Subrecipient vs. Contractor

To determine whether NC State should issue an entity a subaward to a “subrecipient” or a procurement contract to a “contractor”, follow the governing regulation Uniform Guidance, §200.330, Subrecipient and Contractor determinations. In order to remain consistent, NC State has adopted this guidance to determine the status of a subrecipient versus a contractor for all sponsored projects, no matter the funding type (federal, state or industry funding).

Subrecipient

Under the Uniform Guidance, §200.330 (a), characteristics that support a classification of subrecipient include:

  • Determines who is eligible to receive what federal assistance;
  • Has its performance measured against whether the objectives of the program were met;
  • Has responsibility for programmatic decision making;
  • Is responsible for adherence to applicable program compliance requirements specified in the award; and
  • Uses the funds to carry out a program for a public purpose as compared to providing goods or services for the benefit of the pass-through entity.

Other indications that an organization should be deemed a subrecipient include when:

  • The organization is contributing to the scholarly/scientific conduct of the project as described in a statement of work for the organization (programmatic involvement);
  • The conduct of the organization’s portion of the project requires use of the discretion and unique expertise of the organization;
  • The subrecipient’s principal investigator may be a co-author on publications or may seek patent protection for inventions; and
  • Title to intellectual property created by subrecipient is normally retained by the subrecipient.

Contractor

A contract is used for obtaining goods and services for NC State’s own use and creates a procurement relationship with the contractor.

The characteristics of a “contractor” under the Uniform Guidance, §200.330 (b), include:

  • Provides goods and services within normal business operations;
  • Provides similar goods and services to many different purchasers;
  • Operates in a competitive environment;
  • Provides goods or services that are ancillary (secondary) to the operation of the program; and
  • Is not subject to compliance requirements of the Federal program.

The Uniform Guidance, §200.330 (c), instructs us to use judgment in making a determination.