Opportunity Application Contract Post-Award


Information : Application


Determining the Price to be Charged

    Determining the Price to Charge a Sponsor for Research

It is important to understand the distinction between the cost of conducting a research project and the price to charge a sponsor for carrying out the research on their behalf. The introduction of the pFACT costing tool will allow the full economic costs for all research projects to be determined irrespective of sponsor. While price does not always need to equal cost, an understanding of the costs of research undertaken at individual project level will be a key component in determining the appropriate price to be charged to ensure the overall sustainability of the University’s research portfolio.

The future sustainability of the University’s research portfolio will be dependant on the move towards recovering full economic costs on as large a number of research grants as possible. It is recognised, however, that this position will only be achievable over time and that interim pricing arrangements are necessary. To assist all staff involved in preparing, reviewing and approving research grant applications a matrix providing guidelines on pricing research grant proposals has been developed. Details of the price matrix are outlined in the following section. This matrix is intended to provide general guidance and any queries that may arise should be referred to the Research Support Office.

The following price matrix provides information for each major type of sponsor:

Research Councils

Guideline price = 80% of full economic costs

Research Councils have accepted the principles of full economic costing and will provide funding at a level of 80% of full economic costs. The balance of funding is provided to the University through the Qualitative Research (QR) element of the block grant.

A few exceptions to this agreed funding arrangement exist:

1. If capital elements are included as a cost on the grant and are in excess of £50,000, Research Councils will provide 100% funding for these items.

2. Research Councils will provide 100% funding for research studentships included in a research proposal.

UK Charities

Guideline price = 100% of additional costs

Charities have not yet accepted the principles of full economic costing. Large UK charities are being lobbied at a sector level and it is hoped that there will be a move towards charities accepting the principles of full economic costing in the near future.

From 2006/07 additional QR funding will be made available as part of a charity partnership initiative to assist in partially filling the funding gap between the level of funding charities currently provide and the full economic costs of undertaking research on their behalf. The University will provide further guidance when the exact amounts are known.

In the short term applications to charities should continue to be priced in line with the charities current funding rules (normally additional costs). However, every effort should be made to recover as large a proportion of full economic costs as possible from charities. Steps towards this approach can be made by including some element of the Principal Investigator’s time and indirect costs in grant applications.

UK Government (excluding RD Office)

Guideline price = 100% of full economic costs

All government bodies have been made aware of and have accepted the principles of full economic costing. Representatives from the University have met with senior Officials from all the government departments and outlined the rationale behind full economic costing.

Research grant applications to UK Government sponsors should, therefore, be submitted on the basis that the price for undertaking the research should be funded at 100% of full economic costs.

There will be instances where the government body is an intermediary for EC funding and in these cases the EC guidance will apply.

Where there is a fixed price tender situation the full economic cost should still be calculated and reviewed in line with the price offered. The PI and Head of School should ensure that every effort is made to maximise the return to the University.

R&D Office

Guideline price = 80% of full economic costs

The Research and Development Office is to be treated in line with Research Councils and will pay 80% of the full economic cost. In addition staff based in Trust premises will not attract any indirect costs and 100% of their staff costs will be recovered.

UK Industry

Guideline price = 100% of full economic costs

UK Industry research should be funded at 100% of full economic cost as such research tends to be mainly for the sponsor use and should not be subsidised by the University or public funds.

It is recognised that a number of regular sponsors may not move towards the 100% position in the short term and fluctuations may occur in the interim period. In addition, there are occasions when the industrial sponsor provides capital or consumables free of charge as part of the project and this should be recognised as part of the pricing process.

However, in the medium to longer term the general guidance is expected that industry should fund at least 100% of the full economic cost of research carried out on their behalf.

European Community

Guideline price = current EC regulations apply

The EC is being lobbied at a sector level and it is hoped that the new strands of funding will recognise the principles of full economic costing. In the interim, research funding applications should be processed as normal and in accordance with the terms and conditions of each particular strand of funding. However in the medium to longer term the Principal Investigators will be encouraged to approach other funders with a more positive approach to full economic costing.

European Community Countries

Guideline price = 100% of full economic costs

Research grant applications to EC Countries should be priced at 100% of full economic costs . The rationale being that University and United Kingdom public funds should not be used to subsidise this type of research.

International Countries (Non-European Community)

Guideline price = 100% of full economic costs

Research grant applications to EC Countries should be priced at 100% of full economic costs . The rationale being that University and United Kingdom public funds should not be used to subsidise this type of research.

Other Sponsors of Research

Guideline price = 100% of full economic costs

These tend to be ad hoc funders, subscriptions donations etc. In the main these should be funded at 100% however, individual cases may vary.

Researchers are encouraged to liaise with their Research Support Officer regarding the full economic costing of their research proposals and seek guidance on the appropriate and minimum acceptable price to be included in research grant applications.

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