Proposed STTR Policy Directive 2003
Draft
Appendix I (Draft) - Instructions - Considerations


5. Considerations

This section must include, as a minimum, the following information:

(a) Awards. Indicate the estimated number and type of awards anticipated under the particular STTR Program solicitation in question, including:

(i)Approximate number of Phase I awards expected to be made.
(ii)Type of funding agreement, that is, contract, grant or cooperative agreement.
(iii)Whether fee or profit will be allowed.
(iv)Cost basis of funding agreement, for example, firm-fixed- price, cost reimbursement, or cost-plus-fixed fee.
(v)Information on the approximate average dollar value of awards for Phase I and Phase II.
(b) Reports. Describe the frequency and nature of reports that will be required under Phase I funding agreements. Interim reports should be brief letter reports.
(c) Payment Schedule. Specify the method and frequency of progress and final payment under Phase I and II agreements.
(d) Innovations, Inventions and Patents.
(1) Limited Rights Information and Data.
(i)Proprietary Information. Essentially the following statement must be included in all STTR solicitations:
``Information contained in unsuccessful proposals will remain the property of the applicant. The government may, however, retain copies of all proposals. Public release of information in any proposal submitted will be subject to existing statutory and regulatory requirements. If proprietary information is provided by an applicant in a proposal, which constitutes a trade secret, proprietary commercial or financial information, confidential personal information or data affecting the national security, it will be treated in confidence, to the extent permitted by law. This information must be clearly marked by the applicant with the term ``confidential proprietary information'' and the following legend must appear on the title page of the proposal:
``These data shall not be disclosed outside the government and shall not be duplicated, used, or disclosed in whole or in part for any purpose other than evaluation of this proposal. If a funding agreement is awarded to this applicant as a result of or in connection with the submission of these data, the government shall have the right to duplicate, use, or disclose the data to the extent provided in the funding agreement and pursuant to applicable law. This restriction does not limit the government's right to use information contained in the data if it is obtained from another source without restriction. The data subject to this restriction are contained on pages----of this proposal.'' Any other legend may be unacceptable to the government and may constitute grounds for removing the proposal from further consideration, without assuming any liability for inadvertent disclosure. The government will limit dissemination of such information to within official channels.''
(ii)Alternative To Minimize Proprietary Information. Agencies may elect to instruct applicants to: (A) Limit proprietary information to only that absolutely essential to their proposal. (B) Provide proprietary information on a separate page with a numbering system to key it to the appropriate place in the proposal.
(iii)Rights in Data Developed Under STTR Funding Agreements. Agencies should insert essentially the following statement in their STTR Program solicitations to notify SBCs of the necessity to mark STTR technical data before delivering it to the Agency:
``To preserve the STTR data rights of the awardee, the legend (or statements) used in the STTR Data Rights clause included in the STTR award must be affixed to any submissions of technical data developed under that STTR award. If no Data Rights clause is included in the STTR award, the following legend, at a minimum, should be affixed to any data submissions under that award.
These STTR data are furnished with STTR rights under Funding Agreement No. ---- (and subcontract No. ---- if appropriate), Awardee Name ----------, Address, Expiration Period of STTR Data Rights ----------. The government may not use, modify, reproduce, release, perform, display, or disclose technical data or computer software marked with this legend for (choose four (4) or five (5) years). After expiration of the (4-or 5-year period), the government has a royalty-free license to use, and to authorize others to use on its behalf, these data for government purposes, and is relieved of all disclosure prohibitions and assumes no liability for unauthorized use of these data by third parties, except that any such data that is also protected and referenced under a subsequent STTR award shall remain protected through the protection period of that subsequent STTR award. Reproductions of these data or software must include this legend.''
(iv)Copyrights. Include an appropriate statement concerning copyrights and publications; for example:
``With prior written permission of the funding agreement officer, the awardee normally may copyright and publish (consistent with appropriate national security considerations, if any) material developed with (agency name) support. (Agency name) receives a royalty-free license for the Federal government and requires that each publication contain an appropriate acknowledgement and disclaimer statement.''
(v)Patents. Include an appropriate statement concerning patents. For example: ``Small business concerns normally may retain the principal worldwide patent rights to any invention developed with government support. The government receives a royalty-free license for Federal government use, reserves the right to require the patent holder to license others in certain circumstances, and requires that anyone exclusively licensed to sell the invention in the United States must normally manufacture it domestically. To the extent authorized by 35 U.S.C. 205, the government will not make public any information disclosing a government-supported invention for a minimum 4-year period (that may be extended by subsequent STTR funding agreements) to allow the awardee a reasonable time to pursue a patent.''
(vi)Invention Reporting. Include requirements for reporting inventions. Include appropriate information concerning the reporting of inventions, for example:
``STTR awardees must report inventions to the awarding agency within 2 months of the inventor's report to the awardee. The reporting of inventions may be accomplished by submitting paper documentation, including fax.''
Note: Some agencies provide electronic reporting of inventions through the NIH Edison Invention Reporting System (Edison System). Use of the Edison System satisfies all invention reporting requirements mandated by 37 CFR part 401, with particular emphasis on the Standard Patent Rights Clauses, 37 CFR 401.14. Access to the system is through a secure interactive Internet site, http://www.iedison.gov , to ensure that all information submitted is protected. All agencies are encouraged to use the Edison System. In addition to fulfilling reporting requirements, the Edison System notifies the user of future time sensitive deadlines with enough lead-time to avoid the possibility of loss of patent rights due to administrative oversight.
(e) Cost-Sharing. Include a statement essentially as follows:
``Cost-sharing is permitted for proposals under this program solicitation; however, cost-sharing is not required. Cost-sharing will not be an evaluation factor in consideration of your Phase I proposal.''
(f) Profit or Fee. Include a statement on the payment of profit or fee on awards made under the STTR Program solicitation.
(g) Joint Ventures or Limited Partnerships. Include essentially the following language:
``Joint ventures and limited partnerships are eligible provided the entity created qualifies as a small business concern as defined in this program solicitation.''
(h) Research and Analytical Work. Include essentially the following statement:
(1) ``For both Phase I and Phase II, not less than 40 percent of the R/R&D work must be performed by the SBC, and not less than 30 percent of the R/R&D work must be performed by the single, partnering research institution, as defined in this solicitation.''
(i)Awardee Commitments. To meet the legislative requirement that STTR solicitations be simplified, standardized and uniform, clauses expected to be in or required to be included in STTR funding agreements must not be included in full or by reference in STTR Program solicitations. Rather, applicants must be advised that they will be required to make certain legal commitments at the time of execution of funding agreements resulting from STTR Program solicitations. Essentially, the following statement must be included in the ``Considerations'' section of STTR Program solicitations:
``Upon award of a funding agreement, the awardee will be required to make certain legal commitments through acceptance of numerous clauses in Phase I funding agreements. The outline that follows is illustrative of the types of clauses to which the contractor would be committed. This list is not a complete list of clauses to be included in Phase I funding agreements, and is not the specific wording of such clauses. Copies of complete terms and conditions are available upon request.''
(j) Summary Statements. The following are illustrative of the type of summary statements to be included immediately following the statement in subparagraph (i). These statements are examples only and may vary depending upon the type of funding agreement used.
(1)Standards of Work. Work performed under the funding agreement must conform to high professional standards.
(2)Inspection. Work performed under the funding agreement is subject to government inspection and evaluation at all times.
(3)Examination of Records. The Comptroller General (or a duly authorized representative) must have the right to examine any pertinent records of the awardee involving transactions related to this funding agreement.
(4)Default. The government may terminate the funding agreement if the contractor fails to perform the work contracted.
(5)Termination for Convenience. The funding agreement may be terminated at any time by the government if it deems termination to be in its best interest, in which case the awardee will be compensated for work performed and for reasonable termination costs.
(6)Disputes. Any dispute concerning the funding agreement that cannot be resolved by agreement must be decided by the contracting officer with right of appeal.
(7)Contract Work Hours. The awardee may not require an employee to work more than 8 hours a day or 40 hours a week unless the employee is compensated accordingly (for example, overtime pay).
(8)Equal Opportunity. The awardee will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin.
(9)Affirmative Action for Veterans. The awardee will not discriminate against any employee or application for employment because he or she is a disabled veteran or veteran of the Vietnam era.
(10)Affirmative Action for Handicapped. The awardee will not discriminate against any employee or applicant for employment because he or she is physically or mentally handicapped.
(11)Officials Not To Benefit. No government official must benefit personally from the STTR funding agreement.
(12)Covenant Against Contingent Fees. No person or agency has been employed to solicit or secure the funding agreement upon an understanding for compensation except bonafide employees or commercial agencies maintained by the awardee for the purpose of securing business.
(13)Gratuities. The funding agreement may be terminated by the government if any gratuities have been offered to any representative of the government to secure the award.
(14)Patent Infringement. The awardee shall report each notice or claim of patent infringement based on the performance of the funding agreement.
(15)American Made Equipment and Products. When purchasing equipment or a product under the STTR funding agreement, purchase only American-made items whenever possible.
(k) Additional Information. Information pertinent to an understanding of the administration requirements of STTR proposals and funding agreements not included elsewhere must be included in this section. As a minimum, statements essentially as follows must be included under ``Additional Information'' in STTR Program solicitations:
(1)This program solicitation is intended for informational purposes and reflects current planning. If there is any inconsistency between the information contained herein and the terms of any resulting STTR funding agreement, the terms of the funding agreement are controlling.
(2)Before award of an STTR funding agreement, the government may request the applicant to submit certain organizational, management, personnel, and financial information to assure responsibility of the applicant.
(3)The government is not responsible for any monies expended by the applicant before award of any funding agreement.
(4)This program solicitation is not an offer by the government and does not obligate the government to make any specific number of awards. Also, awards under the STTR Program are contingent upon the availability of funds.
(5)The STTR Program is not a substitute for existing unsolicited proposal mechanisms. Unsolicited proposals must not be accepted under the STTR Program in either Phase I or Phase II.
(6)If an award is made pursuant to a proposal submitted under this STTR Program solicitation, a representative of the contractor or grantee or party to a cooperative agreement will be required to certify that the concern has not previously been, nor is currently being, paid for essentially equivalent work by any Federal agency.