The University prefers not to accept fixed-price contracts as they pose a greater financial risk than cost-reimbursable contracts. In instances where fixed-price contracts are accepted, the following procedure is followed at the contract end:
- Ninety (90) days after the contract ends and it has been ascertained that all charges have cleared, the (PI) is asked by Accounting for a PI organization number into which the residual funds, Facilities and Administrative cost (F&A), will be transferred. F&A is deducted prior to the transfer of residual funds because the proposal and award were made based on estimated costs, including F&A costs. F&A costs are incurred regardless of the accounts from which these funds are expended and they must be reimbursed.
- If a fixed-price contract account has an over-run at the end of the contract period, the fiscally responsible organization must cover this over-run, less F&A. Contract and Grant Accounting will contact the P.I. about clearing this over-run.
- If, at the end of the contract period, the residual amount is in excess of twenty (20%) percent of the original contract amount, the PI must submit a justification and a transfer approval request to the Director, OSP prior to transfer of the residual funds to a PI account. Lack of significant expenditure on a fixed-price contract account causes the auditors to question the accuracy of the proposal pricing or investigator which accounts were possibly charged for the work instead of the fixed-price account.