Award Acceptance

 Introduction

All sponsored project awards contain terms and conditions; it is essential that the Research Administrator and the Principal Investigator read, understand, and follow them.

Sponsored Project Award Agreement Types

Sponsored project agreements are typically categorized into these mechanisms: 

1. grants

2. cooperative agreements

3. contracts

Over 70% of Stanford's sponsored projects are supported by grants. These agreements can be viewed as assistance and are significantly less restrictive than contracts, which may be thought of as procurements. The intent of the sponsor dictates which type of agreement is used. 

At one end of the spectrum is a grant, which is financial assistance to carry out a public purpose of support or stimulation where typically the only deliverable is a final report. At the other end of the spectrum is a contract, which is intended for the purpose of acquiring goods and services for the direct benefit of use by the contractor.

All four agreements are legal documents with their own set of terms and conditions that stipulate obligations and responsibilities. 

Sponsored Award Agreement Types	Description
Grant	An award of financial assistance bestowed to carry out a scope of work. The sponsor is a passive participant and has no substantial involvement in the work.
Cooperative Agreement	An award of financial assistance bestowed to carry out a scope of work but differs from a grant in that sponsor has substantial involvement, or is a partner in the work.
Contract	Typically considered a procurement action. The sponsor is a buyer of goods and services for the direct benefit of the sponsor. The sponsor may act as technical overseer and may have substantial involvement. Contracts have firm timelines and deliverable requirements.  Sometimes, terms and conditions are identified prior to submitting a proposal, and confirmed prior to accepting a contract. Contracts can have various payment structures: Cost Reimbursement Contracts: Provide for sponsor payment of the allowable, allocable, and reasonable costs of the project. They are designed to estimate total costs required for the work, and expenses are reimbursed as costs are incurred. Cost reimbursement contracts set a spending ceiling that the investigator may not exceed without additional funds being allotted by the sponsor’s contracting officer. Fixed Price Contracts: Establish an agreed-upon price for performing the work, as determined by Stanford’s proposed estimated costs and the program officer’s approval. Fixed price contracts do not provide for any cost adjustments, and place Stanford at maximum risk for assuming full responsibility for total project costs. Industry Sponsored Clinical Trials: Funded by industry to investigate the effects of drugs or devices on patients with specific clinical indications. They have FDA permissions to conduct the study for the purpose of acquiring the FDA’s approval of the drug or device itself. Typically paid for on a per-patient basis. JPA (Joint Personnel Agreements): Cost Reimbursement Contracts in which the sponsor purchases services of specific Stanford University staff on research projects. It must be for research purposes. These are for salary only.
Subaward	A contract to perform an intellectually significant portion of an overall project that was awarded to another entity.  Subawards can be awarded on a cost-reimbursement or fixed-price basis and often includes our sponsor passing down the award terms from the ultimate source of funding, or the prime sponsor

Specialty Agreement Types

Specialty agreements govern a range of situations that require specific terms in order to meet legal or compliance requirements.

Specialty Agreement Types	Responsible Office
Material Transfer Agreements (MTAs)	Industry Contracts Office (ICO)
Collaboration Agreements	Office of Sponsored Research (OSR)
Data Use Agreements	OSR
Intergovernmental Personnel Agreement (IPA)	OSR
Joint Personnel Agreement  (JPA) Non-disclosure Agreement (NDA)	OSR ICO for industry agreements and ORA for all others
Material Transfer Agreement (MTA)	ICO

About Terms and Conditions

The terms and conditions are either attached to the award document or incorporated by reference. Most sponsors incorporate terms and conditions by reference, which may be found on the web by searching for the awarding agency. The Office of Sponsored Research (OSR) or your school-based management team can help you find and recognize terms and conditions for a sponsored project award.

It is critical that you read and understand the terms. Terms and conditions also flow down to sub recipients of contracts and grants, so they will receive a corollary agreement.

Terms and conditions always outline requirements for billing and reporting (e.g., technical and financial reports that need to be submitted by the PI). They may also contain:

• Prior approval requirements (there may be requirements embedded for prior approvals by the sponsor before certain expenditures are allowed, such as foreign travel, food, or equipment. 

• Requirements for budget expenditures and unallowable costs. (Some expenditures may be specifically identified as unallowable.)

Federal Research Terms and Conditions

The Federal Research Terms and Conditions (RTCs)  implement Uniform Guidance as it applies to research and research-related grants made by the Federal awarding agencies specified below to institutions of higher education and non-profit organizations. While the Uniform Guidance outlines provisions that are specific to research, these terms and conditions:

• Incorporate the entire Uniform Guidance by reference, clarifying or supplementing select provisions where appropriate and consistent with government-wide research policy. 

• Incorporate the set of Frequently Asked Questions in effect at the time the award that is made for the Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR § 200 (located at https://cfo.gov/cofar-resources ). These FAQs are meant to provide additional context, background, and clarification on the policies described in 2 CFR § 200. 

• Apply to an award when included as part of the award or when incorporated in the award by reference.

In addition to these Research Terms and Conditions, there are three appendices that provide additional guidance on pre-approval requirements:

RTC Appendix A Prior Approval Matrix - November 12, 2020

RTC Appendix B Subaward Requirements - November 12, 2020

RTC Appendix C National Policy Requirements - November 12, 2020

What agencies participated and what is their implementation timeline?

Please see this document regarding each agencies' implementation timeline: Research Terms and Conditions (RTC) Agency Implementation Statements - November 12, 2020

How do I know if I have an award with the new RTCs?

• These Research Terms and Conditions will apply to an award when included as part of the award documentation or when incorporated by reference.

• Please note that additional agency-specific requirements may apply in addition to the RTCs.

  • DHS - N/A
  • DOC - 11/20
  • DOE - 11/20
  • HHS/NIH - 11/20
  • NASA - 11/20
  • NSF - 11/20 (Significant Changes in 11/20), 10/20 (Significant Changes in 10/20)
  • USDA/NIFA - 11/20

Who do I contact if I have questions about the terms and conditions that apply to my award?

Your Institutional Official at OSR or RMG can answer any questions you may have regarding the terms and conditions that apply to your award.

Where can I find guidance on managing program income?

If your award contains program income, make sure you’ve reviewed the program income policy and that you understand the additional tracking and reporting requirements associated with program income.

Federal Contract Terms and Conditions

Federal Contracts use FAR clauses as their terms and conditions. The vision of the FAR System is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. Clauses are either incorporated by full text or referenced by number in your contract. They are the terms and conditions of the contract. Review the list FAR clauses or contact OSR for help when working with Federal Contracts.

Travel on Federal Awards

Federal regulation and Stanford Policy require (with some exceptions) travelers who will be reimbursed by federally sponsored projects to use a U.S. flag air carrier service. This is known as the "the Fly America Act.”

There is an exception to the rules of "the Fly America Act." The exception is called the  "Open Skies Agreement." The Open Skies Agreement allows travelers who will be reimbursed by federally sponsored projects to use European Union (plus Norway), Australian, Japanese, or Swiss airlines.

The Open Skies Agreement does not apply if travel is funded by the Department of Defense (DOD) or by a department of the U.S. Military. Travel funded by the DOD or by a U.S. military department must be on a U.S. flag air carrier.

For more information go to Fingate: Fly America Act and Open Skies Exceptions.  From this page you can click on a destination for specifics on allowable conditions and air carriers.

For assistance on travel contact the Financial Support Center at 3-2772.

Review Terms and Conditions

Before accepting an award on behalf of the University, the Institutional Official (IO) reviews all terms and conditions, regardless of the sponsor, and is responsible for negotiating appropriate terms if an award:

• contains provisions that are incompatible with the Stanford's policies on sponsored research

• is inconsistent with government-wide regulations for universities

• fails to include all elements agreed upon prior to the award

• requires modification to conform to the PI's needs

When the University accepts the terms and conditions of an award, we are bound by them and it is critical that they be reconciled with both government regulations and University policy. Always check the exact text of the regulation or policy rather than relying on your general recollection when negotiating terms and conditions to make sure they don’t conflict. 

Note: State of California awards often have very explicit restrictions on budgets; so be sure to review each of these award terms and conditions in detail!

In the case of all industry awards or other awards with non-standard patent, copyright, or licensing terms, the Industrial Contract Office must also approve the award terms. This approval is coordinated by your pre-award office.

Key Clauses May Require Negotiation

While federal grants are governed by a standard set of terms and conditions; the exact language depends on the government agency and funding instruments. In other agreements, the following clauses commonly require negotiation:

Publication Restrictions

Stanford policy prohibits the acceptance of any award that restricts publication, access, or dissemination of research results or prevents Stanford from disclosing the existence of an agreement.

Indemnification

Stanford does not cover sponsor loss unless SU is negligent or exercises willful misconduct.

Warranty

Stanford does not guarantee any research results.

Proprietary Information/Material

Stanford as an institution cannot agree to protect a sponsor’s proprietary information. An individual may enter into a non-disclosure agreement with a sponsor.

Liability

Stanford does not accept provisions which impose unlimited liabilities for Stanford.  Example: re-procurement clauses.

Intellectual Property

Stanford retains title to intellectual property.

Financial Viability

The financial viability of some commercial sponsors may not be readily apparent and must be researched prior to accepting an award.

Export Controls

Stanford's Openness in Research policy permits the acceptance of export controlled information only if foreign national members of the research group are able to continue to "participate in the intellectually significant portions of the project." Similarly, Stanford will not accept research agreements whose results are subject to export controls.

Pre-Award Spending

It is possible to spend before the anticipated award start date if the sponsor authorizes it in writing. Check the terms and conditions of the specific award for restrictions on pre-award spending. 

• Most federal sponsors allow preaward spending for grants 90 calendar days prior to the anticipated award start date.

• Other sponsors limit the dollar amount or do not allow pre-award spending. 

• It is rare for contracts to include language allowing pre-award spending. Special language must be negotiated. 

If the sponsor authorizes pre-award spending, you can open an early PTA (Project Task Award). If the research involves human or animal subjects or stem cells, a protocol must be submitted before an early PTA can be opened. Although you can receive an early PTA, certification is required that protocols have been filed for review and that no expenses involving those activities will be incurred until the final protocol approval is granted. Learn how to open an early account by view Sponsored PTA Manager Early Account User Guide.

The sponsor is not obligated to fund the pre-award costs if the project is not funded, and the sponsor's authorization of pre-award spending does not guarantee that the PI will receive the award. If the award does not materialize, the PI must cover for the costs from his or her unrestricted funds.

In addition, if the start date of the project is delayed beyond the 90 day period, the award will not cover the costs if they were incurred outside the 90 day period.

Award Acceptance

Once the terms and conditions are agreed upon, the award is signed by the IO on behalf of Stanford University. In those instances where a Stanford signature is not required on the agreement (such as federal grant awards), acceptance of the terms is typically indicated when the expenditures on the award have taken place and/or the check is cashed or funds drawn from the government. For this reason, Project Task Awards (PTAs) are not established until after there is notice from an IO that the agreement terms are acceptable. 

The notification of IO acceptance is the Award Acceptance Notification (AAN). Each agreement received by Stanford is recorded in the Stanford Electronic Research Administration (SeRA) system as an award transaction. The award transaction captures key details regarding the agreement including general project level details, the amount funded, attachments including signed agreement documents, negotiations notes and key terms and conditions. These key elements are entered into the SeRA transaction by the IO who then approves the award transaction in SeRA. Once approved, the AAN is generated by the system and sent to the project stakeholders. This step triggers the PTA setup.

The NOA (Notice of Award) will be sent out via the SeRA system once the New PTA Setup Transaction has been completed. The NOA content is similar to the AAN, however it will now include PTA details.