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Grant Money Doesn't Come Free: How to Keep Your Company Out of Trouble When Using Federal Funds

By Edward T. Waters
June 30, 2009

The American Recovery and Reinvestment Act has already begun to pump billions of dollars into federal grant programs that run the gamut from education to the environment to infrastructure improvement. This unprecedented influx of capital has attracted both long-standing recipients of federal grants ' such as state and local government, colleges and universities, and non-profit organizations ' as well as many newcomers to the federal grant process, including private, for-profit companies.

For example, the Recovery Act appropriates literally billions of dollars for the development of green technologies, including $2 billion for advanced battery projects, $6.7 billion for energy efficiency programs, and $93 million for wind energy projects with an emphasis on research and development. Many of these funds are available on a competitive basis to for-profit companies as well as those long-standing recipients noted above. And that's just the funding available from the Department of Energy. Many other federal agencies also received billions of dollars in Recovery Act funds that will, in turn, be spent through federal grant awards. For instance, the Department of Defense has allocated $300 million for near-term energy-efficiency research and demonstration projects. Additionally, some of the funding allocated to the National Science Foundation will undoubtedly be available for clean-energy research and development (potential applicants can locate programs of interest on a federal Web site, www.grants.gov).

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