H.R. 7691 (95th): Federal Grant and Cooperative Agreement Act
PUBLIC LAW 95-224—FEB. 3, 1978 92 STAT. 3 Public Law 95-224 95th Congress An Act To distinguish Federal grant and cooperative agreement relationships from Feb. 3, 1978 Federal procurement relationships, and for other purposes. [H.R. 7691] Be it enacted hy the Senate and House of Representatives of the United States of America in Congress assembled, That this Act be Federal Grant cited as the "Federal Grant and Cooperative Agreement Act of and Cooperative 1977". Agreement Act of 1977. FINDINGS AND PURPOSE 41 u s e 501 note. SEC. 2. (a) The Congress finds that— 41 u s e 501. (1) there is a need to distinguish Federal assistance relation- ships from Federal procurement relationships and thereby to standardize usage and clarify the meaning of the legal instru- ments which reflect such relationships; (2) uncertainty as to the meaning of such terms as "contract", "grant", and "cooperative agreement" and the relationships they reflect causes operational inconsistencies, confusion, inefficiency, and waste for recipients of awards as well as for executive agen- cies; and (3) the Commission on Government Procurement has docu- mented these findings and concluded that a reduction of the exist- ing inconsistencies, confusion, inefficiency, and waste is feasible and necessary through legislative action. (b) The purposes of this Act are— (1) to characterize the relationship between the Federal Gov- ernment and contractors. State and local governments, and other recipients in the acquisition of property and services and in the furnishing of assistance by the Federal Government so as to pro- mote a better understanding of Federal spending and help elimi- nate unnecessary administrative requirements on recipients of Federal awards; (2) to establish Government-wide criteria for selection of appro- priate legal instruments to achieve uniformity in the use by the executive agencies of such instruments, a clear definition of the relationships they reflect, and a better understanding of the responsibilities of the parties; (3) to promote increased discipline in the selection and use of types of contract, grant agreement, and cooperative agreements ' and to maximize competition in the award of contracts and encourage competition, where deemed appropriate, in the award of grants and cooperative agreements; and (4) to require a study of the relationship between the Federal Government and grantees and other recipients in Federal assist- ance programs and the feasibility of developing a comprehensive system of guideline for the use of grant and cooperative agree- ments, and other forms of Federal assistance in carrying out such programs.
92 STAT. 4 PUBLIC LAW 95-224—FEB. 3, 1978 DEFINITIONS 41 use 502. SEC. 3. As used in this Act, the term— (1) "State government" means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, any agency or instrumentality of a State, and any multi-State, regional, or interstate entity which has governmental functions; (2) "local government" means any unit of government within *' • a State, a county, municipality, city, town, township, local public authority, special district, intrastate district, council of govern- , , ments, sponsor group representative organization, other inter- . : state government entity, or any other instrumentality of a local government; (3) "other recipient" means any person or recipient other than a State or local government who is authorized to receive Federal assistance or procurement contracts and includes any charitable or educational institution; (4) "executive agency" means any executive department as defined in section 101 of title 5, United States Code, a military department as defined in section 102 of title 5, United States Code, an independent establishment as defined in section 104 of title 5, United States Code (except that it shall not include the General Accounting Office), a wholly owned Government corporation; and (5) "grant or cooperative agreement" does not include any agreement under which only direct Federal cash assistance to individuals, a subsidy, a loan, a loan guarantee, or insurance is provided. USE OF CONTRACTS 41 use 503. SEC. 4. Each executive agency shall use a type of procurement con- tract as the legal instrument reflecting a relationship between the Federal Government and a State or local government or other recipient— (1) whenever the principal purpose of the instrument is the acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government; or (2) whenever an executive agency determines in a specific instance that the use of a type of procurement contract is appropriate. USE OF GRANT AGREEMENTS 41 use 504. SEC. 5. Each executive agency shall use a type of grant agreement as the legal instrument reflecting a relationship between the Federal Gov- ernment and a State or local government or other recipient whenever— Transfers. (1) the principal purpose of the relationship is the transfer of money, property, services, or anything of value to the State or local government or other recipient in order to accomplish a pub- lic purpose of support or stimulation authorized by Federal ' statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government; and (2) no substantial involvement is anticipated between the executive agency, acting for the Federal Government, and the State or local government or other recipient during performance of the contemplated activity.
PUBLIC LAW 95-224—FEB. 3, 1978 92 STAT. 5 USE OF COOPERATIVE AGREEMENTS SEC. 6. Each executive agency shall use a type of cooperative agree- 41 USC 505. ment as the legal instrument reflecting a relationship between the Fed- eral Government and a State or local government or other recipient whenever— (1) the principal purpose of the relationship is the transfer of Transfers, money, property, services, or anything of value to the State or local government or other recipient to accomplish a public pur- pose of support or stimulation authorized by Federal statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Govern- ment; and (2) substantial involvement is anticipated between the execu- tive agency, acting for the Federal Government, and the State or local government or other recipient during performance of the contemplated activity. AUTHORIZATIONS SEC. 7. (a) Notwithstanding any other provision of law, each execu- Contracts, grant tive agency authorized by law to enter into contracts, grant or coopera- or cooperative tive agreements, or similar arrangements is authorized and directed to agreements. enter into and use types of contracts, grant agreements, or cooperative 41 USC 506. agreements as required by this Act. (b) The authority to make contracts, grants, and cooperative agree- Scientific ments for the conduct of basic or applied scientific research at non- research. profit institutions of higher education, or at nonprofit organizations whose primary purpose is the conduct of scientific research shall include discretionary authority, when it is deemed by the head of the executive agency to be in furtherance of the objectives of the agency, to vest in such institutions or organizations, without further obliga- tion to the Government, or on such other terms and conditions as deemed appropriate, title to equipment or other tangible personal property purchased with such funds. STUDY OF FEDERAL ASSISTANCE PROGRAMS SEC. 8. The Director of the Office of Management and Budget, in 41 USC 507. cooperation with the executive agencies, shall undertake a study to develop a better understanding of alternative means of implementing Federal assistance programs, and to determine the feasibility of devel- oping a comprehensive system of guidance for Federal assistance programs. Such study shall include a thorough consideration of the Contents. findings and recommendations of the Commission on Government Procurement relating to the feasibility of developing such a system. The Director shall consult with and to the extent practicable, involve Consultation. representatives of the executive agencies, the Congress, the General Accounting Office, and State and local governments, other recipients and other interested members of the public. The result of the study Report to shall be reported to the Committee on Government Operations of the congressional House of Representatives and the Committee on Governmental Affairs committees. of the Senate at the earliest practicable date, but in no event later than two years after the date of enactment of this Act. The report on the study shall include (1) detailed descriptions of the alternative means of implementing Federal assistance programs and of the circumstances in which the use of each appears to be most desirable, (2) detailed
92 STAT. 6 PUBLIC LAW 95-224—FEB. 3, 1978 descriptions of the basic characteristics and an outline of such compre- hensive system of guidance for Federal assistance programs, the devel- opment of which may be determined feasible, and (3) recommendations concerning arrangements to proceed with the full development of such comprehensive system of guidance and for such administrative or statutory changes, including changes in the provisions of sections 3 through 7 of this Act, as may be deemed appropriate on the basis of the findings of the study. GUIDELINES 41 use 508. SEC. 9. The Director of the Office of Management and Budget is authorized to issue supplementary interpretative guidelines to promote consistent and efficient use of contract, grants agreement, and coopera- tive agreements as defined in this Act. REPEALS AND SAVINGS PROVISIONS Repeal; effective SEC. 10. (a) The Act entitled "An Act to authorize the expenditure date. of funds through grants for support of scientific research, and for other purposes", approved September 6,1958 (72 Stat. 1793; 42 U.S.C. 1891 and 1892), is repealed, effective one year after the date of enactment of this Act. 41 u s e 501 note. (b) Nothing in this Act shall be construed to render void or voidable any existing contract, grant, cooperative agreement, or other contract, grant, or cooperative agreement entered into up to one year after the date of enactment of this Act. 41 u s e 509. (c) Nothing in this Act shall require the establishment of a single relationship between the Federal Government and a State or local government or other recipient on a jointly funded project, involving funds from more than one program or appropriation where different relationships would otherwise be appropriate for different components of the project. Excepted (d) The Direxitor of the Office of Management and Budget may transactions. except individual transactions or programs of any executive agency 41 u s e 501 note. from the application of the provisions of this Act. This authority shall Expiration date. expire one year after receipt by the Congress of the study provided for in section 8 of this Act. Approved February 3, 1978. LEGISLATIVE HISTORY: HOUSE REPORT No. 95-481 (eomm. on Government Operations). SENATE REPORT No. 95-449 accompanying S. 431 (eomm. on Governmental Affairs). CONGRESSIONAL RECORD: Vol. 123 (1977): Sept. 27, considered and passed House. Oct. 1, considered and passed Senate, amended, in lieu of S. 431. Vol. 124 (1978): Jan. 19, House agreed to Senate amendment.