Subaward FAQs

Hopefully these FAQs provide answers to your Subaward questions. If you don’t find your answer here, please feel free to contact me directly at 994-2381 or by email at [email protected]. You may also visit our website at https://www.montana.edu/research/osp/subcontracts/index.html 

How do I know if I need a subaward?

If a grant is issued to MSU and work is to be performed at another institution, a subaward may need to be issued.  Subaward agreements must to be handled by the Office of Sponsored Programs and cannot be executed by the MSU PI or department.

When should I determine if there will be a subaward?

The determination of the potential need for collaboration is normally made at the grant proposal stage.

What if I determine I need a subcontract after the grant has been awarded?

If you become aware of the need for collaboration after your grant has been awarded, your sponsoring agency will need to be contacted for authorization to proceed. Please work with your OSP Fiscal Manager in this scenario.

What information do I provide to the sponsor agency?

The sponsor needs to approve the scope of work and the budget of the collaborator. Depending on the sponsor and the project, additional information may be necessary.

How is a subaward set up?

The subaward will be initiated by the MSU PI. See https://www.montana.edu/research/osp/subcontracts/index.html “Request a Subaward” for the steps and forms needed to complete your request for a subaward. You may also email [email protected] if you have any questions.

My grant has been extended and/or provided additional funds for another year. Will my collaborator's subaward automatically be extended?

No, subawards are not automatically extended. The MSU PI, in accordance with their grant terms and conditions, determines if/when a subaward is modified. See https://www.montana.edu/research/osp/subcontracts/index.html “Modify an Existing Subaward” for the steps and forms needed to complete your request for a subaward. You may also email [email protected] if you have any questions.

I’ve decided I want to spend my grant funds differently and want to eliminate or modify my subaward budget. Can I do this?

Discuss this question with your grant Fiscal Manager in OSP. If your grant sponsor agrees to this change in scope, any subaward that has already issued will need to be modified according to the steps above. Since a subaward is a legally binding agreement, this process will take time. Clear communication between the MSU PI and the Collaborator is essential. You will also need to modify the budget on your prime grant by working with your OSP Fiscal Manager.

Can subrecipients receive Indirect Costs (IDCs)?

Indirect Cost terms flow down from the prime award. If the prime grant collects IDCs at MSU’s federally negotiated rate, then the subrecipient is allowed to collect at their federally negotiated IDC rate. A copy of the subrecipient’s federally negotiated IDC rate agreement, or a link to it online, is required. If they do not have a federally negotiated indirect cost rate agreement, they are eligible to elect the federal de minimis IDC rate. If there are any IDC restrictions on the prime grant, such as a reduced IDC rate, this same restriction flows down to the subrecipient.

How are IDCs (Indirect Costs) calculated on subaward expenses on my grant?

MSU’s federally negotiated rate agreement allows us to collect IDC’s up to the first $25,000 of each subaward. Prime awards may have other allowable rates that affect the amount of IDCs that MSU collects on subawards. This information is usually clearly stated in the solicitation and award that the MSU PI receives.

Are subawards paid in full when the award is signed?

No, subawards are cost reimbursable and not paid in advance. The subrecipient must submit invoices to the MSU Financial Contact identified in their agreement for review, approval, and routing. The MSU PI is responsible for monitoring the technical performance of the subrecipient as well as for the approval of all subaward expenses submitted for payment.  PIs should be encumbering the total Authorized Amounts of their subawards to ensure they set-aside adequate funds to cover their subaward obligations over the life of the award.

What information is required on a subrecipient invoice?

Invoices can be submitted using the subrecipient’s standard invoice, but at a minimum must include current and cumulative costs (including cost sharing), billing period, and the subaward ID. They should also include a signed certification by the subrecipient as to truth and accuracy of invoice.

Which account code should be used on the BPA?

All payments for up to the first $25,000 (cumulative) of a subaward must use the account code 621471. Once the cumulative payments on a subaward exceed $25,000, account code 621472 should be utilized for all remaining payments.

Examples