Subrecipient vs Vendor

Distinguishing Between Subrecipient and Vendor

What distinguishes a subrecipient from a vendor?

Subrecipient

A subrecipient is an entity that receives Federal assistance passed down from a prime recipient or another subrecipient to carry out or administer a program.  Distinguishing characteristics of a subrecipient include such items as responsibility to meet compliance requirements, performance measured against meeting the objectives of the program, responsibility for programmatic decision making, and determining eligibility for assistance.

Vendor

A vendor is an entity responsible for providing generally required goods or services related to the administrative support of the Federal assistance program.  Distinguishing characteristics of a vendor include such items as providing the goods and services within normal business operations, operating for profit, providing similar goods or services to many different purchasers, operating in a competitive environment, and not having responsibility for adherence to program compliance requirements.  Audit requirements for vendors are covered by the terms and conditions of the contract. 

A not-for-profit may be a prime recipient, subrecipient, and/or a vendor.  The awards received as a prime recipient or subrecipient would be subject to A-133 audit.  The amounts received for contracts, determined to only provide goods or services as a vendor, would not be considered Federal awards.

Determination

In making the determination of whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the contract.  The Federal cognizant, oversight, or grantor agency may be contacted for guidance in making these determinations.

Last modified November 21 2012 10:06 AM