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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.
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.