On May 1, 2025, the National Institute of Health (NIH) issued NOT-OD-25-104 updating its policy to reiterate the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting requirements. This policy change will also prohibit foreign subawards in grants and cooperative agreements effective May 1, 2025, until NIH has developed a new foreign collaboration award structure policy. NIH is hoping to issue its new policy by September 30, 2025.
Why is This Policy Change Happening?
The Director of NIH indicated that while they issue grants to universities, medical schools and other research institutions, these recipients issue subawards to other entities which makes it difficult to track. NIH is concerned that it is not being completely transparent with where its funding is spent which may also result in national security issues.
Additionally, a recent Government Accountability Office (GAO) report identified noncompliances where recipients did not report their subawards into FSRS.gov (now SAM.gov) or monitor subrecipients. Recipients are required to input the first tier subawards consistent with Federal Funding Accountability and Transparency Act (FFATA) when the subaward is equal to or greater than $30,000 (Appendix A to Part 170 Award Term (2)(i)). This includes reporting subawards that are initially less than $30,000 but a modification to the subaward increases it to $30,000 or greater.
How is This Policy Change Being Implemented?
This change will be applied prospectively (i.e., doesn’t affect current awards which include foreign subawards or direct foreign awards), so your current awards should be ok for now. Additionally, any direct foreign awards will not be impacted.
All in-process awards are impacted. If you are developing a current proposal, you will not be able to include any first tier foreign subawards.
NIH will not accept any approval requests to add a new foreign subaward on an ongoing project. However, if a project is no longer viable without the new foreign subaward, NIH plans to work with the recipient to negotiate terminating the project.
NIH plans to expand this policy below first tier subawards (i.e., impacting all subawards at all tiers) in the near future.
Any Exceptions to the New Policy?
Not for first-tier subawards and soon to be all subawards at any tier. However, you can continue to propose and procure foreign consultants and equipment under your procurement standards using contracts.
Takeaways
Grant recipients and subrecipients should review existing grants as well as subawards and even have subrecipients determine if there are foreign subawards at lower tiers. Any grants coming up for renewal or any new proposals in the pipeline should be scrutinized as soon as possible to determine if there is a domestic entity that can perform the research or whether the foreign entity will need to submit a proposal directly to NIH, if that is an option.
Ensure Compliance with NIH and 2 CFR 200 Requirements
Redstone Government Consulting supports organizations in meeting grant compliance requirements both before and after award. Our team of experts assists with drafting and reviewing accounting and procurement policies, preparing and reviewing quarterly financial reports, and developing property management procedures. We also offer practical tools such as templates for contractor versus subrecipient determinations, risk assessment checklists, and monitoring documentation. For organizations managing subawards, we provide third-party subrecipient monitoring, help resolve audit findings and offer monthly accounting support or guidance in structuring compliant accounting systems. Additionally, Redstone GCI delivers training sessions on critical topics under 2 CFR 200. Whether you're applying for new NIH funding or navigating ongoing grant obligations, we help ensure your organization is positioned for compliance and long-term success.
Lynne is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to Commercial Item Determinations and support, Cost Accounting Standards, DFARS Business System Audits, Proposals, and Incurred Cost. Prior to joining Redstone Government Consulting, Lynne served in several capacities with DCAA and DCMA for over 35 years. Professional Experience Lynne began her career working with DCAA in the Honeywell Resident Office, Clearwater, FL in 1984. Lynne’s experience included various positions which involved conducting or reviewing forward proposals or rate audits, financial capability audits, progress payments, accounting and estimating systems, cost accounting standards, claims and disclosure statement reviews. She is an expert in FAR, DFARS, CAS and testified as an expert witness. Lynne assisted in drafting the commercial item guidance for DCAA Headquarters. Lynne was assigned as a Regional Technical Specialist where she provided guidance to 20 field offices on highly complex or technical issues relative to forward pricing, financial capability or progress payment issues. As an Assistant for Quality, she was involved in reviewing and ensuring audit reports were in compliance with policy and GAGAS as well as made NASBA certified presentations to the staff including but not limited to billing reviews, CAS, unallowable cost and progress payments. To enhance her experience in government contracting, Lynne accepted a position with DCMA in 2015 as part of the newly organized DCMA Cadre of Experts in the Commercial Item Group. This included performing reviews of prime contractor’s assertions and/or commercial item determinations as well as performing price analyses. Lynne was a project lead and later became a lead analyst where she engaged with the buying commands on requests and reviewed price analysis reviews performed by a team of 5 analysts. She also assisted the DCMA CPSR team relative to commercial items and co-instructed the Commercial Item Training presented to DCMA. Education Lynne earned a Bachelor of Science Degree in Accounting from the University of Central Florida. Certifications State of Florida Certified Public Accountant State of Alabama Certified Public Accountant Defense Acquisition Workforce Improvement Act (DAWIA) Level III- Auditing DAWIA Level III – Contracting