A subaward is a formal written agreement made between Stanford University and another institution or organization to perform an intellectually significant portion of the SOW (Statement of Work) under a Stanford sponsored project.

A subaward must include a clearly defined, intellectually significant SOW to be performed by the subrecipient's personnel, using its own facilities and resources. The subrecipient takes full responsibility for adhering to the terms and conditions of the subaward including those flowed down from Stanford's sponsor, and assumes creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling the subrecipient's SOW within the subrecipient's approved budget. 

A subaward SOW may include fabrication of specialized equipment to be used for the Stanford sponsored research project as a project related asset or as a deliverable to the sponsor. 


Subawards differ from procurement contracts used to acquire goods or services from vendors.

View  RPH 16

Once the potential subrecipient is identified and it is determined that a subaward is the appropriate mechanism, the PI assisted by the department administrator obtains the subrecipient proposal elements from their subrecipient.

The proposal should be compiled in the format required by the sponsor and Stanford and forwarded to the institutional official for review. A proposal must include the following elements for each named subrecipient to be endorsed by institutional official.

1. The subrecipient's statement of work (SOW), including a clear description of the work to be performed, the proposed timelines, and deliverables.

2. The subrecipient's budget and budget justification, including the subrecipient's direct and indirect costs, calculated using both the subrecipient's F&A and fringe benefit rates, and verifying any committed cost sharing.

3. The Subrecipient Commitment Form (OSR Form 33 or for clinical trials OSR Form 33 CT) completed and signed by the subrecipient's institutional official.

4. A Fair and Reasonable Cost Analysis & Sole Source Justification (OSR Form 45) if the funding mechanism is known to be a Federal contract at time of proposal. The PI's signature on this form certifies that he/she has selected the subrecipient in accordance with Stanford policy, and determined that their costs are reasonable with respect to the proposed SOW. In addition, the PI certifies that s/he has reviewed the subrecipient's proposed budget to ensure that all proposed costs are allowable under the sponsor's anticipated terms and conditions. PIs are responsible for working with their subrecipients to make necessary modifications to proposed budgets that may be required to bring them into conformance.

5. Additional elements that may be required by Stanford's sponsor.

Rarely, a PI may recognize the need for outside involvement on a project but is either unable to identify the best subrecipient by the time of proposal submission. In these instances, proposals may be submitted with a subrecipient To Be Named.

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, the 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.

Once a sponsored project award is accepted by Stanford University and an account (PTA) has been set up, the department submits a request to issue a subaward by processing a requisition through Oracle iProcurement.

The requisition documents the desired subrecipient, the funding amount authorized by the PI for the subaward and delineates the period of performance. OSR is not authorized to issue a subaward until an approved requisition and specific documents are on file. A Stanford PI or designee may not authorize a subrecipient to begin working without a fully executed subaward agreement in place.

This requisition documents desired subrecipient, the funding amount authorized by the PI for the subaward and delineates the desired period of performance.  Subawards are typically not issued for more than one year at a time to ensure adequate monitoring of the technical progress to date and compliance with federal audit requirements. In no event can a subaward be issued for a period of time that extends before or after the period of performance of Stanford’s prime award.  OSR is not authorized to issue a subaward until an approved requisition has been received by OSR. 

The subaward requisition submitted to OSR should include any special requests that may be required, or that the PI may want included in the agreement, such as the following.

• Particular payment schedules or terms
• Increased invoicing requirements
• Required deliverables
• Prior approval requirements such as: rebudgeting restrictions and carry forward restrictions

The PI and department administrators should also note any concerns or prior issues in dealing with this subrecipient

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 and 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 OSR 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.