A subaward is a formal written agreement that is issued when sponsored project funding is passed through to another entity so that entity can carry out an intellectually significant portion of the sponsored project's scope of work. 
 

A subaward must include a clearly defined scope of work to be performed by the subrecipient's personnel, using its own facilities and resources. The subrecipient takes full responsibility for adhering to the terms and conditions of the subaward including those flowed down from the prime sponsor and assumes creative and intellectual responsibility and leadership as well as financial management for performing and fulfilling the subrecipient's scope of work within the subrecipient's approved budget.


It does not include payments to a contractor or payments to an individual that is a beneficiary of a program. Subawards differ from procurement contracts used to acquire goods or services from vendors.

Subaward Package

When submitting a proposal that includes a subaward, a subaward package is needed at proposal stage. A basic subaward package includes, at a minimum:

  • Letter of intent, signed by subawardee's institutional official
  • Scope of work
  • Budget
  • Budget justification
  • Federally negotiated rate agreement, if applicable

Other documents that may be needed :

  • CV's / Biosketch(es)
  • Current and pending (other) support disclosures
  • Letters of support
  • FDP subaward template
  • Any other documentation required by the sponsor or prime applicant

Distinguishing between a subaward and a procurement action 

Characteristics that support the classification of the recipient entity as a subrecipient include when the entity: 

  • Has its performance measured in relation to whether objectives of the sponsored program were met. 
  • Has responsibility for programmatic and scientific decision making.
  • Is responsible for adherence to applicable program requirements specified in the award.
  • Uses, in accordance with its agreement, the funds to carry out work for a public purpose specified in the authorizing statute.

Characteristics indicative of a procurement relationship between the prime sponsored program entity and a contractor are when the entity receiving the flow through funds:

  • Provides the goods and services within its normal business operations (for example a consulting company).
  • Provides similar goods or services to many different purchasers.
  • Operates normally in a competitive environment.
  • Provides goods or services that are ancillary to the operation of the federal program.
  • Is not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply for other reasons


Other universities and most nonprofits are not consultants – their missions are teaching, research, outreach, community service... not to provide goods and services. So, they are most often subrecipients.

For more information, consult 2 CFR 200.22