Fixed Frice Agreements Ivette M.C. Alvarez 10 Jul 1997 12:07 EST
I need help in identifying the positive points as well as the negative points of accepting fixed price agreements. Please share as much information as possible as to how your University is handling some of the issues stated in the questions listed below. The information received will assist us in reviewing our present policy and procedures and to propose changes, if warranted. None of the documents/ information received will be attributed or released outside of the Comptrollers Office of my Institution. 1- Does your Institution accepts fixed price agreements? If it does not, please explain briefly why not. 2-Do you have written policies and procedures in place to guide the faculty and other administrative offices in the administration of this type of agreement? 3- Percentage of your University's total funding that represents fixed price agreements. Please state a percentage and the fiscal period. If you do not have this information handy, just give me an average and/or a sense as to whether this type on funding is increasing or decreasing at your Institution. 4--Major sources of fixed price funding: Federal or non-federal? 5- What percentage of your non-federal fixed price agreements from Pharmaceutical Corporations, if any. 6- Most common payment arrangements used: advance payment in full, payment schedule tied with deliverables, in full at the completion of the project, half at the beginning and the other half upon completion, other. 7- Do you require that the payment arrangement be specified in the body of the agreement? 8-When pricing a fixed price agreement, do you factor in an extra fee to cover risks to the University such as delays, default costs, poor performance, or loss of key staff? 9-In the absence of extra fees,how are costs overruns dealt with? Who covers them and how are they handled: cost sharing, transferred to a cost overrun cost center, or transferred to the Principa Investigator's Home Department budget? 10- Type and extent of monitoring performed by the Pre-Award and by the Post Award offices ( technical and fiscal monitoring). 11- Disposition of unexpended balances: do you limit the amount that the Principal Investigator is allow to transfer out of the fixed price cost center, and do you specify the purpose for which it can be used? 12- Do you have a high incidence of completed fixed price projects( the Principal Investigator verifies that all deliverables have been completed and delivered,and the agreement is paid in full) without costs recorded in the cost center assigned to the agreement? If this is the case, is this practice acceptable at your University? 13-How do you dispose of the residual funds? 14- Do you normally charge the Institution's negotiated Indirect Costs rates? 15- Do you track those Principal Investigators that consistently end up with large amounts of residual funds or with costs overruns? 16- Do you issue subcontracts under fixed price agreements, and if you do, which types of subcontracts do you issue most: fixed or cost-reimbursable? 17- Do you apply budgetary constrains to fixed price agreements such as not allowing federal non allowable costs being charged? 18- Have you revised your policies and procedures for fixed price agreements in light of the applicability of the 4 Cost Accounting Standards and the latest revision to Circular A-21? Please explain how and why. Please send your comments and written information directly to my attention to the address listed below or through E-Mail or Fax. I will be glad to post a summary of the answers and information received if there is sufficient interest in receiving them. Your assistance is greatly appreciated. Ivette M.C. Alvarez, Director Grants and Contracts Accounting Services The George Washington University 2100 M St., N.W., Suite 310 Washington, D.C, 20052 Tel. #: 202 973-1043 Fax #: 202 973-1013 E-Mail: xxxxxx@comp.vpt.gwu.edu