Oregon State University receives grants and contracts for research, scholarship, and creative activities from a variety of public and private sources. Many of the sources of funding have specific guidance as to how to process a portion of that money to other organizations and whether that processing is as a subaward or procurement. The distinctions between subawards and procurements are guided by the Federal Acquisition Regulations, OMB Uniform Guidance 2 CFR Part 200, and OSU policy. These distinctions include the purpose of the distribution of funds to a subrecipient and the necessity to flow-down the terms and conditions of the award from the organization initially receiving the funds.
A procurement process generally is used when OSU buys goods or services for the benefit of the project. In this instance, the activity is a procurement, and the entity receiving the funds is a vendor.
The subaward process is used when OSU passes-through a portion of the sponsored award to another entity for the purpose of programmatic effort on the project. All of the terms and conditions that are part of the primary award must be included in the subaward document. Acceptance of these terms by an authorized signatory of the receiving entity is required. The entity receiving the funds is a subrecipient.
When preparing your proposal budgets, we offer the following guidance to be considered in classifying whether an activity is a procurement or a subaward.
Does the entity receiving a portion of the funds from you:
If your answers to these questions are "Yes," this activity should be classified as a subaward.
Does the vendor/entity receiving a portion of the funds from you:
If your answers to these questions are "Yes," this activity should be classified as a procurement from a vendor.
Once you have determined whether the funds should be classified as a subaward or a vendor procurement, the activity should be correctly categorized in your proposal budget.
Incorrect processing of sponsored funds distributed to outside entities can lead to having our procurement and contracting system disapproved, more frequent audits, or in the worst case scenario, loss of an award.
If while preparing a sponsored project proposal you need assistance in understanding how to classify a portion of your budget going to another organization, please contact the Office for Sponsored Research and Award Administration (OSRAA) at firstname.lastname@example.org or (541) 737-4933.
If you anticipate a procurement from a vendor and you have questions on how to request a procurement action, please contact Procurement, Contracts and Materials Management (PCMM) at (541) 737-4261.