JULY12, 2011

SESSION 7 OF AAPLS – BUDGETING FOR PROPOSALS WITH

SUBCONTRACTS: ESTABLISHING RELATIONSHIPS

APPLICANTS & ADMINISTRATORS PREAWARD LUNCHEON SERIES

Module C: Budget Basics

Overview of this Session

How to decide whether to budget for a vendor, a consultant or a subcontract?

- Self assessment quiz

Subcontract documents for proposalsBudget calculations with subcontracts

Subcontract agreements

Vendor, Consultant of Subcontract?

The nature of the collaborative relationship determines the type of the agreement

For Vendor and Consultant agreements Tufts uses the template “Contract for Goods and Services”. These are processed by Purchasing

Subcontract agreements are prepared by ORA using several templates that are customized for each agreement

Vendor (Purchasing Relationship)

Provides similar goods and services to many different purchasers

Provides services within its normal business operations

Operates in a competitive environmentProvides goods and services that are ancillary

to the grant programHas its performance measured against the

deliverablesResults produced by the vendor belong to

Tufts

Consultant (Collaboration with an Individual)

Provides professional advice or servicesNormally not an employee of the engaging partyIn unusual situations, an individual may be both a

consultant and an employee of the same party, receiving compensation for some services as a consultant and for other work as a salaried employee

Consultant agreement is typically with an individual not with the institution that employs him or her

Results produced by the consultant belong to Tufts

Sub-recipient (Subcontract Relationship)

Carries out a program rather than provides goods and services; has responsibility for making programmatic decisions

Has its performance measured against whether objectives of the program are met

Has responsibility for adherence to compliance requirements

May collaborate with Tufts to publish results of the research

Results developed by the sub-recipient are owned by the subcontract institution

Subcontracts are with institutions not with individuals

Subcontract Documents for Proposals

For proposals with subcontracts, Tufts should request from each collaborating institution a budget with budget justification and all the documents required by the sponsor agency

If Tufts is a subcontractor, we must provide all necessary documents to the prime institution at the time of application submission

Internal coordination form and financial disclosure(s) are routed at the time of the application

Refer to the Subcontract Checklist for documents needed for submissions to NIH & Other PHS agencies

Budget Calculations with Subcontracts

Both direct and indirect cost of the subcontract become part of total direct cost budget for Tufts

NIH excludes indirect costs of the subcontracts from total direct cost budget cap

NIH limits indirect cost budget of foreign institutions to 8% of their total budget less equipment

Budget Calculations with Subcontracts (cont)

Base for F&A (overhead,) is the amount multiplied by F&A rate

Base can be MTDC (modified total direct costs) or TDC (total direct costs)

For federal awards use MTDC as base for F&AFor federal budgets with subcontracts this means

that the amount of each subcontract in excess of $25,000 is excluded from overhead cost calculations

For non-federal awards use TDC as base for calculating F&A unless sponsor agency specifically requires excluding certain budget categories (for example, Gates Foundation)

Subcontract Agreements

Must be executed when award is issued to the prime awardee

Subcontract agreements are drafted, negotiated, signed and processed by ORA

Subcontracts are normally issued as cost reimbursable agreements. Justification for deviation from the standard business practice is required. Allow additional time for drafting of subcontracts if customized payment terms are required.

More on Subcontract Agreements

ORA flags awards with subcontracts for processing of the subcontract agreements and amendments

An email from the PI to ORA about the need to issue a subcontract or an amendment for another budget year will expedite the process

The PI should verify that budgets for any subcontracts included with the application are still accurate at the time of the award

Internal rebudgeting is necessary if the subcontract amount must be different from the amount awarded for the subcontract by the agency

Agency approval may be required to modify subcontract amounts. This approval is requested by ORA

Information Needed by ORA to Issue a Subcontract

Award numberInternal account number (received from

Sponsored Accounting via INOA)Start and end dates of the subcontractName and full contact information of the

other party’s Institutional OfficialSubcontract PI name and full contact

informationSubcontract budgetSubcontract scope of work

Conclusions

Subcontract arrangements formalize collaborative relationships between Tufts University and partner institutions to implement research and technical assistance projects

Intent to enter into a subcontract should be documented at the time of the proposal

After the award is made to Tufts, ORA will issue subcontracts for the project

Tufts has responsibility to monitor performance under the subcontracts