Post-Grants Subrecipient Monitoring Procedure

Subpart D of the Uniform Guidance (UG) (see § 200.330 through § 200.332) specified Subrecipient monitoring and management. 

That is why it is vital to properly distinguish between a subrecipient and a contractor particularly on the proposal stage of the budget as improper identification might affect the amount of award to be received. Upon approval of the award, where subrecipient are written on the award, the fixed and administrative (F & A) cost are only applied to the first $25,000.00 of the subcontract. The Contractors, however, have the F & A – (commonly called Indirect Cost) basis, based on the total cost of goods and services.

Subrecipient are mandated by the Pass-through entity so that the federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and are subject to compliance requirements. Contractor or vendor on the other hand, is not subject to compliance but rather subject to the rules of procurement contract.

Subcontractor or subrecipient refers to the recipient of any Subcontract issued by Prime Recipients or Pass-Through Entity (PTE). PTE is the organization which receives the award directly from the Prime Sponsor and flows down a portion of the work and a portion of the award funds to a third party using a Subcontract agreement. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency.

The following definition from Grants.gov will assist in identifying the categories of prime recipients and subrecipients of the federal awards.

An Award is a financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the federal government to an eligible recipient. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies, or insurance; direct payments of any kind to individuals; and contracts which are required to be entered into and administered under federal procurement laws and regulations.

A subaward is a form of legal agreement, including an agreement that the pass-through entity considers a contract. 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 Contractor (previously called vendor) is an entity that receives a contract as defined in § 200.22. Contract of the OMB Uniform Grant Guidance. Contract means 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.

Listed below are the characteristics of a subrecipient and a contractor as stated in UG Guidance § 200.330.

Characteristics of a Subrecipient

  • Determines who is eligible to receive what Federal assistance;
  • Has its performance measured in relation to whether objectives of a Federal program were met;
  • Is responsible for adherence to applicable Federal program requirements specified in the Federal award
  • Has responsibility for programmatic decision making
  • Uses Federal funds to carry out the program of the entity as compared to providing goods and services for a program of the pass-through entity 

Characteristics of a Contractor/Vendor

  • Provides the goods and services within normal business operations
  • Provides similar goods and services to many different purchasers
  • Normally operates in a competitive environment
  • Provides goods and services that are ancillary to the operations of the federal program 
  • Is not subject to the compliance requirements of the federal program as a result of the agreement, though similar requirements may apply for other reasons