A Sub-recipient (SR) is an organization/entity engaged by a Principal Recipient (PR) to carry out programme activities that are part of a Global Fund grant. Taking into account that UNDP-managed Global Fund grants are implemented under Direct Implementation Modality, an SR is also referred to as a ‘responsible party’ (RP), while UNDP is the ‘implementing partner’ (IP).
UNDP classifies SRs into three categories:
- Government entities;
- Civil society organizations; and
- United Nations agencies.
UNDP’s selection and capacity assessment procedures vary according to the SR category.
Sub-recipients versus Private Contractors
Private contractors may also provide services in the implementation of a Global Fund programme, but private contractors are not SRs and cannot be engaged as such. Engagement of private contractors is described in detail in the UNDP Programme and Operations Policies and Procedures (POPP). Table 1 below can be helpful in identifying whether an entity is an SR or a private contractor.
When it is not clear whether an entity should be contracted as an SR or a private contractor, the UNDP Country Office (CO) consults with the Global Fund/Health Implementation Support Team.
Type of organization
· Government entity
· Civil society organization (CSO)
· United Nations agency
· Commercial entity
· Private company/business
· Provider of professional services
Type of activity
· Substantive development activities that require a substantive developmental approach: activities that lead directly to development outcomes and require selection of like-minded, non-commercial institutions
Specific project inputs that do not require a substantive developmental approach: services that do not directly lead to development outcomes typically sold in the open market and provided by commercial non-development entities
Example of activity
· HIV counselling and testing; TB and malaria testing
· Community development
· Care of people living with HIV
· Behaviour change communication
· Manufacture of goods
· Sale of goods
· Facilitation of the procurement of goods
· Innovation or delivery of services that is not directly tied to programme outcomes (e.g. provision of workshop services such as venue, meals, translation)
|Values and vision||Share UNDP’s development values and vision||Do not necessarily share UNDP’s development values and vision|
|Availability||Interventions/services are not available in the open market||Services or goods are readily available and traded in the open market|
Questions and answers:
Question: UNDP wishes to engage the services of an organization to distribute large numbers of insecticide-treated nets; should this be an SR or a private contractor arrangement?
Answer: It depends on the actual service to be provided:
- If the service involves delivering the insecticide-treated nets directly to beneficiaries, then behavioural change communication is a critical component of the activity and this should be contracted as an SR arrangement.
- If the service is simply the delivery of the insecticide-treated nets to health facilities, and the health facilities will be responsible for providing the nets to beneficiaries, this could be contracted through a private contractual arrangement providing this is the most cost-effective approach and taking the risks into account.
Organizations included in the Consolidated United Nations Security Council Sanctions List are summarily excluded from becoming SRs because they are on a list of terrorism-linked institutions, established by the Security Council Committee.
Country Coordinating Mechanism membership of Sub-recipients
If an organization is a member of the Country Coordinating Mechanism (CCM) and at the same time wishes to become a grant SR, it should consult the CCM Secretariat to obtain guidance on CCM membership and conflict of interest. In most CCMs, SRs can continue to act as CCM members, as long as they disclose the potential conflict of interest (please see item 6 in the Global Fund Guidelines and Requirements for CCMs), and do not vote on any decisions that affect them. However, since an organization cannot provide effective oversight of itself, SRs are usually not members of the CCM Oversight Committee. In the case of potential conflicts of interest when identifying or contracting SRs, UNDP COs should consult the Global Fund/Health Implementation Support Team.
As PR, UNDP is responsible for identifying and selecting SRs. Although the Global Fund and the CCM cannot determine which organizations are selected as SRs, it is good practice to keep the CCM informed of the SR selection process. The SR selection process should be detailed, transparent, open and fully documented. 
There are two possible procedures for selecting SRs, depending on the type of SR required:
- UNDP identifies government entities and United Nations agencies as potential SRs exclusively through a direct programmatic engagement.
- UNDP identifies CSOs through either a UNDP direct programmatic engagement or a UNDP competitive procurement engagement.
Direct Programmatic Engagement
This approach is used only for the following entities:
- All government entities;
- United Nations agencies: in certain circumstances they may be asked to serve as SRs to provide technical support to grant implementation in line with their organization’s expertise and mandates; and
- Civil society organizations (CSOs)
- If the CSO in question is named as SR in a grant proposal submitted by the CCM to the Global Fund, and UNDP has assessed the entity as having the programmatic and operational capacity to take on the SR role. Also, a CSO can be engaged directly if it was a former SR or PR when there is a transfer of the PR role from another PR to the UNDP CO.
- If the CSO has not been named in the grant proposal and the CO wishes to select it through the direct engagement modality, the CO provides a justification to UNDP Global Fund/Health Implementation Support Team. After analysis of specific circumstances described in justification, the UNDP Global Fund/Health Implementation Support Team might authorize the direct engagement. Nevertheless, such direct engagement is still subject to a positive capacity and value for money assessment. The value for money (VfM) assessment is conducted by UNDP CO and evaluated and authorized by the UNDP Global Fund/Health Implementation Support Team.
Entities that qualify for direct programmatic engagement are not required to undergo a formal competitive selection process under UNDP procurement rules and procedures with approval from the Contract, Assessment and Procurement Committee (CAP)/Regional Advisory Committee on Procurement (RACP)/Advisory Committee on Procurement (ACP). However, if the UNDP CO deems that there are alternatives to the entities so named, it is entitled to undertake a competitive procurement selection process. The naming in the funding request; former SRs/PRs when there is a transfer PR role or authorization of the entities based on specific circumstances are the only cases in which CSOs are engaged directly. For direct engagement, a programming decision of the Local Project Appraisal Committee (LPAC) should be made prior to engagement. For all other cases, the engagement is subject to procurement processes.
Figure 1. Selecting Government and UN Agencies by Direct Engagement
Figure 2. Selecting CSOs by Direct Engagement
Competitive Procurement Engagement
UNDP COs should use UNDP’s competitive procurement process to select a CSO as an SR in the following cases:
- There is no CSO named in the funding request;
- The CSO is not a former SR or PR;
- The CSO is not exceptionally authorized by UNDP Global Fund/Health Implementation Support Team to go through direct engagement modality; or
- The UNDP CO deems it appropriate to use a competitive process.
The competitive process begins with developing detailed terms of reference for the intended scope of work. Proposals are then solicited through either a Request for Quotation (RFQ) or a Request for Proposal (RFP), depending on the total amount of the activity/proposal. The competitive selection processes required by UNDP are fully set out in the UNDP POPP.
In 2015 UNDP published a policy for engaging NGOs/CSOs through competitive and non-competitive procurement modalities. The COs can use these modalities in accordance with the guidance outlined in the policy. However, for non-competitive procurement engagement based on the assessment of NGOs’/CSOs’ collaborative advantage, the COs are requested to complete the value for money assessment in the form and substance as it is done for direct programmatic engagement with the VfM. This specific requirement serves as a risk mitigation instrument for engagement without competitive selection. The VfM assessment, along with the other corresponding documents as described in the policy for collaborative advantage modality, should be evaluated and recommended for approval by the evaluation panel appointed by the CO’s senior management. The cumulative thresholds as well as review and approval of Procurement Review Committees (CAP, RACP, and ACP) must apply for all procurement engagement modalities as per the policy.
It is also useful for UNDP COs to hold a tender consultation meeting with all potential SRs and organizations working with key populations to present the Global Fund programme, and answer and clarify questions and/or concerns. It is best practice that meeting minutes are distributed to all attendees and posted on the UNDP CO website.
UNDP should advise potential SRs to review the CCM concept note before completing their quotation/proposal and to visit the Global Fund website to review documents relevant to their application. Proposals in response to the RFQ or RFP should include a work plan and budget as part of the proposal.
 For the purposes of this classification, this includes: non-governmental organizations (NGOs), faith-based organizations (FBOs), community-based organizations, community groups and academic institutions.
 Please refer to Global Funds Core Operational Policy Note on Additional Safeguards Policy (24 July 2015), for the Global Fund and CCM Role in an ASP Country.