>
Acquisition
vs. Assistance:
How Contracts Differ from Grants
Interagency Agreements
Georgia
Hubert
Federal
Assistance Director
Office
of the Procurement Executive
U.S. Department
of State
October
23, 2002
Acquisition
What is
a procurement contract?
Principal
purpose of the relationship is to acquire by purchase, lease or barter,
property or services for the direct benefit of the Federal Government.
Use a procurement
contract when the principal purpose is:
To acquire
property or services
For the direct
benefit of the USG
Acquisition Definitions
00FAR 2.101
Acquisition = the acquiring by contract
with appropriated funds of supplies or services (including construction)
by and for the use of the Federal Government through purchase
or lease, whether the supplies or services are already in existence
or must be created, developed, demonstrated, and evaluated.
Acquisition Definitions
00FAR 2.101
Contract = a mutually binding legal relationship
obligating the seller to furnish the supplies or services (including
construction) and the buyer to pay for them.
Contract
Acquisition
00very agency
has inherent authority to enter into contracts to procure goods and
services for its own use, as long as the purpose of the procurement
is reasonably related to the agency00 mission.00/font>
GAO Principles
of Federal Appropriation Law, 2d ed. at 10-11
Assistance
00owever,
there is no comparable inherent authority to give away the government00
money or property. . . to benefit someone other than the government;
this must be authorized by Congress. Therefore, the agency00
basic legislation must be studied to determine whether an assistance
relationship is authorized at all, and if so, under what circumstances
and conditions.00/font>
GAO Principles
of Federal Appropriation Law, 2d ed. at 10-11
Assistance
Use a grant agreement when the principal purpose is:
To transfer
a thing of value;
To carry out
a public purpose of support or stimulation;
Authorized
by law; and
Substantial
involvement is not expected
Use a cooperative agreement when the principal purpose is:
To transfer
a thing of value;
To carry out
a public purpose of support or stimulation;
Authorized
by law; and
Substantial
involvement is expected
Substantial Involvement
Gives the
USG greater control over the project
Does not
include:
Approval
of recipient plans or applications
Normal Federal
stewardship, e.g., site visits, performance and financial reporting,
audits
General statutory
requirements agreed to in advance, e.g., civil rights, environmental
protection, provisions for handicapped
General administrative
requirements in OMB Circulars and 22 CFR Parts 135, 137, and 145
Assistance
Key Question: Is the principal purpose
to serve the immediate needs of the federal government, or is it to
provide assistance to a non-federal entity in serving a public purpose?
Grants and
cooperative agreements are not 00rocurement contracts,00but they
are contracts, requiring actions by the recipient 00otherwise, without
such requirements, they would be gifts.
10 Nash
& Cibinic Report p 2 (Jan 1996)
Assistance Authorities
Federal Grant
and Cooperative Agreement Act does not provide authority to award grants.
Normally,
the authority to award grants is in the basic legislation for each agency.
Statutory
authority to make grants is limited to specific annual amounts or authorizations.
Authority
of heads of agencies is constrained by various OMB circulars and regulations.
Grants Officer Appointment
Must have
separate Grants Officer warrant
Appointed
by the Procurement Executive
DS-Form 1859
Issued to
individuals, not positions
DOS employees
with Contracting Officer warrant do not have inherent authority
to award grants or cooperative agreements
Interagency Acquisition
A procedure
by which one Government agency needing supplies or services (the requesting
agency) obtains them from or through another agency (the servicing agency)
FAR 17.501
Economy Act (31 U.S.C.
1535)
An agency
may place orders with any other agency for supplies or services that
the servicing agency may be better able to supply, render, or obtain
by contract, if it is determined by the head of the requesting agency
, or designee, that it is in the Government00 interest to do so.
FAR 17.502
Economy Act
Requirements
for Use
Legal authority
for the acquisition exists
Action does
not conflict with any other agency00 authority and responsibility
The acquisition
conforms to the FAR requirements regarding contractor versus Government
performance
FAR 17.503
Interagency Acquisitions
Cannot be
used as a means to avoid FULL AND OPEN COMPETITION!
The Government
Contracts Reference Book, p. 229
FAR 6.002
State First Policy for
Acquisition
Bureaus and
offices may only transfer funds to another agency for acquisition services
after formal consultations with their contracting office and in strict
adherence to the DOSAR.
Maintains
contracting and fiscal accountability where it belongs 00at the Department
of State.
Foreign Assistance Act
(sec. 632)
Codified at
22 U.S.C. 2392
President
may allocate or transfer funds to any agency of the USG for the
procurement of commodities, defense articles, military education and
training, or services (including defense services).
Funds available
for obligation for authorized purposes, in accordance with granted authority
or under authority of the USG agency to which such funds are allocated
or transferred.
Foreign Assistance Act
00Allocation versus Transfer
Allocation
Funds remain
in USAID00 account
USAID retains
some financial responsibility
Recipient
agency provides periodic financial reports to USAID
Transfer
Reapportionment
by OMB
Moves funds
to recipient agency00 appropriation account
Legal augmentation
of recipient agency00 appropriation
Foreign Assistance Act
00Sec. 632(b)
Similar to
an Economy Act IAA
USAID is the
requesting agency
IAA should
include:
Scope of
work, budget, and other applicable terms and conditions
Reporting
requirements for servicing agency
USAID monitors
both financial and programmatic performance
Foreign Assistance Act
00Sec. 632(b)
Applicable
DOSAR Sections
617.502-70(a)(2)(iv)
00clearance with budget office
617.504-70(a)
00individuals authorized to execute
617.504-70(b)
00use of DS-1921, if requesting agency does not have own form (USAID
has one 00it is acceptable)
617.504-70(c)(3)
00clearance by L
617.504(d)(4)
00IAA manager must consult with appropriate contracting activity before
IAA is signed
617.504(d)(5)
00uniform numbering system
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