In my opinion it is better to write into the agreement with sub-awardee B that programmatic supervision will be done by the prime PI and sub-awardee A PI (and then have the prime PI and sub-awardee A PI both sign off on the invoices before the prime pays sub-awardee B directly) then it is to sub on a sub.

After all the supervision issue is about the science and not the accounting office.

________________________________________
From: Research Administration List [xxxxxx@lists.healthresearch.org] on behalf of Young, Katherine S [xxxxxx@ILSTU.EDU]
Sent: Saturday, August 31, 2013 11:53 AM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] Direct Cost Limit  - Third Tier F&A Question

But in practice there are exceptions where the first subrecipient is essential in the supervision of the activities of the lower tier subrecipient.  Think of the delays every time an invoice comes in... It's tough enough at times with your own PI approval.  In turn, as the middle institution, it can be frustrating when the lead institution did not write a clear, deliverable oriented sub award and we had no leverage to ensure performance.

Sent from my iPhone

On Aug 31, 2013, at 9:55 AM, "Moise, Jessica" <xxxxxx@MSSM.EDU> wrote:

> Agreed - while second tier subs are allowed they are almost never a good idea in practice.
> ________________________________________
> From: Research Administration List [xxxxxx@lists.healthresearch.org] on behalf of Marisa Steffers [xxxxxx@CHPNET.ORG]
> Sent: Friday, August 30, 2013 10:48 PM
> To: xxxxxx@lists.healthresearch.org
> Subject: Re: [RESADM-L] Direct Cost Limit  - Third Tier F&A Question
>
> why not just make the 3rd sub-contract a second sub-contractor of the prime?
> ________________________________________
> From: Research Administration List [xxxxxx@lists.healthresearch.org] On Behalf Of Joanne Cobble [xxxxxx@FOUNDATION.SDSU.EDU]
> Sent: Friday, August 30, 2013 9:05 PM
> To: xxxxxx@lists.healthresearch.org
> Subject: Re: [RESADM-L] Direct Cost Limit  - Third Tier F&A Question
>
> Thank you. As we interpreted the guidelines....
>
> Sent from my iPad
>
> On Aug 30, 2013, at 5:01 PM, "Wood, Roger" <xxxxxx@INFOEDGLOBAL.COM<mailto:xxxxxx@INFOEDGLOBAL.COM>> wrote:
>
> Joanne,
> Consistent with how standard sub awards work, the total costs of the third-tier sub award formally include both directs and indirects of the sub – as direct costs on the second-tier sub and, by extension on the prime. However, for purposes of assessing compliance with NIH direct cost limits on awards (e.g., the $500,000 annual costs rule), the third-tier sub award costs would be excluded just as would the second-tier sub award  indirect costs.
>
> Roger
>
> Roger Wood, SR PRODUCT MANAGER
> xxxxxx@infoedglobal.com<mailto:xxxxxx@infoedglobal.com> | +1.518.713.4200   ext  150
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>
>
> From: Joanne Cobble <xxxxxx@FOUNDATION.SDSU.EDU<mailto:xxxxxx@FOUNDATION.SDSU.EDU>>
> Reply-To: Research Administration Discussion List <xxxxxx@lists.healthresearch.org<mailto:xxxxxx@lists.healthresearch.org>>
> Date: Friday, August 30, 2013 3:36 PM
> To: "xxxxxx@lists.healthresearch.org<mailto:xxxxxx@lists.healthresearch.org>" <xxxxxx@lists.healthresearch.org<mailto:xxxxxx@lists.healthresearch.org>>
> Subject: [RESADM-L] Direct Cost Limit - Third Tier F&A Question
>
> We are trying to confirm if we would exclude the third tier subcontract F&A for the purposes of calculating the direct cost prior approval letter?
> The NIH guidance isn’t very clear…
> Thank you. Joanne
>
> ·       Direct costs:
> o   In the rare case of third tier subawards, section F.5 “subawards/consortium/contractual” costs should include the total cost of the subaward, and the entire third tier award is considered part of the direct costs of the consortium for the purposes of calculating the primary applicant’s direct costs.
> o   Cost Principles. Regardless of what cost principles apply to the parent grantee, the consortium is held to the standards of their respective set of cost principles.
> ·       F&A:
> o   Consortium F&A costs are NOT included as part of the direct cost base when determining whether the application can use the modular format (direct costs < $250,000 per year), or determining whether prior approval is needed to submit an application (direct costs $500,000 or more for any year).
>
>
> Joanne Cobble
> Sponsored Programs Coordinator
> Sponsored Research Development
> San Diego State University Research Foundation
> 5250 Campanile Drive
> San Diego, CA 92182-1931
> 619-594-5505
> 619-594-4950 (fax)
> xxxxxx@foundation.sdsu.edu<mailto:xxxxxx@foundation.sdsu.edu>
> http://www.foundation.sdsu.edu
>
>
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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.healthresearch.org (click on the
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 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help
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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.healthresearch.org (click on the
 "LISTSERV" link in the upper right corner)

 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help
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