Subagreement Pathways: The Slower Track vs. the Faster Track
FDP (Federal Demonstration Partnership) institutions of higher education should complete the one-page FDP Pilot Subrecipient Project Information sheet. Other subrecipients are required to complete the Subrecipient Commitment Form.
A subaward or subcontract agreement is more than a handshake between two individuals. When UC Berkeley receives an award from an external sponsor, the sponsor often indicates the terms and conditions that UC Berkeley must flow down to any subrecipient partners involved in the project. The UC system may also impose additional requirements for certain subrecipients.
If the potential subrecipient disagrees or questions these terms, conditions, and requirements, it will take longer for SPO to negotiate the subagreement. If the subrecipient cannot or will not comply with these requirements, SPO may not be able to establish the subagreement. The following section provides an overview of the issues that would cause a subagreement to follow a slower vs. a faster track at SPO.
|Topic||Red Flag Issues||How to get on the “Slower” Track||How to get on the “Faster” Track||Forms/Tools You Will Need|
|Treating a “Supplier” as a “Subrecipient”||If a supplier is misclassified as a subrecipient at the proposal stage, the supplier may balk when they are asked to comply with the compliance requirements that flow down to subrecipients from the prime award at the award stage, e.g., effort reporting or providing the organization’s most recent audit report. This will slow down negotiations and delay the setup of the subagreement.||The proposed subrecipient is really a supplier providing standard goods and services.||The proposed subrecipient is a true partner and will play a significant role in project decision making.||Consult the Subrecipient vs. Supplier Wizard to determine if the proposed partner is a true subrecipient.|
|Subrecipient Commitment Form or FDP Pilot Subrecipient Project Information||SPO must have a completed Subrecipient Commitment Form or FDP Pilot Subrecipient Project Information for each subrecipient before establishing a subagreement. Incomplete and/or unsigned forms and forms over 12 months old, must be completed and/or updated.||A complete/signed Subrecipient Commitment Form or FDP Pilot Subrecipient Project Information is not provided for each subrecipient listed in the proposal.||A complete/signed Subrecipient Commitment Form or FDP Pilot Subrecipient Project Information is provided for each subrecipient at the proposal stage.||Subrecipient Commitment Form or FDP Pilot Subrecipient Project Information|
|Requesting that a Subaward be Established||A PI may change his or her mind about partnering with the subrecipient and may want to adjust the scope of work and/or funding as the project progresses.
Therefore, SPO does not begin to establish or amend any subaward until a Subaward Request Form is submitted to SPO.
|A Subaward Request Form is not submitted timely to SPO to establish a new subaward and/or to amend an existing subaward.||A Subaward Request Form is submitted to SPO in time to establish a new subaward and/or to amend an existing subaward.
A Subaward Request Form is submitted annually when the PI wants to extend/modify the subaward.
|Subaward Request Form
Submit the form to: firstname.lastname@example.org
|Single Audit Requirements||SPO is required to check the single audit findings of any proposed or existing subrecipient expending $750K in federal funds annually. If findings related to the proposed subaward are found in the organization’s most recent single audit, SPO will need to conduct a risk assessment that could delay the set-up of the subagreement.||The proposed subrecipient is subject to the single audit requirement and findings related to the subaward are noted in the organization’s most recent single audit.||The proposed subrecipient provides a clean single audit with no findings related to the proposed subaward.||To obtain the single audit status of any potential subrecipient go to the Federal Audit Clearinghouse or contact email@example.com for assistance.|
|Mini-Audit Questionnaire Requirements||Under UC policy, SPO is required to complete a mini-audit of any organization not subject to single audit requirements. If the mini-audit reveals areas of greater than average risk to the University, SPO will need to conduct a risk assessment that could delay the set-up of the subagreement. (See mini-audit risk areas below.)||The subrecipient provides a mini-audit questionnaire that indicates that a subagreement to this organization will create greater than average risk to the University.||The subrecipient provides a mini-audit questionnaire that indicates that a subagreement to this organization will not create greater than average risk to the University.||See the mini-audit questionnaire.|
|Working Capital Advances||When the subrecipient needs advance payments and cannot accept a cost reimbursement subagreement, negotiations will be delayed.||The proposed subrecipient does not have enough working capital to accept the University’s standard cost reimbursement payment process, and no one informs SPO.||At the proposal stage, the Authorized Official Representative (AOR) of the Subrecipient should indicate on the Subrecipient Commitment Form that the Subrecipient will require a working capital advance should the project be funded.||The Berkeley PI must submit a complete Subaward Request Form with all required attachments and indicate on the form that a working capital advance is requested for the Subrecipient.|
Mini-Audit Risk Areas
Subrecipients that expend less than $750K in U.S. federal funds are not subject to A-133/single audit requirements. Therefore, the University must ask these subrecipients to complete a mini-audit questionnaire before establishing a subagreement. If any issues are identified from the subrecipient’s responses on the mini-audit questionnaire, the subrecipient will be considered a higher risk subrecipient, and when this occurs the PI should anticipate additional time will be needed to establish the subagreement with this entity.
In some cases, a fixed amount subagreement with a high risk subrecipient may be a viable alternative. This option should be discussed with SPO when the Subaward Request Form is submitted. Please Note: A fixed amount subagreement is only appropriate for subagreements in which there is no cost sharing, payments can be tied to clear “deliverables” or products provided by the subrecipient, and the use of a fixed amount subaward is approved by the sponsor. The amount of a fixed amount subaward also may not exceed the simplified acquisition threshold in place at the time the subaward is issued.