Contracts Frequently Asked Questions
1. Grants vs. Contracts
Using the federal definition of a grant and a contract:
Grants:
- Are federal assistance to support a project that contributes knowledge to the public.
- Generally provide flexible support for research or scholarly activity.
- Deliverables are typically in the form of a report.
- Are governed by 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Contracts:
- Are a federal procurement mechanism to acquire a specific product, service, or result for the government.
- Impose more specific obligation and typically include firm deliverables, milestone‑driven reporting, more restrictive budgets, and more compliance requirements.
- Are governed by the Federal Acquisition Regulations (FAR).
At CU Boulder, we also receive agreements that are not governed by either UG or FAR. In these cases, an agreement that is governed by neither UG or FAR may be assigned to the contracts team if there are extensive negotiations needed on terms the university is unable to accept.
The majority of federal grants do not require negotiation. They are issued under standard regulations, including the Uniform Guidance and specific federal agency regulations, and these regulations closely align with the university’s research and education mission.
Contracts are more complicated because they seek a specific outcome, have less standard award terms, and often additional compliance requirements. This means that contracts often require:
- Negotiation so that terms align with the university’s research and education mission as well as rules and policies;
- Coordination across multiple CU units for compliance areas, including cybersecurity, export controls, IRB/IACUC, conflict of interest, and legal review.
- For all contracts, the statement of work and budget are reviewed in detail with the award. A statement of work (SOW) is the part of the contract that clearly describes what work will be done, by whom, by when, and what will be delivered.
There are two main types of payment structures for contracts, cost reimbursable and fixed price.
Cost Reimbursable:
- Sponsor reimburses actual, allowable, incurred costs
- Financial risk is primarily on the sponsor as CU can only perform the SOW up to the amount of the agreement. This creates risk because if costs change, the amount funded may not be sufficient to complete the project.
- Detailed reporting required
- CU invoices regularly for actual allowable expenses up to the authorized amount
Fixed Price:
- Sponsor pays a set amount regardless of actual costs
- Financial risk is primarily on CU Boulder as CU plans and proposes costs to complete an SOW. The risk is that if the cost of the project increase, CU would still have to complete the project even if the funds are not sufficient to cover costs.
- Less detailed reporting typically required
- Payment is tied to deliverables, milestones, or dates
Expect specific deliverables, structured reporting, more compliance requirements, restrictive budgets, sponsor involvement in defining the deliverable, time needed for negotiations and compliance approvals, and sponsor approval for many changes. Because working through these details take time, it may take more time to execute an contract than a grant.
No. However, CU is seeing a federal trend towards more contracts and use of restrictive agreements, such as Other Transactional Authority (OTA).
2. Contracting Philosophy, Risk, and Mission Alignment
Risk assessment is collaborative and considers the statement of work, intellectual property, publication restrictions, financial and legal exposure, reputational risk, student impacts, payment terms, and nonprofit status implications.
CU prioritizes IP terms that:
- Allow PI flexibility
- Protect CU’s obligations to sponsors
- Preserve CU’s ability to use its own IP
- Protect CU’s tax‑exempt status
OCG and the Industry Research Partnerships (IRP) team are collaborating to improve contracting with industry. These efforts include working on:
- Using term sheets before negotiations
- Establishing bottom‑line positions
- Asking companies early about flexibility to avoid prolonged negotiation
- Attend Industry Pathways workshops
- Build strong relationships with companies
- Coordinate with OCG and IRP to leverage existing CU–industry relationships
- Avoid making commitments to industry. Any commitments will be done through a signed contract.
It is rare that CU cannot accept funding that researchers pursue. Industry or commercial work, non‑fundamental research, national security or controlled technology projects, and international agreements increase the complexity of projects and timeframe to execution of related agreements.
3. Contract Types and Special Circumstances
Single projects typically require simpler agreements that are quicker to execute because the agreement is scoped to a specific project, rather than multiple, often unknown, projects.
Ongoing engagements can take the form of rate-based service agreements and master research agreements. Rate‑based service activities often involve more detailed scopes of work, setting of rates, and compliance considerations. Master research agreements have to take the entire campus and multiple unknown projects into consideration, which broadens the scope of agreements, complexity of considerations, and increase risk.
Sponsor type, cybersecurity requirements, publication restrictions, intellectual property assignments and license requests, export controls, national security considerations, foreign collaborators, sponsors changing contract terms during the negotiation process, and terms and conditions that CU Boulder cannot accept (e.g., indemnification, governing law).
International contracts often require additional legal review, export control assessment, and negotiation around governing law and jurisdiction.
A contract, purchase order (PO), and subaward all differ in scope, purpose, and when each is appropriate. You typically need a contract when the arrangement is complex, high-value, long-term, or involves significant risk, such as consulting services, multi-year projects, or agreements requiring customized legal terms (e.g., intellectual property, confidentiality, or liability provisions). A purchase order (PO) is a simpler, transactional document used to procure specific goods or routine services at a fixed price and quantity. You would use a PO when the purchase is straightforward, low to moderate in complexity, and does not require extensive negotiation, often relying on standard terms and conditions or an existing contract. You need a subaward when the external party is collaborating on the programmatic effort itself (not just providing goods or routine services) and must comply with the sponsor’s requirements, including reporting, audits, and regulatory obligations.
Any agreement requirements that are not CU-standard or do not fit a university environment including:
- Contracting with a Foreign entity, participation restrictions, working with controlling technology or data, indications that project may not qualify as Fundamental Research
- IP ownership that does not align with Bayh-Dole
- Publication requiring any type of CU receipt of notice or approval prior to publication
- Confidentiality with no marking requirements, obligations with no end date, any requirements that conflict with the Colorado Open Records Act and the Freedom of Information Act.
- Animal or Human subject involvement
- HIPPA or FERPA information involvement
- Any cyber security requirements
- Requirement for CU to indemnify another party
- Governing law or venue outside of the state of Colorado
- Insurance requirements that exceed CU’s general liability limitations
- Payment dependent on milestone or deliverable acceptance or prime Sponsor payment
- Non-standard reporting requirements
4. Process Transparency, Timelines, and Tools
The Proposal Submission Request (PSR) form outlines potential approvals. PIs can find a lot of information about actions needed for approvals on the PSR form and are encouraged to start early where possible. COs also notify PIs and Department Research Administrators (DRAs) at award stage about required approvals.
Contract execution timelines may be impacted by a variety of factors throughout the review and negotiation process. Delays may occur when agreements are submitted through an incorrect intake process (e.g., submitted as grants rather than contracts), when required documentation such as PSRs contain errors or omissions, or when project activities begin prior to full contract execution, requiring additional review and documentation to address pre-award activities. Other factors that may contribute to delays include extended sponsor review or negotiation timelines, delayed responses from principal investigators (PIs) or departments, incomplete or inaccurate PSRs or DEPA forms, and required reviews by partner offices such as Intellectual Property, Export Controls, or Cybersecurity.
Yes. OCG is exploring visual tools to clarify steps and expectations.
When CU Boulder is a sub-awardee to another entity, that entity is OCG’s sponsor. OCG does not have a direct relationship with the prime funder. OCG reviews terms and works to protect CU’s interests, but the prime sponsor ultimately controls subcontract issuance.
Because contracts vary in complexity and sponsor requirements, there is no standard length of time that it takes to finalize a contract; some may take days while others may take months.
5. OCG Capacity, Staffing, and Service Model
OCG is at its strongest staffing level to date, though federal changes starting in January 2025 due to the federal administration changes and implementation of new research security compliance requirements have increased workload.
Filling open positions, new award notifications, timeline dashboards, clearer expectations for Contract Officers, and continued development of contract review software for consistency.
OCG Contract Officers are assigned a portfolio of work through department and institute assignments. These assignments are based on total actions, level of support needed, staff experience, and departmental and institute needs.
6. Communication, Partnership, and Culture
Email is preferred for documentation and multi‑party coordination. OCG aims for a 48‑business‑hour response time. Supervisors can be contacted if response expectations are not met.
Clear subject lines, checking InfoEd for award status before emailing, scheduling meetings for complex issues, sending agreements to ocg@colorado.edu, and maintaining open communication.
7. Additional Questions Submitted by Faculty
Faculty noted that risk tolerance varies across OCG and that IP negotiations can be time-consuming. CU acknowledges these concerns and continues to refine processes.
Stabilizing staffing, improving timeliness expectations, updating the Roles & Responsibilities Matrix, publishing setup timelines, and developing new tools for award progress visibility.
OCG serves as CU Boulder’s Authorized Organization Representative (AOR). It is responsible for negotiating and accepting sponsored project documents on behalf of the Regents of the University of Colorado. In most cases, OCG Contract Officers are the individuals authorized to review and sign the various types of contracts. These include standard contracts, research service agreements, data transfer and use agreements, material transfer agreements, and non‑disclosure agreements. In order to sign a contract, individuals within OCG must be granted signature authority for that specific type of agreement.