Policies & Procedures

About Research Administration at GSU

Policies and Procedures for Research and Sponsored Programs

Policies and Procedures for Research and Sponsored Programs

Subcontracting Under Sponsored Programs

Introduction

Sponsored programs are usually conducted within the physical boundaries of the University.  On occasion, a portion of the required effort may be provided by one or more other institutions or companies (third parties) who are made responsible for a discrete part of the project.  When the portion of effort being performed by a third party constitutes a substantive component of the sponsored program, the third party is required to provide the resources and personnel necessary to conduct that portion of the work as an independent contractor.  Costs normally associated with third party effort could include any or all of the following: labor, employee benefits, materials and supplies, travel, equipment, subcontracts, consultants, other direct costs, and facilities and administrative costs (indirect costs).

Subcontract Relationship

The term Prime Sponsor or Sponsor refers to the organization that makes an award directly to Georgia Southern or the Georgia Southern University Research and Service Foundation.  The document that the ORSSP generates to formalize a third party relationship with another organization to perform substantive work based upon an award made to Georgia Southern is a Subcontract.  The third party performing the effort under a subcontract is the Subcontractor.

Activities performed by an individual under a sponsored agreement are normally administered through a Consulting Agreement issued by the ORSSP.  A purchase order must be used when purchased services may involve an organizational entity, but does not involve a substantive portion of the work effort of the project.  For example, a purchase order would be appropriate for the performance of repetitive tests or activities requiring little or no discretionary judgment on the part of the provider.  In these instances, a Consulting Agreement or a Purchase Order may be issued through the normal Georgia Southern procurement process.

Subcontract Proposal and Incorporation into Georgia Southern’s Proposal

There must be adequate time provided between the receipt of a subcontractor's proposal and the Sponsor's proposal due date, to allow the Georgia Southern Principal Investigator sufficient time to discuss and negotiate the statement of work.  If the proposed subcontract involves human subjects or animal experimentation, appropriate subcontractor compliance certification to their policies must be included with the proposal.

The subcontractor's costs are included in Georgia Southern’s budget as a direct cost. A budget, itemized by major budget categories, such as salaries and wages, employee benefits, supplies, equipment, travel, consultants, subcontractors and other direct costs, is submitted by the subcontractor as part of its proposal.  Greater itemization of categories may be needed if required by the prime agreement.  Facilities and administrative costs (indirect costs) should be included and should be calculated using the subcontractor's current rate(s).  A copy of the subcontractor's negotiated rate agreement is needed to verify the costs requested and to support those costs in case of an audit.  If the subcontractor uses a rate for employee benefits, a copy of that rate agreement will also be needed.

The subcontractor's proposal must be signed by a designated official who is authorized to commit the subcontractor's resources to the completion of the project.
During the processing of a proposal by the ORSSP, the subcontract portion is reviewed to ensure all items required have been incorporated.

Preparing the Subcontract

When the ORSSP receives a fully executed award from the prime sponsor, a subcontract with the proposed organization is prepared.  The ORSSP must receive approval from the Principal Investigator to release the subcontract.  Since the proposal either went through the sponsor or the peer review process, and the proposed collaboration was funded, the sponsor has approved the sole source selection and the costs are determined reasonable to perform the statement of work.

If the subcontractor was not proposed in Georgia Southern’s original proposal, sponsor approval may be necessary prior to issuance of the subcontract.  Prior approval may also be necessary even if the subcontractor was proposed in the original proposal.  In some very rare instances, it may be necessary for the sponsor to review and approve the proposed subcontract agreement prior to Georgia Southern’s release to the subcontractor.

Once the subcontract is prepared, it is normally sent unsigned to the subcontractor for review. The subcontractor may want to negotiate changes or request clarification of the terms and conditions. The ORSSP is responsible for all agreement negotiations and coordinates those requested changes with department personnel and the Principal Investigator, where appropriate.  Once negotiations are complete and the signed subcontract is received, the ORSSP executes it on behalf of Georgia Southern University, returns the fully executed document to the subcontractor, and makes the proper internal distributions.

Advance Payments to Subcontractors

Advance payments are generally not allowed since:

1. Sponsor guidelines normally state that subcontractors are reimbursed for expenses incurred for performing the work.
2. Georgia Southern does not usually receive advance funding from its sponsors; therefore, it is poor fiscal management to advance funds to a subcontractor.

Requests for advance payments for subcontractors will be considered only in very unusual circumstances and on a case-by-case basis.  All advance payments, if approved by the ORSSP will be issued by Research Accounting and only after a fully executed subcontract is in place.

Technical Monitoring

Georgia Southern is responsible ensuring subcontractor's work is conducted and completed in a timely manner.  Progress reports must be reviewed by the Georgia Southern Principal Investigator and discussed with the subcontractor as needed.  These reports are usually incorporated in the overall reports submitted to the sponsor by the Georgia Southern Principal Investigator. The ORSSP is responsible for obtaining the other reports required by the subcontract terms and conditions.  For example, invention, fiscal, property and audit reports may be required.

Fiscal Monitoring

The Georgia Southern Principal Investigator should approve all subcontractor invoices and submit them to the ORSSP for payment.  Invoices will be reviewed to ensure proper facilities and administrative costs (indirect costs) direct costs were expended in accordance with the approved budget. The invoice will also be reviewed to determine that the invoice number is correct, costs are properly allocated and the amount invoiced is within the estimated cost of the subcontract.  No invoice will be approved for payment that exceeds the estimated cost of the subcontract, even if approved by the Principal Investigator.  

All invoices must be approved by a Georgia Southern Authorized Representative. In order to be eligible for reimbursement invoices shall be for allowable, approved costs incurred in accordance with the terms of the agreement and shall display expenses for reimbursement by budget category, identifying the total project costs, the reimbursable costs and the subcontractor's share pursuant to submitted budget. An Authorized Representative of the subcontractor shall certify on each invoice that the costs, including those requested for reimbursement and those shown as the subcontractor share, are the actual costs as recorded in subcontractor's records and as expended for the work actually performed in accordance with the terms of this Agreement.

Amendment to Subcontracts

During the term of a subcontract, it may be necessary to change or modify one or more of the terms and conditions of the subcontract. Some changes, such as scope of work or Principal Investigator, may require sponsor approval before an amendment can be issued. Requests for changes should be submitted by the subcontractor's Authorized Official and have the approval of the Georgia Southern’s Principal Investigator prior to the ORSSP requesting sponsor approval.

In most cases, the terms and conditions of a subcontract will remain unchanged for the duration of the subcontract. Amendments to the subcontract, such as time extensions, rebudgeting or fund changes are accomplished by an amendment to the subcontract.  The amendment is the vehicle that clearly states the changes and provides for the signature approvals by Authorized Officials of both parties.

Close-out Requirements

In accordance with the terms of the agreement, the subcontractor may be required to submit one or more of the following documents upon completion.

• Final Fiscal Report
• Final Technical Report
• Final Inventory of Property
• Final Statement of Inventions
• Small and Small Disadvantaged Business Report
• Final Audit Notification if subcontractor is subject to OMB Circular A-133