Skip to main content

Subrecipient Agreements

A subrecipient agreement: is an agreement made by the University of Houston in which a defined portion of the UH work statement activity is carried out by a non-UH entity. OCG must negotiate the subrecipient agreements in accordance with the prime agency's guidelines, standard business practices and, as appropriate, the Federal Acquisition Regulation. The agreement will outline the scope of work, budget, performance requirements, program authorizing legislation, Program Regulations, CFDA Title and Number, Award Name, Name of Agency, applicable compliance requirements, and a notification of annual risk assessment. If the award is issued under ARRA, this information will be clearly identified on the agreement sent to the sponsor.

Subrecipient or Vendor?

A subrecipient is an institution, company, or organization that receives, at any level, financial assistance that is passed down from the primary recipient of the prime sponsored agreement. The portion of work being performed by the subrecipient constitutes a significant component of the research program, and the subrecipient is required to provide the resources necessary to conduct that portion of the work. The work must be performed by the subrecipient's personnel, using their facilities and support services, and the subrecipient takes full responsibility, including intellectual leadership, for the subcontracted effort.

A vendor provides the goods or services within normal business operations, provides similar goods or services to many different purchasers, and operates in a competitive environment. When a vendor rather than a subrecipient is used, the department will issue a procurement contract on a purchase requisition. OCG will finalize and encumber the amount on a purchase order. In this case, the PI must provide, with the vendor contract, the method used for selecting the contractor. The most common methods used are either to make a selection based on a consideration of the technical merit and cost objectives. In all instances, a Recommendation for Award form showing the basis by which an award is recommended is needed. The form must provide information pertinent to all of the following:

  • which procurement method used;
  • price tabulations outlining the price acquisition process;
  • prices obtained in arriving at best value to the University;
  • bases for best value to the University; and (e) the name of the preferred vendor.

Refer to Distinguishing Between Subrecipient, Subawardee, Vendor and Consultant for guidance.

Request to Issue a Subrecipient Agreement (pdf) form: OCG has developed this form to allow the PI to provide OCG with the information needed to initiate the agreement. If the subaward was not included in the original proposal and approved in the project award, the RA must contact the sponsor for permission to add a subrecipient to the project. Each sponsor’s requirement for documentation to add a subrecipient after the fact will differ. The PI will work with the RA to provide the relevant documents for this request.

Subrecipient Monitoring

Subrecipient monitoring begins before the agreement is executed. Before signing the agreement, OCG must verify that prospective subrecipients to a federal grant are not suspended, debarred, or otherwise excluded from federal contracts. To obtain this information, an EPLS (Excluded parties list System) search for each new contract and any additional amendments is done and a copy of the web search page is attached to the subrecipient file. A SAM (System Award Management) search is also conducted for subrecipients paid from ARRA (American Recovery and Reinvestment Act) awards. The Uniform Guidance and OMB Circular A-133 entitled “Subrecipient Monitoring,” provides the general standards for managing subawards. OCG is responsible for ensuring that subrecipients meet applicable audit requirements. Annually, OCG will review the Federal Audit Clearinghouse website for the previous fiscal year’s audit information of all subrecipients, and ensure that corrective action is taken in instances of noncompliance with Federal laws and regulations. If a subrecipient’s audit information is not on the Federal Audit Clearinghouse website, a Subrecipient Audit Certification letter is mailed to the subrecipient. Other types of monitoring are done for each subrecipient according to the level of risk determined at the time an agreement is issued.

Reporting under FFATA

The Federal Funding Accountability and Transparency Act (FFATA) was signed on September 26, 2006. The intent is to empower every American with the ability to hold the government accountable for each spending decision. The end result is to reduce wasteful spending in the government. The FFATA legislation requires information on federal awards (federal financial assistance and expenditures) be made available to the public via a single, searchable website. [Source: https://www.fsrs.gov/]

Under FFATA, OCG is required to report each new first-tier subaward over $25,000, under federal awards issued after October 1, 2010. Subawards that were initially issued for less than $25,000 but later were modified to be over $25,000, must be reported on once they are amended to meet the required amount.

For additional information regarding subrecipient agreements, contact Priya Navin.

Encumbering the Subrecipient

Once the agreement is negotiated and fully executed (signed by both parties) OCG will encumber the funds on the award cost center. UH F&A rates will be applied to the first $25,000 of subrecipient agreements. The remainder of the subcontract is excluded from F&A. Different account codes used on the cost center will indicate this charging method.

Payment

The subrecipient is required to submit periodic invoices to UH for reimbursement and to report cost sharing. Those invoices are sent directly to the Office of Contracts and Grants where it is reviewed for accuracy and for compliance with the budget, then routed to the PI and department for approval and payment. The invoice is sent to the department with a cover memo containing information on how to process the payment. If applicable, the memo will include a section with ARRA information that includes the CFDA number, award number and the prime agency name. This information will be added to the payment voucher and printed on the sub recipient check or ACH message.

Principal Investigator Monitoring

As the prime award recipient, the University of Houston assumes the ultimate responsibility for the conduct and completion of the project. However, the PI must review all invoices from the subcontractor/subrecipient to determine that the charges are appropriate and that the amount of effort and technical progress of the project is consistent with the amount being invoiced. The PI must also verify that the subrecipient has submitted all required reports and/or deliverables and that the subrecipient has made acceptable progress toward the objectives of the scope of work.

Amendments

Any changes to a subrecipient agreement must be in the form of a written amendment to the agreement signed by both parties. The PI must send OCG a request to change any of the provisions in the agreement. The RA may also initiate the amendment process without a specific request from the PI, as in the case of authorizing the next budget period of the project. The OCG Research Administrator will initiate the amendment with the full knowledge of the PI then route it for review and signatures.

Early termination of agreement

Should the PI determine that it is necessary to terminate a subrecipient agreement, he/she should contact OCG as soon as possible. OCG will forward a stop work order to the subrecipient in accordance with the agreement’s termination clause, and will follow with a formal contract modification.

End of the agreement

At the end of the indicated expiration date, the OCG administrator obtains final reports from the subrecipient institution such as, but not limited to, patent and invention reports, property reports, HUB vendor reports, or other closeout reports as required. OCG will submit copies to the UH's primary sponsor as needed.