General Award Process Overview
FAR Contracts always require at least some negotiation before an award can be accepted by the University. JROC will perform a comprehensive review of the award, including the terms and conditions incorporated by reference to specific FAR clauses. Unlike a grant which is often complete upon receipt, the time it takes to review, negotiate and sign a federal contract will generally take several weeks and can be a very labor intensive process.
A JROC contract negotiator will work with the Federal Contract Officer to ensure appropriate terms and conditions are included in the final contract. This negotiation often includes obtaining input from other offices at the University including the applicable Department involved in the agreement, the Office of Technology Management, the Office of General Counsel, the Office of the Chief Information Security Officer, the Export Controls Officer and others.
Understanding My Award
FAR contracts share many similarities with other research agreements. For example, FAR contracts include a scope of work, reporting obligations, and payment terms as well as the other basic elements of a contract. However, instead of enumerating all clauses in full text in the agreement, FAR contracts reference contract clauses that are located in the federal regulations. These contract clauses can be found in Part 52 of the FAR. In addition to the general FAR, each government agency has agency-specific contract clauses which may also be incorporated by reference (e.g. DFAR, HHSAR, EPAAR). These can all be found at http://farsite.hill.af.mil/.
The contract clauses found in the FAR (and agency-specific FAR) detail many aspects of the agreement including the type of funding (e.g. Fixed Price or Cost reimbursable), allowability of certain costs, ownership of equipment purchased with contract funds, financial reporting obligations, right to own, use and publish data resulting from the project, ownership of inventions, termination rights, liability provisions, information security requirements, and compliance obligations associated with a myriad of federal laws to name a few. Please see the Examples of Troublesome Clauses section below for a few specific examples.
No two Federal Contracts are alike. The Contract Officer for each action will select which clauses should be listed based on numerous factors such as funding amount, type of work, funding agency, the nature of the deliverables and other variables. Because each FAR clause represents a specific set of requirements, it is important that they be reviewed not only by JROC but also by representatives at the Department level who will be administering the agreement.
Troublesome Contract Clauses
Troublesome FAR and agency-specific clauses are encountered both at the prime contract and subcontract level. A specific FAR clause may or may not be applicable based on several factors, including: dollar threshold; scope and type of work; type of organization (for-profit company vs. non-profit research institution); type of contract; or classification. As part of the negotiation of these awards (including the submission of the Exception Letter at the proposal-stage) JROC may request a clause be removed completely from the agreement or that specific variations of a clause be used.
Examples of Troublesome Clauses include the following:
FAR 52.227-17 Special Works – This clause prevents the release, distribution and publication of any data first produced in the performance of the award and provides that the Government owns all data and deliverables.
DFAR 525.204-7000 Disclosure of Information – This clause prevents the release of any information pertaining to the project or contract to anyone outside of the recipient institution without prior approval of the Government, and constitutes a publication restriction.
FAR 52.216-07 Allowable Cost and Payment – This clause outlines which cost principles apply to the agreement and defaults to the cost principals applicable to commercial entities which are not consistent with University practices.
FAR 52.246-8 Inspection of Research and Development – Cost Reimbursement Alt I – If the Government determines that the work does not meet the contract requirements, this clause allows the Government to require re-performance of work at no additional price and/or allows the government to have another party perform the work and charge the University for any increased cost.
When the University receives a FAR subcontract, there may be additional difficulties presented if a Prime Recipient flows down terms that are inapplicable or problematic for the University. For example, if a for-profit company is the prime recipient of a FAR contract, the clauses applicable to the corporation will differ from those applicable to the University. If the corporate Prime Recipient fails to flow down appropriate provisions (e.g. by simply attaching all FAR Clauses in the Prime Contract) significant negotiation may be needed.
Special Compliance Requirements
FAR Contracts may require compliance with special reporting and compliance obligations. A few of these requirements are outlined below.
Small Business Subcontracting Plan
Please visit the Small Business Subcontracting Plan page for information, templates, and other resources.
The Federal Information Security Management Act of 2002 (FISMA)
FISMA appears in several FAR and government agency FAR clauses (e.g., FAR 7.103, HHSAR 352.239-70, Standard for Security Configurations; 352.239-71, Standard for Encryption Language; 352.239-72, Security Requirements for Federal Information Technology Resources). Under FISMA, each federal agency is required to develop and implement a comprehensive information security program for the systems that support the agency, including those provided or managed by another agency or contractor.
FISMA is of concern to Washington University, because the university’s computer systems are not universally FISMA-compliant. When FISMA clauses are included in FAR Contracts they are generally treated as non-negotiable. While FISMA requirements are not unique to FAR Contracts, they are more common in FAR Contracts then Federal Grants.
When a FISMA clause appears in a contract, JROC will connect the Department and Principal Investigator with the University’s Information Security Office so that an assessment of applicability can be performed and a plan for compliance developed.
DFAR 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting
DFAR 252.204-7012 requires, among other things, adequate security for all covered contractor information systems that support the performance of work under the contract. If covered contractor information systems are not already part of a government IT service or system, the contractor must comply with the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations” as soon as practical, but no later than December 31, 2017, and/or other approved security measures.
DFAR 252.204-7012 is a required provision in all Department of Defense FAR solicitations and contracts. Similar to FISMA, JROC coordinates efforts between the University’s Information Security Office and the PI’s Department Administrators to determine how to comply with these security requirements, as the University’s systems are not universally in compliance with the NIST standards.
Compliance with export control laws such as the International Traffic and Arms Regulations and the Export Administration Regulations are not unique to FAR Contracts. However, they may be implicated in FAR Contracts due to the occasional restrictions on publication and participation of foreign nationals imposed in these agreements. For academic institutions, the vast majority of research is shielded from the export control requirements by the Fundamental Research Exclusion (FRE). Research is considered “Fundamental Research” when it meets the following definition
“Basic or applied research in science and engineering at an accredited institution of higher learning, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.”
Publication or access restrictions in agreements nullify the Fundamental Research Exclusion (FRE), thus necessitating a more robust compliance review. If a project is found to be subject to export compliance obligations, different steps may need to be taken, including obtaining licenses for certain foreign nationals to participate in the project and/or putting a formal plan in place to shield project information from unauthorized disclosure. More information about export controls and the FRE can be found here.