Procedure for Operating Under Fixed-Price Agreements for Research and Other Sponsored Programs



“Fixed-price agreements” are characterized by payments of predetermined amounts by a sponsor to support a project. A sponsor may be a non-profit agency or organization, or a for-profit company. Such agreements are subject to the same policies and procedures that apply to all sponsored programs.


As with all other types of research or sponsored projects, full Facilities and Administrative (F&A, or indirect) costs will be recovered (see UM Policy 10000653: Full Recovery of Facilities and Administrative Costs Required for All Sponsored Programs), and all direct costs incurred as a result of performing the Scope of Work must be expensed directly to the project. An account will be established for the project, and costs will be charged appropriately (reference the Accounting Office Direct Cost Charging Policy). With accurate budgeting and charging of costs, there should be neither a deficit nor a substantial surplus of funds at project completion.

In the event of cost overruns, such costs will be assumed by the Principal Investigator (PI), department or school.

In the event that unspent funds remain at the end of the project, such funds will be transferred to an appropriate unrestricted account 90 days after the end of the project period, under the condition that all expenses for the project were appropriately charged to the account, deliverables have been made and documented, and the sponsor has confirmed satisfaction with the project results. Prior to transfer, the Accounting Department will:

  • Recover F&A costs identified within the budget, and/or recover any that had been waived without the consent of the Vice Chancellor for Research and Sponsored Programs, up to the federally negotiated rate; and

  • Send an email or memo to the PI requesting instructions for transferring surplus funds to an appropriate account.

If an account is not identified by the PI, surplus funds will be transferred to the deans’ unrestricted overhead account.