When to Subcontract
When a principal investigator (PI) identifies a need or opportunity to use a subcontract on an upcoming sponsored activity, he/she contacts the proposed subcontractor and requests a formal proposal. 

The subcontractor then submits a proposal directly to the VUMC PI, including a budget, budget justification, scope-of-work (SOW), and letter-of-intent (LOI) signed by an authorized representative of the subrecipient institution. The PI then incorporates this into his/her proposal, and it is forwarded via Coeus in the usual way-- through the chair and dean (as applicable) to OSP for review and approval. 

When VUMC is the prime organization, the amount of the subcontactor's total budget is included as a separate item in the "Other Direct Cost" or "Consortium/Contractual" category of the proposal budget. This entry should make reference to the subcontractor's complete proposal*, including a line-item budget and sufficient budget justification. Finally, the subcontract is subject to VUMC's indirect cost rate on the first $25,000 during the budget period(s) in which those costs occur within a competing segment of an award. 

Any modular budgets that include a subcontract for an NIH award require a consortium justification, due to the lack of a full budget and the location of the consortium amount only at the very end of the modular budget. Please note that the consortium justification is structured a bit differently than a standard justification. For more information, please view the highlighted section of the SF 424 instructions and sample justification:

In short, the subcontractor's proposal is an ancillary proposal within the larger VUMC proposal. The prime sponsor's issuance of the grant or contract to VUMC usually includes specific authorization for the subcontract. 

Occasionally, the need for subcontractor collaboration develops after an award has been made to VUMC. Under these circumstances, most sponsor policies require that the prime institution (VUMC) obtain sponsor approval of the subcontract before it is entered into by both parties. Such requests originate with the PI in writing, are co-signed by OSP Director Clint Brown (or by an authorized designee), and are forwarded to the sponsor for final review and approval. 

*Please note that the subcontractor's proposal, composed of the scope-of-work, budget, and budget justification, must be approved by an authorized official of the subrecipient institution.