Subrecipient Vs. Vendor

Differences between subrecipients and vendors

Determining whether a proposed collaboration should be classified as a subrecipient or vendor can be challenging. The determination is based primarily on the type of work proposed, not solely on the type of entity (e.g. university, business entity, nonprofit entity). As principal investigator, you must ensure that sufficient information about the proposed arrangement is shared with the departmental administrator and the Office of Research Administration (ORA). You and your departmental administrators are strongly encouraged to consult with a grant consultant before a proposal due date if you have questions about the appropriate classification.

The information provided below will assist you and your grant consultant in determining differences.

Subawards and subrecipients

Under the Uniform Guidance (2 CFR 200.92), subaward means an award provided by a pass-through entity to a 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 who 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.

These are characteristics of a subaward. The subrecipient:

  • has responsibility for programmatic decision making
  • contributes to the scholarly/scientific conduct of the project as described in the statement of work for the prime award
  • uses the funding to carry out a program for a public purpose specified in the authorizing statute, as compared to providing goods or services for the benefit of the pass-through entity
  • exercises considerable discretionary judgment and provides unique expertise in the performance of the work
  • would be considered as a co-author of publications resulting from the work performed under the prime award
  • performs work that involves human subjects or animal studies

Professional services agreements

Generally, the university recommends use of a professional services agreement when collaborating with individuals. Professional services agreements are handled through the Indiana University Purchasing Department.

Vendors/fee for service purchase orders

A vendor provides goods or services within normal business operations and operates in a competitive environment providing similar goods and services to a variety of customers.

These are characteristics of a vendor/fee for service purchase order. The contractor organization:

  • provides a routine service (e.g., equipment fabrication or repair, data processing, performing routine analytical testing services, etc.)
  • provides the goods or services as part of its normal business operations
  • operates in a competitive environment (i.e., competes with others who can provide a similar service)
  • provides similar goods or services to many different purchasers

Fee for service arrangements are handled through the Indiana University Purchasing Department.

Visit the Indiana University Purchasing Department