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2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
§200.
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1 Subrecipient and Subaward.
Subrecipient means a non-Federal an entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but award. The term subrecipient does not include an individual that is a beneficiary of such programor participant. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agencyagency. Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to contribute to the goals and objectives of the project by carrying out part of a Federal award received by the pass-through entity. It does not include payments to a contractor, beneficiary, or participant. A subaward may be provided through any form of legal agreement consistent with criteria in with § 200.331, including an agreement the pass-through entity considers a contract.
§200.
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1 Contractor and Contract.
Contractor means an entity that receives a contract as defined in §200. 22 Contract. Contract means, for the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award. For additional information on subrecipient and contractor determinations, see § 200.331. See also the definition of subaward in this section.
Click to open paragraph toolsmeans, for the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award. For additional information on subrecipient and contractor determinations, see § 200.331. See also the definition of subaward in this section.
[78 FR 78608, Dec. 26, 2013]
Anchor 330 330
§200.
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331 Subrecipient and contractor determinations.
The non-Federal An entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a . The pass-through entity must make is responsible for making case-by-case determinations to determine whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of the entity receiving Federal funds is a subrecipient or a contractor. The Federal awarding agency may supply and require recipients require the pass-through entity to comply with additional guidance to support make these determinations, provided such guidance does not conflict with this section. The Federal agency does not have a direct legal relationship with subrecipients or contractors of any tier; however, the Federal agency is responsible for monitoring the pass-through entity's oversight of first-tier subrecipients. All of the characteristics listed below may not be present in all cases, and some characteristics from both categories may be present at the same time. No single factor or any combination of factors is necessarily determinative. The pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. In making this determination, the substance of the relationship is more important than the form of the agreement.
(a) Subrecipients. A subaward is for the purpose of carrying out a portion of
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the Federal award and creates a Federal financial assistance relationship with
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a subrecipient.
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See the definition of Subaward in § 200.1. Characteristics that support the classification of the
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entity as a subrecipient include, but are not limited to, when the
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entity:
(1) Determines who is eligible to receive what Federal assistance;
(2) Has its performance measured in relation to whether the objectives of a Federal program were met;
(3) Has responsibility for programmatic decision-making;
(4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
(5)
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Implements 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.
(b) Contractors. A contract is for the purpose of obtaining goods and services for the
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recipient's or subrecipient's
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use and creates a procurement relationship with
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a contractor.
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See the definition of contract in § 200.1. Characteristics that support a procurement relationship between the
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recipient or subrecipient and a contractor include, but are not limited to, when the contractor:
(1) Provides the goods and services within normal business operations;
(2) Provides similar goods or services to many different purchasers;
(3) Normally operates in a competitive environment;
(4) Provides goods or services that are ancillary to the
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implementation of
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a Federal program; and
(5) Is not subject to compliance requirements of
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a Federal program as a result of the agreement. However,
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similar requirements may apply for other reasons
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.
[78 FR 78608, Dec. 26, 2013, as amended at 80 FR 54409, Sept. 10, 2015]
Frequently Asked Questions
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It is the responsibility of the pass-through entity to make the correct determination between subrecipient or contractor determination. This determination is to be made on a case-by-case basis depending on the unique relationship of each individual situation. Entities should focus on the substance of the relationship, not the form of the agreement, when making this determination. Entities MUST Entities MUST use judgement in determining whether each agreement is a subaward or a procurement contract (§ 200.330(c) 331 above).
Why is it important to properly distinguish between a subrecipient and a contractor?
Federal regulations differ between subrecipients and contractors. One of the biggest reasons is that subrecipients are required to comply with applicable Federal compliance requirements, which are passed down from the pass-through entity to the subrecipient. Contractors are not subject to the same compliance requirements of the Federal program. It is the responsibility of the pass-through entity to identify the subaward to the subrecipient and include the information listed in § 200.331332(ab)(1-6) in the associated agreement document.
Our organization uses a "contract" as the legal instrument to enter into agreements with both subrecipients and contractors. Therefore we consider all of our relationships as contractors. Is this acceptable?
No. Many non-Federal entitiesrecipients, particularly State agencies, call all of their legal instruments "contracts". A non-Federal entity may concurrently receive Federal awards as a recipient, subrecipient, and a contractor, depending on the substance of its agreement with the Federal awarding agency and pass-through entities. Therefore, a pass-through entity must make a case-by-case determination whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. Pass-through entities need to reflect upon the nature of each agreement's relationship to determine if the non-Federal entity is relationship is that of a subrecipient or a contractor.
What guidance can you provide in order to help distinguish between a subrecipient or contractor?
§ 200.330331(a) provides characteristics which generally support the classification of a non-Federal entity as a subrecipient. Characteristics generally supportive of a contractor are listed in 2 CFR 200.330331(b).
What are some of the characteristics indicative of a subrecipient relationship
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?
Some Characteristics that support the classification of the more common characteristics of entity as a subrecipient relationship include, but are not limited to, when the non-Federal entity:
(1)
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Determines who is eligible to receive
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what Federal
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assistance;
(2)
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Has its performance measured
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in relation to whether the objectives of
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a Federal program
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were met;
(3)
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Has responsibility for programmatic decision-making;
(4)
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Is responsible for adherence to applicable Federal
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program requirements specified in the Federal award; and
(5)
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Implements a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for
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the benefit of the pass-through entity.
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Some additional characteristics (in reference to research projects) of a subrecipient relationship include, but are not limited to, when:
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(5) publications may be created or co-authored at the entity; and (6) the entity provides cost sharing or matching funds for which it is not reimbursed by pass-through entity.
What are some of the characteristics indicative of a contractor relationship
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?
Some of the more common characteristics of a contractor relationship include when the non-Federal entityCharacteristics that support a procurement relationship between the recipient or subrecipient and a contractor include, but are not limited to, when the contractor:
(1)
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Provides the goods and services within normal business operations;
(2)
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Provides similar goods or services to many different purchasers;
(3) Normally operates in a competitive environment;
(4)
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Provides goods or services that are ancillary to the
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implementation of
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a Federal program; and
(5)
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Is not subject to compliance requirements of
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a Federal program
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as a result of the agreement. However, similar requirements may apply for other reasons.
Some additional characteristics (in reference to research projects) of a contractor relationship include, but are not limited to, when:
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