Updated NIH Policy on Foreign Subawards

1. If the award is currently in its final budget period:
   • The foreign subawardee may complete the work and invoice for expenses up to and including the current award increment only.
   • Ensure that the foreign subaward is appropriately reported in RPPRs and financial reports. See Penn policies on subaward management here.
2. If you are anticipating additional budget periods on your prime award:
   • Consider contacting your NIH Program Officer to discuss your options.
   • Assess whether the project work can be completed without a subaward to a foreign entity:
     • Can the work be subsumed at Penn or by another existing collaborator on the project?
     • Can the work be performed by a new domestic entity?
     • Can it be performed by a consultant or vendor (which may be foreign)?
   • Re-budgeting may be required; submit a revised budget to your NIH Grant Management Specialist (GMS) as necessary.

Recipients must report all subawards/subcontracts/consortiums equal to or greater than $30,000, including those initially below $30,000 but later modified to exceed this amount.

Please refer to the Penn policies on subaward management here.

You may maintain the foreign subaward only to the end of the current budget period.

Since the policy applies prospectively to all NIH grants and cooperative agreements to domestic and foreign entities (new, renewal, and non-competing continuation), Penn will not issue a termination amendment on a current foreign subaward. If you anticipate an additional budget period(s) on the prime award, no additional subaward amendment will be issued to a foreign subawardee.

The policy does not apply to funds provided for foreign consultants or purchasing unique equipment or supplies from foreign vendors.

You may continue to use foreign consultants and vendors to provide goods or services for a current NIH award.

If a foreign consultant or vendor is appropriate to provide goods or services for a continuing project, you may consider using that approach for a future increment.

Since the policy change applies prospectively to all NIH grants and cooperative agreements to domestic and foreign entities (new, renewal, and non-competing continuation), you will need to assess whether the work of the project can be completed without a foreign subaward.

NIH will establish a new award structure prohibiting foreign subawards from being nested under the parent grant. Instead, independent awards linked to the prime will be used to track funds individually.

The new award structure is expected to be implemented by September 30, 2025, before federal Fiscal Year 2026.