For budgeting purposes, the subcontract (or subgrant) should be identified in the proposal budget as a separate line item. The item should be noted and a cost breakdown for the subcontract should be referenced as an attachment to the main proposal budget. The subcontract budget should reflect all appropriate direct and indirect (F&A - Facilities and Administrative Costs) costs. (Educational institutions should include F&A costs at their current federally negotiated rates.) Subcontract budgets must be approved by appropriate officials of the proposed subcontractors preferably before the proposal is submitted.