11 Penn State Subcontracting Issuance and Administration Stacey Bucha, Negotiator - OSP Theresa Pietrowski, Lead Contracts Specialist – EOC

22 Subcontracting Issuance and Administration Subcontract or Subaward 2CFR ??? (formerly OMB Circular A-133) Compliance What do you need to know?

Sponsored Lifecycle 3 Pre-AwardPost-Award SubmissionSubmission ReviewReview NegotiationNegotiation Period of Performance Reconcile & Closeout 1 st Period 2 nd Period 3 rd Period Extension

44 Subcontracting Issuance and Administration Definitions: Subcontract: acquisition or procurement to perform substantive sponsored project effort (subcontractor). –Concerned with more than the end product, unlike a Purchase Order. –supports contract or grant –deliverables –monitor performance and/or cost –negotiated terms and conditions

55 Subawards/Subcontracts Subaward: financial assistance to perform collaborative sponsored project effort (Subrecipient). –Concerned with more than the end product, unlike a Purchase Order. –Determines who is eligible to receive financial assistance –Has performance measured against whether the objectives of the federal program are met –Has responsibility for programmatic decision making –Has responsibility to adhere to applicable federal program compliance requirements –Uses the Federal funds to carry out a program of the organization

66 Subcontracting Issuance and Administration Subcontracts and Subawards: Processed through Office of Sponsored Programs, ARL or EOC. Application of F&A: First $25K of Subcontracts/Subawards.

77 Subcontracting Issuance and Administration If prime award is a contract (procurement) –All lower tier awards will be procurements, i.e. Subcontracts/P.O.’S/consulting agreements. If prime award is a grant (financial assistance) –Lower tier awards may be either procurements or subawards.

88 Subcontracting Issuance and Administration Subcontract/Subaward Selection –Sole Source –Single Source –Competitive Bid (ARL & EOC)

99 Subcontracting Issuance and Administration Questions that might help: –Will the entity be a co-author on any publications? –Will the entity own any part of the work? –Is the subrecipient subject to A-133 (2CFR???); If not, are they fiscally viable?

10 Subcontracting Issuance and Administration Additional questions to ask when considering a Subcontract: What program (specific Contract / Grant Number) will be supported? What are the services/supplies to be procured? Is this clear? Has a technical project plan been approved by and funding authorization received? If identified as ‘sole’ source, why? Has a ‘Justification for Other than Full and Open Competition’ form been completed? Why is this subcontractor uniquely qualified? Was there an effort to identify other alternative sources? Can/should this be competitively bid? Is the intended subcontract work subject to export control? Will the RFP include classified documents for proposal review/preparation? And/or will the intended subcontract work be classified? If yes to either, what classification (Confidential – Secret – Top Secret)? Has a DD254 Form been prepared for the pending subcontract? Will PSU transmit any proprietary information with the RFP? If yes, is the appropriate PIDA in place? Will PSU transmit proprietary information during performance of resulting subcontract? If yes, either a PIDA to be in place OR does the resulting subcontract contain specific non- disclosure language? Will any Government Furnished Equipment/Materials be required? What Key Personnel should be utilized by the selected subcontractor? RFP Package to include: –Cover Letter –Conditions of Offer –Statement of Work –Delivery Schedule –Representations and Certifications –Closeout Forms and Information

Sponsored Lifecycle 11 Pre-AwardPost-Award SubmissionSubmission ReviewReview NegotiationNegotiation Period of Performance Reconcile & Closeout 1 st Period 2 nd Period 3 rd Period Extension

12 Subcontracting Issuance and Administration Request to Issue a Subcontract/Subaward –Sole Source vs. Competitive If joint proposal/funded as proposed, state so under sole source selection –Foreign Organization/Institution –Attach copy of proposal package, to include: Cover page/certifications with appropriate signatures Statement of Work Detailed Budget Copy of F&A (IDC) Agreement –Forward to OSP for processing

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15 Subcontracting Issuance and Administration OSP Processing Responsibility: Sub request logged into SIMS and assigned to negotiator and A-133 Audit review performed by OSP Subcoordinator (Michele Kuhn) When necessary, a more detailed audit review is performed by the Subaward Policy Specialist (SPS) (Jennifer Taylor-Hillebrand) Negotiator reviews prime award and drafts subcontract or subaward (based on type of prime award) When required by prime sponsor, subaward/subcontract forwarded to sponsor for approval Subcontract/subaward forwarded to subrecipient for signature OSP negotiates changes requested by subrecipient (if any) Upon receipt of fully executed subaward/subcontract, OSP distributes/scans fully executed document NOTE: This process is different for both ARL and EOC, due to the nature of the work being performed at those facilities.

Sponsored Lifecycle 16 Pre-AwardPost-Award SubmissionSubmission ReviewReview NegotiationNegotiation Period of Performance Reconcile & Closeout 1 st Period 2 nd Period 3 rd Period Extension

17 Subcontracting Issuance and Administration PI/College Responsibilities –Funds are available –Sub is performing work and submitting reports/deliverables as required –Invoices are submitted in proper format and in accordance with the requirements of the subcontract for the work performed to date –Process Sub payments via IBIS OSP Responsibilities –Respond to questions/assist with problems

18 Subcontracting Issuance and Administration Closeout PI/College Responsibilities –Prepare Certification of Technical Completion and submit to OSP (along with Final invoice) –Verify invoice is marked “FINAL” with CUMULATIVE COSTS. OSP Responsibilities – Verifies A-133 compliance of subrecipient –Negotiator conducts desk audit of costs incurred vs. budget. Questions regarding costs incurred addressed to subrecipient or College/Unit as appropriate. –Negotiator verifies all required closeout documents have been received. –Authorizes College/Unit to release final payment. –Closing statement distributed. NOTE: ARL & EOC follow a slightly different closeout process

Subcontracting Issuance and Administration Sample Final Invoice w/ Cumulative Costs 19

Subcontracting Issuance and Administration 20

21 Subcontracting Issuance and Administration International Subawards Fixed-Price Agreements Advance payments or milestone payments based on receipt of reports or deliverables are necessary. Payment to be made in U.S. dollars. (Ex: Exchange rate fluctuations – for budgets prepared in 2002, the South African Rand subsequently lost ½ its value – how to do the same work for ½ the money?) What type of entity is the international subrecipient? - government entity? A university? Other? Any licenses, approvals, insurances needed? And from whom? (Note: In addition to foreign approvals, NIH must obtain State Department approvals for subawards with foreign collaborators.)

22 Subcontracting Issuance and Administration Any concerns relative to tax issues, export controls, legal issues? What is the culture of research administration in the collaborator’s country? How developed are the structures that will support the research (audit and accounting, reporting, human subjects (if applicable), animal welfare (if applicable), conflict of interest? Can the subrecipient administer a federal award in compliance with the (federal) requirements?

23 Subcontracting Issuance and Administration Be aware of cultural differences (different languages, work climate, socio-economic differences, civil and tribal differences, complicated bureaucracies, etc.) that may affect the way in which the subaward is administered. Consider the end of the project as you set things up at the beginning.

24 Subcontracting Issuance and Administration PSU Subcontract Policy: –RA16 –OSP Procedures: (currently being revised) PSU Subaward Policy: –RA19 –OSP Procedures: (currently being revised)

25 QUESTIONS