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Contracts vs. Assistance Agreements


A contract is a legal instrument which is used to enter into a relationship between the Department of Defense (DoD) and a contractor when the principal purpose is to acquire supplies or services for the direct benefit or use by the DoD.

An assistance agreement is a legal instrument which is used to enter into a relationship between the DoD and a grantee (recipient) when the principal purpose is to transfer a thing of value to the recipient to carry out a public purpose of support or stimulation authorized by a law of the United States, rather than to acquire supplies or services for the DoD's direct benefit or use. There are two main forms of assistance agreement awards: (1) a grant and (2) a cooperative agreement. A grant award is used when substantial involvement is not expected between the DoD and the recipient when carrying out the activity contemplated by the assistance agreement. A cooperative agreement award is used when substantial involvement is expected between the DoD and the recipient when carrying out the activity contemplated by the assistance agreement.

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