Subagreement Guidelines

Subagreement Definition

An agreement that is written under the authority of, and consistent with, the terms and conditions of a prime award, and authorizes a portion of the research or substantive effort to be performed by another organization. Other terms for a subagreement include subaward, subcontract, subgrant, purchase order, purchase agreement, and consortium agreement. As defined in OMB Circular A-110, Subpart A2(e), a "subaward means an award of financial assistance in the form of money, or property in lieu of money, made under an award." Subagreements as defined above are not subject to the procurement standards set forth in Sections 40-48 of A-110.

Subagreements at the Proposal Stage

When a PI decides to transfer a portion of the research or substantive effort to another organization-generally through a collaboration with a colleague or colleagues at other institutions-a formal subagreement proposal must be prepared by the subcontractor's PI and incorporated by the lead institution's PI into the application to the sponsor. Subagreement proposals should include a statement of work, budget, budget justification, and other materials as required by the prime sponsor and must be endorsed by the subcontractor's authorized institutional official.

When Northwestern proposals include the transfer of research or substantive effort to another institution, Northwestern's PI is responsible for obtaining all required subagreement materials and incorporating them into his/her proposal prior to OSR review.

Subagreement submission procedures for proposals from Northwestern to a lead institution are the same as standard proposal submissions. They should be reviewed and approved by the department chair or center/institute director and dean and routed to OSR (accompanied by an OSR-1 form) for review and institutional endorsement. Because subagreement proposal materials must be incorporated into the overall proposal submitted by the lead institution, submission deadlines are routinely a week or more in advance of the published sponsor deadline.

Responsibilities

At the time of proposal submission, both the lead institution and the subcontractor institution are responsible for review of the subagreement proposal materials. At Northwestern, this review is performed by the PI and OSR in accordance with the normal proposal review process.

If the proposal results in an award, the lead institution is responsible for the overall project and is accountable to the sponsor for project performance and compliance with all applicable rules and regulations. The subcontractor is responsible for complying with all relevant rules and regulations outlined in the subagreement.

Subagreement Approval

Sponsor approval must be obtained prior to preparing a subagreement. In most cases, this approval is provided when an award is issued based on a proposal that included the subagreement. In other cases, specific written approval is required even when the subagreement was proposed.

Subagreement Preparation

Once approval has been secured, the PI or unit business administrator should initiate the issuance or modification of subagreements by completing and submitting to OSR an OSR-6 form for new subagreements or an OSR-7 form for continuing subagreements. Requested information includes such things as budget period, authorized funding level, budget, work statement, reporting requirements, PI, and administrative contact. Submission of this information authorizes OSR to proceed with the issuance of the subagreement.

Subagreement Components

Subagreements traditionally include the following.

• Preamble
• Recitals (optional)
• Schedule
  • Key personnel
  • Technical and administrative representatives
  • Period of performance
  • Estimated costs
• Special Provisions
• General Provisions
• Statement of Work
• Budget
• Institutional Endorsement

A subagreement should clearly describe the roles, responsibilities, and rights of both parties. Because the lead institution is ultimately responsible to the sponsor for the overall conduct of the project and compliance with rules and regulations, the subagreement must incorporate all applicable requirements.

Subagreement Post Award Management

When subagreements issued by Northwestern are fully executed, the PI and unit business administrator are notified and directed to establish a purchase order (PD). It is the PI's responsibility to oversee technical performance on subagreements. PI sign-off on subagreement invoices certifies satisfactory progress. Accounting Services for Research and Sponsored Programs (ASRSP) is responsible for monitoring subagreement invoices and initiating payments. ASRSP, in concert with the PI and unit business administrator, is responsible for subagreement closeout.

When subagreements issued to Northwestern are fully executed, they are handled in the same manner as awards received directly from a sponsor. OSR matches the proposal to the subagreement award, establishes an account, and notifies the PI and unit business administrator. Because most subagreements are not received until after the period of performance start date, PIs are encouraged to consider requesting the establishment of pre-spending accounts (see "Prespending on Sponsored Accounts," page R24). Costs for project activities can then be charged directly to the appropriate account, thus eliminating after-the-fact cost transfers.