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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

Sep. 29, 2005
Sep. 29, 2005
Office of Sponsored Projects

 

Part 17. Office of Sponsored Projects/Sponsored Projects Award Administration - Table of Contents


17.2. TYPES OF AWARDS

A. Introduction

The types of awards that may be granted for sponsored projects include:

  • Contracts
  • Grants
  • Cooperative agreements
  • Letters of agreement
  • Gifts
  • Sub notice of awards (SNOA)

B. Contracts

Fixed price, cost reimbursable, letter of credit, and advance payment are types of contracts that the University has negotiated. These types of sponsored projects have specific terms, requirements, and deliverables.

A contract [definition from Public Law 95-224 (1978)] is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever

  • The principal purpose of the instrument is the acquisition (by purchase, lease, or barter) of property or services for the direct benefit or use of the federal government; or
  • An executive agency determines in a specific instance that the use of a type of procurement contract is appropriate.

Public Law 95-224 (1978)

1. Fixed Price Contracts

Fixed price contracts are characterized by payments of predetermined amounts from a sponsor in support of research activity. Payments may be made periodically or in a lump sum, and they may require a payment request from the University.

The initial fixed price contract is submitted to the Office of Sponsored Projects (OSP) for review and negotiation. OSP will review the contract to ensure that it conforms to University financial and research compliance policies.

Office of Sponsored Projects

a. Budgeting

Budgets for fixed price contracts should reflect the actual expenses for the project. It is the responsibility of the Principal Investigator (PI) to estimate total budgets accurately, including appropriate facilities and administration costs. An unanticipated overestimate of a project's cost should not exceed five percent (5%) of the total project value.

b. Revenue Management

Fixed price contracts contain an element of risk to the University's revenue stream. If a funding entity defaults on payment, the University may have insufficient funds to cover the costs of a particular project. Unanticipated cost overruns may also occur. To mitigate the risk, the University centrally retains the net proceeds of a project to cover outstanding research-related accounts receivable and provide seed funding for research initiatives. Net revenue for a fixed price contract should not exceed five percent (5%) of the total project value.

c. Closeout

A fixed price contract is considered complete when the sponsor has accepted the results of the contracted work and the fixed price contract amount has been paid in full.

i. Unspent Funds

Upon completion of a contract, the associated University account is closed, and net proceeds are transferred to a centrally administered project adjustment account. The project adjustment account will be maintained at a funding level sufficient to cover forecasted uncollectible accounts receivable amounts (bad debt). Any amount in excess of the total annual forecasted bad debt will be transferred to the Vice President for Research to provide seed funding for research initiatives.

Office of the Vice President for Research

ii. Over-expenditures

If the total amount expended on a project exceeds the contract amount, Sponsored Projects Award Administration will notify the Principal Investigator (PI) and the Associate Vice President. The Associate Vice President will work with the PI; College, School, or Unit leadership; Vice President for Research; and the Office of the Executive Vice President and Provost to determine an appropriate source of funding to cover the over-expenditure. The project adjustment account may be used as a funding source. After a funding source has been designated, a funds transfer will be processed to settle the over-expenditure, and the following individuals will be notified of the transfer:

  • Principal Investigator
  • Dean
  • Vice President for Research

Documentation of the funds transfer will be placed in the contract file administered by Sponsored Projects Award Administration.

Office of Sponsored Projects

Office of the Vice President for Research

Office of the Executive Vice President and Provost

2. Cost Reimbursable Contracts

Information about cost reimbursable contracts is forthcoming.

3. Letters of Credit

Information about letters of credit is forthcoming.

4. Advance Payment Contracts

Information about advance payment contracts is forthcoming.

C. Grants

Research, training, construction and equipment, institutional formula, and student financial aid are types of grants that the University has negotiated. This type of sponsored project has fewer restrictions than a contract.

A grant [definition from Public Law 95-224 (1978)] is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever

  • the principal purpose of the relationship is the transfer of money, property, services, or anything of value to the state or local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by federal statute; and
  • no substantial involvement is anticipated between the executive agency, acting for the federal government, and the state or local government or other recipient during performance of the contemplated activity.

D. Cooperative Agreements

Agriculture research, extension, personnel exchange, testing, and consortium are types of cooperative agreements that the University has negotiated. The sponsor usually has substantial involvement in this type of award.

A cooperative agreement [definition from Public Law 95-224 (1978)] is the appropriate agreement to be used in a relationship between the federal government and a recipient whenever

  • the principal purpose of the relationship is the transfer of money, property, services, or anything of value to the state or local government or other recipient in order to accomplish a public purpose of support or stimulation authorized by federal statute; and
  • substantial involvement is anticipated between the executive agency, acting for the federal government, and the state or local government or other recipient during performance of the contemplated activity.

Public Law 95-224 (1978)

E. Letters of Agreement

A letter of agreement (LOA) is an internal subcontract between principal investigators (PIs) on The University campus, negotiated by the Office of Sponsored Projects (OSP). LOA funding is derived by splitting an existing award and placing it under the authority of a different PI.

A letter of agreement has the same restrictions as the prime (the award from which funds are derived) and requires a specific research effort to be conducted by a PI at The University.

Office of Sponsored Projects

F. Gifts

A gift has limited restrictions. Cash is received at the time of the award. Gifts for research that have a receivable or require a specific effort or report of progress are set up as 26 accounts and are administered by Sponsored Projects Award Administration.

Office of Sponsored Projects

G. Sub Notice of Award (SNOA)

A sub notice of award is a subcontract under an existing sponsored project that is issued to an outside (non-University) entity. The Office of Sponsored Projects (OSP) negotiates, issues, and monitors subcontracts and subrecipient agreements under sponsored project awards. Sponsored Projects Award Administration is responsible for the accounting function for these awards.

Office of Sponsored Projects

 

 

Part 17. Office of Sponsored Projects/Sponsored Projects Award Administration - Table of Contents