How to handle a subawardee that is not performing?

Question

I work at a small for profit company. We won a Fed grant based on some of our previous work, and included in it a university researcher as a subawardee.

The university researcher has done next to nothing. He has been very busy with other engagements and essentially handed off the entire work to a grad student, who has no background in this area and is unable to produce.

For several months, I've tried to right the situation. First I raised the problem. I got a mediocre response, basically telling me that the work is fine, that he doesn't have time to be more involved, that it's taking him away from other responsibilities and lucrative consulting, and that the funding agency is too clueless to know or care anyway, and that my expectations are too high... At one point, he suggested he just cancel his award and refund the money, but that was said in jest. In short, I got no results or even expression of concern.

I then tried to remedy the situation by setting concrete milestones, a project plan, and written goals. The researcher received this well but continued to do next to nothing. The grad student has tried but not been able to do the work. He delivered something which is incomplete, unintelligible, and downright flimsy, certainly nothing we could use in the work or for publication. At this point, I really have nothing to show from their involvement, and am giving up hope that they'll produce anything.

My questions is: How do I handle this? If the contract was with a small business, I'd simply not pay them, and state "You haven't done the job." We'd probably reach some type of agreement and move on. But I imagine that, with a university, its a lot more complicated. The professor can't exactly tell his university "yes, I ended up not having the time to do the work, please cancel it" - I imagine that would get him in a lot of trouble. The university likewise is unlikely to accept my claim and instead, I imagine, would always back their own people. I don't want to make an enemy of the researcher, or to cause him problems at his university, or to get into a protracted lawsuit with the university. But I can't justify handing over the cash to the university when I know they've done nothing. Not to mention that, legally and ethically, I'm responsible to be a good custodian of the funding agency's money.

Given that I've essentially despaired of getting anything from the university researcher, how can I bring this to a controlled landing? Ideally, I'd like to find a way to reach a settlement, giving him a path to back out of the subaward without causing him problems with the university, and avoiding a fight between myself and the university, or myself and the researcher, while reaching a settlement where I don't hand over (most of) the funding.

Handing over the funding would be a real shame, not only because they're not producing anything with it, but, being that their end has not been done, the project will remain incomplete.

(The situation is complicated because the university has already paid him extra summer salary, and I doubt there's a mechanism for him to return it, and, even if there were, I doubt he'd be willing to admit any wrongdoing. In short, I think the conflict and the admission of guilt are greater concerns than the funding itself.)

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UPDATES:

1. Several hundred hours were budgeted for the professor
2. The professor provided next to no deliverables; except for a few emails, all deliverables were provided by the student only
3. The work provided by the student was clearly flimsy and not suitable; any person qualified in the field would reach that conclusion
4. The researcher has done good work in other things; he made no real attempt to hide that, in this case, he basically just handed things off to the student. I've seen his work in other cases, and, if he would even do 25% of his budgeted hours, he could get the job done.
5. The student seems to be aware of all of the above; he seems to realize that he's unable to do it by himself, and that the researcher really isn't too involved; he's made gentle statements of such
6. I've made many attempts over the course of the work to bring this to the researcher's attention or to help correct the problems; none have brought results. I think he simply doesn't have the time and doesn't want to take time away from more important activities (he's practically said as much)

Thank you for the great answers. Some recommended just paying. My question on that is: doesn't that subject me to liability vis-a-vis the funding agency?

Some recommended trying to have gentle conversations, emphathize, etc. I've done that several times now with nothing to show.

Some recommend reporting it to the ethics agency. I certainly don't want a war. I don't want to harm the researcher. I'm not even sure that not doing work you are supposed to do is unethical. I am sure that the university would not want to make their own faculty look bad (it looks bad on them) and would fight any ethics charges tooth and nail.

Answer 1

I'd like to find a way to reach a settlement, giving him a path to back out of the subaward without causing him problems with the university, and avoiding a fight between myself and the university, or myself and the researcher, while reaching a settlement where I don't hand over (most of) the funding.

This is a noble, but likely unrealistic goal. Your two subgoals "don't give them most of the money" and "avoiding a fight" are very much in conflict by now. Based on what you explain, most (all?) of the money has already been spent by the university (on summer salary, on grad student stipends, etc.). Hence, there is no graceful way out for the researcher anymore, as every potential way out will lead to substantial losses for the university. Further, I would expect having to fight the university the legal way for the not-paid-out money, as it seems highly unlikely that they will agree to your viewpoint that they did not deliver except in the utmost extreme cases (basically, the only case I can imagine is when the team of the researcher delivered absolutely nothing, no code, no papers, no study, verifiably did not attend the meetings or teleconferences ...). This does not seem to be the case - shoddy work is a very distinctly different beast than no work, especially to an outside observer who is likely not an expert in your field.

To me, as an outsider, there remains a bit of doubt based on your description whether the work they delivered was indeed bad, or whether you just had a misconception of what you can expect from a university as a partner. Even in this case the researcher may easily be at fault, as (my impression) universities often unreasonably upsell the quality of the work they will be able to produce with the resources they have before entering industrial collaborations. However, funding agencies will typically not agree to withholding money for a reasonable job done by the researcher, even if you expected much more and even if more was (usually somewhat hedgily) promised in the grant proposal.

My questions is: How do I handle this? If the contract was with a small business, I'd simply not pay them, and state "You haven't done the job."

Firstly, think about this not as a contract with a small business, but as a contract with a division of a large enterprise. In this case you would also not "simply not pay them", at least not without reasonable expectation of not having to fight over a law suite.

Secondly, how I have seen underperforming partners being handled is usually in a proactive way. For instance, in a 3-year EU project, we had a partner who delivered very bad work in the first reporting period (i.e., the first year). After a stern discussion with the coordinator, the agreement was reached that this partner's resources (and tasks) for the second and third year were substantially reduced, and a new partner was taken on board to take them over. The money for the first year was paid out in full. As this money was already spent (even if it was spent badly), there was simply no graceful way to take it back again.

I understand that your project is already at its completion, so this isn't an option for you anymore. I am afraid, in this case you can really only choose between fighting over the money (and, honestly, this is a fight you could easily lose) or hand over the money in full and learn from the experience. One thing to learn is that (even, or especially) university projects need management and proactive progress monitoring. A second thing to take away may be that the input that is to be expected from the university needs to be defined orally and in writing in much clearer terms. For instance, it should not have come to you as a surprise that the researcher delegated most of the actual work to a grad student.

Answer 2

Additionally to the perfectly fine answer by @xLeitix, I would like to suggest to try to arrange that the grad student physically is located in your office (preferably full-time, but if that is not possible, then at least three days per week) for the remainder of the project. Then have regular progress meetings (once per day, or at least a few times per week). That will make the communication much easier, and allows you to give much more direct feedback. Unrealistic or unintelligible plans can be identified straight away, and not only after spending days or weeks on them.

Do not expect a lot from the professor. It is clear that your project is at the bottom of his priority list. I doubt that there is much that you can do to change this.

Lessons for next time (with a different institute/professor, I would assume):

• When negotiating the collaboration: make it explicit who will be doing the hundreds of hours of work: a grad student? a post-doc? somebody else?
• Especially when the work is of great importance to you: try to be part of the interviewing committee in case the student still has to be contracted.
• Also make the guidance explicit: how many hours, and by whom (post-doc, overworked professor?).
• make the deliverables as tangible as possible. In case of code, think also of unit tests, code reviews, etc.
• Before starting the project: agree on regular progress meetings (which frequency?), and in which form (face-to-face, telephone, ...)