What is the difference between a cost reimbursable and fixed-priced contract?
Cost Reimbursable A contract/grant for which the sponsor pays for the full costs incurred in the conduct of the work up to an agreed-upon amount. In a cost-reimbursement contract, the sponsor agrees to pay for all allowable costs incurred by the University in the process of doing the work or research up to an agreed upon maximum. If the project costs less to complete than the original amount budgeted, the sponsor is obligated to reimburse the University only up to the allowable costs of the project. Fixed-Price Contracts Unlike a cost-reimbursement contract, a fixed-price contract pays the University a fixed sum of money to provide a deliverable, service, or specified level of effort. A fixed-price contract disregards the actual costs incurred by the University to perform the contract. The University assumes the risk of over spending. If the project is completed with less spending than the contracted amount, the University can keep the unexpended funds for unrestricted use. For this re
Cost Reimbursable A contract/grant for which the sponsor pays for the full costs incurred in the conduct of the work up to an agreed-upon amount. In a cost-reimbursement contract, the sponsor agrees to pay for all allowable costs incurred by the University in the process of doing the work or research up to an agreed upon maximum. If the project costs less to complete than the original amount budgeted, the sponsor is obligated to reimburse the University only up to the allowable costs of the project. Fixed-Price Contracts Unlike a cost-reimbursement contract, a fixed-price contract pays the University a fixed sum of money to provide a deliverable, service, or specified level of effort. A fixed-price contract for billing purposes disregards the actual costs incurred by the University to perform the contract. The University assumes the risk of over spending. If the project is completed with less spending than the contracted amount, the University can usually keep reasonable unexpended fun
