Renewal of Sub-recipient Agreements

At the end of the existing Sub-recipient (SR) agreement, the UNDP Country Office (CO) may choose to renew the SR agreement of an SR that has received a positive evaluation. However, the UNDP CO is not obliged to continue with the same SR if that SR received a negative evaluation or if any changes in the overall context, implementation arrangements, or scope-and-scale of the project would justify a variation. In those cases, UNDP conducts a new SR selection process.

When the UNDP CO intends to renew the SR agreement, it may amend the current SR agreement to enable the SR to continue the same activities without a gap or delay in implementation. The amendment should include the SR’s new work plan, budget, calendar and performance framework for continued activities, as well as any changes to the Standard Terms and Conditions of the Template SR Agreement (if any). In case of Proposal Defined Engagement of a CSO SR, the UNDP CO should prepare a new value for money (VfM) submission for the new period. It is also best practise to conduct a new capacity assessment to assess any changes to the organisation which can impact implementation in the new period as well as to assess the organization’s capacity to implement new activities, and to implement several activities at once.

The renewal request should be submitted to the appropriate review committee: SRs initially selected through Proposal Defined Engagement are recommended for approval by the Local Project Appraisal Committee (LPAC). Civil society organizations (CSOs) selected by procurement engagement (strategic selection) are recommended for approval by the Contracts, Asset and Procurement Committee (CAP), Advisory Committee on Procurement (ACP), or Regional ACP (RACP), depending on the monetary thresholds in the new proposal.

If there are questions regarding extension/renewal modalities, the UNDP CO should consult with GFPHST.

Practice Pointer

• In case the first capacity assessment of the proposed SR was borderline (low rating, an action plan should have been developed to improve risky areas), it is necessary to conduct a new capacity assessment and submit evidence that the action plan has been implemented (which means that the new capacity assessment will not highlight the improved areas as risky). The evidence of fulfilment of the action plan can be also gathered through regular M&E activities and programmatic/financial/PSM reporting of the SR that is verified by the CO. In such cases a new capacity assessment is not necessary.
• About performance evaluation: Although there are no prescribed forms for performance evaluation, one has been developed by the UNDP Global Fund Partnership and Health Systems Team (GFPHST).

Questions and answers:

Question: The SR agreement will expire in three months. Based on performance evaluation of the SR during the previous quarters, we would like to renew the SR agreement with the Sub-recipient. Should we wait until the last day of the SR agreement and conduct a final performance evaluation in order to start the renewal?

Answer: If the UNDP CO is able to put on record a positive performance evaluation (PE) of the SR for the previous periods, then there is no need to wait until the last day of the agreement. If the PE is positive, you can start preparations for renewal of the agreement to ensure there will be no gap or delay in implementation (please see the clauses about the changes in TOR). However, a performance evaluation for the entire length of the current SR agreement should be completed later.

Question: Can one organization have more than one SR agreement?

Answer: One organization can implement activities in the framework of several Global Fund grants that have discordant disbursement schedules. In such cases, and to ensure operational efficiency and effectiveness, one organization can have more than one SR agreement.

Question: What is a no-cost extension of an SR agreement?

Answer: A no-cost extension of an SR agreement means that there is no change to the already approved budget, but there is an extension of the length of the agreement to allow enough time to reach the objectives. The payment for works/services is continued until the end of the extension period.