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Small Business Development Center for Innovation

Opportunities for University-Business Collaboration

Cal Poly welcomes the opportunity to join with private companies in partnerships that are mutually beneficial. In particular, we seek relationships that will enable our students and faculty to work on projects of interest to industry and encourage an exchange of knowledge and expertise between academia and private enterprise.

A number of options are available to private companies interested in establishing such partnerships. These range from simple "in-class" projects to more complex, long term arrangements.

In-Class Project

A project carried out by students (usually in a team) as part of a class. Normally, these projects are funded through a gift to the University. Students and faculty are not paid for their work on the project. The contribution from the company is used to defray expenses related to the project (e.g. materials, travel expenses). There is no contractual arrangement between the University and the sponsoring company.

Student-Centered Project

A project carried out by an individual student or teams of students, whose primary purpose is student learning. An example of an individual student project is a senior project or a Master’s thesis that fulfills requirements for a baccalaureate or Master’s degree, respectively. An example of a qualifying team-project would be a project whose primary purpose is to provide students with project-based learning experiences. Student-centered projects may be funded through a fixed-price contract between the University and the sponsoring company. A low indirect cost rate (8% at present) is assessed on such projects. Students may be reimbursed for their work, but, generally, faculty who supervise the projects contribute their time.

Fee for Service

A mechanism to facilitate contractual relationships in which standardized services (testing, analysis, etc.) are provided to multiple sponsors ("clients"). These fee-for-service arrangements allow approved services to be provided and billed to clients in a simplified and efficient manner.

Letter Contract

A streamlined contract used for simple projects whose costs are less than $15,000. A letter contract may be cost-reimbursable for fixed-price (see below). A letter contract is particularly suited for exploration of an idea for future research or demonstration of performance capability.

Cost-Reimbursable Contract

A contract used for more complex projects carried out by faculty (and/or students under faculty supervision) and described in a proposal for funding that has been reviewed and approved by the sponsoring company. The proposal identifies the activity, staff, duration, costs, and likely outcomes and is incorporated into the contract. The contract also clarifies issues such as payment schedules or milestones, governing law, intellectual property rights, publication rights, termination clauses, etc.

Fixed-Price Contract

A contract similar to a cost-reimbursable contract in most respects that allows a lump-sum payment for an agreed-upon deliverable. It is less commonly used because of the uncertainties inherent in academic research.

Master Agreement

A general agreement developed between the University and a sponsor when the relationship is expected to be long-term and encompass many projects (task agreements). This agreement lays out the general principles that will govern subsequent task agreements. Individual task agreements may then be less detailed and approved more rapidly. The general agreement may specify one or more of the funding mechanisms listed above.

Indirect Cost Rates
Negotiated periodically with the U.S. Department of Health and Human Services, the rate is designed to recover expenses incurred by the University in the conduct of sponsored programs but which are not billed as direct costs to each project. Examples of such expenses are: space, utilities, fiscal services (e.g., accounting, payroll, purchasing), and administrative oversight. The current rates (effective 7/1/12) are:
On-Campus: 38% of MTDC* and Off-Campus: 14% of MTDC*
* MDTC = Modified Total Direct Costs. This base includes all direct costs except equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships, and fellowships, as well the portion of each subgrant and subcontract in excess of $25,000.