Form 406
V20121102
Lower-Tier Agreements Under a Contract
Checklist for Vendor Versus Subcontract Determination (for Accounting Classification)
Lower-Tier Organization:
HJF Cost Code:
Requestor Name and Contact Information:
Purpose: In making the determination of whether a Lower-Tier Agreement should be classified as a
subcontract or a vendor contract for accounting purposes, the substance of the relationship is more important
than the form of the agreement. In very basic terms, if HJF is acting as a pass-through entity, the Lower-Tier
Agreement shall be classified as a subcontract. If HJF is not acting as a pass-through entity, the Lower-Tier
Agreement shall be classified as a vendor contract. The following checklist shall be used as a tool to help
identify the substance of the relationship. It is not expected that all characteristics will be present and
judgment should be used in making the determination.
Instructions: Select either A or B for each numbered row (if applicable). Selections must be supported by
comments.
1
2
3
4
Vendor
A) The work performed or
supplies/services provided
by the lower-tier
organization are secondary
and subordinate to, or
indirectly support, HJF’s
performance of the scope of
work and objectives of the
prime award.
A) HJF (often times in
collaboration with
government program
personnel) has determined
what it requires from the
lower-tier organization in
terms of specifications or a
statement of work.
A) The lower-tier
organization’s performance
is not measured directly
against whether the
objectives, specific aims or
statement of work of HJF’s
prime award are met.
A) The lower-tier organization
will provide
deliverables/reports that will
be modified or integrated by
HJF in the final deliverable
under HJF’s award.
Subcontract
B) The work performed or
supplies/services provided
by the lower-tier
organization directly fulfills
elements of HJF’s scope of
work and objectives under
the prime award.
B) The lower-tier organization
(solely or in collaboration
with HJF/government
program personnel) has
determined its objectives.
B) The lower-tier organization
has its performance
measured directly against
whether the objectives,
specific aims or statement
of work of HJF’s prime
award are met.
B) The lower-tier organization
will provide deliverables/
reports directly to the
government, OR the lowertier organization will
provide deliverables/
reports to HJF and HJF will
provide the deliverables as
is to the government.
Comments (Attach sheets if necessary)
5
6
A) The lower-tier organization is responsible for providing labor
that supplements and is used interchangeably with the program’s
regular work force (i.e., HJF or government personnel) under the
same supervisors (as opposed to supervisors of the lower-tier
organization). In other words, the lower-tier organization is
responsible for providing personnel who will then be directed and
supervised by the program and the lower-tier organization is not
responsible for accomplishing the work assigned to its personnel
on a day-to-day basis by program personnel.
List the percentage (%) that this action represents to the overall HJF award:
7
Identify level of oversight exercised by HJF (Daily, Weekly, Monthly, or Annually):
8
Based on my best judgment the agreement with the lower-tier entity should be classified for accounting purposes
as :
A) Vendor Contract_____
B) Subcontract_____
Buyer: Concur _____
Non concur _____
Buyer:
Signature
Print Name
Date
Signature
Print Name
Date
Signature
Print Name
Date
Signature
Print Name
Date
Signature
Print Name
Date
Buyer’s Supervisor:
Additional Approvals (as necessary):
Vice President for
Acquisitions
Office of General
Counsel
Senior Vice
President & CFO
6720A Rockledge Drive · Suite 100 · Bethesda, Maryland 20817 · Telephone: 240-694-2000 · Fax: 240-694-3100 · www.hjf.org