Global Research Toolkit

Contracts and Sub-Awards

A contract or sub-award may be needed when working with a foreign institution and comes with some considerations that should be made at the proposal development stage. Foreign sub-recipients may be contracted to accomplish a specific task or for staffing and payment reasons in a more general sense. As identified by Harvard University, if the program may involve a sub-award or sub-contract to a foreign entity, it is important to facilitate clear and concise sponsor obligations by the foreign organization and its key personnel, as well as the obligations imposed by U.S. and foreign law.

The use of a standard sub-award/subcontract template, such as those developed by the Federal Demonstration Partnership (FDP), will typically not work effectively as a model for a foreign component or foreign site agreement. Instead, agreements should include brief descriptions of each regulatory requirement in plain language accompanied by a website link to enable the research and administrative staff of the foreign organization or foreign site to obtain a fuller understanding of these requirements and to establish policies and processes to ensure and monitor compliance. Also, agreements to be executed with foreign persons must normally be prepared and/or reviewed by local counsel in the foreign country to ensure compliance with local laws, including labor laws.

All parties need to be clear on reporting from the very beginning of a project and communicate regularly – this should include primary administrative personnel and not just researchers. Other special considerations for sub-awards between U.S. institutions and foreign institutions, as identified by Harvard University, include issues of culture, language, infrastructure, budget, regulation, data sharing, export control, liability, publications, intellectual property, and/or institutional Name use. Coordinate with your Office of General Counsel (OGC) on the selection of local counsel and anticipate for these costs. Commercial options may also be available, such as American Language Services.

Additionally, the level of acceptable risk associated with U.S. federal grants and doing business with foreign institutions should be taken into account. Federal OMB “Uniform Guidance,” specifically §200.331, requires pass-through entities to evaluate each sub-recipient’s risk of noncompliance. If, in the U.S., your institution does not have an existing list of sub-recipients and their level of associated risk, you should make a preliminary review at least 2 weeks before the submission deadline to submit to your department, college, or central research office for evaluation. If you are outside of the U.S., ask your U.S. partners at the outset what reporting requirements they have and what problems you anticipate with compliance. This will help to prevent any roadblocks later in the process.

Types of common Awards and Agreements:
  • Gift | Gift policies will vary from institution to institution. Some accept unrestricted gifts, while others accept only gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purpose, and priorities. Generally, gifts are not accepted when they violate the terms of the corporate charter, are unduly burdensome to administer, pose an unacceptable risk of liability to the institution, benefit a specified institutional employee or student, or that are for purposes outside the mission of your institution.
  • Grant | Financial assistance mechanism providing money, property, or both to an eligible entity to carry out an approved project or activity. A grant is used whenever the grantor anticipates no substantial programmatic involvement with the recipient or grantee during performance of the financially assisted activities. A Grant is distinguished from a cooperative agreement in that it does not provide for substantial involvement between the grantor or pass-through entity and the recipient or grantee in carrying out the activity contemplated by the award.
  • Contract | An agreement creating obligations enforceable by law, typically where one entity is paying an amount of money for a specific deliverable(s) without substantial involvement of the paying entity.  There are many types of contracts, particularly in the federal or state government context.
  • Sub-award | An award provided by a pass-through entity to a sub-recipient for the sub-recipient to carry out part of an award received by the pass-through entity.  A sub-award may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.
  • Consulting (Professional Practices Services) Agreement | An agreement providing for an individual, typically faculty, who provides professional advice or services in line with the institution’s mission as a not for profit educational institution, for a fee.
  • Memorandum of Understanding (MOU) | A memorandum of understanding (MOU or MoU) is a formal agreement to establish official partnerships or collaborations. MOUs are not legally binding but they carry a degree of seriousness and mutual respect and should be treated accordingly.
  • Non-Disclosure Agreement (NDA) or Confidentiality Agreement (CDA) | A confidentiality agreement (also called a nondisclosure agreement or NDA) is a legally binding contract in which a person or business promises to treat specific information as confidential or proprietary and not to disclose this information to others without proper authorization.
  • Material Transfer Agreement (and Data Transfer Agreement) | A legal document defining the conditions under which research or other materials, or data, can be transferred and used among the parties, including research laboratories.
  • Rotation/Affiliation Agreement | An agreement providing for a student, or over time various students, to temporarily work with another entity, typically as part of their study or work.
  • Vendor/Service Agreement | An agreement whereby an institution is seeking to purchase and own the goods or services, typically as part of an overall sponsored award.  The Purchasing Office will handle the majority of these agreements, however determining when an entity is a sub-recipient vs. a vendor/contractor requires careful consideration.  Please see this helpful Sub vs. Vendor Quick Guide from Johns Hopkins University.
  • Secondment Agreement | This agreement provides for an employee to temporarily transfer to another job for a defined period of time for a specific purpose, to the mutual benefit of all parties. A secondment job can be full-time, part-time or job share.
  • Clinical Trial Agreement | The Clinical Trial Agreement is a document used between your institution and an outside party to define the terms and conditions associated with the conduct of a clinical trial.

Normally, your institution’s research administration has model template agreements available for research collaborations, contractual professional practice services, and memoranda of understanding.  Use of formalized model agreements is strongly preferred and recommended by research administration offices.  Please reach out to your research administration contact to discuss options and available templates available, as use of a formal template will help to expedite finalizing the agreement.

Information sourced from Johns Hopkins University.

Some resources for identifying and managing risk associated with U.S. sub-awards and contracts include: