The purpose of this procedure is to assist University principal
investigators and departmental administrators in the preparation and
administration of subcontracts issued under sponsored programs.
All Sponsored Awards received by the University that include collaborative
sponsored research services from a third party(usually another academic
institution) in support of the technical goals and outcomes of the award are
required to have a subcontract document prepared to formalize the
collaborative relationship between the University and the third party. All
such subcontract documents are issued and negotiated by the Office of
Sponsored Programs (OSP). This procedure does not cover subcontracts that the
University of Virginia receives from other institutions, nor does it cover
procurement activities under Sponsored Awards for the purchase of goods and
Facilities and Administrative Costs (F & A)
– F & A costs (also known as “indirect costs”) are those that are
incurred for common or joint objectives and therefore cannot be identified
readily and specifically with a particular sponsored project, an
instructional activity, or any other institutional activity. The University's
F&A costs are consistent with the definitions of specific F&A cost
categories in Circular A-21, Section F.
The University of Virginia charges F & A on the first $25,000 of each
subcontract under any award or contract which allows F & A, and for each
competitive cycle of the award or contract. If the prime award allows F &
A to be calculated on "total direct costs (TDC)" then UVA's portion
of the F & A on the subcontract shall be on the entire cost of the
SP -30 (Subcontract/Subaward
Request Form) – Form used when requesting a new subcontract or a
modification to an existing subcontract under a sponsored award. Form
Sponsor – An external funding source that
enters into an agreement with the University to support research,
instruction, public service or other sponsored activities. Sponsors include
for-profit organizations, foundations and other not-for-profit organizations,
other universities, and federal, state and local governments.
Sponsored Award – The grant, contract or
cooperative agreement document processed by the Sponsor and accepted by the
University that provides financial assistance and the terms and conditions
under which the sponsored activity occurs.
Statement of Work – The Statement of Work
outline the procedures and methods, which will used
by the subcontractor to accomplish the goals of the subcontract.
Subcontract – The document issued by the
University that formalizes a collaborative research relationship with a third
party to perform substantive sponsored project services under a Sponsored
Award made to the University. Can also be called a Subaward.
Subcontractor – The third party performing
substantive sponsored project services under a Subcontract.
System References [Top]
– Subcontract Request Form
“Compliance With Sponsor Requirements”
Office of Sponsored Programs
OSP is responsible for the issuance, negotiation, acceptance and certain
compliance monitoring aspects of all external Subcontracts and modifications
including financial reports, performance reports, audit reports, site
monitoring reviews and timely resolution of audit findings
The Department is responsible for timely submission to OSP of proposal and
post-award paperwork pertaining to Subcontract issuance, modification,
processing invoices and closeout
The Principal Investigator
The Principal Investigator is responsible for authorizing issuance of
subcontracts and modifications under his or her Sponsored Awards. Further,
the PI is responsible for monitoring technical progress of the Subcontractor,
reviewing Subcontractor invoices for appropriateness and allowability
of charges, and approving such invoices for payment.
Office of Sponsored Programs Contract and Grant Administrators
The Assistant Vice President for Research Administration in the Office of
Sponsored Programs is responsible for ensuring that this procedure is
necessary, reflects actual practice, and supports University policy.
Procedure Steps [Top]
- The Principal
- The PI will initiate
the collaboration by receiving a proposal from the subcontractor and
including this documentation in the Proposal to be submitted to the
School/Departmental administrator shall assist the PI in compiling the
following subcontractor information in the proposal.
- Proposal Face Page
or equivalent endorsed by an authorized official
for all Key Personnel
- OSP Sole Source
Justification form for all subcontracts in excess of $10,000 to non-governmental
entities that are not named in UVA’s proposal to the sponsor. For
further information see Financial and Administrative Procedures Manual
- Detailed Budget
Pages & justification –including letter of commitment when cost
sharing is required.
- Statement of Work
- Note on budget
preparation: The full proposal budget must include F & A for UVA
on the first $25,000 on each subcontract that is proposed. This is to be
charged once during each competitive renewal cycle. (Exception: When F
& A is awarded by the sponsor as TDC – see definition above)
- Office of Sponsored
- OSP and The School
of Medicine’s Office of Grants and Contracts, will review and approve
all proposals for submission to Sponsor.
- When establishing
proposed subcontracts with organizations for the first time when those
entities are not subject to A-133 audit, or when establishing
subcontracts with organizations that have a history of A-133 audit
findings, OSP may interview subcontractor officials to determine what
financial controls are in place to ensure proper expenditure of
Subcontract funds. Interviews shall obtain information pertaining to
Subcontractor’s environment, systems and controls sufficient to
identify the level and methods of monitoring required. The decision to
conduct a priori interviews will be made by Director of Grants and
Contracts or his/her designee. The interviews, whether conducted orally
or by written correspondence, will be reduced to writing and the documentation
placed in the subcontract file.
- The Principal
- To initiate the
issuance of a subcontract upon receipt of an award or an award
modification, the PI reviews and signs an SP-30 authorizing the
establishment of a new subcontract or an amendment to an existing
subcontract.(See II. Performance Phase-School/Departmental
- The PI maintains
contact with the subcontractor and is in receipt of all required
reports on a timely basis.
- The PI assesses the
Subcontractor’s technical progress and required reports and if
sufficient approves subcontractor invoices for payment.
- SP-30 FORM An SP-30 Form
is prepared when a new subcontract or a modification to an existing
subcontract is required. For a new subcontract or subaward
complete Sections A.1, B, C and D. For a modification to an existing
subcontract or subaward, complete sections
A.2, B, C and D. It is necessary to complete all sections and provide
all required attachments noted in Sections A.1 and B.
- The SP-30 must be signed
by the PI and routed through the proper channels to OSP.
- Office of Sponsored
- OSP will issue all
subcontracts and modifications to existing subcontracts at the request
of the PI via the SP-30. Upon receipt of all required documents a
subcontract will be drafted, routed for signatures and then sent to the
Subcontractor for final execution.
- No subcontract shall
be issued until the applicable subcontractor human and animal research
protocol approvals have been received. If the requested subcontract is
to a foreign institution which will be using animals, these additional
- Upon receipt of the
SP-30 for a new subcontract/subaward, OSP
will establish in the Integrated System, a new project with the
requested budget (including UVA F & A on the first $25,000 of the
subcontract if applicable). This project will remain on “Hold” until
the subcontract is fully executed.
- Subcontract budgets
for modifications to existing subcontracts will be transferred out of
the designated master project to the subcontract project upon receipt
of the fully executed subcontract amendment.
- Copies of the final
documents will be distributed to the PI and the Department after the
funding has been released in the Integrated System.
- OSP will receive all
Subcontractor invoices and Financial Reports for initial review and
will forward invoices to the appropriate departmental contact for
further processing. (See Section III below).
- In the event PI
notifies OSP of subcontractor nonperformance, OSP may at the direction
of the PI: (a) provide subcontractor with written notice of
nonperformance and provide opportunity to cure deficiencies (b)
terminate subcontract for non-performance consistent with the terms of
the agreement (c.) take other action as appropriate and consistent with
- OSP will obtain a
copy of the subcontractors’ A-133 certification for each fiscal year in
which the subcontractor participated and maintain specific files for A-133
monitoring. Special emphasis will be placed on monitoring institutions
that receive more than $500,000 a year in federal funds from University
of Virginia. The A-133 certification will be reviewed for material
findings by the OSP Subcontract Administrator, logged in the
Subcontracts Issued spreadsheet and filed. Should relevant material
findings be noted, the OSP Director of Research Administration Outreach
and Compliance will be notified for further investigation. If a
subsequent audit of Subcontractor is required, OSP in conjunction with
Internal Audit will ensure that reports and documents required of the
Subcontractor are submitted and will follow up with Subcontractor on
any related issues that arise from the audit.
- OSP shall follow up
on delinquent A-133 certifications. The yearly cycle shall be November
and March. If three requests go unanswered the delinquent institutions
will be forwarded to the Director of Research Administration Outreach
and Compliance for further action.
- The subcontractor is
responsible for generating all invoices and maintaining proper
documentation to substantiate charges. Invoices should state the
subcontract number and list line item detail of expenditures for the
current billing period as well as the to-date cumulative total. The
invoices should be mailed to the Office of Sponsored Programs as
specified in the subcontract document.
- Office of Sponsored
- OSP receives
subcontractor invoice and enters it into an OSP tracking system. OSP
sends invoice to the department for review, approval and payment, along
with a transmittal letter stating that payment of the invoice confirms
adequate technical performance on the part subcontractor.
- The PI reviews the
invoice to confirm that the Subcontractor is performing according to
the agreed upon scope of work and approved budget. The PI confirms that
the expenditures fall within the project period and budget as stated in
the Subcontract, and that expenditures are reasonable and allowable
according to progress. After the PI has approved the invoice by
signature, the departmental administrator will process the payment.
- Based on the
approval of the Principal Investigator the departmental/school
administrator should process the invoice for payment using the correct
award-project number. After the invoice is paid it will be filed with
the award financial documentation in the department.
payments may only be paid from an appropriately designated subcontract
project in the integrated system. There are only two expenditure types
that can be used. (Charges using any other expenditure type are not
allowed and must be transferred off the subcontract.):
Subcontracts, Spon Prgm
– to be used on the first $25,000.00 of expenses if applicable
Subcontracts, OSP no F & A – typically used after the first
$25,000.00 of expenditures
- Example of the
Invoice Payment Process:
- UVA awards a
subcontract in the amount of $60,000 and budgets UVA F & A based
on the first $25,000 of the subcontract. Over the life of the project
the subcontractor bills UVA 3 times. The following expenditure types
should be used when processing payments:
- Amt. Expenditure
- Inv. No. 1-$20,000
$20,000 Svcs, Subcontracts, Spon Prgm (will burden
- Inv. No. 2-$20,000
$ 5,000 Svcs, Subcontracts, Spon Prgm (will burden
- $15,000 Svcs, Subcontracts, OSP no F & A
- FINAL 3-$20,000 $20,000 Svcs, Subcontracts, OSP no F & A
- Office of Sponsored
- After the close of a
subcontract, OSP will send an email to the Departmental Administrator
with a copy to the PI, requesting confirmation that the subcontractor
performance was adequate and all required technical reports have been
- OSP shall ensure
that the Subcontractor submits final reports, A-133 certifications and
the final invoice.
- OSP may, per the
terms of the subcontract agreement, withhold final payment to the
subcontractor, pending receipt of all reports required at closeout
including any outstanding A-133 certification letters.
- OSP will work with the
department to reconcile all subcontract accounts with the
Subcontractor’s final financial report.
- The Department will
ensure the receipt of all reports required for close-out.
- The Department will
confirm by e-mail to OSP that all deliverables have been received.
- The Department will work
with the award accountant to reconcile all subcontract accounts with
the Subcontractor’s final financial report.
- The Principal
- Upon acceptance of all
required deliverables, PI will approve final payment to the
End of Activity