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Agencies Need Better Guidance for Choosing Among Contracts, Grants, and Cooperative Agreements

GGD-81-88 Published: Sep 04, 1981. Publicly Released: Sep 04, 1981.
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Highlights

The Federal Grant and Cooperative Agreement Act was passed primarily because the failure of Federal agencies to distinguish among procurement and various assistance relationships led to inappropriate use of grants to avoid the requirements of the procurement system and the unnecessary administrative requirements in grants. GAO has monitored the implementation of this Act and reported on actions needed to accomplish the Act's objectives.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress should renew, without a time limit, the OMB authority to except individual programs or transactions from the provisions of the Act.
Closed
Please call 202/512-6100 for additional information.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget The Director of OMB should revise its guidance on the Act to: (1) more clearly define the terms "direct benefit and use" as they relate to the selection of contracts and "accomplishing a public purpose of support or stimulation" as it relates to assistance; (2) require Federal program officials to base instrument choices on the Federal purpose in the relationship established after reviewing their authorizing legislation to determine their authority to procure or assist and reviewing each proposed transaction in light of the Act's criteria; and (3) clearly state that section 7(a) of the Act does not create new authority to make assistance awards independent of program legislation.
Closed
Please call 202/512-6100 for additional information.
Office of Management and Budget The Director of OMB should: (1) direct Federal agencies to develop administrative systems necessary to implement and monitor compliance with the Act, identify emerging problems so that revisions to policies and procedures can be considered, provide adequate staff training and technical assistance on the Act and OMB guidelines, and develop systems of records on their operating experiences in implementing the Act; (2) actively monitor the implementation by Federal agencies to assure that OMB policies and guidelines are carried out uniformly and in a timely manner; (3) establish an effective, ongoing system to document and respond to problems identified during monitoring activities; and (4) revise the OMB guidance to provide more insight into how agencies can avoid unnecessarily increasing Federal liability under cooperative agreements.
Closed
Please call 202/512-6100 for additional information.
Office of Management and Budget The Director of OMB should take the lead in establishing clear operational differences among contracts, grants, and cooperative agreements.
Closed
Please call 202/512-6100 for additional information.

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Topics

ContractsCooperative agreementsFederal grantsFederal legislationGrant administrationMonitoringProcurement practicesProgram managementProcurementFederal agencies