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Subrecipient Agreements

Subrecipient Agreements

A subrecipient agreement is a contract in which a non-UH entity carries out a defined portion of a sponsored project statement of work. The Office of Contracts and Grants (OCG) negotiates the agreements following the prime agency's guidelines, standard business practices, and the Uniform Guidance and Federal Acquisition Regulation for federal awards. Agreements 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 considers information from the risk assessment conducted.


Subrecipient – A subrecipient is a non-federal entity such as another university, company, or organization that receives a subaward from a pass-through entity to carry out a portion of work that constitutes a significant component under a sponsored project.  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.  See Uniform Guidance §200.1 definition.

Contractor (aka Vendor) - Contractor means an entity that receives a contract. A contract is a legal instrument by which the University purchases property or services needed to carry out the work for a sponsored project. When a contractor instead of a sub-recipient is used to carry out work under the project, the university procurement procedure, including sole source justification, must be used. See the Uniform Guidance §200.1 definition. 

Sub-award – A sub-award is an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of an award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a project.

Sub-Award Agreement – This is a legal agreement through which the subaward is issued to the sub-recipient.  It outlines the sub-award terms and conditions and usually flows down all of the prime award's terms and conditions.

Refer to Distinguishing Between Subrecipient, Sub-Awardee, Vendor, and Consultant for guidance.

Request to Issue a Sub-award

The request to issue a subrecipient agreement must be submitted formally to OCG at the time of award, even if it is part of the award budget.  The information will allow OCG to build the subrecipient agreement with the requirements from the PI.  The form is completed electronically via the PI portal and/or the Department Business Administrator Work Center in My Inbox.  Complete the form here and submit it for processing.  If the subaward was not included in the original proposal, the RA must contact the sponsor to add a subrecipient to the project. Each sponsor's requirements for documentation to add a subrecipient after the fact will differ. The RA will work with the PI to provide the relevant documents for Prior Approval to issue a sub-award not budgeted.

Subrecipient Monitoring

Before signing the agreement, OCG must verify that prospective subrecipients to a federal grant are not suspended, debarred, or otherwise excluded from federal contracts. This information can be obtained via SAM (System Award Management) by searching for potential subrecipients by DUNS number or name. 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 sub-recipients 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 when an agreement is negotiated.

Reporting under FFATA

The Federal Funding Accountability and Transparency Act (FFATA) was signed on September 26, 2006. The intent is to empower every American to hold the government accountable for each spending decision. The goal is to reduce wasteful spending in the government. The FFATA legislation requires information on federal awards available to the public via a single, searchable website Under FFATA, OCG must report each new first-tier subaward over $30,000.00. Subawards that were initially issued for less than $30,000.00 but later modified to be over $30,000.00 will be reported when amended to meet the required amount.

Encumbering the Subrecipient

When a subrecipient agreement is fully executed, OCG encumbers the funds on the grant cost center's funds using a Purchase Order (PO). The university’s federally negotiated Facilities and Administrative (F&A) rates are 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 to indicate this charging method. A PO-voucher must be used to process the subrecipient payment within 15 business days of receipt of the invoice. The OCG Research Administrator (RA) should be contacted immediately if the invoice cannot be paid due to non-performance by the sub-recipient.  The matter will be documented, and the RA will help to resolve the issue, including contacting the sponsor for a resolution. 


When the subrecipient submits invoices for payment, they are sent directly to OCG. The invoices are reviewed for accuracy and compliance with the agreement and budget, then routed to the PI and department for approval and payment. The invoice is sent to the department with a cover memo that requires the Principal Investigator or delegates to sign.  The signature certifies that the recipient is making satisfactory progress on the work assigned and can be paid for the amount stated on the invoice. For federal awards, payments should be remitted with details about the CFDA number, award number, and the prime agency name. 

Departments should follow the steps below when processing payments to the sub-recipient on the PO voucher:

  • DELETE the PO lines that have exhausted all encumbrance to process payments from the next PO line encumbrance on the voucher.
  • To expedite payment and prevent delays on outstanding invoices, amend the payment terms from the default 30 days to the current processing date on the voucher.
  • For federal awards only:
    • In the payment tab field in the payment options section, enter the Prime Agency Name and ID in the message field.
      • For example, US Department of Energy, DE-EE0008332
    • In the invoice number field, add the CFDA number to the Invoice Number.
      • For example: 000543, CFDA-81.086

Principal Investigator Monitoring

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


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 contract. The RA may also initiate the amendment process without a specific request from the PI, as in the case of authorizing the project's next budget period. The OCG RA will initiate the amendment with the full knowledge of the PI then route it for review and signatures.

Early termination of the agreement

Should the PI determine (or learn from the prime) 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 according to the sponsor and the agreed-upon termination clause, then follow-up with a formal contract modification.

End of the agreement

At the end of the project, the PI verifies all deliverables are met by signing and submitting the final invoice for payment.  OCG obtains a closeout memo from the subrecipient that confirms that all patent and invention disclosure, property, and other closeout reports are submitted and all invoices paid in full before closing the sub-recipient record its system.