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Subaward Vs Procurement Contract Toolkit

Subaward vs Procurement Contract Toolkit: Understanding the Difference for Effective Grants Management

Grant management involves a lot of moving parts, and one of the most critical aspects is understanding the difference between subawards and procurement contracts. Both play a vital role in the grant process, but they are quite distinct and require varying degrees of oversight and management.

To help you navigate the complexities of grant management, we’ve put together a subaward vs procurement contract toolkit that includes the key concepts and factors that you need to consider.

Subawards: What are They?

A subaward is a type of agreement where a recipient of a grant passes on a part of the funding to another organization, usually to perform a specific set of activities or tasks. The subaward recipient is accountable to the primary grant recipient, and the latter is responsible for ensuring the subrecipient’s compliance with the grant requirements.

Subawards are typically used when the primary grant recipient does not have the capacity or expertise to perform a specific task or activity. Therefore, they engage a subrecipient who has the expertise to carry it out.

Procurement Contracts: What are They?

A procurement contract is an agreement between the grant recipient and a vendor or supplier for the procurement of goods or services. The contract outlines the terms of the agreement, including the scope of work, payment terms, and timelines.

Procurement contracts are used when the grant recipient requires goods or services that cannot be provided in-house or by a subrecipient. Procurement contracts require competitive bidding, selection of the vendor or supplier based on specified criteria, and clear performance metrics.

Subawards vs Procurement Contracts: What’s the Difference?

The primary difference between subawards and procurement contracts is the type of agreement involved. Subawards are agreements that involve passing on a part of the grant funding to another organization to perform specific activities. Procurement contracts, on the other hand, are agreements between the grant recipient and a vendor or supplier for the procurement of goods or services.

Another difference between subawards and procurement contracts is the level of control and oversight required. Subawards require the grant recipient to oversee the subrecipient’s compliance with the grant requirements, while procurement contracts require the grant recipient to manage the vendor or supplier’s performance against the contract’s performance metrics.

Finally, subawards and procurement contracts have different reporting requirements. Subrecipients on subawards are required to submit progress reports to the grant recipient, who will, in turn, report to the funding agency. In contrast, vendors or suppliers on procurement contracts are accountable to the grant recipient, who reports to the funding agency on the contract’s progress.

Conclusion

Understanding the difference between subawards and procurement contracts is critical for effective grant management. The subaward vs procurement contract toolkit we have provided should help you navigate this complex area of grant management. Remember, subawards are agreements where a grant recipient passes on some grant funding to a subrecipient for specific activities while procurement contracts are agreements between the grant recipient and a vendor or supplier for the procurement of goods or services. By understanding the nuances of each and effectively managing them, you can ensure that your grant project stays on track, within budget, and meets all the requirements of the funding agency.