Price Plus Percentage Fee. Sorry about that. More often called Cost plus... It's a reimbursement contract with a percentage fee for profit. I might have a $100,000 contract which is comprised of $86,957 of costs and a 15% fee. If I spend the full 86,957, I'll get my full fee. If I spend only $80,000, I'll get 15% of that or $12,000. Greg ----- Original Message ----- From: "Jean M. Murphy" <xxxxxx@WELLESLEY.EDU> To: <xxxxxx@HRINET.ORG> Sent: Tuesday, October 05, 2004 11:24 AM Subject: Re: [RESADM-L] fixed price subawards under NIH grants? > 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") > ====================================================================== > ====================================================================== 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") ======================================================================
