January 24, 1979
79-8 MEMORANDUM OPINION FOR THE ASSISTANT ATTORNEY GENERAL FOR ADMINISTRATION, OFFICE OF MANAGEMENT AND FINANCE
Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. § 501 et seq .)—Application to the Department of Justice—Drug Enforcement Administration—21 U.S.C. § 872(a)(2)
This is in response to your request for our opinion concerning the ap plication o f the Federal Grant and Cooperative Agreement Act o f 1977 (FGCAA), Public Law No. 95-224, 29 Stat. 3, 41 U .S.C . § 501 et seq., to the components o f the Department o f Justice. Your request raises two general issues: first, the effect o f the Act on the general authority o f the Department o f Justice to enter into contracts, grants, or cooperative agreements, and second, the extent to which the Attorney General has delegated authority derived from the Act and to the com ponents o f the Department. It then raises the particular question whether the Act and Department regulations authorize the Drug Enforcement Administration (DEA) to enter grant agreements with State and local governments under 21 U.S.C. § 873(a). We understand that DEA intends to provide State and local govern ments with “ seed m oney” to establish investigative units that will concen trate on particular types o f violations. DEA has suggested that it is authorized to provide such assistance as a cooperative arrangement under 21 U.S.C. § 873(a)(2) and that § 7(a) o f the FGCAA permits it to use a form grant agreement in doing so. We conclude that DEA lacks authority to provide assistance under 21 U.S.C. § 873(a)(2) by grant, notw ithstand ing the FGCAA. We have also concluded, however, that 21 U.S.C. § 872(a)(2) and the FGCAA authorize DEA to fund experimental enforce ment projects by State or local agencies through either a grant or a cooperative agreement. As a preliminary matter, we note that the FGCAA applies to “ executive
57 agencies,” which it defines as the executive departm ents, independent establishments, and wholly owned Government corporations.' Thus, the Act applies to the Departm ent o f Justice as an entity. With exceptions not relevant here, the functions o f the Department are vested in the Attorney General, subject to delegation.2 Therefore, the powers and duties under the Act are conferred upon the Attorney General. The Act declares in effect, that three types o f legal instruments can em body the relationship between a Federal executive agency and the recipient o f Federal assistance or a procurem ent contract: the contract, the grant agreement, and the cooperative agreem ent.3 Sections 4-6 o f the Act, 41 U.S.C. § 503-505, define the type o f relationship between an agency and the recipient in which each instrument will be used. Section 7(a) o f the Act, 41 U .S.C . § 506(a), authorizes the agencies to enter into the type o f agree ment that is appropriate to the agency’s underlying relationship with the recipient. The text and legislative history o f the Act dem onstrate that it does not change the substantive authority o f agencies to enter particular relationships with recipients; it merely requires them to use the proper legal instrument in the exercise o f that authority. The Act requires a procurement contract to be used “ whenever the prin cipal purpose o f the instrument is the acquisition, by purchase, lease, or barter, o f property or services for the direct benefit or use o f the Federal G overnm ent.” 4 Assistance, as opposed to procurem ent, requires either a grant agreement or cooperative agreement. In both cases, a relationship exists where: * * * the principal purpose o f the relationship is the transfer of money, property, services, or anything o f value to the State or local government or other recipient in order to accomplish a public purpose o f support or stimulation authorized by Federal statute* * *. [Emphasis added.]5 A grant agreement must be used when “ no substantial involvement” by the Federal agency in the recipient’s activity is anticipated;6 a cooperative agreement must be used when “ substantial involvement” is anticipated.7 The purpose o f these provisions is to provide uniform, Government- wide criteria for selecting a legal instrument that will reflect the type of basic relationship expected between the Federal Government and non- Federal parties.' Taken together, they “ provide a basic structure that
1 41 U .S.C . § 502(4); see 5 U .S.C . §§ 101-105. 1 28 U .S.C . § 509, 510; see also 21 U .S.C . § 871. 1 The Act does not apply to direct cash assistance to individuals, subsidies, loans, loan guarantees, or insurance. 41 U .S.C . § 502(5). 4 41 U .S.C . § 503. 1 41 U .S.C . § 504(1), 505(1). ‘ 41 U.S.C. § 504(2). 7 41 U .S.C . § 505(2). * S. Rept. 449, 95th C ong., 1st sess., 2, 7 (1977). See also Federal G rant and Cooperative Agreements A ct, P ub. L. No. 95-224, § 2(b)(2); 123 C o n g . R e c . H. 10159-60 (Sept. 27, 1977).
58 expresses existing relationships between the Federal Government and non- Federal entities.” 9 The powers conferred by § 7(a) o f the Act, 41 U.S.C. § 506(a), must be understood in this context. Section 7(a) provides: Notwithstanding any other provision o f law, each executive agency authorized by law to enter into contracts, grant or cooperative agreements, or similar arrangements is authorized and directed to enter into and use types o f contracts, grant agree ments, or cooperative agreements as required by this Act. On its face, the section permits and directs any agency to use the type o f instrument which the preceding sections have declared appropriate to the type o f relationship the agency is entering. As the Senate committee report on the bill explains, agencies may have previously been statutorily re stricted to a type o f instrument that did not accurately reflect the nature o f the relationship. The authority given by § 7(a), it continues, “ will provide the executive agencies with needed flexibility in their efforts to use ap propriate legal instruments to reflect the relationships established with non-Federal recipients.” 10 In other words, § 7(a) gives the executive agen cies authority to comply with the criteria o f §§ 4-6. Sections 4-6, however, do not alter the substantive power o f the agency to enter a particular type o f relationship. Instead, they require the use of grant or cooperative agreements only when the agency is “ authorized by Federal statute” to provide support or stim ulation." As the legislative history repeatedly points out, their purpose is to require the form o f the agreement to reflect the substance o f the relationship.'2 It follows that the Act does not confer on the Departm ent o f Justice new authority to pro cure property or services, make grants, or cooperate with non-Federal en tities. Rather, it authorizes and directs the Department to use the correct legal instrument to carry out its authorized functions.
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January 24, 1979
79-8 MEMORANDUM OPINION FOR THE ASSISTANT ATTORNEY GENERAL FOR ADMINISTRATION, OFFICE OF MANAGEMENT AND FINANCE
Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. § 501 et seq .)—Application to the Department of Justice—Drug Enforcement Administration—21 U.S.C. § 872(a)(2)
This is in response to your request for our opinion concerning the ap plication o f the Federal Grant and Cooperative Agreement Act o f 1977 (FGCAA), Public Law No. 95-224, 29 Stat. 3, 41 U .S.C . § 501 et seq., to the components o f the Department o f Justice. Your request raises two general issues: first, the effect o f the Act on the general authority o f the Department o f Justice to enter into contracts, grants, or cooperative agreements, and second, the extent to which the Attorney General has delegated authority derived from the Act and to the com ponents o f the Department. It then raises the particular question whether the Act and Department regulations authorize the Drug Enforcement Administration (DEA) to enter grant agreements with State and local governments under 21 U.S.C. § 873(a). We understand that DEA intends to provide State and local govern ments with “ seed m oney” to establish investigative units that will concen trate on particular types o f violations. DEA has suggested that it is authorized to provide such assistance as a cooperative arrangement under 21 U.S.C. § 873(a)(2) and that § 7(a) o f the FGCAA permits it to use a form grant agreement in doing so. We conclude that DEA lacks authority to provide assistance under 21 U.S.C. § 873(a)(2) by grant, notw ithstand ing the FGCAA. We have also concluded, however, that 21 U.S.C. § 872(a)(2) and the FGCAA authorize DEA to fund experimental enforce ment projects by State or local agencies through either a grant or a cooperative agreement. As a preliminary matter, we note that the FGCAA applies to “ executive
57 agencies,” which it defines as the executive departm ents, independent establishments, and wholly owned Government corporations.' Thus, the Act applies to the Departm ent o f Justice as an entity. With exceptions not relevant here, the functions o f the Department are vested in the Attorney General, subject to delegation.2 Therefore, the powers and duties under the Act are conferred upon the Attorney General. The Act declares in effect, that three types o f legal instruments can em body the relationship between a Federal executive agency and the recipient o f Federal assistance or a procurem ent contract: the contract, the grant agreement, and the cooperative agreem ent.3 Sections 4-6 o f the Act, 41 U.S.C. § 503-505, define the type o f relationship between an agency and the recipient in which each instrument will be used. Section 7(a) o f the Act, 41 U .S.C . § 506(a), authorizes the agencies to enter into the type o f agree ment that is appropriate to the agency’s underlying relationship with the recipient. The text and legislative history o f the Act dem onstrate that it does not change the substantive authority o f agencies to enter particular relationships with recipients; it merely requires them to use the proper legal instrument in the exercise o f that authority. The Act requires a procurement contract to be used “ whenever the prin cipal purpose o f the instrument is the acquisition, by purchase, lease, or barter, o f property or services for the direct benefit or use o f the Federal G overnm ent.” 4 Assistance, as opposed to procurem ent, requires either a grant agreement or cooperative agreement. In both cases, a relationship exists where: * * * the principal purpose o f the relationship is the transfer of money, property, services, or anything o f value to the State or local government or other recipient in order to accomplish a public purpose o f support or stimulation authorized by Federal statute* * *. [Emphasis added.]5 A grant agreement must be used when “ no substantial involvement” by the Federal agency in the recipient’s activity is anticipated;6 a cooperative agreement must be used when “ substantial involvement” is anticipated.7 The purpose o f these provisions is to provide uniform, Government- wide criteria for selecting a legal instrument that will reflect the type of basic relationship expected between the Federal Government and non- Federal parties.' Taken together, they “ provide a basic structure that
1 41 U .S.C . § 502(4); see 5 U .S.C . §§ 101-105. 1 28 U .S.C . § 509, 510; see also 21 U .S.C . § 871. 1 The Act does not apply to direct cash assistance to individuals, subsidies, loans, loan guarantees, or insurance. 41 U .S.C . § 502(5). 4 41 U .S.C . § 503. 1 41 U .S.C . § 504(1), 505(1). ‘ 41 U.S.C. § 504(2). 7 41 U .S.C . § 505(2). * S. Rept. 449, 95th C ong., 1st sess., 2, 7 (1977). See also Federal G rant and Cooperative Agreements A ct, P ub. L. No. 95-224, § 2(b)(2); 123 C o n g . R e c . H. 10159-60 (Sept. 27, 1977).
58 expresses existing relationships between the Federal Government and non- Federal entities.” 9 The powers conferred by § 7(a) o f the Act, 41 U.S.C. § 506(a), must be understood in this context. Section 7(a) provides: Notwithstanding any other provision o f law, each executive agency authorized by law to enter into contracts, grant or cooperative agreements, or similar arrangements is authorized and directed to enter into and use types o f contracts, grant agree ments, or cooperative agreements as required by this Act. On its face, the section permits and directs any agency to use the type o f instrument which the preceding sections have declared appropriate to the type o f relationship the agency is entering. As the Senate committee report on the bill explains, agencies may have previously been statutorily re stricted to a type o f instrument that did not accurately reflect the nature o f the relationship. The authority given by § 7(a), it continues, “ will provide the executive agencies with needed flexibility in their efforts to use ap propriate legal instruments to reflect the relationships established with non-Federal recipients.” 10 In other words, § 7(a) gives the executive agen cies authority to comply with the criteria o f §§ 4-6. Sections 4-6, however, do not alter the substantive power o f the agency to enter a particular type o f relationship. Instead, they require the use of grant or cooperative agreements only when the agency is “ authorized by Federal statute” to provide support or stim ulation." As the legislative history repeatedly points out, their purpose is to require the form o f the agreement to reflect the substance o f the relationship.'2 It follows that the Act does not confer on the Departm ent o f Justice new authority to pro cure property or services, make grants, or cooperate with non-Federal en tities. Rather, it authorizes and directs the Department to use the correct legal instrument to carry out its authorized functions. Where the Attorney General has delegated his authority to procure or to enter cooperative rela tions, it would be consistent with the purpose o f the Act to read into the delegation the power and duty to use the appropriate instrument provided by § 7(a). Applying these principles to DEA, it is apparent that § 7(a) has not given DEA authority to use grant agreements to implement a program under 21 U.S.C. § 873(a)(2). The latter statute provides: The Attorney General shall cooperate with local, State, and Federal agencies concerning traffic in controlled substances and in suppressing the abuse o f controlled substances. To this end, he is authorized to — * * * * * * *
9 S. Rept. 449, 95th Cong., 1st sess., 10 (1977). 10 S. Rept. 9, 95th Cong., 1st sess., at 10 (1977). " 41 U.S.C. §§ 504(1), 505(1). 11 See S. Rept. 449, 95th C o n g ., 1st sess., 2, 7-8, 10 (1977); 123 C o n g . R e c . H . 10159-60 (Sept. 27, 1977).
59 (2) cooperate in the institution and prosecution o f cases in the courts o f the United States and before the licensing boards and courts o f the several States* * *. The Attorney General’s authority under it has been delegated to the A d m inistrator o f D E A .13 The relationship which this statute authorizes DEA to enter is a cooperative one—i.e., mutual involvement and assistance in a m atter o f common concern. There is nothing in its legislative history or, insofar as we are aware, in its previous application, that would authorize DEA to provide simple financial assistance to state or local law enforce ment agencies. Accordingly, the effect o f § 7(a) is not to permit DEA to provide such assistance through grants, but rather to require it to provide otherwise permissible assistance in the form o f a cooperative agreement. There is, however, other statutory authority for DEA to make grants to State or local law enforcement agencies for limited purposes. Under 21 U .S.C . § 872(a)(2) DEA is authorized to conduct research programs relating to controlled substance law enforcement, including “ studies or special projects designed to compare the deterrent effects o f various en forcement strategies on drug use and abuse.” 14 U nder 21 U.S.C. § 872(b), contracts for such research are authorized. The statute contemplates that research will be performed by persons outside the Federal G overnm ent.15 State or local law enforcement agencies are logical bodies to conduct a special project testing new enforcement methods. We are therefore o f the opinion that the Act permits DEA to provide them with funds in order to conduct a limited test o f a new enforcement strategy. Since the underlying authority to enter a financial relationship with these agencies for enforce ment research exists, the Federal G rant and Cooperative Agreement Act permits and requires DEA to use the type o f legal instrument that ac curately reflects the purpose o f the relationship. Depending on the specific circumstances o f the project, this would be either a grant o r cooperative agreement.
M a ry C . L a w to n D eputy Assistant A ttorney General Office o f Legal Counsel
" 21 U .S.C . § 871(a); 28 CFR §§ 0.100(b), 0.101(a). 14 We note that the Departm ent o f Justice A ppropriation A uthorization Act, § 2(10), 92 Stat. 3461, authorizes appropriations for research under this statute. See H. Rept. 1444 (Part I), 91st Cong., 2d sess., 24, 51 (1970).