Subcontract vs. Independent Contractor/Consultant/Vendor

Subrecipients may have some or all of the following characteristics:

  • Measure performance against the objectives of the program
  • Have authority for administrative and programmatic decisions
  • Provide on-going service for the life of the program
  • Carry out program (vs. providing service for a program)
  • Responsible for applicable program compliance requirements

On a federally funded sponsored project, subrecipient funds are passed through from the recipient to a subrecipient by a subcontract. This agreement will flow down the various regulatory and compliance requirements. 


  • Provide service as part of normal business operations
  • Provide a similar service to many different purchasers
  • Operate in a competitive environment (compete with others who provide similar services)
  • Provide a service outside program compliance requirements 

In Summary

A subrecipient serves as a co-investigator and is responsible for the end results of the research effort equally with the principal investigator where federal funds are being passed through to another entity. 

A vendor provides ancillary goods or services that the principal investigator needs to conduct the research effort. A vendor is not responsible for research results.