Many funding bodies provide copies of the contracts they require organisations to enter into if their funding application is successful.
These contracts are provided in advance of your application so you know what the funding body expects prior to developing your proposal, writing your application, and entering into a contract.
A contract often details:
- The parties to the contract
- Background to the agreement
- An agreement
- Defined terms (these are noted in the definition section and are capitalised throughout the contract)
- Standard clauses (also known as boilerplate clauses)
- Intellectual Property Rights to ownership of any products that are produced as a result of the program/service
- A schedule.
Read through the contract and note down any clauses:
- Which you are uncertain about or which appear ambiguous
- You partially agree with
- You disagree with.
When reading through the contract, consider the list of organisational needs that you developed in Building Relationships and note any deficiencies. Jot down potential remedies for each deficiency you identify.
If you are unsure about the meaning of any of the contract's clauses or if they appear ambiguous, contact the funding body to seek clarification and/or get legal advice.
Varying the Contract Terms
Check the funding guidelines with the funding body to see whether you may vary the contract clauses.
If contract clauses are able to be varied, construct a contract compliance table indicating the clauses with which you:
- Partially agree
If you partially agree to some of the clauses, indicate exactly what changes you require.
Only seek to vary the clauses which would result in an unfair situation or onerous burden being placed on your organisation. For example, you may want to make sure that you are able to submit activity reports and financial statements at the same time thereby reducing the amount of time that you spend preparing and submitting reports.
If your application is successful, your contract compliance table will form the basis of your contract negotiations with the funding body. You may not be able to introduce new variations at the negotiation stage other than the ones flagged in your application. So make sure you raise all potential issues at the submission stage (see After Submission for more information about negotiating the contract terms).
If the funding body does not permit applicant organisations to make any changes to the contract clauses, consider the contract carefully and make a note of any clauses which may result in an onerous burden being placed upon your organisation. Determine whether you wish to enter into a contract with the funding body by considering:
- Your relationship with the funder
- The potential benefits of the funding
- The likelihood of the burden arising
- Potential outcomes of the burden.
In the risk management section of your proposal, identify the risks in contract clauses, and the likelihood and potential outcomes of the risks eventuating.
Inform the funding body about how you will prevent such risks from eventuating (e.g., highlight the communication and/or project management strategy that you plan to implement to counteract such risk).
- Always speak with the funding body to clarify any ambiguous contract clauses or areas of concern and determine what contract clauses can be varied or deleted.
- Ensure that you inform the funding body of the contract terms you want varied or deleted in your funding application. It may be too late to do this after your application is accepted.
- Consider whether you can incorporate an amount in your budget for contract management services. This may be included as a stand alone consulting cost or as part of an infrastructure cost. Speak with a lawyer or project management firm to find out the costs for such services. Alternatively, liaise with a local government department to see if they can provide such a service or explore other pro bono options.
The websites and resources below may also be useful in explaining common contract terms and matters.
For an overview of ambiguous contract terms, read:
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