35.017-1 Sponsoring agreements
Source: FAR 35.017-1 on acquisition.gov
A sponsoring agreement with specific required provisions is mandatory for every FFRDC, must be reviewed and renewed at least every five years, and governs the center’s mission, operations, and compliance obligations.
Overview
FAR 35.017-1 outlines the requirements for establishing and maintaining sponsoring agreements between the Government and Federally Funded Research and Development Centers (FFRDCs). These agreements formalize the relationship, define the FFRDC’s mission, and ensure periodic review. The regulation mandates that a written sponsoring agreement be prepared at the establishment of an FFRDC, and it specifies minimum content requirements, including mission statements, termination provisions, asset disposition, retained earnings, competition restrictions, and policies for accepting work from non-sponsors. The agreement’s term cannot exceed five years but may be renewed in increments of up to five years following periodic review. Additional provisions may be included as appropriate, such as cost element agreements and fee negotiation considerations.
Key Rules
- Written Sponsoring Agreement Required
- A formal, clearly designated agreement must be established when an FFRDC is created, regardless of its legal form.
- Minimum Content Requirements
- Agreements must address mission, termination, asset disposition, retained earnings, competition restrictions, and acceptance of non-sponsor work.
- Additional Provisions
- Agreements may include advance cost element agreements and fee negotiation considerations.
- Term Limits and Renewal
- Agreements are limited to five years but may be renewed in increments of up to five years after review.
Responsibilities
- Contracting Officers: Ensure all required elements are included in the sponsoring agreement and that the agreement is properly designated and periodically reviewed.
- Contractors (FFRDCs): Comply with the terms of the agreement, including competition restrictions and procedures for accepting non-sponsor work.
- Agencies: Develop policies and procedures for sponsoring agreements and conduct periodic reviews for renewal.
Practical Implications
- This section ensures clarity, accountability, and compliance in the relationship between the Government and FFRDCs.
- It impacts how FFRDCs operate, especially regarding competition, asset management, and acceptance of outside work.
- Common pitfalls include missing required agreement elements, failing to renew agreements on time, or not properly restricting competition.
(a) In order to facilitate a long-term relationship between the Government and an FFRDC, establish the FFRDC’s mission, and ensure a periodic reevaluation of the FFRDC, a written agreement of sponsorship between the Government and the FFRDC shall be prepared when the FFRDC is established. The sponsoring agreement may take various forms; it may be included in a contract between the Government and the FFRDC, or in another legal instrument under which an FFRDC accomplishes effort, or it may be in a separate written agreement. Notwithstanding its form, the sponsoring agreement shall be clearly designated as such by the sponsor.
(b) While the specific content of any sponsoring agreement will vary depending on the situation, the agreement shall contain, as a minimum, the requirements of paragraph (c) of this subsection. The requirements for, and the contents of, sponsoring agreements may be as further specified in sponsoring agencies’ policies and procedures.
(c) As a minimum, the following requirements must be addressed in either a sponsoring agreement or sponsoring agencies’ policies and procedures:
(1) A statement of the purpose and mission of the FFRDC.
(2) Provisions for the orderly termination or nonrenewal of the agreement, disposal of assets, and settlement of liabilities. The responsibility for capitalization of an FFRDC must be defined in such a manner that ownership of assets may be readily and equitably determined upon termination of the FFRDC’s relationship with its sponsor(s).
(3) A provision for the identification of retained earnings (reserves) and the development of a plan for their use and disposition.
(4) A prohibition against the FFRDC competing with any non-FFRDC concern in response to a Federal agency request for proposal for other than the operation of an FFRDC. This prohibition is not required to be applied to any parent organization or other subsidiary of the parent organization in its non-FFRDC operations. Requests for information, qualifications or capabilities can be answered unless otherwise restricted by the sponsor.
(5) A delineation of whether or not the FFRDC may accept work from other than the sponsor(s). If nonsponsor work can be accepted, a delineation of the procedures to be followed, along with any limitations as to the nonsponsors from which work can be accepted (other Federal agencies, State or local governments, nonprofit or profit organizations, etc.).
(d) The sponsoring agreement or sponsoring agencies’ policies and procedures may also contain, as appropriate, other provisions, such as identification of-
(1) Any cost elements which will require advance agreement if cost-type contracts are used; and
(2) Considerations which will affect negotiation of fees where payment of fees is determined by the sponsor(s) to be appropriate.
(e) The term of the agreement will not exceed 5 years, but can be renewed, as a result of periodic review, in increments not to exceed 5 years.