Subcontracts

A subcontract (or subaward) is a legally binding agreement between two parties in which:

1. The prime recipient provides funding to another organization to conduct a portion of the sponsored project work, which fulfills part of the prime recipient's obligation to the sponsor.
2. The work is performed using the subrecipient's own resources.
3. The agreement sets forth the work to be performed, deliverables expected, agreed payment for the work and flows down the terms of the prime award.

TTUHSC can be the prime recipient and award a subcontract to another institution, or be the recipient of a subcontract from another prime recipient institution. Subcontracts are negotiated and signed by the Office of Sponsored Programs. Subrecipients should be identified during the proposal stage of the sponsored project. Subcontracts that are needed later in the life cycle of the grant normally require approval from the sponsor prior to entering into the contract.

As a prime recipient of external funds from federal sponsors, TTUHSC is required to monitor any subrecipients that expense $750,000 or more per year of federal awards in accordance with OMB 2 CFR 200. This is called subrecipient monitoring. The following items are completed as part of TTUHSC's subrecipient monitoring responsibility:

1. A risk assessment to be performed before the subcontract is issued per OMB 2 CFR 200.
2. As invoices are received from the subrecipient for payment by Accounting Services, the fund manager and PI must review, assess whether work performed aligns with expenses reimbursed, and approve the invoice before payment is made.
3. Accounting Services requests yearly audit reports from subrecipient organizations to help assess risk after the fact. Any findings are communicated to OSP.

For more information on subrecipient monitoring, see HSC OP 65.09.

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