Effective April 1, 2020, the Third Party Determination Form will be a required document at the proposal stage for any federal grant that includes one or more subawards.  Below is a description of the federal requirement:

Subrecipient vs. Contractor

Determinations are made on a case-by-case basis at the proposal stage. A Subrecipient vs. Contractor Determination Form is to be completed for each subrecipient. Before a proposal is submitted to an agency, OSP will make the final determination using the recommendations from the Third Party Determination Form. 

It is important to differentiate between subrecipients and contractors before entering into an agreement with a third party organization performing a portion of UAB’s research project. This classification will determine the type of legal agreement as well as the type of monitoring required for the relationship. Misclassification may result in delays in subaward processing, as well as inclusion of incorrect facilities and administrative costs (F&A), leading to significant budgetary errors. UAB follows the requirements in the OMB Uniform Guidance (2 CFR 200), Section 200.330 to determine subrecipient or contractor status.

A subrecipient relationship may be appropriate when many of the following factors are present:

• The organization’s SOW represents a substantive and intellectually significant portion of UAB’s research project.
• The organization participates in a creative way in designing and/or conducting the research.
• The organization retains some element of programmatic control and discretion over how the work is carried out.
• The organization makes independent decisions regarding how to implement the requested activities.
• A principal investigator has been identified at the organization and functions as a “Co-Investigator.”
• There is an expectation that the organization will retain ownership rights in potentially patentable technology or products produced in the course of fulfilling its SOW.
• Publications may be created or co-authored at the organization.
• The organization assumes responsibility for adherence to applicable sponsor program compliance requirements.

A contractor relationship may be appropriate when many of the following factors are present:

• The organization is providing specified services in support of, or ancillary to, UAB’s research project.
• The organization has not significantly participated in the design of the research or project itself, but is implementing the research plan or project activities of the UAB investigator.
• The services are performed in the organization’s normal course of business and marketed to a range of customers.
• The organization makes little or no independent decision-making in the design and/or conduct of the research being completed.
• The expectation is that the work will not result in patentable technology that would be owned by the organization.

OMB Uniform Guidance allows grantees to use judgment in determining whether a relationship is that of subrecipient or contractor. Not all of the characteristics listed above will be present. Conversely, the presence of many of the characteristics is not necessarily determinative. Thus, the substance of the relationship is more important than the form of the agreement. UAB PIs are required to analyze the substance of the relationship with their subrecipients and note their recommendations by completing the Third Party Determination Form and submitting it to OSP at the proposal stage.