SubContractors

SUBCONTRACTORS (6591)

Contractors - A contract is for the purpose of obtaining goods and services for the non-Federal entity's own use and creates a procurement relationship with the contractor. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the contractor:

(1) Provides the goods and services within normal business operations;

(2) Provides similar goods or services to many different purchasers;

(3) Normally operates in a competitive environment;

(4) Provides goods or services that are ancillary to the operation of the Federal program; and

(5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons.

(6) ACC employees cannot be paid as subcontractors. All employees must be paid through payroll.

Use of judgment in making determination between Subrecipient designation or Subcontract designation

In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a sub-recipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract.

Note: The Subcontractor object code is 6591

• A contract or Memorandum of Understanding (MOU) is required in order to pay a subcontractor. The contract, generally, will be more specialized and more specific than what is generally seen in Service Agreements.
• In the case of grants, costs for services rendered prior to the creation of an agreement could be disallowed completely and flagged during the audit.
• Grant contractors cannot be paid at a higher rate than ACC world normally pay for similar non-grant contractors.
• No payments will be approved unless the vendor's application and W-9 have been received in the Purchasing department.

• Subcontractor invoices (Those that are tied to a PO or BPO number in ACC's purchase system) can be approved by the budget authority and grant accounting, and submitted directly to Accounts Payable.
  • If the grant proposal / budget identifies an individual or organization with which ACC will subcontract, it is important to make sure that the individual / organization is not listed as Debarred or Suspended. It is wise to check the SAM.GOV website prior to submitting the grant proposal. Go to https://www.sam.gov and click on “Search Records” button on the right side of the screen. Enter the individual’s or organization’s name and click “search.”
  • Blanket PO for subcontractors will be tracked using the grant tracking spreadsheet to ensure the total invoices do not exceed the amount of the agreement, or the amount budgeted in the grant.

Contract administration is managed through ACC's Purchasing Department. Additional information on contracts can be found at http://www.austincc.edu/offices/contracts-administration.