Hi.  Most companies fixed fee is calculated on the total cost (including
cost of money, G&A, labor rates, materials & supplies). The fee is a
negotiable item that is allowable up to 15% for R&D work, as per the FAR.
However, more typical fee rates range from 7-10%.  I would go a step
further, however, and check with the companies DCAA or DCMC to ensure that
the costs proposed are aportioned correctly and that the fee is indeed
calculated on the total costs, consistent with the companies normal
procedures. If you are working with a small company and it does not have
negotiated rates, then you should receive a copy of their recent audit and
a certification from their accounting firm that the rates are reasonable
and consistent with similar work with other institutions.  The name and
number of the DCAA and DCMA agencies are listed on the face page of their
SF 1411 accompanying their proposal.  Also, don't forget to obtain a
certificate of current cost and pricing data once you have negotiated the
subcontract and make sure you include a general release clause in the
subcontract so you can close it out (if over 500K).  Some companies,
particularly if in a recent merger, may takes years to finalize their rates
and then you can't close out the subcontract unless you ensure quick close
out (and I use the general release clause to make that happen).  Although
there are several issues in this paragraph, I hope it helps.  Feel free to
email if you have further questions.

>Do any universities out there accept cost plus fixed fee contracts and if
>so, how do you calculate the fee?  A colleague with industry roots asked
>this question and, to be honest, it is easier to ask the group than to look
>it up.  We are strictly cost no-fee (with the occasional FFP or T&M) kind
>of people around here.  Thanks for any info you can provide.
>
>----------------------------------------------------------
>Martha M. Taylor,   Director               (334) 844-4438
>Contracts and Grants Administration         FAX (334) 844-5953
>310 Samford Hall
>Auburn University,  AL  36849-5131
>xxxxxx@mail.auburn.edu

Amy Henderson-Harr
Sr. Grant & Contract Officer
Office of Sponsored Programs
120 Day Hall
Cornell University
Ithaca, NY  14853
email: xxxxxx@cornell.edu
(607) 255-6306 (phone)
(607) 255-5058 (fax)