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SECTION 811: ALLOWABLE COST POLICIES - SUBCONTACTS
SOURCE: NDSU President
- A SUBCONTRACT is the establishment of a written agreement whereby a sponsored project is carried out by the grantee and one or more cooperating institutions that are separate legal entities independent of the grantee.
- SUBSTANTIVE PROGRAMMATIC WORK are project activities which are a primary part of the agreement and/or a significant portion of the activities to be conducted under the agreement.
- Under federal guidelines, none of the substantive programmatic work under a grant or other agreement may be subcontracted or transferred without prior approval of the Federal sponsoring agency.
- Under nonfederal programs, the prime agency's guidelines must be reviewed for any restrictions regarding subcontracts before a subcontract is executed.
- All arrangements for the conduct of activities that are subcontracted shall be formalized in a contract between NDSU and the third party. The agreement must state the activities to be performed, the time schedule, the prime agreement policies and requirements that are applicable to the contractor, other policies and procedures to be followed, the maximum amount of money for which NDSU may become liable to the third party under the agreement, and the cost principles to be used in determining allowable costs in the case of cost-type contracts.
Any such contracts must be reviewed by the University's General Counsel.
- No NDSU employee, officer or agent shall participate in the selection, award or administration of a contract in which University funds are used whether such funds are federal, state, or private, where to the individual's knowledge, the individual or the individual's immediate family or partners, have a financial interest in or with the contracting party with whom the individual is negotiating or has any arrangement concerning prospective employment. "Immediate family" includes the individual's spouse, lineal descendants (children, etc.) parents and grandparents, sibling and their lineal descendants.
- Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources.
- The Office of Grant and Contract Accounting will assist the investigator in preparing the subcontracting agreement.
- All agreements must be reviewed and approved by the Office of Grant and Contract Accounting and the Office of Sponsored Programs Administration before execution.
- When budgeting for a subcontract in a proposal, the subcontract should be shown as a single line item of direct cost. The subcontract budget should be attached to the total proposal budget.
- All invoices submitted under executed subcontracts should be submitted to the Office of Grant and Contract Accounting for payment. The Office of Grant and Contract Accounting will review the invoice for compliance with the terms of the agreement and prepare an Accounts Payable Voucher. The Accounts Payable Voucher will then be sent to the Principal Investigator for certification of the work performed. The Accounts Payable Voucher should then be returned to the Office of Grant and Contract Accounting for processing.
- All Accounts Payable Vouchers to subcontractors will include a certification statement by the Principal Investigator as follows:
"I HAVE REVIEWED AND APPROVED THE WORK PERFORMED BY (name). I FOUND THE WORK TO BE SATISFACTORY AND IN ACCORDANCE WITH THE ESTABLISHED POLICIES OF THE CONTRACT AGREEMENT."
- The initial $25,000 of payments each fiscal year under a subcontract agreement should be coded Account 624010. Accumulated payments in excess of $25,000 each fiscal year should be coded Account 624005.
HISTORY: July 1990; Amended April 1992; June 1996, August 2007, October 2007.