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GPD
Part 2.02: Pre Award - Determining Appropriate Award Instruments
HHS
Transmittal 99.06 (9/14/99)
Part
2 Pre-Award
Section
O2 Determining Appropriate Award Instruments
A. Principles
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Purpose. This Grants Policy Directive (GPD) provides guidance
for determining whether to use a grant, cooperative agreement, or procurement
contract when making an HHS award. It is based on the Federal Grant
and Cooperative Agreement Act (FGCA) of 1977, as amended (31 U.S.C.
6301-08), which specifies the appropriate use of these legal instruments.
It supplements 45 CFR Parts 74 and 92.
This
GPD also provides guidance related to making the determination of
award instrument when the award involves information collection activities
(as defined in the Office of Management and Budget's (OMB) regulations
at 5 CFR 1320, "Controlling Paperwork Burdens on the Public,"
implementing the Paperwork Reduction Act, as amended).
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Scope. The policies in this GPD apply to all HHS programs
and awards.
B. Definitions
The terms "grant" and "cooperative agreement" are
distinguished in certain sections of this GPD. However, in GPDs, in the
HHS regulations at 45 CFR Parts 74 and 92, and in other HHS regulations
affecting grant programs or their administration, the terms "grant"
and "grantee" generally include "cooperative agreement"
and "recipient of a cooperative agreement."
C. Use of Grants or Contracts
The
decision to use a grant or a procurement contract should be based on the
primary purpose of the award and its intended beneficiary in accordance
with the FGCA criteria (as indicated below). In some cases, the specific
circumstances of a program or transaction may require additional analysis
in order to make this determination. In addition, ambiguities may arise
concerning awards to entities which receive both grants and contracts.
Even in these cases, however, the appropriate instrument can be determined
by establishing the principal intent and beneficiary of the award. This
section includes examples of these situations and the rationale for selection
of a particular award instrument.
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Grants and Cooperative Agreements. HHS awarding offices shall
use a grant or cooperative agreement when the principal purpose of the
transaction is the transfer of money, property, services or anything
of value to accomplish a public purpose of support or stimulation authorized
by Federal statute. The primary beneficiary under a grant or cooperative
agreement is the public, as opposed to the Federal Government.
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Contracts. HHS awarding offices shall use a procurement contract
when the principal purpose of a transaction is acquisition, by purchase,
lease, or barter, of property or services for the direct benefit or
use of the Federal Government.
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Examples of Ambiguous Circumstances.
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Funding for conferences may be awarded through grants or by contracts
depending on the nature of the activity and the primary beneficiary.
For example, a conference whose purpose is to exchange and disseminate
information among the public should be funded using a grant. While the
awarding office may benefit from information exchanged at the conference,
the principal intent of the award is to stimulate dissemination of knowledge
to benefit the public. If a conference is initiated by a Federal agency,
funding should be provided under a contract. For example, a conference
to provide specialized training services to grantees which could otherwise
be provided by the Federal agency should be handled by contract. Although
the recipients of the training benefit from it, the principal intent
of the award is for the government to procure training services in lieu
of conducting its own training program, which directly benefits the
Federal agency.
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Evaluations/studies are also types of activities that can be awarded
as either grants or contracts. A study intended to track service benefit
impacts of Federal programs at the State and local level should be funded
using a grant if the primary beneficiaries are the State and local community
programs being studied. However, a study of a specific demonstration
program should be funded by contract if the primary purpose of the award
is to prepare a mandated report on the program for the Secretary to
send to Congress. In the first scenario, while the Federal Government
might benefit from the information obtained from the study, the primary
beneficiaries are the State and local agencies and, ultimately, the
recipient service population. In the second scenario, the report is
for the direct use of the Federal Government.
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Some recipients may receive funds in the form of grants and contracts
for seemingly similar purposes. An example is when contracts are awarded
by a Federal agency to an organization for providing impact assessments
of proposed legal or policy changes on grantee populations. The organization,
however, might also receive grants to conduct demonstration projects.
In the first instance, contracting for the impact assessments is appropriate
since the Federal Government is acquiring the service for its own use.
Grants are a more appropriate funding vehicle in the latter instance.
Although the Federal agency should benefit somewhat from the insights
gained through demonstration projects, the public is the primary beneficiary.
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Statutory Language and Instrument Selection. The statute authorizing
a program or activity may sometimes specify use of an award instrument
seemingly inconsistent with the FGCA or may include language indicating
that a particular relationship is intended. Regardless, the choice of
appropriate instrument should always be determined based on the criteria
identified in the FGCA and reflected in C.1 and 2, unless the provision
requiring the use of a grant, contract, or cooperative agreement indicates
that the restriction is being imposed notwithstanding the provisions
of the FGCA. In that case, the statutory language would prevail.
D. Using Grants or Cooperative Agreements
The
distinguishing feature between a grant and cooperative agreement is that,
under a cooperative agreement, substantial involvement is anticipated
between the awarding office and the recipient during performance of the
funded activity. This involvement may include collaboration, participation,
or intervention in the activity.
The
determination resulting in the choice of a cooperative agreement is largely
one involving "programmatic" considerations as differentiated
from grants management ones. It should be based primarily on whether the
level of Federal involvement under a cooperative agreement will have programmatic
benefits that the recipient would not otherwise have available to it in
carrying out the project. A cooperative agreement should not be used solely
as a means of exercising greater control over a recipient or the project
than would be the case under a grant.
E.
Information Collection and Instrument Selection
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Use of a Grant or Contract. The criteria and principles that
apply to the selection of the appropriate award instrument also apply
when the award involves the collection of information [as defined in
5 CFR 1320.3 (c)]. Consistent with Paragraph C.2. above, a procurement
contract would be the appropriate award instrument when the collection
of information is primarily intended for the use of the Government.
Grants or cooperative agreements may also involve the collection of
information. In these cases, to ensure that OMB approval is obtained
when required (see Paragraph E.2. below), particular attention should
be paid to whether a grant (as opposed to a cooperative agreement) is
the appropriate instrument and, under a grant, to limiting the awarding
office's role in the information collection.
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OMB Approval Requirements for Information Collections. Office
of Management and Budget (OMB) approval is required if a Federal agency
conducts or sponsors a collection of information, as indicated below,
unless the information is collected from nine or fewer respondents.
Under
the OMB requirements, collection of information under a contract or
cooperative agreement is deemed "conducted or sponsored"
by the Federal Government. Awarding offices/OPDIVs must comply with
their internal OPDIV requirements and HHS requirements (Circular No.
IRM-402) when seeking the required OMB approval.
Collection
of information under a grant would not normally be considered "conducted
or sponsored" by the Federal Government. However, if the collection
of information under a grant is undertaken at the direct request of
the awarding office or the terms and conditions of the award require
awarding office approval of the collection of information or collection
procedures, then OMB approval is required.
F.
Responsibilities
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Chief Grants Management Officer.
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When a disagreement as to whether a contract or grant is the appropriate
award instrument cannot be resolved by the Contracting or Grants Management
Officer and the Program Official, the Operating Division's Chief Grants
Management Officer and the Principal Official responsible for Acquisition
will serve as arbiters. The Chief Grants Management Officer may also
be consulted, if necessary, to assist in determinations concerning the
appropriate use of a grant or cooperative agreement.
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The OPDIV Chief Grants Management Officer and OPDIV Senior Information
Collection Official (or designee) must review and approve any information
collection under a cooperative agreement or an information collection
"conducted or sponsored" under a grant consistent with 5 CFR
1320 prior to submission to OMB.
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Grants Management Officers (GMOs).
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GMOs are responsible for ensuring that the appropriate award instrument
is used.
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GMOs must ensure that grant or cooperative agreement awards involving
collection of information have appropriate terms and conditions that
inform the recipient of OMB approval requirements and the associated
OPDIV process.
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GMOs are responsible for coordinating with their awarding office/OPDIV
Senior Information Collection Official (or designee) on information
collection activities under grants and cooperative agreements.
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