A Federal Contract, like a grant, is a mechanism used by the Federal Government to provide funding for research and development projects. However, unlike a grant or cooperative agreement, the Federal Government uses contracts as a procurement mechanism. The principal purpose of the Federal Contract instrument is to purchase property or services for the direct benefit or use of the United States Government.
Federal Contracts are governed by a strict set of terms and conditions, including clauses from the Federal Acquisition Regulation (FAR). These contracts usually require frequent reporting and a high level of responsibility to the sponsor. A failure to perform and achieve the promised results or product on time and on budget could result in criminal and/or civil actions and/or financial consequences to administrators or others involved.
Federal Contract Process (Overview)
The Federal Contracting process for vendors can be equivalent to a relationship with the sponsor. Therefore, there are various stages and some interactions between the various stages to have the process work efficiently and effectively for all parties.
- When determining if the award in hand is a Federal Contract, always trace the funding back to the prime sponsor (organization holding the contract from the Federal Government).
- Suppose the award is at the modification/amendment stage. In that case, you may need to go back to the original award document to determine if the prime source is a Federal Contract.
- Federal Contracts come in many forms, such as:
- Standard Contract
- Order for Supplies or Services
- Master Agreements with Task Orders
- The Federal Government uses the same template for contracts and cooperative agreements. The template will say “Contract No.” regardless of the type of award mechanism.
- Prime sponsors may call a third-party agreement a “Subcontract” even if the prime source is a grant.
- A good resource for searching for Federal Contracts is Federal Procurement Data System. If an award is in this database, it is a Federal Contract. (Note: search terms must match the database entry. So if your search fails to return possible matches, it may result from the search term not matching the database data.)