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Subgrants vs. Subcontracts

Subgrants vs. Subcontracts. TAA-CCCT Grants November 16, 2011. Topics for today’s webinar. Review of Subgrant prohibition Subrecipients and Subgrants Vendors and Subcontracts Agreement types. Subgrant Prohibition.

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Subgrants vs. Subcontracts

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  1. Subgrants vs. Subcontracts TAA-CCCT Grants November 16, 2011

  2. Topics for today’s webinar • Review of Subgrant prohibition • Subrecipients and Subgrants • Vendors and Subcontracts • Agreement types

  3. Subgrant Prohibition • Grantees do not have authority under this program to award sub-grants (pg. 22 of SGA) • Consortium members are not subgrants • May award subcontracts, but must be true subcontracts (Attachment A to SGA) • General purpose, • Programmatic functions, and • Responsibilities that the grantee gives to the other organization along with grant funds

  4. Subgrant: An award of financial assistance in the form of money, made under a grant by a grantee to an eligible subgrantee. Subcontract: An agreement, purchase order, or any legal instrument issued to a third party the subcontractor, calling for the performance of a defined piece or work or production and/or delivery or specified goods and services. Subgrants vs. Subcontracts

  5. Subgrants vs. Subcontracts • Distinction between sub-grants vs. subcontracts based on: • General Purpose • Focus • Recipient Responsibility

  6. Subrecipient vs. Vendor • Distinction between subrecipient and vendor based on: • Use of funds to carry out program goals • Provision of good and services • Applicability of Federal grant management requirements & rules • Sub-recipients must follow such rules & vendors do not • Discussed in OMB Circular A-133 Section 210

  7. Subrecipients • Determines which participants are eligible for Federal assistance • Performance measured against objectives of the program • Programmatic decision making • Adheres to Federal program compliance requirements • Uses funds to carry out a program as compared to providing goods or services for a program of the pass-through entity

  8. Subgrant • Type of document needed to establish subrecipient relationship • PROHIBITED SUBGRANT

  9. Vendors • Contract to provide goods, supplies and/or services as part of normal business operations • Does not directly support goals of grant; ancillary to the operation of the program • Does not have programmatic decision making authority • Not subject to program compliance requirements • Subject to procurement regulations

  10. Subcontracts • Type of document used to establish vendor relationship

  11. Agreement Types - Goods • Sub grants – Not applicable • Subcontracts • Purchase Order • Requisition • Example: lab equipment

  12. Agreement Types - Services • Sub grant: Prohibited • Example: a subgrant to and organization giving them authority to develop a deliverable under the statement of work on behalf of grantee • Subcontract: • Individual services • Faculty to develop curricula under grant • Professional • Industry consultant/subject matter expert • Audit firms • Software development • Personal services

  13. Individual Services Contracts • Independent contractor and casual employee services • When a fee or honorarium paid • Non-employees for services performed • Current employees for services not related to their appointments

  14. Professional services contracts • Professional Services defined in 2 CFR 220, Appendix A, #37 • Consultants, members of particular profession or possess a special skill • Not officers or employees of grantee institution

  15. Cost Reimbursement Contract • Work is done BEFORE costs are funded • Costs specified in contract budget • Requires upfront capitol from contractor • Advances may be used

  16. Fixed Price Contracts • Specified amount for work performed • Payment options vary • Purchase Order is example

  17. Cost plus fixed fee • Reimbursement for actual costs • Fixed fee for profit or fee paid performance • Fee negotiated as a dollar amount

  18. Cost plus percentage of costs • UNALLOWABLE contract type under government grants

  19. A Word About Funded Partners • Grant funds can only be given to grant partners through sub contracts • Activities in contract must be appropriate for a contract not a grant

  20. Questions??

  21. Follow up questions • More details on proper procurement: • Introduction to Procurement online training https://etareporting.workforce3one.org/page/financial • Contact your FPO to discuss your SOW and whether work is a subgrant or subcontract and the appropriate procurement vehicle

  22. Coming in 2012 • Financial Reporting • Intellectual Property • Monitoring

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