So You Want to Outsource -What is the Right Vehicle?


Federal grantees may use federal grant funds to obtain the services of a third party for the purpose of performing tasks or providing services to help the grantee accomplish project goals. That “outsourcing” may happen in the form of a subrecipient relationship or a procurement relationship. Although the Uniform Guidance explicitly states that a subaward “is for the purpose of carrying out a portion of a federal award and creates a federal assistance relationship with the subrecipient” and a contact “is for the purpose of obtaining goods and services for the non-federal entity’s own use and creates a procurement relationship with the contractor,” it can still be quite challenging to make the determination of which relationship may be most appropriate for any given arrangement. The importance of making an appropriate determination cannot be overstated because each method – subawarding and contracting – triggers a different set of federal grants management requirements with which the grantee must comply. This presentation will discuss and explain the various factors, distinctions, and considerations relevant to the decision of proceeding with a subaward or a “contract.”
Learning objectives:

• Understand the factors stated in the Uniform Guidance (and predecessor factors stated in OMB Circular A-133) relevant to the subrecipient/contractor determination.

• Understand important factors not included in the enumerated factors listed in the Uniform Guidance.

• Analyze and discuss the pros and cons of contract relationships and subaward relationships from the perspective of prospective

GPC Competencies Addressed:
Strategies for effective program and project design and development  
Post-award grant management practices sufficient to inform effective grant design and devleopment


Scott Sheffler is a Partner with the firm in the Federal Grants and Health Law practice groups. In this capacity, he routinely assists clients in drafting and negating subrecipient agreements, and assists clients with procurement and audit matters. Scott regularly represents both passthrough entities and subrecipients.

L’Kel is an Associate with the firm in the Health Law and Federal Grants practice groups. L’Kel regularly assists clients with the reviewing, drafting and negotiation of federal grants management documents, subrecipient agreements, affiliation agreements, and other contracts.