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Outgoing Subaward andSubcontractInitiation and Management

DefinitionsDefinitions

When we talk about outgoing subawards and subcontracts, we often get tangled up in definitions. This happens for a couple of reasons. We use different terms to refer to the same thing. In addition, UCLA can find itself in any of several roles in the tiers that make up a subaward, depending upon the situation. This module will provide some standard definitions.

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When you complete this module you will..

Be familiar with: – the numerous terms used for third party agreements,

and what they mean

– What terms are commonly used at UCLA

When you complete this module you will be familiar with the numerous terms used for third party agreements, and what they mean and what terms are commonly used at UCLA.

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Sponsor

Sponsor refers to any third party that issues a grant, contract, or cooperative agreement to UCLA

Sponsor refers to any third party that issues a grant, contract, or cooperative agreement to UCLA. Sponsors may be federal, state, or local governments, foundations, companies, or other entities that award grants or contracts. For example, some of our sponsors are the National Institutes of Health, the National Science Foundation, the Department of Defense, the American Heart Association, and the County of Los Angeles.

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Entity Receiving Award (UCLA) can be referred to as:

RecipientPrime RecipientPrime AwardeePrime GranteePrime ContractorPass Through Entity

The entity that receives an award from a sponsor may be referred to in a number of different ways. It can be referred to as: RecipientPrime Recipient Prime AwardeePrime GranteePrime ContractorThe term “prime” refers to the top rung on the recipient ladder.Pass Through Entity – This term is used because funds are passed through the recipient when the recipient issues a subaward

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Recipient (UCLA)

Uses Sponsor funds to carry out a specific projectHas performance measured against meeting the objectives of the proposed effort (or not) Has primary responsibility for programmatic decisionsResponsible for adhering to Sponsor terms and conditions Responsible for monitoring Subrecipients

Some of the characteristics of a recipient are:Uses Sponsor funds to carry out a specific projectIts performance measured against meeting the objectives of the proposed effort or not. Has primary responsibility for programmatic decisions.Responsible for adhering to Sponsor terms and conditionsResponsible for monitoring any subrecipients

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The Third Party

When a Recipient enters into an agreement with a third party to carry out a portion of the activity, the third party can be referred to as:

• Subrecipient (for subawards)• Subgrantee• Subawardee• Subcontractor (for subcontracts)• Vendor• Consultant

When a Recipient enters into an agreement with a third party to carry out a portion of the activity, the third party can be referred in a number of different ways. It can be called a:subrecipient, a Subgrantee, Subawardee, or Subcontractor (if the prime funding is a contract) ,a Vendor, or a consultant

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Subrecipient/Subcontractor

The legal entity to whom a subaward or subcontract is made

Has its own Principal Investigator

Will carry out a substantive portion of the scope of work

Note: UCLA can be a Subrecipient and a Subcontractor, issuing lower-tiered subcontracts

A subrecipient or subcontractor is the entity to whom a subaward or subcontract is made. We talk about subrecipients generally when we are flowing down grant or cooperative agreement funding and we talk about subcontractors when we are flowing down funds from a prime contract. A subrecipient has its own Principal Investigator and works independentlyA subrecipient carries out a substantive portion of the scope of work.I should also mention that UCLA can be both a subrecipient and asubcontractor, which in fact often happens. As a subcontractor, UCLA can also issue a lower-tiered subcontract. We’ll show this a little later on in a graphic.

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Types of Third Party Agreements

Subaward/Subgrant/Subagreement/Consortium Agreement (NIH)– When Sponsor’s award is a grant or cooperative agreement– Intent of funding is to ASSIST in research

Subcontract/Purchase Order/Purchase Contract/Vendor Agreement– Contracts are used to procure very specific goods or services – Contracts have very specific, detailed deliverables

Subs – general term that refers to both subawards/subcontracts

Consultant Agreement (BFB BUS – 34)

Independent Contractor/Professional Services (BFB BUS - 77)

A subaward, subgrant, or subagreement, or, if talking about NIH funding, a consortium agreement, is used when the prime award is a grant or cooperative agreement. One of the things that distinguishes grants from contracts is that grants and cooperative agreements are known as “assistance” mechanisms – they provide funding for general line of research. Contracts, on the other hand, are used to procure very specific goods or services. A subagreement under a contract is known as a subcontract, a purchase order or purchase contract, or possibly a vendor agreement. Contracts have very specific, detailed deliverables. Sometimes we use the short term “subs” to refer to both of these mechanisms. Consultant Agreements or Independent Contractor/Professional Services Agreements are yet other mechanisms to move research money to third parties. We’ll talk more about that later.

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Other Important Definitions

Flowdown Requirements– Terms/conditions of

Sponsor’s award that flow down to the Subrecipient

Lower Tier Subaward– Agreement written by a

Subrecipient when entering into an agreement with another entity

Lower Tier SubawardAgreement written by a Subrecipient when entering into an agreement with another entity

Flowdown requirementsTerms/conditions of Sponsor’s award that flow down to the Subrecipient

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NIH (SPONSOR)

UCLA – (Recipient)

issues a grant to...

USC issues a lower tier subaward to...

USC – (Subrecipient)

UCLA issues a subaward to...

Kaiser Health Care

(Lower tier Subrecipient)

UCLA receives a prime award from NIH and issues a subaward to a subrecipient. The subrecipient issues a lower tier subaward

This is a graphic that illustrates what might happen when UCLA receives a grant from NIH, for example. UCLA needs to have a portion of the work done by someone other than ourselves. we've identified USC as a subrecipient. So we, issue a subaward to USC. It may be that USC is unable to do all the work with their own expertise so they issue what's called lower-tiered subaward to Kaiser Healthcare, for instance.

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NASA

University of New Hampshire (Subcontractor)

issues a contract to...

UCLA issues lower-tier subcontracts

UCLA – (Subcontractor)

University of New Hampshire issues a subcontract to...

NASA issues prime contract to University of New Hampshire (UNH). UNH issues a subcontract to UCLA. UCLA issues lower-tiered subcontracts A B C

Here is another example Lets say that NASA issues a contract to the University of New Hampshire. The University of New Hampshire in turn issues a subcontract to UCLA under that prime NASA contract. IF UCLA needs to use a third party to carry out a portion of the work, it in turn issues lower-tiered subcontracts to other entities.

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In summary, as you can see these terms can be confusing. .You might want to print a copy of this module (from the resources tab) or bookmark it as a reference.

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ORA acknowledges and thanks Connie Whitley, Contract and Grant Officer in the

Office of Contract and Grant Administration, for her contributions to the content of this module

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ORA acknowledges and thanks the “voice” of the

Subaward and Subcontract modules

Ken Castro-Oistad, Grant Analyst Office of Contract and Grant Administration