Templates | Pre-Award-Subrecipient vs. Contractor Checklist 2

Subrecipient vs. Contractor Checklist 2
Pdf Summary
This document from www.agacgfm.org provides a checklist to help recipients of federal funds determine if an entity receiving those funds should be classified as a subrecipient or a contractor, based on the U.S. Office of Management and Budget’s Uniform Guidance (2 CFR Part 200). This guidance, effective since December 26, 2014, governs administrative requirements, cost principles, and audit standards for federal awards.

Key definitions clarify roles: 
- A <strong>Recipient</strong> is a non-federal entity that obtains federal funds directly for program activities.
- A <strong>Subrecipient</strong> carries out part of the federal award and has a federal assistance relationship.
- A <strong>Contractor</strong> provides goods or services for the recipient’s own use under a procurement relationship.

The checklist breaks down the determination into four main criteria:

1. <strong>Decision Making Authority:</strong> If the entity determines eligibility or makes programmatic decisions per federal requirements, it is likely a subrecipient. Contractors provide goods/services as directed by the recipient without making such decisions.

2. <strong>Nature of Award:</strong> Subrecipients perform activities aligned with federal objectives and terms of the federal program, often reporting progress and adhering to federal compliance. Contractors work per terms defined by the recipient, focusing on delivering goods/services.

3. <strong>Award Risk:</strong> Subrecipients assume little financial risk as non-compliance risk is on the recipient, who monitors them. Contractors assume financial risk if failing to meet agreement terms, without federal compliance requirements.

4. <strong>Criteria for Selection and Business Environment:</strong> Subrecipients are selected for their role in carrying out federal program goals, often contributing matching funds and chosen through applications. Contractors operate in competitive markets, chosen via procurement processes, providing goods/services as part of their regular business.

Users are instructed to use their judgment based on responses to questions in each category, as no single indicator definitively classifies the entity. Final determinations affect the agreement type and applicable federal regulations—pass-through rules for subrecipients (Section 200.331) and procurement standards for contractors (Sections 200.317-200.326). The document is intended to help ensure federal fund compliance and correct classification of partnerships.
Keywords
federal funds
subrecipient
contractor
Uniform Guidance
2 CFR Part 200
federal awards
decision making authority
award risk
procurement
federal compliance