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Contract vs Grant Resource

Per 2 CFR 200.331, a pass-through entity (state agency) must make determinations whether each agreement it makes for the disbursement of federal program funds assigns the party receiving the funds in the role of a subrecipient or a contractor.

Contract

Grant

A legal instrument by which a contractor purchases property, goods or services needed to carry out the project or program under an awardA legal instrument of financial assistance between a pass-through entity and a subrecipient to carry out a program for a public purpose.
Used to benefit or supplement the state through a procurement relationship for the purchase of goods and servicesUsed to benefit the citizens of the State through projects, initiatives and programs
Governed by 2 CFR 200.317-326 (Procurement Standards)Subject to the Uniform Guidance and the award’s terms and conditions

Characteristics of a contractor per 2 CFR 200.331(b) include:

  • Goods and services are provided within normal business operations
  • Similar goods or services are provided to many different purchasers (non-exclusive)
  • Operating in an openly competitive environment
  • Providing goods or services that are ancillary to the implementation of the program
  • Not being subject to compliance requirements of Federal programs as a result of the contract. However, similar requirements may apply for other reasons
  • Relatively inflexible as to scope of work, budget and other change
  • Significant emphasis placed on delivery of results, product, or performance
  • Payment is based on deliverables and milestones

Characteristics of a subrecipient per 2 CFR 200.331(a) include:

  • Able to determine eligibility for assistance
  • Performance is measured in relation to the established award objectives
  • Responsible for programmatic decision-making
  • Required to adhere to program requirements as defined in the award
  • Implements a public program or purpose specified in authorized statute
  • Flexible as to scope of work, budget and other changes. Does not provide for substantial involvement between he pass-through entity and the subrecipient in carrying out the activity completed by the subaward.
  • Significant emphasis placed on carrying out projects, initiatives and programs
  • Subrecipients use funds to complete the objectives of a program instead of just providing goods and services

Resources

Sample Subrecipient Contractor Determination Tool (Use this tool to determine subrecipient/vendor role)
Subrecipient Award Checklist (Use if determined to be a subrecipient relationship)
Contractor Procurement Checklist (Use if determined to be a contractor relationship)