Greasing the wheels of your government grant contract

You may have just won a grant for your climate business - but don’t expect to see the cash just yet. First, you’ll have to go through a long and arduous contracting process to iron out the details and negotiate the finer points. A lot of the time, these delays are out of your control, but there are also best practices you can follow to avoid unnecessarily drawing out the process. 

To find out how founders can make the contracting process go smoothly, we sat down with Emelie Lucas. Emelie is the Vice President of Grants for Climate Finance Solutions, and has managed over 800 grant applications over the course of her career. 

This is the sixth in a series of pieces we're publishing together with Climate Finance Solutions to provide tactical guidance to climate entrepreneurs around winning and managing grants.

Grant contracting timelines

The wait between finding out you’ve won the award and signing your contract - keeping in mind that this is not when you’ll receive your payment - can be anywhere between three months to a year. SBIR grants tend to have the fastest turnaround, but otherwise, the length of the delay will generally be determined by the size of the award. If it’s a rather large sum, the agency will want time to scrutinize every detail of the contract. If you’re a subrecipient on a project, it could take longer. The primary of the project will need to sort out the primary award details before they can finalize negotiations on sub-agreements.

Avoiding bottlenecks 

1. Get legal advice
If you don’t have legal counsel, get it - preferably someone that’s done government contracts before, and even better if they have expertise with that specific agency. It’s recommended that you do not use your generalist startup attorney to negotiate your Department of Energy contract for you. 

If you don’t have a legal firm, but you have an affiliation with a university, you might be able to use their counsel. Some will have an Innovation and Technology office - a department specifically designed to help postgraduate faculty members get their new technology out into the market - who’ll be familiar with this type of contract. 

Otherwise, you can tap into your network to ask founders who’ve already received these awards what legal team they used, and if they’d recommend them. Even if they haven’t won a grant themselves, they might be able to point you in the direction of someone who has. The Small Business Association can also give you some guidance on what to look out for and where there’s room for negotiation in a contract. 

2. Involve key internal stakeholders early
Don’t let your COO or CEO be the last person to see the contract - chances are they’ll spot something they want to change. If they’re involved from the beginning, their requests might still be turned down, but at least they won’t derail the process at the last minute.

The key people who need to be involved in the process EARLY are the principal investigator, i.e. the person leading the project; your Authorized Organizational Representative, who can sign off on the contract (likely your CEO); and the staff who’ll actually be working on the project (i.e. your technical team). 

3. Make sure everyone has eyes on the small print
All of your key personnel should do a run through of the contract, since different people will pick up on different things. Highlight anything that catches your eye, and triple check the award date, the amount, and the names of the awardees - getting these things corrected once everything is signed will be a huge hassle.

Other things to keep in mind when contracting

1. There might be flexibility on dates
Some of the dates in the contract can be retrospective. For example, if you wanted the contract to start on October 1 but it took until October 15 for everything to get signed, it’s still possible for the project start date in the contract to be October 1, allowing you to start accruing expenses from then.

Some agencies even have a pre-spend period of anywhere between 60 to 90 days. Meaning if there’s a piece of equipment you need to buy, but you haven’t gotten the contract yet, you’ll still be able to purchase it with the grant funding within this period. 

2. Understand the terms you’re agreeing to
By accepting the award, you become subject to the agency’s investigation procedures, so read them carefully. It’s up to you to familiarize yourself with what is and isn’t allowed. For example, with most federal agency grants, there’ll be a restriction around doing your work within the US - if you ship your stuff to China for manufacturing, you’ll get hit with a potential audit and/or a fine, and have to repay those funds. Contracts with federal agencies don’t come with a lot of wiggle room around these restrictions - remember you agreed to the terms of the grant when you submitted your application. 

3. Negotiating a more favorable payment process
Different agencies will pay out the grant on different timelines - it could be upfront, on a schedule, after you provide your annual progress report, or they might reimburse you as you spend. Even if the terms of the payment schedule aren’t negotiable, some of the process might be, such as how long the reimbursement period takes, and whether you can receive advance payments on milestones. The agency won’t give you this leeway unless you ask, but it can help massively with your cash flow, so speak to your program officer or grant management specialist - they’re there to help you.  

In the end, if you’re unable to get funding up front, you can always get a Grant Advance from us.

4. Ask for more time to compensate for delays
Many founders end up not meeting their milestones as quickly as they’d originally planned because of the protracted contracting process. While you can’t ask for more money, in most cases you can get a no-cost extension from the agency if you need more time to hit your milestones.  This is something to keep in mind, and investigate, as you negotiate your milestone schedule in the contract.

5. Check the reporting requirements
The reports you submit could determine whether your funding is actually released to you, and reporting properly will also help to build your rapport with the agency, which will set you in good stead for future awards. So it’s important to start off on the right foot by making sure you understand the reporting requirements. Do you have to provide technical reports, effort reports, and/or financial reports? Are they on an annual basis, semi-annual basis, or is there only one at the end of the project? What are the requirements around effort reporting? Start creating checklists for everything you need to include so you can set up internal reminders. 

The contractual terms around reporting are pretty set in stone, especially on the technical side. But you could be granted some flexibility around when you provide your report and what documentation you have to provide, as long as you talk to the grant management specialist in advance of the reporting deadline. 

Emelie Lucas is the Vice President of Grants for Climate Finance Solutions. Emelie is a Certified Research Administrator (CRA) holding a Master's of Science in Research Administration and Compliance from City University of New York, boasts an impressive track record. With over a decade of expertise in grant management within the realm of public higher education, she has adeptly overseen more than 800 grant submissions, successfully securing a remarkable total of over $1 billion in funding from federal, foundation, and industry sources. Ms. Lucas's proficiency spans pre- and post-award grant processes, positioning her as a valuable asset in the grants domain.