Archived News Information

Vendor Agreement/Subaward Updates – posted April 23, 2008 – The Vendor Agreement template has been revised to include a Scope of Work and Deliverables and Fee Schedule as an attachment rather than a Scope of Work and Budget as attachments. Other changes include the modification of the address to which vendors and subrecipients are required to submit invoices and the addition of designated representatives to the Vendor Agreement template. The most recently revised version of the Vendor Agreement and Subaward templates are available on the Sponsored Programs website at http://www.sponsoredprograms.eku.edu/forms.

Rather than a cost-reimbursement contract, a Vendor Agreement is a fee-for-service agreement. Essentially, this means that a vendor quotes a price to perform a particular service, and EKU pays the vendor only after the service has been provided. The result of the work to be provided is called a deliverable, and each deliverable must be tied to a certain fee. Deliverables must be clearly defined in Attachment 1 of the Vendor Agreement and will vary by vendor and by project. For example, a deliverable can be the provision of a training manual that the vendor has developed, the vendor’s presentation of a workshop, the vendor’s submission of a progress report detailing services that have been provided, or other appropriate documentation that signifies the work has been completed. Vendors will be paid for services only in accordance with the Deliverables and Fee Schedule outlined in Attachment 1. Payment will be made upon receipt of the respective deliverable(s) and signed invoice(s) and subsequent to the approval of the Project Director signifying the satisfactory completion of each respective deliverable.

Vendor Agreements are generally not amended as the fee for a particular service is not subject to change. However, there may be exceptional cases in which an additional activity and deliverable would be added to the scope of work, and an amendment would be necessary to include the fee for the additional deliverable. In addition, if EKU and the vendor mutually agree that a deliverable may take longer than anticipated to complete and the extended date of completion is within the period of the prime grant award to EKU, an amendment may be used to modify the project performance period and the deliverables schedule.

Since payment is tied to deliverables rather than to the vendor’s cost incurred for the service, a detailed budget is no longer included as part of the Vendor Agreement. The most significant impact this change will have on Project Directors is that travel will no longer be included as a budget item for reimbursement. Vendors will need to consider travel costs when quoting a fee for their services, but they will not be reimbursed for travel expenses. Project Directors are responsible for ensuring that proposed fees are reasonable and in line with the rates of other vendors providing similar services. Vendor Agreements are subject to the University’s procurement process, which requires that agreements totaling $25,000 or more be competitively bid or have an approved Sole Source Justification.

The address to which vendors and subrecipients are required to submit invoices has also been revised in the Vendor Agreement template as well as the Subaward template. Invoices will now be sent directly to Accounts Payable rather than to a departmental representative. Project Directors are still responsible for certifying that work has been performed satisfactorily and that the invoice is ready to be paid. The difference is that Accounting will process the invoice for Project Director approval and will withhold payment until a receiver has been entered in Banner and an approved copy of the invoice has been received. This change allows the University to account for liabilities at any given time rather than awaiting the submission of invoices from departments. It also puts into a place a system of follow-up that will allow Accounting to monitor the timely payment of invoices.

In order to facilitate this process with Accounts Payable, Sponsored Programs will immediately implement a new process for assigning numbers to Vendor Agreements and Subawards. The new numbering system will include a six-digit organization code, a two-digit year code, and a three-digit assigned number (i.e., 451000-08-251). This new numbering system will not affect Vendor Agreements or Subawards that are already in place. The addition of the organization code will allow Accounts Payable to recognize the invoice as pertaining to a Vendor Agreement/Subaward on a sponsored project so that the appropriate approval process may be followed. It will have no impact on the payment process itself. The Vendor Agreement/Subaward Request and Routing Form has been revised to include the Banner Organization Code from which the vendor/subrecipient will be paid. If multiple organization codes will be used for payment, Sponsored Programs will use the first organization code listed on the routing form for the purpose of assigning a number to the Vendor Agreement/subaward.

In order to ensure that all services are properly and thoroughly reviewed prior to the completion of the Vendor Agreement or Subaward templates, Attachment 1 of the Vendor Agreement and Attachments 1 and 2 of the Subaward are required to be submitted along with the Vendor Agreement/Subaward Request and Routing Form. Following approval of the routing form, the attachments will be retained by Sponsored Programs and attached to the template upon receipt. The attachments are now linked separately on the Sponsored Programs website.

Sponsored Programs appreciates your patience and cooperation as we continue to review processes and documents and work towards a more regulation-compliant and user-friendly system. Please feel free to contact our office if you have any questions about these changes or the Vendor Agreement/Subaward process.

Updated Fringe Benefit Rates - posted April 15, 2008 - Effective May 1, the fringe benefit composite rate to be included in grant proposal budgets will increase to 34% for faculty and professional staff and 40% for hourly staff.  The full-time benefit rate shall apply to all staff who work 25 or more hours per week.  The part-time benefit of 8% will remain unchanged for staff who work less than 25 hours per week. 

Because this rate is a composite calculation of all faculty and staff at the University and not an exact calculation for individual employees, the actual rate charged to a sponsored project account will vary for each employee based on the benefit options selected.  Sponsored Programs encourages project directors to review fringe benefit expenditures for current staff and budget accordingly. 

Sponsored Programs will not require the revision of budgets already established or the resubmission of budgets that are currently pending awards.  However, project directors are encouraged to revise budgets if they anticipate fringe benefits will be charged in excess of the amount budgeted. 

Project directors should use the new rates for all budgets submitted to Sponsored Programs after May 1.