Standard 3: Accurate and cost-efficient proposal budgeting.

• Primary responsible: Proposal decision-makerThe proposal decision-maker is a senior staff (typically the country representative) with responsibility for making strategic decisions related to CRS’ response to a specific funding opportunity. This includes partnership/consortium-related negotiations and agreements; recruitment and selection of key personnel; definition of preliminary budget parameters (including any CRS cost-share); other critical budget decisions; and review and approval of final versions of proposal documents (including budgets). This is a critical, though not full-time, proposal development team role.
  • The proposal decision-maker (or the CR, if the CR is not the proposal decision-maker) leads the process to consider the appropriate award type and amount.

• Others involved: Country representative (CR), if not the proposal decision-maker; proposal coordinator; senior management team (SMT) especially the head of operations (HoOps) and head of programming (HoP); subject-matter experts from IDEA, as applicable; partner leadership.
  • The SMT and IDEA staff, as applicable, offer advice;
  • Partner leadership provide information and context relevant to this decision.

• As early as possible in the proposal development process.

This key action builds on Standard 1, key action 2 (making partnering decisions based on partner capacity). It should occur before or in conjunction with Standard 3, key action 4, on developing partner budgets.

Follow these steps to decide on the appropriate partner award type:

1. The proposal decision-maker, in consultation with the proposal development team or SMT members as needed, reviews the donor requirements around sub-awards as well as CRS guidance for Contractor/(Sub)recipient Determination to identify the most appropriate award type for each partner.

• Remember that the type of partner award can have significant project design and budgeting implications, especially around CRS oversight of the partner, the timing of advances and liquidations, and steps needed to finalize the partner award during project start-up.
• If the funding opportunity is from the U.S. government (USG), the options are to make an award to the partner either as a contractor (paid to deliver a project activity or service) or a sub-recipient (typically distinguished by the fact that the partner has responsibility for programmatic decision‑making, and/or has its performance measured against whether the objectives of the Federal program are met). For more details, see U.S. Government Regulation 2 CFR 200.300, Subrecipient and Contractor Determinations.
• Consider using contracts, not sub-recipient agreements, when deliverables can be clearly defined and measured. With contracts, CRS only pays when deliverables are produced, which reduces the costs associated with CRS’ oversight.
• If the funding opportunity is from a non-USG source or CRS discretionary resources, refer to the Contractor/(Sub)recipient Determination Tool to consider options.
• Keep in mind that many donors will require that they approve all sub-recipient agreements, to ensure that key terms will be observed by all implementing parties.

2. The proposal decision-maker, with support from the CR if the CR is not the decision-maker, discusses with the partner the appropriate partner award type for the project, based on the partner’s capacity, the work to be undertaken, partner and CRS policies and procedures, and donor requirements.

• This can be a sensitive conversation with local partners (see the Partnership section below). Emphasize that the type of award is specific to the project and will not be the de facto arrangement for future projects with the partner.
• Ensure the partner understands that in a sub-recipient award arrangement, the donor agreement will bind the partner to all the main regulatory terms and conditions to which CRS is bound. For many donors, these can be quite complex.
• Discuss also the timing of financial disbursement and reporting, and requirements associated with the award arrangement selected.

3. The proposal decision-maker shares with the proposal team the information about the award type selected for each partner and its impact on financial disbursement and reporting, to factor into project staffing and activity plans and budgets.
4. For partners where analysis indicates that a sub‑recipient award is the most appropriate arrangement, the proposal decision-maker works with the HoOps to determine the partner’s level of risk. This helps CRS gauge how best to manage any risk associated with partner capacity and how to support the partner. See ProPack I, page 111 for more detail.

• Per CRS Subrecipient Financial Management Policy, no re-assessment is required for sub-recipients assessed prior to October 1, 2017, unless the country program or sub-region find it prudent or helpful. However, all partners not assessed prior to October 1, 2017 require an assessment.​

5. For existing partners not assessed prior to October 1, 2017 or for which a new sub-recipient financial management assessment is deemed necessary, CRS program and finance staff work with partners to conduct the management assessment and develop an internal control improvement plan (see Standard 1, key action 2 guidance on partner assessment). If this is not feasible during proposal development, it should be done as soon thereafter as convenient.

• Use the assessment and any partner past performance references (for new partners) to determine what CRS oversight and capacity strengthening support may be required, and develop project management and staffing plans accordingly.

TIP: For proposals with a high win probability, if a sub-recipient financial management capacity assessment is needed but it is not possible to conduct it during the project design phase, plan to conduct the assessment shortly after proposal submission. 

6. For U.S. government awards, any organization receiving USG funding is required to have a Unique Entity Identifier (UEI) number. The HoOps works with partners who do not have a UEI number to obtain one before donor approval, regardless of whether their award will be structured as a contract or a sub-recipient agreement.