Laurie - I think a part of your question hinges on the reaction of NASA and
the subcontractor to the nonrenewal of the relationship with the
subcontractor. You mentioned that you had stated in the original proposal
that the subcontractor was included in the work plan for the entire three
year project. I have two questions that may help you make the decision: Does
the subcontractor bring something unique to the project that cannot be
obtained from elsewhere? Some scientific expertise or special knowledge? Was
the fact that the subcontractor was included in the package a part of the
reason the project was awarded to your principal investigator? Finally, does
the award include language that NASA must approve any change in
subcontractor? (Three questions, isn't it? Oh well, you know research
administrators!)

If the answer to all of the above is no, then I don't think you have any
problems. If the answer to even one of the questions is yes then you may
want to discuss this situation with your contract specialist at NASA.

As far as the legal obligation to the subcontractor, if the commitment was
made in writing to the three year deal, then the only way out, legally, is
to terminate. Your subcontract should have included language for termination
with and without cause. If that is there, then you legally have an out by
using the termination without cause clause. If you can only terminate with
cause, then you must establish cause for termination. I would be very
careful here.

Good Luck!

Celia

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Celia Gravely, Senior Grants Specialist
IFAS Sponsored Programs
University of Florida
G040 McCarty Hall, P.O. Box 110110
Gainesville, Florida 32611-0110
352-392-2356, ext. 25 (voice)
352-392-8479 (fax)

Visit our homepage: http://grants.ifas.ufl.edu

----- Original Message -----
From: "Laurie Chamness" <xxxxxx@COFC.EDU>
To: <xxxxxx@HRINET.ORG>
Sent: Wednesday, February 16, 2000 2:25 PM
Subject: Declining to issue a subcontract renewal

> Do any of you have experience in declining to issue a subcontract
> renewal award to a private company on a multi-year federal grant? If so,
> what justification to the private company, if any, is required on our
> part, in declining to issue the renewal? What are the possible legal
> ramifications regarding the private company's rights?
>
> We have a three year NASA grant on which we have issued a subcontract to
> a private company for the past 2 years. The relationship between our
> institution and the private company has deteriorated to the point where
> the PI would prefer not to issue the subcontract to the private company
> for Year 3 of the grant. This private company was named in the original
> grant proposal to NASA as a subcontractor for the 3 year grant period.
> Our PI does not want to hire the private company for Year 3, but he also
> wants to avoid the conflict of having to provide a legal justification
> to the company for not renewing the subcontract.
>
> Laurie
>
> --
>
> Laurie P. Chamness                    Phone:  (843) 953-4973
> Assistant Director                        Fax:  (843) 953-6577
> Research & Grants Admin          E-mail:  xxxxxx@cofc.edu
> College of Charleston
> 66 George Street
> Charleston, SC  29424
>
>
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