In proposals for a fixed price agreement, the sponsor is provided with a lump-sum cost for the research, education or other services proposed. While no budget details are provided to the sponsor, the University does have an obligation to estimate the price from the costs associated with the work plan. In developing the fixed-price request, the items incorporated must comply with federal (if federal sponsor) and university policies. That is, costs must be reasonable, allowable, and allocable to the work; appropriate F&A rates must also be included in the cost.
Given the relative imprecision of the cost estimates, it is reasonable to expect that on some occasions the fixed-price may result in funds remaining at the end of the award, while on other occasions the fixed-price will not cover all costs. Fixed-price agreements that consistently result in significant positive balances will be scrutinized so that more accurate estimates can be developed for future applications.
Effort committed for key personnel engaged in fixed-price projects is included in the effort