Policies & Regulations
Academic Affairs: Research & Sponsored Programs


Fixed-Price Sponsored Project Agreements
Number:
Checked

New Policy

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Major Revision of Existing Policy

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Minor/Technical Revision of Existing Policy

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Reaffirmation of Existing Policy

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Repealed Policy

Effective Date:
Revised Date:
Responsible Division/Department:
Office of Research and Sponsored Programs / Academic Affairs


  1.  OBJECTIVE & PURPOSE

    The purpose of this policy is to outline the administrative requirements for formulating, monitoring, and closing-out fixed-price sponsored project agreements, including the treatment of residual funds and cost overruns resulting from sponsored projects funded via fixed-price agreements. Fixed-price agreements are generally used when reasonably definite specifications for research or service project deliverables are defined to be accomplished within a delimited period of time and for which a fair and reasonable budget can be estimated and established.

  2. STATEMENT OF POLICY

    Under a fixed-price sponsored project agreement, sponsoring agencies pay a fixed dollar amount for certain agreed upon deliverables, services, and/or milestones. Fixed-price agreements pose a risk to the University and thus must be closely monitored by the principal investigator. In a fixed-price agreement the University agrees to perform the work regardless of the actual cost of conducting the project. If the University underestimates the cost of the project, the University must pay to complete the work. If the University overestimates the cost of completing the work, residual funds will remain after the project is completed

    Costing/Budgeting:
    All proposals for fixed-price sponsored projects must be processed using established University procedures for sponsored projects administration, regardless of any tentative understanding between the Principal Investigator and the sponsor.  Special care is needed when developing budgets for fixed-price agreements to ensure that the University is in the best possible position to fulfill its proposed obligations.  Fixed-price agreements do not typically require a submission of an itemized budget to the sponsor, however an itemized budget is required to ensure cost proposals for fixed price relationships are estimated on a cost basis consistent with UNF cost accounting policies.  Expenses should be budgeted and justified based on anticipated reasonable cost.  Budgets should not anticipate revenue in excess of expense or funding to recover expenses incurred prior to the beginning of the project.  Fixed-price sponsored project agreements carry Facilities and Administrative (F&A) costs consistent with University policy.

    Deficits/Cost-overruns:
    It is the responsibility of the principal investigator to properly monitor the timing of tasks, completion of deliverables, and final reporting of results on fixed-price sponsored project agreements. Most fixed-price agreements include a clause or special terms section regarding the submission and/or acceptance of a final report or product tied to the final payment. If the terms are not met as provided by this section the institution has violated the agreement and total reimbursement of costs may not be forth coming.

    Any cost overruns on sponsored project fixed-price agreements including costs incurred in excess of the awarded amount, or deficits incurred for late submission, unmet or unacceptable deliverables are the responsibility of the principal investigator(s), the departmental or center, and the college of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator). If the University has met all the terms of the agreement and sponsor does not pay in full for the work delivered as outlined in the agreement, the principal investigator(s), the departmental or center, the college of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator) and the Office of Research and Sponsored Programs must cover the deficit in the sponsored project index including accrued F&A costs.

    Residual Balances:
    Funds resulting from a positive residual balance on a fixed-price sponsored project agreement upon full close out of the project are retained by the University and are considered institutional funds. These funds must be utilized to support the University’s research and sponsored programs activities. Remaining residual balances resulting from fixed-price sponsored project agreements are maintained in the Sponsored Research Trust Fund administered by the Office of Research and Sponsored Programs.

    If a residual balance exists upon project closeout, the residual balance will first be used to cover Facilities and Administrative (F&A) costs at the University's current federally approved rate. The recovered F&A costs will be distributed in accordance with the University F&A distribution policy.

    Before any funds are transferred, the remaining residual balance will be utilized to cover any cost overruns (deficits) made by the principal investigator(s) on other restricted accounts for which he or she is responsible.

    If the residual balance is ten percent (10%) or less of the total award amount, the remaining funds (after posting of full F&A charges) will be treated as follows:  fifty-percent (50%) will be transferred to the principal investigator(s)’ research development index and fifty percent (50%) to the departmental or center research development index(es) of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator).

    If the residual balance is 11% -18% of the total award amount, the remaining funds (after posting of full F&A charges) will be treated as follows:  forty (40%) will be transferred to the principal investigator(s)’ research development index, forty (40%) percent will be transferred to the departmental or center research development index(es) of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator) and twenty percent (20%) will be maintained in the Research Reserve to support faculty research programs at the University.

    If the residual balance is 19% -25% of the total award amount, the remaining funds (after posting of full F&A charges) will be treated as follows:  thirty-three (33%) will be transferred to the principal investigator(s)’ research development index, thirty-three (33%) percent will be transferred to the departmental or center research development index(es) of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator) and thirty-four percent (34%) will be maintained in the Research Reserve to support faculty research programs at the University.

    If the residual balance exceeds twenty-five percent (25%) of the total award amount, the remaining funds (after posting of full F&A charges) will be treated as follows:  twenty-five (25%) will be transferred to the principal investigator(s)’ research development index, twenty-five (25%) percent will be transferred to the departmental or center research development index(es) of the unit(s) to which the project was assigned (according to the percent of credit allocated to each investigator) and fifty percent (50%) will be maintained in the Research Reserve to support faculty research programs at the University.

    If the salaries for the principal investigators, other researchers, or administrative staff of a research program are supported entirely from external funds, an exception to the residual balance distribution formula outlined above will be considered. Such an exception will require the written approval of the Assistant Vice President for Research.

    Funds transferred to Research Development Indexes must be used in accordance with the UNF Use of F&A Recovery Policy.