Subawards at Proposal

Page Updated: May 1st, 2018

Proposal Submission

When including a subaward in a UW-Madison proposal, approval from the proposed subrecipient institution should be obtained. The approval generally consists of a short letter agreeing to the terms and conditions and any required cost share. It should come from an institutional contact with signature authority. For example, at UW-Madison, this would be RSP. The approval documents will be submitted along with the rest of the UW-Madison proposal package.

At a minimum, a subrecipient's proposal should include the following:

Endorsement from the Subrecipient's Authorized Official

This endorsement is typically a signed letter of intent which covers the subcontract proposal, or a signed sponsor cover sheet or face page.

A clear description of work to be performed by the subrecipient

The statement of work (SOW) provides a general overview of the subrecipient's role in the project. The goal is to ensure the subrecipient understands what is expected of them and what should be included in the finished product.

Note: The SOW is not the budget justification. Most importantly, a well written SOW will help protect the PI, the department, RSP, and the UW as a whole, in the event the subrecipient fails to perform their obligations to the agreement.

A good Statement of Work should include the following elements:

  • A detailed description of the work to be performed
    • Clearly state what you want the subrecipient to achieve and deliver.
    • Will travel be required to complete the work?
    • Is there a specific number of times something needs to be done (i.e. interview 10 subjects)
  • Deliverables (if needed)
    • Include a timeline of major deliverable due dates
      • Fixed dates
      • Flexible dates (i.e. Two weeks after some event occurs)
    • Include milestones as necessary so that the work can be monitored to ensure that you are getting what you need and the quality of the work is as expected.
  • Special requirements
    • Travel
    • Special skills or knowledge
    • Resources
    • Special tools/equipment/supplies
  • Remember to include:
    • Specific language
    • Don't leave room for interpretation
    • Use language everyone can understand
    • A definition of completion
      • If a final product is submitted, what constitutes acceptance?
A budget and budget justification for the subrecipient's portion of the project

It is imperative that the budget be detailed, in order to ensure the subrecipient spends the funds in accordance with the objectives of the agreement. The subaward budget should include everything that the institution receiving the subaward will need to complete their subaward.

When required by the Sponsor, Subrecipients may need to provide additional information, such as:

  • Biographical Sketches of Key Personnel
  • Current and Pending Support of Key Personnel
  • Representations and Certifications
  • Negotiated Facilities and Administrative Cost Agreement

Note: If you have a situation where all the subrecipient sites have not been determined prior to submission of the proposal, the UW-Madison budget justification should clearly identify this situation, and all required Sponsor approvals for issuing subawards will be sought when the parties are identified.

Budgeting Subaward Costs in UW-Madison's Proposal

When preparing the overall project budget, include the total costs of each subaward (Directs + F&A = Total costs), as one line item in the UW-Madison direct cost budget.

If using the F&A MTDC base, only the first $25,000 of each subaward's total cost is included in the calculation of UW F&A. The federal government limits the amount of F&A that UW-Madison may incur for outgoing subawards. UW may charge F&A to the first $25,000 of an outgoing subaward. This limitation applies to the period of performance of an award, that is, each competitive segment. If a project is renewed, F&A will be charged for the first $25,000 of each subaward issued under the new competitive segment, regardless of whether the subrecipient participated in the previous segment.

When preparing a budget that includes subawards, ensure the appropriate amount of the subaward budget is included in UW-Madison's MTDC base.

Detailed Subrecipient Budgets

All budgets for subawards need to include expenses by budget category.* If the sponsor has a specific template for budgets, the subawardee budget should follow that template. RSP cannot issue subawards using loaded rates (i.e. $200/hour; $500/day). If an entity uses a loaded rate because it is the standard rate for the entity, that is an indicator that a vendor/procurement relationship is being established. Such relationships are processed through Business Services.

* An exception may be made for clinical trial subawards.

Budgeting for Fixed Price Outgoing Subawards

Per the Uniform Guidance (UG Sections 200.201, 200.332) prior approval from federal sponsors is required if UW-Madison wants to issue a fixed price subaward rather than a cost-reimbursement subaward. By federal regulation, the total cost of each fixed price subaward may not exceed $150,000.

If contemplating a fixed price subaward, you should contact RSP during development of the proposal, prior to submission. RSP can assist with determining if a fixed price subaward is appropriate. Should it be deemed appropriate, RSP will provide you with the specific language that should be incorporated into your proposal.

Subaward Indirect (F&A) Costs

The Uniform Guidance (Sections 200.331, 200.414) specifies that F&A costs should be budgeted for subrecipients as follows:

  1. If the subrecipient has a federally negotiated F&A rate, the negotiated rate must be included in all proposed subawards.
    • The only exceptions are if the Federal program has a published F&A cap, or the non-federal sponsor has a published policy that limits F&A that can be charged. In such cases, the capped rate will be used by both UW-Madison and its subrecipient(s).
  2. If the subrecipient does not have a federally negotiated F&A rate, under the Uniform Guidance "may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely." Costs must follow guidance in §200.403 Factors affecting allowability of costs, including that “costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both.” If the 10% de minimis rate is chosen, it must be used consistently for all Federal awards until the subrecipient chooses to negotiate for a rate.

Note: UW-Madison will not negotiate indirect rates with subrecipients who do not have a current negotiated indirect cost rate agreement with a U.S. Federal agency.