Introduction to Funding Categories

Most biomedical research project funding falls into one of the following 4 categories:

1.    Contracts

Contracts are the most formal type of award. Under a contract, the sponsor supports clearly defined activities. Contract characteristics include:

• Specific deliverables are stipulated in negotiations.
• Project performance is monitored by the sponsor.
• Technical reports are required.
• Detailed financial reports are required.

Contracts - n. an agreement

Contracts are legal agreements used for procuring a specific service or product. In the case of fixed­price contracts, a set lump­sum payment is established in advance for performance of a specified set of tasks or delivery of a certain service (e.g., $/lab test per completed patient) and payment is limited to such price multiplied by the number of units performed. Cost­reimbursement contracts provide for payment of actual costs incurred, up to a ceiling amount equal to the total estimated cost stated in the contract. The contractor may discontinue work on the project after costs reach this upper limit, unless the sponsor increases the total contract. However, the reporting and record­keeping necessary to document the expenses on a cost­reimbursement contract usually outweigh the advantage of working with a more flexible cost ceiling.

2.    Grants

Grants are made to support a specific project as outlined in a proposal. Grant characteristics include:

• Project usually has stated goals and objectives.
• The sponsor has expectations about how the funds will be spent.
• Grant deliverables may include formal project reports.
• A financial report is required.

Grants - n. something bestowed

Grants are generally less restrictive than contracts, although technical and financial reports are generally required. Grants and Cooperative Agreements are usually awarded to support projects rather than to procure a definite service or product. Grants may be awarded by foundations, corporations or agencies of the federal government. Amounts and types of awards vary from sponsor to sponsor, and many agencies offer several sorts of grant opportunities.

3.    Cooperative Agreements

Cooperative agreements are a grant-contract hybrid.

This form of federal assistance involves both the Government and the grantee sharing responsibility for programmatic management of the project. Cooperative agreements anticipate "substantial federal involvement with the recipient during performance of the contemplated activity." Specific terms of collaboration are spelled out in individual agreements, which the ORA will review carefully with the investigator. In all other respects, cooperative agreements follow the policies applicable to grants.

4.    Gifts

Gifts support diverse institutional activities. Three general features of gifts include:

• No deliverables are required from the activities supported.
• No formal reports are required.
• No formal financial reports are required.