Under fixed price agreements, funding is provided either on a payment schedule or based on a designated milestone schedule, rather than as costs are incurred. Fixed price agreements typically do not require the return of unspent funds. Clauses that carry a potential financial penalty must be underwritten fully by the proposing unit.
Fixed price agreements are common for industry-sponsored research. For other sponsors, the use of a fixed price agreement is reviewed by RAS. Regardless of the funding mechanism, sponsored projects should provide full cost reimbursement (MIT Policies and Procedures, 14.1.1).
Proposal
At proposal, estimate costs accurately, and choose deliverables that do not rely on specific research outcomes, such as technical reporting.
Negotiation
Fixed price agreements are negotiated by different teams, depending on sponsor:
- Federal sponsors: RAS' Federal Negotiation team
- Foreign, foundation and non-profit sponsors (excluding industry): RAS' Foreign, Foundation and Non-Profit (FFN) team
- Industry: Office of Strategic Alliances, Transactions & Translation (OSATT)
Closeout
When a fixed price award terminates and all the terms and conditions of the award have been satisfied, any residual funds remaining in the account do not need to be returned to the sponsor. Follow Institute procedures for the distribution of residual funds.