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Contractor and Consultant Agreements

When an agency determines it is appropriate to pay another entity for goods or services using federal grant funding, the agency must have contractual documents in place prior to entering into a relationship with the entity.

First, the program must decide what type of contracting relationship exists based on the nature of the agreement and the criteria in the Uniform Requirements. See 2 CFR §200.330, section 200.22 and section 200.92.  (After opening the link search for 200.330).

Subrecipient: You have a subrecipient relationship with another entity when the entity:

  1. Has the ability or authority to determine who is eligible to receive assistance;
  2. Has its performance measured against whether the objectives of the state/federal program are met;
  3. Has responsibility for programmatic decision-making
  4. Has responsibility for adherence to applicable state/federal program compliance responsibilities;
  5. Uses grant funding to carry out a program of the organization rather than just providing goods and services.

*All subrecipient relationships must be pre-approved prior to a program entering into a contract.

Contractor: Contractors are also called vendors. Contractors provide goods and services within normal business operations; provide similar goods and services to different purchasers; operate in a competitive environment; provide goods and services that are ancillary to the operation of the grant funded program; and are not subject to compliance requirements.

Professional Services: Professional services are unique, technical or infrequent functions performed by an outside contractor (vendor), qualified by education, experience or technical skills and abilities. Examples of professional services include but are not limited to, laboratory analysis, project evaluation, marketing, auditing, translation/interpretation and website development.

Consultants: Consultants are experts or people who hold special knowledge or skills, or who give professional or legal advice. Consultants are hired on a contractual basis and are not employees of your agency.

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