Appendix A to Part 1108 - Background on Assistance, Acquisition, and Terms for Types of Legal Instruments
2:1.2.8.3.4.2.64.84.23 : Appendix A
Appendix A to Part 1108 - Background on Assistance, Acquisition,
and Terms for Types of Legal Instruments I. Purpose of This
Appendix
This appendix provides background intended to clarify some
terms:
A. That are used in this chapter to describe either types of
legal instruments that DoD Components, recipients, and
subrecipients issue, or the purposes for which those types of
instruments are used; and
B. For which this part provides definitions that vary depending
on the context within which the terms are used.
II. Why Definitions of Some Terms Are Context-Dependent
A. The DoDGARs contain both:
1. Direction to DoD Components concerning their award of grants
and cooperative agreements at the prime tier; and
2. Terms and conditions that DoD Components include in their
grants and cooperative agreements to specify the Government's and
recipients' rights and responsibilities, including post-award
requirements with which recipients' actions must comply.
B. In some cases, the same defined term or two closely related
terms are used in relation to both DoD Component actions at the
prime tier and recipient or subrecipient actions at lower tiers
under DoD Components' awards. But a given defined term may have
meanings that differ at the two tiers. For example, in part because
the Federal Grant and Cooperative Agreement Act applies to DoD
Component actions at the prime tier but not to recipient or
subrecipient actions at lower tiers (see sections III and IV of
this appendix):
1. The terms “acquire” and “acquisition” do not have precisely
the same meaning in conjunction with actions at the prime and lower
tiers.
2. The meaning of the term “procurement contract” used to
describe DoD Component prime-tier actions is not precisely the same
as the meaning of “procurement transaction” or “contract” used to
describe recipient or subrecipient actions at lower tiers.
III. Background: Distinguishing Prime-Tier Relationships and Legal
Instruments
A. The Federal Grant and Cooperative Agreement Act (31 U.S.C.
chapter 63) specifies that the type of legal instrument a DoD
Component is to use is based on the nature of the relationship
between the DoD Component and the recipient.
B. Specifically, except where another statute authorizes DoD to
do otherwise, 31 U.S.C. chapter 63 specifies use of:
1. A procurement contract as the legal instrument reflecting a
relationship between a DoD Component and a recipient when the
principal purpose of the relationship is to acquire property or
services for the direct benefit or use of the Federal
Government.
2. A grant or cooperative agreement as the legal instrument
reflecting a relationship between those two parties when the
principal purpose of the relationship is to transfer a thing of
value to the recipient to carry out a public purpose of support or
stimulation authorized by Federal statute.
C. The terms “acquisition” and “assistance” are defined in this
part to correspond to the principal purposes described in
paragraphs III.B.1 and 2 of this section, respectively. Using those
terms, paragraphs III.B.1 and B.2 may be restated to say that
grants and cooperative agreements are assistance instruments that
DoD Components use, as distinct from procurement contracts they use
for acquisition.
IV. Background: Distinguishing Types of Recipients' and
Subrecipients' Instruments
A. While the Federal Grant and Cooperative Agreement Act applies
to Federal agencies, it does not govern types of instruments that
recipients and subrecipients of any tier use. That statute does not
require a recipient or subrecipient to:
1. Consider any instrument it makes at a lower tier under a
Federal assistance award to be a grant or cooperative agreement.
Therefore, at its option, a recipient or subrecipient may consider
all of its lower-tier instruments to be “contracts.”
2. Associate an “assistance” relationship, as that term is
defined in this part and used in this chapter, with any lower-tier
transaction that it makes.
B. However, the DoDGARs in this chapter do distinguish between
two classes of lower-tier transactions that recipients and
subrecipients make: Subawards and procurement transactions. The
distinction promotes uniformity in requirements for lower-tier
transactions under DoD grants and cooperative agreements. It is
based on a long-standing distinction in OMB guidance to Federal
agencies, currently at 2 CFR part 200, which DoD implements in this
chapter.
C. The distinction between a subaward and procurement
transaction is based on the primary purpose of that
transaction.
1. The transaction is a subaward if a recipient or subrecipient
enters into it with another entity at the next lower tier in order
to transfer - for performance by that lower-tier entity - a portion
of the substantive program for which the DoD grant or cooperative
agreement provided financial assistance to the recipient. Because
the Federal Grant and Cooperative Agreement Act does not apply to
the recipient or subrecipient, it may make a subaward as defined in
this part using an instrument that it considers a contract.
2. The transaction is a procurement transaction if the recipient
or subrecipient enters into it in order to purchase goods or
services from the lower-tier entity that the recipient or
subrecipient needs to perform its portion of the substantive
program supported by the DoD award.