[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 32CFR22.205]



[Page 76]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 22_DoD GRANTS AND AGREEMENTS_AWARD AND ADMINISTRATION--Table of 

Contents

 

             Subpart B_Selecting the Appropriate Instrument

 

Sec.  22.205  Distinguishing assistance from procurement.



    Before using a grant or cooperative agreement, the grants officer 

shall make a positive judgment that an assistance instrument, rather 

than a procurement contract, is the appropriate instrument, based on the 

following:

    (a) Purpose. (1) The grants officer must judge that the principal 

purpose of the activity to be carried out under the instrument is to 

stimulate or support a public purpose (i.e., to provide assistance), 

rather than acquisition (i.e., to acquire goods and services for the 

direct benefit of the United States Government). If the principal 

purpose is acquisition, then the grants officer shall judge that a 

procurement contract is the appropriate instrument, in accordance with 

31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and 

Cooperative Agreements''). Assistance instruments shall not be used in 

such situations, except:

    (i) When a statute specifically provides otherwise; or

    (ii) When an exemption is granted, in accordance with Sec.  22.220.

    (2) For research and development, the appropriate use of grants and 

cooperative agreements therefore is almost exclusively limited to the 

performance of selected basic, applied, and advanced research projects. 

Development projects nearly always shall be performed by contract or 

other acquisition transaction because their principal purpose is the 

acquisition of specific deliverable items (e.g., prototypes or other 

hardware) for the benefit of the Department of Defense.

    (b) Fee or profit. Payment of fee or profit is consistent with an 

activity whose principal purpose is the acquisition of goods and 

services for the direct benefit or use of the United States Government, 

rather than an activity whose principal purpose is assistance. 

Therefore, the grants officer shall use a procurement contract, rather 

than an assistance instrument, in all cases where:

    (1) Fee or profit is to be paid to the recipient of the instrument; 

or

    (2) The instrument is to be used to carry out a program where fee or 

profit is necessary to achieving program objectives.