Background

Award negotiations is the period of time and the scope of activities between proposal submission and UCR's acceptance of an award. During this period, the award mechanism (grant, cooperative agreement or contract) and the sponsor will largely determine the length and complexity of the negotiation process. The end result of award negotiations is a mutually agreeable set of terms under which UCR will conduct the proposed project.

Who Can Negotiate the Award?

The authority to negotiate an award on behalf of the University has been delegated from The Regents to the Chancellor. The Chancellor has redelegated this authority to Sponsored Programs Administration (SPA). SPA works in conjunction with the Principal Investigator to negotiate an award that is acceptable to the University, Principal Investigator, and sponsor.

Changes to the Scope of Work and/or Budget

Any time a sponsor requests or requires a change in the originally proposed budget or scope of work, the Principal Investigator should always notify and coordinate a response through the Contract and Grant Officer assigned to their unit before submitting a revised budget or scope of work to the sponsor.

Grants and Cooperative Agreements

Grants and cooperative agreements usually contain references to a sponsor's established grants management policies or in the case of government grants, government-wide regulations, laws or directives. While most grants and cooperative agreements from federal sponsors do not require negotiation of terms and conditions, grants from private non-profit sponsors and other non-governmental sponsors may require negotiation of a variety of terms. These negotiations usually revolve around such issues as:

• indemnification
• intellectual property rights
• allowability of costs

Industry Research Contracts

Agreements with for-profit sponsors cover many activities including basic, applied or developmental research, collaborative research, and various types of testing.

As a public, non-profit educational institution, the University is bound by certain policies and regulations regarding what it can and cannot accept in an agreement. These policies are designed to foster the University's basic mission of teaching, research and public service and to ensure the academic freedom of our faculty. Because for-profit sponsors are motivated by different forces, they sometimes do not understand the ideals and principles behind our policies. Consequently, negotiations can take additional time while SPA works with the sponsor to arrive at a mutually acceptable agreement.

Whenever possible, the University tries to negotiate an agreement using the appropriate standard University contract language for the activity proposed. These standard agreements address key concepts required by University policy. When a for-profit sponsor prepares an agreement or insists on controlling the preparation of an agreement, these concepts may or may not be addressed and can lead to protracted negotiations.

Contract negotiations with for-profit sponsors can be difficult and complex because the agreements must address a substantial number of issues in a variety of areas such as budget, payments, audit, scope of work, intellectual property rights, publication rights, indemnification, termination and confidentiality.

Before commencing negotiations, SPA attempts to discuss all aspects of the proposed project with the Principal Investigator. In particular, SPA needs to know whether graduate students will be involved in the project, if existing University or sponsored-owned intellectual property will be used in conducting the project, and if research materials that are not of UCR origin are needed to perform the work.

Federal/State Contracts

Federal

Contract negotiations with a federal government agency primarily focus on budget and scope of work issues. The terms and conditions of the award are usually fixed by law or regulation. However, differences in the interpretation of law and regulation can result in the negotiation of certain clauses, especially in the areas of export controls, restrictions based on citizenship status, contractual requirements to provide protected private information in the absence of any regulations, options to classify the project as secret, publication approval and other publication restrictions or editorial controls. Therefore, it is important to make sure that the terms and conditions imposed by the agency are appropriate for the work proposed and applicable to the University.

State

Contract negotiations with state agencies primarily focus on budget and scope of work issues, payment terms, use of UC travel rates, reporting requirements, requirements for documenting invoices, audit, ownership of research records, termination and penalty clauses for breach of contract.

Background

The award process period is the time between the Research and Economic Development's (RED) receipt of a fully executed award or a unilateral award (e.g., federal grants) that contains acceptable terms and conditions and the time that the Campus Award Notice  (CAN) is issued. As part of the award set up process Contract and Grant Officers must ensure all administrative requirements are in place prior to issuing the CAN. The most common delays in release of funding include:

• lack of regulatory committee approvals
• conflict of interest disclosures have not been filed
• conflict of interest disclosures have not been approved

Regulatory Committee Approvals

Many sponsors require proof of regulatory committee approval just prior to making an award. Any scope of work, which requires approval from one or more of the regulatory committees, must have approval prior to the release of the CAN. Since most of the UCR regulatory committees only meet once per month, Principal Investigators should submit their protocol applications to the appropriate committee as soon as an award appears to be forthcoming. For more information, please visit the Research Integrity home page.

Conflict of Interest Disclosure

Depending on the sponsor of a project, Principal Investigators are required to disclose potential conflicts of interest.

For the Public Health Service (PHS) and the National Science Foundation (NSF), as well as those sponsors who have adopted the federal requirements, RED must receive the appropriate disclosure form prior to the release of project funding.

For non-governmental sponsors, unless the sponsor is exempt, RED must receive the appropriate disclosure form. This completed form should be forwarded to RED along with the proposal for review.

For both disclosure processes, if a positive interest is identified, the disclosure must be first reviewed by the Conflict of Interest Committee (COIC) and then approved by the Vice Chancellor for Research and Economic Development. The COIC meets on an ad hoc basis. For more information, please visit the COI home page.

After an award has been received, negotiated (if necessary), and executed by SPA, and SPA’s verification that no regulatory approvals are outstanding, SPA will generate a Campus Award Notice (CAN) through Kuali Award, and will issue an Award notification email to Extramural Funds (EMF) Accounting, the PI, and the Department Administrator containing a link to the CAN and the Award.  SPA has no further action in the Access to Funds process. 

Next, EMF will assign the department's default Chart of Accounts (COA) to the Award.  In the event the PI and/or Department wishes to utilize a different COA for a particular project, then the Chart of Account - Sponsored Programs (for Cost Sharing and/or Default Override) form will need to be completed and routed to EMF.  (A link to that form will be embedded in the Award notification email.)  For additional post-award financial questions, please contact EMF.

Who to Contact for Information:

Sponsored Programs Administration is responsible for negotiating and executing research agreements with extramural sponsors; individual faculty members may not contractually bind the University.

Following is background information regarding research agreements with private sponsors, as well as a discussion of the University's position relative to certain elements in its standard research agreement. Some sections of the agreement contain a hyperlink to a brief explanation about the University's policies and expectations. Additional questions regarding University principles, policies and positions related to negotiation or administration of privately sponsored research agreements may be directed to the Contract and Grant Officer assigned to your unit.

Background:

Part of the University's primary mission is to carry out research to advance the frontiers of science and technology and further the University's educational programs. Toward that end, the University will enter into arrangements for research sponsored by for-profit entities ("industry") when that research does not interfere with University commitments and: 1) it provides faculty the opportunity to gain experience and knowledge of value to their teaching and research; 2) it is suitable research through which the individual may make worthy contributions to knowledge; or 3) it is an appropriate public service.

When conducting research for industry, the University must keep the public trust and maintain institutional independence and integrity to permit faculty and students to pursue learning and research freely. Consequently, University facilities may be used only for activities appropriate to the University's mission. University Regulation No. 4 ("Special Services to Individuals and Organizations") governs the use of research facilities and establishes guidelines limiting research to activities that are appropriate to the University.

University employees must avoid situations in which an employee has the opportunity to influence a University decision (research related or otherwise) that could lead to financial or other personal advantage, or that involves other conflicting official obligations. University policy and State law require principal investigators to file a financial disclosure statement indicating whether or not they have a direct or indirect financial interest in each private sponsor of their research. When disclosure indicates that a financial interest exists, the disclosure must be reviewed by the UCR Conflict of Interest Committee and approved by the Vice Chancellor for Research before funding for the research can be approved.

Prior to the initiation or conduct of a research project, the University and project sponsor must enter into a written agreement that defines the scope of work and formalizes the terms and conditions under which the University will conduct the sponsored project. These terms and conditions are negotiable within the limits of University policy.

Project Administration

All University research projects, including research sponsored by industry, are governed by the tradition of the free exchange of ideas and timely dissemination of research results. The University is committed to an open teaching and research environment in which ideas can be exchanged freely among faculty and students in the classroom, in the laboratory, at informal meetings, and elsewhere in the University. When conducting research for industry, the University and the principal investigator must take reasonable steps to insure that commercial pressures do not impede faculty communication with their colleagues or their students about the progress of their research or their findings.

A collegial environment and effective departmental management are the key to ensuring the highest standards of performance in all research projects. The University's policies related to research conduct, health and safety, financial management, accountability and internal controls are applicable to conduct of all University research.

University regulations also protect the academic freedom of students, and principal investigators are responsible for adhering to these principles. Students must be able to choose research topics for educational reasons without being overly influenced by the need to advance investigations of direct interest to a particular sponsor; they must be protected against the premature transmittal of research results; and they must be advised objectively on career choices.

Elements of Note Regarding UCR's Standard Research Agreement

Corporate Identity

The University of California is a public trust, administered by the Regents of the University of California, a California constitutional nonprofit corporation. All research agreements must be issued in the University's legal, corporate name: "The Regents of the University of California".

Scope of Work

The scope of work is a detailed written description of the work that principal investigator will undertake during the period of performance of the contract. It must be as explicit as possible to avoid any conflicts over patent rights given to the sponsor.

Period of Performance

The period of performance is the period of time between the start date and end date of the contract in which the principal investigator is responsible for completing the scope of work.

Budget

As a public-supported institution, UCR is required to recover the full cost (direct costs and F & A costs) of research conducted for outside sponsors. To do otherwise would result in subsidizing for-profit research with public funds. The budget represents the principal investigators best estimate of the costs that will be incurred while conducting the scope of work.

Direct costs are project specific costs that can be identified and assigned with a great degree of precision to a research project. The University pools F & A costs for ease of accounting because it is difficult to assign these costs with a relative degree of accuracy to a specific project. The federal government's Office of Management and Budget establishes the standards for calculating the F & A rate and UCR negotiates its rates with the United States Department of Health and Human Services audit agency.

Generally, the University negotiates contracts on a cost-reimbursement basis. Once the University has incurred costs up to the amount specified in the contract for performing the scope of work, the University is not obligated to continue work unless, and until, the sponsor approves a revised budget to complete the scope of work and agrees in writing to provide additional funds.

Payment

As a public trust and non-profit institution, UCR cannot underwrite expenses for the sponsor. The University generally requires a minimum initial payment of 25% of the total anticipated cost upon execution of the agreement to ensure that there is sufficient working capital available for project start-up costs. When a project involves significant start-up costs, the University may require a larger initial payment. Subsequent payments are generally scheduled quarterly in advance so the the university has sufficient funding to ensure that the performance of the project is not disrupted.

Confidentiality

UCR must maintain an open academic environment to fulfill its mission. Research projects involving the use of a sponsor's confidential information will be accepted if: (1) the extent of confidential information shared with the University is limited; (2) the information is clearly identified by the sponsor as confidential: and (3) the sponsor agrees that the University will not be financially liable for disclosure. The University cannot accept projects requiring overly broad access and use restrictions or elaborate data protection procedures.

Rights in Data and Reports

All rights in data arising from University employment or the use of University resources belong to the University. Title to the copyrightable materials and data that are developed under a contract or grant from a commercial sponsor normally belongs to the University. As an academic institution, the University must ensure that the data, information and materials generated during the course of research remain widely available for academic dissemination and scientific validation. Retaining rights to such research products allows the University to ensure that its faculty can pursue their research without undue impediments.

The University provides regular progress reports, including a final project report, to the sponsors of its research, training and public service projects. Because most sponsored programs are highly advanced investigations in complex fields, the conduct of programmatic work will last several years. Generally, the University reports its progress on an annual basis. However, alternative reporting schedules will be discussed provided that such reporting schedules do not impede upon the progress of the project or place an undue burden upon the University in any way.

The University regularly affords its research sponsors the right to use the data, information and reports, but the use of such data, information and reports is limited to research and evaluation purposes. Because the University owns such data, information and reports, any commercial use by a sponsor would require special licensing terms.

Publications

Because the University conducts research activities as an integral part of its overall educational program, these activities often form the basis for articles in professional journals, seminar reports, presentations at professional meetings, and student dissertations and theses. Accordingly, freedom to publish and disseminate results is a major criterion of the appropriateness of any research project. The University will undertake a research project only if scientific results can be published or otherwise promptly disseminated.

It is the responsibility of the University and the principal investigator to ensure that the teaching and research environment remains open so that ideas can be exchanged freely among faculty and students. Therefore, University policy precludes assigning to extramural sponsors the right to keep or make final decisions about what may be published. A sponsor may seek a short delay to comment upon and to review publications for disclosure of its proprietary data or for potentially patentable inventions. These are legitimate business concerns and UCR is willing to work with sponsors to address these concerns. However, such a delay should normally be no more than 60 to 90 days.

Patent Rights

The basic aim of the University's intellectual property policies is to promote the progress of science and technology, to assure that discoveries and inventions are used to benefit the public, to provide appropriate royalty revenues to the University and the inventor, and to support University research and education through the use of invention-related income. The University retains all patent rights from sponsored research, and any invention or patentable idea conceived or reduced to practice in the course of the research belongs to the University.

Subject to the conditions set forth below, research agreements may provide to a sponsor a time-limited, first-right to negotiate an exclusive or nonexclusive license (based upon the level of sponsor support) to patentable inventions (other than plant patents) conceived and reduced to practice in the course of the sponsored research. All licenses will:

• be royalty-bearing, rates negotiable and based on general industry practice for the type of invention involved;
• provide for diligent development, commercial marketing, or use as one condition for retention of the license; and
• normally require reimbursement of patent prosecution and maintenance costs, a license issue fee, and appropriate minimum annual royalties.

Licenses under corresponding foreign patent may be granted where possible on terms and conditions similar to U.S. licenses.

Indemnification

Research, by its nature, is unpredictable and inherently involves some risk. University research is conducted on a "best efforts" basis and without guarantee of successful results. The University will agree to indemnify the research sponsor for the conduct of University officers, agents, employees, students, invitees, and guests under research contracts and it is expected that the research sponsor will reciprocate.

Termination

Generally, either party may terminate the research agreement provided that either party determines that the research project is no longer academically, technically or commercially feasible. However, the University, cannot incur financial losses resulting from termination. In the event an agreement is terminated, the sponsor will be expected to reimburse the University for all project costs incurred through the date of termination and for all uncancellable obligations incurred to support the project.

Applicable Law

The University is a constitutional entity of the State of California and contracts accepted by the University are interpreted under California Law.

• Types of Research Agreements at UCR (pdf Brochure)
• Sample: Industry-Sponsored Research Agreement (excluding any federal monies) (pdf)