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Award Negotiation

Funding Mechanism Types

A grant is a flexible method of financial assistance provided to support a project and its set goals in support of a public purpose with no substantial programmatic involvement from the sponsor. 
A contract is a legal instrument for procuring goods or services where the purchaser has significant programmatic and administrative control over the completion of the project. 

A formalized agreement where a project is carried out between a recipient of an agreement and subsequent organization(s) that is a separate legal entity. Subrecipient agreements are required when the subsequent organization is collaborating on the completion and direction of the project’s goals. The University regularly receives funding as a subrecipient to other institution’s funding, as well as providing funding to sub-recipients on projects held by UNCW. 

A method of financial assistance between a sponsor and recipient(s) that involves a substantial amount of programmatic involvement by both the sponsor and the recipient(s) in completing the awarded activities. 

Funds provided to the University for a non-generalized or specific purpose are considered a gift if they: 

  • Do not require deliverables or reports on the progress completed 
  • No specified period of performance 
  • No fiscal accountability to the donor 

This type of funding mechanism is not administered by SPARC; it is administered by the University Advancement 

Generally, the University recommends use of a professional service agreement when collaborating with individuals. These are handled through SPARC. A consultant may provide advisory services related to a sponsored research project. UNCW personnel may not receive consulting or professional services agreements when the prime award is received directly to the University, those personnel should be included on the main project budget with their effort allocated as appropriate to the project.  
A research service agreement is a contract between UNCW and a sponsor for the purposes of funding and conducting research at UNCW for a limited period. An RSA may be supported by for-profit (e.g., private industry) or non-profit (e.g., state or federal government, foundations, peer institutions, etc.) sponsors. 
An award to develop or enhance research training opportunities for individuals who are training for careers in specified areas of biomedical, behavioral, and clinical research.  
An agreement for the primary purpose of developing infrastructure. 

Fellowships and scholarships are grants that support the educational experience of the recipient. They may be research related or non-research activities. These funds are not considered compensation for performance. The purposes of these grants are to enhance the academic experience and career growth.  

Some Sponsors use the term fellowship to support individuals who are actually participating in a defined research project in which deliverables are expected. The funds are considered compensation for performance and usually includes stipend payments. This type of fellowship represents an employment relationship. It is important to carefully read the sponsor’s guidelines to determine which type of fellowship the sponsor is offering and the implications for proposal processing, budgeting, deliverables, award acceptance, and award management. 

Many sponsors fund fellowships; however, the most common are foundations, NSF and NIH. 

A research consulting agreement is required when an individual not affiliated with UNCW serves as a consultant and provides a highly technical or specialized service on a University research project. The consultant is considered to be an independent contractor (IC) and the agreement must be in place before any professional service is provided in support of the project. 

If the individual is employed at another university, UNCW will need written documentation from the principal investigator stating that the consultant will not be doing the work at their university (i.e., not using their university office or lab space, resources, etc.). 

Agreement Types

A sponsor’s notification that provides funding under a grant or cooperative agreement.
A legally binding agreement that requires signature by the University. It may be used for various types of funding mechanisms including grants and contracts.
An agreement modifying the terms and conditions of an original agreement, including modifications to the scope of work and budget. All types of agreements can be amended.
An agreement that covers the study of investigational drugs or devices in humans to establish their efficacy before bringing the product to market.
An agreement that defines the relationship between two or more collaborators on a project that is funded via a separate mechanism (e.g., grant, subcontract, internal funding, etc.). It typically covers the relative roles and responsibilities of each party, plans for publication and copyright, and intellectual property. It is typically unfunded.
An agreement meant to stimulate research and the commercialization of technology when involving a private company. This mechanism allows all parties to keep the research temporarily confidential under the Freedom of Information Act (FOIA) and the private company to retain the intellectual property rights of any developed inventions.
An agreement used to transfer data from one party to another, to prevent protected data (such as Protected Health Information (PHI)) from dissemination and misuse. It is normally not a funding document.
An agreement with a Federal agency and an institution that provides for the temporary reassignment of personnel between the two organizations. It is normally used for personnel costs and does not serve as a funding document for a project.
Master Agreement is a contract that is used to cover a number of different projects funded by one sponsor over a period of time. These types of agreements are also called "Blanket Agreements or Umbrella Agreements." Master Agreements are used to streamline the contracting process for both the University and the sponsors who intend to fund multiple research projects over time. The contracts are usually negotiated to cover an extended period.

Master Agreements are arranged with industrial research partners, and some federal and/or state governmental entities that contract with the University on a frequent basis. In these cases, SPARC pre-negotiates the legal terms and conditions of the agreement. Then, when a new project is proposed, the

terms of the Master Agreement apply and only the statement of work, period of performance and budget must be determined. Some flexibility may be built into master agreements to accommodate the possibilities regarding future scopes of work, intellectual property, and research personnel. The terms and conditions in a Master Agreement remain unfunded until a funded proposal officially results in a signed project specification. The PI should inform SPARC of potential sponsors who might be interested in negotiating a Master Agreement.

Task Orders or Work Orders

Once a master agreement is in place, an addendum or task order is created for each new project to be awarded under the master agreement. Task Orders/Work Orders are the individual authorizations to perform project specific work under the terms and conditions of a Master Agreement.

An addendum/task order/ work order frequently contains the following for each specific project:
  • Scope of work to be conducted and associated budget
  • Payment obligations and timing
  • Management of the project
  • Staffing of the project
  • Schedules, milestones, and deliverables
  • Co-funding information (if any)
  • Background intellectual property information (if any)
  • Licensing options and considerations
UNCW is concentrating efforts to establish master agreements with a variety of partners to help expedite the initiation and funding of research, student and student projects
An agreement that details a common plan of action or intent between two parties. It is used when the parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It is generally not used as a funding agreement.
An agreement which controls the transfer of tangible materials between parties for research purposes. It is not normally used as funding document.
An agreement that allows parties to share confidential or proprietary knowledge and information for specific purposes, particularly to determine whether to pursue a project or business relationship between the parties. These agreements restrict access, use, or dissemination for any other purpose. It is not used as a funding document.
An agreement where a party is funding other sponsored activities that do not involve performing research but are strictly for providing services such as routine testing, processing, or other specialized services. It is regularly a funding document.
An agreement issued under a master agreement. All terms of the master agreement apply to the task order.
This type of agreement indicates a general agreement on the nature of the working relationship between both parties. These can also set forth basic terms related to the ownership of intellectual property and other programmatic issues such as data sharing.

Important Award Negotiation Terms

Terms and conditions are detailed in the award or agreement that funds a project or is incorporated in the document by reference. Sponsors regularly have their terms and conditions available on the internet or included in the funding opportunity.

These requirements can affect both financial and programmatic aspects of the project. Terms and conditions can include the frequency of technical reporting, allowable costs, and prior approval requirements. Therefore, it is important that Departmental Administrators, as well as the PD/PIs, are familiar with all the obligations that are included with accepting sponsored funding.
The Federal Research Terms and Conditions (RTC) are used by select agencies for Institutes of Higher Education (IHEs) and non-profit organizations. These clarify regulations specifically for Federal financial assistance programs (grants and cooperative agreements) provided for research and research-related projects. Awards issued under the RTC directly reference the terms and conditions and incorporate them by reference. These terms and conditions do not negate Federal-wide policies or Agency-specific requirements.

The RTC has recently been updated to incorporate additional information and supplements from Uniform Guidance (2 CFR §200) specifically for organizations like Universities. Current participating agencies include:
  • Environmental Protection Agency (EPA)
  • Federal Aviation Administration (FAA)
  • National Aeronautics and Space Administration (NASA)
  • National Institutes of Health (NIH)
  • National Science Foundation (NSF)
  • US Department of Agriculture (USDA)
  • US Department of Commerce
  • US Department of Energy
  • US Department of Homeland Security
Contracts issued by Federal agencies use the Federal Acquisition Regulations (FAR) as their method of providing recipient institutions with terms and conditions. Individual clauses from the FAR are applied to contracts based on the activities being acquired, the type of institution providing the acquisition, and the Federal laws and regulations that apply to the activities in the contract.
The period of performance is the time between the start and end date of the project. It is the period during which the University is allowed to incur costs to complete the work required by the scope of work for the project. It is important to be aware of these time limits to properly manage the scientific progress of the project and compliantly expense funds.
Programmatic reporting is the mandatory accounting for the technical and scientific progress of the project. It is important to be aware of the schedule of reporting requirements to confirm that they can be met. If these will constitute a hardship on the programmatic staff, it is important to attempt to mitigate the issues through negotiations.
Many sponsors have rules around budgeting and expenditures using their funds. Knowing how and when funds can be spent is vital to compliant project management. All individuals involved with a project should be aware of the sponsor’s budgetary restrictions.
Sponsors prohibit certain activities unless the University requests permission in advance of the action. Project changes such as carryover, certain types of rebudgeting no-cost extensions, and types of personnel changes must be reported and approved by the sponsor before the University can proceed. All requests must be routed through your department’s Sponsored Project Specialist (SPS). It is important that those involved with a project are aware of the mandatory approvals before making any changes to the project.
Sponsors regularly mandate how the University accounts for project expenditures. It can include a reporting schedule as well as the format of the reports. Attention to the schedule is important because the University must be able to meet the requirements. If the requirements are not within the University’s abilities, OSP will negotiate the reporting terms and conditions.
Sponsors may impose requirements surrounding research subjects in addition to those in place at the University. It is important for the PD/PI and project staff to be aware of these terms and conditions so that they can take the steps needed for approval and reporting when working with research subjects.

Common Issues

Much of the University’s mission relates to its activities as an educational institution and the accessibility of knowledge. Publication restrictions limit the rights of researchers from publishing the results of their work. It may negatively affect the University in two ways:
  • Work conducted under publication restrictions may adversely affect student activities. Publication restrictions are not just limited to published articles but also to student dissertations
  • Dissemination of findings into the public sphere provides the University protection under Export Control regulations. The University functions under the Fundamental Research Exclusion. It exempts the University from certain export requirements because the work done is ordinarily published and shared within the scientific community. By conducting research under a publication restriction, the agreement puts the University’s Export Control exemptions in jeopardy.
The interests of the University are to be protected. Most sponsors will allow the University to retain the rights to copyrights and intellectual property related to and developed by sponsored projects. However, some sponsors may want to retain them instead. It may result in researchers not being able to develop their results further or incorporate their work in later research. OSP will attempt negotiations to achieve favorable intellectual property rights for both the University and researcher. Any instance where the sponsor will not provide full rights to the researcher in exchange for licensing of any inventions will be addressed with the PD/PI before accepting the agreement.

Governing Law is a clause in an agreement that specifies the agreement will be subject to the law of a particular jurisdiction. Sponsors regularly include Governing Law clauses that require the Agreement to

be subject to the laws of a given state other than North Carolina. As a state entity, the North Carolina attorney general represents the University. OSP cannot accept contract language that may limit the statutory power of the attorney general. The University may only agree to govern law and jurisdiction in the State of North Carolina or must remain silent.

Indemnification provisions allow the parties to allocate the risk of carrying out the obligations outlined in the contract. Generally, the party better suited to minimize or understand the risk is the party that should be responsible for the financial implications associated with that risk. The University is held to the NC Tort Claims Act, which limits the amount of indemnification that can be provided to other parties. OSP is required to ensure we do not contractually agree to levels of indemnity above those provided under the NC Tort Claims Act.
It is important to protect the University’s right to its name, logo, and other trademarks relating to its identity. Occasionally, agreements will not specify that a party must obtain permission to use the University’s name. UNCW needs to have the right to review and approve any use of its name by another entity. This allows the University to maintain its copyrights and prevent unauthorized use of its branding.
Assignment determines whether activities or obligations conducted under an agreement can be transferred to another party. Some agreements include terms that allow a sponsor to reassign responsibilities partially or completely to another entity with minimal notice and at their discretion. Having the project be subject to reassignment is a disadvantage to both the University and the researchers. It is important to negotiate assignment terms that require mutual consent by both parties and notice.