Thanks to all who responded personally to me in a similar vein.  It was just
such a long-winded response, I wanted to clarify when I did it for some
reason.

I think it is important to "jump in" and help out when you can from the
Federal side, even in an "informal" way, instead of merely "lurking" all the
time.  That's what the ListServ is for, among other things.

Sincerely,

Todd

-----Original Message-----
From: Kaaren J. Downey [mailto:xxxxxx@MSNOTES.WUSTL.EDU]
Sent: Thursday, June 08, 2000 10:06 AM
To: xxxxxx@HRINET.ORG
Subject: Re: Audit Requriement for Subrecipient

I want to echo Ruth's sentiment!!

Kaaren Downey

Ruth Tallman <xxxxxx@LEHIGH.EDU> on 06/08/2000 07:33:58 AM

Please respond to Research Administration Discussion List
 <xxxxxx@hrinet.org>

To:   xxxxxx@HRINET.ORG
cc:    (bcc: Kaaren Downey/Medadmin/Washington University)
Subject:  Re: Audit Requriement for Subrecipient

Todd,

Thank you for your advise and research in response to Leah's query (I've
printed
it for my file for the next time I draw a blank when faced with a similar
situation).  I am writing to remark about your P.S.:  "Researched and
posted at
8:13 PM CST - Not on Government Time or Dime."  Maybe you are ONR and this
was a
DOE question, but I find it EXTREMELY valuable to have the input of
professionals from the agencies on this discussion group and I would never
object to anyone using government time to interact and dessiminate
information
with your "customers"!  I sure hope your supervisors feel the same!

Ruth Tallman

"Frye, Todd" wrote:

> 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
>
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 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")
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 subscription information and a web-searchable archive, are available
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