Subrecipient or Vendor

How do I correctly determine if I need to establish a Subrecipient (e.g. Sub-awardee) or a Contractor (e.g. Vendor) relationship for a proposal submitted to a Federal entity?

Per the Uniform Guidance (2 CFR. Part 200):

  • Subrecipient is a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program, but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding entity.
  • Contractor is an entity that receives a contract (a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award).

Often a subrecipient or a subawardee will have one or more of the following characteristics:

  • Determines who is eligible to receive what Federal assistance
  • Has its performance measured in relation to whether objectives of a Federal program were met
  • Has responsibility for programmatic decision-making
  • Per the agreement, uses Federal funds to carry out a program for a public purpose specified in an authorizing statute as opposed to providing goods or services for the benefit of the pass-through entity

Often a contractor or vendor will have one or more of the following characteristics:

  • Provides goods or services within normal business operations
  • Provides similar goods or services to many different purchasers
  • Normally operates in a competitive environment
  • Provides goods or services that are ancillary to the operation of the Federal program

From the Federal Demonstration Partnership’s (FDP) Checklist to Determine Subrecipient or Contractor Classification, “Generally, the determination of the relationship with an entity is verified through the institutional review of the proposal narrative, budget justification, and other related proposal documents, as well as through discussions with key personnel prior to proposal submission.” 

If the relationship remains unclear, please contact your department’s assigned Grants Administrator in MUSC’s Office of Research and Sponsored Programs for more guidance and assistance.