Stories from the front line: managing research contracts in 2018

By Dan King, 20/07/2018

In the complex world of academic research and collaborations, research contracts teams in universities play an essential, yet often undervalued role. Their work facilitates ordered collaboration between organisations, the transfer of funds for R&D and due diligence to ensure the inherent risks of collaboration are managed.

And when the unexpected happens, we look to the assurance of their agreements to guide the next steps.

To illustrate the scale, the Higher Education – Business and Community Interaction Survey for 2016/17 indicates over 157,000 income generating contracts for contract research, consultancy or facilities agreements – underpinning income of £1.9bn.  Additional agreements relating to confidentiality, materials transfer or university-to-university collaborations would undoubtedly take the total well over 200,000.

Perceptions of growing workload and complexity are evidenced in the  recent State of the Relationship report (NCUB, 2018). This publication notes an increase in the number of ‘deals’ between universities and business, particularly for SMEs where these rose by over 11%, and an increase of foreign funds into HE research. The UK Government’s commitment to growing R&D to 2.4% of GDP by 2027 will by necessity drive increased volumes of collaboration and knowledge exchange.

Over the past few months, Research Consulting has been working with research contract managers in an international benchmarking exercise involving 30 UK and Australian Universities. In September 2018, we will publish our final public report, which summarises the findings and key messages.

19 UK Universities participated and, with their research incomes ranging from over £100m down to under £1m, they represent a broad range of sizes, shapes and specialisms. Recently, we held open workshops in Reading and Nottingham for research contracts managers. The workshops focused on topics that have emerged from our discussions with university contracts officers and legal advisors – a total of 44 Directors, Legal Advisors and Contracts Managers met to discuss these contemporary issues and challenges in the area.

So what are research contracts managers in the UK concerned about? Here are a few of the issues.

International research collaborations driving workload

The challenges of international research collaborations are a growing issue, along with the position to adopt on governing law, the legal status of Memorandums of Understanding and international due diligence.

The Global Challenges Research Fund, launched in 2015, brings many of these challenges together, adding an additional (and potent) mix of funder obligations, internal compliance processes and practical difficulties in implementing these in the real (developing) world.

And perhaps the latter point is the most significant – dealing with small organisations and social enterprises in Africa or India brings a number of practical challenges: access to reliable due diligence information; their understanding of contractual terms and obligations and finally, when the agreement is in place, actually transferring money to the project partners is far from easy.

We’ve heard a variety of costly measures being put in place to address this. In some cases, universities are building work packages into GCRF projects to build capacity for understanding legal, compliance and due diligence issues amongst the partner organisations. What is clear is that a huge amount of work is ongoing across universities to address these compliance and due diligence requirements and, so far, few universities are confident that they have the right approach.

Is the value of PhD students to industry a danger?

PhD Studentships is an area which (for me) surprisingly emerged as challenging when dealing with industry funding or co-funding partners. Case studies in the NCUB State of the Relationship report indicate just how crucial a role PhD studentships play in effective university-business partnerships, and in many cases these are highly integrated into the company’s R&D team:

By including the (PhD) students as part of the Ørsted team, they will be able to rapidly gain deep understanding of the company’s key challenges and priorities. This will ensure that research remains highly relevant to the company, as well as enabling knowledge transfer between Ørsted and Durham University.

“To help businesses overcome this challenge the Hertfordshire Science Partnership, through its Hertfordshire Knowledge Exchange Partnership (HKEP), gives any organisation access to a dedicated PhD researcher who will, uniquely, spend their first year embedded in the organisation.”

Cranfield University “.. are proud of the work that our academics and PhD students are doing to support Severn Trent and its important role in protecting and sustaining water as a natural resource and the environment as a whole”

We should rightly be celebrating this level of engagement, but we should recognise that PhD students are just that – students – and protecting the student’s interests, as well as the university’s, is one of the issues contracts managers wrestle with.

Perhaps the value that PhDs can bring to companies is driving a hardening in negotiating positions – typically IP ownership and the publication (or embargoing) of the PhD thesis itself. Balancing the need for external funding, protection for publication rights and IP ownership is, by the accounts we’ve heard, getting harder.

Which raises an interesting question: if IP ownership and restricted dissemination are the negotiating priorities for a company, is a PhD studentship really the right approach for the project?

Creaky systems, but interesting developments are afoot

Inevitably workload and resources to manage a growing complexity and volume of contracts are a continuing concern. And in these scenarios having good systems to  critical.

Across the sector, systems that support contracts teams are usually home-made affairs that typically blend limited use of existing systems (e.g. finance) with spreadsheets to capture information specific to the contracts work.  But there is evidence of change: some universities are implementing new research information management systems, with dedicated (and integrated) contracts management modules.  A development Research Directors and Heads of Contracts should be watching carefully.

The use of e-signature systems is an interesting development, and an area that offers scope to improve the efficiency of concluding agreement with partners in the UK and overseas. At present it seems that most universities are hesitant in adopting this approach, but are responding to requests from businesses to use such systems. Given how much time is devoted to chasing hard copy signatures on agreements, I suspect that over the next five years there will be a tipping point when this becomes the norm in university-business interactions – but don’t ask me to predict exactly when!

Some final thoughts

Research contract teams deliver huge volumes of work, and without their input projects simply couldn’t proceed.  The research contract teams in this study delivered an astonishing 18,400 contracts from just 107 people – that’s an average of 172 per contracts professional.

During our project, we heard many examples of how research contracts teams are working to deliver high volumes of agreements, balancing efficiency and management of the risks.

Dedication, professionalism and commitment we saw in abundance – and from time to time I’m pretty sure they’d welcome a bit of recognition and thanks.