Direct comparison
2 CFR 200.331: Subrecipient vs. Contractor
2 CFR 200.331 tests five subrecipient factors against five contractor factors -- no single one decides. Plus the checklist and why "vendor" isn't a category.
Side-by-side comparison
| Dimension | Subrecipient | Contractor (a.k.a. Vendor) |
|---|---|---|
| What it does | Carries out a substantive portion of the funded program's scope of work, under its own direction | Provides goods or services needed to carry out the project, within its normal business operations, for a fee |
| Governing 2 CFR 200 provision | 200.331(a) subrecipient characteristics; 200.332-200.333 pass-through-entity duties | 200.331(b) contractor characteristics; 200.317-200.327 procurement standards |
| Determines who's eligible for the assistance? | Yes -- a defining factor | No |
| Performance measured against | Whether the federal program's objectives were met | Contract deliverables/specifications, not program objectives |
| Programmatic decision-making authority? | Yes -- has responsibility for it | No |
| Subject to the award's compliance requirements? | Yes -- award terms flow down to it | No -- subject to the contract/procurement terms instead |
| Market relationship? | No -- a programmatic partnership, not a competitive purchase | Yes -- normally operates competitively, serving many purchasers |
| Compliance regime that applies | Subrecipient monitoring: risk assessment, flow-down of award terms, Single Audit exposure (200.332-200.333, Subpart F) | Procurement standards: competition requirements, required contract clauses (200.317-200.327, Appendix II); not itself subject to Single Audit |
| Who decides, and how? | The pass-through entity (prime recipient), case by case, judging substance over form -- 200.331(a) | The same determination process -- the two categories are decided together, not separately |
| Typical instrument | Subaward agreement | Purchase order or procurement contract |
| Is "vendor" a separate category? | N/A | No -- pre-Dec-2014 term for this same category; still used interchangeably in practice |
| Typical example | A partner institution performing a defined portion of the research, with its own PI, budget, and human-subjects approvals | A reagent or equipment supplier, a core facility charging a standard fee, a firm hired for a discrete statistical-analysis task |
Common questions
FAQ
Is a consultant a subrecipient or a contractor?+
Almost always a contractor. A consultant hired for a discrete, fee-for-service task -- advice, a specific analysis, a single deliverable -- without programmatic decision-making authority or responsibility for program eligibility fits the contractor characteristics in 2 CFR 200.331(b), even when the agreement is informally called a "consulting agreement" rather than a purchase order.
Does the dollar value of the agreement decide subrecipient vs. contractor status?+
No. 2 CFR 200.331(a)-(b) does not list dollar value as a determining factor -- classification turns on the substance of the relationship. Separate dollar thresholds exist for other purposes (e.g. the $25,000 covered-procurement-contract threshold for debarment/suspension checks under 2 CFR 180.220, or the $50,000 minimum subaward amount that counts toward the MTDC base) -- those are unrelated to the subrecipient/contractor test itself.
Can the same organization be a subrecipient on one award and a contractor on another?+
Yes. The determination is made per agreement, not per organization -- 2 CFR 200.331 expressly contemplates that an entity may receive federal funds as a subrecipient under one award and as a contractor under a separate agreement, depending on the nature of each specific relationship.
How does this apply to ARPA/SLFRF awards?+
Treasury's SLFRF (State and Local Fiscal Recovery Funds, enacted under the American Rescue Plan Act) guidance applies the same 2 CFR 200.331 subrecipient/contractor test, but adds a third, program-specific category not found in the general Uniform Guidance: "beneficiary" -- an individual or entity that is the direct end user of SLFRF-funded assistance, such as a household receiving rental assistance or a small business receiving a relief grant. Beneficiaries are not subject to subrecipient monitoring or Single Audit requirements the way subrecipients are.
What happens if an institution misclassifies a subrecipient as a contractor?+
It skips the subrecipient-monitoring obligations 2 CFR 200.332-200.333 require -- risk assessment, flow-down of award terms, ongoing compliance monitoring -- in favor of procurement-only oversight. That's a classification error a federal audit or Single Audit finding can surface after the fact. Pass-through entities are expected to document the basis for each determination, using judgment against the 200.331(a)-(b) factors.
Is there a subrecipient vs. contractor checklist?+
2 CFR 200.331 itself is written as a substance-over-form judgment, not a numeric checklist -- no single factor decides the outcome. That said, the comparison table above and the working checklist in the "A working checklist for applying the 200.331 determination" section on this page both walk through the same six determining questions from 200.331(a)-(b) (eligibility determination, performance measurement basis, programmatic decision-making authority, compliance-requirement exposure, normal-business/competitive-market operation, and whether the goods/services are ancillary to the program) so a pass-through entity can document its answers and its overall determination in writing.
