University of Vermont

Sponsored Project Administration - SPA

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Contracting with Industry - A Step by Step Guide

Step 1 - Initial contact with the industrial sponsor 

Often the investigator has some conversation with his/her contact at the Company that results in a preliminary plan and budget. While it's OK to send a preliminary budget to the Company you will want to make it clear that the budget is in fact preliminary, pending University review. Best practice is to ask SPA to review even preliminary budgets before you convey them to a potential sponsor. This helps ensure that the budget won't have to go through any increases or changes that the Company wasn't anticipating or which may delay the process. If you do send a preliminary budget, copy it to SPA and follow-up with a phone call to begin the UVM process. Remember: If everyone works together and communicates with the company with one voice, the process is easier.

Key points to mention to SPA

  1. Does the company have a dollar cap in mind?
  2. How quickly does the contract need to be finalized? Two-weeks? Two months? Are you running up against a year-end deadline?

Better yet: Call SPA before sending in a preliminary proposal and get their help preparing the budget.

Step 2 - University's position on key contracting issues

  • Publication review and approval:  Delaying publication and public disclosure for a reasonable period of time to allow sponsors to confirm that any confidential information the sponsor provided is not inappropriately disclosed, or to protect intellectual property is allowed. In general this delay should not exceed thirty days for initial review and an additional sixty days for intellectual property protection. Sponsors should never be allowed to approve publication content. 
  • In general, the University owns the data it generates under sponsored agreements. The key points to address is who has access to the data for how long and how does each party get to use the data in the future. It's much more productive to talk in these terms than in terms of "data ownership." 
  • Inventions and patents:  In accordance with the University’s Intellectual Property Policy, the University owns the inventions generated by its faculty under sponsored agreements. There may be multiple sources of funding for a single invention, including a mix of private and federal agencies making ownership and licensing rights complicated. In particular, if federal funds are involved, the University is legally required to retain ownership. The University’s usual practice is to give sponsors a non-exclusive license for research purposes and an option to exclusively license to inventions arising from the projects they fund.
  • Indirect costs:  UVM's policy is to request reimbursement of all costs, including indirect costs, unless a sponsor has a written policy limiting reimbursement. This is true for both private and public sponsors of research.

Step 3 - Contract negotiation

As soon as you get an indication from the company of interest in pursuing the project, get SPA involved if you haven't already done so; stay in touch with SPA and let SPA know your position on the above four key issues. Other points of negotiation may include:

  1. How will confidential information received from the company (not the actual data you generate) be dealt with for publication, presentations, etc? For example, the company may share with you the chemical structure of a new pharmaceutical.
  2. Under what conditions can the contract be terminated by either party?
  3. How will conflicts and disputes be resolved?
  4. If equipment is to be purchased, is ownership of equipment clearly spelled out?
  5. Are there issues of liability?

Step 4 - Setting up an Advance Account

In the event negotiations are ongoing, and the work needs to begin, explore the "advance account" option. In this case, the Department or the Dean's Office "guarantees" the funding of part or all of the project until the contract is in place.

Two key points

  1. The investigator should be virtually certain that the contract will go through in the long run.
  2. The company should be willing to add a clause allowing pre-incurred costs to cover the work that will have already been done.

Step 5 - Take care of compliance issues

Don't forget all the other issues: Human subjects, use of animals, radioisotopes, etc. need to be addressed just as for NIH.

The University recognizes that the nature of the work and the needs of the parties involved play a central role in defining a research agreement and therefore does not have a standard model agreement. However, the sample agreement is one that complies with University policy and reasonably protects the Sponsor's interests. It is a good starting point.

Last modified April 23 2014 01:38 PM

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