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1
BROWN BAG LUNCHEON SERIES
September 9, 2009
Negotiation of Sponsored Research Contracts at Yale
Presented By:
Donald T. Deyo, Ph.D. Cheryl MagovenyDirector, International Agreements and Senior Grant & Contract ManagerExport Control Licensing Grant & Contract AdministrationGrant & Contract Grant Administration [email protected]@yale.edu Phone: 203-436-9146Phone: 203-785-3817 Fax: 203-785-4159Fax: 203-432-7138:
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Agenda
Grant vs. contract GCA process for negotiating and executing
corporate sponsored research contracts Corporate contract challenges Publications Confidential Information Intellectual Property Indemnification Termination Payment Terms
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Grant vs. Contract
Grant - Financial “assistance mechanism”
Awarded by a publicly constituted body– Government – Federal, State, or Local– Non-profit organization - organized for public purpose
foundation, charity, etc.
Purpose– to transfer money, property, services, or anything of value to
recipient – to serve a public purpose and not immediate needs of Federal
Govt. Involvement with Recipient -no substantial programmatic
involvement during performance of activity
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Grant vs. Contract
Contract
A mutually binding legal relationship obligating Yale to furnish deliverables or services in exchange for payment by sponsor
Meeting sponsor’s need include:– specific objectives, – direction, – specifications, – costs, or methods of performance (see PR1304: Distinguishing
Between Gifts and Sponsored Projects)– services to be performed or – products to be delivered
Requires substantial involvement between the sponsor and recipient during performance of the Scope of Work
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Types of Contracts
U. S. Government Contracts Proposal
– Pricing Model– RFP– Other RFP Requirements
Award– Contract terms– FAR Clauses
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Types of Contracts
NON-FEDERAL Contracts Sponsored Research Agreement (SRA) with commercial
sponsor such as Pfizer or IBM Yale faculty member works out details of research plan
and budget with sponsor GCA negotiates terms and conditions with sponsor Other types of agreements are corporate clinical trial
agreements, material transfer agreements, confidentiality agreements.
Note: Contracts must have terms and conditions consistent with Yale’s not-for-profit status and must advance its educational and research objectives.
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GCA Process for Corporate Sponsored Research Contracts
Initiation: Usually through Investigator Department works to get Prosum to GCA with
budget and statement of work Negotiation: Usually takes going back and forth with
a Sponsor to get mutually acceptable terms. Budget and payment terms negotiated by
Investigator and Department Execution/Signature by Officials from both parties PI Signature of acknowledgement and understanding
of Terms and Conditions Yale has standard templates!
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What Usually Causes a Delay in Completing Agreements?
Publication Confidential Information Intellectual Property Indemnification Termination Payment Terms
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Publications
Yale policy protects the right of faculty and students to publish research results
– Neither GCA nor the PI have the authority to give up publication rights
– Sponsor can only review and comment on publications or presentations-NOT Approve content
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Delay of Publication
Should not exceed 90 days
Possible justifications:– To allow sponsor to review and comment– To protect sponsor’s confidential information– To allow a patent to be filed– To allow all parties of collaborative research
to complete their work
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Confidential Information
Yale strongly prefers not to accept confidential information– Complicates our right to publish– Our standards for protecting confidential
information don’t meet industry standards– Graduate students must be able to publish
without delays
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Confidential Information
Yale may agree to protect the confidential information that sponsor identifies in writing
We do not want to classify information which we develop in the course of the research as confidential
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Intellectual Property
IP defined as those “results” of the research that can be protected as:– Patents– Copyrightable works of authorship– “Research results” such as data and
information generally not protectable as IP
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Intellectual Property
Yale intellectual property Sponsor intellectual property Joint intellectual property Background intellectual property
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Handling of Intellectual Property
For patents, sponsor has the right to negotiate a license
Sponsor receives a limited non-exclusive copyright license to research reports generated under the SRA
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Indemnification
Why Indemnify?
What is it:• Terms that contains the phrase “indemnify, defend and
hold harmless”;
• Duty to make good any loss, damage, or liability incurred by another; or
• Right of an injured party to claim reimbursement for its loss, damage or liability from a person who has such duty.
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Indemnification
Sponsor generally should indemnify Yale– Sponsor is usually a commercial entity that will benefit
from the results of the sponsored research project– Yale is not going to commercially benefit and therefore
should not carry the burden of protecting the commercial sponsor
Exceptions to sponsor’s indemnification of Yale– Yale’s negligence or willful misconduct– Yale’s failure to follow applicable law
Yale generally prefers not to indemnify the sponsor
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Termination of Contracts
Termination– Termination for convenience: Both parties
may terminate for any reason (this rarely happens)
– Upon the date of expiration or termination, there shall be a final financial report prepared by Yale
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Termination of Contracts
Usually, within thirty (30) days after receipt of the Final Financial Report or invoice, sponsor will make payment to Yale for:
(1) All appropriate and allowable encumbrances, made by Yale through the date of termination not yet paid for; and
(2) All non-cancelable obligations incurred for the research by Yale prior to the date of termination
– Yale must ensure that its costs are recovered or reimbursed!
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Payment Terms
Fixed price or cost reimbursable contracts Yale, not the sponsor, should determine payment
terms Fixed price contracts obligate Yale to complete the
work without regard to internal cost; the sponsor must pay the full fixed amount regardless of how much it actually costs
Cost reimbursable contracts obligate Yale to work until the work is completed but no more than the agreed-upon cost is reimbursed
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Payment Terms
Advance Payment-large Installments– Minimize losses if there is a later dispute or default– Saves administrative costs and futility of collections
Payment in Full Upon Execution of Contract– Small awards– Short-term contracts – Use short-notice “material breach” language for
quick termination if default of payment
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What can Departments do to help?
Let GCA know as soon as possible regarding plans to initiate a SRA
Provide Yale’s standard agreement template to the sponsor; simultaneously providing sponsor contact information to GCA
Make sure the Prosum is properly completed and submitted with the correct F&A (65.5%) rate
Other concerns? COI, HIC, IACUC
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Questions?