Does the idea of decoding grant management make you feel unsettled?

(Maybe even a little anxious as you pour through all the grant regulations?)

Since the founding of the United States, federal grants have historically been seen as a gift with a few conditions thrown in.

The Federal Government didn’t seem to take the concept of performance and accountability too seriously.

This “pay, then maybe chase” view is no longer the rule.

We have entered a new time in the evolution of grant management, with the OMB Uniform Guidance changes.

Some are even calling it “The New Age of Accountability.”

In the past, making an effort may have been good enough, but now it is performance that matters.

And the regulations have a role to play in spelling out everyone’s roles and responsibilities.

Let’s look at the first step in decoding grant management by understanding what grant money can be used for and the main types of federal awards.

What Can Federal Grant Money Be Used For?

An “award” is financial assistance from the federal government that supports a public purpose. An award includes grants and other types of agreements.

Perhaps the “award” terminology will make more sense when we look at what an award is not:

• An award is not technical assistance. (Remember, an award must include financial assistance.)
• An award is not a loan, loan guarantee, subsidy, or form of insurance.

Here are some real-life examples of things that federal grant money is used to support:

• Supporting disaster relief by establishing and sustaining Metropolitan Medical Response Centers, also called MMRCs
• Providing services to help and retrain displaced workers, such as those in the auto industry
• Lowering infant mortality rates by developing body warmers for premature infants

These public purposes can be accomplished with various types of grants and federal award instruments.

What is a Federal Grant-Main Types of Federal Awards

The federal administrative requirements in the new Uniform Guidance cover three main types of award instruments:

• Grants (including Fixed Amount Awards)
• Cooperative Agreements
• Contracts

As a general rule, the awarding agency determines the type of award and the level of their involvement before releasing the request for proposal.

Let’s look at the similarities and differences between these award types.

Federal Grant vs. Cooperative Agreement

Both grants and cooperative agreements give federal financial assistance.

Both have a principal aim to accomplish a public purpose of support or stimulation as authorized by federal statutes.

However, a cooperative agreement differs from a grant in that the awarding agency has far more involvement in the project or program funded by the cooperative agreement than in the project or program funded by a grant.

Federal Grant vs. Contract

The area of contracts can be a confusing area for both agencies and recipients.

In many respects, an award contract could look similar to a procurement contract but be managed under award rules rather than procurement regulations.

When a contract falls under award rules, there are more stringent requirements to follow than when the contract falls under procurement rules.

Generally, contracts are used by a non-federal entity to purchase property or services needed to carry out the project or program under a federal award, such as buying a box of pens or servicing the office copier.

But sometimes, a pass-through entity with use a contract for a subaward to carry out part of a federal award.

And occasionally, the funding agencies will use contracts to carry out what seems to be a grant for all practical purposes.

When a contract is used for carrying out a public purpose, such as researching the effects of pollution or reducing the number of DUI drivers on the road, the contract would be managed under the higher standard of award rules instead of procurement rules.

Which Grant Rules to Follow?

Determining which rules to follow boils down to two things:

• First, how does the funding agency view the relationship?
• Secondly, is the contract providing just goods and services, or does it anticipate carrying out part of the scope of work of the award?

In other words, the nature of the work and the funding agency’s view of that relationship are most important in managing the work.

If you have questions about whether a contract is administered under the regulations for grants and cooperative agreements or federal procurement laws and regulations, please get in touch with your contracting officer or agency representative.