Quick Reference Guides-Contractor vs. Subrecipient Decision Checklist

Contractor vs. Subrecipient Decision Checklist

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The document explains how to distinguish a <strong>subrecipient</strong> from a <strong>contractor</strong> under a federal award. An organization’s nonprofit or for-profit status does not determine its classification; the key question is whether it carries out part of the federal program or simply provides goods or services.

A <strong>subrecipient</strong> carries out a public-purpose program, helps determine who is eligible for assistance or services, and has responsibility for programmatic decisions and outcomes. Its performance is assessed against the program’s objectives. It must follow applicable federal program requirements, report performance measures, and is generally subject to a subaward agreement, compliance monitoring, risk assessment, and possible audit requirements. Examples include a nonprofit delivering services to beneficiaries, a community organization conducting outreach, a local agency operating a funded program component, or an educational institution implementing grant-funded activities.

A <strong>contractor</strong> provides goods or services in the ordinary course of business, often to many customers in a competitive marketplace. Its services may support the program but do not involve running it or making program decisions. Contractors are generally evaluated on deliverables and performance, managed through standard vendor processes, and are not subject to federal program requirements beyond those included in the contract. Procurement contracts must include applicable provisions required by 2 CFR 200, Appendix II. Examples include an accounting firm conducting an audit, an IT company providing software support, a printing company, or a consultant providing staff training.

Keywords

subrecipient

contractor

federal award

2 CFR 200

subaward agreement

programmatic decisions

public-purpose program

compliance monitoring

procurement contract

federal program requirements