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Home Back Issues No. 12: Grant Clinic: Obligated to Hire Consultant?

Jan 18

No. 12: Grant Clinic: Obligated to Hire Consultant?

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Grant Clinic:

Obligated to Hire Consultant?

Reader Question: A grant proposal names a particular individual as "consultant" and lists their credentials to perform consulting work. The grant is awarded. To what extent is the PI obligated to hire that individual? Could another consultant be retained without repercussion? Does the proposal constitute a contract between the institution and the consultant? What if the would-be consultant becomes seriously ill, or has a "falling out" with the PI before the grant work starts?

Expert Comments:

The award of grant funds by a funding agency to a PI is essentially a contract between the funding agency and the PI to carry out the proposed research. Usually the answer to “change of consultant” is yes. The funding agency approved the PI’s budget, which contained the consultancy position. The agency does not normally approve each individual listed in the budget, other than the PI. If the budgetary position had not been approved, the PI could not use any of those grant funds for hiring a consultant. The PI generally has options about which personnel are to be supported on the grant, including any necessary changes to accomplish the research.

The PI did not offer the reason for the change, but it would be well to consider at least two aspects.

1) Review all correspondence and conversations between the PI and the initial consultant to determine to what extent the consultant may have been “promised” the position. If there were obligations made or implied, to what extent would they be legally binding if brought to court?

2) Gather all pertinent material about the replacement consultant and then contact the Project Officer of the funding agency. Cite the reasons for the change, the expertise of the new consultant, and offer to send on further documentation. Assure the Project Officer that the research can/will be carried out under the terms of the award with the new consultant.

Comments by Charles F. Howard, Jr., Ph.D, established GrantsCrafter Consultancy, is a Trainer for The Grantsmanship Center, co-teaching a workshop on Writing Research Proposals, and is also a Senior Grantwriter for Campbell and Co.

Howard is the speaker of the upcoming audioconference "Writing Successful Grant Proposals" on January 26, 2010 at 1:00pm EST.

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This eAlert is brought to you as an informational training tool by the Principal Investigators Association, which is an independent organization. Neither the eAlert nor its contents have any connection with the National Institutes of Health (NIH) or the National Science Foundation (NSF), nor are they endorsed by these agencies. All views expressed are those personally held by the author and are not official government policies or opinions.

Comments (14)
written by [email protected], January 12, 2010
Notify the granting agency's program officer explaining why the change has to be made.
written by ShadyLady, January 12, 2010
I have heard thst a certain well-known consultant "loans out" his name for grant proposal submissions--for a fee--but somehow always get sick or otherwise indisposed by the time of research beginning, so the PI has to substitute one of this fellow's "junior" people. Doesn't this sound like a racket somehow? Do the grant officers, or ORI, ever check up on possible shenanigans like this?
written by aeroeng, January 12, 2010
Two instances I have personal knowledge of, one an Air Force proposal, the other a NASA proposal. In the first case, the Air Force grant was won by Company A with the Principal Investigator B. ""B"" went to start his own company, the customer went crazy, demanded a written statement that ""B"" was giving the time he promised to the project. In the 2nd case, the NASA proposal required the explicit statement something like ""I, the principal investigator, promise to devote the time and resources I have promised to this project."" In other cases, we have proposed various subcontractors, won the grant, then dumped the subcontractor, but not because we were deceiving anyone, we merely had learned some things about the subcontractor's capabilities that caused us to dump him. We didn't even tell the technical adviser, and not a peep out of him--of course, we might have more latitude to change the project (an SBIR) then we do with other project funding sources.
written by vpeguero, January 12, 2010
The PI is not obligated to hire the individual that has been identified in the proposal submission. As the consultant is not a ""Key personnel"" the PI has the liberty to replace the consultant without obtaining approval from the sponsoring agency. The PI has to be diligent and find an individual who can perform the consulting work required for the project. The proposal does not constitute a contract for service between the institution and the consulant. The PI has the descretion on whether he will use, or not use, the consultant when the award is made whether the consultant has become ill or they've had a falling out. The key point is the consultant is not an individual whose effort on the project has been identified as being crucial to meeting the project milestones or completing the project.
written by LooseyGoosey, January 14, 2010
The way I am reading most of the comments is that ANYBODY can be named as a consultant but has no legal or ethical duty to actually perform. Miraculously, neither is your grant penalized if the "all star consultants" who impressed the Study Section don't actually show up. My unfunded prior grant applications were obviously short on "Consultants". OK. My next submission will feaure as Programmatic Consultant "Barack Obama", and as my budget consultant "Tim Geitner". Let's hope Sen Grassley doesn't get wind of any of this. PS: Is here any requirement the named consultant need actually still be alive? Because I think Ben Franklin would be fantastic for our application's prestiege in electrical engineering.
written by Treasurer, January 18, 2010
We would like a certain consultant, but he wants a high fee. Must he--or we--adhere to some official fee scale, or can he charge "whatever the traffic will bear"? Could we bridge any money gap by letting him use our "summer cabin at the lake" free of charge for a week?
written by IowaSciEd, January 19, 2010
A grant score is based in part on the track record of the personnel - that is - whether or not the team assembled has the required skills and is likely to complete the work. Thus, there is an expectation that the person named will perform the work. However, granting agencies are normally flexible and if there is a valid reason for changing people there is no problem. FYI. I once cancelled a subcontract in mid grant when it turned out the technique the subcontractor was using would not yield the information I needed. I was able to use the funds to test the hypothesis using a different technique, but only with funding agency approval. The sub contractor was not happy but the funding agency would have been even unhappier if I told them I was funding someone to do nothing.
written by Used, January 19, 2010
Prior to the "multiple PI" option, I was included as a co-PI on an NIH grant that was funded. Within a few weeks after the award, I was removed from the grant for no other reason given than "the project is going in another direction" and I lost a major chunk of salary support. The PI hired a post-doc instead. When I later encountered one of the grant reviewers, he told me that without my name on the grant as a co-PI, it would not have been funded. Basically, my name was used to obtain the grant. I contacted NIH at the time and was told that I had no recourse. Fun times.
written by John Davis, January 19, 2010
Basically, there are two major lines of responsibility here: 1) The organization has responsibility to its customer to get th job done right, the PI having single-point responsibility to accomplish that using whatever legal means are available); and 2) The organization's responsibility to be a good citizen (stay legal, be fair, meet obligations, etc.), the PI being just one of it's points of interface for this. So long as: 1) the original consultant/subcontractor was offered in good faith; 2) the replacement resource is both qualified and capable (not necessarily as good as the original); 3) the project outcomes (quality, budget and schedule) actually meet goals, and 4) the replaced consultant does not bring legal action against the customer, then the contracting officers have no standing to interfere with the organization's business - including who is hired for what. On the other hand, consultants who allow their name to be used fraudulently (PIs and firms are actually doing this when there is no written agreement, even if both intend to follow through) when no legal recourse exists to make it happen. Worse, you are courting trouble with the customer if you boot someone who has access to cheap legal help (brother in law???) and also has the stones to name the customer in a legal action along with your organization. That gives the customer standing to interfere and actually threatens his/her career. In any monetary/employment relationship between two entities it is imperative that there be some paperwork to manage expectations. We have long taught our clients: ""Don’t do the deal if you need paper to trust the other party, but at the same time, don't do the deal unless there is paperwork between you to help manage expectations."" Any firm and subcontractor/consultant who plans to work with each other absolutely need such paperwork -- just to be legal (avoid charges of ""fraud""), if for no other reason - and there are plenty of other reasons. So, play it smart - do the paperwork (rarely is an attorney needed to do this -- legally-binding letters of intent will usually suffice) to manage expectations and keep your ""t.."" out of the wringer. HINT: Being able to make your application reviewers comfortable by informing them that you use this practice should also help you win more competitive awards (you'll look more reliable and business-like than those who just ""wing it""). ----------------- John Davis, CEO and General Manager, SBIR Resource Center®, 410-315-8101 / [email protected] / www.sbir.us .
written by gibbsphaserule, January 19, 2010
Contractually, there is usually no real difference between a consultant and subcontractor. Both are Other Direct Cost items loaded with the same Indirect Cost rates. In my community, prime contractors that try to dump subcontractors or consultants are regarded as something almost as despicable as child molesters. My experience is that the real motive for dumping is almost always greed and other stated reasons are smokescreens. By some interpretations, dumping of subcontractors or consultants can be the basis for a protest and/or contract cancellation on the basis that the proposal contained falsehoods and misrepresentations.
written by Real Expert, January 19, 2010
A grant is a grant. A contract is a contract. A grant is not a contract. With a grant you are not obligated to do anything. However, note that a 5 year NIH grant is actually a series of 1 year grants. The agency has every right to not renew at any point.
written by gibbsphaserule, January 19, 2010
I stand corrected by Real Expert. If the funding agreement is literally a grant with no specific (or minimal) Statement of Work or Terms and Conditions, then I assume that the recipient is free to tell any or all proposed team members, ""We decided not to use you after all."" However, in my opinion this is slime-ball behavior, and it may make it difficult to find team members (including consultants) for future grant applications.
written by terri52, January 20, 2010
It would seem important that the consultant, i.e. person whose name may have been beneficial in obtaining a grant, should have a binding agreement with the company seeking the grant award, that in the event the grant is awarded, he / she would be on board. these kind of shananigans described, are unprofessional and unfair to the person or company subcontractor whose name is being used!
written by Glad I'm No Longer a Research Administrator, January 20, 2010
Real Expert, If you think that a grant is not a contract, how do you explain the mountains of regulatory documents, and terms and conditions that apply to federal grants? While it is true that grants typically have far more flexibility than contracts, there is an explicit expectation that grants be conducted in accordance with the objectives, specific aims, and general budgetary parameters outlined in the grant proposal; as well as the various regulatory conditions imposed on their performance and administration. When an organization starts to spend grant funds, that organization essentially enters into a contract with the funding agency, which promises that the organization will perform the work proposed, and in accordance with the rules associated with that grant. Can a PI use a grant to pursue similar, closely-related objectives without the funding agency's prior approval? In most cases the answer is yes. However, some federal agencies are as picky with grants as they are with contracts, with respect to the scope of work that can be pursued. Is it necessary to get an agency's prior approval to use a different contractor than the one outlined in the proposal? It depends! Some agencies are pickier than others over such issues, and one should never assume that private funding organizations behave the same way that the feds do.

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