New Subawards

Preparing an Outgoing Subaward

What is an Outgoing Subaward?

An outgoing subaward is an agreement with a third-party organization performing a portion of a Yale research project. The specific terms of this relationship (subaward / subcontract) are determined by Yale’s prime award. A subrecipient works collaboratively with the pass-through entity (PTE) to complete a significant portion of the project outlined in the prime award scope of work.

It’s important to understand that not every collaboration with another entity on a sponsored project will constitute a subrecipient relationship. The distinction between a subrecipient and a vendor can be confusing, and misclassifying the type of relationship can cause problems when managing a sponsored project. Therefore, it is crucial to determine at the proposal stage whether the work meets the definition of a subaward.

Determination of Subrecipient vs. Vendor

Distinguishing between subrecipients and vendors is essential before entering into an agreement with a third-party organization. This classification dictates the type of legal agreement needed and the level of monitoring required. Misclassifying the relationship can lead to delays in subaward processing, as well as errors in facilities and administrative (F&A) costs, which can cause significant budgetary issues. Yale follows the requirements in the OMB Uniform Guidance (2 CFR 200), Section 200.331 to make this subrecipient or vendor determination.

The table below outlines the typical characteristics of a subrecipient or a vendor relationship with Yale:

Subrecipient Relationship Vendor Relationship
The principal goal of engaging the entity is to carry out a public purpose authorized by Yale’s prime award The principal purpose is to acquire goods or services for the direct benefit of an award
The performance of the entity is measured against the objectives of the prime award The entity provides the goods and services within normal business operations
The entity has programmatic decision-making responsibility The entity provides similar goods or services to many different purchasers
The entity receives prime award funds from Yale through a subaward to carry out its own program The entity normally operates in a competitive environment
The entity exercises considerable discretionary judgment The entity provides goods or services that are ancillary to the operation of the prime award program
The entity may be required to provide matching funds or cost sharing dollars The entity provides services of a repetitive nature or goods of a commonly available kind
The entity has its performance measured in relation to whether objectives of sponsored award were met The entity is generally not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply based on the scope of work (e.g., IRB approval, COI)
The entity is responsible for adherence to applicable federal program requirements specified in the federal award if under a federal prime award or the requirements of the non-federal sponsor, as appropriate  

The Uniform Guidance allows PTEs to use judgment when making a determination. Not all characteristics listed above will be present in every case, and the presence of many of the characteristics is not necessarily conclusive.

OSP has developed a Subrecipient vs. Vendor Checklist tool to assist in making the correct determination.

Submitting a Proposal with a Subaward

Yale Principal Investigators (PIs) should alert their Department Business Office (DBO) as early as possible when planning to include a subrecipient in a proposal. This allows time to gather all required information and certifications from the subrecipient. If the PI has not identified a specific subrecipient at the time of proposal, the subrecipient will be identified as “to be determined” in the budget and proposal.

Subaward Documentation Required

  • Subrecipient Information and Compliance Form (SIC)
  • Scope of Work
  • Budget and Budget Justification
  • Federally negotiated F&A Rate Agreement, if applicable
  • Any other documents required by sponsor (e.g., certifications, assurances, etc.) If the proposed subrecipient is a new subrecipient to Yale:
  • A Subrecipient Questionnaire is required if the subrecipient is not subject to the Single Audit (this will be identified on their SIC form).
  • A copy of the subrecipient’s most recent audit report or most recent financial statements is required if the subrecipient is not subject to the Single Audit.
  • A request for a new Workday Supplier must be sent to the Supplier Compliance Unit. Instructions can be found at 3401 PR.01 Supplier Setup and Change (link accessible to internal Yale only).

Conflicts of Interest

Proposals may not be submitted to a Public Health Service (PHS) agency, the Department of Energy (DOE), the National Science Foundation (NSF), or any other sponsor requiring adherence to PHS regulations, unless the subrecipient certifies that it has a compliant policy and has made all required disclosures.

For a list of PHS agencies and PHS-like sponsors, visit the Frequently Asked Questions for COI section.

If the subrecipient does not have a compliant PHS policy, the Department Business Office (DBO) provides the subrecipient with the Yale model PHS compliant policy and the model COI disclosure form for the subrecipient to adopt and complete.

Subrecipient Cost in Yale’s Budget

When including a subrecipient in a proposal, the Principal Investigator (PI) must integrate the subrecipient’s scope of work and full budget. The Subrecipient’s budget (including the subrecipient’s F&A costs) should be included as a direct cost line item in Yale’s budget.

For new federal awards issued on or after July 1, 2025, Yale charges F&A on the first $50,000 of each subaward. For awards issued before this date, the $25,000 threshold applies. Please note this formula only applies to federal sponsors. Using this formula to budget other types of awards may require a cost-share waiver. Check with your Proposal Manager to determine if a cost share waiver is needed.

When calculating the Yale budget, be aware of the prime sponsor’s written policy, as it may differ from Yale’s standard practice. For example, many non-profits and foundations have written policies which dictate lower indirect cost rates.

Issuing Subawards that Were Not Proposed (After the Fact)

Throughout the life of an award, a situation may arise where a portion of the research must be carried out by a subrecipient that was not included in the original proposal. If Yale has already received the prime award, review the sponsor’s requirements and contact the OSP Award/Contract Manager to determine if prior sponsor approval is required, especially for foreign subawards, first or second tier. The Award/Contract Manager will advise on the necessary approval process according to the prime award.

The DBO should obtain all required documentation from the subrecipient. These documents should be emailed to the department’s assigned GCAT mailbox. The email should contain the Yale PI’s name, the IRES record number, and the Notice of Award number. An activity log will then be opened to the Award/Contract Manager to review the subrecipient’s documents. If approved, the Award/Contract Manager will log the new subaward to the Subaward Manager for processing, which will include creating the new subaward Grant Line and Supplier Contract in Workday.

Subaward Initiation and Setup

Prior to issuing a subaward, the Subaward Manager will confirm that all required subrecipient documents and certifications have been received. The Subaward Manager will contact the DBO to secure any missing or incomplete information, such as:

  • Confirmation of IRB/IACUC protocol approval
  • Certification that the subrecipient has adopted its own PHS FCOI policy

OSP typically does not issue a subaward until all compliance requirements are in place.

Risk Assessment

The Uniform Guidance requires Yale to complete a risk analysis to evaluate the likelihood that a subrecipient will fail to comply with the terms and conditions of the subaward. OSP assesses the subrecipient’s financial status and internal controls prior to issuing a subaward. The risk assessment is completed prior to subaward issuance, and risk level is monitored during the life of the subaward.

The criteria used in evaluating risk can include the subrecipient’s audit history, their prior oversight and monitoring, fiscal maturity, and the size and complexity of the proposed research project. If the subrecipient is not subject to the Uniform Guidance Single Audit requirement, the DBO will contact the subrecipient to obtain a copy of their most recent audit or financial statements and ask that they complete a Subrecipient Questionnaire to finalize the risk analysis.

The Senior Financial Analyst will conduct a financial audit check based on OMB Uniform Guidance (2 CRF 200 Subpart F), or other financials if the subrecipient is not subject to the Single Audit. The Subaward Manager will complete the project-specific risk assessment.

Based on the evaluation, OSP determines the appropriate monitoring strategy. If the assessment identifies areas of concern, OSP will consult with the PI and DBO to determine an appropriate risk mitigation plan.

The Subaward Manager drafts the subaward agreement, selecting the most appropriate agreement mechanism and flowing down all applicable prime award terms. Negotiating these terms may be necessary and could involve the PI and business office. Once Yale and the subrecipient reach the final agreement, the subaward will be signed by both institutions.