Characteristics of a Vendor vs. Subcontractor

AGREEMENT IS WITH An entity, usually a university A business An Individual with a specialized skill
RICE ISSUING OFFICE OSR Issues a subcontract with flow down of terms in prime award; research collaboration detailed in proposal Procurement issues a PO which includes OMB A-110, Attachment A provisions as needed OSR issues a Professional Services Agreement (PSA) with OMB A-110 addendum (for PSAs paid from R funds)
SELLS TO MANY OR A COLLABORATOR Generally provides a portion of the sponsored award because an intellectual contribution is required (programmatic decision making) A business An individual with a specialized skill
OWNERSHIP OF IP Shared ownership of intellectual property created during the conduct of the research No ownership of Intellectual Property Work made for hire: Rice owns any IP created/explicit terms incorporated to this effect
PI/PD OR SERVICE PROVIDER/SELLER Has a Principal Investigator or Project Director May have a project manager/typically no specified PI Typically an individual with a specialized skill
CONTRACTUAL MECHANISM [COST REIMBURSEMENT VS. FIXED PRICE] Agreement refers to scope of work and references prime award/ level of effort is identified for the key personnel and a line item budget is specified Agreement refers to project specifications Agreement includes a very specific statement of work and deliverables
PUBLICATION Publication encouraged as part of the collaboration Publication unlikely Generally publication is not likely/ Rice PI review is stipulated/ Agreement stipulates work made for hire
PAYMENT TERMS Determines how to use the financial support (funding) provided by the subagreement; most typically a cost reimbursement agreement; less often a fixed price agreement. Financial assistance not provided; entity is paid negotiated amount (fixed price/ fixed fee agreement) Usually a fixed price agreement
ACCOUNTABILITY Is accountable for the use of funds provided Only accountable if agreement is cost reimbursement Only accountable if agreement is cost reimbursement
COMPETITIVE BID OR SOLE SOURCE In many cases the subrecipient is the sole source of the deliverables/ typically a non-profit entity Operates in a competitive environment In many cases the consultant is the sole source capable of performing the required service/ the service is the consultant’s business
PROGRAMMATIC RESPONSIBILITY The deliverables provided are central to the award’s purpose Generally provides goods and services that are ancillary to the operation of the program The deliverables provided are necessary to conduct the research
SUBJECT TO INCORPORATION OF TERMS AND CONDITIONS IN PRIME AWARD Has responsibility to adhere to applicable Federal program compliance requirements [i.e. flow down of prime award terms and conditions] Is not subject to the compliance requirements of the program such as effort reporting, rebudgeting and allowability rules Responsibility to adhere to Federal program compliance [i.e. human subjects or animal protocol] may be required
PERFORMANCE MEASURE Has its performance measured against whether the objectives of the Federal program are met Has performance measured against quality of goods or services delivered Performance is based deliverables
SUBJECT TO OMB A-113 Agreement subject to audit and possibly OMB A-133 if the subrecipient spends $500,000 or more in a year in Federal awards Contract does not have audit clause No audit clause, depending upon prime award
EFFORT CERTIFICATION Subrecipient required to certify that work is completed in accordance with the terms and conditions of the award and Federal rules and regulations Vendor generally not required to certify effort, although Davis Bacon may apply Payment based on a schedule of deliverables or hours/days worked
INVOICE FORMAT Invoices required to be in Rice’s format Invoices are in the vendor’s format, not Rice’s format Invoices are required to contain information on hours/days worked and deliverables and other provisions set forth in the PSA.
ENTITY IS IDENTIFIED IN PROPOSAL Generally needed for a subrecipient and the subrecipient is identified in proposal; prior approval is typically required to add a subcontractor if added after the award is issued Generally vendor is not identified in proposal, although documentation for proposed equipment costing more than $25,000 must be available Generally the need for the consultant is identified in the proposal
SPONSOR APPROVAL REQUIRED Prior approval typically required to add a subrecipient not included in the proposal Sponsor approval may be required for purchases not identified in award budget if they are more than 10-25% of the total award Need for consultant typically identified in the proposal; addition of a consultant after the award is made may require sponsor approval if it entails a change in scope
F&A Generally, F&A recovery by Rice only on the first $25,000 Generally, no F&A on equipment, while other purchases are subject to full F&A Generally, F&A recovery on full amount of professional services