Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL

SPONSORED AGREEMENTS
40.27
New 1-08
Sponsored Programs Services
335-2058

Fixed Price Agreements

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FIXED PRICE AGREEMENTS

Fixed price agreements are defined as agreements for which the sponsor provides a set price for the work. Fixed price awards are usually established as contracts with scheduled payments.

Characteristics

Fixed price agreements normally have the following characteristics:

Processing Facilities and Administrative Costs

Principal investigators (PIs) and administrators are expected to request the full facilities and administrative (F&A) rate for on-campus or off-campus activities related to sponsored projects under fixed agreements, in accordance with 40.23 and 40.25.

Upon completion of a fixed price agreement, the applicable federally-approved F&A cost rate is applied to the "cash balance," i.e., any funds remaining after completion of the project. F&A costs are distributed according to established University policies. See 40.09, 40.23, 40.25, and Executive Policy Manual EP2.

Distribution of Residual Balance

Any funds remaining after the F&A costs are applied to the cash balance are referred to as the "residual cash balance." Sponsored Programs Services (SPS) distributes the residual cash balance based upon the following conditions:

Conditions Met Within Six Months

If all three of the distribution conditions listed above are met within six months of the agreement end date, the residual cash balance is first used to offset any uncollectible accounts for which the principal investigator (PI) was the project director.

Sponsored Programs Services (SPS) distributes any remaining residual amount as follows:

Use of the funds may be predetermined by agreement between the department chair and the PI.

Approve the retention of the entire residual in excess of 50%;

Approve retention of a portion of the residual in excess of 50%; or

Disapprove retention of some or all of residual in excess of 50%.

SPS transfers any allowed portion of the residual to the department's fixed price consolidation account. SPS establishes an account for the Office of Research under program 13Z or 14Z and transfers any disallowed portion of the residual to this account.

Conditions Not Met Within Six Months

If all three of the distribution conditions listed above are not met within six months of the agreement end date, SPS establishes an account for the Office of Research under program 13Z or 14Z and transfers the entire residual balance to this account. SPS then closes the departmental account. The Office of Research uses the funds to support a variety of research initiatives.