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University of WashingtonOutgoing Subcontract

Administrationfor Sponsored Programs

May 2010

Michael J. Blackwell, Sponsored ProgramsDebbie Emerson-Carter, Sponsored Programs

Suzi Freelund, Financial ServicesMichelle Schrader, Procurement Customer Service

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S U B C O N T R A C T S

Through this presentation, you will learn…

What a Subcontract is and how it differs from a Purchase Order for goods and services;

The proposal requirements for including a Subcontractor and administering a Subcontract;

How to process invoices to pay the Subcontractor; and

The procedures for closing out a Subcontract.

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SUBCONTRACTS

PROCESS IMPROVEMENT • Currently engaged in USER Task

Group #2• Part of Seamless Procure to Pay

Project• Goal is to Streamline Operations

between the Academic Dept., OSP, and Accounts Payable

• New GIM 7 Subcontracts for Sponsored Programs just released

• Plan is to be finished by mid 2010

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S U B C O N T R A C T S

I. Background, Definition, and Budget Format

II. Responsibilities of the UW PI and Various Offices

III. Subcontracts to the UW from Another Institution

IV. Questions or Need More Help?

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S U B C O N T R A C T S

I. Background, Definition, and Budget Format

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Background

From fiscal year 2005 to 2009, the growth in dollars of UW issued subcontracts has been 21.7%. During the same period, overall sponsored awards grew by 12% at UW.

This is part of a larger national trend by Federal and private sponsors to encourage cross-disciplinary collaborative research, e.g., in RFAs or RFPs.

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S U B C O N T R A C T S Background, Definition, and Budget Format

DefinitionCharacteristics indicative of a Federal

award received by a subcontractor are when the organization (UW PI):

Determines who is eligible to receive what Federal financial assistance;

Has its performance measured against whether the objectives of the Federal program are met;

Has a responsibility for programmatic decision making;

Has responsibility for adherence to applicable Federal program compliance requirements; and

Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

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S U B C O N T R A C T S Background, Definition, and Budget Format

DefinitionCharacteristics indicative of a payment

for goods and services received by a Subcontractor are when the organization (UW):

Provides the goods and services within normal business operations;

Provides similar goods or services to many different purchasers;

Operates in a competitive environment; Provides goods or services that are ancillary to

the operation of the Federal program; and Is not subject to compliance requirements of the

Federal program.

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S U B C O N T R A C T S

II. Responsibilities of the UW PI and Various Offices

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

Proposal Stage: When a UW PI selects one or more

Subcontractors, be sure to get a signed proposal (at a minimum, work scope and detailed budget) from authorizing official.

Encourage use of prime sponsor forms by the Subcontractor, e.g., R&R 424.

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

This Subcontract proposal is then folded into the UW proposal for transmittal through UW channels and on to the sponsor.

This is then loaded into Grants.gov or whatever portal/method UW uses by UW dept. staff.

Attach in SAGE to GC-1 also.The first $25K is subject to UW IDC, unless the

standard rate is not allowed by the sponsor, e.g., a 10% of TDC base.

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices: UW Budget Format

Budget Format 01 Salaries $100 K 07 Benefits $ 22 K 05 Supplies $ 5 K 03-62 Subcontract

(MIT) $ 35 K 03 Other $ 5 K -- Subtotal DC = $167 K 25-99 Subtotal

IDC@56% MTDC = $87.92 K -- GRAND TOTAL = $254.92 K

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

Award Stage:When the award, including the proposed Subcontract,

is made to the UW, a Budget No. is assigned by Grant and Contract Accounting (GCA) and the PI and dept. staff notified.

Next step is to start the Purchasing Requisition in PAS using the budget number. Note: only one budget number can be used.

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SUBCONTRACTS

OUTGOING SUBCONTRACTS ARE FINANCIALLY SOLVENT!

WHY?WE DON’T ISSUE SUBCONTRACT

AWARDS WITHOUT THE MONEY!

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

• To avoid unnecessary delays, the PI or designated

staff person in the local UW department must: immediately enter an on-line Purchase

Requisition (PR) in the amount of the Subcontract,

which is then directed via Purchasing’s Buyer Assignment to OSP,

where the Subcontract, including all applicable conditions, is prepared.

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SUBCONTRACTS

PROPER WAY TO FILL OUT A PURCHASE ORDER FOR A SUBCONTRACT REQUEST

• Use Object Code 03-62• Always Check “NO” for Attachments in

PAS• Send Attachments to Subcontract

Manager in OSP with PR Number on Them• Refer to OSP website for detailed

guidance

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

Subcontract Preparation:OSP’s Subcontracts Group will use a standard

template of general conditions (see OSP web site) and add the special “flowdown conditions” from the prime sponsor.

The Subcontractor will be contacted for review and confirmation of all terms, especially the budget (cost and price analysis) and the need for an audit report.

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

Once signed by the OSP Subcontract Manager and e-mailed to the Subcontractor, then signed and returned to OSP, it is at this point that the funds are encumbered in ordered status in PAS so that invoices from the Subcontractor may be received and processed for payment.

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S U B C O N T R A C T S Responsibilities of the UW PI and Various Offices

Invoice or Voucher Review and Approval:Subcontractor submits invoices at least quarterly, not

more frequently than monthly, to Accounts Payables (AP).

AP coordinates with PI and department staff on approval of invoices, then authorization is granted back to PA for check issuance. Both RIP and Non-Rip ($10K +) procedures are used.

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S U B C O N T R A C T S Responsibilities of the UW PI and Various

Offices

Renewals or Modifications: If the PI, under the prime award, receives a

new Budget No., do a new PR. If the existing Budget No. is used to

continue the research program, just send a request in writing/e-mail to the OSP Subcontract Manager.

PIs are not authorized to amend Subcontract terms (see Article VI).

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SUBCONTRACTS

PROPER WAY TO REQUEST A MODIFICATION TO A SUBCONTRACT

• New Form created about a year ago (UW PI or authorized designee must sign)

• Using the Form is Optional, but Completing it Properly may result in Faster Service

• The Form is available at the OSP website under Subcontracts section

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S U B C O N T R A C T S

III. Subcontracts to the UW from Another Institution

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S U B C O N T R A C T SSubcontracts to the UW from Another Institution

Members of the faculty are sometimes invited by colleagues at other institutions to participate in research and other sponsored programs.

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S U B C O N T R A C T SSubcontracts to the UW from Another Institution

Faculty member should prepare and submit, through regular UW channels, a proposal with Form eGC-1 outlining the extent of participation and funding and facilities commitment necessary to carry out the participation.

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S U B C O N T R A C T SSubcontracts to the UW from Another Institution

This will provide an opportunity for the same type of review given proposals going to primary funding sources, and will assure the awardee institution of official UW approval of the proposed collaboration.

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SON - S U B C O N T R A C T S

IV. Questions or Need More Help?

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S U B C O N T R A C T S Questions or Need More Help?

Questions concerning preparation, execution and close out of subcontracts should be directed to:

Tru Ambrose, Verenice Barbosa, Jessica Brase and Lorri Vlcek (for new subcontracts, renewals, and modification requests)

Adelina Caberto (execution and ordered status in PAS)

Debbie Emerson-Carter (close out matters and ATA or invoice discrepancies)

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S U B C O N T R A C T S Questions or Need More Help?

Questions concerning how to process invoices and payments to Contractors should be directed to:Accounts Payable/Financial Services206-543-4500 – Main Customer Service Linepcshelp@u.washington.edu(Must have the Subcontract No. to contact

this office.)

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S U B C O N T R A C T S Questions or Need More Help?

Questions concerning subcontracting using gift and state budgets should be directed to:Purchasing Services206-543-5810buyhelp@u.washington.edu

Subcontracts in Accounts Payable

How Invoices Get Paid

Suzi Freelund – Accounts PayableMichelle Schrader – Procurement Customer Service

206-543-4500pcshelp@u.washington.edu

Sorting & Batching Online Invoices

Invoices get sorted by the following criteria:Manual vs. OnlineDirect/Priority vs. Regular HandlingRIP vs. NonRIP

Invoices are then given to the appropriate team to log into batches

Sorting & Batching Online InvoicesRIP and NonRIP invoices have notices sent to the

department RIP notices let the department know the invoice is pendingNonRIP invoices require written approval to be paid

Direct invoices already have written approval to payCurrently piloting with several departments to have all

subcontract invoices verified in department before being sent to AP for payment.Allows departments to stop problems before they happen.Allows AP to expedite payment of invoices

AP Glossary

• “Online” Invoices are invoices processed through PAS and payment is automatically generated by the system.

• “Manual” Invoices are processed completely by hand and manually keyed into PAS for payment.

• “Wire Transfers” are manual invoices paid via electronic bank communications to Subcontractors in foreign countries.

Paying Online Invoices

Direct invoices are cleared for payment within 24-48 hours of being logged

NonRIP invoices are processed for payment then held pending written approval to pay.

Priority & RIP invoices are processed 5 business days after the RIP notice is sent but within 30 days of the invoice received date.

Manual Invoice Payments

Invoices given to Subcontract team for batching & processing.

Hard copies of the Subcontract are pulled from the Subcontract filing cabinet in AP.

Currently piloting with several departments to have all subcontract invoices verified in department before being sent to AP for payment.Allows departments to stop problems before

they happen.Allows AP to expedite payment of invoices.

Processing Manual Invoices

Department may submit these with an invoice voucher (see handout).

The AP technician matches the invoice against the subcontract, including performance period, encumbrance, and dollar amount.

This information is logged in a spreadsheet and in Doc Logging.

FAS enters data in PAS and FIN to issue the check.

Payment sent to Subcontractor

Wire TransfersWire Transfers are logged into their own batch in Doc

Logging.Allows Procurement Customer Service to know if the wire has

been sent.Allows for data collection.

Wires are sent using Bank of America Direct. Initiated by Suzi or Mesfin.Approved by Julie, Suzi or Pramilla.

Wires can be sent in US Dollars or most Foreign Currencies.Wires sent inside US cost $10 and can take 5 business days

to reach the beneficiaryWires sent Internationally cost $25 and can take 14 business

days to reach the beneficiary

Continued…Wires logged into Wire Log SpreadsheetFunds unencumbered in PAS

PO is closed if one-time paymentJVs entered into FASTRANS Spreadsheet and sent to

JVREQ Once JVs are uploaded, spreadsheet is returned with

JV numbers and batch numberUpdated JVs are saved into an Excel workbook Emails are sent to department contacts with JV and

Wire information attached in Excel files for BAR reconciliation

Invoice DiscrepanciesManual – When invoice entered in Doc-Logging

Order in Pre-Buy StatusSubcontractor Mismatch

Online – Generated while clearing invoice for paymentExceeds Order or Line NTE amountBeyond Contract TermsOrder Closed Item doesn’t match orderFreight not authorized

Sent to Subcontract Manager for resolutionCleared for payment when approved by Subcontract

Manager

Presented by: Debbie Emerson-Carter

CLOSEOUT PROCESS FOR

SUBCONTRACTS

Background

OSP receives monthly reports for Subcontract budgets that expired the month prior.

Depending upon the performance period, OSP Subcontract Coordinator (Currently Debbie Emerson-Carter) will send closeout or amendment memos electronically to the UW PI and department contact, informing them that the subcontract has expired and requires a response.

Memos were previously sent via campus mail with original signature. Effective 12/09 all amendment and closeout memos are being sent via email with an electronic signature.

Modifications and New Subcontracts

Note: All other requests for amendments or new subcontracts should be made directly the Subcontract Manager (currently Mike Blackwell) only.

What’s Required of the Subcontractor?

The Subcontractor must provide the department with a Final Technical Report within 30 days after the end of the subcontract performance period.

The Subcontractor must provide the Final Invoice to UW Payables, Marked Final with the A-133 statement if it is a requirement stated in the subcontract within the time specified in the subcontract terms.

A-133

“The Contractor assures to the University that all expenditures were incurred in full compliance with OMB Circular A-133 or its own applicable audit regulations. Disallowed costs if found during the retention period of this Subcontract will be promptly refunded to University.”

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The Subcontractor must submit Exhibit D Close Out Certification to the University’s Subcontract Manager no later than 60 days following the termination of the Subcontract under Federal Contracts, DoD and NASA Grants only.

What’s Required of the Departments?

Departments must review and retain a copy of the final invoice prior to payment to make certain all requirements of the subcontract have been met, which is due no later than 60 days following termination of the subcontract.

 

Final Closeout Steps

Final invoice is received and paid, Departments must contact me via email at ddcarter@u.washington.edu requesting the subcontract be closed out and any remaining encumbrance be liquidated.

The request is received, OSP Subcontract Coordinator (Debbie Emerson-Carter) will send an email to SAF at saf@u.washington.edu giving the ok to close the subcontract (copying the department) requesting the subcontract to be closed to verify that the final invoice was received and paid in accordance with all of Article IV. requirements (Allowable Cost and Payment Section of the Subcontract)

QUESTIONS

Contact Information:Debbie Emerson-Carter

ddcarter@u.washington.edu(206) 543-5823