11.2 Contract Research
Original Approval Date:
May 13, 2003
Date of Most Recent Review/Revision:
November 20, 2007 (editorial)
Office of Accountability:
||Office of Research Services
This policy applies to research contracts to be administered by the university for research carried out by university employees or students, on or off university premises, using university personnel, resources, services, facilities or equipment and sponsored by an external party. The university must ensure that research contracts with external parties benefit the university and are consistent with the mission and mandate of the University.
Universities are required, as far as possible, to seek full cost recovery from sponsors of research, and cannot subsidize clients (in the public or private sector) for whom they carry out research. Full cost recovery includes both the direct and indirect costs of a research project.
This policy discusses the negotiating and signing of research contracts with external parties, direct and indirect costs of research, the allocation of indirect costs, and other contract conditions.
A. Contract ResearchContract research is research undertaken according to a specific written agreement between the university and a sponsoring external party. A research contract normally includes clauses or statements pertaining to specific "deliverables" or output from the research project; a schedule and date(s) for the completion of work, including progress reports and a final report; funds payable to the university and the schedule for payment, often in response to invoices sent to the sponsoring party for expenses incurred (including honoraria, if a part of the agreement); the ownership of intellectual property resulting from the project; and publication and disclosure. The agreement, once signed by all parties, is a legally binding contract, subject to the laws of the province in which the contract is awarded.B. Indirect Costs
Indirect costs (i.e. overhead) are any expenses that cannot be identified with a specific part of the university's teaching, research, or service activity. Indirect costs to the university for conducting research include property maintenance; the provision and maintenance of space and equipment; insurance; utilities; renovations; administrative services such as accounting, payroll, purchasing, and the office of research services; and library, computing, telephone, office equipment, and staff services not charged directly to the project.
III. Negotiating and Signing Research Contracts
Following initial contact by faculty or staff with an external sponsoring party regarding a potential research contract, the office of research services must be notified and become involved early in the negotiations if the research contract is to be administered by the university. Individual faculty or staff are not authorized to sign research contracts on behalf of the university; all research contracts must be signed by the associate vice-president:research.
All research contracts involving university employees or students, which are to be administered by the university, must involve the associate vice-president:research in the early stages of negotiation, and must have signatures:A. on the WLU Contract Negotiation Cover Sheet (copies are available on the office of research services web site), by the principal investigator (PI) and all co-investigators, and the chairperson and/or dean of the academic unit of the PI, who agrees that the research is consistent with the mission of the university and the academic unit, and that the research will benefit the department and/or faculty; that the research can be completed successfully with existing facilities and services or with those purchased as part of the contract; and, that the contract research will not conflict with the responsibilities to the university of faculty, staff or students involved in the project.
B. on the final copy of the contract, by the principal investigator (and any co-investigators), who agree to be responsible for the technical, scientific and scholarly conduct of the research, including meeting all ethical, intellectual property, animal care, human subject, conflict of interest and financial requirements, regulations and procedures of the university and of the sponsor; and by the associate vice-president:research (or delegate), who agrees to administer the contract on behalf of the university, and that the financial and legal responsibilities of the university have been protected.
Contracts must ensure that the rights of the university and of its employees are protected and that the university and its employees can perform as agreed.
IV. Direct Costs
All costs which are directly attributable to or identified with the research project must be charged to the project. This includes the salaries of faculty, staff and students for time involved in the work and any other expenses which are necessary to complete the project.
V. Indirect Costs
Faculty and staff have an obligation and responsibility to assist the associate vice-president:research in the negotiation of indirect costs, but do not have the right to waive indirect costs, or to establish the amount to be charged.
Indirect costs are charged according to existing agreements (for example, that between the Association of Universities and Colleges of Canada (AUCC) and Public Works and Government Services Canada(PWGSC)) or are negotiated and charged as a percentage of the direct costs associated with the proposed project.
According to the 1985 agreement between AUCC and PWGSC universities have agreed that the minimum indirect cost to be charged on contracts negotiated through PWGSC will be: 65% on faculty and staff salaries (including release time stipends) and benefits; 30% on graduate student and post-doctoral fellows' salaries and benefits; and 2% on travel costs. For the purpose of salaries and wages to be budgeted and charged on a per diem basis, PWGSC agreed that these may be calculated at 1/225 times actual annual salary.
When indirect costs are negotiated and charged as a percentage of the direct costs associated with the proposed project, the direct cost must be based on full cost recovery, and must include the costs of specialized equipment, facilities or supplies; maintenance, repair and depreciation; space which must be acquired or assigned to the project and associated utility costs; and faculty and staff time.
Overhead charges for contracts or contribution agreements with the private sector and with other public agencies (for example, the Canadian International Development Agency (CIDA)) should be negotiated as indirect costs, or should be included in the direct cost of specific lines in a proposed budget. An appropriate percentage to charge for overhead might range from 20% to 40% of the total direct costs.
Lower indirect costs may be negotiated for student projects when the project is undertaken for academic credit (e.g. thesis or dissertation, where the intellectual property rights reside with the student); or for major equipment or capital donations to the university that will facilitate faculty, staff, or student research in the future.
If it is agreed that indirect costs are not to be fully covered by the sponsor (i.e., the cost of the project is to be partially funded by the university), the contract must specify that the project is jointly sponsored by the contractor and the university. In this case, the ownership of the intellectual property and the control and distribution of the original data are vested in the university.
VI. Allocation of Indirect Costs
Indirect cost revenue from a specific contract will be collected at the time of each payment and deposited to a general overhead account in the office of research services. This revenue will not be used as base income in the budgeting process since contracts are for a limited term, and therefore it would not be appropriate to use indirect cost revenues to meet continuing financial obligations. Transfers from the overhead account in the office of research services to the general university operating fund and the home faculty overhead account will be made only following the completion of all contract work; that is, following the submission of the final report, the receipt of all revenue per outstanding invoices, and the closure of the research contract account. On completion of the project, the revenue generated by the indirect cost recovery will be shared as follows:A. For Individual Contracts or Contracts Generated by University-Affiliated Centres or Institutes1. General university operating fund = 30%B. For Contracts Generated by Faculty-affiliated Centres or Institutes
2. Office of Research Services overhead account (see Note 1) = 30%
3. Home faculty overhead account (see Note 2) = 40%
1. General university operating fund = 30%Any over-expenditure of funds in a contract including holdbacks not released by the sponsor, are to be charged to the principal investigator and/or the home faculty overhead account.
2. Office of Research Services overhead account (see Note 1) = 20%
3. Home faculty overhead account (see Note 2) = 50%
VII. Other Conditions
A. If a principal investigator leaves the university before the completion of a contract, the sponsoring party is to be notified by the office of research services. The associate vice-president:research is responsible for ensuring that financial matters and contractual agreements are concluded to the satisfaction of all parties, including the PI, university and sponsor.
B. Each proposed contract must indicate on the Contract Negotiation Cover Sheet, the demands of the proposed research on university space, equipment, supplies and personnel (secretaries, technicians, students, etc.)
C. The title to any donated or purchased equipment should be specified in the contract. Any equipment or materials purchased by the university as part of the project shall remain the property of the university unless otherwise specified.
D. Contracts must include reasonable and appropriate mechanisms for renewal, termination or extension of the contract. In the case of termination, the university must be paid for all costs incurred or committed to the date of termination.
E. Contractual obligations must be integrated into the ongoing activities and responsibilities of the individuals involved, and of those of his or her academic unit.
F. No right or obligation related to research contracts shall be assigned by either party without the prior written permission of the other. The university shall not subcontract any work to be performed except as specifically set forth in the research contract.
1. The revenue allocated to the office of research services will be used to offset costs associated with the administration of contracts (such as Animal Care Committee, Research Ethics Board and technology transfer expenses), and to provide seed money to stimulate and enhance innovative research activities across the University.
2. Each faculty will establish a policy for the distribution of this revenue which ensures that the PI who signed the contract receives additional (generally 10-15% of the faculty share) research support (but not salary or a stipend), at the time of the contract or in the future.