Form 407
V20121102
Lower-Tier Agreements Under An Assistance Agreement
Checklist for Vendor Versus Subaward 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 subaward
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 subaward. 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
5
Vendor
A) There is no Principal
Investigator listed for the
lower-tier organization.
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
is responsible and liable for
delivering a specific outcome
or result from its efforts.
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.
Subaward
B) A Principal Investigator is
identified for the lower-tier
organization.
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) determined its
objectives.
B) The lower-tier organization is
responsible and liable for
working towards its delegated
objectives and scope of work
to the best of its ability; those
efforts may not result in a
specific outcome or result
being achieved.
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.
Comments (Attach sheets if necessary)
6
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.
7
10
A) The lower-tier organization:
provides the goods and
services within its normal
business operations,
provides similar goods or
services to many different
purchasers, and operates in
a competitive environment.
A) The lower-tier organization
does not have discretion
relative to making changes
to the objectives, specific
aims, or scope of work with
which it has been tasked.
A) A vendor contract shall be used in all cases where the lower-tier
organization will have an opportunity to earn a profit or fee.
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:
11
Identify level of oversight exercised by HJF (Daily, Weekly, Monthly, or Annually):
12
Based on my best judgment the agreement with the lower-tier entity should be classified for accounting purposes as:
A) Vendor Contract _____
B) Subaward_____
8
9
10
Buyer: Concur _____
B) The lower-tier organization
will provide
deliverables/reports directly to
the government, OR the
lower-tier organization will
provide deliverables/reports
to HJF and HJF will provide
the deliverables as is to the
government.
B) The lower-tier organization
does not: provide the goods
and services within its normal
business operations, provide
similar goods or services to
many different purchasers,
and operate in a competitive
environment.
B) The lower-tier organization
has some discretion relative
to how the objectives, specific
aims, or scope of work are
carried out.
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