Basics of Federal Contracting

The federal government may award research and development funding in the form of grants, cooperative agreements, contracts, or other transaction agreements. Unlike grants and cooperative agreements, which are assistance mechanisms, a federal contract is a procurement mechanism. This means that the principal purpose of a federal contract is to purchase property or services for the direct benefit or use of the US Government.

Federal contracts are governed by a strict set of terms and conditions, including clauses from the Federal Acquisition Regulation (FAR). They usually require frequent reporting and a high level of responsibility to the Government. A failure to perform the project in strict compliance with the contract and provide the required deliverables on time and on budget could result in criminal and/or civil penalties, as well as potential financial consequences.

Other Transaction Agreements (OTAs) are not subject to the administrative requirements of grants nor the federal regulations governing procurement. The Federal Contracts Services Team is responsible for processing any OTAs or subcontracts under OTAs, or proposals that may result in OTAs, both when the University is the prime recipient or a subcontractor.

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