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The government uses grants and cooperative agreements as a means of assisting researchers in developing research for the public good, whereas it uses contracts as a means of procuring a service for the benefit of the government. Grants are much more flexible than contracts.
The Difference Between Public Vs. Private Grant Funding. The procurement of grants for your project can mean the difference between success and failure. Public and private grants provide a monetary source for innovation that, unlike loans, you do not need to pay back. Review your grant options to decide which type of grant most suits your project.