Subcontracts and Consultants

External entities may act as consultants or recipients of subcontracts. Subcontract relationships are different from purchase or service agreements or work-for-hire relationships. 

  • Consultants provide services as vendors.
  • Subcontracts are agreements to carry out a scope of work with intellectual property rights and responsibilities adhering to the subawardee institution.

Whether an outside entity is a consultant or a subcontract affects the project budget for federal awards. 

  • Consultant fees provide full overhead.
  • Subcontracts provide full overhead to the prime institution (the one issuing the subaward) on the first $25,000 of direct expense only for the period of the award.


A consultant is an independent contractor, typically an expert in the field, who is not an employee of the Institute and is normally paid as a vendor. 

When budgeting:

  • List each consultant; their specialty or service to the project; and their daily, weekly, or monthly rate of reimbursement. They may be reimbursed for services as well as travel and other miscellaneous expenses
  • Show the consultant's total projected cost on the project. 
  • In the proposal, include a letter of collaboration and the consultant's curriculum vitae.
  • Dr. James Brown is an authority on statistical analysis of cross-cultural social studies. He will conduct an independent analysis of our interview data to assure that our methods and conclusions are consistent with rigorous statistical standards. Brown will also participate in our annual research group meeting to advise on improving subject recruitment and retention concerns.


If your proposal includes a subaward, include a detailed budget with direct and F&A costs for the subawardee (typically in the same budget format as the MIT budget). 

See RAS Subawards Overview and Specific Guidelines for comprehensive information on preparing and submitting subaward proposals.