Managing Research Contracts 2018 – An international benchmarking study

Research contract management is a critical function for all research-active universities. Funders, external partners and businesses are seeking greater value from their university relationships.  At the same time internal pressures driven by growth and complexity  impact on management, investment and skills. This report is intended to provide an evidence-based assessment of current practice, to assist those managing research contracts functions and inform policymakers.

19 UK universities and 11 Australian universities participated, completing a common assessment framework in early 2018. The research incomes of participants ranged from under £1m (A$1.8m) to over £250m (A$448m), and   they have a combined research income of £1.6bn (A$2.9bn).

Their research contracts functions involve over 220 contracts staff, in a range of leadership, officer and administrative roles.  Collectively they oversaw the completion of more than 50,000 agreements in the three-year study period.

Areas of investigation

The study looked at key areas of research contract management, including research income, contract volumes, the staff and system resources in place and the costs, structures and remits of the research contracts functions in the participating universities.

The number and range of participating institutions has allowed a number of comparisons to be drawn – by size (research income) and by territory (UK/Australia).

What the study shows – our overall findings

For the participating universities, their research contract functions typically cost less than 1% of their institution’s research income. Research contract functions are generally located within ‘research office’ structures, though in around a fifth of cases they form part of a central legal services team.

Research contracts functions deploy a range of staff roles to support research contracts, from administrative through to legally qualified staff. Contracts managers/officers are the backbone of the service for most universities, accounting for over 60% of reported full-time equivalent staff members (FTEs).

Universities with higher levels of research income involve significantly more staff with professional legal qualifications (50%). In universities with lower levels of research income, 20% of staff report legal qualifications, despite research contracts being more likely to be delivered by central legal services in these institutions.

Participants report increased complexity across all types of agreements.  In particular, multi-party collaboration agreements and European Commission agreements (UK only) are perceived to be increasing significantly in complexity. International collaborations and funding schemes account for some of these changes.

A significant number of metrics cannot be reported from the current systems used by research contracts functions. Out of ten identified metrics, only two metrics were available and reported by at least half of the participating universities.  Metrics that help manage workload (inactive contracts, contract turnaround by area/people/type), were unavailable to the majority, with under 20% reporting these.

International comparisons – similarities and differences

There are distinct differences in the ways UK and Australian institutions approach the process to sign off agreements. Within the UK, in general there is greater devolution of sign-off authority to less senior roles and completion of sign-off occurs within the research contracts function. In Australia, sign-off responsibility is more commonly held at the level of director or a member of the university senior management.

On average, preparing a contract is more expensive in Australia than in the UK (£510/A$914 compared to £393/A$686 for the UK).  The relative difference in salary costs between UK and Australian staff is a factor.

Australian participants reported a 33% higher cost per FTE and higher salary levels than institutions in the UK. Only a proportion of this difference is explained by the higher cost of living and salary levels in Australia, which are typically 10-30% higher than the UK.

Over recent years, the volume of contracts has increased more significantly for Australian participants (11% p.a.) than for UK participants (5% p.a.).  However, on average, UK institutions were handling more contracts per year, with an average of 661 compared to 591 for Australia.

We observed differences in the approach to governing law on international agreements. Australian participants prefer to remain silent on governing law when interacting with partners from other countries that do not accept Australian jurisdiction. This is not the case for UK participants, who are more likely to  accept the foreign jurisdiction or stipulate a mutually agreeable neutral jurisdiction.

There appears to be greater adoption, or planned adoption, of dedicated software for contract management in Australia. Within the UK, participants reported frequent use of supplementary spreadsheets to augment information held in systems not primarily designed for research contracts management. The development and implementation of integrated research contract management software within the UK may change this in the future.

Dedicated research contracts teams located within the research office function are typical for universities with larger research incomes. For those with smaller research incomes, research contracts are more likely to be managed by the legal services function of the university.

Typically, universities with the largest research incomes reported a narrower remit for their research contracts function. This is no doubt influenced by scale, with separate technology transfer offices, consultancy units/managers and clinical trial units able to deal with certain types of agreement.

In Australia, contract volumes reported have grown most significantly for the universities with the largest research incomes.  For the largest universities growth was 17%, but for those with the smallest research incomes it was 8%.

In the UK, growth in contract volumes was greatest for the smallest universities In the UK, reported contract numbers have grown most significantly for the universities with the smallest research incomes.  For the largest universities average volumes decreased  by 2%, but for those with the smallest research incomes growth was 20%.

Workload, measured through a “contracts per FTE” indicator, was highly variable between institutions, but, typically, smaller universities reported volumes per FTE 33% higher than the largest universities.

Universities with large research incomes reported a smaller percentage of overall research income directed at research contract management, typically around 0.4%. For those with medium or smaller research incomes, the cost reported was typically 0.7% and 1.3%, respectively.

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