The Difference Between a Subcontract and a Contract for Professional Services
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Definitions:
Consultants & Professional Services
Contractual agreement
Short-term Expert advice Specialized services
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Definitions:
Sub-award (Subcontract)
Contractual agreement that includes terms and conditions of the prime award that makes the sub-awardee responsible for a portion of work scope Time intensive (usually coincides with some or all of the budget periods)
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How a distinction is made:
It is not expected that all characteristics
of a subcontract or professional service will be present.
Good judgment should be used in determining whether a sub-award/contract or CPS should be used.
The substance of the relationship is
more important than the form of the agreement.
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Why a distinction is needed:
Sub-award/contracts maybe subject to
OMB A128/A133 auditing and monitoring if prime-funding source is from a Federal Agency. Sub-award/contract usually flows down the terms and conditions of the prime award. CPS vendor is not subject to the proceeding regulations or terms and conditions.
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Sub-award/contract Traits
Performance measured against whether
the objectives of the sponsored program are met (carrying out a portion of the programmatic effort of the project). Responsible for programmatic decision making relative to the subrecipient's portion of the work.
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Sub-award/contract Traits
Must adhere to sponsored compliance
requirements (IRB, IACUC, rebudgeting restrictions, publication, IP rights). Uses the sponsored funds to carry out a program of the organization as compared to providing goods or services.
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CPS Traits
Provides goods/services within normal
business operations. Provides similar goods/services to many different purchasers. Operates in a competitive environment. Provides goods or services that are ancillary to operation of sponsored program.
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CPS Traits
Is not subject to compliance
requirements of the prime sponsor. Pay particular attention to testing, processing, computer programming, editing, etc. functions that are outsourced. A CPS probably should be used. Services provided by an individual or sole proprietor.
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CPS/Sub Traits
There may be unusual circumstances or
exceptions to the above listed characteristics. If you are still unsure of the distinction when reviewing these characteristics, please contact the Grant Administrator in SPA that handles your project for additional guidance.
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Proposal Budget:
Consultant & Professional services
included in the sponsored project budget examples:
Advisory/oversight board members software programmers Editors other technical experts
Costs include:
Fees expenses such as travel justification of need for consultant is necessary
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Proposal Budget:
Sub-award/subcontract
included in sponsored project budget provided by sub-recipient with PI statement of intent sub-recipient’s institutional approval sub-award/subcontract budget consists of:
prime award budget applies F&A on first $25,000 of project period justify use of the sub-awardee or subcontractor in the "research plan"
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direct costs F&A (indirect) costs (approved rates)
Negotiation and Execution:
Consulting/Professional Services:
Use electronic Contract for Professional Services form (two parts) Internal Info/approval process via FN Contract signed by vendor, authorized signer & Purchasing (if applicable)
Sub-award/subcontract:
PI provides workscope/budget/info SPA negotiates and executes Specific agreement that includes terms & conditions of the prime award
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QUESTIONS?
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