We are having a problem with auditors on our collaborative projects.
The auditors do not see a difference between projects that are
developed collaboratively by several institutions (working as partners)
and projects developed by one institution with the intent to subcontract
once funds are awarded.

 We have explained to them that collaborative projects involve partners
who have worked together to develop the statement of work but the
sponsor requires one partner to serve as fiscal agent.  Therefore, funds
for the partners must be disbursed through a subcontract.  However,
the auditors insist that a subcontract is a subcontract is a subcontract,
and that we must receive bids before we make an award.

We, obviously, have no desire to go back to a partner and tell them we
got the funding, but they now have to re-compete in order to receive
their share.  We have included names of the partners in the contract
with the sponsor and have even gotten letters from the sponsor
acknowledging that a partner is part of the project, all to no avail.

How do some of you handle this situation?

Ann Lessem, Ph.D.
Program Manager
The Proposal Office
Texas Engineering Extension Service
Texas A&M University System