Cooperative agreement

What Is Cooperative Agreement?

A cooperative agreement is a type of financial assistance provided by a federal government agency to a recipient to support a public purpose where substantial involvement is anticipated between the federal agency and the recipient during the performance of the activities. Unlike a grant, which primarily involves oversight, a cooperative agreement signifies a more active partnership and collaboration. This instrument is a key component within the realm of financial instruments used by government entities to achieve shared objectives. Federal agencies use cooperative agreements when they expect to be highly engaged in the project, often participating in aspects like design, data collection, analysis, and training.

History and Origin

The framework for distinguishing between different forms of federal financial assistance, including the cooperative agreement, was largely formalized with the enactment of the Federal Grant and Cooperative Agreement Act of 1977. This legislation aimed to provide clear guidelines for federal agencies on when to use contracts, grants, and cooperative agreements. The Act stipulated that a cooperative agreement is appropriate when the principal purpose is to transfer a thing of value to a recipient to carry out a public purpose, but where substantial involvement by the agency is expected.²⁰

Historically, various forms of federal-state cooperation existed, with examples dating back to the early 20th century in areas such as agricultural development and labor statistics, where federal agencies worked alongside state entities to achieve shared goals.¹⁸, ¹⁹ This legislative clarity reinforced and structured how such collaborative undertakings would be funded and managed, moving beyond informal arrangements to a more standardized approach to funding mechanisms.

Key Takeaways

• A cooperative agreement involves substantial programmatic involvement from the federal awarding agency with the recipient.
• The primary goal is to transfer value to a recipient to accomplish a public purpose, fostering a collaborative partnership.
• Cooperative agreements differ from grants, which entail less active federal participation, and contracts, which are for acquiring goods or services for the direct benefit of the government.
• They are commonly used for initiatives requiring close coordination, shared responsibilities, and ongoing dialogue between the federal agency and the implementing entity.
• Recipients of cooperative agreements often have stricter reporting requirements and more frequent interactions with federal staff than grant recipients.

Interpreting the Cooperative Agreement

Interpreting a cooperative agreement involves understanding the balance of responsibility and collaboration between the federal agency and the recipient. The "substantial involvement" clause is central to its interpretation. This means that unlike a typical grant where the federal role is primarily monitoring and oversight, a cooperative agreement implies that federal staff will actively participate in key aspects of the project. This could include shared project management, technical assistance, joint decision-making, or coordination of activities.¹⁵, ¹⁶, ¹⁷

The specific nature and extent of this involvement are typically outlined in the funding opportunity announcement and the terms and conditions of the award. For a recipient, this translates to a more integrated relationship with the federal sponsor, necessitating regular communication and adherence to agreed-upon procedures. The aim is to leverage the expertise and resources of both parties to maximize the likelihood of achieving the intended public outcome.

Hypothetical Example

Imagine the U.S. Environmental Protection Agency (EPA) aims to improve water quality in a specific watershed that spans multiple states. The EPA could issue a cooperative agreement to a non-profit environmental organization with a proven track record in watershed restoration.

Under this cooperative agreement, the EPA would provide financial assistance to the organization. However, instead of simply funding the project and monitoring progress, the EPA's scientists and program managers would actively work alongside the organization's team. This might involve:

1. Joint Planning: EPA specialists collaborate on the development of detailed restoration plans, including setting specific targets for pollutant reduction.
2. Technical Support: EPA experts provide ongoing technical guidance on water sampling protocols, data analysis, and the implementation of remediation technologies.
3. Shared Outreach: Both the EPA and the organization jointly conduct public awareness campaigns and engage local communities in conservation efforts.
4. Phased Approval: The agreement could stipulate that certain stages of the restoration project, such as major construction phases or significant shifts in strategy, require joint approval from both the organization and the EPA before proceeding.

This close collaboration ensures that federal resources and expertise are directly applied to the project, fostering a synergistic approach to environmental protection.

Practical Applications

Cooperative agreements are widely used across various sectors where federal agencies seek to partner actively with non-federal entities to achieve specific programmatic goals. For instance, the National Institutes of Health (NIH) frequently uses cooperative agreements for high-priority research areas that require significant collaboration between investigators and NIH staff, such as multi-site clinical trials or complex disease studies.¹³, ¹⁴

The Environmental Protection Agency (EPA) also utilizes cooperative agreements extensively for environmental programs, including those related to Superfund site cleanup, pesticide control, and water reuse initiatives.⁹, ¹⁰, ¹¹, ¹² These agreements facilitate shared efforts in areas like program management, monitoring, and enforcement. The U.S. Agency for International Development (USAID) uses cooperative agreements when active participation and continuous feedback are needed to achieve developmental outcomes, often focusing on building capacity for the recipient and local partners.⁷, ⁸ Such arrangements demonstrate a commitment to interagency collaboration and strategic planning to address cross-cutting challenges.⁶

Limitations and Criticisms

Despite their collaborative benefits, cooperative agreements come with certain limitations and have faced criticisms. One primary challenge lies in clearly defining and managing the extent of "substantial involvement" without blurring lines between assistance and procurement. If an agency's principal purpose is to acquire property or services for its direct benefit, a contract should be used instead of a cooperative agreement.⁵ Misclassification can lead to protests and legal challenges, as federal oversight bodies like the Government Accountability Office (GAO) have dismissed protests concerning cooperative agreements, citing their lack of jurisdiction over non-procurement instruments in post-award scenarios.⁴ The GAO has previously ruled against agencies attempting to obtain services through cooperative agreements when a procurement contract was more appropriate.³

Furthermore, the extensive involvement required by federal agencies in cooperative agreements can sometimes lead to bureaucratic complexities, increased reporting burdens, and potential delays if communication or decision-making processes are not streamlined. Managing differing expectations between the federal agency and the recipient regarding roles, responsibilities, and due diligence can also present challenges, requiring robust risk management strategies and clear terms in the agreement.

Cooperative Agreement vs. Grant

The primary distinction between a cooperative agreement and a grant lies in the degree of federal agency involvement. Both are forms of federal financial assistance awarded to accomplish a public purpose. However, a grant is used when the federal agency anticipates minimal programmatic involvement with the recipient during the project's performance. The agency provides funding and exercises general oversight, but the recipient is largely responsible for carrying out the project independently.

In contrast, a cooperative agreement is used when "substantial involvement" from the federal agency is expected. This means the agency staff will actively participate in the project's execution, potentially collaborating on design, implementation, and analysis. This active role implies a partnership where responsibilities are shared, and the federal agency often works alongside the recipient to achieve the desired outcomes. Essentially, grants provide funding with general oversight, while cooperative agreements provide funding with active, collaborative engagement.

FAQs

Q: Who typically receives cooperative agreements?
A: Cooperative agreements are typically awarded to state and local governments, academic institutions, non-profit organizations, and sometimes commercial entities, that are working towards a public purpose in collaboration with a federal government agency.

Q: What does "substantial involvement" mean in a cooperative agreement?
A: "Substantial involvement" refers to the active participation of the federal awarding agency's staff in the project's execution. This can include joint program management, technical assistance, decision-making, or providing training to the recipient's staff.¹, ²

Q: Are cooperative agreements legally binding?
A: Yes, cooperative agreements are legally binding instruments that define the terms and conditions under which federal funds are provided and how the collaborative activities will be carried out. Recipients must comply with all statutory and regulatory requirements, including those related to compliance and accountability.

Q: Can a cooperative agreement be used for commercial purposes?
A: While primarily used for public purposes, a cooperative agreement may sometimes involve commercial organizations if their activities contribute to the specified public purpose and substantial federal involvement is warranted. However, profit is generally not an allowable cost under assistance awards like cooperative agreements.