Subaward
Definition
A subaward is an agreement in which the institution that holds a grant passes part of the funded research, and part of the money, to another organization. The holder is the pass-through entity and the other organization is the subrecipient.
How it works
A subaward works by extending part of a prime award to a collaborator who carries out a portion of the project's programmatic work. The subrecipient runs its part of the science, has its own PI (often called the site PI), and must follow the same federal rules that flow down from the prime award. Under the Uniform Guidance, the pass-through entity must:
- Include the required federal award information and terms in the subaward agreement.
- Assess each subrecipient's risk of noncompliance.
- Monitor the subrecipient's spending and performance, including reviewing invoices and reports.
At proposal time, the lead institution's application usually includes each subrecipient's budget, budget justification, statement of work, and a letter of intent signed by the partner's office of sponsored programs.
Subaward vs contract
A subaward is for a partner that performs part of the research and shares responsibility for its outcome, while a contract is for a vendor that sells goods or services. The federal rules for this call are in 2 CFR 200.331. Signs of a subrecipient listed there include making programmatic decisions, having its performance measured against the federal program's objectives, and being responsible for following the program's requirements. A lab that runs standard assays for a fee, as it does for many customers, is usually a contractor.
Why it matters for research offices
Subawards matter because they affect the budget, compliance work, and timing. For federal awards, only the first $50,000 of each subaward counts toward modified total direct costs (MTDC) under the 2024 Uniform Guidance revisions (up from $25,000), so the lead institution recovers indirect costs on only part of a large subaward. Institutions follow the base defined in their negotiated rate agreement, so some still apply $25,000 until their next rate negotiation. Subrecipients also charge their own indirect costs inside their subaward budget. Every subaward adds post-award monitoring, and agreements can take weeks to negotiate after the prime award arrives.
Common mistakes
- Treating a collaborator as a vendor (or a vendor as a subrecipient), which changes the compliance and indirect cost treatment.
- Collecting subrecipient documents in the final week before the deadline.
- Forgetting that a subrecipient needs a Unique Entity ID.
- Overlooking whether a limited submission counts subawards toward the institutional cap.
Frequently asked questions
In federal grants, a subaward goes to a partner that performs part of the research, while a contract buys goods or services from a vendor. Many universities still call subawards subcontracts informally.
The subrecipient includes its own indirect costs in its subaward budget. The lead institution charges its indirect rate on only the first $50,000 of each subaward under the 2024 Uniform Guidance, or $25,000 under older rate agreements.