Policies & Compliance

Overview of Sponsored Projects Administration

3.3 Types of Sponsored Projects

3.3.1 Grant

A grant is a form of financial assistance awarded to the University to carry out research, instruction, training, public service, or other programmatic activities as described in an approved proposal. Grants are used when the sponsor does not anticipate substantial programmatic involvement during the performance of the project.

Grants typically allow the Principal Investigator (PI) reasonable flexibility to adjust the direction of the work as the project progresses, provided that such changes remain within the approved scope of work.

Characteristics of a grant generally include:

Terms governing the use of funds, including budgetary restrictions, project objectives, period of performance, responsible personnel, and invention rights.
Authority for the sponsor to terminate or withhold funding if project objectives are not met; unexpended funds may need to be returned.
Requirements for formal financial accounting, either during the project, at closeout, or both, with funds managed in a restricted project account.
Requirements for technical or programmatic reports during the project and/or at its conclusion; sponsors may also request copies of publications.
Incremental payments or periodic disbursements to support ongoing project costs.
Inclusion of Facilities & Administrative (F&A) costs, along with University commitments of facilities, personnel, or other resources.
Research-related awards from corporations, corporated foundations, or major private foundations typically take the form of a grant unless terms require a contract mechanism.

3.3.2 Cooperative Agreement

A cooperative agreement is a funding mechanism used by federal agencies when the sponsor anticipates substantial programmatic involvement in project activities. As with grants, the primary purpose is to provide support for research or other public-purpose activities authorized by federal statute. Cooperative agreements differ from grants in that the sponsor may participate in project planning, direction, or decision-making.

3.3.3 Contracts

A contract is a procurement mechanism used when the sponsor seeks to acquire specific goods, services, or deliverables from the University. Contracts typically:

Specify the work to be performed in detail;
Require deliverables within a defined timeframe;
Allow less flexibility for modifying the scope of work; and
Impose more restrictive terms related to cost allowability, reporting, intellectual property, or publication.

Contracts may take several forms:

Cost Reimbursement Contracts

The sponsor reimburses the University for actual allowable costs incurred (both direct and F&A), up to the contracted amount. These contracts carry lower financial risk because the University is obligated to use best efforts, but not to guarantee specific outcomes.

Prepaid Contracts

Funds are paid in advance, either fully or in installments tied to time periods or milestones. Financial reporting is required; unspent funds may need to be returned. Projects under advance-funded agreements may be subject to audit.

Fixed Price Contracts

Fixed price contracts provide a set payment amount for defined deliverables. These agreements impose greater financial risk on the University because the deliverable must be completed regardless of actual cost. Unexpended balances (residual funds) may be transferred to a departmental account after:

F&A is applied,
Deliverables are fully completed, and
Residuals are justified in accordance with University policy.

If the residual amount exceeds 50% of the contract value, the PI must provide written justification explaining how deliverables were completed under budget to address potential tax or compliance implications (e.g., avoidance of unrelated business income concerns).

Federal Definitions of Fixed Amount and Fixed Rate Mechanisms

Fixed Amount Award (Uniform Guidance §200.45): A grant agreement providing a set level of support without regard to actual costs; accountability is based on performance.
Fixed-Rate Agreement: A mechanism (often per-unit, such as per-patient in a clinical study) in which the total award amount is not known at the outset because it depends on the number of units delivered. Under NIH guidance (NOT-OD-18-222), prior approval is generally not required for fixed-rate agreements unless other conditions apply.

Responsibility of Expenditures

The PI is responsible for ensuring expenditures are accurate and allowable. Over-expenditures must be covered by the PI's department. Residual funds from one sponsored project may not be used to pay costs on another sponsored project without explicit sponsor approval.

Additional Types of Agreements

3.3.3.a Research Agreement

Used when a sponsor seeks to advance knowledge in a specific area. The PI conducts investigator-driven research, often generating new intellectual property.

3.3.3.b Service Agreement

Used when the University provides defined services using established methods, protocols, or analyses. Deliverables generally consist of results, analysis, or reports, and may lead to publications.

3.3.3.c Clinical Services (Investigations) Agreement

Used for clinical trials or clinical testing services. Agreements may be titled "investigator agreement," "clinical investigation agreement," or similar. Sponsors often require a confidentiality agreement before sharing protocols.

3.3.3.d Master Agreement

A long-term agreement that outlines standard terms for multiple projects funded by the same sponsor. Individual task orders authorize specific scopes of work under the Master Agreement and require a Document Summary Sheet (DSS).

3.3.3.e International Agreement

Used for sponsored projects involving foreign sponsors, collaborators, or subcontractors. These agreements may require special consideration for:

Currency exchange and invoicing;
Banking and payment restrictions;
Choice of law (the University cannot accept foreign governing law);
Intellectual property rights;
Export controls'
Compliance with the Foreign Corrupt Practices Act (FCPA).

Investigators must work with OSP and other University offices when negotiating international agreements.

3.3.3.f Memorandum of Understanding (MOU)

An MOU is an informal document outlining the intentions of parties to pursue future collaboration. It is not a binding contract, but can support planning for subsequent formal agreements. An MOU must identify the involved parties, general terms, and the nature of the intended relationship.

3.3.3.g Material Transfer Agreements (MTA)

Requests for materials or data may be fulfilled only after an appropriate agreement is in place - typically a Confidential Disclosure and Material Transfer Agreement and/or a Material Transfer Agreement (MTA). These agreements define the permitted use of the materials or data, protect confidentiality, and ensure compliance with University policy and legal obligations.

Additional information on how to process CDAs, NDAs, MTAs, DTAs, and DUAs is available here.

The University is also a signatory to the Uniform Biological Material Transfer Agreement (UBMTA), developed by the NIH. For transfers between institutions that have signed the UBMTA Master Agreement, materials may be exchanged under the UBMTA through a simple letter agreement identifying the specific transfer. Updated lists of participating institutions and a copy of the letter agreement are available at www.autm.net.

University investigators who receive an MTA from an external entity - often required when acquiring proprietary or privately owned materials - must forward the agreement to the OSP or the Technology Licensing Office for institutional review, negotiation, and signature.

More information on how MTAs are administered at the University can be found here.

3.3.3.h Affiliates (or Consortium) Programs

The University supports Affiliate (Consortium) Programs to promote collaboration among industry, government, and academic partners. These programs allow sponsors to pool resources and share in research developments, emerging methodologies, and domain-specific expertise. Benefits to sponsors may include:

Access to non-proprietary research findings;
Participation in program meetings or advisory groups;
Opportunities to engage with faculty and students;
A mechanism to address shared industry-wide challenges.

Affiliate programs require significant administrative and programmatic oversight and must receive advance University approval before being established to ensure alignment with University policy, research integrity standards, and financial requirements.

3.3.3.i Other Agreements, Other Transaction Agreements (OTAs), Technology Investment Agreements (TIAs)

Other Transaction Agreements (OTAs) and Technology Investment Agreements (TIAs) are specialized contractual mechanisms used by certain federal agencies - most commonly the Department of Defense (DoD) and other research-focused federal entities - to support research, prototype development, or innovation efforts.

Key characteristics include:

Fewer procurement-related restrictions compared to traditional grants or contracts;
Significant flexibility in negotiation of terms;
The Bayh-Dole Act may not apply, meaning the sposoring agency may retain full rights to resulting intellectual property;
Terms and requirements that may differ substantially from standard federal assistance mechanisms.

Although useful in specific circumstances, OTAs and TIAs are used infrequently at the University due to their unique requirements and higher negotiation complexity. Investigators must work closely with OSP when approached with or considering an OTA or TIA to ensure careful review of intellectual property, data rights, publication rights, and compliance implications.

Go to Next Chapter >>

Office of Sponsored Projects

VP for Research