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Fixed Price Sponsored Projects, Determination of Applicability

Policy
Purpose: 

This policy will define the occasions when a fixed-price agreement is the appropriate mechanism for managing a sponsored project. It will also provide guidance for determining the appropriate payment schedules for fixed-price agreements.

Applies to: 

Principal Investigators with Sponsored Projects (grants or contracts)

Campus: 
Lawrence
Policy Statement: 

KUCR may attach a Fixed-Price Statement on a proposal to a for-profit sponsor when the total cost estimate is equal to or less than $100,000 and the sponsor has not indicated that a formal research agreement will be forthcoming. Inclusion of the standard Fixed-Price Statement will be determined on a case-by-case basis by the PI in agreement with KUCR Pre-Award Services.

Payment schedules are included in the Fixed-Price Statement at the time the proposal is submitted and will generally reflect the following expectations:

  • For projects costing less than $10,000 or for any project with a duration of less than one year: The project will begin upon receipt of initial payment of 90% of the total cost. The remaining 10% will be due upon completion of the project.
  • For projects costing more than $10,000 with a project duration of one year or more: The project will begin upon receipt of initial payment of a minimum of 40% of the total project cost. An additional 40% will be due at mid-point through the project, or upon delivery of a specific, agreed-upon deliverable. The final 20% will be due upon completion of the project.
Exclusions or Special Circumstances: 

Any exceptions to this payment schedule will require KUCR prior approval.

Some sponsors may award fixed-price agreements on their own terms without prompting from KUCR. In most cases, KUCR will accept fixed-price agreements and will not insist upon cost-reimbursable agreements regardless of the award amount.

Contact: 

Kristi Billinger, Assistant Vice Chancellor
Office of Research
785-864-7231
kristib@ku.edu

Approved by: 
Vice Chancellor for Research
Approved on: 
Tuesday, March 1, 2011
Effective on: 
Tuesday, March 1, 2011
Review Cycle: 
Annual (As Needed)
Background: 

The University of Kansas accepts funding for the majority of sponsored projects through the KU Center for Research, Inc (KUCR). Most sponsored projects come to KUCR in the form of cost-reimbursable agreements (grants or contracts). In certain circumstances it may be appropriate or preferable to manage some projects on a fixed-price basis. OMB Circular A-21 provides the basis for the cost principles KUCR adheres to for estimating costs and managing sponsored projects, including fixed-price agreements.

A fixed-price agreement provides funding for a sponsored project wherein the agreed upon award amount is based on the actual costs estimated to be expensed for completion of the scope of work or research described in the proposal. The cost for completion of the project remains unchanged and is not normally subject to adjustment. Fixed-price agreements may be appropriate for small projects where there is a reasonably definitive deliverable and where the costs can be estimated with a high degree of accuracy. A fixed price agreement provides minimum administrative burden, but subjects KU to a certain amount of risk resulting from the responsibility to provide deliverables, regardless of the actual cost.

Keywords: 
Sponsored Projects, Fixed-Price, Fixed-Price Agreement, For-Profit Sponsors
Review, Approval & Change History: 

12/15/2014: Policy formatting cleanup (e.g., bolding, spacing).

06/18/2014: Selected 'Lawrence' for Campus; updated title of 'Office of Research'; added link to OMB Circular A-21.

07/22/2013: Updated contact information.

Research and Sponsored Projects Category: 
Research and Sponsored Projects

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