Research Conflict of Interest

Among its many missions, the university seeks to foster interactions with the private sector due to the ever-increasing importance of transforming interdisciplinary and translational research into usable technologies and scholarship that benefit the public. There is, however, the potential for financial conflicts of interest in such collaborations.

The purpose of these standard operating procedures (SOPs) is to establish standards to provide a reasonable expectation that the design, conduct, and reporting of sponsored projects will be free from bias resulting from an Investigator’s financial conflict of interest.

A financial conflict of interest (FCOI) describes a situation in which an individual’s professional judgment is at risk of being biased due to their having a significant financial interest in an outside entity. Having a financial conflict of interest does not mean the person is biased or has done something wrong – the term refers to the risk of bias, whether or not bias or harm has actually occurred.

State law and the federal regulations for sponsored projects allow for certain financial conflicts of interest to exist when specified conditions are met, as outlined in these SOPs. In most cases, those conflicts can be managed appropriately, rather than eliminated, thereby enabling research with objective and integrity.

Transparency and appropriate oversight of relationships with external entities promote and safeguard the interests and reputation of the university and its employees, and they assure research sponsors, participants, and the broader public that the possibility for personal gain has not biased the university’s sponsored projects.

These SOPs must be read alongside the Disclosure of Additional Activities and Interests policy, No. XXXXX, and apply to all employees who will participate in sponsored projects as “Investigators” (see section 3.1, “Definitions”). All faculty, staff, and employed students, whether full or part-time, are considered to be employees for purposes of these SOPs.

If an employee involved in a sponsored project at the university does not meet the Investigator definition but has a significant financial interest related to the project, the employee should contact the Director of the Research Conflict of Interest (COI) Program for a reportability assessment.

Employees who manage or administer research and the Office of Sponsored Programs (OSP) have responsibilities under these SOPs. Note that OSP maintains internal procedures related to organizational conflicts of interest.

These SOPs applies to all sponsored projects, regardless of sponsor. The policy is compliant with applicable federal FCOI regulations (see section 3.2, “References”). Although the federal FCOI regulations exempt Phase I SBIR/STTR programs from the requirements outlined in these SOPs, university policy does not exempt these programs from review or management.

1.1 Responsibilities

Investigators are responsible for taking FCOI training and completing an electronic disclosure of additional activities and interests as outlined in the university’s disclosure policy (No. XXXXX).

The Office of the Senior Vice President for Research and Innovation is responsible for overseeing the implementation of these SOPs, and the Director of the Research COI Program is responsible for their administration.

1.1.1  Training Responsibilities

Investigators must complete FCOI training prior to the expenditure of sponsored project funds and at least every four years thereafter. Investigators will be notified when their training requirement is due and must promptly complete it. Funds from new awards will be held until the training requirement has been met. See the university’s website for required research trainings for more information.

Investigators must complete FCOI training immediately (within 30 days or as outlined by the Director of the Research COI Program) in the following circumstances:

1.  An Investigator is new to the university and is joining an ongoing sponsored project;
2.  These SOPs is revised in a way that affects the requirements of Investigators; or
3.  The university finds that an Investigator is out of compliance with these SOPs or a sponsored project’s FCOI management plan.

1.1.2  Disclosure Responsibilities

Investigators are responsible for disclosing to the university any significant financial interest (SFI) held by themselves or an immediate family member. SFIs include payments greater than or equal to $5,000 or any equity value held by the Investigator or a member of their immediate family in the past 12 months from the disclosure date that reasonably appear to be related to the Investigator’s institutional responsibilities and could directly and significantly affect the design, conduct, or reporting of research. See the SFI definition for more information. Note that Investigators should resolve any doubt about disclosing in favor of disclosure.

Investigators will disclose SFIs as a part of their disclosure to the university, consistent with the university’s disclosure policy (No. XXXXX) and using the [new system name TBD]. The requirement to disclose must be met within 30 days of hire, annually as prescribed by the university, prior to engaging in any new activities, and within 30 days of discovering or acquiring a new SFI (see section 3.0, “Non-compliance”). Funds from new awards will be held until the disclosure requirement has been met by all Investigators on the project.

As a general policy statement, an Investigator may not serve as the Principal Investigator (PI) on both sides of a sponsored project if they hold a greater than 3% equity interest in the contracting entity. For an exception to be possible, the proposed arrangement must be approved by the department in advance of the proposal’s submission and by the Management Plan Advisory Committee once the sponsor approves and funding is received by the university. Committee approval is typically possible if there is a justified, demonstrable need for this arrangement. Investigators are strongly encouraged to contact the Director of the Research Conflict of Interest Program during the proposal development stage.

Note that an Investigator’s disclosures to the university do not alleviate their obligation to disclose to sponsors when proposing for or receiving funding. These disclosures allow sponsors to properly assess the capacity of the individual to carry out the proposed project and any potential overlap or duplication with other projects. Principal investigators, project directors, and other senior/key personnel should review the guidance on OSP’s website, which outlines the current requirements for disclosing to federal sponsors.

2.2   FCOI Determination

Investigators on sponsored projects must disclose SFIs for the university, through its designated university official, to identify and manage financial conflicts of interest to promote objectivity. The Director of the Research COI Program (or designee) is the designated university official responsible for making FCOI determinations for sponsored projects.

An FCOI assessment is a factual evaluation based on the existence of certain parameters that could lead to biased judgement. An FCOI is possible if the SFI held by the Investigator or immediate family member is related to the sponsored project, and an Investigator's SFI is related to the sponsored project when the designated university official reasonably determines that the SFI could be affected by the project or is in an entity whose financial interest could be affected by the project. The designated university official may involve the Investigator in their determination of whether an SFI is related to the sponsored project.

If the SFI held by the Investigator or immediate family member is related to the sponsored project, then the designated university official must determine whether the SFI could directly and significantly affect the design, conduct, or reporting of the project. If so, an FCOI exists and the designated university official must ensure that a plan to manage the SFI is developed and implemented to provide a reasonable expectation that the design, conduct, and reporting of the project will be free from bias resulting from an Investigator’s financial conflict of interest.

All disclosed SFIs will be reviewed by the Director of the Research COI Program (or designee) who will ensure that a plan is put into place to promote objectivity, the FCOI is reported, and compliance is monitored as needed.

2.3   Management Plan Advisory Committee

Disclosed SFIs are reviewed by the Management Plan Advisory Committee (MPAC) if determined by the Director of the Research COI Program to be necessary due to the level of risk presented with sponsored projects. The MPAC is a standing committee of the university composed of faculty, administrative personnel, and ex-officio members that is convened by the Director of the Research COI Program who serves as chair. The MPAC considers an Investigator’s disclosure within the context of the project and provides recommendations to the program director for managing, reducing, or eliminating the FCOI. Committee members, appointed by the Senior Vice President for Research and Innovation for 3-year terms, must adhere to applicable rules of confidentiality pertaining to FCOI review as outlined to the member by the Director of the Research COI Program.

2.4   FCOI Management Plan

If the designated university official determines that an FCOI exists, they will develop a plan for managing the FCOI that must be adopted prior to the start of the project. Funding for the related project will not be released until the management plan has been implemented and agreed to by the Investigator and other relevant individuals as well as all necessary approvals for the Act being obtained (see section 2.7, “State Conflict of Interest Act - Exception Process for Sponsored Project Contracts”). If funding has already been released, it might be frozen until a management plan is agreed to by the Investigator and other relevant individuals.

The designated university official will develop the management plan based on state and federal requirements and input from the MPAC, the Investigator with an FCOI, and other relevant stakeholders, as needed. The management plan aims to mitigate the risk of bias, promote objectivity, and provide academic and professional protection for graduate students and postdoctoral scholars, respectively.

Mitigations will be based on a risk assessment of the FCOI scenario. Possible management plan components include, but are not limited to:

1.  Disclosure of the SFI in publications and presentations of results from the project;
2.  Disclosure of the SFI to project colleagues, postdoctoral scholars, and graduate students;
3.  Recommendation of disclosure of the SFI to prospective research participants (subject to IRB consideration);
4.  Appointment of an independent monitor to take appropriate measures, to the extent possible, to protect the design, conduct, and reporting of the project against potential bias resulting from the Investigator’s FCOI;
5.  Appointment of an independent monitor to take steps, to the extent possible, to protect the academic and professional progress of graduate students and postdoctoral scholars, respectively;
6.  Modification of the project plan or personnel roles to promote objectivity;
7.  Appointment of an independent monitor to review project expenditures;
8.  Reduction or elimination of the SFI.

There are circumstances that require the Investigators to contact the program (for example, graduate students being added to the project when there was no graduate student involvement when the plan was initially put into place). As described in the plan, Investigators are responsible for contacting the Research COI Program within 30 days when changes to the management plan are needed.

Investigators are responsible for being accurate, honest, and transparent regarding their external relationships and financial interests in all matters, internal and external to the university, regardless of the disclosure requirements outlined in these SOPs or additional disclosure strategies instituted by the university in management plans. This includes but is not limited to disclosing completely and accurately in accordance with the disclosure requirements of journals, conferences, professional associations, and government agencies.

2.5   FCOI Reporting

Once the management plan has been implemented and agreed to by the Investigator as well as all necessary approvals for the Act being obtained, the designated university official will report the FCOI determination and the agreed upon management plan to the following, as appropriate:

1. OSP/the sponsor;
2. The Human Research Protection Program (HRPP) or Animal Care and Use Program (ACUP) for review by the IRB or Institutional Animal Care and Use Committee (IACUC), respectively;
3. The external IRB serving as the IRB of record for the research;
4. The FCOI point of contact at Carilion Clinic or Children’s National Hospital if the Investigator is primarily appointed there.

The Research COI Program will notify OSP that the contract may be executed and funding may be distributed, and the project may begin. Federal sponsors exempt Phase I SBIR/STTR projects from the FCOI reporting requirement. Otherwise, the policy of the Public Health Service (PHS) requires FCOI reporting through eRA Commons. The Department of Energy (DOE) requires FCOI reporting to the program office on a per-contract basis. The policies of the National Science Foundation (NSF) and the National Aeronautics and Space Administration (NASA) require FCOI reporting only if the university finds that it is unable to satisfactorily manage an FCOI or if the university determines that an NSF- or NASA-funded project will proceed without an FCOI management plan.

The university must apply relevant FCOI requirements of the originating sponsor to subrecipients. For FCOI reports related to subrecipients on federally sponsored projects, see section 2.9.1, “Subrecipients”.

2.6   FCOI Management Plan Compliance

While the Investigator with an FCOI bears primary responsibility for carrying out the plan, the Investigator’s department head and others asked to participate in oversight must monitor compliance as described in the management plan.

The university monitors compliance with management plans on an ongoing basis. The Investigator and individuals engaged in oversight must periodically provide an update on the fulfillment of the management plan’s terms upon request of the Research COI Program. If the university finds the Investigator is not in compliance with their management plan, the Investigator is responsible for complying with all corrective actions, enforcement mechanisms, or sanctions imposed by the university (see section 3.0, “Non-compliance”).

2.7   State Conflict of Interest Act - Exception Process for Sponsored Project Contracts

As an agency of the Commonwealth of Virginia, all university employees are subject to the Code of Virginia’s “State and Local Government Conflict of Interests Act” (or “the Act”). The Act prohibits employees from having a personal interest in a university contract, other than their own employment contract. This prohibition applies even if the person is not a signatory of the contract.

Employees will disclose personal interests as a part of their disclosure to the university, consistent with the university’s disclosure policy (No. XXXXX). Once an employee discloses to the university their personal interest in a contract for a sponsored project, the Director of the Research COI Program will determine whether an exception under the Act is available and assist the employee in applying for the approvals needed to qualify for an available exception.

The usual exception process for sponsored project contracts is found in the Act at Section § 2.2-3106 C. 8. An exception for a prohibited conflict of interest related to a sponsored project contract is often possible if the following criteria are met:

1. The contract involves research and development and/or commercialization of intellectual property (which includes SBIR/STTR subawards);
2. The employee’s personal interest has been disclosed in the [new system name TBD] and the required approvals have been received prior to the university entering into a contract with the entity;
3. A management plan is agreed to by the employee, which includes the conditions of the state law exception that must be addressed by the conflicted employee; and
4. The employee promptly files a disclosure statement (called the Statement of Economic Interests) initially and annually thereafter as instructed by the Commonwealth of Virginia until all relevant sponsored project contracts close.

Following the President’s approval, the Research Conflict of Interest Program will notify Human Resources, who will contact the conflicted employee regarding the initial disclosure statement required by the Act. The conflicted employee is responsible for following all requirements of the state law exception process as outlined in their management plan and § 2.2-3106 C. 8. See section 3.1, “Definitions”, for more information about a “personal interest in a contract”.

2.8   Complying with Related Policies

Investigators must also comply with the university’s disclosure policy (No. XXXXX) and related policies, as applicable, like the university’s policies for gifts. Note that gifts or donations of any kind, including equipment, must go through the proper channels and never to the employee directly, consistent with the university’s policies (No. 12110, 12115).

Investigators may only use the university’s facilities and resources for university business. Use of the university’s facilities or resources on behalf of an external entity is not permitted unless the university is performing the scope of work authorized through an award or subaward that is fully executed before work begins. Only the documented scope of work is authorized to be performed using the university’s facilities and resources.

2.9   Additional Requirements of the Federal Regulations for the Designated University Official

The procedures in this section are for the designated university official. This section applies to federally sponsored projects (as indicated) and sponsoring entities that are adherent to the federal FCOI regulations.

During an ongoing PHS or DOE-funded project, when an Investigator who is new to participating in the project or an existing Investigator discloses a new SFI to the university, the SFI will be reviewed within 60 days by the designated institutional university official to determine whether an FCOI exist. If so, a management plan will be implemented on at least on interim basis.

For PHS-funded and DOE-funded projects, if required by the terms and conditions of the award, the designated university official must submit an FCOI report to OSP/the sponsor: 1) prior to the university’s initial expenditure of funds, 2) within 60 days of identifying an FCOI for an added Investigator or a new FCOI for an existing Investigator, and 3) annually for the duration of the project period.

When the designated institutional university official identifies an SFI that was not disclosed, identified, reviewed, or managed in a timely manner, the official will review and determine whether the SFI is a financial conflict of interest and, if so, the FCOI must be reported to the PHS or DOE within 60 days. The official will implement, on at least an interim basis, a management plan specifying the actions that have been, and will be, taken to manage the FCOI going forward. Within 120 days of the non-compliance determination, the university will complete and document a retrospective review to determine whether any PHS or DOE-funded project conducted during the time period of the non-compliance was biased in the design, conduct, or reporting of such project. The designated institutional university official will enlist an independent individual to assist in making this assessment. If bias is found, the PHS awarding component or DOE will be notified promptly and a mitigation report will be submitted by the Director of the Research COI Program. Based on the results of the retrospective review, if appropriate, the official will update the previously submitted FCOI report, specifying the actions that will be taken to manage the FCOI going forward. Phase I SBIR/STTR projects are exempt from this process.

The designated university official is required to submit FCOI reports of Investigators, consistent with section 2.5, “FCOI Reporting”. The designated university official must submit FCOI reports to the direct sponsor if the university is a subrecipient on a federally sponsored project and must submit FCOI reports of collaborating Investigators from subrecipient institutions to the sponsor consistent with the sponsor’s requirements.

The designated institutional university official must maintain records related to SFI disclosure and FCOI management for a minimum of 3 years after final expenditures reporting. As per PHS and DOE regulations, under certain criteria, the designated institutional university official will make available required information about an FCOI held by an Investigator on a PHS-funded or DOE-funded project to a requestor within 5 business days of a request.

2.9.1   Subrecipients

The university must apply relevant FCOI requirements of the originating sponsor to subrecipients. For projects sponsored by PHS, NSF, DOE, or NASA, OSP is required to verify, by way of a written agreement with subrecipient institutions, whether these SOPs in its entirety or the FCOI policy of the subrecipient will apply to its Investigators who are collaborating with Virginia Tech Investigators.

As a rule, the university will require subrecipient institutions to maintain and administer their own FCOI policies and will only in exceptional circumstances assume primary responsibility for directly soliciting and reviewing subrecipient disclosures to make an FCOI determination.

If the subrecipient uses these SOPs, the subrecipient must adhere to procedures and time frames established by the university. The subrecipient will enter into a written agreement requiring its Investigators to report SFIs to the university and complete the university’s FCOI training pursuant to these SOPs and associated procedures. Only the SFIs related to the subrecipient Investigators’ responsibilities on the project must be disclosed to the university. See the Research COI Program’s website [TBD] for information about subrecipient processes for financial conflicts of interest.

The following are examples of non-compliance with these SOPs: failure to complete the FCOI training requirement in a timely manner, failure to comply with an approved FCOI management plan, and failure to submit a timely SFI disclosure. The Director of the Research COI Program will oversee non-compliance related to FCOI training, FCOI management plans, and late SFI disclosures related to ongoing sponsored projects.

The Director will work cooperatively with employees and others to resolve any minor issues of non-compliance. Non-compliance concerns that go beyond minor issues will be forwarded for appropriate action to the Investigator’s Department Head and senior management area as needed. The Director of the Research COI Program will refer non-compliance to the Office of Audit, Risk, and Compliance (OARC), IRB, IACUC, OSP, and the sponsor, as applicable. PHS and DOE-specific requirements for instances of non-compliance are addressed in section 2.9, “Additional Requirements of the Federal Regulations for the Designated University Official”.

Corrective actions for non-compliance may include an annual certification of the employee’s SFIs, disclosing the FCOI in each public presentation of the results of the project and requesting an addendum to previously published presentations of the results, suspension or termination of the project and/or funding, and/or removal from the project.

Disciplinary action for non-compliance will be decided in accordance with applicable disciplinary policies and procedures as outlined in the Faculty Handbook, the Staff Handbook, and other relevant policies. Violations of the Act can result in imposition of both civil and criminal penalties and might constitute malfeasance in employment.

3.1 Definitions

• Business means a corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, trust or foundation, or any other individual or entity carrying on a business or profession, whether or not for profit.
• Contract means any agreement to which the university is a party.
• Disclosure means the mechanism for employees to communicate specific information about their reportable external relationships and financial interests to the university.
• Employee means all faculty, staff, or employed students, whether full or part-time.
• Entity means any organization outside of the university and its affiliated corporations, whether domestic or foreign, public or private, non-profit or for-profit.
• Equity interest means stock, stock options, and all other ownership interests; has a value if publicly traded.
• Financial conflict of interest (FCOI) means a significant financial interest that could directly and significantly affect the design, conduct, or reporting of research.
• Financial interest means anything of monetary value, whether or not the value is readily ascertainable.
• Immediate family member means a spouse and any other person who resides in the same household and is a dependent of the employee.
• Institutional responsibilities mean the professional responsibilities an Investigator has by virtue of being a university employee, which might include activities such as research, research consultation, teaching, professional practice, institutional committee memberships, and service on panels or boards. For subrecipient Investigators, ‘institutional responsibilities’ refers to the work being done for the university under the terms of the subaward or subcontract.
• Investigator means the Principal Investigator, project director, and any other person, regardless of title or position, who is responsible for the design, conduct, or reporting of research. Exceptions include personnel or students whose research activities are directly supervised.
• Management Plan means the documented actions taken to address the FCOI to promote objectivity in the sponsored project.
• Payment means any remuneration from entities other than the university, including but not limited to:
  • Salary;
  • Payments for services not otherwise identified as salary (for example, consulting fees, honoraria);
  • Intellectual property payments;
  • Travel reimbursements or payments on one’s behalf (disclosures must include the sponsor/organizer, purpose of the trip, destination, and duration);
  • Income from investment vehicles, such as mutual funds and retirement accounts, if the investment decisions made in these vehicles are directly controlled by the Investigator or immediate family member; and
  • Venture (or other) capital financing.
• Personal interest means a financial benefit accruing to an employee or to a member of their immediate family that entails ownership in a business exceeding 3% of the total equity of the business or salary or other payments from the business that exceeds, or may reasonably be anticipated to exceed, $5,000 annually.
• Personal interest in a contract means an employee has a personal interest in a business that is a party to the contract.
• Significant financial interest (SFI) means payments greater than or equal to $5,000 or any equity value held by the Investigator or a member of their immediate family in the past 12 months from the disclosure date that reasonably appears to be related to the Investigator’s institutional responsibilities and could directly and significantly affect the design, conduct, or reporting of research.  SFIs do not include:
  • Payments or equity unrelated to the Investigator’s institutional responsibilities;
  • Payments ≤$5,000;
  • Income or payments from the university or Virginia Tech Intellectual Properties, Inc. (VTIP);
  • Travel paid with university funds, including sponsored projects; or
  • Income from investment vehicles, such as mutual funds and retirement accounts, if the investment decisions made in these vehicles are not directly controlled by the Investigator or immediate family member.
• Sponsored project means a planned university teaching, training, service, or research project that is supported by an extramural award from any funding source outside of the university and its affiliated corporations.
• Subrecipient means an entity or individual receiving a subaward or subcontract from the university to carry out a portion of a federally sponsored program.

3.2  References

1. Code of Virginia, State and Local Government Conflict of Interests Act
   https://law.lis.virginia.gov/vacodepopularnames/state-and-local-government-conflict-of-interests-act/
2. DOE, Interim Conflict of Interest Policy Requirements for Financial Assistance
   https://www.energy.gov/sites/default/files/2021-12/Interim%20COI%20Policy%20FAL2022-02%20to%20SPEs.pdf
3. Disclosure of Additional Activities and Interests policy, No. XXXXX
4. NASA, Conflict of Interest Policy for Recipients of NASA Financial Assistance Awards https://www.federalregister.gov/documents/2023/08/31/2023-18802/conflict-of-interest-policy-forrecipients-of-nasa-financial-assistance-awards
5. NSF, Conflict of Interest Policies
   https://www.nsf.gov/pubs/policydocs/pappg19_1/pappg_9.jsp
6. PHS, Promoting Objectivity in Research
   https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=992817854207767214895b1fa023755d&rgn=div5&view=text&node=42:1.0.1.4.23&idno=42#sp42.1.50.f