A subaward is likely the appropriate contracting mechanism if you can answer “yes” to any of the following questions.

1. Does the entity’s statement of work represent an intellectually significant portion of the programmatic effort of the overall project?

2. Will the entity have responsibility for programmatic decision making?

3. Could the entity’s work result in intellectual property development or publishable results (including co-authorship)?

4. Will the entity need animal and/or human subjects approvals for its portion of the work?

5. Will the entity complete its portion of the work at its own facilities, using its own personnel?

If you can answer “yes” to any of the following questions, the appropriate contracting mechanism is likely a procurement/services contract:

1. Does the entity provide the goods and services within its normal business operations?

2. Does the entity provide similar goods or services to many different purchasers?

3. Does the entity operate in a competitive environment?

4. Will the entity provide goods or services that are ancillary to the operation of Stanford's sponsored project?

A subaward will not be issued, nor payments to a Subrecipient authorized, prior to Stanford's receipt and acceptance of a funding commitment from the prime sponsor. A Stanford PI or designee may not authorize a subrecipient to begin working without a fully executed subaward agreement in place. Proposed subrecipients who commence work without a fully signed subaward agreement from OSR do so at their own risk and have no assurance of payment from Stanford. In the event a subaward is subsequently issued to a subrecipient, a subrecipient may claim costs properly incurred under its own risk, provided that the costs are otherwise allowable. In such cases, the Subrecipient must furnish evidence to Stanford that all required compliance approvals were in place at the time the costs were incurred.

Stanford issues subawards on a cost-reimbursement basis. Rare exceptions may be made when it can be demonstrated that a fixed-price agreement is in the best interest of the University.

Submit a requisition through Oracle iProcurement to request a modification to a subaward. A PI may want to modify the SOW, provide incremental funding, modify the budget, change the period of performance etc. Any requested changes should be detailed in the requisition so the OSR Officer can include the appropriate modifications in the subaward amendment. The department administrator should submit a requisition through Oracle iProcurement. If the subrecipient's SOW or budget has changed, the PI/administrator should attach the revised documents to the requisition. 

A PI may not reduce obligated funding or prematurely terminate an approved subaward unless they submit a corresponding requisition through Oracle iProcurement to request a formal change in their subaward. In such cases, Stanford is required to honor the terms of the subaward, which typically require an advance notice period.

Stanford is responsible for ensuring that sponsor funds, including those provided by Stanford to other entities, are spent in accordance with all applicable laws and regulations. The University is required to monitor its subrecipients as if it were the sponsor. This monitoring requirement places Stanford in much the same position as if it were a federal agency dealing with its own primary recipient.

Principal Investigator & Departmental Responsibilities for Monitoring Subawards

It is the PI’s responsibility to monitor subrecipients so there is reasonable assurance that the subrecipient uses the award for authorized purposes, complies with laws, regulation, and the provisions of the agreement, invoices Stanford for allowable expenses in accordance with the agreement, and achieves its performance goals.

Invoice Review and Signature

The PI must review the subrecipient’s invoices and indicate approval by personally signing each invoice for payment.  The following language has been developed and required to be included on each invoice: 

In signing below I approve payment of this invoice and attest that charges appear reasonable, and progress to date on this project is satisfactory and in keeping with the statement of work.

You can order stamps with the above language printed on it for affixing on an invoice. Email the JP Cooke sales department directly at sales@jpcooke.com and request the stamp ordered by Stanford University Dept. of Sponsored Research on February 7, 2013.

As part of invoice review, the PI and departmental administrators should verify that the invoice was prepared in accordance with the subaward requirements and that invoiced costs are:

• In accordance with the approved budget or permissible rebudgeting
• Incurred within the approved period of performance and overall cost limitations
• Aligned in terms of cost and type of expense with the scientific progress reported to date
• Allowable, allocable, and reasonable

The subrecipient’s invoices should reflect both current period and cumulative expenses to date.  The PI and departmental administrators should also verify that the subrecipient is adequately meeting any cost-sharing commitments made for the subaward.

Clarification of Invoiced Charges:  In the event the level of detail included on an invoice is not sufficient to fully understand the costs, or if it appears that some costs may be excessive or understated, the PI or departmental administrator should question the subrecipient's expenditures by requesting further documentation or explanation prior to approving an invoice.   If the explanations are not sufficient to render a prudent judgment on the allowability of the cost, and the terms of the subaward permit, department grant administrators may request detailed justifications from subrecipient.  Department administrators may also periodically request, if the terms of the subcontract permit, particularly from high-risk subrecipients, detailed support for selected invoiced charges to verify their appropriateness and reasonableness.  Such inquiries must be done in a timely manner (e.g., within thirty days after receipt of an invoice) so that the subrecipient can be promptly paid for approved costs.

Examples of detailed justifications that may be requested from subrecipients include: payroll records, copies of paid invoices showing the cost of items purchased, descriptions of services rendered by consultants, including hourly rates and time reports; details of incurred travel charges stating the purpose, airfare, meals, ground transportation, unallowable costs, etc.  Copies of all such documentation and the ultimate outcome of the investigation should be retained in the project file.

When there is a concern about the allowability of cost, the administrators can contact the Office for Sponsored Research for coordination of subsequent actions. OSR staff are available to assist the PI and their departmental staff in resolving any invoice review issues that may arise.

Technical Progress & Compliance

The PI must be in contact with the subrecipient regularly to discuss technical progress, receive and review required reports or deliverables, and verify that the subrecipient maintains current human and animal subjects approval when applicable. The subaward monitoring and compliance obligations of the PI may be shared with department administrators or other Stanford employees; however, in no event may such monitoring and compliance obligations be delegated to a non-Stanford employee.

Quarterly Review & Certification

At quarterly review and certification, the PI certifies the allowability, allocability, reasonableness, and consistency of the subrecipient's expenditures and the related sufficiency of the subrecipient's technical progress under each subaward involved in the research project, as well as expenses incurred directly at Stanford.

Regulations and Assurances

The federal regulations that describe subrecipient monitoring are general, but contain the following core elements of compliance:

• Advising subrecipients of all applicable federal laws and regulations, and all appropriate flow-down provisions from the prime agreement
• The routine receipt and review of technical performance reports
• The routine review of expenses-to-budget
• The periodic performance of on-site visits, or regular contact, if necessary
• The option to perform "audits" if necessary, review of A-133 audit reports filed by subrecipients, and any audit findings review of corrective actions cited by subrecipients in response to their audit findings
• Consideration of sanctions on subrecipients in cases of continued inability or unwillingness to have required audits or to correct non-compliant actions

The above list is not exhaustive of all compliance requirements. In addition to the general elements of compliance noted above, there may be additional sponsor- or program-specific requirements that mandate collecting and documenting other assurances (e.g., on lab animals, human subjects, biohazards, etc.) during the course of a project.

In order for Stanford to comply with its financial report requirements, subrecipients are required to submit a final invoice, clearly marked “Final”, to Stanford by the date that is required in the subaward agreement, typically no later than 60 days after the end of the Subrecipient's period of performance. In the event no invoice is received within the required timeframe, Stanford may treat the Subrecipient's last invoice as the final invoice. Payment for Subrecipient invoices submitted to Stanford later than the due date may not be paid. PIs and departments are responsible for assisting OSR in obtaining final closeout information, including final invoices, from their subrecipients.