DoD Grants and Cooperative Agreements — Award Format and Administration

Legal Authority

• 10 U.S.C. § 113 — Secretary of Defense authority: general authority of the Secretary of Defense to manage DoD operations, including grant-making authority
• 5 U.S.C. § 301 — Agency housekeeping authority: general authority for federal agencies to issue regulations governing their own operations and procedures
• 2 CFR Part 200 — OMB Uniform Administrative Requirements for Grants and Cooperative Agreements (Uniform Guidance): the government-wide framework that DoD implements through its agency-specific Parts 1120, 1134, and 1136

Key Mechanics

DoD grants are administered through a three-part regulatory framework layered on top of OMB's Uniform Guidance (2 CFR Part 200). Part 1120 standardizes award format across all DoD components; Part 1134 governs reporting requirements; Part 1136 covers other administrative requirements including records retention and audit. DoD grants flow primarily to universities, research institutes, and nonprofits for defense-relevant research. The Defense Advanced Research Projects Agency (DARPA) and the military service research offices (Army Research Office, Office of Naval Research, Air Force Office of Scientific Research) are the primary grant-making components; their grants are subject to these uniform administrative requirements.

Current Rule (2026)

What This Rule Does

When the Department of Defense gives out grants or cooperative agreements — to universities, nonprofits, state and local governments, and other organizations — it must follow a uniform set of rules governing how those awards are structured, what recipients must report, and what administrative requirements apply. Three CFR Parts work together to form the DoD grant administration framework:

• 2 CFR Part 1120 sets the standard award format: what must appear on the cover page, how award-specific and general terms are organized, and how DoD components implement the format
• 2 CFR Part 1134 governs financial, programmatic, and property reporting — what recipients must report, how often, and in what form
• 2 CFR Part 1136 covers other administrative requirements including records retention, audit rights, remedies for non-compliance, and close-out procedures

Together these Parts implement OMB's government-wide grants management framework (2 CFR Part 200, the "Uniform Guidance") with DoD-specific requirements layered on top. Any organization receiving a DoD grant or cooperative agreement is bound by these terms.

Award Format (Part 1120)

• § 1120.1 — Establishes a single standard layout so recipients can find the same information across awards from different DoD offices
• § 1120.100 — Every award or award modification must include a cover page with key facts about the award and the recipient
• § 1120.105 — Cover page must include: award number, recipient name and address, period of performance, total amount, cost-sharing requirements, administrative contacts, and applicable terms and conditions
• § 1120.200 — Award-specific terms (conditions applying to only that award) must be included as a separate section and written clearly so recipients can understand them
• § 1120.205 — Award-specific terms must be organized so award managers and recipients can find them easily; DoD encourages plain language
• § 1120.3 — Each DoD Component that gives grants must implement the standard format within 18 months of the rule's effective date

Reporting Requirements (Part 1134)

Performance Reporting

• § 1134.100 — Recipients must report on program performance; reports must follow OMB guidance in 2 CFR 200.301 and 200.328
• § 1134.105 — Construction awards: DoD may waive performance reports since construction monitoring happens through site inspections; reports only required when genuinely needed
• § 1134.110 — Non-construction research awards: DoD limits how often it can require reports beyond what OMB already mandates
• § 1134.115 — Recipients must use OMB-approved standard forms for performance reports; DoD may not invent non-standard reporting requirements

Financial Reporting

• § 1134.200 series — Recipients must submit financial reports using the SF-425 (Federal Financial Report); frequency depends on award type and risk level; final report due within 120 days of period end

Property Reporting

• § 1134.300 series — Recipients must report on federally owned property in their custody and on property acquired with federal funds above threshold

Subaward and Executive Compensation Reporting

• § 1134.400 series — Recipients above $30,000 in federal funding must report first-tier subaward data to USASpending.gov; recipients of $25 million or more per year in federal funding must also report the total compensation of their five most highly compensated executives

Administrative Requirements (Part 1136)

• § 1136.5 — Records retention: recipients must keep financial and program records for three years from submission of the final financial report (longer if audits are pending)
• § 1136.10 — DoD has the right to audit any recipient at any time; recipients must allow access to records, facilities, and staff
• § 1136.20 — Non-compliance remedies: DoD may place conditions on awards, suspend or terminate, or disallow costs for recipients who fail to comply with requirements
• § 1136.25 — Close-out: recipients must submit final reports within 120 days of the award end date; DoD must complete close-out within one year of receiving all required reports

Implementing Regulations

The DoD grants framework is implemented primarily through the Defense Grant and Agreement Regulatory System (DGARS) — a suite of 32 CFR Parts that sit alongside the OMB Uniform Guidance (2 CFR Part 200):

32 CFR Part 21 — DoD Grants and Agreements: General Matters (59 sections across 5 subparts): the master enabling regulation establishing the DGARS structure, explaining how the system works, defining coverage, and establishing the hierarchy of authorities that grants officers must follow. Key provisions:

• § 21.200 — DGARS structure: the Defense Grant and Agreement Regulatory System is the comprehensive body of DoD policy for assistance awards; it covers grants, cooperative agreements, and technology investment agreements (TIAs) awarded by DoD Components to entities outside the federal government — universities, nonprofits, state and local governments, and for-profit organizations; the system provides a uniform policy framework while allowing DoD Component-specific supplements
• § 21.205 — Covered instruments: DGARS applies to grants, cooperative agreements, TIAs, and project agreements; it does not apply to procurement contracts (which are governed by DFARS); the threshold distinction is whether the primary purpose is to accomplish a public purpose (assistance) or to acquire goods/services for the government's direct benefit (procurement)
• § 21.210 — Purposes of DGARS: uniform policies reduce administrative burden on recipients dealing with multiple DoD Components; promote accountability; implement statutory requirements (particularly the Federal Grant and Cooperative Agreement Act, 31 U.S.C. Chapter 63); and ensure DoD-wide consistency
• §§ 21.300–21.385 — Regulatory hierarchy: grants officers must apply requirements in this priority order: (1) statute; (2) OMB guidance; (3) DGARS; (4) DoD Component supplemental regulations; (5) terms and conditions of the individual award; DGARS requirements prevail over Component supplements unless the Component supplement is more restrictive

Part 21 is the "constitution" of the DGARS — it tells grants officers what the system is and how it works, but most operational requirements are in the specific Parts (22, 22a, 34, and others) that cover particular award types and recipient categories. Recent rulemaking: 85 FR 51237 (August 2020) — major DGARS revision implementing OMB Uniform Guidance changes and adding new technology transfer and intellectual property provisions.

32 CFR Part 22 — DoD Grants and Agreements: Award and Administration (35 sections — governs how DoD grants officers award and administer grants and cooperative agreements to all recipient types). Key provisions:

• § 22.205 — Distinguishing assistance from procurement: Grants officers must make a positive judgment that assistance (not procurement) is the appropriate instrument before using a grant; if the government will be "substantially involved" in the work, a cooperative agreement is required rather than a grant
• § 22.210 — Statutory authority: Before awarding, grants officers must identify both the program statute (the law creating the program) and the assistance-type authority (31 U.S.C. Chapter 63) to confirm grant authority exists — a two-step legal prerequisite that prevents unauthorized grants
• § 22.215 — Grants vs. cooperative agreements: A grant is used when the government will not be substantially involved in carrying out the activity; a cooperative agreement is used when DoD expects to be actively involved (joint planning, progress review, joint publication rights) — the label matters because it affects recipient autonomy and government oversight rights
• § 22.300 — Competition policy: DoD policy requires maximum competition in grant awards; for research and development grants, merit-based peer review is the standard competitive process; limited non-competitive awards require documented justification
• § 22.315 — Merit-based competition: DoD uses peer review panels of qualified experts to evaluate research grant applications; panel composition, conflict-of-interest management, and evaluation criteria must be documented and applied consistently

32 CFR Part 34 — Administrative Requirements for Grants and Agreements with For-Profit Organizations (32 sections — the DoD-specific counterpart to the Uniform Guidance for commercial organizations, which are excluded from 2 CFR Part 200's standard terms). Key provisions:

• § 34.11 — Financial management systems: For-profit recipients may use their own commercial financial management systems; DoD does not require adoption of government systems as a condition of award — recognition that commercial companies have mature internal controls that differ from nonprofit/university structures
• § 34.12 — Payment: DoD offers two methods — reimbursement (pay after costs are incurred, standard for most for-profit awards) or advance payment (uncommon, requires special justification); payment is made against submitted invoices with supporting documentation
• § 34.13 — Cost sharing: Contributions to the project cost from the recipient (cash or in-kind) are valued at fair market value; third-party in-kind contributions are allowable if documented and if the third party's costs would otherwise be allowable under federal cost principles
• § 34.16 — Audits: For-profit recipients that expend $750,000 or more in federal awards in a year must have an independent audit; unlike nonprofit/government recipients (who use the Single Audit Act), for-profit recipients use a program-specific audit of DoD awards rather than an entity-wide single audit — a significant compliance difference
• § 34.17 — Allowable costs: Cost allowability is governed by FAR 31.2 (Contracts with Commercial Organizations), not 2 CFR Part 200's cost principles — another distinction from nonprofit treatment; this means for-profit DoD grant recipients follow the same cost accounting rules as DoD contractors, not grant cost principles

2 CFR Part 1132 — Recipient Procurement Procedures: General Award Terms and Conditions (14 sections — governs how DoD grant recipients must buy property and services when using DoD award funds). Key provisions:

• § 1132.1 — Sets standard wording for procurement terms and conditions that recipients must follow when purchasing supplies, equipment, real property, or services under DoD grants, implementing 2 CFR 200.317–200.326
• § 1132.100 (PROC Article I) — States must use their own procurement laws and procedures for purchases under DoD grants, provided those systems comply with OMB standards; DoD components must include Article I wording verbatim in grant terms for state recipients
• § 1132.200 (PROC Article II) — Universities, nonprofits, local governments, and Indian tribes must follow federal procurement standards (2 CFR 200.318–200.325): full and open competition, independent cost estimates, prohibition on conflict of interest, and documentation requirements for all purchases
• § 1132.205 — DoD components must use the exact wording of Appendix B (PROC Article II Sections A–F) in award terms for non-state, non-profit recipients; no deviation without a waiver
• § 1132.300 (PROC Article III) — Contract provisions required in subcontracts: equal opportunity, Davis-Bacon (construction), Clean Air Act compliance, anti-kickback, debarment/suspension certifications, and rights in data; applies to all recipients

How It Affects You

If your organization receives a DoD grant or cooperative agreement — research contracts with universities, community development grants, nonprofit program awards — these rules determine your compliance obligations.

Reporting burden is real. You'll need to submit performance reports (typically semi-annually or annually), financial reports (SF-425), and potentially subaward data to USASpending.gov. Missed deadlines can trigger conditions on future awards.

Executive compensation disclosure applies if your organization receives $25 million or more in total federal funding annually — not just DoD money. If that threshold is met, you must publicly report your top-five executives' compensation.

Records must be kept for at least three years after the final financial report. In practice this means keeping grant files even after the project ends. If you have pending audits or unresolved findings, the retention period extends.

Subawards to subrecipients above $30,000 must be reported to USASpending.gov within 30 days. If you pass-through DoD funds to another organization, you inherit prime recipient obligations and must flow down applicable requirements.

Statutory Authority

This rule implements:

• 10 U.S.C. § 113 — Secretary of Defense's authority to issue regulations governing DoD administration and operations
• 5 U.S.C. § 301 — General agency housekeeping authority
• 2 CFR Part 200 — OMB's government-wide Uniform Guidance for federal awards, which DoD implements and supplements through these Parts

Recent Rulemakings

No major Federal Register amendments reported for these Parts. The rules implement the post-2014 OMB Uniform Guidance framework.

Pending Action