With federal grants, terms and conditions are set by Uniform Guidance, the sponsor agency, and the research program. Federal grants are typically non-negotiable and in fact do not require acceptance via a “wet” signature. Acceptance of a federal award begins when the recipient (e.g. the University) begins to incur expense activity and draw down on the award. PIs should not commence work on the award until they’ve received official notification of award from the University. To learn more about terms and conditions on federal awards, please see our Understanding Terms and Conditions web page.��

With non-federal awards, such as funding received from private foundations, non-profits or for-profit entities, the terms and conditions can vary.

So, what is negotiable in a non-federal agreement? There are certain clauses that Office of Sponsored Programs (OSP) staff members pay particular attention to when reviewing an agreement in order to best protect the interests and freedoms of the PI and the institution. Some examples are:

Intellectual Property (IP)

• What is IP? In general, IP is a creative work, or “product of the mind.” IP includes, but is not limited to, a creative work for which one has rights and may apply later for a patent, copyright, trademark, etc. Research and development agreements with industry, for example, provide for an opportunity to negotiate IP ownership between the two parties. The parties can agree to several options. It’s standard in academia that newly created IP (foreground IP) by the University, under a sponsored research agreement, be solely owned by the University. IP created by the sponsor is solely owned by the sponsor. Jointly created IP is jointly owned by both parties.
• IP is often the major point of negotiation between universities and private sponsors and takes the most time to negotiate. Universities bring valuable resources (faculty expertise, facilities, equipment) to the engagement, while industry sponsors often want exclusive rights to any IP created under an activity that they are sponsoring and later, paying to file for patent and/or to commercialize. Ideally, any solution should ultimately be favorable to both parties’ interests.
• It is important to note that contracts under a “work-for-hire” relationship carry different expectations regarding IP. In a work-for-hire relationship, the funder specifies how the work is to be done, often using their methodology and materials, and as such, typically claims title to any IP created by the contractor.

Publication Rights

• What are Publication Rights? This is a term or condition that governs the publication or dissemination of data/information generated under the agreement. As an institution of higher education, it is important to retain the right to disseminate, publish, and share knowledge. Universities typically allow sponsors a “review and comment” period to allow for the request and removal of proprietary and/or confidential information, or time to file for patent prior to publication.

Use of Names

• What is “Use of Names”? “Use of Names” is a clause that defines when the parties can use the other party’s name or trademark in advertising or publicity. Like Publication Rights, a sponsor may request that the University seek the sponsor’s approval before using their name, etc. in any instances (advertising, press release, or publicity).

Termination

• What is Termination? Typically, research agreements include a process for terminating an agreement. “Termination for Convenience” is when an agreement is terminated due to non-performance reasons, such as lack of funding or lack of time to continue work. In contrast, “Termination for Default” signifies that an agreement can be terminated because of performance deficiencies or an agreement violation. Because of the nature of sponsored research, i.e. “unpredictability,” universities veer away from agreeing to a “termination for default.” Moreover, it is important to include language that provides either party the option to initiate termination upon 30-60 days written notice, with the caveat that any non-cancellable financial commitments be reimbursed up to the date of termination.

Governing Law and Jurisdiction

• What are Governing Law and Jurisdiction? Governing Law determines which laws are applicable to the agreement, i.e. which country or which state. Jurisdiction defines the specific courts or location that will be used to resolve disputes arising from the agreement. In general, when working with sponsors outside of the University’s state jurisdiction, including foreign sponsors, it may be necessary to negotiate governing law and jurisdiction language. Public/state universities may not be able to accept another governing jurisdiction. Oftentimes, the parties agree to be silent on jurisdiction in these situations.

Indemnification

• What is Indemnification? Indemnification refers to the compensation given from one party to another party for fees or damages incurred in the event of a breach or lawsuit. ��Ʒ���˸������� University is subject to the New Jersey Tort Claims Act. Claims against ��Ʒ���˸������� University are referred to the State Attorney General’s Office. It’s important to negotiate language around indemnification to protect the University. Often, OSP will coordinate with University Counsel on terms surrounding indemnification or limitation of liability.

Warranty

• What is Warranty? In general, it’s a guarantee of the quality, performance, and specifications of goods or services produced by the scope of work. Research, however, is unpredictable, and contractually, is typically conducted on a best efforts basis under a sponsored research agreement. A work-for-hire contract, again, comes with a different set of expectations and might include a warranty provision grounded in commonly accepted professional standards of practice in the field.

The above terms and conditions are just some of the numerous terms and conditions that may be included in a non-federal sponsored research agreement. Although the scope of work is created and conducted by the PI/PD, agreements are established between the sponsor and the University. Under a standard non-federal sponsored research agreement, the University’s authorized signatory has the legal authority to bind the University, and the University is ultimately responsible for carrying out the terms and conditions under the agreement. PI’s/PD’s should reach out to OSP as soon as they engage with a non-federal sponsor, or if they are considering a university/industry-sponsored research collaboration, or are unsure if the relationship would steer more towards “work for hire.” OSP has extensive experience in negotiating these types of agreements, and may additionally meet and consult with numerous parties, to include the sponsor, the PI, the Office of Research Compliance, the Provost’s Office, and University Counsel. As always, OSP is available to answer any questions you may have when considering a sponsored research activity.

By: Samantha Tassillo and Catherine Bruno

In the context of Data Use Agreements that OSP negotiates, the term “data” most commonly refers to human subjects data, such as medical records or survey results. Data Use Agreements can also cover sensitive administrative data, de-identified datasets, or government-regulated information. In contrast, “confidential information” typically refers to non-public business/organizational information. There are different matters at stake here. It is important to protect data about individuals from being disclosed to the general public to prevent invasion of privacy, discrimination, or other kinds of physical, social, or economic harm to these individuals. By contrast, it is important to keep an organization’s proprietary information confidential to protect sensitive information and prevent other entities from infringing on intellectual property or releasing non-public information. Both these types of agreements can be one-way or two-way, or alternatively, “unilateral,” or “bilateral.” The party sharing the information is typically labeled the “Provider,” and the party receiving the data is the “Recipient.”

What is a Data Use Agreement?

A Data Use Agreement is used when there is a transfer of data between institutions that includes human subjects data or other kinds of sensitive data. These can include, but are not limited to the following:

• Medical records
• Human subjects research datasets
• School district data
• Census data

There are a number of regulations that govern the protection of this data. HIPAA covers protected health information (PHI), and FERPA regulations protect educational information. The FDP’s serves as a useful categorization tool for these cases.��

Data Use Agreements contain terms on how to protect this information. The terms can vary depending on how sensitive the data is. Data Use Agreements define a discrete timeline for the recipient to be able to access the data. They also outline a plan for storing the data during the term of the agreement and a plan for returning or destroying the data after the term of the agreement has ended.��

In the case of de-identified human subjects data, there is nearly always a provision specifying that the recipient must not use the data to try to re-identify or contact participants. The document also frequently outlines provisions about breaches of confidentiality, detailing who must be contacted in the event of a breach and how soon. Finally, the agreement can establish terms surrounding liability and indemnification to establish who can be held legally responsible for damages that may arise from misuse of the data.��

What is a Confidentiality Agreement?

By contrast, a confidentiality agreement, often referred to as a Non-Disclosure Agreement (NDA) or Confidential Disclosure Agreement (CDA), exists to protect an organization’s proprietary information. For an industry sponsor, this could take the form of a scientific methodology or protocol, such as a particular drug company’s process for manufacturing a medication. Alternatively, it could be financial information or client information.

The standard terms in a Confidentiality Agreement outline what information must be kept confidential, often requiring that information is specifically labeled as such. This also includes defining what is not confidential information: that which has already been made public or that which was already known by the receiving party and is therefore not bound by the terms of the agreement.��

The agreement outlines the obligations of the receiving party, including whether the information can be shared with any third parties (such as research associates assisting with the project). This often includes the clause that confidential information may be disclosed to a court upon legal request. Like a Data Use Agreement, Confidentiality Agreements outline how long the recipient may access the data and how and when it should be returned or destroyed. They may also contain a number of other standard contract clauses, such as limitation of liability (which party can be held responsible for damages) and governing jurisdiction (which municipality’s laws will govern a dispute).��

Conclusion

Data Use Agreements and Confidentiality Agreements protect the interests of different parties: research participants and business partners, respectively. In negotiating these agreements, it is vital to consider not only the interests of the providing party, but also those of the receiving party (the researchers). In most cases, the top consideration is protecting researchers’ right to publish. In both of these kinds of agreements, research administrators often advocate for a publication clause establishing that the researcher may publish manuscripts, so long as they do not contain confidential information or the full dataset. Often, the provider of the data is granted a “review and comment” period, allowing them a certain amount of time to read the manuscript and request changes to protect their interests.��

Faculty members should contact OSP when they are performing work on a project that involves providing or receiving any type of data from another institution, even if the project is not grant-funded. DUAs, NDAs, and CDAs must be reviewed and endorsed by the institution, so faculty members should not sign these agreements independently.

By: Samantha Tassillo and Ted Russo

The Uniform Guidance (2 CFR 200) outlines key cost principles in budgeting for and spending on federal grants. A cost must be “necessary” (), “allocable” (), “afforded consistent treatment” (), and “reasonable” () in order to be considered allowable on a grant. For a cost to be necessary, it must be integral to the scope of work of the project. The cost must also be allocable, meaning that it must be charged in proportion to how the item is used for the project, especially in the case of shared equipment or space rentals. Items or services charged to a grant must be consistently treated by the institution as direct or indirect costs. Finally, a cost is reasonable if it “does not exceed an amount that a prudent person would incur under the circumstances” ().

But what does it look like in practice to be reasonable? This standard is particularly flexible and context-dependent. Some key guidelines for determining reasonable costs within your budget include aligning with industry standards and justifying an expense with scientific reason or precedent. When it is programmatically necessary to purchase a more expensive piece of equipment for technical reasons, previous work or studies can provide a precedent to guide you internally as you create your budget. Defining the market by establishing an average cost for the item or service, as well as comparing vendors at different price points, can help create a framework for reasonableness as well.

Let’s examine a few case studies to assess the reasonableness of different items in a pre-award budget.

Case Study #1

Dr. Pierre Moreau is a professor of Psychology, conducting a study assessing object permanence in children of various ages. He hopes to understand more about how children react when a toy is hidden from them, as well as where they first look for it. He finds a grant from the National Science Foundation that he hopes to apply for.

As he budgets for his proposal, he carefully considers what toys he will use during the study. A colleague suggests that all that is necessary is a small bouncy ball for $0.50 that can be hidden beneath a plastic cup. However, toys like this can pose a choking hazard to the age group that Pierre hopes to study. Additionally, Pierre has read in some prior studies that if a child is not engaged or excited by the toy, they may demonstrate indifference to it. This could invalidate the results of the data, which require the child to be invested in the toy’s whereabouts. For these reasons, Pierre chooses to budget for a more expensive toy for $16 with a bright pattern that crinkles upon touching it. These aspects, which appeal to sight, sound, and touch, are more likely to engage the child, which is critical for the validity of the research. He can justify this using prior studies as examples, so the upgraded toys can be considered a reasonable expense.

When it comes to equipment or other program-specific supplies, the programmatic justification is critical. What is reasonable for one study may be deemed unreasonable for another, simply based on the context: oftentimes, context understood primarily by the researcher.

Case Study #2

Dr. Amelia Jackson is a professor of environmental science seeking to budget for a statistician to analyze data collected in her fieldwork related to water quality. She reaches out to several individuals for quotes. Hubert, who has recently graduated from his Ph.D. program with limited experience in statistical consulting, would charge $100/hour for an estimated 40 hours. Jack, another colleague with much more experience, would charge $200/hour but estimates that the work will only take him 30 hours. Finally, Patricia, a statistical consultant by trade, would charge $450/hour and estimates that the work will take her 20 hours.

Amelia has the best relationship with Jack, whom she’s known since graduate school. She knows that he will be communicative and professional in his work, although he would charge more than Hubert. Patricia was recommended to her from a colleague at another institution, but the rate seemed far above the typical market value for a statistician for this type of work. Additionally, although Patricia’s estimate of the hours was lower than the other two, Amelia would be taking on a significant financial risk if the work took the 30 or 40 hours that Jack and Hubert had predicted. She decided that hiring Patricia would be unreasonable.

After completing the rest of her budget, Amelia realized that she had a little bit over $5,000 left to fill the consulting role before reaching the proposal’s budget limit. She trusted the quality of Jack’s more so than Hubert’s, and his rate would be within her budget if she could negotiate it down a little bit. She asked Jack if he would consider lowering his rate to $175/hour, and he agreed. Amelia marked the budget accordingly.

Assessing the market value of a skill or an item can help whittle down the possible options. Having adequate documentation from professionals in the field about their usual rates and experience level can provide additional insight into what is standard for any given service. A certain number of quotes may also be required by procurement at the time of hiring, depending on the price threshold. Finally, the budget itself may put constraints on the price thresholds that make sense for any given item or service when there are multiple reasonable options available.

Overall, reasonableness is extremely context-dependent on the project needs and current market. This is why allowability does not stop at the pre-award stage. When a federal agency awards a grant and approves the budget, that agency is essentially deeming the budget reasonable. By the time of award, though, prices may have changed, warranting some adjustment of expenses. With any budget revision, departmental and central sponsored programs administrators can help guide investigators on staying in line with the financial terms of the grant. Some sponsors may not require prior approval for budget changes, but the institution can still be at risk of audit findings or non-payment for expenses that are deemed unallowable. Following the principles of reasonable, allocable, and necessary expenditures minimizes risk for both the investigator and the institution.

By: Samantha Tassillo

If you attend any NSF-sponsored event where NSF staff engage with members of the research community, at some point you are guaranteed to be advised to contact a program officer. This can occasionally be an intimidating prospect for some prospective PIs. However, it’s important to remember that these individuals are your colleagues. They are generally former faculty members or even current faculty members on leave from their current appointments to serve as a rotator. (See the NSF’s web page for more details on the program.)

Program officers can help provide feedback on your proposal ideas and discuss alignment with program priorities and goals. If what you are proposing to carry out is not the best fit for one program, the program officer may refer you to another. Speaking with a program officer early in your process can provide critical insights that can lead to a successful proposal. For this reason, we at OSP often echo the refrain from NSF as we encourage members of our research community to reach out to a program officer early in the proposal development process.

Working with NSF

While communicating with NSF personnel early and often is one of the most frequently offered pieces of advice for achieving success with securing NSF funding, another is to take a step beyond communicating with program officers and offer up your services to work alongside them as a peer reviewer. The peer review process is a critical component to how NSF makes funding decisions. For the operation to function as designed, NSF needs engagement from people like you. By working as a reviewer, you not only provide a critical service to NSF, but there is a lot you stand to gain from the experience that can yield dividends in your own efforts to obtain funding for your research. I recently had the opportunity to serve as a panelist and personally found the experience to be not only instructive, but also enjoyable. It impressed upon me how much time and care goes into reviewing each proposal that gets submitted.

What to Expect From Panel Service

Earlier this year, I served on a panel with five other individuals, supported by two program directors. We received instructions and resources to review about one month prior to the panel dates. A virtual orientation session via Zoom was held approximately two weeks prior to the panel date. Proposals were released to us in Research.gov in advance of the meeting and we were tasked with submitting reviews prior to the panel meeting dates.

The panel reviewed 10 proposals, with each panelist tasked with giving a closer read to six of those proposals. I served as a primary reviewer on two proposals and a secondary reviewer on the other four. Primary review service entailed leading the discussion on that proposal while also serving as scribe. Secondary reviewers participated in the discussions of the strengths and weaknesses of the proposal in light of the program goals and NSF’s merit review criteria. The first day of panel service was devoted entirely to discussing the proposals. The second day was dedicated to drafting and critiquing the panel summaries and offering ratings on the competitiveness of each proposal. Panelists were asked to check in via Zoom each day at 10:00AM and block off the entire day until 6:00PM for panel service. Each proposal was carefully considered and discussed for around 30-40 minutes.

Peer reviewers do not have the authority to make funding decisions directly, but they do provide recommendations, which program directors will weigh as they make their official funding recommendations. In our case, the program director asked us to place a proposal on a continuum ranging from highly competitive to non-competitive. At the conclusion of our work, we revisited these ratings and had the opportunity to make any final revisions to those ratings.

Benefits of Reviewer Service

The benefits of review service are manifold, providing value and benefit to the research enterprise as a whole and to you as an individual researcher. The National Science Foundation aims to fund transformative projects that will advance the public good. It does this with taxpayer-funded support. As a reviewer, you play a critical role in stewarding those public funds and helping NSF direct public resources to projects that are likely to have the most impact for our society. Reviewer work is essential and meaningful work to advance NSF’s goals and safeguard public funds and the public interest. This is review work seen on the more grandiose and selfless scale.

This experience can also provide valuable insights to you as a prospective PI. Reviewers are typically researchers who themselves aspire to be first-time or repeat recipients of NSF funding. For those aspiring to receive NSF funding to support their work, the window into the process provided by serving as a reviewer provides invaluable insight. You will see firsthand how others prepare their proposals and how reviewers respond to these proposals and discuss their merits and limitations. Fellow panelists shared that what keeps them returning as reviewers is both the enjoyment they derive from the process, but also the positive impact it has on them as PIs. Your experience will undoubtedly shape how you approach your future work developing proposals for the better.

For me as a former faculty member turned research administrator, the experience helped inform the work I do with faculty and university stakeholders on a daily basis. As someone who works with the nitty gritty of the rules and requirements that give shape the form and structure of a compliant NSF proposal, it was valuable to see a layer beyond what makes a compliant proposal to what makes a competitive proposal.

How to Become a Reviewer

Whether you do it primarily for the greater good, for your own benefit, or anywhere along that spectrum, if you’re compelled to take the next step, you may want to know how to get started. There are different ways to get engaged as a reviewer. You can reach out to a program officer who works in an area that aligns with your expertise. There is also a form you can complete to express interest on . NSF also occasionally reaches out through their email lists to solicit reviewers for certain programs, so you’ll want to ensure you are signed up to receive emails from NSF. For more information, you can also consult NSF’s webpage, “.”

By: Jonathan Parker

is a federal code of broad regulations that all grantors and grantees must follow. It defines basic administrative requirements, cost principles, and audit requirements for federal awards. Uniform Guidance is the framework that federal agencies like NSF use to define their agency-specific regulations. These rules typically inform what actions require prior approval (special permission from the sponsor) and how to request it. Beyond this, individual funding opportunities at these agencies may contain their own program specifications relating to individual program matters, such as the amount of funds allowed to be charged for participant support or travel. If there is a subaward on the project, the subawardees may have to comply with subaward terms and conditions imposed by the pass-through entity, in addition to all the federal and sponsor regulations that “flow down.” At the grantee level, institutional policies dictate how grant activities are implemented or charged on a day-to-day basis. Finally, federal, state, and local laws serve as the foundation for Uniform Guidance and minimize risk to individuals and communities.

Agency-specific regulations and program specifications can be found in grant documents in plain text or be incorporated by reference. Many federal agencies post their agency-specific regulations on their website, like the National Science Foundation does with their . However, it is also critical to read through the funding opportunity announcement, since these can contain important information and restrictions on the project as well. Agency regulations and program specifications should not conflict with Uniform Guidance, but they may impose narrower requirements that need to be followed. With so many levels of regulations, the most specific regulation takes precedence.

To explain how these regulations can overlap, let’s take a hypothetical case study:

Dr. Ben Windlass is a biology professor at Montclair who wants to apply for an NSF MRI (Major Research Instrumentation Program) grant to purchase equipment. He plans to buy a DNA sequencer for $50,000, and he will budget an additional $5,000 for a technician to come in and perform routine washes and calibrations for the equipment every month for the first year. He is a co-Principal Investigator on another NSF grant where he is contributing one month on researching migration patterns of the invasive spotted lanternfly. He asks the Pre-Award Specialist in OSP if he can budget for one additional month of effort on the NSF MRI grant in order to test out the DNA sequencer and run some preliminary analysis on specimens already in his lab to form a basis for his future research. Can he do this?

There are several layers of terms and conditions to examine before making a final determination, and several questions that we have to ask. Can Principal Investigators charge salary to a grant? If so, how much? Does this particular agency have any limits on who can charge effort to grants, how much, and why? How about the program, or the institution? Finally, if it is allowable, is there money in the budget to support this? 

Please see the table below for the full analysis.

On the broadest level, Uniform Guidance does allow investigators to charge salary to their grants for work performed. More narrowly, the agency-specific regulations of the National Science Foundation limit senior personnel from requesting over two months of effort on all NSF grants combined (with few exceptions requiring detailed justification). Dr. Windlass has committed one month on another NSF grant, so requesting one additional month here would so far be allowable, since that would equate to two months of the year.

However, this particular NSF MRI program listing puts yet another restriction on budgeting for salary. For this funding opportunity, the only allowable salary and fringe costs are for individuals providing maintenance or training for the equipment, not doing research. Because Dr. Windlass would be using his effort for research, this is considered unallowable as per the program specifications, so he cannot be paid from the grant for this purpose. Although it does not conflict with the broader federal and agency regulations and he has money in his budget for it, the narrower regulation takes precedence. The technician’s salary is still supported, as per the funding opportunity guidelines.

It can be complicated to pinpoint what is considered allowable for federal awards because there are so many layers of regulations. These directives intersect with federal, state, and local laws, as well as institutional policies, to prevent research misconduct, ensure legal compliance, and help the institution maintain a strong reputation as grantee. Oversights early in the process can lead to additional complications later on, for Principal Investigators and for the central offices. If these terms are not followed, grantees may face increased scrutiny from grant officials, termination of the award, or an institutional label of “high-risk grantee,” leading to more difficulty securing funding or collaborations. The pre-award specialists and post-award officers in the Office of Sponsored Programs have the administrative and regulatory expertise to navigate the many layers of administrative policy involved in federal funding work to ensure that all grants remain in compliance–and to allow researchers the time and freedom to focus on the heart of their projects.

By: Samantha Tassillo

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

There are two main types of collaborators: “subrecipients” and “contractors.” These two categories are budgeted for differently, reported on differently, and have contrasting levels of input on the project.��

What is a Subrecipient?

A subrecipient (also called a “subawardee”) is an institutional collaborator on a grant that provides programmatic direction on the project, significantly helping to shape the methodology or interpret the results. The subrecipient’s objective is to contribute to the aims of the grant in an open-ended way, rather than providing one specific good or service. They are subject to more rigorous scrutiny and have different budgeting and reporting requirements than contractors do. The researcher applying for federal funding will decide in the proposal stage if they want to add a subrecipient onto the project. When the sponsor awards the grant, that researcher’s institution is placed in charge of distributing a portion of those funds to the agreed-upon subrecipient via a “subaward agreement.” 

Let’s take an example. You’re a faculty member at ��Ʒ���˸������� University with a specialization in neuroscience, and you’re applying for an NSF grant to study the effects of different kinds of music on brain activity. You have a colleague at Vanderbilt University who has a particular niche in music psychology–she has robust experience in different instrumentations and music theory and has applied these concepts to behavioral studies. You have experience working with EEGs and other relevant equipment, as well as comprehensive knowledge of the brain. She would bring unique insights to the table about the kinds of music that could be compelling to measure. In this way, you would both significantly contribute to the design and direction of your project. Which party becomes the “lead institution” and which becomes the “subrecipient” is up for debate. Since you are the more experienced investigator and ��Ʒ���˸������� University has the relevant equipment to conduct the study on campus, you mutually agree that Montclair will be the lead institution. You apply to NSF with the clear intention of adding Vanderbilt University as a subrecipient to your project, and when the funds are awarded, ��Ʒ���˸������� University will distribute the agreed-upon amount to Vanderbilt.

In this case, NSF is the sponsor, awarding funds to ��Ʒ���˸������� University (the recipient). Vanderbilt would be considered the subrecipient. From Vanderbilt’s perspective, ��Ʒ���˸������� University would be considered a “lead institution” or “pass-through entity,” since the funds are being distributed to them from NSF through Montclair.��

What is a Contractor?

A contractor (also referred to as a “vendor” or “supplier”) is an individual or entity that provides a good or service to the grant recipient. They operate in a competitive environment, meaning that there are multiple options for potential suppliers. Most often, the contractor provides this deliverable to many different clients as a part of their business. The contract is made out to an individual or a business entity, unlike subaward agreements, which are generally awarded to institutions. Their services are delivered through a contract with the recipient, and they are not bound by the same regulations as subrecipients.

Let’s again turn to the example above. Vanderbilt University has entered into a subaward agreement with ��Ʒ���˸������� University to complete this research project. You’ve collaborated with the PI at Vanderbilt to design a study where you will measure participants’ brain activity through an EEG in response to live music versus recorded music. The music you’re using is a famous string quartet piece, but you need people to play it. There are many instrumentalists in your area who would be willing to do it (competitive environment), and most are career musicians (they have provided this service before and do so for their business). You’re requesting specific deliverables: a recording of the piece and a live performance of the piece to 3 groups of participants over the course of a week. You are budgeting a flat fee to pay them. They are not shaping the direction of the project, just providing a service. For these reasons, they are contractors.��

Who Decides?

Sometimes, this distinction becomes blurred. Ultimately, Uniform Guidance gives the power to the pass-through entity, or the lead institution, to decide. Tools like this Subrecipient vs. Contractor Determination Checklist can help guide the decision-making process.��

There are significant ramifications involved in this decision. It’s not difficult to release a contractor, but there is no such thing as simply “firing” a subrecipient institution. They are granted additional protections because they are operating under Uniform Guidance and the terms and conditions of the award, just like the lead institution. This means that the relationship you have with your subrecipient is critical.��

From the start, it’s important to conduct a “risk assessment” on the potential subrecipient to inform how to proceed moving forward. If the subrecipient has prior experience with similar subawards, is audited regularly with no findings, and has long-tenured administrators and systems, they will likely be considered a “low-risk” entity, meaning that they have a low likelihood of misusing the funds or disobeying federal or agency regulations. An institution like this may not need any additional “subrecipient monitoring plans.” 

For a medium-risk or high-risk entity, OSP may implement a plan to help ensure that the institution is spending funds on allowable purchases, keeping careful track of their expenses, and obeying all other compliance requirements. This plan may involve having the subrecipient submit invoices and expense reports more frequently to OSP (monthly instead of quarterly, for instance) or turning in financial and programmatic reports early for a comprehensive review. This gives ��Ʒ���˸������� University an opportunity to ensure that expenses are being recorded properly and that the subrecipient is operating fully in alignment with award terms and conditions. Contractors come and go, but subrecipients are here to stay. Picking the right one can add layers of depth and intrigue to your project, but they must be chosen with thought and care.

By: Samantha Tassillo