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Subawards to Foreign Entities

Page Updated: April 24th, 2023

Required Registrations

Any foreign entities that will receive federal funds need to be registered in the System for Award Management (SAM) and have a SAM Unique Entity Identifier (UEI). SAM registration must be renewed annually. In order to register with SAM, international organizations must also obtain a NATO Commercial and Governmental Entity (NCAGE) code.

In addition, the foreign institution must be registered in NIH Commons if collaborating on an NIH funded project. If the person at the foreign institution will be a PI on UW-Madison's proposal for a multi-PI submission, they must be affiliated in Commons with their institution with the PI role.

Budgeting

The Uniform Guidance allows foreign subrecipients with federally negotiated rates to use those rates, although few foreign entities have such rates. If no negotiated rate exists, NSF allows foreign organizations to recover indirect costs at the 10% de minimis MTDC rate; NIH allows an 8% MTDC indirect cost rate for foreign organizations. Please always read the sponsor's guidelines on allowable F&A costs for foreign institutions.

When possible, obtain budgets in USD to alleviate issues with exchange rate fluctuation.

Many foreign countries are subject to a Value Added Tax (VAT) that is levied on products, materials, and services purchased in lieu of sales tax. While VAT is generally considered an allowable cost according to the Uniform Guidance, these costs are often unknown during the proposal stage when the budget it developed. As such, the subrecipient should be responsible for these types of taxes and similar fees.

Terms and Conditions

The FDP provides a checklist of additional terms and conditions to be considered for foreign subawards that may apply to foreign subawards. Please note that prior to the issuance of a subaward to a foreign entity, RSP will consult appropriate institutional officials to ensure the subaward meets institutional, sponsor and project requirements.

In cases where foreign entities may need advance payment to start work on the project, we will need to establish clear expectations as it relates to progress reporting, financial reporting, and invoicing against the advance.

Effective January 1, 2024, NIH expects recipients such as UW–Madison to issue subagreements compliant with the NIH GPS 15.2.1, including the update in NOT-OD-23-182. The update contains a specific requirement aimed at foreign subrecipients. In the subaward agreement, foreign subrecipients must agree to provide access to copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report, to the primary recipient with a frequency of no less than once per year, in alignment with the timing requirements for Research Performance Progress Report submission. Such access may be entirely electronic.

NIH states in an FAQ that this requirement “has to do with what information collaborators must share with each other to support award oversight and compliance.” Thus, the UW–Madison researchers must arrange with the subrecipient’s researchers to obtain access to the required information.

See all NIH FAQs about Foreign Subawards at this link.

Research and Sponsored Programs will insert a term in the subaward agreement when applicable and modify existing subawards as appropriate. The term will read as follows:

• By signing this subrecipient agreement, [Subrecipient name] agrees to provide access to copies of all lab notebooks, all data, and all documentation that supports the research outcomes as described in the progress report, to UW–Madison PI with a frequency of no less than once per year, in alignment with the timing requirements for progress reports described in this Agreement. [Subrecipient name] will make such data available via UW–Madison PI's preferred method (e.g., Sharepoint, Teams, Box, etc.).