is:
• international (outside of U.S.)
• start-up (new entity)
• small entity (commercial or nonprofit)
– Will not have A-133 audit report
– Inquire with Subrecipient as to what
kinds of current accounting and audit
information are available, and obtain
copies
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Customizing the agreement
When Subrecipient is International or Start-Up
• First, perform a “desk review” of all
current audit and accounting
information the Subrecipient has
available
– Areas of inquiry:
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Independent audit report?
Financial statements?
Accounting, procurement procedures
Time-keeping procedures
Property management
Basis for IDC, FB charged
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Customizing the agreement
When Subrecipient is International or Start-Up
Your institution as pass-through entity may
conduct an up-front “limited scope” audit
of the Subrecipient, using an outside
accounting firm
– it covers activities allowed or unallowed;
allowable costs/costs principles; level of
effort; reporting
– See OMB Circular A-133, Section 230(b) for
details
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Customizing the agreement
When Subrecipient has Special Risk Factors
• Add terms and conditions for
subrecipient monitoring:
– OMB Circular A-133 Compliance Supplement
(March 2006) lists some:
• Reporting
• Site Visits
• Regular Contacts and Inquiries with
Subrecipients regarding program activities
• For non-A-133 subrecipients, “Agreedupon procedures engagements” including
audit under OMB Circular A-133, section
___.230(b)(2) (costs chargeable to prime
award)
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Customizing the agreement
When Subrecipient has Special Risk Factors
• Add terms and conditions for subrecipient
monitoring:
– Source documents: Parts 3-M and 6-M of
OMB Circular A-133 Compliance Supplement
(March 2006) are located at:
http://www.whitehouse.gov/omb/circulars/a133
_compliance/06/pt3.pdf
- and http://www.whitehouse.gov/omb/circulars/a133
_compliance/06/pt6.pdf
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Customizing the agreement
Balancing Risk Factors with Future Collaboration
• Your institution (as pass-through entity
issuing a subaward) may be held
responsible for subrecipient’s errors and
may be required to reimburse the
funding agency for them
– See case studies by Office of Inspector
General, Department of Health and Human
Services, at
http://oig.hhs.gov/oei/oeisearch.html
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Customizing the agreement
Balancing Risk Factors with Future Collaboration
At the same time……
• Maintain a collaborative
relationship with the subrecipient
– Facilitate successful completion of
research project
– Lay groundwork for future
collaborations
– Undue burdens imposed upon
Subrecipient may call forth undue
burdens in return
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