You’ve found a great research partner at a university. You’re both excited about the science or tech, and now it’s time to roll that collaboration into your federal grant proposal. Perfect match, right? Not so fast. If your partner is coming on as a subawardee, you’re stepping into a highly regulated space with deadlines, documentation, and institutional approvals that don’t always move at startup speed.
Honestly, this is where I see a lot of well-intentioned proposals stall. A university subaward isn’t just a line item in your budget. It’s a full-on legal agreement between your organization and the university, and it needs to be baked into your proposal in a way that satisfies both the funder and the university’s internal policies. And yes, that usually means more paperwork and longer timelines than you’re expecting.
What Even Is a Subaward?
Let’s clear this up early. A subaward is what happens when part of the project (and the funding) goes to another institution to carry out a distinct portion of the work. The key word here is distinct. Your subawardee isn’t just providing services (that would be a contractor). They’re contributing intellectually to the project, bringing their own expertise, personnel, and often facilities. That makes them a full partner in the eyes of most funding agencies, and it means their costs are treated a little differently.
In SBIR and STTR proposals especially, subawards are common. STTRs require a nonprofit research institution as a partner. SBIRs allow them, but you have to be careful, as there are percentage limits on how much of the budget can go to outside entities.
Why Universities Can Be Tricky Partners (But Worth It)
Working with a university has huge upsides: deep expertise, access to specialized equipment, and built-in credibility. But they’re also large bureaucracies, and that matters. Most university PIs can’t just say, “Sure, we’re in! Here’s our budget.” Their sponsored research office (SRO, also known as a sponsored programs office) has to review, approve, and route everything internally, which can take a few weeks or more. If your proposal deadline is tight, that’s a problem.
Another wrinkle? Indirect costs. Universities almost always apply their federally negotiated indirect cost rate (IDC or F&A), which can be north of 50%. If you didn’t build that in, your budget could get torpedoed fast.
What You Need from Your Subawardee (and When)
By the time you submit your proposal, you’ll need several key pieces from your university partner: a detailed scope of work, a budget and justification, and a letter of commitment (sometimes: documentation of their indirect cost rate). For NIH and NSF, you’ll often need Biosketches for Key Personnel and other compliance materials too, e.g., human subjects assurances, data sharing plans, and more.
Here’s where timing matters. Because the university has to review and approve all this internally, you need to get their SRO involved early. Like, as soon as you know they’re on board. Waiting until the last week is a recipe for missed deadlines and finger-pointing.
I’ve had clients try to rush this step, thinking the university PI could handle it all. They can’t. The SRO is the gatekeeper, and nothing moves forward without their sign-off. I usually recommend building in at least three weeks for this process, and more if it’s a large or unfamiliar institution.
Common Mistakes That Will Trip You Up
The biggest issue I see is misalignment between the prime applicant’s proposal and the subaward materials. Maybe the narrative says the university will run statistical analysis, but the budget doesn’t include a biostatistician. Or the university budget includes travel, but the main proposal doesn’t explain why. These disconnects create red flags for reviewers.
Another big one? Indirect costs. I’ve seen startups almost accidentally double-count IDC or forget to include it entirely. Reviewers don’t always notice these little slip ups, but if they do, you’ll feel silly.
And don’t get me started on missing letters of commitment. Funders want to see that your subawardee knows they’re part of this and has agreed to it formally. A simple email won’t cut it. You need a signed letter, usually on institutional letterhead, that outlines their scope, budget, and intent to participate.
A Few Things I’ve Learned
Here’s a tip: draft a short MOU or collaboration agreement as soon as you start working with a subawardee. It doesn’t have to be legalese, just something that spells out roles, responsibilities, deliverables, and timelines. It sets expectations early and gives you something to fall back on if things drift.
Also, keep your subaward narrative tight. I like to write a mini version of the university’s role within the main project description, just a paragraph or two that connects the dots for reviewers. That way, they can see how the sub fits into the big picture without having to hunt through attachments.
Finally, overcommunicate. I once worked with some university faculty that insisted they didn’t need internal routing. Spoiler: they did. It caused an annoying delay. Now I always confirm what their internal process looks like before we get anywhere near a deadline.
The Bottom Line
Adding a university subaward can strengthen your proposal, but only if you manage it well. That means clear communication, early engagement, and airtight alignment between your application and their materials. Don’t treat it like an afterthought. Treat it like a partnership.