The detail provided in the line-item budget and budget justification, or narrative further describing subrecipient costs, for each cost category must be sufficient to satisfy UVA expenditure monitoring and sponsor requirements. 

If the subrecipient is providing cost share as part of their project contribution, then a detailed budget and narrative for the cost share should be provided and an additional Letter of Commitment for the cost share is required.

Budgeting Subaward Costs

Because subrecipient budgets include detailed line-items costs, only the total value of each subaward is entered on the subawards line in the overall project budget. 

Currently, if using a Modified Total Direct Cost (MTDC) base rate for indirect costs, UVA is permitted to generate indirect costs on the first $25,000 of each new subaward issued on a project. If using a Total Direct Cost (TDC) base, UVA indirect costs are assessed on the full amount of the subaward.

The period of performance of a subaward may not be greater than the primary award period of performance. It is common for subrecipients to be involved for shorter durations than the full award period, and the subrecipient period of performance should be budgeted accordingly. In most instances, however, UVA will release and obligate subrecipient funding in yearly increments.

Award transfers may require additional consideration regarding the UVA indirect costs generated on subawards. In such cases, input should be sought from the appropriate School or departmental Research Administrators or OSP at ospnoa@virginia.edu.

Subrecipient Indirect Costs

Uniform Guidance (sections 200.332 and 200.414) specifies that when a subrecipient has a federally negotiated rate, indirect costs should be budgeted at the subrecipient's rate.

In certain circumstances, the following exception may apply:

  • If a federal program has a published indirect cost rate cap or a non-federal sponsor has a published policy that limits indirect costs, the sponsor-required or capped rate will be used by both UVA and the subrecipients. 

If the subrecipient does not have a federally negotiated indirect cost rate, Uniform Guidance states that they "may elect to charge a de minimis rate of 10% of MTDC which may be used indefinitely." Therefore, if the 10% de minimis rate is chosen, the subrecipient should use it consistently for all federal awards until the subrecipient chooses to negotiate a rate.

Foreign subrecipient collaborating on an NIH funded project must typically use an indirect cost rate of 8%.

Note, UVA will not negotiate indirect rates with subrecipients who do not have a current negotiated indirect cost rate agreement with a U.S. federal agency. Furthermore, subrecipient organizations cannot use the UVA indirect cost rate.

Fixed Price Awards

Uniform Guidance (sections 200.201 and 200.333) requires that pass-through entities obtain prior approval from federal sponsors to issue fixed price subawards instead of cost-reimbursable subawards. To be eligible for a fixed price subaward, the following conditions must apply:

  • The total subaward may not exceed the Simplified Acquisition Threshold, which is currently $250,000 (see Uniform Guidance, section 200.320).
  • The subrecipient cannot be providing mandatory cost share or match.

Additionally, the subrecipient must propose the work as fixed price and it should be clearly noted as such in the budget justification provided at proposal stage.

If the prime award is issued as a contract, the FAR clauses of the prime award dictate whether a fixed price subaward is possible and whether additional prior approvals will be needed prior to issuance.

If you believe a fixed price subaward may be appropriate for a project based on programmatic and subrecipient considerations, please reach out to ospnoa@virginia.edu for further guidance. If OSP concurs with a fixed price subaward approach, appropriate language will be provided for inclusion in the UVA budget justification.