Grant or Contract

I don't believe you've described the primary purpose of the work. In order for it to be classified as an assistance award, the primary purpose of the work or research would be to stimulate the public. Is the work that the center is going to do going to be available to the public or for the good of the public or is the primary purpose for the agency?

Its been awhile since I worked in the grant world, but I seem to remember that agencies have to be granted authority to enter into assistance awards and that 26 agencies have been approved to make assistance awards. 

I would first determine what the purpose of the work your asking the center to do is to determine if it's assistance or an acquisition, and if it's an assistance award, if your agency has assistance authority.

See 31 U.S.C. Chapter 63, Using Procurement Contracts and Grant and Cooperative Agreements.

Go to Grants.gov for more general information and OMB guidance. http://www.grants.gov/web/grants/home.html

The "Learn Grants" page at Grants.gov is especially useful.

An ancillary question would be in relation to the contractors' contribution to the University Center. Would it be an unallowable contribution, or an allowable expense because either (1) there is a project whose output creates a quid pro quo for the funds provided, or (2) it is a method for identifying and recruiting top-notch engineers (a very scarce commodity in the A&D industry these days)?

(Question based on real-world discussions with DCAA auditors)

There would have to be some sort of authorizing statute permitting use of a grant or cooperative agreement.  In the agency I work for we have this in our several program statutes that authorize the programs.  Each year we receive appropriations under those programs which enable us to enter into these types of agreements.  I'd recommend you talk with your "program" folks to see if they know of any such authorities.

Some agencies also have a third type of instrument, separate from a grant/cooperative agreement or a procurement contract.  This other category is sometimes referred to as "other transactions."   Our agency has such an authority.  This type of authority has also been referred to as a "non-assistance" cooperative agreement.  Under this statutory authority we can enter into non-competitive agreements to acquire goods or services, including personal services from a “State, political subdivision, or agency thereof, a public or private agency, organization, or any other person”, if “the objectives of the agreement will: (1) serve a mutual interest of the parties to the agreement in carrying out agency programs; and (2) all parties will contribute resources to the accomplishment of these objectives.”  These agreements typically require the partner provide a 50/50 match of funds/resources.  The types of partners that normally seek such an arrangement are those who have like interests to our agency and want to accomplish the same goals for a common purpose.

Also, while it may not at issue here, I thought I'd provide the following additional information for possible future reference.  Sometimes it is not clear whether or not a grant/cooperative agreement or a procurement contract is appropriate when you agency has authority to use appropriated funds for a specific purpose.  The appropriate choice of vehicle can be particularly difficult to determine where the Federal government provides assistance to specified recipients by using an intermediary.  The intermediary, or third party, situation arises where an assistance relationship, such as a grant or cooperative agreement, is authorized to specified recipients, but the Federal grantor delivers the assistance to the authorized recipients by utilizing another party.  In such circumstances, the choice of instrument for an intermediary relationship depends solely on the principal Federal purpose in the relationship with the intermediary.  In these situations, it is necessary to examine the agency’s program authority to determine the authorized forms of assistance. The agency’s relationship with the intermediary should normally be a procurement contract if the intermediary is not itself a member of a class eligible to receive assistance from the government. In other words, if an agency program contemplates provision of technical advice or services to a specified group of recipients, the agency may provide the advice or services itself or hire an intermediary to do it for the agency. In that case, the proper vehicle to fund the intermediary is a procurement contract. The agency is “buying” the services of the intermediary for its own purposes, to relieve the agency of the need to provide the advice or services with its own staff. Thus, it is acquiring the services for “the direct benefit or use of the United States Government,” which mandates the use of a procurement contract under the Federal Grant and Cooperative Agreement Act.  On the other hand, where the Government’s principal purpose is to “assist” the intermediary in providing goods or services to the authorized recipient, the use of an assistance instrument, such as a cooperative agreement, is proper (GAO Red Book, Third Edition (2006), Volume 2, Chapter 10; 58 Comp. Gen. 785 (1979); 61 Comp. Gen. 637 (1982)).  Note, there are exceptions to this general rule regarding intermediaries.  While it is not likely common, there could be language in the authorizing statute that allows agencies to acquire the services of an intermediary by "cooperative agreement or contract."

Colleagues...thank you for the directional responses and the homework assignments.  I have it from here.

On 5/2/2016 at 9:16 AM, Todd Davis said:

There would have to be some sort of authorizing statute permitting use of a grant or cooperative agreement.  In the agency I work for we have this in our several program statutes that authorize the programs.  Each year we receive appropriations under those programs which enable us to enter into these types of agreements.  I'd recommend you talk with your "program" folks to see if they know of any such authorities.

Some agencies also have a third type of instrument, separate from a grant/cooperative agreement or a procurement contract.  This other category is sometimes referred to as "other transactions."   Our agency has such an authority.  This type of authority has also been referred to as a "non-assistance" cooperative agreement.  Under this statutory authority we can enter into non-competitive agreements to acquire goods or services, including personal services from a “State, political subdivision, or agency thereof, a public or private agency, organization, or any other person”, if “the objectives of the agreement will: (1) serve a mutual interest of the parties to the agreement in carrying out agency programs; and (2) all parties will contribute resources to the accomplishment of these objectives.”  These agreements typically require the partner provide a 50/50 match of funds/resources.  The types of partners that normally seek such an arrangement are those who have like interests to our agency and want to accomplish the same goals for a common purpose.

To Todd Davis: Putting aside the original question asked by jonmjohnson, my question is, from the federal agency's perspective, if there is no authorizing statute giving the federal agency the power to do a grant or cooperative agreement or other transaction for the purpose in question, and so the federal agency's only option left is to do it as a procurement, if a state government agency bids on the solicitation, should the federal agency even consider that state government agency "eligible" for award?  Basically, I'm asking if there are any laws or regulations that forbid a state government entity from being an offeror and/or awardee on a federal government contract.

A federal agency can issue a purchase order to a state or local government -- Ihave done it many times.

ji20874 said:

A federal agency can issue a purchase order to a state or local government -- Ihave done it many times.

Could you please expound on this?

govt2310 said:

To Todd Davis: Putting aside the original question asked by jonmjohnson, my question is, from the federal agency's perspective, if there is no authorizing statute giving the federal agency the power to do a grant or cooperative agreement or other transaction for the purpose in question, and so the federal agency's only option left is to do it as a procurement, if a state government agency bids on the solicitation, should the federal agency even consider that state government agency "eligible" for award?  Basically, I'm asking if there are any laws or regulations that forbid a state government entity from being an offeror and/or awardee on a federal government contract.

It can be done, but only if the requirement is not set aside for small business concerns as may be required by FAR 19.5.  "Concern" is defined by FAR 19.001 as meaning "any business entity organized for profit (even if its ownership is in the hands of a nonprofit entity) with a place of business located in the United States or its outlying areas and that makes a significant contribution to the U.S. economy through payment of taxes and/or use of American products, material and/or labor, etc. “Concern” includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. For the purpose of making affiliation findings (see 19.101), include any business entity, whether organized for profit or not, and any foreign business entity, i.e., any entity located outside the United States and its outlying areas." 

The way I read it, a governmental entity would be excluded from the definition of a small business concern. 

I should add that OMB Circular A-76 states that it is "the longstanding policy of the federal government has been to rely on the private sector for needed commercial services."  However, I believe the Circular applies to competition between Federal and private sector competition for commercial activates.  I'm not sure if it has any bearing on the question at hand, but haven't researched it enough to be sure.  I didn't see a definition of "private sector" in the circular, but did find what appears to be an outdated version of a supplemental handbook for use with the circular.  It does not define the term "private sector", but defines a "commercial source" as "any business or other concern that is eligible for contract award in accordance with Federal Acquisition Regulations." 

I haven't done much research to see if there are GAO decisions on the matter of other non-Federal governmental entities competing for contracts, but did find one related to the Randolph-Sheppard Act (B-250783) where the Air Force cancelled a competitive solicitation under the 8a program and then subsequently solicited on an unrestricted basis "to permit participation by the Mississippi state agency for the blind, pursuant to the Randolph-Sheppard Act."

Maybe someone else with more experience has something to offer.

Todd is right -- a state or local government, or a non-profit, cannot compete for a small business set-aside of any sort.

In a previous agency, most (but not all) awards to the state or local governments were non-competitive and the purchase order was really a funding transaction.  For example, our agency had law enforcement officers but we had no jail, so we would issue a purchase order to the local sheriff at $95/day or thereabouts to house and feed our prisoners until we could get them transferred somewhere else.  As another example, we would issue a purchase order to the state for a permitting fee.   The FGCAA (Federal Grant and Cooperative Agreement Act) provides that an agency must use a procurement contract when “the principal purpose of the instrument is to acquire (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government,” or the agency otherwise “decides in a specific instance that the use of a procurement contract is appropriate,” 31 U.S.C. § 6303.

A search on www.fpds.gov for "State of" generates 139,748 hits -- the first pages shows examples such as--

Agency:  CONSUMER PRODUCT SAFETY COMMISSION
Contractor:  TEXAS, STATE OF
Amount:  $25,000
PSC:  INSPECT SVCS/MISC EQ

WILDLIFE AND PARKS (ASSISTANCE SECRETARY)
STATE OF CALIFORNIA
$34,000
WILDLIFE STUDIES

OFFICE OF ENERGY RESEARCH
STATE OF CALIFORNIA
$60,000
COAL

ENERGY, DEPARTMENT OF
SOUTH DAKOTA< STATE OF
$69,000
SOLAR/PHOTOVOLTAIC (BASIC)

BUREAU OF MINES
STATE OF NEVADA
$36,000
R&D-OTHER R & D

All of these are coded as either DEFINITIVE CONTRACT or PURCHASE ORDER.

It appears to be a simple grant.  Is this a reasonable conclusion based on the above information?

My opinion contract.

you said ' The entities who fund fund future prospective employees while giving them real world problems to work on, and at the same time gets the benefit of some targeted research overseen by SMEs in the field.'

Entity benefits, not the general public. If you said they released the research to the public, then grant.

Ji, in regard to your post of yesterday, State agencies can compete on a small business set-aside under the Randolph-Shepard Act.  See, Intermark, Inc., B-290925, October 23, 2002.

Retread,

Almost, but not quite.  A state licensing agency cannot participate in a normal set-aside acquistion.  The decision you cited says an agency doing a Randolph-Sheppard acquisition may structure a solicitation to allow a SLA's offer to be considered at the same time as only small business offers, but in reality the SLA does not compete head-to-head against the small businesses -- the other offers are never considered for selection if the SLA's priority offer is accepted -- if the SLA's priority offer is not accepted, only then are the small businesses considered for selection.  Here are the pertinent words from the decision:

The solicitation can include a “cascading” set of priorities or preferences whereby competition is limited to small business concerns and the SLA, with the SLA receiving award if its proposal is found to be within the competitive range and consultation with the Secretary of Education results in agreement that award should be made to the SLA; otherwise, award will be made to an eligible small business in accordance with the RFP's evaluation scheme.  Such an approach would preserve the SLA's superior preference, while according small businesses a preference vis-à-vis large businesses (other than the SLA), to which they are entitled under the Small Business Act and applicable regulations.

On ‎6‎/‎8‎/‎2016 at 0:37 PM, ji20874 said:

a state or local government, or a non-profit, cannot compete for a small business set-aside of any sort.

Ji, based on your latest post, it seems you now recognize that the quoted statement is too broad.

I don't know what you meant when you said the SLA and small businesses do not compete head to head.  All offerors are considered using the same evaluation factors.  The government then establishes a competitive range.  It is only then that the SLA's priority kicks in.  You might be interested to know that Intermark actually got the award from the RFP it protested even though the SLA submitted a proposal that was found to be outside the competitive range.

As for the language you quoted, note that the GAO stated that using cascading priorities was one way to handle an SLA's participation in a set-aside procurement.  However it did not say it was the only way and did not say it was a required procedure.

In any event, the RFP is issued as a small business set-aside.

You say that Intermark got the award and the SLA was outside the competitive range.  That's fine and goes along with what I wrote earlier.  A contractor such as Intermark could only have gotten the award if the SLA was not selected.  Once the SLA was out of the running, then all the other contractors could be considered for selection.

The Randolph-Sheppard process is an exception to everything.

As a general matter, a state or local government, or a non-profit, cannot compete for a small business, SDVOSB, HUBZone, WOSB, or EDWOSB set-aside.

By head-to-head competition, I mean competition for the actual award.  In a Randolph-Sheppard acquisition, if the SLA makes it to the competitive range, the SLA is considered for award all by itself on a priority basis and all other offers are ignored for the time being -- if the SLA is selected for award, that's the end and the small business offers are never considered for selection.  However, if the SLA is not selected, then the small business offers are considered against each other (but not against the SLA) for selection.  The merits of the SLA's offer (price, technical, and so forth) are never considered in a tradeoff setting along with the merits of the small business offers.

In discussing Randolph-Sheppard, we're far removed from the original posting -- but I continue to wonder why the FAR doesn't acknowledge Randolph-Sheppard (except for a statement that FAR Subpart 22.12 doesn't apply to Randolph-Sheppard acquisitions).  If a contracting officer wants to do a Randolph-Sheppard acquisition, he or she has to go to the Department of Education for guidelines.

DoD has a Directive or Instruction on how to implement the RSA.  It largely tracks the DoEd regs, but adds some guidance of its own. 

Dining facility contracts can get tricky.  If you are doing full food service, you do RSA.  However, if you are doing less than full food service, e.g., mess attendant services, you have to consider Ability One.  Just more things for contracting officers to be familiar with.

As I recall, if the SLA gets the award from a set-aside RFP, the contract is reported as a set-aside contract in FPDS.