Subcontracts

Agreement Checklist (pdf)

What is a Subcontract?

In recent years, the University of South Alabama has entered into an increasing number of formal cooperative relationships with other organizations, generally universities or non-profit organizations. These collaborative efforts take the form of Subcontracts, a specialized type of agreement that differs in several respects from those for the more standardized procurement of goods and services from commercial vendors.

How Do I Identify a Subcontract?

A Subcontract typically results from a USA proposal which has specifically identified participation by a Cooperating Institution or Subcontractor by name. The project’s principal investigator is responsible for determining reasonableness of the amount budgeted for the Subcontractor’s participation in relation to its scope of work. A Subcontractor’s total Budget and Scope of Work are included in the proposal submitted to the funding agency and is considered a subsidiary proposal within the USA proposal submitted for funding consideration. Certain federal agencies also require a letter of intent from the Subcontractor to demonstrate approval of the proposed participation.

After an Award is Received, How is the Subcontract Issued?

The award ultimately received by the University to sponsor the project will specifically authorized funds detailed in the submitted proposal to be issued to the Subcontractor. In order to generate an agreement to a Subcontractor, a sequence of steps must take place:

The award document from the funding agency must identify funds available for a Subcontract. If no funds exist, a re-budgeting request must take place to ensure the activity is consistent with the terms of the award and the rules of the sponsoring agency.

After funds are identified, three items must be submitted to Sponsored Projects Administration (SPA): a Budget, a Scope of Work, and an executed Agreement Checklist. These items are submitted to SPA to develop the Subcontract for the Cooperating Institution.

All subcontracting agreements sponsored by restricted funds are generated by Sponsored Projects Administration in concert with the University’s Legal Department and the University’s designated signatory. No agreements created outside this framework will be acknowledged by the University. It is necessary to keep production of Subcontracts within the designated structure to assure the University is within agency compliance and follows the rules and regulations of the award and the funding agency.

After a Subcontract is created, the appropriate number of copies is sent to the Subcontractor by SPA for execution. No agreement is considered fully executed until signed by both parties. This includes any changes to the agreement made between USA and the Subcontractor before final execution.

Copies of the fully executed agreements are distributed by SPA to the Subcontractor and kept on file in respective departments within the University. The original signature copy retained by the University will be kept in the file of record in the Office of Grants and Contracts Accounting.

What about Multi-Year Agreements?

Most awards will not fully fund a project but rather issue funds on a year-to-year basis. When Subcontracts require changes to reflect additional money or time, the same steps are followed to generate a modification to the original agreement, i.e. Budget, Scope of Work and executed Contract Checklist.

What Happens When Changes to the Project Occur?

The principal investigator should immediately notify SPA if any of the following changes takes place and warrant a change to the original agreement:

  • Change in the Scope of Work or Period of Performance
  • Change in the Budget
  • Cancellation of all or a portion of the Subcontract
  • Any other changes that will impact the original agreement

What about Subcontracts from Other Institutions?

USA faculty are often participants in projects funded by awards to other institutions. In these instances, the Subcontract will be written by the prime institution to the USA as the Cooperating Institution. Paperwork to participate in this sort of activity should still be filed with the Sponsored Projects Administration and the agreement written to USA will serve as the funding document.

Questions?

If you have questions about the subcontracting process, please call Sponsored Projects Administration, (251) 460-7888.