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# 8.1 Required Institutional Signatures or Acceptance

Background

Most grants, especially those from federal agencies, award funds unilaterally, without the need for a signature of the parties. However, grants from not-for-profit sponsors and contracts from all sponsors require the signature of an authorized representative of the recipient institution to indicate acceptance of the terms.

The Caltech Way

Office of Sponsored Research (OSR) staff have delegated responsibility to sign as institutional officials on formal agreements, grants, contracts, or cooperative agreements related to research and other sponsored activities.

Prior to acceptance of an award, the Executive Committee of the Board of Trustees must approve new proposals with budgets of $5 million per year or total funding that exceeds$10 million.

In the highly unusual event when the sponsor issues an award to the Institute prior to the submission of a proposal through the normal Institute process, the PI must submit the scope of work, budget and completed Division Approval Form (DAF) to OSR. The PI must also obtain all necessary compliance approvals (e.g., Human or Animal use, Biosafety, etc.). Only after the required Caltech review processes have been completed may OSR accept and process the award.

Caltech Faculty Handbook Chapter 7

9/20/10

# 8.2 Key Award Terms and Conditions

Background

The terms and conditions of an award set out the expectations of the parties and the anticipated deliverables. In order to minimize confusion or disputes later regarding performance, the terms should be written clearly in unambiguous language.

The Caltech Way

Principal investigators and other key members of the sponsored project research team should review the agreement terms and understand key requirements of the sponsor. If a PI is contacted directly by a sponsor regarding the terms of an award under discussion, they should be referred to the Office of Sponsored Research.

The Institute accepts awards from an external sponsor if the terms and conditions are consistent with Institute principles.

Caltech Faculty Handbook Chapter 7

Sponsor agreements shall not impose restrictions on the Institute that are in conflict with its established policies and practices, and should permit performance of the research in the same manner as research financed with the Institute's own funds.

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# 8.2.1 Parties

Background

The terms "party" or "parties" are used to describe the legal entities that are entering into an agreement. Usually, there are no more than two parties to a grant, contract or cooperative agreement, i.e., the sponsoring organization and the award recipient.

The Caltech Way

California Institute of Technology is the official award recipient for sponsored agreements.

The Institute accepts awards in the form of a grant, contract or other type of legal agreement, from an external sponsor for the support of a faculty member's project.

Caltech Faculty Handbook Chapter 7

9/20/10

# 8.2.2 Scope of Work

Background

The scope of work is a chronological description of work to be performed under a grant. contract, cooperative agreement, or subcontract in the completion of a project. A well-defined scope of work indicates the anticipated tasks that will be accomplished for a stated level of funding. The expansion of an agreed-upon scope of work by the sponsor should lead to an increase in funding.

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# 8.2.3 Period of Performance

Background

The period of performance is the length of time the award provides support for a project. Awards may commit to an entire multi-year project period or to an initial period of support with the possibility of an extension of the end date. In the latter case, the firm commitment is only for the length of the initial period of support; however, annual extensions could extend the project to match the multi-year project period in the first example.

The Caltech Way

Unless an exception is formally approved by the sponsor only those costs incurred during the period of performance are considered allowable.

Caltech Code of Conduct

4/22/14

# 8.2.4 Funds Awarded

Background

Award documents (the grant or contract) provide important information related to the total amount of the award, how much money is being made available at different times in the project, and how Caltech will receive the funds.

Total Award: The total amount of an award includes funds made available by the sponsor for the award period. Usually, sponsors include direct and indirect costs in this total. These are the funds "committed" or "obligated" by the sponsor. However, this figure may not be the amount of funds subsequently paid to Caltech.

Available Funding: National Institutes of Health and National Science Foundation projects are programmatically approved for support in their entirety, but are generally funded in annual increments called budget periods. Some other federal agencies use this model. The projected levels of future support are contingent on satisfactory progress, the availability of funds, and the continued best interests of the Federal government. These future budget increments are not funding guarantees and create no legal obligation to provide funding beyond the ending date of the current budget period indicated on the award. Investigators should spend only those funds provided in the initial budget period, plus funds as they are released in later budget periods.

Federal contracts use a similar mechanism to release funds on an incremental basis during the period of performance. Investigators should closely monitor expenditure patterns to avoid overspending on a contract.

Payment Method: Award terms also specify how payment will be made. Some awards, particularly those from private foundations, provide the entire amount of the award at the beginning of the project period. Obviously, this method is preferred.

Other sponsors make periodic payments to satisfy the total award. Private contractors often establish a payment schedule during the project term and withhold the final payment until an acceptable final report or deliverable is provided by the PI. This mechanism increases the risk to the PI and Caltech.

Government agencies, especially federal agencies, provide an automated letter of credit that allows the recipient institution to draw down funds as needed to meet the expenditures on the project. The institution may draw down only those funds that have been released by an award.

The Caltech Way

Principal Investigators should pay close attention to the amount of the funds that have obligated by the sponsor and to the schedule of future payments in projecting their spending through the period of the award.

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# 8.2.5 Deliverables

Background

Deliverables are the work products that are required to be provided to a sponsor under the terms of the award. They can be written reports, software, or any other tangible research result. Deliverables can be linked to the issuance of a final payment.

The Caltech Way

The PI is responsible for providing the deliverables required by a sponsored award in accordance with deadlines or schedules included in the award.

The term "Deliverables" is usually associated with a contract or subcontract, i.e., the term refers to the "things" (goods or services) that the recipient is being paid to develop for the sponsor. In the world of grants and cooperative agreements, the "things" required by the sponsor are typically research and scientific progress reports and final reports.

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# 8.2.6 Publication and Dissemination of Results

Background

The results of research and other sponsored projects should be able to be shared with colleagues and other researchers through publication on the internet, in scholarly and professional journals, or presentations at scientific meetings.

The Caltech Way

It is essential that the Institute undertake research activities that contribute to its educational and scholarly objectives. Therefore, the Institute requires that all grants and contracts provide freedom to publish and otherwise disseminate the results of sponsored research performed by faculty, staff, and students.

Caltech Faculty Handbook Chapter 7

Faculty are encouraged to deposit reprints of their publications in their Division offices for the benefit of colleagues and graduate students.

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# 8.2.7 Ownership of Data and Information

Background

Data produced during the course of a sponsored project may have value for future research and education. Data may also support patents or other intellectual property arising from a project. For these reasons, among others, universities typically retain ownership of data produced in conjunction with sponsored projects. This is the case even when some data may be identified as a "deliverable" to a sponsor under the terms of an award.

Caltech's Position

Caltech normally owns the technical data and other products generated from a sponsored project. Federally-funded research awards typically do not impose additional data restrictions on recipients. For-profit sponsors and, to a significantly increasing extent, non-profit sponsors, occasionally seek to impose restrictions on access to and use of data and information arising from sponsored projects. It is important for the Institute to retain ownership of the data to assure continuing access by faculty and students. Nonetheless, the Principal Investigator and other key members of the research team are permitted to retain copies of such data and information for their own use.

Caltech Faculty Handbook Chapter 7

9/20/10

# 8.2.8 Proprietary, Confidential or Sensitive Information

Background

For-profit sponsors may provide information, data or other materials that they consider to be vital to their commercial success to researchers for use in meeting project goals. Generally, this information is labeled by the sponsor as "proprietary" or "confidential," with instructions to the recipient regarding handling and restrictions on dissemination. In rare instances, Federal agencies also may provide data or other materials considered to be "confidential" or "sensitive."

Such restrictions place tremendous burdens on the institution and present a dilemma when graduate students and postdoctoral fellows depend upon publishing their theses or freely disseminating information derived from the restricted research to further their careers.

The Caltech Way

The Institute prefers not to receive confidential or proprietary information from sponsors due to the added risks to Caltech and potential infringement to academic freedom. Under very limited circumstances, Caltech may agree as part of the grant or award terms to allow the PI to accept proprietary, confidential or sensitive information in order to conduct the proposed research as long as the acceptance of such information does not place automatic restrictions on the ability of the PI to disseminate the results of the research.

Caltech Faculty Handbook Chapter 7

Caltech will allow the sponsor to provide proprietary or confidential information to the PI under the following conditions:

• The information must be vital to the completion of the project.
• The information must be delivered only to the PI or a designated project team member, who assumes all responsibilities for its use and protection.
• The information must be in writing or electronic media, as appropriate, and clearly labeled as "Confidential" or "Proprietary" on the face page or on each individual page of the restricted information.
• Where applicable, the information should be marked to clearly indicate any restrictions under U.S. export laws and regulations.
• The information may not be officially classified by the federal government.
• There must be clear instructions in the award as to disposition of the information or materials at the end of the project.
• Caltech reserves the right to decline to receive any export controlled information from the sponsor or a third party associated with the sponsor.
• The PI must establish procedures in the laboratory or other research space for protection of the information. These might include housing the restricted information in a locked cabinet with limited access by laboratory personnel, prohibiting copying of the information, and prohibiting removal of the information from the laboratory.
• The PI assumes responsibility for the review of publications or presentations to ensure that no appropriately labeled proprietary, confidential or sensitive information is disclosed.

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# 8.2.9 Patents and Inventions

Background

A patent is an intellectual property (IP) right granted by the Government of the United States of America to an inventor "to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States" for a limited time in exchange for public disclosure of the invention when the patent is granted.

Grant and contract documents often include a provision addressing the ownership of IP and licensing rights, if any, to the sponsor.

The Caltech Way

The Office of Technology Transfer (OTT) handles all intellectual property-related issues for the Caltech campus and JPL, including patent, trademark and copyrights.

Inventions made by employees in the line of Institute duty or with the use of Institute facilities may be patented in order to protect and benefit the Institute and the public. Title to such patents is to be assigned to the Institute or, if appropriate, the sponsor.

All Institute employees sign a Patent and Copyright Agreement assigning their rights to the Institute or its sponsor. Employees shall report immediately to the Institute any innovation or discovery that might reasonably be considered patentable and that arises in the line of their duties or from the use of Institute facilities. Reporting duties also apply to copyrightable materials.

Caltech Faculty Handbook Chapter 7

Office of Technology Transfer

9/20/10

# 8.2.10 Special Award Terms and Conditions

Background

Agreements may include a number of miscellaneous terms and conditions that impose added burdens upon researchers or the Institute. Examples include provisions that restrict or limit payment of expenses, require prior approvals by agency personnel, and require more frequent or more detailed reporting of progress or financial status than can be accomplished within current processes.

The Caltech Way

The Office of Sponsored Research will make every attempt to negotiate agreement terms that avoid imposing burdens upon Institute researchers or administrative staff. Unusual terms and conditions that impact the PI and project staff are spelled out in the Award Summary prepared by OSR and distributed to the PI and others with each award. Both the PI and Institute staff should take note of any special terms and conditions in an award that require their action.

Caltech Faculty Handbook Chapter 7

9/20/10

# 8.3 Deviations from Standard Award Terms

Background

Agreements sometimes include terms and conditions that are inconsistent with the Institute's standard terms associated with sponsored projects. Often an award is offered contingent upon the acceptance of a normally unacceptable condition. In order to consider the facts related to a particular non-standard requirement, institutions establish a review process to consider exceptions to the standard terms.

The Caltech Way

Caltech strongly discourages deviations to Institute policies in the terms and conditions of sponsored agreements.

Deviations from Institute policies of any significance must be approved by the Provost's Office, Institute committee(s) concerned, the Office of the General Counsel, the President, and, if deemed by the President to be desirable, the Board of Trustees.

Caltech Faculty Handbook Chapter 7

9/20/10

# 8.4 Account Set Up

Background

Individual accountsPTA's are established for each grant, contract or cooperative agreement in order to allow for discrete accrual of income and expenses and reporting on an award-by-award basis.

The Caltech Way

At Caltech, the term "PTA" (Project-Task-Award) is used to describe an account in the financial system. Once an award has been accepted for the Institute, the request for establishing a PTA is initiated by the grant manager on behalf of the PI and funded by the Office of Sponsored Research.

The accounting system for grants and contracts provides considerable flexibility with regard to the project-task-award structure that can be employed for a given grant or contract. Decisions about the structure to be used in a specific situation need to be made before the PTA set-up process begins.

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# 8.5 Pre-Award Costs / Late Award Receipt

Background

The term "Pre-Award Costs" has two related, but distinct meanings.

1. Costs for a project incurred prior to the "effective date" of the award.
2. Costs for a project incurred on or after the effective date of the award, but prior to the Institute's receipt of the award documents.

Many federal granting agencies permit the awardee institution to approve a pre-award start date that is up to 90 days prior to the effective date of the award.

Under limited circumstances, the Institute permits the creation of a project PTA (account) before the award documents have been issued.

The primary reason for establishing a pre-award account is to avoid the situation of having project expenses charged to another PTA (particularly one associated with another sponsored project) until the project account has been set up and then having to process the resulting cost transfers.

The Caltech Way

An Investigator can request the establishment of a Pre-Award PTA under the following circumstances:

1. The PI believes that there is an extremely high probability the award will be made.
2. The effective date of the award is known.
3. If the Pre-Award account takes effect prior to the effective date of the award, there is a reasonable assurance that the sponsor will approve costs incurred prior to the effective date of the award.
4. The PI has identified an unrestricted "back-up" account that will cover costs incurred in the event that the award is not made, or does not cover the entire period during which costs have been incurred.

Pre-Award accounts are typically set up for a maximum of 90 days with an estimate of the total costs expected to be incurred during the pre-award period.

Note: The "back-up" account must have a sufficient balance to cover the anticipated "pre-award" costs.

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# 8.6 "No Cost" Extensions

Background

For a variety of valid reasons, as the end of the period of performance of a grant, contract, or cooperative agreement nears, it becomes necessary for the PI to request additional time to complete the project. An extension of the end date of a project without the need for additional funding is known as a "no cost" extension. Unless the end date of a project is extended, charges incurred after the end date will be "bounced" by the financial system.

Extending the project end date requires the approval of the sponsor. That approval may be obtained in several different ways, depending on the terms of the particular award. Some sponsors (e.g., NIH, NSF, NASA, and DOE) have delegated the authority to extend grant dates for up to one year to the Office of Sponsored Research. In all other instances, the extension must be approved by the sponsor prior to the end date.

The Caltech Way

All requests for "no cost" extensions are initiated by the Principal Investigator. Several items of information should be included in the request:

• The reason for the request
• The amount of time requested (not more than one year)
• The estimated unobligated balance of funds as of the original end date of the award

No cost extensionsmust be requested before the award has ended. Under ideal circumstances, the request should be made by the PI at least 60 days before the award end date. The request requires approval by the sponsor or by the Office of Sponsored Research acting on behalf of the sponsor. The PI, grant manager, Project Accounting, Purchasing, and others are notified via an Award Summary when the extension has been approved.

9/20/10

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