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The subaward is the legally-binding agreement between a pass-through entity (PTE) and another non-Federal entity (NFE). The purpose of this agreement is to establish a Federal assistance relationship between the PTE and its NFE partner associated with carrying out either all, or a portion, of a Federal financial assistance award. There are no restrictions on what the PTE calls this agreement; rather, it is principle purpose of the relationship established in the agreement that defines it . However, at the Federal level, the agreement will be defined, and regulated, by its principle purpose (cf. 'Subrecipient vs. Contractor determination') . Therefore, PTEs must exercise reasonable judgment in making the correct determination of the nature of the agreement, even when not all subaward characteristics in §200.331(a) are present.
Authorities
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2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
§200.92 Subaward.
Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.
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[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 80 FR 54409, Sept. 10, 2015]
2 CFR 200 Compliance Supplement (Frequently Asked Questions—July 2017 update)
.331-2 Limits on layers of Subrecipients for Indirect Costs
Frequently Asked Questions
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How many times can a Federal financial assistance award be subawarded?
2 CFR 200 does not place Q: Is there a limit on the number of layers of subrecipients at which the requirement to pay indirect costs is no longer applicable? For example, a state may pass-through Federal grant funds to a local government. The local government may then pass all or some of the funds through to a local nonprofit, which then also utilizes the services of other nonprofit providers as subrecipients.
A: No, there is no limit under the Uniform Guidance, but the Federal award may have a limit.
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times this may happen. So, barring any applicable Federal statute limitations, or Federal awarding agency discretion, the Federal award may be subawarded as many times as each pass-through entity determines is necessary, as long as each subaward continues to meet the requirements in 200.331. (cf. Uniform Guidance FAQ .331-2 here).
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