A subagreement is a legally binding agreement issued within a prime sponsored project to a collaborator at another institution. It establishes an agreement between the university and the subrecipient's institution for the execution of a significant role on the sponsored project. A subrecipient can be a company, university, or organization.
It is important to note that this funding mechanism differs from the procurement of goods or services from a contractor or vendor.
The table below highlights some of the key distinctions between subrecipients and contractors.
| Subrecipient | Contractor |
|---|---|
| A collaborative partner committed to an intellectually substantive contribution. | A service provider hired to provide an ancillary deliverable or task. |
| Responsible for internal programmatic decision making and design. | Operates independently within a defined scope. |
| Performance measured against program goals. | Performance measured against contract terms. |
| Typically receives funding for programmatic work. | Typically receives payment for goods or services. |
| Generally eligible for indirect costs (F&A). | Eligibility for indirect costs (F&A) is limited or not allowed. |
The Principal Investigator is responsible for ensuring the subrecipient successfully fulfills the designated scope of work and utilizes allocated funds in strict accordance with the approved budget. Prompt communication to the Office of Post Award Management (OPAM) is essential in the event that the Principal Investigator becomes aware of any potential incidents of non-compliance by the subrecipient.