Fixed Price Awards Guidance

• 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 (ORA) staff on the budget and system 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 ORA 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.

• Fixed price awards will receive a Project ID established for the time period of the project.
• The budget loaded into SOARFIN reflects the PIs anticipated expenditures; however, the PI generally has flexibility in actual expenditures without requiring prior approval of the sponsor.
• The Principal Investigator is responsible for delivering tasks and/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.

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 will be closed using standard account close out 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 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 not be kept open in order to allow expenditure of the residual funds. Exceptions may be made by the Associate Vice President for Research.