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Michael11

Awarding a grant under a prime contract

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can it be done? They're assisting us in completing our prime deliverables but there won't necessarily be a profit motive in their agreement. Is there a problem using grant terminology under a prime contract award?

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I would caution on using a grant instead of a contract or subcontract and recommend talking to folks who are knowledgeable in the grants field. Additionally, I recently had to do some research on the question if GAO will hear a protest on the award of a grant. I found that according to GAO an interested party can protest to GAO. In GAO Protest Decision B-406738 et al., August 15, 2012, GAO states:

"...we will review a timely protest asserting that an agency is improperly using a cooperative agreement or other non-procurement instrument, where a procurement contract is required, to ensure that an agency is not attempting to avoid the requirements of procurement statutes and regulations..."

Here's a link to the GAO Decision that contains additional information for review:

http://www.gao.gov/assets/600/593742.pdf

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I don't know of anything in the contract that specifically prohibits it - we wouldn't be calling it a grant to avoid calling it a subk but because the organization is a non profit accustomed to performing grants. To me, grants have the connotation of just giving away free money without the guarantee or requirement to complete certain deliverables. Which, as the prime, would be a reason I'd want to call it something else. But it seems they will perform a critical support role to the project so I'm optimistic we'll get the govt a good return on their investment as they are aware of the possibility of issuing a grant. I know there is a grants world and a contract world but didn't know if the nature or terms of a grant would be prohibited from being awarded under a contract. I'll take a look at that GAO decision thanks.

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Thoughts -

Are you saying the non-profit that you are intending to use like a subcontractor does not do contracts themselves for needs the non-profit has? You would think they do and have some knowledge of what a "contract" is.

So just write the document it like a grant but everywhere it says grant change the word to "contract". Likewise in drafting my first effort I would also drop any reference to grants and cooperative agreements acts. Then I would give it to the non-profit and say "what do you think, do we have a meeting of minds?" and if they say yes I would finalize and sign the "contract".

Probably vet the draft with my own legal counsel too for any advice.

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To me, grants have the connotation of just giving away free money without the guarantee or requirement to complete certain deliverables.

You really need to confer with someone who is more informed on grants since I don't believe the above statement is accurate. Recently, OMB has issued new guidance at 2 C.F.R. 200 titled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Here's a link for additional information:

https://cfo.gov/cofar/

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Not-for-profit entities perform contracts all the time. They are just subject to a different set of requirements, as policyguy noted in his post of 8:19 AM.

There is no need to use "grant" terminology simply because the performing entity is a N4P. Just award an FFP P.O. using your normal procurement procedures for such actions. You should be fine.

Hope this helps.

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Thanks for all the feedback this is all very good advice. What Help and Culham suggested is very close to what I envisioned. It's my understanding that the COR is the one who has insisted this could be awarded as a "grant" for whatever reason but I would just assume avoid using that terminology. Policyguy I didn't mean for it to sound like I actually think grants are just giveaways without any oversight. I personally just think there's sort of that stigma attached to it. From my perspective I always want to do as much as I can to show best value and that the govt is getting bang for their buck. Someone may see that we've awarded a "grant" and get the wrong idea but maybe that's just me. Again I appreciate the insights.

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The difference between a grant and a contract is by who benefits from it. If the prime/Government benefit from the work then it is a contract. If the public or some other country benefits from th work being done, it is a grant. There are differing procedures but both requrire we get what we pay for and both require oversight and audits. In the past there has been a lot of lax oversight in grants that gave appearance of a give away and that is one reason for the complete rewrite of Government Grant Policies. I don't know about other agencies but our OIG has finally woke up and realized the Government has more money in grants than in Contracts so they are starting to look closer at them. I think the "easy money" days are waning.

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If you think a "grant" wouldn't be a subcontract, you are very wrong. And don't assume that the distinction that FAR 2.101 makes between contracts and grants would apply to private sector relationships.

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The difference between a grant and a contract is by who benefits from it. If the prime/Government benefit from the work then it is a contract. If the public or some other country benefits from th work being done, it is a grant. There are differing procedures but both requrire we get what we pay for and both require oversight and audits. In the past there has been a lot of lax oversight in grants that gave appearance of a give away and that is one reason for the complete rewrite of Government Grant Policies. I don't know about other agencies but our OIG has finally woke up and realized the Government has more money in grants than in Contracts so they are starting to look closer at them. I think the "easy money" days are waning.

Boof,

I think you are trying to distinguish between grants and procurement contracts. A grant is typically a contract under the law, just not the type of contract regulated by the FAR.

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Don,

Agree. I am too Government centric I guess.

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