Agreements between the federal government and private individuals or businesses generally take one of three forms:
- Procurement Contracts
- Federal Grants
- Cooperative Agreements
When Does The Federal Government Use A Procurement Contract?
A procurement contract is an instrument used when the United States government and a private party establish an agreement for the government to acquire property or services for the direct benefit or use of the United States. The vast majority of the agreements entered into by the United States government constitute procurement contracts. Since they are generally for the government's direct benefit, the government typically demands far more extensive involvement or participation during the performance of such a contract that most private parties would insist on.
When Does The Federal Government Use A Federal Grant Or Cooperative Agreement?
The government uses either a grant or cooperative agreement (instead of a procurement contract) when the principal purpose of the relationship is to transfer something of value to a state or local government or a non-profit entity to carry out a public purpose. A "grant" is used when substantial involvement is not expected between the government and the recipient when carrying out the activity contemplated in the agreement. A "cooperative agreement" is used when there is expected to be substantial involvement between the government and recipient.
Do I Need An Attorney If I Wish To Enter Into A Public Contract With The Federal Government?
As all three types of public contract agreements with the government are governed by federal rules, an attorney's assistance is absolutely necessary. Attorneys experienced in contract or government law can make sure that any public contract between you and the government meets the requirements of federal law. Also, retaining a business attorney will be invaluable in making sure that the government does not take advantage of you through the terms of the contract.