Contracts in Sponsored Programs and Research

Information for Grant Support Staff (GSS) to aid in the set up and management of an award

Susan C. PuryearDirector of Sponsored Programs and Research

May 2014

What is a Contract?

• A contract is an agreement creating obligations enforceable by law. The basic elements of a contract include:– Mutual Assent– Consideration– Capacity– Legality

Contracts vs. Grants

Contract Grant

Project Conceived by Sponsor Project Conceived by PI

Used to acquire a product or service for the direct benefit or use by the sponsor

Used to provide financial assistance of support toward meeting a need or established purpose

Sponsor exercises more control over parameters of work and deliverables

PI establishes details of project and retains more freedom and ownership over process and products

When do we need Contracts in Sponsored Programs and Research?

To establish the Terms and Conditions of …

• Contract work between a sponsor and Clark • A prime grant award from a sponsor to Clark• Work to be performed by the subawardees on a grant (the subcontract)• Work to be performed by consultants, vendors or other 3rd parties on a

project

NOTE: A grant or contracted project is not considered officially/legally in effect and binding until a contract is fully executed by the other party and an appropriate and authorized Clark signatory (unless award notice provides otherwise).

Stages in the Contract CycleSolicit or Develop

Review

Negotiate

Facilitate Execution

Modify/Amend

Facilitate Execution

Contract Solicitation/Development

Solicit/Develop

OSPR

PI

GSS

• May request contracts from Prime Recipient or Sponsor

• Develops contracts for collaborations and with third party providers, and

subcontracts when Clark is the prime recipient

May in some cases engage in pre-contract discussions of certain terms and conditions

relating to the execution and delivery of the work in some cases

May in some cases solicit contracts from Prime Recipient or

Sponsor

Contract Review

OSPR

• Reviews contract in entirety to identify issues requiring negotiation or highlighting, or to approve for signature

PI

• Needs to review entire contract and get back to OSPR to discuss issues/ changes

GSS

• Reminds PI to review!

• May review as well to contribute to the identification of issues

Common Issues in Terms & Conditions• Parties – Clark should be a party to the contract, not the

PI/Institute/Center/Department• Period of Performance Dates – should align somewhat with proposal or at

least be the same performance length of time starting within an acceptable time period

• Statement of Work/Deliverables – should align with those proposed or agreed upon in pre-contract discussions

• Budget – should agree with that approved by Clark at proposal stage• Invoicing & Payment Terms – ideally invoicing requirements should not

create undue burden with documentation, payments should be available at intervals that cover or reimburse project expenses without burdensome delay

• Signatory – should be an authorized signatory of the university (Dean of Research) and not the PI or Center/Institute/Department Head

• Other – indemnification, choice of law, insurance, intellectual property, etc.

Contract NegotiationThe go-between wears out a thousand sandals. – Japanese Proverb.

PI & GSS

• May discuss aspects of the project contract with counterpart in some cases where appropriate with understanding that university reviews and approval done by OSPR and Dean of Research

OSPR

• Negotiates content and language of Terms & Conditions of contract on behalf of the university

Dean of Research

• Gives final approval and executes contract on behalf of the university.

Execution• A Contract is not in effect legally until fully executed (signed by

both parties to the agreement).• Typically Clark extends an unexecuted “final”

contract/subcontract to the other party for their final review and initial signature and then completes full execution upon its return.

• Typically scanned and emailed signed copies suffice unless a party requests original signatures.

• Who facilitates execution? It depends…• OSPR always needs a fully executed copy of the agreement and

PIs/GSS should also keep copies for their files and reference to requirements.

Contract Amendment/Modification• Contracts contain provisions for amendments/modifications to

the original agreement which normally must be agreed to in writing by authorized officials of both parties.

• Amendments/Modifications may be needed for the release of subsequent years of funding (ie. Budget year 2 of a 4 year award) and to extend the period of performance.

• May be used for any other material change to the original Terms & Conditions (change in scope of work, PI, period of performance, budget, etc.).

• Contract amendments/modifications require the same review, negotiation (if needed) and execution process as the prime contract.

Requirements in Contracts for GSS to Note

• Reporting Requirements• Project Deliverables (including timeline)• Notification Requirements• Re-budgeting Terms • Prior-approvals Requirements• Record-keeping• Invoicing and Payment Terms and Schedule• Unallowable Costs & Activities• Acknowledgements