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While the overwhelming majority of grants are awarded to non-business entities (e.g., state and local governments, schools and universities, nonprofit organizations, etc.), many cooperative agreements and contracts are awarded to for-profit businesses. Below is an overview of the key differences between grants, cooperative agreements and contracts. In addition to grants, the federal government also awards funds directly to business entities through cooperative agreements. Like grants, cooperative agreements are typically awarded through a competitive process.
â With the federal government directly; OR. â With a federal government contractor to provide goods or services that are either ânecessaryâ to the performance of the ultimate. contract with the federal government or that fulfills a part of the direct contractorâs agreement with the federal government; OR.