Conflict of Interest Situations with Possible Management Plans
SBIR and STTR Programs in Federal Research Agencies
The Small Business Innovation Research (SBIR) program funds early-stage research and development at small technology companies. Note that to participate in the SBIR program:
- during Phase I, a minimum of two-thirds (or 67%) of the effort must be performed by the proposing firm; a minimum of one-half (or 50%) of the effort in Phase II
- the Principal Investigator must spend more than one-half (or 50%) of their time employed by the proposing firm
The Small Business Technology Transfer (STTR) program is similar in structure to the SBIR but funds cooperative research and development projects involving a small business and a research institution. Note that to participate in the STTR program:
- the small business must perform a minimum of 40% of the work and the research institution a minimum of 30% of the work in both Phase I and Phase II
- the small business must manage and control the STTR funding agreement (i.e., serve as the prime contractor with the Government)
Example 1: Subcontract with minimal risk
Company X applies for and receives an SBIR/STTR award. Professor K is part-owner and President of Company X. Professor K will NOT be involved as the PI or a Key Investigator in the research being conducted at the UM and has no reporting or oversight relationship with any of the key personnel or students/trainees assigned to the UM side of the company sponsored research project.
This situation presents minimal risks and falls into what the conflict of interest committees refer to as “Administrative Shunt” category requiring disclosure as sufficient management.
Example 1a: Subcontract with student element
The UM side of the company sponsored project (described above) will also provide support for a GSRA under the direction and supervision of Professor K. This presents an unacceptable conflict (see Operating Principle #4).
Management solutions may include the following:
- Appointing another faculty member (with no connection to the company) to serve as thesis advisor of the student, if the focus of the thesis is based on this research.
- Serving as co-thesis advisor with another faculty member (with no connection to the company), if the focus of the thesis is based on this research.
Example 1b: Subcontract with a conflicted Key Investigator
The UM side of the company sponsored project (described above) will be under the direction of Professor K (see Operating Principle #5).
This situation presents significant risks. The example solutions provided below are intended to be a guide for demonstrating how particular conflict situations may be managed [note: the details of some situations may make conflict of interest (COI) management unworkable and the project will not commence]. The examples are not intended to be all-inclusive as each individual situation may require a greater or lesser degree of management based upon the elements of risk presented.
- Appoint a different faculty member, who has no connection to the company, as PI. The new PI oversees all aspects of the subcontract to the University. This minimizes the conflict of interest for Professor K (as in Example 1 above), who may decide to be involved in the project as a representative of the company.
- Appoint a different faculty member, who has no connection to the company, as PI and allow the original faculty member (Professor K) to serve as co-investigator. The new PI oversees all aspects of the subcontract including research reporting and financial oversight. This becomes a managed conflict of interest for Professor K (see notes below).
- Although the least desirable, if the technical work requires that Professor K remain as PI, another individual with no connection to the company is appointed to oversee the performance of the subcontract (although this individual may not participate in the research activity) (see notes below).
- For examples B & C the following additional management conditions may apply:
- All three examples require disclosure to and approval by the Regents under the State of Michigan Conflict of Interest Statute.
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Notes:
Professor K does not participate in any decision-making as a representative of the company sponsor and would disclose his/her company connection to lab staff, students, oversight committees (IRB, UCUCA), Purchasing, as well as in any publications about the research. Annual evaluations of staff or key personnel involved in the project would not be the sole responsibility of Professor K; additional oversight would be provided by a higher-level academic administrator. If human subjects are involved in the research, the new PI or another individual with no connection to the company would oversee all aspects of human subject participation.