34 CFR § 75.708 - Subgrants.
(a) A grantee may not make a subgrant under a program covered by this part unless authorized by statute or by paragraph (b) of this section.
(b) The Secretary may, through an announcement in the Federal Register, authorize subgrants when necessary to meet the purposes of a program. In this announcement, the Secretary will -
(1) Designate the types of entities, e.g., State educational agencies, local educational agencies, institutions of higher education, and nonprofit organizations, to which subgrants can be awarded; and
(2) Indicate whether subgrants can be made to entities identified in an approved application or, without regard to whether the entity is identified in an approved application, have to be selected through a competitive process set out in subgranting procedures established by the grantee.
(c) If authorized under paragraph (b) of this section, a subgrant is allowed if it will be used by that entity to directly carry out project activities described in that application.
(d) The grantee, in awarding subgrants under paragraph (b) of this section, must -
(1) Ensure that subgrants are awarded on the basis of an approved budget that is consistent with the grantee's approved application and all applicable Federal statutory, regulatory, and other requirements;
(2) Ensure that every subgrant includes any conditions required by Federal statute and executive orders and their implementing regulations; and
(3) Ensure that subgrantees are aware of requirements imposed upon them by Federal statute and regulation, including the Federal anti-discrimination laws enforced by the Department.
(e) A grantee may contract for supplies, equipment, construction, and other services, in accordance with 2 CFR part 200, subpart D - Post Federal Award Requirements (2 CFR 200.317-200.326, Procurement Standards).