Consortium agreements, administrative and other requirements, written agreements, public policy requirements and objectives, allowable and unallowable costs, approval authorities, tangible personal property, audits

15.2 Administrative and Other Requirements

The following highlights several areas within the consortium relationship that the recipient needs to address with consortium organizations receiving subawards under a grant to ensure compliance with NIH requirements. The requirement for a written agreement addressing these and other areas is specified in this section.

Note that most of these requirements only apply to a recipient's consortium relationships with subrecipients. When the relationship is with a vendor that is providing routine goods and services within normal business operations that are ancillary to the operation of the research program, the public policy requirements listed below do not apply. The vendor must also be providing similar goods and services to many different purchasers and provide them in a competitive environment.

15.2.1 Written Agreement

The recipient must enter into a formal written agreement with each consortium participant that addresses the negotiated arrangements for meeting the scientific, administrative, financial, and reporting requirements of the grant, including those necessary to ensure compliance with all applicable Federal regulations and policies and facilitate an efficient collaborative venture. At a minimum, this agreement must include the following:

15.2.2 Public Policy Requirements and Objectives

The recipient is responsible for determining whether a consortium participant, including foreign consortium participants under domestic or foreign grants, has filed assurances with NIH that would cover its activities within the consortium and, if not, for ensuring that any required assurances or certifications are submitted to NIH. See Public Policy Requirements, Objectives, and Other Appropriation Mandates in IIA for the full statement of these requirements and their applicability to consortium participants.

The recipient is responsible for ensuring that all sites engaged in human subjects research have an appropriate OHRP-approved assurance and IRB approval of the research consistent with 45 CFR Part 46 (see Guidance on Engagement of Institutions in Human Subjects Research and for complying with NIH prior approval Written approval by an authorized HHS official, e.g., a designated IC GMO, evidencing prior consent before a recipient undertakes certain activities or incurs specific costs (see Administrative Requirements-Changes in Project and Budget-Prior Approval Requirements). requirements related to the addition of sites not included in the approved application (see Administrative Requirements-Changes in Project and Budget in IIA). The list of organizations with approved assurances is available at the OHRP Web site.

The animal welfare requirements that apply to recipients also apply to consortium participants and subprojects. The primary recipient is responsible for including these requirements in its agreements with collaborating organizations, and for ensuring that all sites engaged in research involving the use of live vertebrate animals have an approved Animal Welfare Assurance and that the activity has valid IACUC approval. The approval of more than one IACUC is not required if the recipient and performance site(s) have Assurances; the institutions may exercise discretion in determining which IACUC reviews research protocols and under which institutional program the research will be conducted. If the prime recipient does not have an Assurance and the animal work will be conducted at an institution with an Assurance, the recipient must obtain an Inter-institutional Assurance from OLAW. Under the Inter-institutional Assurance, the recipient and performance site agree that the research will be conducted under the auspices and program of animal care and use of the performance site's Assurance. The recipient is further responsible for complying with NIH prior approval Written approval by an authorized HHS official, e.g., a designated IC GMO, evidencing prior consent before a recipient undertakes certain activities or incurs specific costs (see Administrative Requirements-Changes in Project and Budget-Prior Approval Requirements). requirements related to the addition of sites not included in the approved application (see Administrative Requirements-Changes in Project and Budget-Prior Approval Requirements in IIA). See the OLAW web site for a list of domestic organizations and foreign organizations with approved assurances.

15.2.3 Allowable and Unallowable Costs

The recipient must include in consortium agreements the applicable government-wide cost principles The government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. See Cost Considerations-The Cost Principles for additional details. and NIH cost policies described in the Cost Considerations chapter in IIA and, as appropriate, requirements related to allowable and unallowable costs in other sections of IIB. For example, a university recipient must flow down the cost principles The government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. See Cost Considerations-The Cost Principles for additional details. of 2 CFR Part 200, Appendix IX and 45 CFR Part 75, Appendix IX to a consortium participant that is a hospital. This includes the application of F&A rates in determining consortium budgets and the reimbursement of costs.

Recipients must use an approved federally recognized indirect cost Necessary costs incurred by a recipient for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of F&A (indirect) costs. F&A (indirect) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived. rate negotiated between the subrecipient and the Federal Government. If no such rate exists, the recipient must use either a rate it has negotiated with the subrecipient, including commercial organizations An organization, institution, corporation, or other legal entity, including, but not limited to, partnerships, sole proprietorships, and limited liability companies, that is organized or operated for the profit or benefit of its shareholders or other owners. The term includes small and large businesses and is used interchangeably with "for-profit organization." (except for the SBIR/STTR program, as described in 18.5.4.3,or a de minimis indirect cost Necessary costs incurred by a recipient for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of F&A (indirect) costs. F&A (indirect) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived. rate of 10 percent of modified total direct costs Costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. (MTDC) if the subrecipient has never received a negotiated indirect cost Necessary costs incurred by a recipient for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of F&A (indirect) costs. F&A (indirect) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived. rate from the Federal Government. Recipients are reminded that F&A reimbursement rates are restricted for certain classes of awards. If the consortium participant is a Federal organization, direct costs Costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. will be limited and no F&A will be provided.. (See Reimbursement of Facilities and Administrative Costs.) For more information on allowable costs to Federal organizations, see Grants to Federal Institutions and Payments to Federal Employees Under Grants.

15.2.4 Approval Authorities

The recipient is responsible for obtaining NIH awarding IC The NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award. approval for any actions to be undertaken by consortium participants that require prior approval Written approval by an authorized HHS official, e.g., a designated IC GMO, evidencing prior consent before a recipient undertakes certain activities or incurs specific costs (see Administrative Requirements-Changes in Project and Budget-Prior Approval Requirements).. Recipients may establish requirements for review of consortium participants' activities consistent with those requirements and with any authorities provided to the recipient; however, a recipient may not provide any authority to a consortium participant that the recipient has not been provided under its NIH award.

Regardless of whether there is a change in scope, in all cases, if a recipient (or consortium participant) proposes the transfer of work to a foreign site, awarding IC The NIH organizational component responsible for a particular grant program or set of activities. The terms "NIH IC," or "awarding IC" are used throughout this document to designate a point of contact for advice and interpretation of grant requirements and to establish the focal point for requesting necessary prior approvals or changes in the terms and conditions of award. prior approval Written approval by an authorized HHS official, e.g., a designated IC GMO, evidencing prior consent before a recipient undertakes certain activities or incurs specific costs (see Administrative Requirements-Changes in Project and Budget-Prior Approval Requirements). is required.

15.2.5 Tangible Personal Property

15.2.5.1 Exempt Property

If the recipient provides exempt property to a consortium participant or authorizes a consortium participant to purchase property that would be considered exempt if acquired by the recipient, the recipient may vest title in the consortium participant upon transfer or purchase or may reserve the right to do so at a later time. The recipient also may establish its own use, disposition, and accountability requirements, provided they are consistent with the NIH right to transfer title (see Administrative Requirements-Management Systems and Procedures-Property Management System Standards-Equipment and Supplies in IIA).

15.2.5.2 Nonexempt Property

If the recipient provides nonexempt property to a consortium participant or authorizes a consortium participant to purchase property that would be considered nonexempt if purchased by the recipient, title to such property must remain with the recipient or be vested in the recipient upon acquisition of the property. The recipient may establish use, accountability, and disposition requirements for the property, provided they are consistent with, and do not impair, the recipient's ability to comply with the requirements of 2 CFR Part 200.311 and 45 CFR Part 75.318, as appropriate.

15.2.6 Audit

The recipient must require consortium participants to comply with the requirements of 2 CFR Part 200, Subpart F and 45 CFR Part 75, Subpart F or 2 CFR Part 200.501 and 45 CFR Part 75.501, as applicable, for audit of NIH grant funds expended by consortium participants. A consortium participant also may be a direct NIH recipient or contractor or may be receiving funds only under the consortium agreement A formalized agreement whereby a research project is carried out by the recipient and one or more other organizations that are separate legal entities. Under the agreement, the recipient must perform a substantive role in the conduct of the planned research and not merely serve as a conduit of funds to another party or parties. These agreements typically involve a specific level of effort from the consortium organization's PD/PI and a categorical breakdown of costs, such as personnel, supplies, and other allowable expenses, including F&A costs. The relationship between the recipient and the collaborating organizations is considered a subaward relationship. (See Consortium Agreements chapter in IIB).. Regardless, if a non-profit consortium participant meets the 2 CFR Part 200.501 and 45 CFR Part 75.501 threshold criterion of aggregate annual expenditures of $750,000 or more under applicable Federal awards, the recipient must receive a copy of that organization's 2 CFR Part 200.501 and 45 CFR Part 75.501 audit and take appropriate action to resolve any findings that relate to the consortium agreement A formalized agreement whereby a research project is carried out by the recipient and one or more other organizations that are separate legal entities. Under the agreement, the recipient must perform a substantive role in the conduct of the planned research and not merely serve as a conduit of funds to another party or parties. These agreements typically involve a specific level of effort from the consortium organization's PD/PI and a categorical breakdown of costs, such as personnel, supplies, and other allowable expenses, including F&A costs. The relationship between the recipient and the collaborating organizations is considered a subaward relationship. (See Consortium Agreements chapter in IIB).. The recipient is not responsible for resolving crosscutting findings. If a consortium participant will not reach that expenditure threshold, the recipient is responsible for monitoring the organization's activities to ensure compliance with NIH requirements. The recipient may not require a consortium participant to have an audit and charge the audit costs to NIH grant funds unless required or authorized by 2 CFR Part 200.501 and 45 CFR Part 75.501.