Grant
A grant is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever (1) the principle purpose of the relationship is the transfer of money, property, services, or anything of value to the state or local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by a federal statute, rather than acquisition, by purchase, lease, or barter, or property or services for the direct benefit or use of the federal government; and (2) no substantial involvement is anticipated between the executive agency, acting for the federal government, and the state or local government or other recipient during performance of the contemplated activity.
Contract
A contract is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever (1) the principle purpose of the instrument is the acquisition, by purchase, lease, or barter of property or services for the direct benefit or use of the federal government; or (2) an executive agency determines in a specific instance that the use of a type of procurement contract is appropriate.
Cooperative Agreement
A cooperative agreement is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever (1) the principle purpose of the relationship is the transfer of money, property, services, or anything of value to the state or local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by a federal statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the federal government; and (2) substantial involvement is anticipated between the executive agency, acting for the federal government, and the state or local government or other recipient during performance of the contemplated activity.
____________________________________
Definitions of Grant, Contract, and Cooperative Agreement from O.L. 95-224 (1978)