Is there a possibility that this organization is not really a subawardee but instead a contractor under a grant? In that case you could consider a basis of payment
other than cost-reimbursement, e.g. a fully-loaded rate. You would have to treat this as a procurement, and that has its own challenges. What we find in monitoring of commercial organizations is that often they do not have the right systems in place to handle
federal grants. So we always take a very hard look at the contractor vs. subawardee question when dealing with commercial organizations to make sure that we are not defaulting inappropriately to the subaward classification. Take a look at 2 CFR Part 300 75.351
“Subrecipient and Contractor Determinations” if you are not already familiar with this issue.
My other thought would be that if this organization has never had a negotiated rate agreement with the government the de minimis 10% rate provided for in the
Uniform Guidance might be a possibility (if the organization can live with that amount). They could choose to accept 10% until such time as a federal F&A rate can be negotiated. My understanding is that the government might decline to negotiate a rate with
an entity that is not the direct recipient of any federal grants or contracts. I would be curious to hear if others have experience that would suggest otherwise.
It is also possible, if they can’t get a government F&A rate agreement, for your organization to act as the negotiator. That can be very burdensome for your organization
because it requires a fairly in-depth review of the subrecipient’s financials and has to be updated periodically.
Michael
Michael Pelletier| Vice President, Director Office of Sponsored Programs | Domestic Programs |
EDC
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From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org]
On Behalf Of Kathy Rushlo
Sent: Thursday, August 31, 2017 7:10 PM
To: xxxxxx@lists.healthresearch.org
Subject: [RESADM-L] Consortium F&A for Private Business
I'm am working on an AHRQ grant due September 25. One of our partner sites is a for-profit business. As I was going through the NIH site, I found this:
If the consortium is with a for-profit entity, such as a small business, the organization must have a negotiated F&A rate before they can charge F&A costs. The default small business rate of 40% is only applicable to SBIR (R43 &R44) and
STTR (R41 & R42) applications. See the Division of Financial and Accounting Services (DFAS) at NIH to set up a rate:
http://oamp.od.nih.gov/dfas/indirect-cost-branch/indirect-cost-submission
The only other grants this company has been involved with have been SBIR grants and they do not have a federally-negotiated rate. My reading of the above is that they can't charge F&A (or try to get a rate by 9/25, which would be pretty
difficult). Or can they charge a rate, but know that they will have to get an official rate before they can actually receive any F&A? Has anyone else run across this issue? Do you have a solution? This group is key to the proposal!
Thanks!
Kathy
Kathy Rushlo, MHA
Director, Sponsored Programs, Arizona Campus
A.T. Still University
5835 East Still Circle
Mesa, AZ 85206
480-245-6240
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