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Award Negotiation and Acceptance

Chapter Overview 


The Office of Research and Sponsored Programs (ORSP) supports University faculty and staff in negotiating their federal and non-federal sponsored award agreements, often in consultation with University Counsel. ORSP also supports PI’s in their responsibly managing the award in compliance with sponsor terms and conditions, and federal and state regulations where applicable.

Grants, Cooperative Agreements, and Contracts

Grants, cooperative agreements, and contracts are all externally sponsored “mechanisms” of funding, yet each are unique in how they are negotiated prior to award and administered and carried out upon award. It is important that the PI/PD notify ORSP when they have received initial contact from a sponsor that an award has been recommended for funding. ORSP will assist the PI/PD in ensuring that any changes to the project or budget are in keeping with University policy, and in compliance with federal and state rules and regulations. During the negotiation phase, ORSP often consults with many parties, to include the PI/PD, University Counsel, and other administrative and academic units and personnel, to ensure that the PI/PD and University’s interests are considered and protected.

1. Grants: Upon indication from a sponsor that a proposal is being considered for funding, there is often a period of time where the sponsoring agency and awardee will negotiate the terms and conditions of the grant agreement. Where grants are concerned, this negotiation typically amounts to addressing a series of technical or programmatic questions from the review panel and/or program officer, and negotiating adjustments in the proposed budget and corresponding scope of work. Prior to award, some sponsors will ask for additional documentation to justify costs in the proposed budget, or may require other documentation (e.g., proof of insurance, institutional certifications/representations) in order to proceed. Grants, in particular, provide the greatest degree of freedom and flexibility in how a project’s activities are carried out as the sponsor issuing a grant typically does not have any direct involvement in the research or work to be performed. For this reason, grants are considered a form of “financial assistance” where the sponsor provides funding based on a previously approved proposal for research or other activity (e.g., instructional, educational). Grants typically benefit a public “good” or purpose. Interestingly, most federal grants do not require that the award notice be formally signed by the University’s Authorized Official. “Acceptance” is implicit upon acceptance of the award notice without objection, as well as grant set-up and subsequent incurring of expenses.

2. Cooperative Agreements: Cooperative Agreements are similar to grants in that they both typically represent a form of financial assistance from the sponsor in furtherance of a public good, or purpose. However, under these types of agreements, the sponsor anticipates having substantial involvement in the research or other programmatic activity upon award

3. Contracts: Contracts, by contrast, are very different than grants or cooperative agreements. Under a contract agreement, the sponsor typically agrees to pay the contractor a fixed price for the delivery of goods or services of direct benefit to the sponsor. Clearly defined “deliverables” are spelled out in the proposal, and a timetable for delivery is usually required. Payment may be based on reaching specific “milestones.” For example, government procurement contracts can be quite complex. The terms of U.S. Government contracts are guided by Federal Acquisition Regulation (FAR) which currently occupies nearly two thousand pages. Federal acquisition contracts from U.S. Department of Defense agencies, in particular, may include terms and conditions that restrict publication and impose export control requirements (among other considerations) that might limit who can work on the project. ORSP (when necessary) will work with the PD/PI and University Counsel to successfully negotiate and navigate through the complex terms and conditions of a federal, state, or local contract agreement. Where private and, in particular, industrial or corporate sponsors are concerned, negotiation points typically center on areas to include intellectual property, confidentiality, publication, and payment. Industry/University agreements can be quite complex and take time to negotiate. The University/Industry Demonstration Partnership was formed in the mid-2000’s to identify issues impacting university- industry (U-I) relations, and to develop new approaches to working together. There is a wealth of very helpful materials for PI’s and administrators on their website to guide universities in negotiating U-I contracts to successful conclusion.

Policies ButtonUniversity of the Pacific Intellectual Policy here

International Sponsors

Funding agreements from international sponsors, whether in the form of a grant or contract, can be quite complex. A host of additional considerations fall into place when these types of relationships are formed. As such, it is very important that a Principal Investigator considering application to, or collaboration with, a foreign entity contact ORSP as soon as possible so that appropriate measures can take place to ensure that the PI and University’s interests are considered and protected including federal reporting requirements. Many of the same negotiation points that apply to contracts with domestic public and private entities also apply to international agreements. However, other issues often arise, e.g., governing law and venue, currency exchange, and IRB/IACUC. As with other types of agreements, ORSP consults with the PI/PD and University Counsel where these types of complex terms and conditions apply.

While the end result of any award or contract negotiation cannot be predicted with 100% accuracy, the vast majority of negotiations conclude to the satisfaction of all parties. Favorable outcomes are more likely when potential “red flags,” or areas of potential concern, are addressed sooner, rather than later. As always, ORSP will be available to help in sorting through the complexities of these issues when needed.

Notice of Award

Upon award, sponsors will often issue a “notice of award,” “notice of grant agreement,” or contract via electronic notification or regular mail. This notice will typically specify the amount of funding being provided in the current year, as well as expected funding in future years. It will also incorporate, or “incorporate by reference,” the terms and conditions of the award. It is very important the PI/PD review these terms to become familiar with the sponsor’s expectations and requirements in carrying out the project. For example, federal sponsors will often expect annual and final technical reports. The notice of award will also spell out any budgetary or programmatic restriction and specify the circumstances under which any changes in the project require the sponsor’s prior approval (e.g., change in key personnel).

Subcontracts

Many of the sponsored activities the University carries out involve collaboration with an entity/organization outside Pacific In some instances, Pacific may be the “lead” institution on a collaborative research project with one or more additional partners. Or, alternatively, Pacific may be a “subcontractor,” carrying out a significant portion of the work on a multi-institution collaborative. Either way, the terms and conditions of the prime agreement from the primary funding agency (e.g., NSF) typically “flow down” to the subrecipient regardless of the type of funding mechanism. It is the responsibility of the lead institution to negotiate directly with the primary sponsor, keeping the interests of collaborators in mind and promptly notifying a collaborator if there are significant changes that will impact the subcontractor (e.g., budget cuts).

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