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A federal contract is a legally binding agreement in which federal agencies request certain terms and conditions in order to acquire a desired service or good furnished by the selected awardee. The awardee is selected by demonstrating the best proposal to achieve the service or good, both technically and economically.
See more information about the components of a federal contract submission.
A federal contract is used where the principal purpose is to acquire property or services for the direct benefit of the U.S. Government (31 USC 6303). In contrast, the U.S. Government uses grants to carry out a public purpose of support or stimulation (31 USC 6304). Accordingly, grants are more flexible in their terms and conditions than contracts since the intent with grants is more general in nature. Some important differences between contracts and grants are:
Most solicitations should indicate when funding will be awarded under a federal contract as opposed to a federal grant. If there is uncertainty with this, there are a number of other indicators one can use to identify a federal contract.
Examples of FAR Clauses are: FAR 52.227-14 – Rights in Data, General; DFAR 252.225-7001 - Buy American Act and Balance of Payments Program; or HHSAR 352.224-70 - Privacy Act.