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Agreement Review and Negotiation

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Introduction to Types of Agreements

The following definitions are for use in determining the type of contractual mechanism being utilized by a Sponsor. Each of the described terms constitutes a subset under the umbrella term “agreement.” An agreement is usually a legally binding document between two parties that describes the obligations and commitments of the parties. There are numerous documents that may be used:

Grant

A grant is the least restrictive of contractual mechanisms. It is typically issued by federal sponsors under a “financial assistance” program. The award supports basic research to benefit the public good and one or more progress reports may be the expected deliverable.

Contract

A contract, under this definition, is issued to support a “procurement” activity, the results of which are needed for the sponsor’s use in its own work. It is the most restrictive of the contractual mechanisms and may include very specific requirements for deliverables and ownership of same.  The primary goal is acquisition of goods and services and the beneficiary is the sponsor.

General Contractual Information

The University is subject to numerous state, federal, and institutional policies governing performance under agreements for sponsored research. As a result, most agreements provided by sponsors require revisions prior to execution. A summary of issues which require frequent modifications follows.

Legal Name

All University agreements must be in the name of "The Board of Trustees of the University of Illinois."

Authorized Signatory

The Board of Trustees of the University of Illinois has delegated to the Comptroller of the University signature authority for all grants, contracts, and other agreements which contractually bind the University.

Payment Remittance

Option A - By check

All payments remitted by check should be made payable to the “University of Illinois” and mailed to:

University of Illinois at Urbana-Champaign
Grants and Contracts
28392 Network Place
Chicago, IL 60673-1283
U.S.A

Option B - By ACH (Automated Clearing House) - Domestic wire

Financial Institution: JP Morgan Chase Bank NA

Address: 10 South Dearborn
Chicago, IL 60603-2300
USA

Routing Number: 071000013

Account Title: The Board of Trustees of the University of Illinois EDI Receipts and Federal Depository
Account Number: 616002911
Account Type: Checking

Option c - By ACH (Automated Clearing House) - international wire

Financial Institution: JP Morgan Chase Bank NA

Address: 4 New York Plaza, Fl 15
New York, NY 10004

Routing Number: 021000021

Account Title: The Board of Trustees of the University of Illinois EDI Receipts and Federal Depository
Account Number: 616002911
Account Type: Checking

Swift Code: CHASUS33XXX

Fedwire Coordinator’s Name:          Ms. Lynne Wooden

Fedwire Coordinator’s Phone No:    217-527-3867

Fedwire Coordinator’s Fax No:         217-522-7482

General Agreement Terms

Indemnification

As an instrumentality of the State of Illinois, the University may be limited in our ability to indemnify as we are obligated to comply with various statutory limitations and our self-insurance plan.

Governing Law

The University takes the position that Illinois law should govern the interpretation of a research agreement, particularly if the research will be performed in Illinois. United States federal contract law is an appropriate choice of law in agreements with federal entities. The State Lawsuit Immunity Act (745 ILCS 5/1) says that the State of Illinois (including the University) cannot be made a defendant in any court except as the Illinois General Assembly permits. The General Assembly has permitted the University to be sued only in the IL Court of Claims for suits based on any contract entered into with the University. 705 ILCS 505. Any other proposed terms for governing law must be approved by University Counsel.

Arbitration

As a state-funded, non-profit institution of higher education, the University typically does not agree to arbitration. The University does not have the funds available for arbitration, so in the event of a dispute, the University will normally search for other means to come to a resolution.

Export Controls

Export Control website

The University of Illinois complies with U.S. export laws and regulations. Prior to accepting any export-controlled data or materials, the University wants the opportunity to make an informed decision as to its ability to accept such data or materials.

Warranty 

Warranty provisions cannot be accepted as the University does not warrant research or its results: "The University will make no representations or warranties, expressed or implied, regarding its performance under any research agreement, including but not limited to any warranty of the merchantability, use or fitness for any particular purpose of the research results, and any warranty against infringement of any intellectual property rights."

Publication Restrictions

The University, as an educational institution, must be free to publish research results from grants, cooperative agreements, and contracts. If required by the sponsor, the University will provide the sponsor a short time period (usually 30 days) in which to review proposed publications, manuscripts, abstracts, and presentation materials, in order to determine whether proprietary or sponsor’s confidential information is disclosed.

Confidentiality

The University is a large public institution built upon the open exchange of information and knowledge; confidentiality obligations represent a deviation from this open climate. Any confidentiality obligation should provide:

(1) a clear definition of the “Confidential Information” that will be provided by the sponsor to University personnel,

(2) a requirement that all such information is labeled or otherwise identified or summarized in writing as “confidential” or “proprietary” at the time of disclosure by the sponsor,

(3) generally accepted exclusions to the obligation of confidentiality, and

(4) a time limit on the period of confidentiality(e.g., three years from the date of disclosure by the sponsor).

Insurance

The University maintains a self-insurance program, which has been reviewed and approved by the Office of Naval Research. A Certificate of Coverage can be provided upon request. 

Termination

If a sponsor terminates a funded agreement, the sponsor will be expected to pay for all direct costs and all applicable facilities and administrative costs incurred, and for all non-cancelable obligations made prior to notice of termination, even though they may extend beyond the effective date of termination.

Intellectual Property

As a general rule, inventions conceived solely by University personnel in performing the research project belongs to the University. The sponsor may receive an option for a commercial license to resulting intellectual property in a defined field of use on terms to be negotiated.

Ownership of Results

Only information identified as a deliverable (typically reports) becomes the property of the sponsor, but in this event, the University retains an express license to use the research results of the project for its educational and research missions.

Illinois Audit

Illinois statute (30 ILCS 500/20-65) requires that books and records relating to performance of the contract and necessary to support amounts charged to the State under the contract be maintained for a period of three years from the later of the date of final payment or completion of the contract. The three year period would be extended for the duration of any audit in progress at the time of the period’s expiration.

Terms Found in Federal Awards

Federal Demonstration Partnership (FDP)

The University of Illinois is a member of the Federal Demonstration Partnership (FDP); therefore, certain research awards from participating federal agencies are subject to FDP General Terms and Conditions and FDP Agency Specific Requirements.

Awards received from an FDP agency as a subaward are subject to FDP terms and conditions only if the pass-through entity is an FDP institution.

Intellectual Property: Illinois as Prime Recipient

Under the Bayh-Dole Act (35 U.S.C. Ch. 18) and its implementing regulations (37 C.F.R. Part 401), the University may elect title to any invention developed with federal assistance. In exchange, the University must grant the federal government a non-exclusive, non-transferable, irrevocable, paid-up license to practice the invention throughout the world on behalf of the United States.

Intellectual Property: Illinois as a Subrecipient

As a federal subcontractor, the University may retain title to each invention that it develops under the subcontract. The prime contractor may use such inventions solely for the purpose of and only to the extent required to meet its obligations to the federal government.

OMB Circulars

Uniform Guidance

Released in late 2014, this set of guidelines is intended to reduce unnecessary regulatory and administrative burdens by creating a combined and simplified version of the OMB circulars. Widely adopted by federal sponsors (though not universally adopted), Uniform Guidance (UG) is generally applicable for new awards and incremental funding awarded on or after December 26, 2014. For more information regarding UG, click here for the OBFS page dedicated to the University's adoption of the new guidelines.

OMB Circular A-110

This Circular issued by the Office of Management and Budget (OMB) sets forth standards for obtaining consistency and uniformity among federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals and other non-profit organizations. The standards cover such matters as financial management and property and procurement standards from pre-award to closeout of a federal award. In May 2004, OMB published the Circular in the Code of Federal Regulations (CFR) at 2 CFR Part 215. OMB clarified, however, that the Circular would remain agency guidance rather than binding regulation. Since that time, some federal agencies have given regulatory effect to the Circular by incorporating it into their specific agency regulations. These agency regulations, found in various CFR titles, are considered law and not mere guidance.

OMB Circular A-21

This Circular, located at 2 CFR. Part 220, establishes principles for determining costs applicable to grants, contracts and other agreements with educational institutions. The purpose of these cost principles is to require federal agencies to bear their fair share of totals costs, both direct and indirect, when sponsoring research and development, training, and other work at educational institutions.

OMB Circular A-133

OMB Circular A-133 sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of States, local governments, and non-profit organizations expending Federal awards. Any Non-Federal Entity that expends $500,000 or more in Federal awards in its fiscal year is required to have a “single audit." A single audit means an audit which includes both the entity’s financial statements and the federal awards (expenditures) relating to those statements. 

Federal Acquisition Regulations (FAR)

The FAR, codified at 48 CFR Ch. 1, are a series of regulations for use by all federal executive agencies in their acquisition of supplies and services with appropriated funds. The Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) jointly issue the FAR. The FAR consists of two parts: the acquisition regulations that govern all transactions with the government in general and the regulations issued by a specific federal agency that govern transactions with that agency only.

When a government agency issues a contract or a request for proposal (RFP), it will generally also specify a long list of FAR provisions that apply to that contract or RFP. The purpose of the regulations is to specify how the government is to acquire a particular product or service and to ensure the government does not pay for certain prohibited practices such as cost of lobbying, and to prevent undue influence and other misconduct. The bidder must be able to comply with the FAR provisions cited, or prove exemption.

Compliance