Receiving the AwardReceiving the Award

Receiving the AwardModule 7

Special thanks to SRA members Sharon Kiser, Steve Lawrence, Tim

Quigg, Lawrie Robertson, Cary Thomas, Sheila Vrana and Mark Wdowik for parts from their session on

Contracts, Grants & Cooperative Agreements 10/2005 and

Toni Lawson & Monique Anderson from the University of Maryland for parts of their Contract Compliance and the

FAR 1/2007 presentation

Office of Sponsored Programs Contact Information

OSP Director

Jeanne Wicks 472-1825 jwicks2@unl.edu

Associate Director

Suzan Lund 472-1930 slund2@unl.edu

Assistant Directors

Deb Arent 472-6327 darent1@unl.edu

Mike Behne 472-6323 mbehne1@unl.edu

Office of Sponsored ProgramsContact Information

Grants Coordinators

Shelly Hardies 472-2247 mhardies2@unl.edu

Nancy Becker 472-3601 nbecker1@unl.edu

Currently looking for 2 additional pre-award staff

Office of Sponsored Programs Contact Information

Project Specialists

Kathy Anderson 472-6326 kanderson2@unl.edu

Ruth Clayton 472-3553 rclayton2@unl.edu

Linda Dickinson 472-3510 ldickinson2@unl.edu

Donna Douglas 472-6321 ddouglas1@unl.edu

Belinda Gillam 472-7061 bgillam@unl.edu

Kathi Malone 472-3430 kmalone2@unl.edu

Joyce Schuette 472-6354 jschuette1@unl.edu

Signature Authority • Sponsored Programs has authority for

– proposal submission

– negotiation and acceptance of grants and contracts

Note: IANR has signature authority for USDA projects it submits

• Technology Development has authority for

– negotiation and acceptance of licensing, confidentiality and material transfer agreements

• Signature authority is delegated by the Board of Regents (http://bf.unl.edu/bfpolicy/SignatureAuthority.pdf)

• If a document commits university resources (people, building space, funds), proper signatures are required

Note: PIs, deans, chairs and others are not authorized to sign any proposals, agreements, or any other legal document on behalf of the Board of Regents of the University of Nebraska.

Funding Mechanisms• Grants

• Cooperative Agreements• Contracts• Incoming Subawards

– can come in any of these forms – sometimes come in as Purchase Order

Federal AssistanceTypes of Support• Mandatory – block grants, formula-driven• Discretionary – competitively awarded

Fund Transfer Agreement Types• Grants – assistance• Cooperative Agreements – assistance but with

strings attached• Contracts – procurement/acquisition

Grant

Financial assistance for a project that will benefit the public. There is no substantial involvement between the sponsor and the recipient during performance. Federal grants are governed by Office of Management and Budget (OMB) circulars and Code of Federal Regulations (CFR).

Grants

• Broad Agency Announcements (BAA), Program Solicitation• Financial Assistance Award• Made for stated purpose (proposal/award)• Made for stated period of time (project period)• Made to an organization in the name of a Principal

Investigator (PI)• No substantial programmatic involvement by awarding

agency• Funding may be annual, multi-year or for entire budget

period• Minimum of limiting conditions (governed by OMB

Circulars A-21 and A-110)

Financial assistance for a project that will benefit the public. Substantial involvement is expected between the government agency and the recipient. Federal cooperative agreements are governed by OMB and CFR regulations.

Cooperative Agreement

Cooperative Agreements

• Agencies have substantial freedom to structure the terms and conditions (T&Cs)

• Agencies must issue cooperative agreement regulations

• Often differ from standard assistance regulations and may even resemble acquisition regulations

An agreement, enforceable by law, between two or more competent parties, to do or not do something not prohibited by law, for a legal consideration.

FAR 2.101 defines a contract as a mutually binding legal relationship that obligates the seller to furnish supplies or services and the buyer to pay for them.

Contract

Contracts• Request for Proposal (RFP) and Invitation for Bid (IFB)

• Mutually binding legal relationship that binds the seller to deliver certain specified goods or services (deliverables) in exchange for certain specified consideration (e.g., money)

• Terms are usually detailed and specific

• Activities frequently dictated by sponsor (buyer)

• Less latitude to modify scope of work and line-item expenditures

• Funding may be incremental, tied to work components, final payment (e.g. 10%) may be held until “acceptance” of deliverables

• Process governed by FAR

What is FAR?• Federal Acquisitions Regulations (FAR)

• System of uniform policies and procedures governing the acquisition (purchasing) of all federal agencies

• Procedures manual for federal agencies to acquire goods and services, including research

Location of the FAR

• The FAR is codified at Title 48 of the Code of Federal Regulations (CFR) and consists of 63 chapters.

• The components consist of:

– Federal Acquisition Regulations (Chapter 1)

– Agency Specific Supplemental Regulations (Chapters 2-63)

Path to the FAR

Code of Federal Regulations

US CodePublic Law

Federal Acquisition Regulations

Federal Agency Supplements

Contracting under the FAR• Begin by determining the nature of contract:

– Type• Cost-Reimbursement• Fixed-Price• Time & Material/Labor Hour• Indefinite Delivery/Indefinite Quantity• Basic Ordering

– Purpose• Construction• Research & Development• Supply• Service

Research & Development Contracting

• Purpose is to advance scientific and technical knowledge and apply that knowledge to the extent necessary to achieve agency and national goals.

• Focus is on the Statement of Work (SOW)

• Regulations found at FAR Part 35

Which FAR Clauses Can Be Accepted?Consider

• Appropriateness

• Required or optional

• University policies/restrictions

Contract TypesCost-Reimbursement (CRC)

• Pays allowable costs to extent provided

• Contractor must have adequate accounting system to track applicable costs

Fixed Price (FPC)• Price-based, not cost-based• Price defined in contract (by unit or deliverable)• May be firm or adjustable (economic circumstances, profit, etc.)

Purchase Orders

• Contract becomes effective upon written acceptance or actual performance

Contracts – Cost Reimbursable vs. Fixed Price • Cost reimbursable contracts are paid on regular billing

intervals or can have a payment schedule – only costs incurred should be paid – excess balance returned to sponsor

• Fixed-price contracts pay a flat amount whether costs are covered or not

• UNL requires a substantial up-front payment on industry contracts regardless of the type (usually 75-100%)

Contracts – Fixed Price Issues• UNL must fully recover costs in performing services and cannot

generate profit or be in deficit• Fixed-Price Contracts pay a flat amount whether costs are covered or not• Residual balances at project end must be handled carefully - can violate

state or federal regulations on non-profit status, or on cost-accounting standards which require allocating costs and showing consistency in budgeting and charging costs

• Salaries for staff working on the project but not charged to the account in proportion to the effort expended may not comply with OMB Circular A-21 effort reporting requirements unless the effort is documented elsewhere (PARs)

• If salaries not charged to contract account, effort must be tracked through PARs – per A-21 allowed 100% effort for all activities performed by an individual, whether paid by sponsored project or not

• Account may not pass an audit – costs could be disallowed and required to be returned to the sponsor, possibly with penalty fees

Contracts & Export Controls• The term Fundamental Research means basic and applied research in

science and engineering, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.

• The Fundamental Research Exclusion applies only to the dissemination of research data and information, not to the transmission of material goods.

 • The Fundamental Research Exclusion is DESTROYED IF:

The university accepts any contract clause that– Forbids the participation of foreign persons– Gives the sponsor a right to approve publications resulting from

the research; or– Otherwise operates to restrict participation in research and/or

access to and disclosure of research results. 

Contracts & Export Controls cont.“Side deals” between a PI and Sponsor to comply with such requirements even though not stated in the research contract may destroy the fundamental research exclusion and expose both the PI and the Institute to penalties for export control violations and may also violate university policies on openness in research.

Contracts & OMB Circulars

• OMB A-21

– Incorporated by FAR 31.3, allowable costs

• OMB A-110

– Sets standards for grants & cooperative agreements

– Specific actions not applicable to contracts (i.e. expanded authorities)

– FAR replaces this circular in contracts

• OMB A-133

– incorporated by FAR 52.215-02, Alt.II

Major Differences between Contracts & Grants

Contracts• Often RFP solicitations

• Need for specific service/product

• Schedule technical & expenditure reports and/or other deliverables

• Payment often tied to deliverables

• Numerous special terms and conditions

• Close control on budget

• Usually audited

• Can be cancelled for default

Grants• Often standard guidelines/proposal

kits

• Support for proposed work in general programmatic areas - need to advance knowledge

• Requires technical progress reports

• Payments may be in advance, by schedule, or upon completion

• General terms and conditions

• Flexible budget control

• Some audited

• Almost never cancelled

Useful Web sites:OMB CircularsOMB Circulars: http://www.omb.gov/circulars

CFRCFR: http://www.access.gpo.gov/nara/cfr/cfr-table-search.html

FARFAR: http://www.arnet.gov/far/ or

http://farsite.hill.af.mil/vffara.htm

FDPFDP: http://www.thefdp.org

CFDACFDA: http://12.46.245.173/cfda/cfda.html

MIT Export ControlsMIT Export Controls: http://web.mit.edu/osp/www/Export_Controls/index.htm

Considerations before the award is signed• Pre-award Costs

– Not allowed on “24” grants – State Single LOC

– May not be available on all grants

– Are incurred at the risk of the department

– Are allowable no more than 90 days prior to effective date of award. Written permission from granting authority is required to exceed 90 days.

– Use “Prior Approval to Spend” (IPAS) form to request Pre-Award spending

WBS Establishment

WBSEstablishment

(Award Cost Center)

ProjectManagement

ProjectCloseout

Audit

WBS Establishment• Project information must be complete and include:

– Signed & completed routing form

– Annual Conflict of Interest disclosure

– Verification of Compliance – IRB/IACUC

– Copy of proposal

– A balanced budget that agrees to award

– Cost share information with:• Specific persons identified

• Percentage of time commitment

• Funding source – cost object

– Subaward Information: Letter of Commitment, contact information, budget, detailed work statement

– NOTE: PARS from previous awards must be current.

WBS Establishment• Timeline

– Creating the WBS

• Uploaded into SAP on a Monday, Wednesday, Friday schedule

• Payroll lockdown may impact this schedule

– Changing PAF information

(department responsibility)

– Know your grant specialist

Project Management• Basic Consideration for Costs:

– Primary Principle – All costs must:

• be reasonable

• be allocable

• Be treated consistently across the institution

• Conform to any limitations or exclusions described in these principles or in the sponsored agreement as to types or amounts of cost items

• The cost is unallowable if these conditions are not all met.

Project Management • Department Responsibility

– Strongly recommend maintaining records centrally

– Review expenditures/reconcile SAP reports

– Use commitments for planning purposes

– Deficits not allowed – must remove immediately

– Cost share outside of payroll

• Travel

• Invoices

• Outside source

Project Management• Re-budgeting

– Required in some cases – 0% - ?

– Consider cumulative effect when determining if grantor approval is needed

– Management tool

Project Management• Overspending an Award:

– Costs must be removed from the grant. Per A-21 not allowable to charge to another grant

– Additional budget available?

– Use commitments to avoid deficits

• Special Issues:

• Changing a PI during the grant

• Changing the effort promised

• Leave of Absence (3 months or more)

• Sub-awarding part of the grant

• Transferring award to another institution

• Timing of expenditures – last 30-90 days

Project Closeout• Prior to end date:

– Process PAFs– Act on SAP workflow notifications (“action alerts”)– Request extensions (if needed) in a timely manner

• First 30 days after the end date:– Pay all invoices– Review SAP reports and reconcile outstanding items– PARs

Project Closeout • 30 – 60 days after end of award:

– Post award reviews expenditures posted

– SAP intramurals post

– Department ensures records are ready for audit

– Department (PI) files final technical report

• 60 – 90 days after end of award:– Post award requests final reimbursement

– Post award files final financial report(s)

What Sponsors Look for When Monitoring• Effort falls below proposal levels

• Unreasonably slow progress

• Slow or accelerated expenditure of funds

• Major rebudgeting

• Rebudgeting funds with a restricted purpose

• Pursuing a project outside the scope approval for the grant

• Not responding to phone calls or e-mails

• Habitually late reports

• Indications on the financial statements of a lawsuit or wrongdoing by an officer of the organization

Audits and Reviews• Types of Audits:

– Annual A-133– NU Foundation– Systems and Desk Audits– On-Site Project Specific Audits

• Documentation:– PARs– Invoices– Financial reports– Technical/progress reports– Other information required by the award

• Retention:– Federal requirement is 3 years after receipt of last required document– UNL policy is 5 years after the final report is filed– Multi-year awards

Contact InformationOffice of ResearchOffice of Research302 Canfield Administration Bldg http://research.unl.edu

NURAMPNURAMP472-7003http://research.unl.edu/nuramp/

Office of Sponsored ProgramsOffice of Sponsored Programs312 N. 14th Street, Alexander Bldg West472-3171http://www.unl.edu/research/sp1/