Subawards

Subrecipient/Subaward

• Role: Performs substantive, creative work and shares responsibility for project objectives.
• Compliance: Subject to the same federal compliance requirements as the prime recipient.
• Impact: Determines who is eligible for services and has programmatic decision-making authority.
• Relationship: A collaborative partner in the research or project.

Vendor/Procurement Contract (PSA)

• Role: Provides goods or services, typically in a competitive environment.
• Compliance: Not subject to the same federal compliance requirements; operates under a contract.
• Impact: Provides services for the benefit of the pass-through entity, not for the general public, and does not help with project design.
• Relationship: A vendor or contractor supplying needed resources (e.g., equipment, analysis services). 

Determining the classification requires reviewing the agreement, not just the entity type. A subrecipient often has a "subaward" or "subcontract" agreement, while a vendor has a "purchase order" or "contract". A vendor typically provides similar goods/services to many customers and operates in a competitive environment, while a subrecipient is closely tied to the specific aims of the award. 

Subrecipient/Subaward

Definition: An entity that has agreed to collaborate with the USM PI to perform a substantive portion of the programmatic effort on an award.

• Works collaboratively with the USM PI as a co-investigator at another entity to which funds are being passed.
• Has authority to make administrative and programmatic decisions and to control the method and results of work.
• Has responsibility to meet all applicable sponsor requirements.
• Has performance measured against meeting the program objectives.
• Are designated senior/key personnel in the proposal-may be a Co-PI.
• Uses sponsor funds to carry out a program rather than provide a good or a service.
• Has responsibility for the end results of the research effort.
• Services are complex and require a scope of work and budget, billing requirements, and a deliverable schedule.
• The entity’s statement of work may represent an intellectually significant portion of the programmatic decision making.
• The entity’s work results may involve intellectual property and/or may lead to publications.
• Needs animal and/or human subjects approvals for its independent portion of the work.
• Requires a separate budget and budget justification in the application.

Vendor/Procurement Contract 

Definition: An individual, business, or other entity that supplies products or services to USM.

• Provides similar goods or services to different purchasers.
• Does not make program decisions or take actions that impact a program’s overall success or failure.
• Is not subject to sponsor compliance regulations.
• Goods and services are ancillary to the program.
• Provides goods or services as part of their normal business operations.
• Competes with comparable entities to provide the same goods and/or services.
• Is not responsible for research results.
• There is no scope of work.
• Goods and services are billed according to the vendor/contractor’s established rates.
• The goods and services are secondary to the central purpose of the project.
• No potential for patentable or copyrightable technology to be created through the project from activities of the entity.
• Performs services only (no analysis or discretionary judgment).
• No one individual providing goods and services is identified.

The subaward process at Southern Miss involves shared responsibilities between the Principal Investigator (PI) and ORSD. 

Principal Investigator (PI)

The PI oversees the technical and scientific aspects of the collaboration. Their responsibilities include:

• Initiating the subaward by submitting a request to their assigned Contract and Grants Administrator/ Coordinator after the prime award is received.
• Providing required documents, including the subrecipient’s statement of work, detailed budget, and budget justification.
• Monitoring performance to ensure the subrecipient is meeting project goals and delivering on the agreed scope of work. 
• Reviewing invoices to confirm that charges are appropriate and align with project progress and budget.

Office of Research Support and Development (ORSD)

ORSD holds institutional authority for the legal and administrative aspects of subawards. Our responsibilities include: 

• Conducting risk assessments by reviewing audit reports and financial controls of the subrecipient.
• Drafting and negotiating agreements through the Proposal and Award Management (PAM) team, incorporating all required flow-down terms from the prime award.
• Executing agreements, with only designated institutional officials authorized to sign on behalf of the university.
• Ensuring compliance, including verifying that all necessary approvals (e.g., IRB, IACUC) are in place before issuing the subaward.

1. Proposal stage: The PI notifies their PAM grant administrator with the intent to include a subaward in the proposal. Required documents are collected from the collaborating institution.
2. Award and setup: Once the prime award is received, the PI submits a formal subaward request to their grant administrator to begin the process.
3. Issuance: The Contracts and Grants Administrator/Coordinator – Outgoing Subawards drafts and negotiates the agreement. Once finalized, it is signed by authorized officials at both institutions.
4. Monitoring: The PI oversees the subrecipient’s programmatic progress, while Financial Reporting and Analysis (FRA) reviews invoices for financial compliance.
5. Invoicing and payment: The subrecipient submits invoices to the university. The PI reviews and certifies that the invoiced work has been completed in alignment with the scope of work and project timeline, and FRA processes payment for approved invoices.
6. Closeout: At project completion, the PI approves the final invoice and deliverables. FRA manages the financial and administrative closeout of the subaward.

To initiate a subaward during proposal development, researchers will receive an automated email from the research system prompting them to complete the Subrecipient Determination Form. This helps ORSD assess the nature of the collaboration during proposal setup. Once the form is submitted, your assigned Contracts and Grants Administrator/Coordinator will request the following documents:

• Statement of Work
• Budget
• Budget Justification
• Subrecipient Commitment Form
• Audited Financial Statements, Unaudited Financial Statements, or Other Financial Information
• Negotiated F&A Cost Rate Agreement (if no federally negotiated rate exists, the subrecipient may elect to use a de minimis rate of 15% of modified total direct costs)
  • For entities participating in the FDP Clearinghouse, we will collect this information from your FDP Clearinghouse profile.

If the subaward was included in the original proposal submitted by USM, these documents may already be on file. Additional documentation may be required, depending on the sponsor’s guidelines. All compliance-related matters (i.e., export control, human subjects, animal research, or conflicts of interest) must be addressed before the subaward can be issued.

• 2 CFR Part 200: This federal regulation outlines uniform administrative requirements, cost principles, and audit requirements for federal awards, including subawards.
• Subrecipient accountability: The university remains responsible for the subrecipient’s performance, spending, and reporting to the funding agency.
• Flow-down of requirements: All applicable terms and conditions from the prime award must be included in the subaward agreement.