Valerie,

A purchase requisition should not be treated like a subcontract.  When
issuing a subcontract, you are actually turning over responsibility for
performance of a portion of the statement of work to another party.  The
deliverable will be an integral part of your deliverable.

A purchase requisition, even one for maintenance, should be treated as
you would any other line item (like supplies or equipment) which is NOT
a subcontract and the F&A should be applied accordingly.

Be careful, though.  We've recently run into requests from our subs to
be paid through a purchase requisition because it's faster.  But even if
we were to agree to do that, the same clauses must flow down and the
$25K limit would still apply because they're still subcontractors,
regardless of how we get their money to them.  Your decision really
rests on *what part of the project the other party is providing*.

Good Luck,

Matt

Valerie Seaquist wrote:
>
>         I believe that we all agree that F&A (indirect) should be charged only to
> the first $25K of a subcontract issued under a contract or grant. I'm
> curious as to how other universities would handle the following situation:
>
>         A university purchase order is issued (from a contract/grant account) to a
> company/individual/whatever in an amount greater than $25K for something
> such as computer lab. maintenance, calibration of equipment, machining of
> parts. (This is just a regular requisition = purchase order situation not a
> university subcontract under a prime with university T&C's and prime
> flow-down clauses.) Should we charge indirect on only the first $25K of this
> purchase order amount? If so, are we saying that this purchase order is a
> subcontract? If not, why not?
>
> As always, thank you for your input.
>
> Val Seaquist
> Office of Research Administration
> The University of Alabama in Huntsville
> 256-890-6000 x 228
> 256-890-6677 (fax)
> xxxxxx@email.uah.edu
>
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