Pre-award costs are those incurred:
- Prior to the effective date of the award, directly pursuant to the negotiation;
- In anticipation of the award;
- Where such costs are necessary for efficient and timely performance of the scope of work.
Such costs are allowable only to the extent that they would have been allowable if incurred after the start date of the award. Different sponsors have varying approval requirements, which must be met prior to UVM incurring these costs. Following the December 26, 2014 release of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), most Federal agencies now require prior written approval, as detailed below, for these types of costs.
Most Federal agencies require prior approval for incurring pre-award costs. To prevent potential delays and reduce the risk of the disallowance of costs, SPA strongly encourages Principal Investigators to include the following language in their proposal budget justification, wherever appropriate:
If this project is funded, pre-award costs up to 90 days prior to the start date of the project may be incurred to allow for efficient and timely performance of the scope of work.
All expenses incurred will be allowable and allocable to the project.
Principal Investigators may opt to include some additional context about the need for pre-award costs in their proposal budget justification, for example:
As this proposal is for a continuation of an existing project, the pre-award costs are necessary to ensure a smooth continuation of the scope of work of the project.
Because the work of this project is seasonal in nature, it is critical that it begin in a timely manner.
For documentation purposes, in all cases where pre-award spending is allowed or approved because of inclusion in the proposal, please complete, sign, and submit to SPA a pre-award spending request memo.
NIH and NSF exception
The National Institutes of Health and the National Science Foundation have delegated the authority to approve the incurrence of pre-award costs to UVM.
Prior to incurring pre-award costs on awards issued from these sponsors, complete and submit to SPA for approval the pre-award spending request memo.
For non-federal sponsors (such as State or Private sponsors), the award’s terms and conditions, as well as any other sponsor guidelines, will outline the allowability of pre-award costs. If no explicit information exists for pre-award costs on these awards, prior written approval must be sought through SPA before incurring these types of costs. There is no requirement to submit pre-award spending request memo since explicit approval is required.