Module C: Budget Basics
JULY12, 2011
SESSION 7 OF AAPLS –
BUDGETING FOR PROPOSALS
WITH SUBCONTRACTS:
ESTABLISHING RELATIONSHIPS
APPLICANTS & ADMINISTRATORS
PREAWARD LUNCHEON SERIES
Overview of this Session
 How to decide whether to budget for a
vendor, a consultant or a subcontract?
- Self assessment quiz
 Subcontract documents for proposals
 Budget calculations with subcontracts
 Subcontract agreements
Vendor, Consultant of Subcontract?
 The nature of the collaborative relationship
determines the type of the agreement
 For Vendor and Consultant agreements Tufts uses
the template “Contract for Goods and Services”.
These are processed by Purchasing
 Subcontract agreements are prepared by ORA using
several templates that are customized for each
agreement
Vendor (Purchasing Relationship)
 Provides similar goods and services to many
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different purchasers
Provides services within its normal business
operations
Operates in a competitive environment
Provides goods and services that are ancillary to the
grant program
Has its performance measured against the
deliverables
Results produced by the vendor belong to Tufts
Consultant (Collaboration with an Individual)
 Provides professional advice or services
 Normally not an employee of the engaging party
 In unusual situations, an individual may be both a
consultant and an employee of the same party,
receiving compensation for some services as a
consultant and for other work as a salaried employee
 Consultant agreement is typically with an individual
not with the institution that employs him or her
 Results produced by the consultant belong to Tufts
Sub-recipient (Subcontract Relationship)
 Carries out a program rather than provides goods and
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services; has responsibility for making programmatic
decisions
Has its performance measured against whether
objectives of the program are met
Has responsibility for adherence to compliance
requirements
May collaborate with Tufts to publish results of the
research
Results developed by the sub-recipient are owned by the
subcontract institution
Subcontracts are with institutions not with individuals
Subcontract Documents for Proposals
 For proposals with subcontracts, Tufts should request
from each collaborating institution a budget with
budget justification and all the documents required by
the sponsor agency
 If Tufts is a subcontractor, we must provide all
necessary documents to the prime institution at the
time of application submission
 Internal coordination form and financial disclosure(s)
are routed at the time of the application
 Refer to the Subcontract Checklist for documents
needed for submissions to NIH & Other PHS agencies
Budget Calculations with Subcontracts
 Both direct and indirect cost of the subcontract
become part of total direct cost budget for Tufts
 NIH excludes indirect costs of the subcontracts
from total direct cost budget cap
 NIH limits indirect cost budget of foreign
institutions to 8% of their total budget less
equipment
Budget Calculations with Subcontracts (cont)
 Base for F&A (overhead,) is the amount multiplied by
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F&A rate
Base can be MTDC (modified total direct costs) or TDC
(total direct costs)
For federal awards use MTDC as base for F&A
For federal budgets with subcontracts this means that the
amount of each subcontract in excess of $25,000 is
excluded from overhead cost calculations
For non-federal awards use TDC as base for calculating
F&A unless sponsor agency specifically requires
excluding certain budget categories (for example, Gates
Foundation)
Subcontract Agreements
 Must be executed when award is issued to the prime
awardee
 Subcontract agreements are drafted, negotiated,
signed and processed by ORA
 Subcontracts are normally issued as cost
reimbursable agreements. Justification for deviation
from the standard business practice is required.
Allow additional time for drafting of subcontracts if
customized payment terms are required.
More on Subcontract Agreements
 ORA flags awards with subcontracts for processing of the
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subcontract agreements and amendments
An email from the PI to ORA about the need to issue a
subcontract or an amendment for another budget year
will expedite the process
The PI should verify that budgets for any subcontracts
included with the application are still accurate at the
time of the award
Internal rebudgeting is necessary if the subcontract
amount must be different from the amount awarded for
the subcontract by the agency
Agency approval may be required to modify subcontract
amounts. This approval is requested by ORA
Information Needed by ORA to Issue a Subcontract
 Award number
 Internal account number (received from Sponsored
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Accounting via INOA)
Start and end dates of the subcontract
Name and full contact information of the other
party’s Institutional Official
Subcontract PI name and full contact information
Subcontract budget
Subcontract scope of work
Conclusions
 Subcontract arrangements formalize collaborative
relationships between Tufts University and partner
institutions to implement research and technical
assistance projects
 Intent to enter into a subcontract should be
documented at the time of the proposal
 After the award is made to Tufts, ORA will issue
subcontracts for the project
 Tufts has responsibility to monitor performance
under the subcontracts