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  Federal Government Agreements

Are there different types of agreements awarded by the Federal Government?

Yes. The Federal Government acquires services and supports activities through two types of agreements: (1) contracts and (2) financial assistance agreements. The agreements are completely different and covered by different rules and regulations.  The type of agreement awarded by the Federal Government depends on the nature of the services being solicited.

What is a contract?

A contract is used for acquisitions by the Federal Government, i.e., using appropriated funds for procuring of supplies or services by and for the use of the Federal Government.

What regulations control contracts?

Contracts are governed by the Federal Acquisition Regulations (FAR) which are uniform contract principles, terms and conditions that apply to all federal contracts. Each agency is allowed to supplement the FAR with agency-specific requirements. Therefore, in any contract you would expect to see a combination of clauses from the FAR and DEAR (Department of Energy); DFAR (Department of Defense); EPAAR (Environmental Protection Agency); etcetera, as the case may be. These agency regulations are required to go through a formal rule-making process so the public has an opportunity to comment. However, you will also see some clauses that agencies use that have internal numbers and that have not been published. These clauses normally address local administrative requirements of the agency; as, for example, where to send the invoice.

All contracts should have the same format as outlined in the FAR (sections A through J). There should always be a statement of work (SOW) that defines the work activities as an attachment in the J. section. Sections K, L, and M appear only in solicitations as they are specific instructions on certifications (K), preparation of the proposal (L), and evaluation criteria for the proposal (M). These sections drop off when the award is made.

What is a financial assistance agreement?

A financial assistance agreement is used when the primary purpose is to provide support in furtherance of a public purpose.  There are two types of financial assistance agreements: (1) grants and (2) cooperative agreements.

What is the difference between a grant and a cooperative agreement?

The difference is in the amount of direction and control of the activities by the Federal Government. If the Federal Government wants to interact with the awardee and be involved in the research, then a cooperative agreement should be used. If little interaction/direction is needed, a grant is awarded.

What regulations control financial assistance agreements?

Each agency has promulgated its own regulations that control financial assistance agreements. Grants and cooperative agreements are not subject to the FAR unless the individual agency has adopted FAR clauses as part of their regulations. You will see many agencies adopt their patent and data FAR supplement clauses as part of their financial assistance regulations. The Office of Management and Budget has Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other non-profit organizations (OMB Circular A-110) that the university follows. Again, remember that there may be other specific agency requirements in addition to these. 

You will need to check each agency’s requirements, especially in determining what approvals are needed for subcontracting and what clauses to flow down to subcontractors.

 

 

Last update: September 25, 2002