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The Federal Grant and Cooperative Agreement Act of 1977

In the 1970's, Congress was concerned over the perceived misuse of assistance agreements - using assistance agreements to circumvent competition and procurement rules. To address these problems, and to ensure uniform Agency practices, Congress passed the Federal Grant and Cooperative Agreement Act of 1977 (FGCAA).

The FGCAA establishes government-wide criteria for determining the appropriate legal instrument for funding an extramural activity.

The FGCAA distinguishes between acquisition (procurement/contracts) and assistance (grants and cooperative agreements), based on the principal purpose of the legal relationship between the parties.

If the principle purpose of the funded activity is to provide something for the direct benefit or use of the Federal government, then a contract is the appropriate legal instrument to use.

Benefit or Use Test:

If the purpose of the funded activity is to support or stimulate activities that are not for the direct benefit or use of the Federal government, an assistance agreement (grant or cooperative agreement) may be use.

Support or Stimulation Test:

The distinguishing factor between a grant and a cooperative agreement is the degree of Federal participation or involvement during the performance of the work activities.

If EPA, usually the Project Officer, participates in project activities, then a cooperative agreement is the proper funding mechanism.

If the funded activities meet the definition of assistance and no substantial involvement by EPA is anticipated, a grant must be used to fund the project.

It should be noted that the FGCAA is not the legal authority by which EPA funds assistance agreements. EPA's legal authorities are obtained from the environmental statutes (Clean Air Act, Clean Water Act, etc.).

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| New National Term on Suspension and Debarment | Tips On Writing a Grant Proposal | Sample Indirect Cost Proposal Format For Nonprofit Organizations | EPA Organization Chart | Grant Award Activity Summary | Historical Information | OMB Circulars | Cross-Cutting Public Policies | Lobbying and Litigation | The Federal Grant and Cooperative Agreement Act of 1977 | Catalog of Federal Domestic Assistance | Competition for Assistance Agreements | MBE/WBE Utilization | Overview of the Award Document and Terms and Conditions | Use of a Universal Identifier by Grant Applicants | Responsibilities - Award Phase | Assistance Agreement Payment Process | Purchasing Supplies, Equipment and Services Under EPA Grants | Indirect Costs | Best Practices Guide for Conferences | Glossary | Accessibility | Return to the Grants and Debarment Home Page |


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