Re: fixed price subawards under NIH grants? Jean M. Murphy 05 Oct 2004 10:24 EST
Hello All! I found this exchange on fixed price contracts helpful, but was left with one question. Can someone explain or spell out what a PPPF contract is? Thanks much. Jean Research Administration Discussion List <xxxxxx@HRINET.ORG> writes: >Greg makes very strong points that should be valued. His view of how the >for-profit looks at things is quite accurate. I do wish to point out >that my statement in my final paragraph was directed explicitly towards >grants, as opposed to contracts. Greg, on the other hand, describes >considerations that are more likely to come about in a contract >situation. There can be considerable differences between the two from a >university's point of view when looking at the way to sub- out the work; >a subaward under A-110 rules may be quite different from a subcontract >under FAR because the purposes and risks of the projects, as proposed, >are frequently -- but not always -- different. The views Greg and I >presented should both be studied! > >Chuck > > > >At 10:27 AM 10/1/2004, you wrote: > > >Oh, my gosh! I'm going to disagree somewhat with Dr. Chermside on his >closing point. Could this be professional suicide? > >It is possible that there are several potential for-profits that are >under consideration to team with you. You do not necessarily know what >the final outcome of your proposal will be. You could not really forsee >the scope that will be finally agreed upon between you and the Agency, >and by fiat to the sub, so you couldn't really project the type of award >to be negotiated. The Agency really doesn't care what type of >arrangement you have with your subs except to the extent that the >required flow-through provisions are in the subaward no matter what the >form. > >Now it is true that some branches of agencies look sideways at FPC's for >some reason. They're really no different than a Purchase Order. You >provide a good/service, I give you a fixed amount of money for that. >They don't have problems with those, so they really shouldn't have any >problems with a FPC. > >When should a project be a CRC, CPFF, PPPF, FPC, or any of the other >miriad of types of contracts? The FAR is a good place to look. It's all >about sharing risks. > >If I have no idea whether the objectives can be met or how much it will >really cost, I would issue a CRC (university) or a CPFF (company). Think >basic research. The project could be over as soon as it begins with min >imalcosts. decades costing many billions. Here the risks lean most >heavily on the prime. The sub will be paid for their costs. > >If I'm reasonably sure that the outcomes can be achieved with specific >effort, but there are some significant risks involved, I'd lean towards a >PPPF where my costs will be coverd and I'll still make my profit on a >percentage basis of my costs. Here the risks are shared equally between >prime and sub. The prime pays for what the sub expends, and the sub gets >some or all of their fees. > >Finally, if you know the outcomes and the efforts involved and can put a >price to it with assurance, a FPC is the way to go. This is like buying >a painter's services. You can shop the job out, get costs to perform and >sign a contract. If the painter can knock off your job in a day and you >can accept the quality of work performed, they'll come out ahead. If it >takes them a week, they get the same amount and earn little or lose >money. As the owner, I don't care so long as the quality is there and >the other terms of the agreement are met. Here, the risks are all on the >sub. > >Greg Jean M. Murphy Director of Pre-Award Services Wellesley Centers for Women http://www.wcwonline.org E-mail: xxxxxx@wellesley.edu Phone: 781-283-2508 Fax: 781-283-2504 Wellesley College, Cheever House, 106 Central Street, Wellesley, MA 02481 ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================