Developing and Monitoring Subrecipient Relationships

Subrecipient Relationships

What’s Essential

When MIT is the recipient of a prime award, collaborating institutions that are engaged by MIT to participate in carrying out a portion of the project’s scope of work with funding from the prime award are known as “subrecipients” or subawardees. The award that MIT issues to the subrecipient is referred to as the “subaward,” and is processed by the RAS Subawards Team. To be designated as a subawardee, the collaborating institution must designate a PI, who is acting as a collaborator with the MIT PI in carrying out a portion of the project.  A key feature of the subawardee designation is the nature of the collaborative relationship vs. a consultant who does not have decision-making input on the larger scope of the project, or a vendor who is providing services that it provides to others in a competitive business environment. The Subawards Team at RAS can help you with the determination of a subawardee.

Why It’s Important

The MIT PI is relying on their collaborative partners – subrecipients - to carry out a portion of the project’s scope of work. The subrecipient is compelled to do this and comply with the terms and conditions of the subaward agreement that contains both MIT requirements and "flows down" the terms and conditions of the prime award.  The MIT PI is responsible for monitoring the subrecipient for compliance and for performance of the work proposed. MIT is ultimately responsible for ensuring that the project is properly performed, and that the funding is spent appropriately.

How To Comply

  • Before the project proposal is developed, discuss the proposed collaboration with your local administrator or the RAS Subawards Team to determine whether the relationship should be a subaward, consultant or a vendor procurement transaction. The terms and conditions governing the relationship will differ depending on which type of affiliation it is: subrecipient, consultant, or vendor.
  • Once an award has been received, reach out to the Subawards Team to discuss setting up a subaward.  This process involves negotiation with the collaborating entity and can take anywhere from a week to several months, depending upon the complexities of the scope of work and other factors.
  • If the relationship is appropriately characterized as a subrecipient relationship, only the first $25,000 of subaward expense is subject to the MIT F&A (Facilities and Administration) charge.
  • For subawards issued by MIT, the PI under the prime award is responsible for the overall monitoring of subrecipient performance, including the completeness and acceptability of work performed, reasonableness of expenditures, and fulfillment of cost-sharing commitments.
  • PIs and their administrators should monitor subawards using a combination of the following mechanisms:
    • Reporting – Review financial and performance reports submitted by the subrecipient.
    • Contact – Regularly contact subrecipients about program activities and progress.
    • Invoice Review – If invoices are approved, return them to the RAS Subawards Team; if invoices are disapproved, explain why so that the Subawards Team can pursue resolution.