Federal Grants Subrecipient or Contractor Determination

Responsible Office or Person: Provost Office
Related Law & Policy: CFR 200.330

Policy Statement

Uniform Guidance 2 CFR, Pat 200 requires Carroll University to determine the financial relationship partnering entities have to Carroll when collaborating on federal grant projects. A determination must be made on whether the participating entity is a subrecipient or contractor (200.330). This determination may also be reviewed once the grant is awarded and reaches the post award stage.

Definitions

Subrecipient (200.93): Subrecipient means 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 a program.

Contractor (200.23): A contractor 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.

Compliance

A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. Characteristics which support the classification of the non-Federal entity as a subrecipient include when the non-Federal entity:

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;
In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.

Entities that include these characteristics are responsible for adherence to applicable Federal program requirements specified in the Federal award.

A contract is for the purpose of obtaining goods and services for the pass-through entity’s own use and creates a procurement relationship with the contractor. Characteristics indicative of a procurement relationship between the pass-through entity and contractor are when the pass-through entity receiving Federal funds:

Provides the goods and 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.

Entities that include these characteristics are not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons.
When determination cannot clearly be made using the above criteria, the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. All of the characteristics listed above may not be present in all cases. In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement.

Procedure: At the time of proposal development when the relationship with the partnering entity is unclear, and during the post award stage as needed, the Grants Staff will complete the “Checklist to Determine Subrecipient or Contractor Classification” Form. The form will be completed as a collaboration between the Grants Staff and the Business Office. Completed forms will be placed in the grant file and copies will be sent to Grants Staff.

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