Administrators and the Responsible Conduct of Research
Case Study:
Wally's Easy Way Out

Wally's Easy Way Out

The university signs a subaward with ABCDE Tech, a small company under an NSF grant. The subaward contains appropriate provisions for academic freedom, data rights, and other intellectual property rights. Without telling the university, Prof. Hammer signs a one year consulting agreement for $12,000 with ABCDE Tech (for closely related work) and uses his graduate students (without paying them) to work on the consulting agreement. The consulting agreement contains the usual consulting terms: company ownership of intellectual property, prior approval of publications, confidentiality, and work performed on a "work-for hire" basis. In a conversation, Wally Cox, Assistant Director of the Research Administration Office finds out about the consulting arrangement through a "slip of the tongue" from ABCDE Tech's President. In thinking about it, Wally decides that it would be better not to pursue this further. Wally reviews the subaward's statement of work and thinks there is little likelihood that there will be any inventions resulting from the work. Besides, as long as the work under the sponsored project is completed and the university is paid, telling his boss and the Conflict of Interest Committee would just raise unnecessary questions that might jeopardize future funding from ABCDE Tech. Besides, Prof. Hammer knew what he was getting into when he signed the consulting agreement so if problems arise, it will be Prof. Hammer's fault.

Case Discussion
Interests of the Affected Parties

Prof. Hammer wants to conduct his research project. He also wants to enhance his personal income. He feels he can use his graduate students on the consulting project and can justify it since they are getting additional research experience and exposure to working with corporations.

The graduate students are in a difficult position. Their primary interest is completing their degree requirements. They also may feel it is important to do whatever Prof. Hammer instructs them to do since it would do them no good at all to alienate their advisor. Doing so could have a negative impact on their involvement in the research projects, impede progress toward their degrees. The work on Professor Hammer's consulting project may take time from their degree-related work, but refusing to assist Prof. Hammer would probably have severe negative consequences.

ABCDE Tech needs the research done in whatever way is most advantageous to the company. The subawardSubaward
A contract or legal agreement between the prime recipient of a grant, cooperative agreement or contract and another organization (the subrecipient) that will engage in a portion of the research or perform other programmatic activities that constitute substantive work under the prime award. The agreement is written under the authority of the prime award and specifies the terms and conditions under which the subrecipient will engage in the work. A subaward includes the administrative requirements of the funding agency to which the subrecipient must adhere. The performance of substantive work is the key feature which distinguishes subawards from purchase orders and other third party agreements. A subaward is not an agreement for the procurement or purchase of goods or services. Subaward are referred to by a variety of terms leading in part to the confusions surrounding these agreements and their administration. Subaward, subgrant, subcontract, consortium agreement and subrecipient agreement are all terms that are used. Some of these terms come from specific regulation and have more precise definitions. (Source: NCURA Online Subaward Tutorial, 2006)
is necessary to get the involvement and support of the university for Prof. Hammer's work. The addition of the consulting agreementConsulting Agreement
An agreement between two or more researchers that sets forth the nature of their working relationship in a research project. The agreement may include provisions concerning the intent of the parties to share data, research materials and facilities, and to publish research findings. Since collaboration agreements are usually executed between researchers, they are not documents that legally bind the researchers' institutions to a commitment of any resources.
elevates the commitment of effort at a relatively small cost. The consulting agreement contains intellectual property terms solely benefiting the ABCDE Tech as well as confidentiality terms restricting Prof. Hammer from discussing his work.

Wally Cox have several interests. In the best of all circumstance he would like to keep his job, maintain the trust of his supervisor, sustain good relations with Prof. Hammer, and manage the situation so that no problems arise.

Wally Cox' supervisor needs to be able to trust Wally to do his job properly. The supervisor is responsible for alerting the Conflict of Interest CommitteeConflict of Interest Committee
The body designated by the institution to review and manage or eliminate conflicts of interest.
as well as ensuring that his office is executing and administering awards properly and exercising appropriate stewardship of sponsored funding. Among other things, the latter means ensuring compliance with sponsor policies and the terms of sponsored awards.

The University's primary interest lies in the proper stewardship of sponsored funding. Having situations arise that violate that stewardship could have a negative impact on the award of future sponsored funding and the erosion of the public trust.

Ethical Issues

The Ethical issues begin not with Wally's decisions and actions, but rather with Prof. Hammer's decision to act inappropriately for his personal benefit. Consulting agreements typically contain terms and conditions that are very different from and inconsistent with those found in sponsored project agreements. For instance, the sponsored project agreement signed by the university would have contained a patent clause that would preserve the ownership of inventions by the university. Conversely, the consulting agreement signed by Prof. Hammer would contain a patent clause that would give ABCDE Tech all ownership right to inventions and would exclude Prof. Hammer from those rights. If an invention arises from Prof. Hammer's work, there is an immediate conflict in that both the university and the company would claim ownership.

Prof. Hammer also acted in appropriately by having his graduate students involved on his personal consulting contract. While he made matters worse by not paying them, the very act of using his student for his personal benefit is completely inappropriate and constitutes a conflict of interest.

Wally Cox's ethical decisions began the instant he heard about Prof. Hammer's consulting agreement. It is clear that Wally knew something was wrong. He thought about the situation and he checked to see what potential problems might arise. He then made a conscious decision that the risks were sufficiently low to justify sweeping the whole matter under the rug and simply keeping quiet.

Consequences of Actions

Wally's decision were based on an attempt to avoid questions and problems. He took it upon himself to decide that his personal convenience outweighed following the requirements of university policy. Since NSF funded the company's project, the subaward to the university would have included the NSF's conflict of interest policy. Irrespective of what the university's conflict of interest policy might say, the university is bound to comply with the NSF policy. Wally, therefore, also determined that his personal convenience was more important than complying with the terms of a sponsored project and federal policy.

Wally's inaction serves as an enabling action to Prof. Hammer's inappropriate behavior. If we assume that Prof. Hammer hears from the company president that Wally was told about the consulting agreement, then Prof. Hammer will feel he has the green light to act in a similar manner regarding university policy in the future. We might also assume that Wally's supervisor might hear about this matter at some point. The supervisor will have every reason to assume that Wally is either incompetent or untrustworthy.


Wally needs to remember that he is employed by the university and that employ carries with it the obligation to carry out his employer's policies. He cannot legitimately protect the university's interests only when it is convenient or when the risks of problems arising are low. He also cannot legitimately justify his inaction by laying the blame on Prof. Hammer or anyone else. Wally's obligations are to the university and protecting its interests as a proper steward of sponsored funding. Sometimes, ethical decisions are not quite as clear as they are in this case. In the present situation, however, Wally knows a faculty member has acted inappropriately and contrary to university and federal policy. Wally has the clear obligation to report what he learned from the company president to his supervisor and advise the supervisor that Prof. Hammer is in violation of both university and federal policy. This may create difficulty in his relationship with Prof. Hammer, but Wally needs to remember doing his job as he is trusted to do supersedes his personal convenience.