Subrecipients and suppliers (also called “contractors” or “vendors”) are budgeted and managed differently under UC Berkeley policies and federal regulations. When involving a collaborator from an outside organization in you proposal, failing to categorize that outside organization properly can cause processing delays, unexpected costs, and misunderstandings between UC Berkeley and the outside organization.  This is because:

  • UC Berkeley charges indirect costs differently against subrecipients vs. suppliers.
  • Suppliers will refuse to accept a subaward agreement, because they cannot comply with terms and conditions intended for subrecipients.
  • Subrecipients will refuse to accept a supplier agreement, because such agreements do not give them rights (such as to intellectual property) to which they are entitled under a subaward.

The distinction between a subrecipient and a supplier is not always clear cut. An outside organization may act as a supplier under one project, but a subrecipient under another. This is particularly true of for-profit organizations that most often perform as suppliers but can act as subrecipients under certain conditions. The determining factor lies in the outside organization’s Statement of Work for any given project.

This Subrecipient vs. Supplier Wizard will help you evaluate an outside organization’s Statement of Work. By answering ten questions, you can get an indication of how to categorize the outside organization in your proposal.  It will also help tell you which UC Berkeley office should be involved in managing the transaction with the outside organization, if the sponsor funds your proposal.

The final determination about whether an outside organization should be treated as a subrecipient or a supplier will be made by the Sponsored Projects Office (SPO), after you submit your Subaward Request, and will be based on the outside organization’s Statement of Work. If SPO concludes that the outside organization’s Statement of Work is that of a supplier, SPO will consult with Supply Chain Management before making a final determination, and may also consult the UC Berkeley principal investigator (PI) during that process.

For a more thorough overview how to distinguish a Subrecipient from a supplier consult Supply Chain Management’s Subrecipient vs. Supplier Determination Sheet.

Not sure who can help with your contracting needs? The Decision Support Tool for Contracts will help you determine which office is authorized to develop and execute the agreement you need to conduct business in support of UC Berkeley’s mission of teaching, research, and public service.

Question 1

Will you be sending funds out to another UC campus or an outside organization?

If no: See the “Who Does What? Guide” on the Business Contracts and Brand Protection (BCBP) website

If yes: Go to the next question.

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