OUTGOING SUBAWARDS
Contracting & Research Services
Subcontract Process
Department
Requisition:
•Object code 3350 for the first $25K
encumbered on any subaward and object code
3340 for the remaining funds
•Attach Subaward Initiation Form and all
supporting documents to the Requisition or
Purchase Order Amendment.
•NOTE: Entering a requisition or purchase order
amendment does not make it okay to pay
invoices on that action.
ORCA
Processing the Agreement:
•Contracting & Research
Services receives the signed
SC-227 and requested
documents and initiates
signatures. For new
subawards, Contracting &
Research Services cannot
sign subaward until PACS
approves (finalizes) the PO
number.
ORCA
Drafting the Agreement:
•Contracting & Research Services
receives the requisition after
department and SPS approval.
We then complete compliance
checks and write the draft.
•NOTE: Requisitions are completed
on a first-come-first-serve basis.
Contracting & Research Services
will attempt to accommodate rush
requests whenever possible.
ORCA
Finalizing the Agreement:
•Contracting & Research
Services receives the fully
executed document from the
subcontractor and sends a
PDF via email to the business
office for their files.
Department can now pay
invoices.
Contracting & Research Services (CRS)
orca@email.arizona.edu
520.626.3050
Department
Approval:
•Contracting & Research Services emails the draft to the department for
approval. The business manager
and/or PI review the information and
make any necessary changes.
•We also ask for any additional
documentation at this time.
•Department must return signed SC227 and all requested documents to
ORCA to allow subaward to be
signed.
IMPORTANT!!!!! Invoices may not be
paid until the subcontract is fully executed
and the business office has received a fullyexecuted copy. Invoices not accompanied
by the completed Subcontract Payment
Authorization Form will not be approved for
payment.
At the Proposal Stage
When preparing your proposal for
submission, here are some things to keep in
mind to make issuing your subawards
easier down the line.
Subaward vs. Vendor
Some helpful information when determining if you have a subaward or vendor relationship
At the Proposal Stage

A subcontract involves a collaborative working relationship between a UA
Principal Investigator and a PI at another institution or company, or an
individual:
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The other option is to appoint a vendor to complete a part of the work:
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The Subawardee PI makes program decisions and collaborates with the UA PI.
Performance measured against a pre-designed scope of work.
Accountable to UA for the use of any funding provided through the Subaward.
For a subaward, the University’s IDC is only charged on the first $25,000 of the
total amount (this is the standard case, although it sometimes changes as a
stipulation of the Prime Sponsor or with a waiver from the VPR’s office).
A vendor provides goods or services as a regular part of its business operations as
part of a competitive environment.
For a standard purchase from a vendor, the University’s IDC is charged on the
entire amount of the purchase.
This type of collaboration is processed through PACS
Sometimes a “subaward” can have vendor-like features. Contracting &
Research Services is happy to assist in this determination. Simply provide
your designated Contract Analyst with your Scope of Work.
Subawardee Information
What to collect at the proposal stage
At the Proposal Stage

For Federally Funded Subawards, Contracting & Research
Services will need the following:
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A clearly detailed budget for the individual subawardee.
A completed Budget Negotiation Form, along with negotiation documents.
A clearly outlined and detailed Scope of Work for the individual subawardee.
The Subawardee must have a valid DUNS number.
The Subawardee must be registered in the Central Contracting Registration Database
(CCR).
The Subawardee’s completed A-133 Audit Report, or audited financial statements.
For Non-Federally Funded Subawards, Contracting & Research
Services will need the following:
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A clearly detailed budget for the individual subawardee.
A clearly outlined and detailed Scope of Work for the individual subawardee.
The Subawardee’s completed A-133 Audit Report, or audited financial statements.
Subawardee Information
Why we need a DUNS number and CCR registration for federally funded Subawards
At the Proposal Stage
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In order to receive federal funds, even those funds that are passed
through the University of Arizona to a subcontractor, the recipient of
funds must have a valid DUNS number and have that number registered
in the Central Contractor Registration (CCR) database.
This is not a one time registration. Organizations must renew
registration annually.
When selecting a subawardee to receive federal funds, please check to
see that they are registered in CCR. If not, ask that they start the
process.
Applying for a DUNS number and registering in CCR can take some
time. Contracting & Research Services must hold a subaward until that
subawardee is fully registered, or until their expired registration is
reactivated. This can significantly delay the issuance of a subaward.
Complete information on this requirement, including a link to the CCR
website is provided in this packet.
(see Attachment No. 1)
Preparing a Subaward Budget
What ORCA needs for a subaward budget
At the Proposal Stage
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Contracting & Research Services will require a complete budget for each subaward.
These budgets should be individual to the subawardee

Contracting & Research Services cannot accept a copy of the prime award budget with a line item for
Subaward.
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In the event that you have multiple subawardees for a single project, Contracting & Research Services
will require a separate budget for each individual subawardee.

The budget serves at your guide post for proper monitoring and invoice payment and must be clear and
as detailed as possible.
The budget provided must match the amount that is being requested by the Purchase
Order Requisition in UAccess.
Budgets should be detailed and, at minimum, should include the following categories:

Salary – name of individual(s) receiving salary, amount budgeted and separate amount for F&A
calculation.
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Travel – listing of travel expenditures (i.e., hotel, airfare, misc) and budgeted amounts.

Equipment – listing of authorized equipment for purchase and budgeted amounts.
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Supplies – amount budgeted for supplies.
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Sub-Total amount prior to IDC calculation.
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IDC rate and total IDC calculation.
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Budget total.
Budget Negotiation Documentation
What ORCA will need for Budget Negotiation Documentation.
At the Proposal Stage
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In order to comply with OMB A-110, Subpart C, Section 45 (for federal grants and
cooperative agreements) and FAR Rule 12.209 (for federal contracts) you are
required to retain documentation of budget review and negotiations as part of the
acceptance of federal funds. What does this mean for you when preparing a
budget?
The individual responsible for reviewing and accepting the budget should be
retaining documentation of how they came to the conclusion that the budget was
accurate, reasonable and appropriate. The following is a general list of
documentation or information that should be retained:
 For Salary: correspondence or documentation showing that the individual salaries list in
the budget are in fact the salaries those individuals are paid through their institution or
organization.
 For IDC Rate: a copy of the institution’s or organization’s current rate agreement or
justification for the rate that is being charged (NOTE: if the rate being applied to the
subawardee is dictated by the terms of the prime award no documentation is necessary).
 For Travel: documentation confirming that the estimated travel costs in the budget are
acceptable within GSA per diem rates and appropriate for traveling with federal funds
(i.e., the airline ticket price is not in the first class price range) and that the travel is for
the benefit of the project and for individuals working on the project.
 For Equipment: documents showing that the amount being charged for the equipment
purchased is appropriate (i.e., the budget expense for a computer is appropriate for the
computer that is being purchases, which can be done by an internet search of comparable
computer equipment).

Contracting & Research Services has created a form to assist in the
compilation of this information.
(See Attachment No. 2)
Preparing a Subaward Scope of Work
What ORCA needs for a subaward scope of work
At the Proposal Stage
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Contracting & Research Services will require a clear and detailed scope
of work. The scope of work should outline the work you expect the
subawardee to complete, the timeline you expect it to be completed in,
and the deliverables you expect to receive in exchange for the funding
you are providing.
The scope of work should be individual to the subawardee, not a copy of
the complete scope of work for the entire project as provided in your
prime award.
A vague scope of work can lead to issues with the subawardee’s
performance during the course of the Subaward.
In the event of a conflict with your subawardee, the scope of work
becomes the guide for determining legal requirements for completion of
the project.
Ready for Action
What to do when you are ready to enter
your new subaward or subaward
modification into UAccess.
Prior Approval for Subcontracts
Ready for Action
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Prime Sponsor Approval:
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If a subaward is listed in the prime award budget, a subaward disclosure
form is required.
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If the prime award does not require prior approval to a new subaward, the
Prime Sponsor is notified of the new subaward in the form of a letter,
written by the department and signed in approval by Sponsored Projects.

Please contact your Sponsored Projects Fund Accountant for assistance
with these requirements.
EAR/ITAR Requirements:

The terms and conditions of your prime award will flow down to your
subawardee. If your project is export controlled, your subaward will be as
well. These issues should be addressed when accepting the prime award.

For questions regarding export controls, please contact the University
Export Control Office (UECO) at export@email.arizona.edu.
New Subaward or Modification
Ready for Action
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New Subcontract
 New
Project
 Competitive
Renewal of existing
project
 New agreement
from Prime Sponsor
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Modification
 Existing
Subcontract
 Same Account No.
 Same Project
When is a Modification Necessary
Ready for Action
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Contracting & Research Services needs to issue a written modification to the
subaward for a number of reasons. Some actions require an official change to
the PO in UAccess, while others simply require that you notify Contracting &
Research Services, via e-mail, of the needed change.
Modifications requiring a Purchase Order Amendment in UAccess:
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Modifications that do not require amendment in UAccess, but do require
e-mail notification to Contracting & Research Services:
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The total Budget amount increase or decreases.
The Termination Date of the agreement is changed (extended or reduced).
The Legal name of the subawardee changes.
A material change in the Scope of Work.
The Subawardee PI changes
Any terms and conditions of the original subaward are modified (i.e., when invoices
are to be received, the total estimated cost of the project, changes in policy or law that
require change to the subaward agreement language).
NOTE: Contracting & Research Services does not automatically modify your
subaward. You must request that action be taken to modify your subaward.
How to Enter New Subawards in UAccess
Ready for Action

When completing a Purchase Order Requisition for a new subaward
please be sure to do the following:
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Always use the subaward object codes: 3350 for the first $25k and 3340 for
everything thereafter. If these object codes are not used the action will not be
processed as a subcontract and will never arrive in Contracting & Research Services
action list for approval.
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Attach the New Subaward Initiation form (see Attachment No. 3), along with all of
the backup documentation (i.e., budget, scope of work, sole source justification and
budget negotiation documents) to the requisition.
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Be sure to enter the start and end dates of the subaward in the notes section of the
requisition.
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All subawards are non-taxable, please do not add tax to the subaward amount.
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ALWAYS check the box in the “Payment Request Positive Approval Required” field
to indicate that invoices should never auto approve.
How to Enter a Subaward Modification in UAccess
Ready for Action

When completing a Purchase Order Amendment to an existing
Subaward, please be sure to do the following:
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Keep in mind that the entire life of the Subaward is provided to us when
entering a modification. Please be clear about what action you would like
Contracting & Research Services to take by providing detail in the
“Explanation” box at the top of the action (see below).
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Please attach the Subaward Modification Initiation form (see Attachment No.
4), along with the accompanying documents for that action, to the requisition.
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If you are modifying a subaward that has a PO number from the old FRS
system, please reference the original PO number in the “Orig. Doc. #” box at
the top of the action (see below).
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In the Notes section, please include a note that states what action is required
on Contracting & Research Services part.
In Contracting & Research
Services Hands
What happens after Contracting & Research
Services receives the Purchase Order
Requisition or Purchase Order
Amendment?
Compliance Requirements
Contracting & Research Services must complete a number of compliance checks prior to drafting any subaward action
In ORCA’s Hands

CCR – For federally funded Subawards, Contracting & Research Services must check to
ensure that each Subawardee is actively registered in CCR. If Contracting & Research
Services does not have a DUNS number on hand for the Subawardee, we must search it
out.
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Audit – Contracting & Research Services is required to read each Subawardee’s OMB A133 audit and review all findings to ensure that the Subawardee is in good standing to
receive funding.
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If the Subawardee is not registered, or if their registration has expired, Contracting & Research
Services must hold the Subaward until the Subawardee’s registration is active.
If the Subawardee does not meet the OMB A-133 audit requirements (i.e., receives less than $500,000 in
federal funding in a given year), ORCA must request that the Subawardee complete a financial
questionnaire and provide an audited financial statement for our review.
This is required regardless of the Prime Funding Source.
This requirement must be completed for each Fiscal Year over the life of the subaward.
Debarment/Suspension – Contracting & Research Services is required to complete a
debarment/suspension check on both the Subawardee organization, and all key
personal working on the project, each time an action is made on the subaward.
Prime Sponsor Specific Requirements – Contracting & Research Services is required
comply with all Prime Sponsor’s stipulations in the oversight and issuance of each
subaward. Example: compliance with the E-Verify FAR 52.222-54, as included in most
government contracts.
What Kind of Subaward?
Why don’t we have one standard agreement we can just pass out?
In ORCA’s Hands
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Because the UA does not receive funds from only one organization or federal agency, and issue
subawards to only one organization or institution, we do not have a “standard” agreement.
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Each project is distinct and has its own set of challenges.
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Some factors that go into creating the type of Subaward Contracting & Research Services drafts:
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Prime Sponsor – Are the funds coming from:
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A non-profit in the form of a grant?
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A federal agency in the form of a contract?
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A federal agency in the form of a grant or cooperative agreement?
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A private industry sponsor?
What type of institution or organization are we issuing the Subaward to? Are the funds going
to:
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A non-profit public university or college?
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A private university or college?
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A local state institution?
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A state institution (outside of Arizona)?
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A foreign university or college?
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A not-for profit organization?
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A for profit organization?
What type of work is being completed and for what amount? Is the Subaward for:
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A large dollar amount with a complicated scope of work?
A small dollar amount with a complicated scope of work?
A large dollar amount with a simple scope of work?
A small dollar amount with a simple scope of work?
Drafting the Subaward
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In ORCA’s Hands
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Once Contracting & Research Services has completed its compliance requirements, and
determined the most appropriate type of Subaward to use, it’s time to get drafting!
Contracting & Research Services will complete the Subaward, or Subaward
Modification, to the best of its ability, with the information provided in the Purchase
Order Requisition or Purchase Order Amendment, and the attachments included
therein. The more detail we receive, the easier it is for us to complete the draft.
When the draft is complete, Contracting & Research Services will e-mail a copy to the
Departmental Contact, as provided on the Initiation Forms, for review and acceptance.
The draft will be accompanied by the SC-227 Subcontract Authorization form. This
form will always be the very last page of the draft word document. The SC-227 must be
returned to Contracting & Research Services, via fax or e-mail, to allow issuance of the
Subaward. ORCA cannot sign and mail the Subaward until the signed SC-227 and all
requested documents are received.
The draft, and all of the documents provided are internal only and should not be
forwarded to the Subawardee. Contracting & Research Services is the only department
authorized to issue these subawards on behalf of the University of Arizona.
A copy of the SC-227 Subaward Approval Form is provided in this packet for your
review.
(see Attachment No. 5)
What Happens Now?
In ORCA’s Hands
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When Contracting & Research Services receives the signed SC-227,
approving the new Subaward draft, or Subaward Modification draft, along
with any documents that are requested on SC-227, we prepare the Subaward
for signature.
Lewis Barbieri and Gary Esham are the officials authorized to bind the
University of Arizona in Contracting & Research Services.
Contracting & Research Services finalizes the Subaward, with all appropriate
attachments, and presents it to one of the two authorized signatories to sign
on behalf of the University of Arizona.
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NOTE: ORCA will send the Subaward unsigned if one of the following conditions exists:
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FFATA reporting is required (all federal funding issued to UA after October 1, 2010).
The Prime Sponsor is USDA (Subawardee must complete a form and sign Subaward prior to Contracting &
Research Services).
Contracting & Research Services is unable to locate the Subawardee’s A-133 or other audit documents.
Once the Subawardee returns the signed Subaward, or Subaward
Modification to Contracting & Research Services, it is scanned and e-mailed
to the department.

At this point, it is acceptable to make payments for invoices that show expenses during
the now active period of performance.
The Life of Your Subaward
Monitoring your Subaward, Paying
Subawardee invoices, closing out your
Subaward and more.
The Life of Your Subaward
Subrecipient Monitoring

“Subrecipient Monitoring Responsibilities” form for
all subcontracts
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The level of monitoring required for each subcontract is determined by
Contracting & Research Services and provided to you at the draft stage.
Delineates the responsibilities of the department and Principal Investigator in
ensuring that only ALLOWABLE expenditures are being paid and the
Subaward is properly monitored.
The PI is required to approve all charges on each invoice by completing and
signing the PI portion of the Subcontract Payment Authorization form.
(see Attachment No. 6)
The Departmental authorized official is also required to approve invoices by
completing and signing the Business Official portion of the Subcontract
Payment Authorization Form before they are sent to accounts payable.
 Accounts Payable will not pay any invoice that is not accompanied by a
PROPERLY COMPLETED Subcontract Payment Authorization Form.
The Life of Your Subaward
Subrecipient Monitoring

Risk level is assessed by Contracting & Research Services, based on:
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Amount of the subcontract, Type of institution, Subcontractor’s performance
in prior agreements with the University, Relevant findings on the
Subcontractor’s audit, and Departments compliance with University policy and
process.
Change in Risk Level:
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The following areas can create change in the assigned risk level of a subaward:
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Changes in the contract circumstances
Issues with departmental compliance with subaward policies and procedures
Audit findings on Subcontractors A-133 or other audited/financial documents
Contracting & Research Services will notify department of changes in risk level
and request a revised Subrecipient Monitoring Form.
Please see Risk Level Matrix and Subrecipient Monitoring
Responsibilities forms.
(see Attachment No. 7)
The Life of Your Subaward
Paying Invoices
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NO payment can be made without a fully signed Subaward
in place, covering the period of performance expensed in
that invoice.
In order to send an invoice for payment the PI and Department
administrative official must review invoices and complete the
Subcontract Payment Authorization Form.
The completed form must accompany any subcontract invoice sent
to Accounts Payable for payment. Accounts Payable will reject your
invoice for payment if the form is not included, or if the form is
included but not filled out properly.
Contracting & Research Services has final approval over all
Subaward invoices and will hold invoices for payment if the
payment request is not accompanied by a completed Subcontract
Payment Authorization Form, and if the payment is for a period of
performance that is not covered by the fully signed Subaward.
When the Subaward has Ended
The Life of Your Subaward
Don’t forget the closeout process.

In order to consider a Subaward closed, we must have a fully signed closeout
letter in place.
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This letter, generally called a “Termination Letter,” protects you from future request for
payment. The letter provides the exact end date, the amount of final invoice, and the
total amount expended on the Subaward. Both parties sign in agreement that the project
is closed and there are not additional funds to be paid.
The department must complete a no-cost Purchase Order Amendment to
closeout a Subaward. In the “Explanation” box of the amendment, please
provided the final invoice amount, the final subaward total amount, and the
final end date of the project (see example below).
Contracting & Research Services does not automatically closeout Subawards,
unless no action has been completed on the Subaward more than a year after
the period of performance has expired.

In this event, Contracting & Research Services will send a notice requesting information
to closeout the Subaward.
Audits and the University of Arizona
Who audits Subawards and what you
should do.
Audits at the University
Who can Audit You
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Every Subaward issued by the University of Arizona is subject to audit.
Subawards can be audited by any of the following:

Contracting & Research Services Internal Audit

University of Arizona Internal Audit

State of Arizona OMB A-133 Audit
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Sponsor Audit

Office of Naval Research (ONR) Audit
During the course of any audit, your department may be asked to produce
documentation as proof of appropriate subrecipient monitoring so as to
comply with University of Arizona Policy and procedure, State of Arizona
and Federal oversight requirements, and Prime Sponsor requirements.
If your Subaward is selected for audit, Contracting & Research Services will
notify you via e-mail, informing you who is auditing the file and when the
audit will take place.
If you receive a call directly from an auditor, without prior notice from
Contracting & Research Services, please notify us immediately.
Audits at the University
Contracting & Research Services
Internal Audit

Contracting & Research Services is required to
complete an annual audit of randomly selected
Subawards.
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This audit is done to ensure compliance with all
requirements for the oversight of Subawards.
Contracting & Research services selects a random
sample of active Subawards, and completes a full
audit review of selected Subawards.
This audit will help you prepare for any future audit
by ensuring that your Subawards are in order.
Audits at the University
University of Arizona Internal Audit
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The University of Arizona Internal Audit department
has the right, and responsibility, to audit any
Subaward at any time.
During the course of an audit conducted by the
Internal Auditors, all aspects of compliance and all
expenses for the period in question will be reviewed.
The Internal Auditors are charged with ensuring that
the University of Arizona complies with all rules,
regulations and requirements.
Audits at the University
State of Arizona OMB A-133 Audit
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Each year, the State of Arizona Auditor General’s office
completes the OMB A-133 Single Audit, covering each
institution under its jurisdiction. The University of Arizona is
one of these institutions.
For Subawards, each file is reviewed for compliance with
requirements and each expense under the subaward, for that
given Fiscal Year, is reviewed to ensure that payment was made
within the guidelines.
If your subaward is selected, you will be asked to show proof of
compliance with the terms and conditions of the Subaward, with
terms and conditions of the Prime Award, with the subrecipient
monitoring responsibilities agreed to at the issuance of the
Subaward, and with State of Arizona and Federal requirements.
Audits at the University
Prime Sponsor and ONR Audits
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
Prime Sponsor Audit:

Your Prime Sponsor has the right to audit you for any action taken with
its own funds, at any time during the life of the Project, and for several
years after the Project has ended.

A Prime Sponsor can choose to audit a Project at any time, and has the
right to audit any Subaward under that Project.
Office of Naval Research Audit:

ONR is the University of Arizona’s cognizant auditing authority, and
reserves the right to audit the University of Arizona at its discretion.

ONR is responsible for certifying the University of Arizona Purchasing
System, allowing the UA to do the volume of business it does with the
Federal Government.
At a Glance
Key things to remember to make your
Subaward process easier.
Remember Me!

Retain your budget negotiations documentation.

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Budget and Scope of Work:
At a Glance



The Subrecipient Monitoring responsibilities form outlines the responsibilities for both the PI and the authorized Business
Official. Be sure you are complying with these requirements when monitoring your Subaward and paying your Subaward
Invoices.
DO NOT PAY INVOICES WITHOUT A FULLY SIGNED AGREEMENT IN PLACE.


Make sure your budget clearly outlines the anticipated expenses for the Subaward, and that the Scope of Work clearly
outlines the work you are expecting the Subawardee to perform in exchange for the funding provided.
Know your responsibilities.


Be sure to collect the necessary information at the budget creation stage, regarding all budget negotiations, to provide to
Contracting & Research Services when issuing the Subaward later in the process.
If the last signed agreement or modification has expired, you cannot pay an invoice for expenses incurred beyond that date.
DO NOT send the draft, or any documents provided at the draft stage, to the Subawardee.

The department is not authorized to issue agreements on behalf of the University. The draft is considered an internal only
document until Contracting & Research Services finalizes the agreement for signature.

All other documents provided at the draft stage (Sole Source Justification, Risk Monitoring Responsibilities Form, etc.,) will
always be an internal document.
Remember the Termination Process.

Please remember to enter a no-cost closeout Purchase Order Amendment in UAccess when your Project is complete. This
will ensure that your Subaward is officially, and properly, closed out.
Mistakes to Avoid

Paying invoices without a fully signed Subaward and/or without a completed
Subaward Payment Authorization Form.

At a Glance

Entering the wrong object code.


Contracting & Research Services will request a revised budget and/or scope of work if we feel the
documents we receive do not provide sufficient detail to become part of the legally binding
document.
Unclear Requisition or Purchase Order Amendment.

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Without the correct object codes (3350 and 3340) your Subaward will not be routed to
Contracting & Research Services and could float in the system for some time before someone
figures out where it should go.
Unclear Budget or Scope of Work.
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Payments Requests entered into UAccess without both of these items will be held until both are
in place.
Lack of necessary information on Requisitions or Purchase Order Amendments creates
uncertainty, resulting delays in the process.
Assume No-cost extensions and Terminations are automatic.
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Contracting & Research Services will never automatically extend a Subaward, even when the
prime award is extended.
Contracting & Research Services will never automatically terminate a subaward, even when the
Project period has expired.