Transcript The Ins & Outs of Contracts

The Ins &
Outs of
Contracts
Office of Grant &
Research Development
November 2014
Recording date of this workshop is
November 20, 2014.
Some of the rules and procedures
discussed in this workshop are subject
to change.
Please check university resources
before relying exclusively
on this recorded presentation.
WSU Background
Where does funding come from?
• State legislative allocations
• Donations:
WSU Foundation
(17A accounts)
• Federal and non-federal
programs (includes financial
aid) e.g.: sponsored project
funding (Programs 11-14)
How does the sponsored project money
get here?
• WSU receives funding for three
•
•
different categories of sponsored
projects:
 Research
 Instruction
 Other
The faculty submit proposals to
funding agencies to sponsor research
projects, instruction, and/or other
interests.
Why do faculty do this?
 Part of their appointment
 Required for tenure (usually)
 AND
It is part of our mission!
WSU, the state’s land grant university, is
dedicated to the preparation of students for
productive lives and professional careers, to
basic and applied research in various
fields, and to the dissemination of knowledge.
Process
• These faculty projects are proposed and then
FUNDED as:
 a grant,
 cooperative agreement,
 or contract
• OGRD is the WSU central clearinghouse for all
sponsored project activity – including:
 branch campuses,
 research stations,
 extension units,
 and any other outlying area.
Grant, Cooperative Agreement,
or a Contract –
what is the difference?
ASSISTANCE = GRANT/COOP AGMT.
(Defined in 31 USC §§ 6301–05)
A Grant Agreement shall be used when:
1. the principal purpose is to carry out a public purpose of support or stimulation
AND
2. substantial involvement is not expected between the agency and the recipient
when carrying out the activity.
A Cooperative Agreement shall be used when:
1. the principal purpose is to carry out a public purpose of support or stimulation
AND
2. substantial involvement is expected between the agency and the recipient when
carrying out the activity.
3. Cooperative Agreements can have 2 or more parties to the agreement.
ACQUISITION = CONTRACTS
CONTRACT is a detailed document outlining the terms and conditions
for specific work and/or services. These are used by federal and nonfederal entities.
•
•
Federal entities use acquisition
arrangements to “purchase services” or
acquire products/services for some need
 Federal Acquisition Regulations (FARs)
are referenced.
Non-Federal entities have many forms of
contracts, ie: “purchase orders”, “services
agreements” or “research agreements”.
Anything that requires the parties involved
to sign a document with terms and
conditions attached/included.
Contract (non-federal definition)
• A promise or set of promises by two or more
parties to do (or to not do) something.
CONTRACTS
• We are here to talk more
about contracts in the
context of research and how
we work with them.
• We will discuss the detailed
terms and conditions of
contracts.
• We will learn what contracts
can be negotiated and what
are the best terms for WSU.
The Purpose of a Contract
 Set expectations
 Prepare for situations
where the parties stop
talking
• That’s why the language is so
important.
The Basic
Components of a Contract
• The basics are (the 4Ps):
 Parties: identified and capable
• Description & address of each party
• Indication that the signer is an authorized signatory
 Purpose: accurate description of the services or work
• Scope of work or similar
 Period of performance: term of the agreement
• Also important for the purpose – check alignment
 Price (consideration): price or estimated cost
• The payment for the scope of work (or services)
Parties: identified and capable
WSU’s legal status, authorized officials
Legal Status:
 WSU’s legal status – a state institution of higher education
 WSU is NOT a non-profit organization (i.e. a 501(C)(3))
Not WSU legal entities:
 Washington State University Foundation (WSUF) is a separate entity
 Colleges, Departments, Centers, Programs, Professors are NOT the legal entity nor can
they bind WSU by signing contracts.
WSU Authorized Officials (those who can bind WSU with their signature):
 Different offices and individuals on campus can bind WSU depending on the type of
contract and/or work that is being conducted.
 Authorized officials must have been given signature authority through a specific
designation letter from the President of the University. For a list of authorized WSU
individuals with their specific abilities see: http://contracts.wsu.edu/delegatelist.html
 For any type of sponsored activity, Dan Nordquist, AVP/Director of OGRD, is the
authorized institutional representative.
The Parties to the contract are usually (and should be) identified in the first few
paragraphs of the contract.
Purpose: accurate description of
the services or work
• Faculty should provide this information when submitting a proposal –
•
•
•
•
this is often known as the “Scope of Work” (SoW).
Normally the SoW is an attachment that is referenced in the agreement
and incorporated therein.
“Accurate” may mean two sentences or twenty pages – leave that
determination to the PI, however the SoW should clearly reflect the
expectations of the parties regarding the project.
WSU must be able to defend the PI’s fulfillment of the scope in the
event of dispute. Check to be sure that the SoW actually conveys what
the PI intends to do.
Avoid language in the description that guarantees anything. WSU will
use its reasonable best efforts – research is never guaranteed.
Period of performance: term of the
agreement
• It is important to know when a contract commences in order
to properly charge effort and other expenditures to that project
appropriately.
• It is necessary to have a START and an END date.
• Sponsor is expecting something in return for
the funding therefore a contract normally has a
deliverable which is due on a given date. This
can be a report, prototype, evaluation, etc.
• In some cases, sponsors will allow
“pre-award costs” which allows for the project
expenditures to begin a prior to the contract start date.
Period of performance: term of the
agreement
•A performance period also helps
to communicate the expectations
of the sponsor for the submission
of reports, ie: financial reporting,
technical reporting, property reporting,
invention reporting, etc.
•Important note: if the contract does not allow the
Contractor (WSU) to extend the term by request only
(unilaterally-without signature from both parties) then
permission to extend the end date must be requested from
the sponsor by the PI via OGRD.
Price (consideration): price or
estimated cost
• “Budgeting for Sponsored
•
•
Projects” course offered by
OGRD (online versions are
available as well)
OGRD Guideline 2 – Budget
Assistance
Costs include – salaries, wages,
goods and services, travel,
computer time, equipment,
fringe benefits, subcontractors,
facilities and admin. costs, etc.
Price or Estimated Cost
• Fixed Price (FPA) or Cost-reimbursable
• What is the difference? (OGRD Website, Guideline 28,
http://www.ogrd.wsu.edu/memos/guides/fixedvscomp.pdf )
• Most research contracts should utilize a costreimbursable structure
• Purchase Orders normally FPA’s
• Remaining balances on FPA’s? What happens if
you come up short and you need more money?
• FPCAs – and BPPM 40.27
WSU’s Sponsored Project Agreement (SPA)
• How do the 4Ps apply to WSU’s SPA?




Parties: section 1.1
Purpose: section 4.1 referencing “Attachment A.”
Period of performance: section 5.1
Price or Estimated Cost: section 5.2 referencing
“Attachment B.”
Why So Many Other Sections?
• If only the 4Ps - why are contracts so cumbersome
at times – legal issues, regulations, University
policies.
• Well let’s talk about some of the other articles and
call them Hot Topics!
Hot Topics
• Publication Rights
• Data Rights
• Intellectual Property
• Indemnification
• Governing Law
• Confidentiality and Proprietary Information
Hot Topics
Disclaimer
The “real world” examples that follow are for
discussion purposes only and are NOT to be used
as model responses for contract negotiation.
Hot Topics
Publication Rights (Article 5.9)
 Implicates WSU’s academic freedom, mission,
public standing, public trust
 Industry vs. Public Institution – the culture clash
• Educating the counter-party
 Export Controls and the impact of publication
Hot Topics (section 5.9)
Hot Topics – Publication Rights ex:
Hot Topics – Publication Rights ex II:
“intent is not to
restrict . . .
however . . . .”
Hot Topics
Data Rights – work products developed by state employees
belong to the State (WSU). See OGRD Guideline 29 Research Records:
Definition, Retention, Ownership, Access, and Storage
• Faculty need to be able to use the results of their research
•
•
for their normal teaching, research, and public service
activities without hindrance.
Graduate students need to be able to publish.
Ownership of data is an important issue when managing
misconduct in science allegations (grass burning data
example). Remember, WSU is a state public institution.
Part of our mission is to inform the public.
Hot Topics
Data Rights – work products developed by state employees
belong to the State (WSU). See OGRD Guideline 29 Research Records:
Definition, Retention, Ownership, Access, and Storage
• Faculty need to be able to use the results of their research
•
•
for their normal teaching, research, and public service
activities without hindrance.
Graduate students need to be able to publish.
Ownership of data is an important issue when managing
misconduct in science allegations (grass burning data
example). Remember, WSU is a state public institution.
Part of our mission is to inform the public.
Hot Topics
Data Rights example (from BPPM 45.35):
Hot Topics
Data Rights example:
Hot Topics
Intellectual Property (Article 5.16)
• Most contested term – more and more entities getting
•
•
involved with inventions, copyright, trade secrets,
proprietary and confidential information, so IP terms get a
lot of attention.
WSU owns what it generates as long as our PI’s have
assigned their rights to WSU. (Roche v. Stanford)
 PIs are required to assign rights to WSU (form in in
MyResearch)
Bayh Dole Act - allows US universities to control the inventions and
other intellectual property that arises from federal government funded
research.
Hot Topics
Intellectual Property (Article 5.16)
Hot Topics – IP example:
Hot Topics
Indemnification (Article 5.17)
• This one often hangs people up – basically this
is insuring against third party loss.
• Washington State Legislature has not given
WSU the ability to indemnify.
• WSU can only indemnify for our own negligent
acts or omissions.
• Mostly an issue with National Labs and large
businesses.
Hot Topics
Indemnification (Article 5.17)
Hot Topics
Indemnification Ex:
Hot Topics
Governing Law clause (Article 5.21)
• AG’s office recommends no agreements be
signed with governing law clauses that have
state laws other than Washington.
• Keeping silent is acceptable
• In some cases non-Washington law can be
accepted however, venue outside of
Washington should always be left silent or
rejected.
Hot Topics
Governing Law clause (Article 5.21)
Hot Topics
Governing Law example:
Hot Topics
Confidentiality and Proprietary Information
• WSU is an open access public university – no bars, gates,
•
•
•
security badges, finger print monitoring, retinal eye
scanners, etc.
Employees go in and out of our labs, etc.
Faculty work may be considered proprietary until
published.
Always subject to Public Records Act
Hot Topics
Confidentiality example: [refer to SPA 5.8]
Other Topics of Importance
• Invoice clause (Article 5.4)
• Dispute Resolution (Article 5.14)
• Key Personnel (Article 5.6)
• Control of Research (Article 5.7)
• Publicity (Article 5.10)
• Termination (Article 5.11 & 5.12)
• Disclaimer (Article 5.15)
Contract Close-out
Items to consider
 Financial reports
 Invention reports
 Technical reports
 Property reports
Test Time!
• What’s wrong with this
Question #1
Identification of Parties section?
THIS AGREEMENT is made and entered into by and
between Washington State University’s Department of
Entomology “WSU Entomology” and the Washington
Department of Agriculture (SPONSOR). In this
Agreement, the above entities are jointly referred to as
PARTIES.
WSU Entomology is not a “legal” entity of
WSU. Entomology cannot be bound in the
agreement, only WSU as a whole can.
Test Question #2
• What’s wrong with this publication
clause?
University may publish only after review
and approval of the proposed
publication by Sponsor.
The word APPROVAL. By providing
approval of publications to the
sponsor, WSU gives up it’s ability to
control the content of the publication
as well as the timing of the publication
which can cause problems for
graduate students.
Test Question #3
• What is wrong with this intellectual
property clause below:
Sponsor owns all rights and title to
Intellectual Property created solely by
WSU employees.
WSU owns its intellectual property. Sponsor
ownership of WSU IP can only be approved by
WSU Office of Research.
WSU’s SRA
• WSU’s standard project agreement template available on
•
•
the OGRD website http://www.ogrd.wsu.edu/forms.asp
 Feel free to provide our template to interested companies
who may not have a contract template.
OGRD also has additional resources related to topics on
contracting with video tapes from the National Council
University Research Administrators video series and other
classes.
OGRD also has a presentation on negotiating - “Award
Negotiation: Techniques for Improved Results” that should
be offered again this spring.
This has been a
WSU Training
Videoconference
If you attended this live training session
and wish to have your attendance
documented in your training history,
please notify Human Resource Services
within 24 hours of today's date:
[email protected]