There are no easy answers to your questions, but here are some important points to consider: 1. Since you use the term, "agreement", I will assume you mean that the prime award to Tulsa is an assistance instrument of some type, such as a cooperative agreement or grant, vs. a procurement contract. This assumption points us towards one likely solution path, vs. the one we would take under a procurement contract. 2. What do the DoE Prime award specific terms and conditions say about the handling of subcontracts to commercial concerns? Also, take a look at the DoE General Assistance Terms and Conditions at http://www.pr.doe.gov/gf3tc.html, specifically referencing contract and subaward/subgrant flowdown provisions, with hypertext links to other subparts and appendices that address the question of flowdowns more fully. In short, they invoke Subpart C of 10 CFR 600, which states, "10 CFR 600.104 Subawards. Unless sections of this subpart specifically exclude subrecipients from coverage, all DOE recipients, including State, local and Indian tribal governments, shall apply the provisions of this subpart to subrecipients performing work under awards if such subrecipients are institutions of higher education, hospitals, other non-profit organizations or commercial organizations. Thus, this subpart is applicable to those types of organizations regardless of the type of recipient receiving the primary award. State and local government subrecipients are subject to the provisions of 10 CFR part 600, subpart C, ``Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.'' 3. Also, you should take a look at 10 CFR 600.126, entitled, "Non-Federal audits", which gives DoE Prime assistance recipients the specific authority to seek audits of subs in order to protect the interests of the project, the prime, and DoE 4. You don't really say in the sub-award to the commercial concern is for a shared part of the technical work, (i.e, a true "subrecipient" relationship) or merely the procurment of related items required by the prime (i.e, vendor relationship). This distinction is critical for governing the appropriate Federal flowdowns and audit issues. More on this subject is found in the discussion of subrecipients vs. vendors at OMB Circular A-133, at http://www.whitehouse.gov/OMB/circulars/a133/a133.html#b . Scroll down to "�___.210 Subrecipient and vendor determinations." 5. If the commercial concern sub has any intention of getting into Federally funded research, even as a subcontractor, it would do well to contact the DoE Small Business people, and get ramped up and get "all its vacinations" to become a Federal recipient, subrecipient, or contractor/subcontractor. Good information about getting started with DoE as a small business is found at http://www.er.doe.gov/production/grants/grants.html#SBIR 6. If, on the other hand, they are already in reciept of Federal awards or functioning as a subcontractor, they may already have a cognizant Defense Contract Audit Agency (DCAA) nearby that oversees their work. DCAA has agreements with other agencies to do audits for them, as well as normal DoD Agencies. In this case, they should "know better" than to expect that a $1M subaward would carry no expectation of closeout audit of some type. 7. Item the Last: Partner early and often with your Prime DoE Grants/Contracting Professionals, and seek guidance from them in writing for open issues pertaining to all project obstacles, not just the subcontract costs. Also, was the subcontract approved as part of the pre-award proposal submitted to DoE by Tulsa? If so, then the subaward can rightly be considered a "government directed" subcontract or subaward, and more programmatic and cost type oversight would be appropriate by the DoE at that point. That is in keeping with the nature of cooperative agreements, which envision a more developed involvement of the issuing agency. 8. Sorry to be so long winded. You ask for the time, I tell you how to build a watch. . . . Good Luck! Todd Todd A. Frye, Deputy Regional Director ONR CHICAGO 312 886-5423, ext. 237 xxxxxx@onr.navy.mil P.S. Researched and posted at 8:13 PM CST - Not on Government Time or Dime. -----Original Message----- From: Leah Bevan [mailto:xxxxxx@UTULSA.EDU] Sent: Wednesday, June 07, 2000 4:41 PM To: xxxxxx@HRINET.ORG Subject: Audit Requriement for Subrecipient I am working on a subcontract for a private company which will be issued under a prime agreement with DOE. I understand that all the requirements of the prime flow down to any subrecipient. We as the recipient of the prime require subcontractors to provide us with annual audit reports. Since the subcontractor is a private company and not subject to audit they of course do not want to provide a copy. Over the first budget period (two years), their budget will be $1,118,890 which to me is substantial. Can anyone shine a little light for me? Is there policy/regulations or anything in writing I can reference here dealing with small private companies and audits? Thanks for any help, Leah Bevan Coordinator of Grants and Contracts The University of Tulsa 600 South College Avenue Tulsa, Oklahoma 74104 (918) 631-2883 Fax: (918) 631-2073 ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ====================================================================== ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================
