Fixed Price Awards for Sponsored Projects
Fixed Price Award – An award made by an external sponsor to The University of Southern
Mississippi based on a predetermined budget or fee for work to be performed. The total
award amount is not subject to increase or decrease, and USM is responsible for completion
of the agreed upon tasks even if the awarded amount is insufficient to cover project
costs. There is no expectation that excess funds be returned to the sponsor.
Principal Investigator – The USM person responsible for conducting the project.
Residual Funds – These are the funds remaining, which are unobligated and unspent,
in a project account at the conclusion of the project. Residual funds are a result
of project costs being lower than the awarded and collected amount.
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Fixed price awards are subject to all Research Policies at USM.
Entering into an agreement for a fixed price award
- A fixed price award usually requires that a specific work product be delivered within
a particular time frame.
- The sponsor is usually interested in only the total cost for the work and therefore
might not want a detailed line-item budget, or might want to see only high-level detail.
USM does require a line-item budget to ensure that all costs have been included.
- USM’s applicable Facilities & Administration costs (F&A) must be included (unless
a waiver has been requested and approved by the Vice President for Research).
- Principal Investigators must work with Office of Research Administration staff on
the budget and Cayuse 424 routing in advance of confirming a price with the sponsor.
- Agreements to fund a fixed price award must be reviewed and negotiated (if necessary)
through the Office of Research Administration to ensure appropriateness and accuracy
of the award terms and conditions. The Principal Investigator is responsible for ensuring
accuracy and reasonableness of the scope of work.
Administering a fixed price award
- Fixed price awards will receive a Project ID (80 series) established for the time
period of the project.
- The budget loaded into SOARFIN reflects the PIs anticipated expenditures; however
the PI has flexibility in actual expenditures without requiring prior approval of
- The Principal Investigator is responsible for delivering tasks or reports on time.
Most fixed price awards tie the final payment to the final task or report. Late reports
or deliverables are a violation of the terms of the agreement and could result in
lack of payment by the sponsor.
- Any project expenditures over the amount specified in the agreement are the responsibility
of the Principal Investigator. If the Principal Investigator is unable to cover these
excess expenditures, the responsibility becomes that of the School and College.
- Outstanding expenditures due to lack of payment because of violation of contractual
terms is also the responsibility of the Principal Investigator or the School and College.
Closing out a fixed price award
- Once the project is completed (all deliverables have been provided to and accepted
by the sponsor, and all payments have been received from the sponsor), the Project
account will be closed using standard account closing procedures.
- If residual funds remain, USM’s appropriate F&A rate will be applied and distributed
using USM’s standard F&A distribution procedures. Any remaining residual funds will
be distributed to the PI and in some cases to the Vice President for Research according
to the following:
- If the project carried less than full F&A, F&A will be applied to recover the appropriate
F&A rate for both spent and unspent funds prior to distribution of any residual funds.
- If the project carried full F&A, F&A will be applied to any unspent funds prior to
distribution of residual funds.
- If remaining residual funds equal 20% or less of the total award amount, funds will
be placed into an unrestricted account for use by the PI.
- If remaining residual funds equal more than 20% of the total award amount, a justification
for the large balance must be submitted to the Associate Vice President for Research
Administration. Upon approval of that justification, remaining residual funds will
be distributed so that the PI receives 20% of the total awarded amount, and the Vice
President for Research receives the remainder. PI’s may request a different distribution
from the Vice President for Research. If the justification is inadequate or not approved,
a course of action will be determined by the Vice President for Research.
- The Project account will generally not be kept open in order to allow expenditure
of the residual funds. Exceptions may be made by the Associate Vice President for
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