Federal Award Mechanisms
Grants, cooperative agreements, and contracts are mechanisms by which the Federal Government moves money, property, and services into the public. Grants, along with cooperative agreements, fall under an award type called “Assistance.” Assistance awards support a public purpose and come in a variety of types (project grants, discretionary grants, cooperative agreements, community development block grants, and so on). Contracts, on the other hand, are for acquisition by purchase, lease, or barter of property or services for the direct benefit or use of the Federal Government.
The Federal Grants and Cooperative Agreement Act of 1977 distinguishes between grants, cooperative agreements, and contracts, it also directs the Office of Management and Budget (OMB) to issue guidance to promote consistent and efficient use of these award types.
Grants vs. Cooperative Agreements
Both grants and cooperative agreements are assistance mechanisms, both provide funds to support a public purpose, and both are governed by the terms of the award, the sponsoring agency, and Uniform Administrative Requirements (aka, Uniform Guidance).
Under a grant agreement, no substantial involvement is anticipated between the federal agency and the recipient during the performance. With a cooperative agreement, substantial involvement is anticipated between the awarding agency and the recipient. For example, when an investigator writes a grant proposal, she or he is generating the idea, the objectives to be met, and the scope of work to be done. With a cooperative agreement, the issuing agency might pre-determine the scope of work they want to accomplish.
Cooperative Agreements vs. Contracts
The fact that the sponsoring or issuing agency might be involved with the program is confusing for some because all a sudden a cooperative agreement starts to look like a contract. Typically with a contract, the issuing agency exercises a higher level of control over the work being done as they are purchasing goods or services.
Side-by-Side Comparison
The following table compares award mechanisms including purpose, guidance, solicitation types, and where to find each.
Grants | Cooperative Agreements | Contracts | |
Purpose/Mechanism | To provide funds to support a public purpose/Assistance | To provide funds to support a public purpose/Assistance | To purchase goods or services/Procurement |
Terms & Conditions | Governed by terms of the grant agreement, sponsoring agency, and Uniform Guidance (UG) | Governed by terms of the cooperative agreement, sponsoring agency, and Uniform Guidance (UG) | Governed by the terms of the contract and the Federal Acquisition Regulations (FAR) |
Where to find solicitations | Catalog of Federal Domestic Assistance (CFDA), Grants.gov, and agency websites | Catalog of Federal Domestic Assistance (CFDA), Grants.gov, and agency websites | FedBizOpps (FBO.gov), state procurement websites, and agency websites |
Solicitation Types (typical) | Program Announcement (PA) or Funding Opportunity Announcement (FOA) | Request for Application (RFA) | Request for Proposals (RFP), Quotes (RFQ), or Bids (RFB) |
Sponsor involvement in scope of work | None | Little to substantial | Substantial |
Flexibility in the scope of work | Some | Little | Very little |
Which Mechanism Should I Use?
The sponsoring or issuing agency will determine which mechanism is applicable depending on the rules and regulations surrounding certain pots of money and the purpose or intention of the program.
The important things to understand are:
- There are true differences between assistance awards (grants and cooperative agreements) and contracts in terms of purpose, regulations, and requirements- understand the differences and ensure the issuing agency is using the correct mechanism; and
- Always be aware of the type of award mechanism under which work is being conducted.