DEPARTMENT OF THE NAVY

OFFICE OF NAVAL RESEARCH

BOSTON REGIONAL OFFICE
495 SUMMER STREET, SUITE 627
BOSTON, MA 02210-2109
IN REPLY REFER TO:

August 17, 2020

Mr. Glen Shor

Vice President for Finance
Office of the Executive Vice President & Treasurer
Massachusetts Institute of Technology
77 Massachusetts Ave
NE49-4100
Cambridge, MA 02139-4307

Subject: MIT Master Small Business Subcontracting Plan Approval 2020-2023

Mr Shor

Approval of the Massachusetts Institute of Technology’s “Master Small Business Subcontracting Plan” is hereby
granted through August 17, 2023. This approval is based upon review the Institute’s plan dated as “August 11,
2020” and its adherence to the requirements detailed under FAR 19.704.

In accordance with FAR 19.704, Master plans shall be effective for a 3-year period after approval by the contracting
officer; however, it is incumbent upon contractors to maintain and update master plans. Any changes or required
updates to a master plan are not effective until approved by the contracting officer.

If there are any questions, please free to contact me at eric.garfield@navy.mil or 617-753-4617.

Sincerely
Digitally signed by
GARFIELD.ERIC GARFIELD.ERIC.H.1239504
198
.H.1239504198 Date: 2020.08.17 11:51:18
-04'00'

Eric Garfield
Administrative Contracting Officer

Cc: Victoria Grafflin, MIT Manager, Research Subawards

 Massachusetts Institute of Technology
77 Massachusetts Avenue
Cambridge, Massachusetts 02139–4307

August 11, 2020

MASTER SMALL BUSINESS SUBCONTACTING PLAN

The Federal Acquisition Regulations (FAR) Part 19 identifies the policy of the United States government
(“Government”) to provide maximum practicable opportunities for small and diverse businesses to
participate in performing contracts awarded by federal agencies. The Small Business Administration
(“SBA”) establishes small business size standards on an industry-by-industry basis. These small business
concerns include small businesses, veteran-owned small businesses, service-disabled veteran-owned
small businesses, HUBZone small businesses, small disadvantaged businesses, and women-owned small
business concerns (collectively, hereinafter referred to as either “small businesses” or “SBCs”).

In support of the Government’s policy, MIT maintains a supplier diversity policy. This policy accords the
small businesses detailed above the maximum practicable opportunity to participate in contracts awarded
to MIT by the Government. 1 The policy establishes the duties of the Small and Diverse Business
Program Coordinator, including conducting outreach to small and diverse businesses and providing
resources to the MIT community as they develop their subcontracting plans. In support of the policy,
MIT’s Research Administration Services Department provides guidance for the MIT community.

MIT is the recipient of many Government contracts, which are subject to the provisions of FAR 19.704,
“Subcontracting Plan Requirements” and the implementing contract clause, FAR 52.219-9, “Small
Business Subcontracting Plan.”

FAR 19.701 defines “Master subcontracting plan” as a subcontracting plan that contains all the required
elements of an individual subcontracting plan, except goals, and is incorporated into individual
subcontracting plans when the master has been approved. FAR 19.704 allows contractors to establish a
master plan that contains all of the elements required by 52.219-9, except goals.

In accordance with 52.219-9(d), this Master Subcontracting Plan consists of the following parts:

1
A copy of the policy as of February 2020 is provided in Appendix A. See 6.05, “Supplier Diversity and Small
Business Programs”.
 Massachusetts Institute of Technology

FAR 52.219-9(d) 1-4: Addressed in Appendix B. Goals are developed on a contract-by-contract

basis, details of which are included in the Small Business Plan template.

FAR 52.219-9(d) 5-15: Addressed in Sections 1-8 below, which each reference the corresponding
FAR clause requirement.

1. Description of Method Used to Develop Subcontracting Goals (see FAR 52.219-9(d)(4))

MIT’s method used to develop subcontracting goals consists of either Department administrator(s) or
principal investigators (“PI”) considering sources known to the PI or other collaborators and/or consulting
with MIT’s Office of the Vice President for Finance (“VPF”) to identify potential SBCs who offer goods
or services that meet the requirements of the prime award. Goals are developed on a contract-by-contract
basis, details of which are included in the Small Business Plan template (see Appendix B). As further
described in the paragraph below, the Department works with VPF and MIT’s Research Administration
Services (“RAS”) 2 to complete Appendix B.

When MIT is completing Appendix B and submitting a proposal for a Federal contract, Department
administrators and PIs consult and work with RAS to understand the potential for spending with SBCs
predicated on an evaluation of the resources required to complete the work. RAS assists Departments in
estimating the amount of SBC spending that may be realistic as a goal, developing the corresponding
subcontracting goal, and completing the Small Business Plan template based on those goals.

RAS then prepares a draft Small Business Plan and circulates to the Department administrator who may
discuss with the PI and then confirms back to RAS. RAS then either approves the Small Business Plan or
recommends changes that will put the Small Business Plan in final form.

If, during the development of a Small Business Plan or during performance of the Federal contract, the PI
or Department needs assistance or guidance in identifying SBCs to purchase from, they are encouraged to
contact RAS and/or VPF for further guidance. A description of MIT’s methods for identifying potential
small business sources is described in Section 2 below.

2
Formerly known as MIT’s Office of Sponsored Programs.
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 Massachusetts Institute of Technology

2. Description of Methods Used to Identify Potential Sources for Solicitation Purposes and
Ensuring Continued Small Business Concern Participation (see FAR 52.219-9(d) (5))

MIT’s method for Departments and purchasers to use in identifying potential sources for solicitation
purposes and goal setting are described below:

 MIT Supplier Databases. MIT has developed and maintains two (2) electronic
databases that Departments can utilize to identify potential sources for solicitation. The
first database identifies MIT’s Preferred Suppliers, which is searchable by commodity
and size status (“Supplier Search”). The second database identifies suppliers MIT has
used in past procurements, which is searchable by classification and size status (“MIT
Small Business Enterprises Database”).

 MIT Vendor Fairs. MIT periodically hosts vendor fairs focused on certain commodities,
which highlight small and diverse businesses. Internal purchasers are invited to
participate in these fairs to identify suppliers for their needs.

To help support the methods identified above, VPF’s own method used to identify potential sources and
maintain source lists include searching and updating against the following external databases:

 System for Award Management (SAM)

 Massachusetts Supplier Diversity Office (SDO) of the Operational Services Division
(OSD)
 Cambridge Economic Development Division
 SBA’s Dynamic Small Business Search (DSBS)
 SBA Procurement Technical Assistance Centers (PTAC)
 Outreach and networking with small and minority business associations (WBENC,
NMSDC, etc)
 Solicitation processes (e.g., RFI, RFP) to seek opportunities from offerors for use of
Small, Disadvantaged, Women-Owned and Veteran Owned Business as subcontractors or
suppliers

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In addition, MIT contracts with Dun & Bradstreet (D&B) to identify SBCs. Three times a year, MIT
sends D&B a file containing MIT suppliers to be screened. D&B returns an updated file to MIT that
includes SBC classifications. MIT updates its Vendor Master File with this information, which is used for
supplier selection, reporting, and to maintain a master list of its small/underutilized suppliers that is made
available to the MIT community and supports the efforts noted above.

3. Role of indirect costs on establishing subcontracting goals (see FAR 52.219-9(d)(6))

MIT facilities and administration (F&A) indirect costs are incurred for common or joint objectives and
therefore typically cannot be readily and specifically identifiable to a particular contract. MIT does not
include indirect costs in establishing subcontracting goals; MIT only includes anticipated purchase orders
and subcontracts in establishing subcontracting goals. For general purchasing, MIT’s policy contained in
Appendix A states MIT’s commitment to supporting supplier diversity and small and underutilized
businesses in procurement practices.

4. Name of the individual employed by the Offeror who will administer the Offeror's
subcontracting program, and a description of the duties of the individual (see FAR 52.219-
9(d)(7))

Program administration responsibilities are jointly administered by individuals from MIT’s Research
Administration Services (“RAS”) and the Office of the Vice President for Finance (“VPF”).

The designated individuals from each office who will administer the subcontracting program include the
following, and specific details related to their functions are identified throughout this Plan:

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 Massachusetts Institute of Technology

Function Designated Individual

Compliance and Reporting Victoria Grafflin
Manager, Research Subawards
Research Administration Services
Massachusetts Institute of Technology
77 Massachusetts Avenue, NE18-901
Cambridge, MA 02139-4307
(617) 258-8015
Grafflin@mit.edu
Supplier Diversity Emma C. Homstad
Small and Diverse Business Program Coordinator
Office of the Vice President for Finance
Massachusetts Institute of Technology
77 Massachusetts Avenue, NE49-4000
Cambridge, MA 02139-4307
(617) 715-4288
ehomstad@mit.edu

5. Efforts to Assure Equitable Opportunity of Small Business Concerns Including VOSB,

SDVOSB, HZ, SDB, and WOSB to Compete for Subcontracts (see FAR 52.219-9(d)(8))

The persons primarily responsible for ensuring that small business concerns have an equitable opportunity
to compete for subcontracts are the principal investigator (PI), and the PI’s Department, Laboratory or
Center (DLC) administrative personnel. This effort is not led by a central office. RAS and VPF provide
resources and assistance to the PIs and the DLCs as they undertake these efforts. Efforts by each office to
assure equitable opportunity of small business concerns to compete for subcontracts are identified in the
sections below.

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 Massachusetts Institute of Technology

VPF Efforts:

VPF’s policies and procedures published on the VPF website outline MIT’s commitment to diversity and
inclusion and encourage PIs and DLCs to use resources available to consider SBCs. VPF’s efforts to
assure compliance with these policies and procedures include the following:

 Publicizing resources available to the MIT community through the VPF Statement, which is a
monthly newsletter
 Providing information and resources during VPF Quarterly Procurement Trainings
 Maintaining VPF’s internal website to provide information on MIT’s program, related policies,
and commitment to diversity and inclusion

RAS Efforts:
When MIT is submitting a proposal for a Federal contract, during its negotiation, or at other appropriate
times, RAS will:

 Remind the PI and DLC of their obligations to identify and utilize small business concerns, and
to develop a Small Business Plan
 Promote to the DLC administrator and PI, during the development of the Small Business Plan for
a Federal contract, the resources available for identifying SBCs that can meet the procurement
needs of the project.
 RAS encourages PIs and DLCs to make use of these resources to purchase from SBCs whenever
possible.
 RAS will encourage the PI or DLC to contact the Small and Diverse Business Program
Coordinator in VPF if during the development of a Small Business Plan, or during performance
of the Federal contract, the PI or DLC needs assistance or guidance in identifying
small/disadvantaged business concerns from which to purchase.

Assurances MIT will include flow down provisions in its subcontracts (see FAR 52.219-
9(d)(9), (14), (15))
MIT will include FAR clause 52.219-8, Utilization of Small Business Concerns, in all subcontracts that
offer further subcontracting opportunities ensuring all subcontractors (except small business concerns)
that receive subcontracts in excess of $700,000 ($1,500,000 for construction) will adopt a plan that
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complies with the requirements of FAR Clause 52.219-9, Small Business Subcontracting Plan. MIT will
also include other clauses as required by the applicable prime contract, such as but not limited to FAR
52.232-40, to assure payment to its small business subcontractors on time and in accordance with the
terms and conditions of the underlying subcontract, and provide notice when the Institute makes either a
reduced or an untimely payment to a small business subcontractor. MIT will not prohibit a small business
subcontractor from discussing with the Contracting Officer any material matter pertaining to payment to
or utilization of a subcontractor.

6. As required under this Plan, MIT assures that (see FAR 52.219-9(d)(10)):

(i) RAS and VPF will cooperate in any studies or surveys as may be required;
(ii) RAS and VPF will submit requested and/or required periodic reports so that the
Government can determine the extent of compliance with the subcontracting plan;
(iii) RAS will include subcontracting data for each order when reporting subcontracting
achievements for indefinite-delivery, indefinite-quantity contracts with individual
subcontracting plans where the contract is intended for use by multiple agencies;
(iv) RAS and VPF will ensure that its subcontractors with subcontracting plans agree to
submit the ISR and/or the SSR in accordance with the applicable regulations;
(v) RAS, and VPF with the assistance of RAS, will provide its prime contract number, its
unique entity identifier, and the e-mail address of the official responsible for
acknowledging receipt of or rejecting the ISRs, to all first-tier subcontractors with
subcontracting plans for use in their reports; and
(vi) RAS and VPF will require that each subcontractor with a subcontracting plan provide to
its subcontractors with subcontracting plans the prime contract number, its own unique
entity identifier, and the e-mail address of its official responsible for acknowledging
receipt of or rejecting the ISRs.

7. Records (see FAR 52.219-9(d)(11))

The following records will be maintained in the administration of this Plan by the Small and Diverse
Business Program Coordinator within VPF:
(i) A database that identifies small business, veteran-owned small business, service-disabled
veteran-owned small business, HUBZone small business, small disadvantaged business,
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 Massachusetts Institute of Technology

and women-owned small business concerns used by the Institute in its operations or
research.
(ii) Organizations contacted in an attempt to locate sources that are small business, veteran-
owned small business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business, or women-owned small business concerns.
(iii) Process to maintain records on each subcontract solicitation, where applicable, resulting
in an award of more than $150,000, indicating-
A. Whether small business concerns were solicited and, if not, why not;
B. Whether veteran-owned small business concerns were solicited and, if not, why
not;
C. Whether service-disabled veteran-owned small business concerns were solicited
and, if not, why not;
D. Whether HUBZone small business concerns were solicited and, if not, why not;
E. Whether small disadvantaged business concerns were solicited and, if not, why
not;
F. Whether women-owned small business concerns were solicited and, if not, why
not;
G. And if applicable, the reason award was not made to a small business concern.

(iv) Records of outreach efforts with:

A. Trade associations;
B. Business development organizations;
C. Conferences, events, and trade fairs to locate small, HUBZone small, small
disadvantaged, service-disabled veteran-owned, and women-owned small
business sources; and
D. Veterans service organizations

(v) Records of internal guidance and promotion of VPF’s policies provided to on-campus
buyers through-

A. Workshops, seminars, training, etc.; and

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B. Monitoring performance to evaluate compliance with the program’s

requirements.

(vii) Records to support award data submitted by MIT to the government, including the name,
address, and business size of each subcontractor on a contract-by-contract basis.

8. Assurances regarding bid proposals (see FAR 52.219-9(d)(12), (13))

MIT will make a good faith effort to acquire articles, equipment, supplies, services, and/or materials or
obtain the performance of construction work from the small business concerns that is used in preparing
the bid or proposal, in the same or greater scope, amount, and quality used in preparing and submitting
the bid or proposal. MIT will meet this obligation when:

(i) A PI identifies a small business concern as a subcontractor in a bid or proposal or

associated small business subcontracting plan to furnish certain supplies or perform a
portion of the subcontract; or
(ii) A PI uses the small business concern's pricing or cost information or technical expertise
in preparing the bid or proposal, where there is written evidence of an intent or
understanding that the small business concern will be awarded a subcontract for the
related work if the Offeror is awarded the contract.

Through the reporting obligations under this Subcontracting Plan, MIT will provide written explanations
within 30 days of contract completion, if the Institute fails to acquire articles, equipment, supplies,
services, or materials, or obtain the performance of construction in the same or greater scope, amount, and
quality used in preparing and submitting the bid or proposal.

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Appendix A

Policies: Buying and Paying

6.00 Supplier Selection and Sourcing

As a recipient of federal research funding, MIT must procure goods and services in compliance
with the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). As sound
guidance and practice, VPF has adopted this framework as its purchasing policy for all purchases
made by the Institute.

6.01 Full and Open Competition

All procurement transactions must be conducted in a manner reflecting full and open competition
to the maximum practicable extent. Use of MIT Preferred Suppliers satisfies this requirement.

6.02 Competitive Evaluation and Selection

For purchases from Preferred Suppliers, MIT’s competition requirements are met, and the
following procedures are not required, regardless of dollar amount.
For purchases up to $10,000, DLCs are responsible for ensuring fair and reasonable prices for
their purchases and distributing purchases as equitably as possible among qualified suppliers.
DLCs should strive for prices that a prudent and competent buyer in the particular market would
be willing to pay and that are fair to both parties.
For purchases between $10,000 and up to $250,000, price or rate quotes must be obtained from
an adequate number of qualified sources (at least two), unless a sole source (non-competitive)
procurement is justified (see Section 6.03). A completed Selection of Source Form and all
supporting documentation must be submitted to VPF for these purchases.
For purchases exceeding $250,000, competitive proposals are required, unless a sole source
(non-competitive) procurement is justified (see Section 6.03). Competitive proposals are
normally carried out with more than one source submitting an offer. A formal and well-
documented process that demonstrates how the purchase was evaluated and selected is required.

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DLCs must complete a Selection of Source Form and submit the following supporting
documentation to VPF:
• Proposals, bids, or quotes solicited from an adequate number of qualified sources (at least
two)
• An evaluation of the suppliers’ abilities to fulfill the technical requirements
• After price and other factors (e.g., quality, service) have been considered, a determination
that the selected supplier’s proposal is most advantageous to MIT

6.03 Sole Source (Non-Competitive) Sourcing

Sole source (non-competitive) procurements are conducted by obtaining a price or rate quote or
soliciting a proposal from only one source. Sole source procurements may only be used in place
of competitive procurement methods when approved circumstances exist (e.g., the item is
available only from a single source and no other suppliers can satisfy the unique technical
requirements). Cost or price analysis is required to establish a reasonable price. To document the
sole source justification and cost or price analysis, a completed Selection of Source Form and all
supporting documentation must be submitted to VPF.

6.04 Conflict of Interest

If a purchaser has a potential financial interest in a supplier that is being considered, refer to the
Institute Policies & Procedures, Section 4.4 Policy on Conflict of Interest and the Conflict of
Interest in Research Policy from Research Administration Services (RAS) in the Office of the
Vice President for Research (VPR).

6.05 Supplier Diversity and Small Business Programs

MIT is committed to supporting supplier diversity and small and underutilized businesses in
procurement practices. In accordance with federal guidelines, including Public Law 95-507, VPF
Strategic Sourcing maintains a Supplier Diversity and Small Business Program and has a
designated Program Coordinator to ensure the following classifications have the maximum
practicable opportunity to participate in the performance of contracts paid through U.S.-
sponsored awards at MIT (please see Glossary for definitions of categories):
• Small Business
• Small Disadvantaged
• Women-Owned

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• Veteran-Owned
• Service-Disabled Veteran-Owned
• Historically Underutilized Business Zone (HubZone) Concern
• Otherwise disadvantaged businesses as defined in the Federal Acquisition Regulations
sources for various commodities

In addition, the Program Coordinator:

• Ensures VPF Strategic Sourcing has identified an appropriate mix of diverse suppliers to
meet the procurement needs of the Institute.
• Makes it easier for the MIT community to identify small business concerns when issuing
a Request for Proposal or seeking sources for procurement opportunities.
• Promotes increased business activity with current small business concerns by
coordinating with Procurement agents and DLC requisitioners.
• Establishes and executes an outreach program to identify new small business concerns,
meet with and where possible, qualify these sources, and coordinate meetings between
these sources and Procurement agents and DLC requisitioners.
• Considers establishment of formal agreements with sources who provide products and
services that have broad application throughout the Institute.
• Attends local, federal, state, or privately funded organization meetings, seminars, trade
fairs, and other programs dedicated to program improvement and source identification.

For goals and reporting related to purchases covered by Federal Subcontracting Plans, please
refer to Research Administration Services (RAS).

6.06 Independent Contractors

An independent contractor is an individual who is not considered an employee of the Institute,
and therefore is not paid through VPF HR/Payroll, and is not eligible for MIT benefits.

Criteria for Identifying Independent Contractors

United States federal and Massachusetts state law require the Institute to properly classify its
workers as either employees or independent contractors. MIT will evaluate US individuals who
are offering services to determine whether they should be classified as an independent contractor
(for tax purposes) using the criteria below.
In order to facilitate this evaluation, MIT DLCs must submit the Independent Contractor
Registration Form - Contractor Portion (completed by the individual), the Independent
Contractor Registration Form - Department Portion, and the individual’s resume and client list.
These documents should be attached to the requisition.

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If the individual does not qualify as an independent contractor, payment for the services must be
made through either VPF HR/Payroll (as an employee) or through the MITemps program or
other temporary employment agency.

Criteria for Evaluating Independent Contractors

The Internal Revenue Service (IRS) and individual states have heightened the level of attention
given to consulting arrangements. They want to ensure that individuals are not taken advantage
of by being hired as independent contractors without benefits when they should be hired as
employees with benefits. In addition, the IRS wants to ensure that all appropriate taxes are
collected in a timely manner. If someone has been paid as a consultant who federal or state
auditors determine should have been classified as an employee, MIT will be liable for Social
Security, Medicare, and federal and state withholding taxes on the applicable payments in
addition to any interest and substantial penalties which may apply. It is critical that the correct
classification be made before engaging an independent contractor.
MIT has established criteria to meet the requirements of IRS guidelines. In order to qualify as a
bona-fide independent contractor, the services must meet the following:
1. The person should have a history of offering and performing similar services for the general
public (other organizations) and being paid for such work as an independent contractor (not as an
employee). If a person is just starting a business and MIT is their first client, the person must
certify in writing that they intend to offer his/her professional services to the general public.
2. The person must not be a student at MIT. MIT undergraduate and graduate students should not be
paid as independent contractors. If the person is a former student, he/she may not return to
perform the same work performed while associated with MIT.
3. The person must not be a current employee of MIT. If the person is a former employee, he/she
may not return to perform the same work performed while associated with MIT.
4. The person should possess knowledge and special abilities not generally available within MIT
and the services to be provided should not be comparable to those being performed by other
employees at MIT. The person’s services should not be a key aspect of the regular business of
MIT or the specific department.
5. The person should not directly supervise or be directly supervised by MIT employees. An MIT
employee should not control how or when the work is done (other than providing a statement of
work and respective deadlines). Consultation between an independent contractor and MIT
employees is allowed.
6. The person should generally not be assigned office space or require administrative services
provided by MIT.
7. The services to be provided should be project-driven, generally provided on an intermittent basis
as required or over a short term. With few exceptions, individuals providing services on a steady,
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full time or near full time basis for an extended period are considered employees by the IRS
notwithstanding any consulting contract that may be in effect.

With the exception of #1-3 above, failure to satisfy one or more of the criteria does not
necessarily mandate a negative determination. The final decision is based upon an evaluation of
these and other pertinent factors.
Each independent contractor must be reapproved every two years to ensure that he/she is still
truly functioning as an independent contractor and not as an employee. Complete and updated
independent contractor forms must be submitted every two years.
Exceptions
Individuals providing services listed below will not typically be required to fill out independent
contractor forms:
• Referees, umpires, musicians, singers, dancers, DJs, painters, sculptors, comedians,
clowns, and other similar entertainers doing work on a limited basis.
• Foreign citizens doing work entirely in a foreign country will not be required to submit
independent contractor forms because there are no U.S. tax implications.

6.07 Special Purchases

VPF purchasing teams have identified the following types of purchases that may require special
processing, such as additional documentation, planning, approvals, insurance, licenses, and
inbound and outbound shipping arrangements:
• Sensitive items, such as alcohol, entertainment, and promotional items, are expenses that
are normally unallowable on sponsored projects. See a list of common unallowable
transactions on the RAS website.
• Restricted items require additional approvals prior to purchase:
• The following items require department-level approval and may also require MIT
Environment, Health, and Safety (EHS) approval. Approval authority is limited to MIT
community members with the titles of Professor, M.D., Laboratory Director, or
Pharmacist.
o Ethyl alcohol
o Cyanide
o Arsenate
o Certain substances are reviewed by EHS:
o Radioactive materials
o DEA Controlled Substance
o Select Agent Toxins must be purchased through EHS.
• Items potentially covered under Export Control regulations may need to be classified,
reviewed, potentially licensed, and managed in compliance with United States Export

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Control laws and regulations. Examples of such items include infrared cameras and
sensors and surveillance technology.
• Live Animals or Tissue: All animals required for research or teaching must be approved
and purchased by the MIT Division of Comparative Medicine (DCM). Special forms
must be completed and are available from DCM.
• Human subject research activities must be approved by the MIT Committee on the Use of
Humans as Experimental Subjects (COUHES).
o See Buying and Paying Policy 5.03 and Pay a Human Subject for details on
payment options and processes.

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