---
title: "What is a subaward versus a contract under federal grant rules? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources."
canonical: https://www.m-i-n-d.ai/minds/federal-grants/subaward-vs-contract-federal-grants
jurisdiction: "US Federal"
last_verified: 2026-08-28
license: CC BY 4.0 — https://creativecommons.org/licenses/by/4.0/
attribution: "Source: MIND (m-i-n-d.ai)"
---

# What is a subaward versus a contract under federal grant rules? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources.

Under 2 CFR Part 200, a subaward is an award provided by a pass-through entity to a subrecipient to carry out part of a Federal program, whereas a contract is a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal award. Subrecipients carry out portions of a federal program; contractors provide goods or services through procurement. Distinguishing the two is required under § 200.331.

## Details / How it works

A **subaward** transfers Federal funds from a pass-through entity (a recipient or subrecipient) to a subrecipient to carry out part of a Federal program. A **contract**, by contrast, is a procurement instrument used by a recipient or subrecipient to acquire property or services under a Federal award. The two are mutually exclusive legal instruments with different compliance consequences.

## Numbers & thresholds

| Feature | Subaward | Contract |
|---|---|---|
| Purpose | Carries out part of a Federal program | Procurement of property or services |
| Issued by | Pass-through entity | Recipient or subrecipient |
| Recipient type | Subrecipient | Contractor |
| Governing rule | Subaward definition, § 200.1 | Contract definition, § 200.1 |

## Exceptions & edge cases

Federal awards do not include contracts a Federal agency uses to buy goods or services, nor contracts to operate government-owned, contractor-operated (GOCO) facilities. Subrecipient versus contractor determinations are made under § 200.331.

## Sources

- [1] U.S. Government Publishing Office / Office of Management and Budget — 2 CFR 200.1 — Definitions for federal grants Uniform Guidance · https://www.ecfr.gov/current/title-2/section-200.1 · as of 2026-08-28