University of Southern California


Frequently Asked Questions

What is the Overhead Charge?
Overhead (also called indirect cost) is the university’s mechanism for recovering administrative and facilities costs associated with conducting research and other sponsored activities. Our overhead rate is determined by federal audit and reflects actual expenses associated with conducting research at USC, such as the cost of buildings and maintaining labs. USC’s overhead rate for industry sponsored clinical trials is 35% of applicable direct costs.

How are Time and Effort Billed?
Time and effort is charged on a “percentage monthly effort” rather than by the hour. This means that each person working on a project charges a percentage of their monthly effort over the duration of the agreement, and the sponsor is billed for the actual compensation paid to the individual. For instance, if a faculty member charges 20% effort over a 12 month period, the sponsor will be billed for 2.4 months of compensation. Student compensation is typically divided into semesters (fall from August 16 to December 31, spring from January 1 to May 15 and summer from May 16 to August 15), and is normally only permitted to exceed 50% in the summer. Through USC’s effort reporting system, faculty are required to certify that the effort expended on each project matches the amount billed to the sponsor.

What is the Fringe Benefit Rate?
USC charges a fringe benefit rate to recover university expenses for health coverage, retirement, social security and other employee benefits. Our fringe benefit rate is applied to the compensation of faculty, staff, and postdoctoral research associates, but not to students.

What Qualifies as a Gift?
A gift is a “no strings attached” donation to the university. While a donor can designate a gift to a particular activity, there can be no quid quo pro. This means that a donor does not receive intellectual property rights or any other tangible research product in exchange for the money given to the university as a gift.

What is the Process for Executing a Corporation or Foundation Research Contract?
Contracts and grants for corporate and foundation sponsors are typically executed in five steps: 1. Proposal Preparation; 2. School Review and Approval; 3. Proposal Submission; 4. Negotiation of Agreement; and 5. Award and Account Set-up.

The Department of Contracts and Grants and its Clincal Trials Office are authorized to negotiate and execute a research grant or contract with USC. See Submitting and Negotiating Sponsored Agreements through DCG for Corporate and Foundation Research for specifics.

How are Confidential Disclosure Agreements Handled?
USC will execute CDAs with outside organizations when research depends on the protection of confidential information. CDAs are executed by the Department of Contracts and Grants for the treatment of confidential information related to sponsored research, and by USC Stevens for agreements related to Intellectual Property Licensing. CDAs are never signed by project faculty, students or staff.

What Intellectual Property Rights are Given to Industry Sponsors?
With the exception of research service agreements and industry sponsored clinical trial agreements, USC does not conduct work for hire in research, and therefore retains ownership of intellectual property created at USC. Sponsors receive the first right to negotiate a license with the university. In special cases, alternative intellectual property terms are available.

Will Research be Published?
USC expects that all university research will be published, typically in peer reviewed literature, presentations at professional meetings, and student dissertations and theses. Therefore, we do not accept terms that block or prohibit publications. We will, however, give sponsors the right to review publications in a 30 day period, to ensure that confidential information and IP are properly protected.

What Are Typical Contract Terms?
USC’s standard corporate agreement includes clauses related to indemnification, use of trademarks, limitation of liability and other terms. USC is open to negotiation, depending on the circumstances of the agreement.

How are Sponsors Billed?
Payment terms are negotiated, depending on the needs of the research project. Typically, an upfront payment is paid upon execution of the Agreement and scheduled payments are made throughout the performance period.

What if certain parts of the standard agreements are unacceptable to our company?
Most of the standard agreements can be tailored to fit specific needs. Our template language should be viewed as a starting point for negotiations. We strive to achieve mutually beneficial arrangements in a timely manner.

Who is Responsible for Ensuring that the Sponsored Work is Completed
The project principal investigator (usually a faculty member) is responsible for ensuring satisfactory completion of all project work, as well as compliance with the agreement and university regulations. The Department of Contracts and Grants also monitors projects on completion to ensure that all work products have been submitted as required.

How are Human Subjects and Animal Research Reviewed?
The USC IRBs oversee human participant research conducted at USC. USC has four IRBs. One focuses on Social Behavioral Research and three handle Biomedical Research. Investigators are required to obtain IRB approval for all projects that are determined to be research involving human subjects. This process can take up to 60 days or more; therefore, it is strongly encouraged for investigators to submit research protocols well in advance of their anticipated start date.

Please refer to the OPRS website for further guidance.

USC’s Institutional Animal Care and Use Committee (IACUC) oversees USC’s animal programs, animal facilities, and policies ensuring appropriate care, ethical use and humane treatment of animals. As with human subjects research, investigators are required to obtain IACUC approval and meet all stipulations before animal research can begin. This process typically takes 30 days if submission deadlines have been met for that month.

Who is Responsible for Awards Made from USC?
The Department of Contracts and Grants is the lead office for all awards made from USC to other organizations.

Can USC Faculty, Staff and Students Have a Financial Interest in the Sponsor?
USC’s policy on Conflicts of Interest in Research Policy sets a “rebuttable presumption” standard against research sponsorship into the laboratory of someone who holds a management position, private equity (any amount) or public equity (in excess of $50,000) in the research sponsor. USC also holds “rebuttable presumption” standards against faculty conducting human subjects when they have a financial interest in excess of $10,000, or the university conducting human subject research on IP that we have licensed to outside organizations. In general, all research staff must disclose their financial interests to the Conflict of Interest in Research Committee, and research cannot begin until a relationship is approved and a management plant is in place if required.

For more information on USC’s Conflict of Interest Policies (including Conflict of Interest in Research, Conflict of Commitment, Institutional Conflicts of Interest in Research) contact the Office of Compliance.

What Policies Govern Research?
USC’s policies help ensure ethical and responsible research, along with compliance with all applicable regulations. USC maintains an Institutional Review Board (IRB), and Institutional Animal Care and Use Committee (IACUC), and other research oversight committees. See the USC Research Policies page for a complete list of relevant policies.