When establishing partnerships, Head Start and Early Head Start grantees must determine whether the partner functions as a contractor or subrecipient. Subrecipients are subject to monitoring against the compliance requirements of the federal program. Contractors are not. This resource summarizes the determination requirements at 45 CFR § 75.351 and will be helpful to grantees who partner with child care and other entities.
| Contractor | Subrecipient |
| (1) Provides goods and services within normal business operations. | (1) Determines who is eligible to receive what federal assistance. |
| (2) Provides similar goods or services to many different purchasers. | (2) Has its performance measured in relation to whether objectives of a federal program were met. |
| (3) Normally operates in a competitive environment. | (3) Is responsible for programmatic decision-making. |
| (4) Provides goods or services that are ancillary to the operation of the federal program. | (4) Is responsible for adherence to applicable federal program requirements specified in the federal award. |
| (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. | (5) In accordance with its agreement, uses federal funds to carry out a program for a public purpose specified in the authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity. |
Last Updated: June 23, 2023