Grants Policy and Management
Training for Foreign Investigators

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<< Part 3. Actions You Can Take · Training Index · Part 5. Compliance >>

Learning Points

Understanding subawards (consortium agreements).
When to use a subaward or a consultant.
Your responsibilities as the grantee.
How to create a subaward.
How to change a subaward.
Budget requirements for subawards.

Part 4. Subawards

This is Part 4 of the Grants Policy and Management Training for Foreign Investigators.

Subawards and other collaborations can play an important role in a research project. This part describes the role of the grantee and subaward organization.

It shows how to design an effective subaward agreement, manage a subaward and make changes to an existing subaward.

Working with Collaborators at Other Sites

Subaward agreements are between you -- the grantee -- and the subawardee. They do not involve NIAID.

At any point during your award, you may need to involve collaborators. One way to do that is to create a subaward, (also called a consortium agreement) for researchers, institutions, or organizations that you want to play an active role in your research project.

Subawards allow another organization to perform some activities for your grant under your supervision. They enable collaborations between a grantee and another organization -- the subawardee.

This agreement is between you -- the grantee -- and the subawardee. It does not involve NIAID. You are responsible for the actions of the subawardee.

Think about this arrangement as a bicycle wheel formed from a hub with spokes. NIAID -- the pedal -- gives money and authority directly to you through your institution -- the wheel's center.

You work directly with the subawardees -- the spokes -- and are accountable for their performance, expenditures, and activities. The research forms the rim, which completes the wheel and propels everybody forward.

Roles and Responsibilities When Using Subawards

As the grantee, you -- not the subawardee -- are accountable to NIAID.

In managing their subawards, grantees are fully responsible for the following:

All actions of the subaward related to the award.
All contact with NIAID. If we need information from your subawardees, we will contact you.

As the grantee, you (not the subawardee) are accountable to NIAID for the performance of the research project, spending of grant funds by all parties, reporting requirements, negotiating animals in research and human subjects assurances, and all other obligations for the grant.

You must play a substantive role in the research; you cannot just pass along funds to another institution.
If there's a problem with a subawardee, we expect you to take care of it.

You can add a subaward to your project at any time. See Creating a Subaward and a Subaward Agreement and Reporting a Subaward on Your Progress Report below.

Do You Need a Subaward or a Consultant?

Talk to your business office or program officer when deciding whether to use a subaward or consultant.

Subawardees should make major contributions to the project. Use a subaward when you need the other institution for the design, conduct, or outcome of your project.

For help filling in smaller gaps hire a consultant instead. Consultants usually provide advice or services -- for example, supplying software, making technical comments, or setting up equipment -- and sometimes participate significantly in the research. They work for a fee; for information on paying consultants, see Consultants under What Are Allowable Costs? in Part 6. Receiving and Spending Money.

Ask your institution's business office or speak to your program officer when deciding whether to use a subaward or consultant.

If you decide on a consultant, you need a letter describing the consultant's willingness to participate in your project and his or her role.

Send your consultants a sample letter they can return to you with their signature. That way, the letter will contain all the information you need, and they may return it to you faster.
The letters go in the grant application. Attach as Letters of Support to the PHS 398 Research Plan form.

If you decide on a subaward, continue reading.

Creating a Subaward and a Subaward Agreement

You need to have an agreement in place before you can pay a subawardee with NIAID funds.

For each subaward, your institution outlines the details of the arrangement in a written formal agreement. You need to have an agreement in place before you can pay a subawardee with NIAID funds. See this sample Subaward Agreement.

To create a subaward, prepare a written agreement with each subaward partner to describe how everyone will meet the scientific, administrative, financial, and reporting requirements of the grant. Your goal should be a smooth, orderly collaboration.

Address the following in your agreement:

Scientific work scope. See Importance of Scope of Research in Part 3. Know What Actions You Can Take.
Terms and conditions of award.
Administrative requirements.
Reporting requirements.

Include the following items:

Name of principal investigator and others responsible for the research activities at each site; list their roles and responsibilities.
Roles for managing the research.
Conflict of interest requirements of the collaborating organization.
Rules for owning and handling data.
List of NIH requirements and compliance documents.
Plans for the following:
- Managing the research.
- Reimbursing subaward costs, considering foreign exchange rates, payment schedules, and accounting methods. NIAID does not cover costs associated with currency fluctuations after the initial award. Make sure you are aware of Cost Principles in Part 5. Compliance.
- Handling travel reimbursement, salaries, and fringe benefits.
- Sharing inventions and patents. See the Federal Demonstration Project's Research Subaward Agreement.

Changing a Subaward

Know which subaward changes you can make on your own and which require our approval.

Make sure everyone involved knows that an agreement can change and how to change it if needed.

Changes to a subaward follow the same rules as changes to your grant. Review Part 3. Know What Actions You Can Take to see what changes you can make on your own and what changes require our approval.

If your request needs our approval, ask your business office to send a letter to your grants management specialist with the following information:

Grant number.
Principal investigator name, title, organization, and contact information.
Reason for the change.
Whether it results in a change in scope or Specific Aims.

We will review your request and respond within 30 days. To help us get you the quickest response, send in this information when we request it:

An updated key personnel report.
A detailed budget for a new site, or an updated detailed budget if removing a site or making other changes.
Documentation of a Federalwide Assurance for human subjects and Animal Welfare Assurance for animals in research and applicable certifications (IRB or IEC).

Budget Requirements for Subawards

Keep detailed budget for all grant years of your subawards.

Each subaward should have its own budget. Your institution distributes funds directly to subawardees according to the terms and conditions of award.

As you manage your grant, make sure you maintain a detailed budget for all grant years of your subawards.

Basic Rules

Keep the following points in mind:

The grantee determines each subaward's budget.
Subawards have the same allowable and unallowable costs as the grantee.
Foreign subawardees may receive additional funds for facilities and administrative costs up to 8 percent of the total direct costs of its budget, excluding equipment, to pay for compliance with NIH policies and regulations. See Facilities and Administrative Costs in Part 6. Receiving and Spending Money.
Your subawardees can't enter into subcontracts with any third parties, but they can make purchases and hire consultants who don't affect the scientific direction of your project.
Subawardees don't have any budget authority that NIH has not provided in your Notice of Award.

As you work with your subaward sites, be sure your financial status reports include the actual costs, in U.S. dollars, for each subaward.

See What Are Allowable Costs? and Unallowable Costs in Part 6. Receiving and Spending Money.

Audit Requirements

Grantees receive an annual audit for each subawardee that receives $500,000 or more in total federal funds for a calendar year. See Meeting Your Audit Requirements in Part 8. Other Reporting Requirements.