Grants

What is a Grant?

A grant is defined in one of two ways depending on the state’s role – as a grantee or grantor – of the agreement:

State as grantee – an agreement under which an agency (grantee) receives moneys, property or other assistance from another entity (grantor) for the purpose of supporting or stimulating a program or activity of the agency.
State as grantor – An agreement under which an agency (grantor) provides moneys, property or other assistance to a recipient (grantee) for the purpose of supporting or stimulating a program or activity of the recipient.

The purpose of a grant is to secure a benefit for persons or entities other than parties to the grant instrument, like a class of clients receiving services, a targeted segment of the community, or the community at large. Other examples of assistance provided through a grant include:

Federal assistance that is characterized as a grant by federal law or regulations.
Loans or loan guarantees.
Credit enhancements.
Gifts or bequests.
Commodities.
Other assets.

A fundamental characteristic that distinguishes a grant from a public contract is that the grantor of the funds has no substantial involvement in the program or activity that the grant authorizes. The grantor’s primary involvement is to monitor compliance with the grant conditions to ensure the funds are spent for the purpose intended.

Other distinguishing characteristics of a grant versus a public contract include:

Language of support and mutual benefit instead of obligation.
Not subject to public contracting code.
Has a program description instead of a statement of work.
Describes activities instead of tasks and deliverables.
Funding may be provided in advance to support future activities.
Grantee will likely retain ownership of work product (for example, research data), but may be required to share with agency or others.
Grantee may be permitted to start activities prior to execution depending on the grant agreement.

An agency may receive or provide grants to support its programs or activities. In either role, an agency must have authority to act.

State as Grantee

Grants are not subject to the public contracting code. However, a grant may include provisions for purchasing products or services, and those actions will be subject to the public contracting code, unless the grant specifies otherwise.

Agencies that acquire products or services using grant funds must carefully coordinate program and procurement planning. An agency’s grants coordinator and procurement professional must ensure that any product or service that is acquired through grant funds is in compliance with the terms and conditions of the grant.

An agency should consider:

Specific terms and conditions of the grant.
Timelines for performance of the grant.
Procurement methods or processes that may be required by the grant (that may supersede state requirements).
Reporting requirements.

State law provides that federal statutes and regulations govern when federal funds are involved. In these circumstances, and where federal statutes or regulations conflict with state law (or they require additional conditions in public contracts not authorized by state law), federal statutes and regulations prevail (refer to ORS 279A.030).

An agency that has received a grant award should ensure that its procurement professional is engaged early in the process to assure procurements are in compliance with requirements of the grant. To ensure an efficient process when grant funds are being used, a copy of the grant should be provided to the procurement professional.

An agency that uses grant funds must adhere to the procurement standards of the grant. To the extent that the methods and processes described in this manual conform to applicable federal law and the standards and do not conflict with grant procurement requirements, the agency must adhere to the state’s procurement standards.

State as Grantor

A grant issued by the state is not subject to state procurement law. Additionally, there is no specific state law, rule or process for the granting of funds. However, many of the procurement methods and processes outlined in this manual can be adapted to support planning and executing activities involved in administering a grant.

If an agency is acting as a grantor, where the agency is passing grant funds to another recipient (grantee) all or a portion of the money or property received by the agency under the grant, the agency will need to be certain to comply with any process requirements of the grant, including but not limited to reporting requirements.

Especially with the use of federal grant funds, requirements can be very specific, and the agency will likely take on the additional duty of ensuring the grantee complies with the requirements of the original grant.

Legal Sufficiency Review

If an agency procures products or services using grant funds, and executes a contract that exceeds $150,000, the agency must submit the final negotiated contract to the Attorney General for the required legal sufficiency review. Other types of grant funds expenditures may require legal sufficiency review.

All grants that exceed $150,000, whether received or issued by the state, must be submitted for the required legal sufficiency review, with the exception of the following types of grants that are exempted from review:

Federal Cooperative Agreements.
Federal grants, under which an agency is the grantee, provided the agency has a grants coordinator.
Federal pass-through grants, under which an agency passes through to another recipient all or a portion of the money or property received under a grant from a federal agency, provided that:

the agency does not add to or modify the federal grant except to provide proper administration.
the grant contains a clause that transfers sole liability for the recipient's breach of the conditions of the grant and holds harmless and indemnifies the state for an amount equal to the grant funds required to pay to the grantor.