Financial Services

OUHSC Campus

Grants & Contracts

Subrecipient versus Contractor

OUHSC is required by Federal guidelines to determine whether an entity is a sub- recipient or a contractor. It is very important that we get the classification correct as the requirements for monitoring and the method of charging F&A differ based on the distinction. A subrecipient is for the purpose of carrying out a portion of the award and creates an assistance relationship. A contractor is for the purpose of obtaining goods and services and creates a procurement relationship with the contractor.

Characteristics which support the classification as a subrecipient are:

  • Determines who is eligible to receive assistance.
  • Has its performance measured in relation to whether objectives of the program were met.
  • Has responsibility for decision making.
  • Is responsible for adherence to applicable program requirements.
  • Uses the funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services.
  • A principal investigator is identified.
  • Typically salary commitment is in the form of effort (i.e. calendar months, FTE, etc.)
  • Proposal requires statement of work, budget, budget justification and official organization commitment letter.
  • Subrecipient is entitled to Facilities and Administrative costs as allowed by the prime award.
  • Publication of results are expected.
  • Potential for patentable or copyrightable technology.

If a subrecipient is performing work on an OUHSC award, a Subrecipient Cover Page will need to be prepared and forwarded to the Office of Research Administration for contract preparation.

Characteristics indicative of a contractor are:

  • Provides the goods and services within normal business operations.
  • Provides similar goods or services to many different purchasers.
  • Normally operates in a competitive environment.
  • Provides goods or services that are ancillary to the operation of the program.
  • Person(s) conducting the work is not necessarily identified.
  • No publication or involvement in publication is anticipated.
  • Little or no independent decision-making involved in the design or conduct of project.

The vendor commits to deliverable goods or services which if not satisfactorily completed may result in non-payment or replacement.

It’s important to remember that importance to the award, doesn’t enter into the determination. A contractor can be just as important to the work being done. And remember that the substance of the relationship is more important than the form of the agreement. Just because a contract is written on an ICA form, doesn’t mean we shouldn’t be making sure it is classified correctly.

If a contractor is performing work on an OUHSC award, an Independent Contractor Agreement is usually prepared after the ICA Cover Page is routed to the Office of Research Administration.