From The Vault: Fixed Price vs. Cost Reimbursable Subagreements

[Occasionally, we like to revisit posts from days gone by that either (1) are always relevant, or (2) are the subject of recent questions received by our office.  Today, we'll again compare the two types of subagreements.]

Originally Published November 15, 2011

You know what a fixed price subagreement is, right?  It’s an agreement in which the statement of work (SOW) contains specific performance milestones and deliverable based payment schedule. The deliverables listed in the SOW should directly correlate to the payment schedule.  In other words, how much will be paid when for what.

The exact deliverables listed in the statement of work are the same as those listed on the payment schedule.  Still with me?

We like fixed price agreements for lots of reasons. First, the subrecipient assumes the risk.  That means that if the subrecipient goes over budget, we are not obligated to make additional payments.  Second, because the deliverable is tied to the payment, if they don’t produce, you don’t pay.  Third, there is less administrative burden during the project since you don’t need to confirm that costs are reasonable or review financial reports.

So I assume you also know what a cost reimbursable agreement is, correct?  Cost reimbursement provide payment for allowable incurred costs, to the extent written in the subagreement. These agreements estimate (I repeat, estimate) the total cost of the subagreement for the work to be performed in the statement of work and evidenced by and in accordance with the included budget.

Cost reimbursement subagreements should be used when you have a less defined statement of work and few or no clearly identified deliverables. Got it?

Should the subrecipient need more than the estimated total, a request is sent and modification done to include additional costs.  Our favorite CR subagreements are those that obligate money and establish a ceiling that the subrecipient may not exceed without the prior approval of ORA. If a modification to add funds is not executed by both parties, then the work is being performed at the subrecipient’s own risk (insert creepy laugh). Make sure you check the expenses every invoice to be sure they are reasonable for the amount of work that’s been done so far.

So, there you have it.  That’s the skinny on Fixed Price vs. Cost Reimbursable subagreements.

What We Want And What We Need Has Been Confused

Quick: Think of the many documents that make up a research agreement portfolio.  Now rank them in order of importance.  Was the Statement of Work (SOW) first or second on the list?  If not, perhaps you should rethink your perceptions.

Often overlooked with respect to its impact on a particular project, the SOW serves as the backbone for many of the legal terms stated in the research agreement.  Additionally, we frequently encounter situations where a given legal obligation is specifically contradicted by what is written in the SOW, and the parties needlessly expend resources sorting out the differences.

Consequently, it is imperative that the SOW be an accurate description of not only the work to be performed by your PI, but also any materials used during or activities anticipated following the period of performance.  For example:

Will the PI require any IP owned by the Sponsor to perform his/her research?

Don’t forget to include the necessary license and address the issue of ownership of improvements.

Will the PI be using any University-owned Intellectual Property during the course of his/her research?

Make doubly sure you include a Background Intellectual Property clause that protects the rights of the institution, and clearly spell out the Background IP that will be used.

Will the PI be creating any Intellectual Property during his/her research?

Who will own?  With respect to any patentable inventions, who will bear the responsibility of filing applications and paying the associated costs?

Will the PI need to access any confidential information of the sponsor?

Your institution’s standard CI terms may need to be tweaked to allow the PI and his/her personnel to adequately perform the requested duties.

Will the PI be publishing the results of the research, or any additional information?

Who will be the authors?  Will the sponsor be afforded the opportunity to review any proposed publication prior to submission?

Will the PI be providing a tangible product (or Deliverable)?

Check the payment schedule to make sure that any milestone payments correspond to what actually is being delivered.

In general, the SOW should be more than simply a recitation of the applicable science.  Instead, it should provide the foundation for the terms of the research contract itself – A clear, substantive description of what the PI will be doing, the activities being considered and the various moving parts involved.  Many research administrators are loathe to devote significant time to the SOW, given that there are generally more than enough issues that require negotiation as it is.  However, any troublesome issues in the Statement of Work will naturally affect their accompanying clauses, and thus the ORA representative, the research analyst and the PI should all endeavor to ensure that the SOW is as complete as possible.

NCURA’s YouTube Tuesday

The differentiation between a subrecipient and a vendor can often be confusing, and is something about which we have written previously.  On today’s YouTubeTuesday video from NCURA, Jeanne Galvin-Clarke of the University of Maryland, Baltimore, further breaks down the different services offered by both and how they should be considered contractually.

watch?feature=player_profilepage&v=82eB_2L2fpQ

Don’t forget to visit NCURA’s YouTube page for even more instructional and helpful videos!

Social Media Spotlight

As you all are aware, we recently made the decision to move from the friendly confines of WordPress and host our blog on an independent server, thereby allowing us more freedom both in what we can offer and how we managed our site.  And, as you all are also aware, we encountered our share of issues in doing so, from stale DNS caches to missing posts to deleted subscriptions.  Minus a few outstanding tweaks, we are essentially back to where we were pre-migration, and look forward to finally being able to provide the added content at the heart of our move.

Besides challenging our patience, last week’s events served to reinforce how important it is to integrate all of your SocMed platforms.  It’s true that our various accounts generally focus on different aspects of ORA’s activities – Our blog is for substantive posts both inside and outside of JHSPH, our Twitter feed is for short bursts of information and links to interesting articles, and Facebook provides more informal content.  However, last week we were able to alert readers to glitches with BloggingORA through both outlets, and, had the situation persisted, we would have provided any regular blog-specific content on either platform so that any damage was minimized.

(Additionally, though still in its early stages, we would have been able to disseminate relevant information through our group on LinkedIn.)

Many of our Research Administration brethren have looked to Facebook for their entry into Social Media, but few have a second platform, be it a blog or a Twitter account.  While these accounts require additional maintenance to be viable and successful, they do provide a secondary point from which you can keep faculty and other school personnel up to date with pressing information that you otherwise would have posted on Facebook.  Consequently, even if you don’t have the resources to Tweet every other hour, we experienced firsthand how valuable these secondary accounts can be, and recommend that other institutions at least investigate the possibility of creating accordingly.

Spotlight

Our Social Media Monday spotlight this week falls on The University of Arkansas Research Administration.

When we first got our blog and Facebook up and rolling, we were predominantly focused on providing information to JHU followers and faculty.  But we were galvanized when University of Arkansas became our first ‘big’ follow; someone outside of Hopkins was reading us!  If we weren’t so elated we probably would have deactivated everything out of fear that the outside world had found us.

In any event, RAP does an amazing job of sharing information and events with their school, as they participate in fundraisers, post research policy changes and respond to Frequently Asked Questions on their Facebook page.  In short, if you were going to start an office Facebook page tomorrow, theirs would be a great template to follow! They are concise, informative and fun, and we look forward to interacting with them more in the future.

Below The Fold

Since most casual blog followers rarely read beyond the initial group of postings, and especially since our audience continues to expand, we’ve decided to start a regular feature that highlights some of our recent articles that have fallen from the first page.  Consider it a quasi-digest for our readers who may have missed an entry, as well as a Thursday afternoon timewaster in preparation for Sheldon’s Friday stylings.

NCURA’s YouTube Tuesday gave us the opportunity to provide suggestions for how to best utilize your friendly neighborhood ORA.

Ever wondered how to properly address additional work being performed by a subcontractor?  We have some advice.

Problems with FFATA reporting?  You don’t say.

And we continued our series on Social Media with a look at the excellent SocMed platforms of the Office of Grant & Research Development at Washington State University.

What To Expect When You’re Expecting

It’s been a banner day for your research group.  Globex Corporation has agreed to fund a project undertaken by your boss, Dr. Frink, to the tune of three million dollars.  All that stands in the way of that money is a five-page contract to be signed by both parties.  So, as you’ve been instructed, you forward the draft agreement to your designated department analyst so that they can process and send down to your friendly Office of Research Administration for review and execution.

If you’re in a department, or Dr. Frink himself, your next words are typically “And then we don’t hear anything!”  While we do our best, given the number of awards that are processed by our office each day, let alone each year, it simply isn’t possible to provide email or telephonic comments to all interested parties every step of the negotiation process.  However, JHU recognized the importance of communicating with our PIs, and thus MyRAP was born.

MyRAP (short for “My Research Agreement and Application Place”) operates as an outlet by which PIs and their personnel can check on the status of their pending agreements without the need to contact our office.  An individual record is created by ORA when any of the supported agreements is received, which will designate the lead PI, the sponsor, and other important related information.   As the agreement moves toward execution, the MyRAP record will be updated as applicable showing the progress of negotiations, as well as any information that is required for ORA to continue its efforts.  Consequently, anyone viewing the log for a given MyRAP record will be able to quickly see where things stand, and what has transpired up to that point.  Most of the time, the information on the page is sufficient to answer any questions that ordinarily would have been contained in an ORA-addressed email.

Accessing MyRAP is done simply by going to http://myrap.jhu.edu and signing in with your JHED ID.  Once you’ve logged in, you should be presented with a list of agreements.  If you’ve logged in as a PI, you will see only those records for which you are the primary investigator.  If, however, you are departmental personnel, you should see a list of all MyRAP records for your department.  You will then be able to learn the status of a given agreement by clicking on its related record.

Since MyRAP is web-based, interested parties can log in from anywhere in the world and access a listing of their agreements.  This is especially helpful during these summer months when offices are lightly staffed and PIs are taking a much-deserved break, so we encourage people to log in and take advantage of all that it has to offer.  And if you have any questions or experience any issues, please feel free to email us at admin@bloggingora.com and we’ll help sort them out.

NCURA’s YouTube Tuesday

In today’s installment of NCURA’s YouTube Tuesday, David Ngo, Managing Officer of the Office of Research & Sponsored Programs at the University of Wisconsin-Madison, discusses the topic of cost sharing and the issues involved with getting it approved.  Cost sharing can be a tricky and convoluted component of the award process, and many institutions including JHSPH, will generally only allow it if it is required by the sponsor.  Consequently, it’s important to be mindful of all of its facets to ensure compliance both with the award as well as your university’s policies.

Don’t forget to visit NCURA’s YouTube page for even more instructional and helpful videos!

SWFI Monday

“Never work with children or animals.” – W.C. Fields

In late 2010, NIH began assessing the necessity of using chimpanzees in biomedical and behavioral research, and in December 2011, NIH indicated that it would not fund any project that included research involving chimpanzees until proper guidelines were put in place.  Last week, NIH clarified its interim policy and announced that it would accept submissions that include chimpanzee samples, so long as the samples were obtained on or before December 15, 2011.  For samples collected after that date, applicants must provide additional information concerning their collection.

NIH also announced new requirements for applications involving human embryonic stem cells, which are scheduled to take effect for the September 25, 2012, submissions.

The National Research Council’s Committee on Research Universities hosted a Webcast entitled “Research Universities and the Future of America: Ten Breakthrough Actions Vital to Our Nation’s Prosperity and Security.”

Use A Little Luck, And We Will Make It Work Out Better

As mentioned earlier this week, we’ve been moving our blog from WordPress servers to a private host, which will allow us to provide more and better content to you, our loyal readers, in the future.  However, thanks to the wonders of DNS caches, some folks are still reaching our old WordPress-hosted site instead of our new spiffy digs.  This is why many readers were unable to access today’s first attempt at Fun-Day Frday, as a Murphy’s Law of issues resulted in it being posted to our old setup.

Here’s a quick check to determine to which BloggingORA your ISP is directing you: If you see links to our Twitter and Facebook accounts on the column on the right, you’re still going through WordPress.  If you simply see a recitation of our previous blog entries, you’re all caught up.

[Additionally, check out the actual link to today’s offering from Sheldon.  If you can read it and it ends in -28, you’re still seeing us via WordPress.  If you can read it and it ends in -30, you’ve been reset.]

We’re posting this message to both platforms to ensure maximum coverage, and, as everyone’s ISPs flush and reset their DNS caches, the misrouting should eventually die away.  Until that happens, we apologize for any inconvenience that you may encounter and thank you, yet again, for your patience.