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Subrecipient v. Contractor/Vendor

There often exists substantial confusion when determining whether the collaboration with another organization constitutes a subcontract, a subaward or an independent contractor/vendor relationship. The Office of Sponsored Programs (“OSP”) provides the following guidance (derived, in part, from the Uniform Guidance in 2 CFR § 200.330):

Subcontractor or Subrecipient

AN ORGANIZATION IS CONSIDERED TO BE A SUBCONTRACTOR OR SUBRECIPIENT OF AN AWARD WHEN IT:

  1. Determines who is eligible to receive financial assistance;
  2. Has its performance measured against whether the objectives of the program are met;
  3. Has responsibility for programmatic decision-making;
  4. Has responsibility for adherence to applicable program compliance requirements; and
  5. Uses the funds to carry out a program of the sponsor as opposed to providing goods or services for the benefit of the Boise State University (“University”).

Note: If the organization is a subcontractor or a subrecipient, then OSP will prepare and submit a subaward or subcontract to send to the organization for its review (for more information, see the Steps for Subaward Negotiation and Acceptance). Please contact OSP Contracting Services when you are ready to issue a subcontract or subaward.

Contractor/Vendor

IN CONTRAST, AN ORGANIZATION IS CONSIDERED A CONTRACTOR/VENDOR WHEN IT:

  1. Provides goods and services within normal business operations;
  2. Provides similar goods and services to many different purchasers;
  3. Operates in a competitive environment;
  4. Provides goods or services that are ancillary to the operation of the program; and
  5. Is not subject to compliance requirements of the sponsor’s program, though similar requirements may apply for other reasons.

Note: If the organization is a contractor/vendor, follow the guidance on the Procurement Actions web page.

The above questions must be considered collectively in order to determine the appropriate business relationship using the totality of the circumstances. It is important to note that: (1) the substance of the relationship is more important than the form of the agreement; and (2) all of the factors listed above may not be present in all cases. For this reason, the University must use judgment in classifying parties. The above factors will be considered at the proposal stage in Section 8 of the OSP Proposal & Award Acceptance Workflow (i.e., Frevvo).

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