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Contractor Vs. Subrecipient

When establishing partnerships, Head Start and Early Head Start grantees must determine whether the partner functions as a contractor or subrecipient. Subrecipients are subject to monitoring against the compliance requirements of the federal program. Contractors are not. This resource summarizes the determination requirements at 45 CFR § 75.351 and will be helpful to grantees who partner with child care and other entities.

Contractor Subrecipient
(1) Provides goods and services within normal business operations. (1) Determines who is eligible to receive what federal assistance.
(2) Provides similar goods or services to many different purchasers. (2) Has its performance measured in relation to whether objectives of a federal program were met.
(3) Normally operates in a competitive environment. (3) Is responsible for programmatic decision-making.
(4) Provides goods or services that are ancillary to the operation of the federal program. (4) Is responsible for adherence to applicable federal program requirements specified in the federal award.
(5) Is not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply for other reasons. (5) In accordance with its agreement, uses federal funds to carry out a program for a public purpose specified in the authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.

Topic:Human Resources

Keywords:Consultants, Hiring

Resource Type: Article

National Centers: Office of Head Start

Last Updated: April 12, 2018