1. 1 Subcontracting under your TAACCCT Grant TAA-CCCT Round 2 Grantees April 10, 2013 On Track with Trade Adjustment Assistance Community College and Career Training (TAA-CCCT)

2. 2 Topics for today’s session Review of Subgrant prohibition Subrecipients vs. Vendors Subgrant vs. Subcontracts Vendors and Subcontracts Agreement types Contract Types Procurement

3. 3 Subgrant Prohibition TAACCT Grantees do not have authority under this program to award sub-grants – Consortium members are not subgrants May award subcontracts, but must be a vendor relationship

4. What does this mean? You have to know what type of relationship you are engaging in with other entities 4 Subrecipient?? Vendor?? Partner??

5. Sub-recipients Vendors Legal entity to which a subaward of Federal Funds is made Accountable to recipient for the use of funds provided Performance measured against the objectives of the Federal program Has responsibility for programmatic decision making Has responsibility for adherence to applicable Federal program requirements, rules and regulations Uses federal funds to carry out program of organization Contract to provide goods, supplies and/or services as part of normal business operations Does not directly support goals of grant; ancillary to the operation of the program Does not have programmatic decision making authority Not subject to program compliance requirements Subject to procurement regulations

6. Partners You may have unfunded partners under your TAACCCT grant. – Follow SOW requirements – No federal-wide requirements around unfunded partners Partner is NOT the same as consortium member Grant funds can only be given to grant partners through sub contracts Activities in contract must be appropriate for a contract not a grant (vendor NOT subrecipient) No joint achievement 6

7. 7 Subgrants vs. Subcontracts Subgrant: An award of financial assistance in the form of money, made under a grant by a grantee to an eligible subgrantee. Subcontract: An agreement, purchase order, or any legal instrument issued to a third party the subcontractor, calling for a defined piece of work or production and/or delivery or specified goods and services ancillary to the goals of the grant.

8. 8 Putting it together… Subrecipient relationship = SUBGRANT Vendor Relationship = SUBCONTRACT

9. Resources for Definitions Attachment E to SGA – Source: OMB Circular A-133 Section 210 – http://www.whitehouse.gov/sites/default/files/omb/a ssets/a133/a133_revised_2007.pdf http://www.whitehouse.gov/sites/default/files/omb/a ssets/a133/a133_revised_2007.pdf One Stop Comprehensive Financial Management Technical Assistance Guide (TAG) - Appendix E – http://www.doleta.gov/grants/pdf/TAG_PartII_July201 1.pdf http://www.doleta.gov/grants/pdf/TAG_PartII_July201 1.pdf 9

10. How to distinguish between… General Purpose Focus Recipient Responsibility Subgrants? Subcontracts? Vendors? Subrecipients? 10

11. 11 General Purpose Subgrant To accomplish a public purpose of support or stimulation through the grant, as authorized under statute. Subcontract Purpose is to provide supplies and/or services

12. 12 Focus Subgrantee Carries out one or more major programmatic functions in support of the goals of the grant Subcontractor Does not support the goals of the grant directly Provides supplies and/or services that are ancillary or supportive to the operation of the grant

13. 13 Recipient Responsibility Subgrantee Has responsibility for: – programmatic decision making, – adherence to applicable Federal program compliance requirements, Subcontractor Provides supplies and/or services for use by the prime grantee that are ancillary to the operation of the grant. Subject to procurement regulations, but not programmatic compliance requirements Does not have decision- making authority pertaining to the grant.

14. 14 Subcontracts Type of agreement used to establish vendor relationship Not all subcontracts are vendor relationships Must look to general purpose, focus, recipient responsibility

15. 15 Is it a subcontract? Grantee issues RFP seeking to award contract to: Assess skills, aptitudes and career interests of participants Provide career advice and job search assistance Conduct workshops on resume writing and job interviewing techniques Provide referrals to services provided by workforce, education or public assistance agencies Help participants develop individual career plans

16. 16 Is it a subcontract? No. Called a subcontract but… Activities listed are all deliverables under the grant – Program responsibility placed on contractor, not the grantee BUT Shift program responsibility to grantee Procure specific goods or services Clearly articulate what goods or services vendor is providing the grantee COULD BECOME A SUBCONTRACT

17. 17 Examples of activities in subcontracts Hosting meeting of SME’s to assess curriculum needs May be subcontract provided that: – Vendor is not wholly responsible for performance of grant activities – Vendor does not have authority to make decisions – Vendor provides grantee with defined deliverable (i.e. report) – Oversight provided by grantee Researching, designing and developing a program/curriculum to allow career pathway for participants to obtain professional certification May be subcontract provided that: – As vendor/contractor they design and develop materials but do not make programmatic decisions – Provides grantee defined deliverable – Grantee utilizes these materials to provide career pathway to participants – not contractor

18. 18 Examples continued Hosting and participating in Instructor Certification Training May be contract provided that: – Contractor is providing training – Training must be done on behalf of the grantee and under grantee’s name – Contractor cannot select or screen training participants or evaluate participates other rating pass/fail grade for course – There is a defined contract deliverable Creating a common project book to be used by participants May be contract provided that: – Grantee is procuring a product (project book) that helps to achieve grant deliverable – The product is not the grant deliverable but will be used by grantee to meet its deliverable

19. 19 Agreement Types - Services Sub grant: Prohibited – Example: a subgrant to an organization directing them to develop a deliverable under the statement of work on behalf of grantee Subcontract: – Individual services Faculty to develop curricula under grant – Professional Industry consultant/subject matter expert Audit firms Software development – Personal services – Workforce system services

20. 20 Individual Services Contracts Independent contractor and casual employee services When a fee or honorarium paid Non-employees for services performed Current employees for services not related to their appointments

21. 21 Professional services contracts Professional Services defined in 2 CFR 220, Appendix A, #37 Consultants, members of particular profession or possess a special skill Not officers or employees of grantee institution

22. 22 Utilizing the Workforce System May contract with workforce system to provide staff- assisted or customized services such as: – Comprehensive assessment – Case management – Participant tracking – Job placement Subgrant prohibition still applies – Program responsibility with grantee – Workforce system cannot produce deliverables on behalf of grantee

23. Contract Basic Structure Legally binding – Offer, acceptance, consideration – Offer, acceptance, consideration, made by authorized official In writing A purpose authorized by law Properly executed Specific goods, real property, work, or services

24. 24 Contract Types Cost reimbursement Fixed price Cost plus fixed fee Cost plus percentage of costs

25. 25 Cost Reimbursement Contract Work is done BEFORE costs are funded Costs specified in approved contract budget Requires upfront capitol from contractor Advances may be used Required method between governmental entities

26. 26 Fixed Price Contracts Specified amount for work performed Payment options vary –tie to completion of specific units of work Purchase Order is example

27. 27 Cost plus fixed fee Reimbursement for actual costs Fixed fee for profit or fee paid on performance – Fee negotiated as a dollar amount – Fee negotiated separately – Performance is key!

28. Fee Awards to Commercial for-profit Organizations Fees based on set/fixed amount or incentive MUST be separately negotiated MUST be based on performance achieved

29. 29 Cost plus percentage of costs UNALLOWABLE contract type under government grants

30. May 3, 2011 Wisconsin Suggested Contract Clauses Breach of contract & other legal remedies Termination for cause or convenience Access to records & retention requirements Reporting requirements Applicability of regulations Audit requirements Patent rights, copyrights, rights in data

31. Procurement Requirements 29 CFR Part 95.40-48 Procurement standards for colleges – Supplies, other expendable property, equipment, real property and other services. – All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. 31

32. Procurement Policies Minimum requirements establish: – Written procurement/purchasing procedures – Written code of conduct & conflict of interest policies – Procedures to review procurements Cost price analysis (determination of needs, costs, estimates, etc.) Demonstrated ability to perform – Close-out & protest process of contracts (records, settlement, etc.) 32

33. Non competitive proposals SOLE SOURCE – No responses to adequately drafted and publicized RFPs (more than once) – Public emergency or delay – Rationale for selection must be fully documented, adhere to 29 CFR Part 95, & be approved by Directors/Board – Cost and/or Price analysis is required Last resort for procurement of goods & services – Will be reviewed during monitoring by DOL – USE CAUTION 33

34. Documentation Grantees/Subrecipients MUST maintain the following documents: – RFP & evidence of advertisement – Signed rating sheets/evaluation factors & scores – Documents negotiating incentive fee, if applicable – Cost and/or Price analysis estimates, worksheets, etc. – Justification & approval for sole source – Selection recommendations & approval – A signed & dated agreement by both parties 34

35. Post Award Administration Adhere to the terms & conditions – Monitor budget and payments against invoices and performance results – Perform onsite monitoring and inspect client files and records – Verify that deliverables were achieved – Formal modification of agreement if necessary (material change in the scope of work or performance) 35

36. 36 Questions??

37. 37 Follow up questions More details on proper procurement: – Introduction to Procurement online training https://etareporting.workforce3one.org/page/financial -- Procurement https://etareporting.workforce3one.org/view/3001227 639544026922/info Contact your FPO to discuss your SOW and whether work is a subgrant or subcontract and the appropriate procurement vehicle