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Subcontract with Conflicted Investigator

Example 3:  Subcontract with Conflicted Investigator

Dr. Richards, introduced in Example 1 above, is the developer of specialized software and 25% equity owner of the start-up company, Top Pocket Technologies, Inc. that has licensed his software for commercialization.  In this example, Dr. Richards is the proposed principal investigator for the Virginia Tech subcontract for the company’s research project. This situation is described as “being on both sides of the contract.”  The faculty member has an ownership (or managerial) interest in the company and as such is expected to act in the interests of that company.  He is also a Virginia Tech employee and, for the purposes of this subcontract, is expected to act in the interest of and to represent Virginia Tech, conducting research that is free of bias both in fact and in perception. The faculty member is a conflicted investigator and the situation presents significant risks requiring a more extensive management plan, usually with multiple strategies for mitigation.   The details of some situations may make conflict of interest management unworkable; if so, the project will not proceed.

Actions Required:

  • Investigator Disclosures to Institution:  The investigator discloses ownership throught the COISystem and Statement of Economic Interests per Example 1 above.
  • Proposed Management Plan:  The management plan must be tailored to the facts of the situation and the level of risk and complexity involved.  The management plan in this instance is project-specific.  It should provide independent financial management, safeguards to personnel and students, clear separation of the faculty member’s personal interest and institutional obligations, and sufficient oversight to assure that the research is conducted in accordance with the highest ethical standards.  Direct involvement of the faculty member on both sides of this contract (start-up business and university-sponsored project) is not acceptable under policy 13010.

The following list of example management strategies is not intended to be all inclusive, as each individual situation may require a greater or lesser degree of management based upon the elements of risk presented. 

  • Removal of conflicted investigator:  Appoint a different faculty member, who has no connection to the company, as PI of the VT subcontract. The new PI oversees all aspects of the award to the university. This minimizes the conflict of interest for the faculty owner, who may decide to be involved in the project as a representative of the company. Disclosure and university approval is required; more extensive mitigation strategies may not be needed if the new PI has no financial interest and is not supervised or evaluated by the faculty-owner.

Or If the technical work requires that the faculty-owner remain involved in the project, then independent financial oversight is required along with one or more of the subsequent options:

  • Independent financial oversight (required element of management plan):  Another individual with equal or greater rank and with no connection to the company must be appointed as co-PI to oversee the performance of the Virginia Tech project, including technical and financial oversight.  In some cases, it may be acceptable to name the department head as co-PI to manage financial oversight.  An independent co-PI (not supervised by the faculty-owner) with appropriate expertise may also be assigned technical/research oversight. Please review the financial oversight guidance.
  • Independent research oversight (required element of management plan if investigator is engaged in research at VT involving an entity in which he/she has an interest):  In addition to independent oversight of the project exercised by a co-PI, it may be appropriate to provide independent research oversight by a small committee of faculty members with no personal conflicts.  The oversight committee would be charged with meeting periodically (no less than once/year and preferably more often) to review technical aspects of the project such as selection of subjects, research protocols, methods, outcomes, and eventual products/publications.  At minimum, the committee must certify and report annually that such a review has taken place and that the research was conducted with appropriate disclosures and without bias. If warranted, the committee is expected to recommend adjustments to the project to assure the actual and/or perceived integrity of the research. Please review the research oversight guidance.
  • Disengagement from company involvement with project:  A faculty-owner who serves as PI or co-PI may not participate in any decision-making as a representative of the company sponsor.
  • Disqualification of the researcher from part or all of the research project.
  • Disclosures in any publications and presentations about the research.
  • Disclosure to the research sponsor:  Typically the Office of Sponsored Research will assist or initiate notification of the sponsor concerning an investigator’s disclosure of a significant financial interest.
  • Disclosure to staff/students/others:  The faculty-owner must disclose his/her company connection to lab staff, students, oversight committees (IRB or others), and purchasing department if relevant. 
  • Graduate student supervision:  See strategies in Example 2 above. Please see student/postdoc oversight guidance.
  • Oversight of project personnel:  Annual evaluations of staff or key personnel involved in the project would not be the sole responsibility of the faculty-owner; additional oversight would be provided by a higher-level academic administrator.
  • Human subjects:  If human subjects are involved in the research, the co-PI or another individual with no connection to the company would oversee all aspects of human subject participation.  The faculty-owner’s significant conflict of interest must be shared prior to the subject’s participation.
  • Severance of relationships that create actual or potential conflicts:  Termination of consulting agreements with the company, or resignation from company advisory boards or management positions.
  • Divestiture of significant financial interests
  • Review by Department Head and Dean:  same as Example 1 above.
  • Review and approval by university officials:  same as Example 1 above.