What Have I Got Here?

Grants, contracts, cooperative agreements, RFPs, RFAs -- what are these things anyway? It can get pretty confusing at times, but then again, we're talking about the government here.

When a government agency decides that it needs something (a service or product, for example) that is to be provided by an outside firm, organization or individual, the agency must also determine how it will acquire the product or service. The method by which a service or product is acquired depends on its purpose -- will it be used for the government's direct benefit, or will it be used for a public purpose? The type of solicitation (RFP or RFA) issued by the government reflects these decisions.

• Contracts are used when the principal purpose of the relationship between the government and the contractor is the acquisition of products or services for the government's direct use or benefit. When this is the case, the solicitation will be an RFP (request for proposals), RFQ (request for quotations), IFB (invitation for bids), or other contracting method. Bidders for government contracts are usually for-profit firms.
• Grants are used to accomplish a public purpose of support or stimulation. When a grant is given to an organization -- usually a non-profit -- it involves the transfer of money (and possibly other things of value) from the government to the organization (grantee). Additionally, the government is not substantially involved in the grant activity. Basically, the government serves as a "patron" to the organization, although it does perform routine oversight and stewardship functions. If the solicitation that you've received is an RFA, that means it is a grant, as opposed to a contract.
• Cooperative Agreements are also grants. That is, they are issued to accomplish a public purpose. But the difference between a cooperative agreement and a grant that is not a cooperative agreement is the degree of involvement of the government. If you have an RFA for a cooperative agreement, it means that the government will be "substantially involved" in the grant activity via some stipulated type of collaboration, participation or control.

It all seems pretty clear, but in reality it may not be. I've seen RFPs for contracts that seem more suited to grants, and vice versa. So there's sometimes a fine line where the decision whether to issue an RFP or RFA is known only to the government.