What is the difference between a grant and a contract? And what in the world is a cooperative agreement?
?} In 1977, Congress clarified the difference in the Federal Grant and Cooperative Agreement Act. The government uses money either to acquire goods and services or to assist other organizations. Accordingly, the rules for ACQUISITION are very different from the rules for ASSISTANCE. Government agencies are required to use a procurement contract as the legal instrument whenever the principal purpose of the agreement is the acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the federal government. An assistance mechanism is to be used whenever the principal purpose of the relationship is the transfer of money, property, services, or anything of value to the recipient to help that recipient accomplish its own purposes. There are two types of assistance mechanisms. A grant is to be used when no substantial involvement is anticipated between the government and the recipient during performance of the contemplated activity. A cooperative agree
