### Subrecipients v Contractor Determination - [ Resources](#resources) ## Regulation Requires Case-by-Case Analysis *Subrecipients* are institutions that carry out the work of a *subaward* issued by a direct federal awardee, known as a pass-through entity. These terms are used in the federal regulation *Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards* (2 CRF 200), also known as [***Uniform Guidance***](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1) (UG) to identify a commonly employed award relationship and spell out awardee responsibilities. ### Federal Agency à Pass-through Entity à Subrecipient Although subrecipients do have distinct responsibilities, the lion's share of the requirements fall on the pass-through entity, who is the custodian of the awarded federal funding. Among those UG-specified requirements is a [***case-by-case determination***](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR031321e29ac5bbd/section-200.331) of whether the subawardee role is that of a subrecipient or a *contractor*. While BMC is sometimes itself a subrecipient, the focus below is on BMC's outgoing subawards. Those new to outgoing subawards may desire to consult our [***Basics of Subawards***](https://www.bmc.org/node/172156)***.*** ### BMC Guidance and Forms Refer to BMC's guidance on the [***Process for Independent Contractors on Sponsored Programs***](https://hub.bmc.org/doc/independent-contractors-sponsored-programs) for step by step guidance on engaging with independent contractors/consultants. ##### At the time of proposal: BMC's [***subrecipient v contractor guidance and determination form***](https://hub.bmc.org/doc/subrecipient-v-contractor-guidance-and-determination-form) is used formally each time a BMC principal investigator/program director (PI/PD) seeks to engage an institution as a subrecipient or to purchase good and services from a contractor. The guidance tab is filled out by the PI/PD or department administrator (DA) and uploaded into the InfoEd sponsored program (SP) record at the time of proposal. The form is reviewed as part of SPA's proposal review process, and the determination tab is completed by Sponsored Programs Administration (SPA) personnel. A [***statement of intent*** ](https://hub.bmc.org/doc/statement-intent-when-bmc-prime)is a crucial document to identify the establishment of a BMC subawardee. This document is required at the time of proposal submission. The PI/PD is responsible to ensure that any changes that occur post-submission are reflected in the final statement of intent. ##### At the time of award: The [***subaward agreement request form***](https://bmc.tfaforms.net/170) is used once the collaborator is confirmed as a subrecipient to initiate the the drafting of the agreement. See below for more details about the issuance process. Consult the [***Outgoing Subaward Execution and PO Setup webpage***](https://www.bmc.org/node/171644/)***,*** which features a process [***flowchart***](https://www.bmc.org/sites/default/files/inline-images/JPEG%20Outgoing%20Sub%20FINAL%20-%20Copy.jpg). ### Related Terminology and Distinctions Uniform Guidance (UG) spells out requirements for institutions that receive a federal award directly or indirectly from a federal agency, among which is a "case-by-case determination" of whether BMC is engaging a sub-recipient or a contractor to do work related to an SP ***[(2 CFR 200.331)](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR031321e29ac5bbd/section-200.331)***. ***[Interrelated UG definitions](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1)*** are complicated Below we provide informal meanings for those new to subawards. A **pass-through entity** or **prime awardee** is an institution that receives federal funding directly from a federal agency to conduct a sponsored program (SP) and engages in a subaward agreement with another entity to conduct some of the work of the SP. A **subaward** is an award that the prime awardee provides to a subawardee institution; UG clearly states in the definition of "subaward" that payment to a contractor does *not* constitute a subaward. A **subrecipient** carries out some of the SP work in compliance with applicable terms and conditions of the primary award and is not a contractor. A **contractor** provides ancillary goods and services that are purchased by an awardee. The BMC agreement with a contractor must follow UG ***[procurement requirements](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR45ddd4419ad436d)*** but the contractor is not bound to the full set of terms and conditions. A contractor may be further distinguished as a **consultant** or a **vendor**. Both may provide services, but the consultant provides unique scientific services. **Consultants** advise, assist or provide services and may also participate significantly in the research or sponsored program. Consultants often assist by supplying software, providing technical assistance, or setting up instruments for precision measurement in accordance with data requirements of the research plan. Consultants can be listed as ***[senior/key personnel](https://grants.nih.gov/grants/glossary.htm#Senior/KeyPersonnel)*** only if they will contribute substantively and measurably to the scientific development or execution of a project. Consultants cannot be Boston Medical Center (BMC) or Boston University employees and therefore do not receive salary and fringe benefit support. Consultants may receive a fee for their services. **Vendors** provide goods or services that are not uniquely required for the performance of the award. ### Steps in the Subaward Issuance Process ### Proposal Submission **Upload of required documents into InfoEd** In addition to other documents required by sponsor guidelines, the following are required from all sub-recipient sites during the proposal phase: - A signed [***Statement of Intent***](https://hub.bmc.org/doc/statement-intent-when-bmc-prime) - A detailed budget, and - A Scope of Work. These documents are crucial to the BMC subcontracting and monitoring process. The PI/PD/DA uploads them to the InfoEd record. Absence of these documents may result in subcontract issuance delays at the award management phase. ### Award Management **Step 1: Submission of the** [***BMC subaward agreement request web form***](https://bmc.tfaforms.net/170) Before submitting the request form, the PI/PD/DA must verify that the documents mentioned just above had been saved in the project’s InfoEd record. If any changes were needed to be made to those documents since the time of proposal submission, the outdated documents must be replaced with the revised versions. If a subaward was not included in the original proposal, PI/PD/DA must provide all subaward proposal components and confirm with SPA if prior approval is required. Typically, prior approval is needed for a foreign subrecipient or a change in scope. Incomplete or inaccurate requests cannot be processed. **Step 2: Drafting of the subaward agreement** Upon receipt of the subaward agreement request form and supporting documents, the assigned Grants and Contracts Administrator (GCA) draft the agreement. At this time, the GCA may need to reach out to the requestor with questions. This process takes appropriately 15 business days. During this step, the Grants and Contracts Administrator will request a new PO, or an increase/decrease to the current PO. **Step 3: Provision of the agreement to the subrecipient site** Via DocuSign, the GCA sends the agreement to the sub-recipient site's authorized signing official, the BMC PI/PD and any BMC and subrecipient DAs listed on the request from No action is required on DocuSign from the BMC PI/PD/DA. The sub-site will receive an automatic follow-up e-mail five days after the original e-mail and every seven days thereafter until the agreement is partially executed. The sub-site can request revisions by contacting the GCA via [***subaward@bmc.org***](mailto:subaward@bmc.org). **Step 4: Execution of the agreement** After the sub-site partially executes the agreement via DocuSign, the agreement is automatically routed to SPA’s signing official for signature. During this time, the GCA inserts the purchase order (PO) number into the agreement in DocuSign. Once the agreement is fully executed, a copy of the agreement is automatically sent to the following individuals: - BMC PI/PD - BMC DA(s) listed on the request form - Sub-recipient signing official, and - Sub-recipient DA listed on the request form. **Step 5: Fully executed agreement is uploaded to InfoEd** ### Award Collaborator Determination Table The federal regulation overseeing federal awards distinguishes between subrecipients and contractors, as described above. At BMC, contractors are subdivided between **vendors**, who provide goods and services, and **consultants**, who provide specialized scientific/clinical services that do not fit the requirements of the subrecipient designation. Both are contractors by federal terminology. **Supply Chain Operations** (SCO) handles the procurement requirements related to vendors of goods and services and **Human Resources** (HR) handles the procurement requirements of consultants. ### **Subrecipient v Contractor Determination** During the proposal stage, an initial determination is made as to the treatment of collaborators as a subrecipient or contractor. Before entering into a business relationship with another entity, a determination must be made as to the nature of the relationship and the legal agreement required to document the relationship. The decision will inform the allocation of responsibilities and influence the application of IDC rates. SPA must make a determination at the time of proposal submission. The PI/PD/DA must submit a completed ***[subrecipient v contractor guidance and determination form](https://hub.bmc.org/doc/subrecipient-v-contractor-guidance-and-determination-form)*** along with proposal documents. ### Determination Guidance Table The following table serves as guidance to determine whether a collaborator should be treated as a subrecipient, a consultant, or a vendor. Each situation is unique and must be reviewed as a whole. Review each in the context of the overall project when making the determination. **Review Element** **Subrecipient** **Contractor as Vendor** **Contractor as Consultant** Project description, scope of work, research strategy Collaborates on design or development PI/PD defines scope of work, research strategy Proposal to funding sponsor Works on overall proposal Does not work on proposal development Advises only, but not as a BMC or BU employee Performance of work Substantive programmatic work, significant portion of overall project Work is incidental to overall project, contributes to overall project Subject matter expert advice, review, or services Good and/or services Does not typically produce goods or services Provides similar goods and services to others as part of their business line Provides similar services to others Decision making Controls method and results of their portion of the project Makes no project decisions Compliance Prime award terms and conditions flowed to subrecipient Not subject to prime award terms, similar requirements may apply for other reasons Performance measurement Measured against meeting the project objectives and timeline Tied specifically to contract deliverables, not project objectives Not responsible for progress or overall outcome of project Publications May author or co-author publications Does not typically generate or co-author project publications Might co-author publications depending on contributions to project Intellectual property IP rights addressed in subaward agreement No potential for IP to be created by vendor Not applicable ## Resources - [Research Careers with BMC](https://bmc.wd1.myworkdayjobs.com/en-US/BMC/) - [Systems for Research/SPs](internal:/node/19177) - [SP Policy Library](internal:/node/172135) - [Education and Training](internal:/node/171454) - [Research Operations Forms](internal:/node/171947) - [Contact the SPA Team](mailto:grants.admin@bmc.org)