Introduction to consortiums

A consortium is defined as an association of two or more organizations that have come together to jointly fund research projects through external funds and pooled membership fees.

This topical guide addresses general questions, for detailed information, consult the Consortiums Job Aid.

What are the different types of consortiums?

Type I

The consortium has a main sponsor that is external to ASU (e.g., a federal sponsor such as an NSF Industry/University Cooperative Research Center Program

Type II

This is an internal initiative (i.e., not submitting to a federal or industry sponsor to supply main funds for creation). It is established by a faculty member who creates and submits a business plan (proposal).

How can a PI learn about consortiums?

To set up a meeting to discuss a potential consortium, the principal investigator may write to the Industry Agreements Group.

What is the proposal process for establishing a consortium?

• PI meets with IAG to discuss establishment of a consortium.
• PI develops a business plan (proposal).
• The Research Advancement Administrator (RA) creates an FP in ERA
• RA attaches the business plan (proposal) in 19.0 (Internal Reference Attachments) on ERA SmartForm 8.1.
• The proposal (business plan) is routed for signatures and forwarded to PNT for review.

For additional information about the proposal, agreement negotiation, and account set up processes, see the Consortiums Job Aid.

What is required in a business plan?

• Executive summary that provides an overview of the objectives of the consortium, why the consortium model is needed for the research to be successful, the management team, how long will members be asked to join and a timeline for meeting goals for success measurement
• Detailed description of the benefit of setting up the consortium, who are the targeted members, what gap in the field is being filled by the consortium
• Detailed description of who else is in the field, are there any other existing ASU consortiums that would benefit/suffer from the creation of the new consortium
• Detailed description of how the consortium will be organized, structured and managed. How long of a commitment will be asked of potential members – (1YR, 2YR, etc.)
• Detailed plan on how the consortium will be independently financially viable. Unless restricted by the sponsor, or approval of an F&A waiver, full F&A will be charged to all incoming consortium funds. If an F&A waiver is approved for the consortium, no RID or IIA will be distributed.
• If a reduced F&A rate is approved for the consortium, the approved F&A rate will be charged on Total Direct Costs.

Who approves the business plan (proposal)?

It is routed to the chair, dean, and Senior Vice President for Research in ERA as part of the proposal process.

What are the responsibilities of the consortium staff?

A kick-off meeting which includes, at a minimum, the PI, IAG, the AMT GCO and the RA is scheduled. The purpose of this meeting is to go over the set up and management of the consortium project. The meeting agenda includes:

• Consortium overview
• Identified partners
• Potential partners
• Review account set up requirements
  • New agency code
  • New ORG code
• Membership agreement review
  • Project dates
  • Membership fees
    • All member agreements will be on the same cycle
    • Membership Fees will be prorated based upon join date
  • Invoicing schedule and process
  • Reporting requirements to members
• Bylaws review
  • How will the Manager Account be funded to support Administrative Expenses?  Flat percentage of membership fee or other method
  • Member join dates – membership fee prorated
  • Allowable charges (admin salary, food, meeting expenses, etc.)
  • Process for project selection

Note:  To facilitate decision making and the negotiation process, review the guidance on “Initiating Discussions with Prospective Members”.

What types of projects do consortiums fund?

Consortiums use both internal (e.g., membership fees/prime sponsor monies are used) and external (e.g., source gives money for a specific project) funding to create and perform research projects to be carried out by consortium partners. Typically they fall into three categories:

Core projects

Members vote on which projects they will fund with pooled membership fees.

Non-core projects

An external source (can be a member) will provide funds to have the consortium partners work on a specific project. Rights to the intellectual property developed may not follow the terms defined in the membership agreement. The contracting vehicle for non-core projects is a sponsored research agreement.

Over-fund projects

An external source (can be a member) will provide additional funds to supplement an already-existing core project.

Are all consortium-funded projects made to ASU faculty?

No. A consortium-funded project can be either:

• An internal ASU project
  • The RA creates a proposal in ERA using Create and Route Funding Proposal.
• An award to another entity
  • The RA requests issuance of a subaward, following the steps outlined in the Unit Subaward Management.

What if other organizations want to become paying members of the consortium?

Instructions on adding new memberships are contained in the Consortiums Job Aid

What is required when a renewal of a membership comes due?

A renewal to a consortium membership occurs when an existing member adds money and/or time to its membership. There are not requested changes to the terms and conditions or bylaws. The RA will follow the Consortiums Job Aid instructions for renewal of memberships.

Can changes be made to the membership agreement?

The GCO must determine if the changes requested are immaterial or material? If the change is immaterial, such as an update to contact information, the change is accepted. However, if it is material, such as substantially changing the meaning or intention of a clause, the change must be made through a modification, resulting in an addendum to the agreement. Changes in payment structure also require a modification.

What is a modification?

A modification (also known as an addendum) to a consortium agreement (whether membership or project-related) may be defined as the act of an existing member requesting material changes, meaning terms and conditions and/or bylaws. This may also refer to a change in the payment structure of an agreement (i.e., from standard to in-kind or vice versa). Any requested changes must be negotiated and approved by IAG and/or PNT. Only IAG and/or PNT are authorized to make changes to the standard membership agreements and bylaws.

What is the difference between a standard payment and an in-kind payment?

A standard/traditional payment is where a check or wire transfer of requested funds is sent to ASU. In-kind contributions entail an exchange of goods or services, with a value equal to the requested dollar amount, in place of monies.

How are modifications processed?

Instructions are contained in the modifications section of the Consortiums Job Aid.

Can a consortium be set up on an at-risk basis?

Consortiums are not eligible for at-risk funds/accounts.

What financial responsibilities does the consortium have?

Consortiums staff have responsibility for:

• Expenditures
• Invoicing
• Cash management
• Collections
• Account monitoring/reconciliation
• Account closeout

For guidance with the financial responsibilities, see the Consortiums Job Aid.