MOUs and MOAs are used to coordinate the Corps’ authorized activities with another entity. These “agreements to agree” or umbrella agreements are often used interchangeably, although they are distinctly different. MOUs tend to be used for simple common-cause agreements which are not legally binding. MOAs, on the other hand, establish common legal terms that establish a “conditional agreement” where the transfer of funds for services are anticipated.
The Difference between MOUs and MOAs
Memorandum of Understanding (MOU) defines a “general area of understanding” within both parties' authorities and no transfer of funds for services is anticipated. MOUs often state common goals and nothing more. Thus, MOUs do not contemplate funds transfers and should usually include language that states something similar to: “This is not a funds obligating document; by signing this agreement the parties are not bound to take any action or fund any initiative.” An MOU may be used to outline the operation of a program so that it functions a certain way. For example, two agencies that have similar goals may agree to work together to solve a problem or support each other’s activities by using an MOU. The MOU is nothing more than a formalized handshake.
Memorandum of Agreement (MOA) is a “conditional agreement” between two or more parties where the transfer of funds for services are anticipated. The MOA is prepared in advance of a support agreement/reimbursable order form that defines the support, basis for reimbursement, the billing and payment process, and other terms and conditions of the agreement. MOAs often establish common legal terms that will be read into every reimbursable order that follows. MOAs do not obligate any funds themselves, but they establish the terms for future service and cite one of the appropriate authorities to do so.
Note that neither MOUs nor MOAs can to be used independently to receive services or obligate funds beyond those separately authorized, and that any MOU or MOA with outside entities should be made in accordance with USACE District policies and authorizations.