Federal Contracts

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:

  • Terms: Contracts are governed by relatively strict terms and conditions, including clauses from the Federal Acquisition Regulations. Grants are governed by the terms of the Notice of Award (NOA), in accordance with the NIH Grants Policy Statement.
  • Statement of Work:  The SOW associated with a federal contract is carefully constructed in conjunction with applicable U.S. Agency and often include specific deliverables and milestones.  The failure to provide the final deliverables and milestones may have serious ramifications.  Grants have more flexibility with the associated scope of work.  The primary requirement associated with a grant is reasonable due diligence is efforts to advance the research.
  • Reporting:  With contracts, there are usually frequent reporting requirements and a constant need to keep the applicable U.S. Agency updated on the conduct under the contract and results. With grants, there is usually only an annual reporting requirement.  

Federal Contract Proposals v. Federal Grant Proposals

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.

  • If the award or solicitation contains references to the Federal Acquisition Regulations (FARs or DFARs for DOD contracts), this is a good sign that the project is funded through 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.

  • If the sponsor is the NIH, the Contract Number will begin with HHSN or N01.
  • The cover page of the contract, in most cases, will also indicate that it is a Federal Contract.  For Example: If Section I, Contract Clauses has an X next to it and/or the signature block section is checked to indicate Negotiated Agreement/Contractor Required to Sign (usually block 17).

NIH Contracts

The National Institutes of Health (NIH) is the primary funder for sponsored research conducted at Yale University. NIH contract opportunities are made available through solicitations, named Requests for Proposals (RFP) or Broad Agency Announcements (BAA). These solicitations may be found on FedBizOpps, the NIH RFP Directory, or individual NIH Institutes websites. Solicitations are continually updated to respond to submitted questions and amend crucial information regarding the submission requirements. Therefore, it is important to register for email notifications on selected solicitations to be a part of these updates when they occur. In addition, it is beneficial to return to the solicitation posting to ensure all updates were captured.

It is important to allow sufficient time for the preparation and negotiation of the contract, as the components are generally more complex than those of a grant.

Components of a Federal Contract Submission

There are typically two* components to a federal contract submission: 

  1. The Technical Proposal
    The detailed work plan should signify how the Statement of Work conveyed in the RFP (or BAA by NIH) will successfully be achieved. Details should include information on staffing, organization, and management of the work plan. In some cases a timeline of completion stages for various tasks of a project may be required. Please ensure instructions are followed for accuracy in arrangement and forms when preparing the technical proposal. Special attention should be paid to the:
    • Project plan
    • Personnel and facilities description
    • Summary budget

  2. The Business Proposal
    This includes detailed budget information with backup pricing data. The costs needed to perform the work will need to be adequately addressed in the business proposal for the NIH to evaluate the costs of the work performed. The amounts of the main items should be included in the proposed costs. Main items will include labor, fringe benefits, travel, materials, subcontracts and indirect costs.  Please remember to follow instructions entirely to make certain specifications regarding costs to be included or not included are observed.
    Please note: Form requirements for contracts are different than grant forms and will need to adhere to RFP and BAA specifications. It is important to be aware that not every document in a contract requires a form page.

    * If the TOTAL (including indirects) proposed contract exceeds $700,000 for the entire period of performance, a Small Business Subcontracting Plan (SBSP) will need to be furnished. Please immediately contact Procurement before you build the budget to allow for maximum utilization of Small Businesses.  The SBSP will indicate how small businesses will be utilized in the acquisition of services and supplies within the proposed cost of work. Please remember that if this is accepted at the time of the proposal, this will become part of your contract. This obligation is binding, and it is expected that the SBSP will be adhered to throughout the project. This would be the obligation of the Principal Investigator and Business Office to oversee.