Contracts may be awarded based on a cost-reimbursable or fixed-price basis. Both types of agreements are subject to indirect costs at the rate negotiated for federal grants appropriate for the type of activity. All contracts should include clearly defined deliverables that delineate the investigator’s obligations to the sponsor.
Cost-reimbursable contracts are agreements under which UWM receives payment only after expenditures are made, submitted to the sponsor, and found appropriate and allowable. These contracts require detailed budgets that indicate the intended use of the funds as this detail helps define appropriate and allowable expenditures.
Fixed-price contracts are agreements under which UWM receives full payment only after the investigator fulfills the contract requirements (i.e., deliverables). Upon completion of the contract, UWM receives only the contracted amount, even if the actual expenditures exceed this amount. For these types of contracts, a detailed budget should not be shared with the sponsor although an internal budget which includes all costs (including the indirect costs) is required at the time the contract is submitted to the sponsor. In the event that the sponsor requests a budget, a major-category “burdened budget” should be provided (i.e., each category included in the budget should include an aggregate figure incorporating both direct and indirect costs; neither the indirect costs nor the indirect rate should be detailed).