ADS Chapter 304: Selecting the Appropriate Acquisition and Assistance (A&A) Instrument

Section 635(b) of the Act provides that the President may make loans, advances, and grants to make and perform agreements and contracts with, or enter into other transactions with, any individual, corporation, or other body of persons, friendly government or government agency, whether within or without the United States and international organizations in furtherance of the purposes and within the limitations of this Act. The principal purpose of U.S. bilateral development assistance is to help the poor majority of people in developing countries to participate in a process of equitable growth through productive work and to influence decisions that shape their lives, with the goal of increasing their incomes and their access to public services which will enable them to satisfy their basic needs and lead lives of decency, dignity, and hope. The Federal Grant and Cooperative Agreement Act of 1977 (FGCAA) prescribes criteria that executive agencies must follow in selecting which legal instrument to use to establish a relationship between an agency and a potential awardee. The FGCAA addresses three types of instruments, namely contracts, grants, and cooperative agreements. Grants and cooperative agreements collectively are referred to as "assistance" agreements. One purpose of the FGCAA is to promote uniformity in the use of these three instruments and to further define relationships and corresponding responsibilities associated with each respective instrument. The FGCAA requires an agency to use a contract as the appropriate legal instrument reflecting a relationship between the agency and the organization when the principal purpose of the transaction is to acquire goods or services for the direct benefit or use of the U.S. Government. In contrast, a grant or cooperative agreement is used when the principal purpose of the transaction is to provide assistance to the recipient for a public purpose. The FGCAA also requires an agency to use a grant or cooperative agreement when the recipient is expected to perform a significant portion of the work or when the agency intends to provide significant technical assistance. The Competition in Contracting Act of 1984 (CICA) requires that all procurement actions be conducted in a manner that provides for full and open competition. The CICA also requires that all procurement actions be conducted in a manner that is fair, equitable, and transparent. The CICA applies to all procurement actions, including those for goods, services, and construction. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) and the Agency for International Development Acquisition Regulation (AIDAR) (48 CFR Part 7) also provide guidance on the selection of the appropriate acquisition and assistance instrument. These regulations require that all procurement actions be conducted in a manner that is consistent with the applicable statutes, regulations, and policies. The selection of the appropriate acquisition and assistance instrument is a critical decision that requires careful consideration of the purpose and scope of the transaction, the type of goods or services to be acquired, and the level of assistance to be provided. The selection of the instrument must be made in accordance with the applicable statutes, regulations, and policies, and must be documented in the Agency Secure Image and Storage Tracking System (ASIST) file. The Director, Bureau for Management, Office of Acquisition and Assistance (M/OAA), serves as the Agency Senior Procurement Executive and as the Assistance Executive. The Director provides executive leadership in communicating the importance of selecting the most appropriate acquisition or assistance instrument to Operating Unit (OU) leadership. The Director also makes the final instrument determination when there is a disagreement between the Contracting Officer/Agreement Officer (CO/AO) and the Operating Unit. The Operating Units (OUs) assist the CO/AO with determining the appropriate type of instrument in accordance with relevant statutes, regulations, and policies. The OUs conduct strategic planning, project design, and project/mechanism selection and design in accordance with the ADS 200 Series. The project selection and design includes an A&A Strategy that lists proposed A&A actions. The OUs also prepare statements of work, program descriptions, and all other documents associated with the acquisition or assistance consistent with the selected type of instrument and complies with the appropriate regulations, policies, procedures, and terminology for the selected instrument. The Planner, in consultation with the CO/AO, is responsible for drafting and documenting the recommendation for the selection of instrument. The Contracting Officer/Agreement Officer (CO/AO) collaborates with the Planner at the planning phase and provides guidance on selecting the appropriate A&A instrument. The CO/AO reviews the Planner's recommendation and supporting documents and makes the final determination on the selection of instrument in accordance with applicable statutes, regulations, and policies. The CO/AO also maintains documentation in the Agency Secure Image and Storage Tracking System (ASIST) file to support the type of instrument selected. The Office of the General Counsel (GC) and Resident Legal Officers (RLOs) advise the Planner and CO/AO, as needed, on selection of instrument determinations in accordance with applicable statutes, regulations, and policies.