Contracts and financial assistance awards help EERE to fulfill its mission of investing in clean energy technologies that strengthen the economy, protect the environment, and reduce dependence on foreign oil. Contracts and financial assistance awards are mechanisms that EERE can use to fund projects, among other purposes. But, while they both connect EERE with other organizations- whether those are private companies, universities, nonprofit organizations, or state and local governments- contracts and financial assistance awards are governed by different rules and have different functions.

A contract is a legal instrument defining a relationship between EERE and a business, organization, or individual, in which the principal purpose is the acquisition of property or services for the direct benefit or use by the Federal government. For example, EERE may enter into a contract with an architecture firm to design an energy-efficient office or laboratory building where EERE employees will work.

Financial assistance awards, which include grants and cooperative agreements, are a transfer of money, property, or services to a recipient to accomplish a specific public purpose. Whether the financial assistance award is a grant or a cooperative agreement it affects EERE’s direct role in carrying out the project. Cooperative agreements require that EERE remains substantially involved with the project, which means that EERE scientists, engineers, or other professionals work directly with the Recipient to carry out the project. Grants, on the other hand, do not include this type of EERE participation. An example of a grant could be a project conducted by a university to research and develop new energy-efficient building materials.

Whether a project is being completed as part of a contract or a financial assistance award, EERE is responsible for monitoring the project. Different rules for contracts and financial assistance awards establish differences in how projects are managed and monitored. However, in all cases, EERE works to ensure that funds are spent in accordance with applicable laws, and that the Contractor or the financial assistance Recipient is working within the scope of the project.

EERE plays a critical role in the research, development and use of energy efficiency and renewable energy technologies. The use of contracts and financial assistance awards gives EERE access to outside assets and expertise. And, through effective project monitoring, EERE leverages these resources to help achieve its mission.