What is a CRADA? 6 reasons every small business should know

Created by the Stevenson-Wydler Technology Innovation Act of 1980, CRADAs are a primary tool for the government to partner with the private sector on research and development

Army engineers like Michael Avera (left) hope to collaborate with innovative companies to advance science and technology initiatives that support future soldiers. (David McNally/Army)

A Cooperative Research and Development Agreement, commonly referenced by the acronym CRADA, is a written agreement between a government laboratory and a private party to work together on the research and development of new technologies.

CRADAs are especially valuable to small, high-tech companies, which often struggle with developing contacts inside defense laboratories. But once these firms identify a defense laboratory they want to work with, usually by reading technical papers, a CRADA offers a low-risk opportunity to collaborate and build valuable relationships.

CRADAs are one of the primary tools by which technology and technical expertise can be transferred from federal laboratories to non-federal partners.

And as the Department of Defense’s national partnership intermediary, TechLink facilitates CRADAs with small businesses every year.

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In the United States, these agreements are specifically authorized by the Stevenson-Wydler Technology Innovation Act of 1980 and are guided by federal regulations.

These rules require that federal laboratories give special consideration to small businesses (less than 500 employees) when collaborating with outside groups through CRADAs, as well as to U.S. businesses that will support American jobs by manufacturing subsequent inventions in the United States.

Typically, a CRADA can take about three months to prepare and get signed and covers one to three years of collaborative research. Once signed, the agreements allow defense labs to provide staff, access to facilities, equipment, data, and other resources (but not funding) to a private party with or without repayment.

But the scope of work, which outlines the research to be completed under the CRADA, must support research and development that is consistent with the mission of the defense laboratory.

And CRADAs are not to be confused with a government procurement or acquisition contract, and because they are not, the acquisition procedures that are designed to make government contracting fair and competitive don’t apply to CRADAs.

As the DoD’s national center for technology transfer, TechLink is well versed in facilitating CRADAs. The expert staff of certified licensing professionals at TechLink help businesses form partnerships with defense laboratories through patent licenses and CRADAs, which are beneficial to small businesses for several reasons.

1. R&D Facilities

Most defense laboratories have unique facilities with capabilities beyond what CRADA partners can afford to build. Through a CRADA, a defense lab may allow partners to use their facilities, though they remain subject to the facilities legal and policy requirements. This includes access to specialized equipment. Federal laboratories often have access to equipment and facilities that are of interest to small businesses with limited resources.

Through collaboration, a small business can gain access to what would otherwise be cost prohibitive. Outside partners can leverage the government’s investment in science and technology in support of mutually-beneficial research and development. The defense labs that TechLink works with can perform specific tests and experiments in collaboration with the CRADA partner.

2. Contacts and relationships

While a CRADA may limit the collaborative work between a federal laboratory and a partner from the private sector, the relationships formed often prove invaluable to small businesses.

Under a CRADA, businesses can learn about the government’s needs, and become better positioned to engage on other contracts and opportunities. Joint research through a CRADA allows strong relationships to be built with defense researchers, as well as a thorough understanding of the mission and capabilities of federal laboratories. A CRADA is often an opportunity for a business to grow its network of contacts in the federal laboratory system.

3. Intellectual property

If collaboration under a CRADA results in emergent technology, then the federal laboratory or the collaborator can apply for a patent, accounting for all inventors. Typically, the collaborator would be given the first option to negotiate an exclusive commercial license and the government would retain a right to use the invention for non-commercial purposes.

But through research completed under a CRADA, either party may invent a new technology leading to new intellectual property. This can raise questions with nuanced answers but the general principle surrounding intellectual property remains, what’s theirs is theirs, what’s ours is ours, and what is invented together is shared. And in cases where a party’s interests are no longer being served, the CRADA can typically be terminated 30 days after notice.

4. Pooling talents

After executing a CRADA with a defense laboratory, collaboration gets much easier. CRADAs allow federal researchers, scientists, and engineers to share technical knowledge with private industry, and to accept reimbursement for research conducted under the CRADA. When industry and defense laboratories collaborate, they’re able to utilize the experience, knowledge and skills of all parties involved. A CRADA helps the federal and non-federal researchers to pursue the best solution to the research problem or capability development. This teamwork supports the chances of significant achievement in a shorter time.

5. Innovation

The CRADAs that TechLink facilitates are often directly related to a business’s interest in licensing a patented DoD technology or vice-versa. Sometimes a defense laboratory or center wants to experiment with a patented invention in their facility in ways that could identify new attributes or capabilities that will make the technology valuable for DoD purposes.

And when the parties interact and share ideas, they see and understand how others address research problems, negotiate administrative tasks, and generally operate. This gives all sides a chance to learn from their teammates or counterparts and build upon their capabilities. These new skills can then be put to use in their other work, giving new perspectives and insights that advance technologies.

6. Confidential

CRADAs require that both parties keep the technical data resulting from their collaboration confidential for up to five years. This allows industry partners to work without fear that their efforts will be disclosed to others including competitors.

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