Contracts usually are used by sponsors when they have a short-term need or benefit in mind. Contracts are most often awarded by government agencies and by business and industry, seldom by foundations. These types of awards are quite formal and quite specific: the agency stipulates its needs, and the researcher and the agency reach an agreement about the exact services to be performed for a set price within a set period of time. Industry or corporate sponsors sometimes approach such support as the purchase of services and use a standard purchase order form. A contract cannot stipulate the achievement of specific research results, nor can a sponsor withhold payment if the results are not to its liking.
Contracts should set forth faculty's right to publish and each party's obligations and intellectual property rights, as well as procedures to be followed if patentable discoveries or copyrightable materials result from the sponsored project. The Office of Sponsored Projects has developed a template contractual agreement, including intellectual property provisions. A scope of work must accompany the contract and PIs should carefully and tightly frame the scope of project work for contractual funding: deliverables should be specific and narrow; milestones should be realistic.
For advice and information on intellectual property matters, contact the Director of the Technology Transfer Office (TTO). Information on the TTO and the NIU Intellectual Property Policy can be found at Federal Regulations & University Policies: Compliance and Assurance Regulations.
A type of contract sometimes used by business and industry is a fixed-price contract, which is, in effect, payment for deliverables produced for a set price. The sponsor pays the fixed amount regardless of whether the actual costs of the research activities involved turn out to be higher or lower. If the project ends up costing more than originally estimated, the company normally does not increase the award; thus, the extra expense must be borne by the University.
Another type of contract is the cost-reimbursement award. With this arrangement, the sponsor reimburses the University for the actual costs of the research activities undertaken, up to the amount originally awarded. Audits of project expenses sometimes are required by sponsors making cost-reimbursement awards.