It is not always clear when NCSU should issue an entity a subaward to a “subrecipient” or a procurement contract to a “contractor”. For assistance in making these determinations, follow the governing regulation Uniform Guidance 2CFR 200, Section 200.330 Subrecipient and Contractor determinations. In order to remain consistent, NCSU 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).
A “subrecipient” is an organization that expends funds received from a pass-through entity to carry out a sponsored project. A subrecipient does not include an individual that is a beneficiary of such a program. Under a subaward, a subrecipient generally has a specific scope of work to conduct in conjunction with the proposed project.
Under the Uniform Guidance, Section 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.
A contract is used for obtaining goods and services for a non-federal entity’s own use and creates a procurement relationship with the contractor.
The characteristics of a “contractor” under the Uniform Guidance, Section 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, Section 200.330 (c), instructs us to use judgement in making a determination.
It is important to note that the presence of one or more of the above characteristics that describe a subaward versus a contractordoes not necessarily indicate that a particular type of relationship exists; however, a preponderance of certain features may very well lead to the conclusion that the transaction represents a particular relationship. Remember, when making the decision, the substance of the relationship is most important.
For additional information on subaward collaborations and vendors/consultant services, go to Consultants and Subawards.