Along this line, I have a follow-up question. A federal agency is trying to determine for us that a company we are using is a subcontract instead of a vendor. For our purposes, we are required to follow OMB Circular A-133 section ____.210, which is brought into our contract under FAR 52.215-2 and states: Characteristics of a vendor are: This service is provided as part of their normal business operation. They provide a similar service to many different purchasers. They operate in a competitive environment. Their program compliance requirements do not pertain to the service provided. Characteristics of a vendor are: Their performance is measured against meeting the objectives of the program. They have authority for administrative and programmatic decisions. They provide on-going service for the life of the program. They carry out a program of the subrecipient as compared to providing services for a program of the prime recipient. They are responsible for applicable program compliance requirements. The government’s argument is that based on the definition of a vendor in the “Government Contracts Reference Book,” a vendor is only an organization selling goods (as opposed to services) and in this case it is not a simplified acquisition. They have stated because it is a large sum of money, they want us to flow down all of the contract requirements and they want to be able to manage the money more closely than they would be able to if the company was considered a vendor. We would like to follow the OMB Circulars as to not make ourselves an audit risk. The question is: Do government contractors have the authority to tell us what mechanism to use to issue funds from a federal contract, particularly if we feel it goes against our audit regulations?