Negotiating Award Terms and Conditions for Pre-Award Offices

1. Award Budget Period

Start on the first day of the month and end on the last day of the month.

Start any day of the month and end the last day of the month.

For cost-reimbursable awards, start any day of the month and end any day of the month

If award is executed after the budget period end date, ask for no- cost extension immediately in order to protect billing and collection.

· CGA and RSAs need a clearly defined budget period in order to effectively manage the expenditures.

· Budget periods that end during the month is an issue for cost reimbursable agreements as our IT systems do not effectively prorate payroll.

· To the extent dates are negotiable with the sponsor, the end date should be the last day of the month.

2. Award Amount

Clearly defined award amount that is based on spending pattern or scope of work for each budget period

Award amount is not clearly defined

Deviation seems to be with Clinical Trials and Clinical Service Agreements. CGA is to use budget in eProposal for total award amount.

3. Cost Sharing

Voluntary cost sharing is

strongly discouraged

In-kind cost sharing

Faculty commitment of time on career development grants is not cost sharing.

When cost sharing is committed, please make sure the OSR Approval Form reflects the commitment amount by budget period.

4. Financial Status Report

Due date is 120 days after the budget period ends, and due date is on the last day of the month.

Due date is 90 days after the budget period ends

Due dates earlier than 60 days after the budget period ends; 90 days if the award involves a subcontractor

Except for Federal standard forms and for sponsors with electronic portals, UCSF prefers to use CGA Standard FSR Template (see Cumulative FSR or Current Period FSR).

These preferred timeframes apply to all reports - interim, annual or final.

90-day time frame will allow departments to include all expenses and adjustments for the expired budget period and determine if carryover request or no-cost extension is

needed.

5. Closeout of Awards

Due date is 180 days after the budget period ends.

Due date is 120 days after the budget period ends.

Any due dates before the financial status report or final invoice is due.

180-day time frame will ensure 1) the financial status report is filed; 2) carryover request or no-cost extension is determined and made; and 3) sufficient time to close out the award.

6. Equipment Title

Title of the equipment is transferred to the University at the time of purchase.

Title of the equipment is transferred to the University when the award expires.

Sponsor retains the title of equipment after the award expires.

For Federal grants, we may not have any negotiating power.

7. Facilities and Administrative (F&A) Rate Recovery

Full F&A Rate recovery based on the type of activity, clearly stated in the agreement; full rates include an escalation clause for increases in rates as negotiated in the future.

Modified F&A Rate recovery based, clearly stated in the agreement.

Silence on F&A rates.

All modified rates must be supported by a REMS waiver which should be notated in CACTAS.

8. Billing Contact

Separately stated billing contact and address

Combined contact

No identification of billing contact

9. Billing Terms

Remittances to UCSF should include:

· UCSF Reference

· PI Name

· On Behalf Company name (for 3^rd party billers)

· UCSF Invoice #

Payment breakdown where appropriate

10. Billing Methodology

The billing methodology must be clearly identified from the below options

No clear instructions on how to bill

UCOP has established cash management policies to ensure that sponsored research is properly paid for in advance or as worked is conducted as set in the UCOP Grants Manual Policy, Chapter 6-600

a. Cost Reimbursable Invoicing

· Monthly billing is for previous month expenses on the last day of the month

· Final Billing is due 90 days after the budget period ending

· Invoicing format should be UCSF Cost Reimbursable Standard Template, a standard Federal Form, or State of California AB- 20 standard form

· Monthly billing is due no earlier than 20th of each month for previous month expenses

Any other UCSF Cost Reimbursable Invoicing format –

For the appropriate business risks:

· Bi-monthly or quarterly billing frequencies

· Holdback/withholding, maximum allowed 10%, until the end of the project (e.g., State contracts)

Payment is contingent upon acceptance of the scientific or progress report

· Monthly billing due earlier than 20th of each month for previous month expenses

· Final Billing is due earlier than 60 days after the budget period ends; 75 if a subcontractor is involved on the award

· Payment is contingent upon whether the primary sponsor is paid

The following positions require concurrence from CGA leadership prior to agreement execution:

· Any special invoice formats outside of UCSF standards

· Any payroll reporting outside of UCSF normal award verification process (e.g. timesheets)

· Month close is the 5th working day of each month for previous month's transactions.

· 60-day time frame for the final bill allows departments to include all vendor invoices, cost transfers for non-payroll and payroll, and recharges processed; 75 days recognizes that the subcontractors have 60 days to bill UCSF.

To minimize overhead, UCSF produces invoices systematically and format deviations require manual and, thus, costly interventions.

· To maximize cash flow and eliminate carrying costs, UCSF desires to be reimbursed on a monthly basis.

b. Letter of Credit (Cost Reimbursable)

Payment method for Federal awards is Letter of Credit (cash draw)

Any deviations require concurrence from CGA leadership prior to agreement execution, as well as:

Any payroll reporting outside of UCSF normal award verification process (e.g. timesheets)

Note, if the Federal government is changing the payment method for an active award, please contact CGA prior to executing the modification.

c. Milestone Invoicing (Fixed Price)

· Payment is based on the achievement of pre-defined events as outlined in the award document; therefore, the schedule of events need to be clearly defined

·

Invoicing format should be UCSF Fixed Price Standard Template

· Undefined schedule of events

· Bi-monthly, quarterly, or end of the project billing

· Any deviations require concurrence from CGA leadership prior to agreement execution.

If the award is set-up late, please request a modification for the event schedule or CGA will bill events through award set-up date.

Given payment is contingent on delivery of events, without a predefined event schedule, UCSF is at risk of:

· not collecting its fees timely, and indefensible position for claiming any amounts owed.

d. Units of Service Invoicing (Fixed Price)

· Payment is based on units of service, e.g., clinical service agreements; therefore, the rates for each type of service needs to be clearly defined

· Scope of services to be delivered should be estimated

Invoicing format should be UCSF Fixed Price Standard Template

Payment should be nonrefundable

· If right to bill is dependent on a condition, e.g., patient enrollment in clinical trial, all dependencies need to be clearly defined.

If ability to bill is dependent on sponsor providing information, then agreement should contain performance clause and deadline for sponsor to provide such information

· Undefined schedule of rates for each type of service

· Undefined estimate of scope of service

Bi-monthly, quarterly, or the end of the project billing

Any deviations require concurrence from CGA leadership prior to agreement execution.

Given payment is contingent on units of service delivered, without a predefined pricing schedule and anticipated scope, UCSF is at risk of:

· not collecting its fees timely,

· not recovering appropriate fees, and

· indefensible position for claiming any amounts owed.

·

Remember, UC policy requires for UCSF to recover full costs for all services delivered and budget analysis of the unit rates should have been performed prior to agreement execution to ensure the rate would recover, at a minimum, the full cost of delivery, which includes F&A.

e. Installment Invoicing (Fixed Price)

· Payment is based on a pre-defined schedule as outlined in the agreement, which are not tied to deliverables but merely the passage of time (e.g., quarters)

· Payment may or may not require an invoice, which needs to be explicitly stated in the agreement

· If required, Invoicing format should be UCSF Fixed Price Standard Template

· Payment should be nonrefundable

A clause stating the award is truly cost reimbursable, with a requirement to file a financial status report and any non-spent portion will be refunded

No clearly defined schedule or statement of invoicing requirement.

If the award is set-up late, please request a modification for the installment schedule or CGA will bill installments through award set-up date.

Given payment is contingent on a schedule, without a predefined schedule or requirement to invoice, UCSF is at risk of not collecting its fees timely.

· To minimize overhead, UCSF produces invoices systematically and format deviations require manual and, thus, costly interventions.

f. Hybrid Invoicing (Combination of Cost Reimbursable and Fixed Price)

Needs to be clearly defined in the contract.

· Unit of service rates plus cost reimbursable for certain categories of expenses, such as travel, or scope of the project

· Cost reimbursable for all phases of the project except one which is billed on unit of service rates

This method is highly discouraged. Contact CGA for consultation prior to executing the agreement, especially multiple payor consortiums.

RAS doesn’t handle it efficiently and we are working on solutions; in the interim, we need to work collaboratively and proactively to ensure we can bill contracts before they are executed.

g. Advanced Payments

The Billing Methodology still needs to be clearly defined in the agreement, detailing the advanced payment.

Sponsor makes an advance payment without being invoiced, which is very beneficial to UCSF as it eliminates the cost and risk of collection.

11. Payment Terms

· Payments must be made via check or ACH. Wire is acceptable for international payments only

· Payments paid Net 30 or less

· Clinical trial start up payments paid in advance and non-refundable

· Payments paid Net 45

· Silent on payment processing timeframe

Sponsors do not always include payment terms of this nature but long periods of delay, end of award or after full cycle of patient visits hurts UCSF Cash flow and increases the risk of payment