General Considerations for Industrial Proposals

Proposals to an industrial sponsor must satisfy the same MIT internal requirements and policies as proposals to all other sponsors. When the sponsor is an industrial organization, the following points are especially important to consider:

  1. Domestic or Foreign - Be sure to identify whether the sponsor is a US domestic company or a foreign company, because this will affect the terms in the research agreement. Confirm the location of the company division to which the proposal is being submitted, and that this division will in fact be the funding organization.

    If the sponsoring division is a foreign affiliate of a US-headquartered company, that sponsor will need a separate sponsor record in Coeus, listing it as a foreign sponsor, and the proposal will be considered to be international. If the sponsor is a foreign company, the proposal must be routed to the Office of the Vice President for Research for international approval if the statement of work is new and not being funded under an existing agreement.  
  2. Cost-Sharing - In most cases, proposals to an industrial sponsor should avoid cost-sharing because MIT, as a non-profit educational institution, should not subsidize research that will benefit a for-profit organization. If cost-sharing is identified, it should be appropriately documented and approved in the proposal.  
  3. Co-Funding - Proposals to industrial sponsors should also try to avoid co-funding because co-funding can create conflicts among multiple sponsors, related to priorities for pre-publication review and licensing options. An exception to the co-funding situation occurs in MIT-based research consortia, where all consortium members share equal, non-exclusive rights to publication review and IP options.

    Avoid mixing a non-consortium sponsor's funds with consortium (members') funds, as this creates a challenging co-funding situation with potential inter-sponsor conflicts. If co-funding is identified, confirm the sources of the funds (account numbers and sponsors) and consult with the Industry Liaison to determine whether conflicts might arise as a result of the co-funding.  
  4. Underrecovery - Proposals to industrial sponsors should avoid under-recovery by requiring that the sponsor reimburses MIT for the full costs (direct and F&A) of the proposed research, again to ensure that MIT will not subsidize research that will benefit a for-profit organization. If under-recovery is identified, consult with OSP's Industry Liaison to determine whether it can be approved.  
  5. Conflicts of Interest - Proposals to industrial sponsors should be confirmed to be free of conflicts of interest. These arise when the proposing PI has an existing professional and/or financial relationship with the sponsor (e.g., PI is a founder of the sponsor, on the sponsor’s board of directors, holds a position with the sponsor, holds a significant equity position in the sponsor, and/or is contractually engaged as an advisor to the sponsor).

    In addition, where the sponsor company is a start-up that was founded based upon technology licensed from MIT, MIT may have an Institute conflict of interest that could affect the terms MIT can negotiate in the research agreement. The Technology Licensing Office can confirm whether a start-up company is an MIT licensee. In any case where the Contract Administrator suspects a PI or Institute conflict of interest may exist, the CA will notify the Director of Sponsored Programs about the potential conflict and seek advice on how to proceed.  
  6. Export Controls - Some proposals to industrial sponsors may anticipate the exchange of technology or information subject to the export control laws and regulations, especially if the subject matter of the proposal has potential military or terrorist use. If the statement of work says that materials or equipment will be exported, or if confidential information, equipment or materials will be received by MIT, export control issues may arise. In these cases, consult with MIT’s Export Control Officer for guidance. 
  7. Subawards - Some proposals to industrial sponsors anticipate that MIT will subaward some work to another institution, or to a private consultant. When the statement of work anticipates a subaward, unpaid collaborator, or paid consultant, make sure that
    1. the proposal incorporates a letter of commitment signed by an an authorized representative of the subawardee, collaborator or consultant,
    2. the proposal incorporates a Statement Of Work and budget from the subcontractor or consultant, 
    3. the subawardee’s or consultant’s budget is properly incorporated into MIT’s budget. If a consultant is anticipated, confirm that the consultant is properly defined as such and is not a subawardee.
    4. If the proposal anticipates a subaward and the subawardee has not previously or recently been awarded a subaward by MIT, contact the Research Subawards Team to ensure that the proposed subawardee can be qualified to receive an MIT subaward. If not, the organization will have to be engaged as a consultant or vendor instead.