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Following Samantha Tassillo’s April 2025 informative article “Subrecipients vs. Contractors: What’s the Difference?”, this companion article will focus on the mechanics of creating a subaward at the proposal stage.

When subcontracting to another university, the “rules of engagement” are fairly well understood between each university’s respective Office of Sponsored Programs. The process is generally smoother when collaborating with a university than with another organization that might not have as much grant experience.

For example, let’s say you want to collaborate with a colleague at a small non-profit, but you’re not sure how to engage with them from a “paperwork” perspective. It can be overwhelming, particularly if there are multiple partnering organizations. Not to worry, because your assigned OSP pre-award specialist or college grant manager will know exactly what’s needed.��

Regardless of the type of organization we are subcontracting with, as a general rule, we’ll request the following documents from the subcontracting partner as far in advance of the proposal deadline as possible:

• Statement of Work
• Detailed Budget and Detailed Budget Justification
• Proposal/Project Specific Requirements
• Copy of Federally Negotiated Indirect Cost Rate Agreement (if applicable)

We ask that we receive the above items at least seven days prior to the sponsor’s deadline. Where multiple collaborators are involved, it only becomes more important to process and review them well in advance, particularly if any of the organizations are international.

There are important reasons why we need all of this documentation at the proposal stage, and each has a distinct purpose.��

First, the subrecipient commitment form is an “industry standard” document that requests information that is often needed in a federal submission, such as the university’s “Unique Entity Identifier” that may be required, the address of the partnering organization, congressional district, and additional compliance information that is asked to assess the entity’s ability to manage a potential award in compliance with federal guidelines.��

The Statement of Work (SOW) is a brief description of the work that the subcontracting entity will perform should the project be funded. In other words, it outlines the key “deliverables” for the organization. It should identify the co-investigator and other senior/key personnel and specify tasks/deliverables expected during the project. It sets the “ground rules” for the relationship and, as such, is a very important document. If issues arise where there is confusion or disagreement on the work being performed, the SOW becomes critical to resolve the dispute because it contains the original project goals and direction.

Next, let’s take the budget and proposal materials. Most funders require detailed budgets not just for the lead institution, but for the subcontracting institutions as well. This also includes details about fringe rates and indirect cost rates. Simply noting that “Organization X” will get a subcontract for $100,00 over 3 years won’t be sufficient in most cases. For smaller organizations that have little to no experience with budgeting, OSP can offer a “generic” budget template to assist with the process. With the budget, we will need any additional project-specific materials that are required for submission to the prime sponsor. These will be listed in the funding opportunity, and could include a CV/Biographical Sketch, Current and Pending Support, or other supporting documents.��

Often, we will also need a copy of the organization’s federally negotiated indirect cost rate agreement. Organizations that do not have a federally negotiated indirect cost rate can use the updated federal de minimis rate of 15% of Modified Total Direct Costs for applications to federal sponsors. Most private sponsors will prescribe a mandated rate.��

Upon award, the OSP’s non-financial post-award team will reach out to the subcontracting partner to initiate the contract negotiation process. Like the proposal stage, this process is typically smoother if two universities with prior grants experience are involved. It is further simplified and made more efficient by using the popular .��

If you’re unsure about any of this, or need clarification, please reach out to your assigned OSP pre-award specialist, or college grants manager where applicable.

By: Ted Russo