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Cpt Guidance What are the icons in the table header for? View the 'How do I...?' document. General Guidance on the Project Costing & Pricing Tool General Guidance - Project Costing & Pricing Tool (Please refer to your School's Research Support Officer in the Research and Regional Development Division for further advice and guidance.) Introduction In response to the Government's Transparency Review (TRAC), from 1st September 2005, the Research Councils' funding rules changed so as to provide grants at a higher rate than previously. At the same time, HEFCE requires all universities to calculate their research costs on a Full Economic Cost (FEC) basis for all projects irrespective of the sponsor. As a result, many sponsors will pay a more economically sustainable price for research than before. Further background about TRAC/FEC is available at http://www.sussex.ac.uk/about/trac_fec.html. General Principles The University Council has agreed (March 2001) that no project may normally be priced below its FEC except where the potential sponsor is either: a) a UK Research Council, The Royal Society, The Royal Academy of Engineering, The British Academy, or similar publicly funded body, a UK charity or The European Union, which organisations have non-negotiable overhead rates and rules limiting the costs they will accept; or b) any other public body whether in the UK or elsewhere which has publicly announced rules limiting the costs it will meet. Proposals to all other organisations, in particular to industry and government bodies, must not normally be priced below the FEC of the work. Where a dean of a school feels that a subsidy by the University of a project can be justified by pricing below the FEC, then the dean must provide a written justification after confirming with the school accountant that the funding gap can be internally managed. The general approach to pricing a project should be to recover the FEC of the work, including Estates Directly Allocated Costs and Indirect Costs. Where a sponsor imposes certain limitations on the costs that may be charged, it is important to take care to charge out all applicable allowable costs, including some costs which might otherwise have been recovered in the Estates Directly Allocated Costs or the Indirect Costs, so as to mitigate as far as possible the shortfalls incurred by the University in undertaking a project under such financial limitations. It is important that investigators take care to identify all the costs associated with a project. The fact that there may be certain sponsors, whose rules preclude charging out the FEC, does not detract from the need to fully cost a project. If a sponsor says they cannot afford to pay the FEC of a project, our initial response must be to ask them what parts of the project they would like to cut out or reduce. We should not offer to do the same project for less than FEC. Definition of full Economic Costs Under TRAC/FEC, costs are divided into four types: 'Directly Incurred Costs' are those separately identifiable costs (staff, resources, services) incurred by the University undertaking a project and which would not otherwise be incurred but for the project. 'Directly Allocated Costs' are those separately identifiable costs relating to the use of established staff and other existing departmental or school resources or services which have not been specifically obtained for the project. Included in this category is a pooled technician charge for lab-based departments. 'Estates Costs' are those premises costs, e.g. maintenance, utilities, rates, building depreciation, cleaning, security, that are associated with research. 'Indirect Costs' are those overhead costs representing residual infrastructure and services that are not charged under any of the other cost headings. Estates Costs and Indirect Costs The Estates Costs and the Indirect Costs are calculated on a Ł per FTE basis. For calculating the Estates Costs there is a higher, lab rate (for predominantly lab-based subjects) and a lower, non-lab rate (for predominantly non lab-based subjects) but for calculating Indirect Costs there is a single University rate. Under this method, for each project year, or part thereof, the total FTE of academic and research staff working on a project is multiplied by the ŁFTE rate. The PCPT does this calculation automatically. The following departments/schools attract Estates Cost at the higher rate per FTE, as well as a Pooled Technician cost : Biology & Environmental Sciences, Biochemistry, BSMS, Chemistry, Engineering & Design, Geography, Genome, Informatics, Physics and Psychology. All other departments/schools attract an Estates Cost at the lower rate per FTE. Indirect Costs: All non-estates overheads are recovered through an indirect charge (calculated on a per FTE basis) that applies to all departments/schools. These rates are updated at the end of January every year, with any changes taking effect for new proposals submitted after 1st February. How it Works The PCPT is designed to help investigators to calculate the FEC of projects. For the most common sponsors (e.g. UK Research Councils, UK charities, industry, UK Government), the PCPT will automatically apply the appropriate funding rules to generate a 'Should be' Price. The PCPT works on the basis that investigators must estimate the FEC of projects in order to identify the costs that should be included in bid prices to sponsors. Where there is only one sponsor, then a 'Should be' Price is calculated automatically by the PCPT, applying the sponsor’s rules on the eligibility of the different types of cost identified by the investigator. Where there is more than one sponsor of a project, investigators must identify which cost is allocated to which sponsor. If there is more than one sponsor sharing a particular item of cost, for example consumables, investigators must identify the financial contribution each sponsor is making to meet that particular cost item. At the end of this process, a 'Should be' Price based on the allocation of costs to sponsors will be created. The normal expectation is that a Bid Price will equal the 'Should be' Price. If, however, it is decided to charge a Bid Price that is different from the 'Should be' Price, this may be entered using the 'Amend Bid Price' table and an explanation should be provided by the principal investigator that also confirms that the amendment has the dean’s approval. Inflation Factor Under the TRAC/FEC rules, all projects have to be costed to include inflation. You must enter all costs on a current cost basis (that is, without inflation) and the PCPT will automatically add on inflation when calculating the FEC. Where a proposal has to be submitted on a current cost basis (for example to a UK Research Council or a UK Charity ), that is, where the sponsor will supplement any grant to take account of future pay awards, the PCPT will automatically remove inflation from the 'Should be' Price. The inflation factor used by the PCPT is agreed by the University annually and maintained on the PCPT by the Research and Regional Development Division. Achieving the Correct Bid Price The PCPT automatically calculates the 'Should be' Price according to the rules of certain types of sponsor. For UK Research Councils and UK Charities, the 'Should be' Price will reflect the specific rules of those sponsors. For all other sponsors, including NHS Trusts, Government departments other than the Department of Health, and industry, the 'Should be' Price will equal the FEC. The PCPT cannot automatically produce the correct 'Should be' Bid Price for all sponsors, not least because of the sheer variety of sponsors with special rules. To accommodate this, you should use the 'Amend Bid Price' table to amend the 'Should be' Price. This table allows you, for example, to amend the price to reflect the terms of a specific deal, or to provide for the inclusion of Professional Fees in the Bid Price. The 'Amend Bid Price' table may also be used to take account of a specific sponsor's rules not accounted for by the 'Should be' Price mechanism. For example, the 'Should be' Price for bids to the Department of Health will have to be amended to reflect the fact that, exceptionally for Government departments, this department will apply the 80% of FEC funding rules of the UK Research Councils. Also for EU projects, the ŁFTE Indirect Cost rates will not apply and the 'Amend Bid Price' table will have to be used to amend the Indirect Cost for EU projects to 20% of all Directly Incurred Costs excluding any sub-contractor costs and audit fees. The 'Amend Bid Price' table should also be used to include Student Registration (tuition) fees in the Bid Price (see below). Support Staff Costs and Postgraduate Supervision Costs Support Staff: When considering whether to separately cost directly allocated technician or other directly allocated support staff involvement in a project, please remember that the University's overhead costs include: ŁFTE Pooled Technician Costs (for lab-based departments); and ŁFTE Indirect Costs which cover, amongst other costs - IT Services, Library, School/Department Administrative staff. Therefore a proportion of these costs will be recovered in the overheads applied to the FEC cost calculation. If, however, a research project is expected to utilise a particularly high level of dedicated support from such services, i.e. one which would be above and beyond their normal level of service, then a specific cost provision should to be included under Directly Allocated Costs. Postgraduate Supervision: For directly allocated staff, if a proportion of time to be spent on the project relates to postgraduate student supervision, the time and cost of that supervision must be separately identified. To do this, under 'Directly Allocated Costs', select 'Salaries'. Then select 'New' in the 'Add Staff' table. In the 'Staff Type' drop-down list select 'Academic Staff'. Enter information for them. Then select 'New' again. This time you must select 'Student Supervision' from the 'Staff Type' drop-down list. This is because time spent on supervision does constitute part of the FEC of the project, but the cost of that time will not, at present, be met by certain types of sponsors, for example the Research Councils. Directly incurred staff costs should normally be calculated on an actual cost basis using the current salary scales contained in the PCPT. Directly allocated staff costs should normally be calculated on a daily or hourly rate. Investigators must choose the hourly salary option to cost their time to a project. It is University policy to use the banding option for salaries to keep personal salaries confidential. The PCPT does not link to any salary record of existing members of staff, as this would constitute a breach of the Data Protection Act. Calculating your time TRAC/FEC has established a standard number of hours/days/weeks across the HE sector for calculating PI time spent on a project and the associated salary rate. When inputting staff time into the PCPT, you must bear in mind the following maximum productive hours/days/weeks per annum: 1650 hours per annum 220 days per annum 44 weeks per annum 7.5 hours in a day So if you wish to record that you are going spend 20% of your time on a project then, using the agreed TRAC/FEC formula, this would be 330 hours per year (or 8.8 weeks). Student Registration (Tuition) Fees Tuition fees for our students do not represent a real cost to the University as they are income and are, therefore, not part of the FEC. Sponsors, including the Research Councils, will, however, pay them in full. For example, exceptionally, the Research Councils will not apply their 80% funding rule. Where tuition fees are to be charged in the Bid Price, they must NOT be included in the FEC. The following procedure should be followed. Under 'Directly Incurred Costs', select 'Other Costs' and then select 'Student Registration Fees' from the 'Other Costs' drop-down list and enter a value of Ł0 for each applicable year. After the project 'Should be' Price has been calculated, use the 'Amend Bid Price' table to enter the full tuition fee figure for each applicable year. Equipment Purchases Equipment purchases are entered in the 'Other Costs' option, which is located under 'Directly Incurred Costs'. In order for the PCPT to calculate the correct 'Should be' Price, equipment purchases must be entered in the following manner. Firstly, the total amount of all the equipment purchases should be calculated. If the total purchase amount is £50,000 or less, then select 'Equipment Purchase - First GBP50,000 of Purchase(s)' from the drop-down list and enter the amount in the appropriate year. If, however, the total purchase amount is greater than £50,000, then details of the purchase must be entered in 2 stages: (1) select 'Equipment Purchase - First GBP50,000 of Purchase(s)' from the drop-down list and enter '50,000' in the appropriate year; (2) select 'Equipment Purchase - the Excess above GBP50,000' from the drop-down list, and enter the total purchase amount less £50,000 in the appropriate year. Professional Fees Where the rules of a sponsor do not prohibit it and where it has a dean's approval, investigators may include a personal professional fee in the Bid Price. Typically the only sponsors to whom professional fees are likely to be chargeable are industry sponsors. Professional fees are not part of the FEC or the 'Should be' Price. Professional fees may not be charged unless the FEC of the project is being charged in the Bid Price and is subsequently recovered in the award price. The number of days charged for professional fees may not be greater than the number of days of investigator's time being charged and in no case can the number exceed 220 days per annum, but the fee rate may be whatever rate the investigator wishes to charge, always remembering that it will increase the Bid Price. Money received as professional fees will be paid through the payroll where payment is to the individual, in which case it will be subject to tax, National Insurance and any other statutory deductions. Professional fees may also be transferred to a residue account in the investigator's name. In order to include professional fees in a Bid Price the following procedure should be followed. Under 'Directly Incurred Costs', select 'Other Costs' and then select 'Professional Fees' from the 'Other Costs' drop-down list and enter a value of Ł0 for each applicable year. After the project 'Should be' Price has been calculated, use the 'Amend Bid Price' table to enter the professional fee figure for each applicable year and explain how the figure has been calculated in the 'Reason for Amendment' field. Joint Proposals If a joint proposal is being submitted with other organisations, the information to be entered on the PCPT should be the information relating to the University only but including any costs to the University of using sub-contractors or external consultants. Foreign Currency Proposals If a bid is being proposed to a foreign sponsor, even if the bid itself has to be expressed in a foreign currency, the PCPT must be completed in Ł Sterling. Wherever possible, unless specifically excluded by the rules of a foreign sponsor, Bid Prices should be expressed in Ł Sterling to avoid subsequent potential losses arising from future exchange rate movements. If a Bid Price has to be quoted in a foreign currency then, where permissible, build in a contingency to cover subsequent adverse movements in exchange rates. Advice on whether this is permissible, and what would be an appropriate provision, may be obtained through your Research Support Officer in the Research and Regional Development Division. Contracts and Tenders Either the Research and Regional Development Division or the sponsor may draft the contract for a project. Where a project is subject to contract negotiations, the way a price is presented to a sponsor may be crucial to achieving acceptable terms. There is no single best way of quoting a price, it will depend on the sponsor. As a general rule, however, initially quote a single figure representing the total price. Alternatively, quote loaded daily or hourly rates. Try to avoid giving a detailed breakdown of costs. Always negotiate on price and not on cost. Negotiations should focus on the overall price to be charged and the value of the work to be done. It is important not to underestimate the value of the expertise and skills that investigators bring to a project as well as the value of University background intellectual property that may be used to carry out a project. On no account should any special reference or emphasis be given to overheads or indirect costs. These represent real costs that have to be met. They are not eliminated if we do not charge them. Tenders need to be treated carefully because the terms of any future contract are usually part of the conditions of tender. Tender procedures usually allow a request to amend the prospective contract terms by a specific date in the tendering timetable but, for reasons of fair play, they are often not subject to negotiation after a tender has been awarded. It is important, therefore, that you immediately pass copies of an invitation to tender to your Research Support Officer in the Research and Regional Development Division. The terms of tender may also have a bearing on the Bid Price. Authorised Signatures Investigators are reminded that they are not authorised to sign applications or contracts on behalf of the University. Authorised signatures must be obtained through the Research and Regional Development Division. Even if an application form does not require an authorised signature on behalf of the University, an application must not be submitted until the PCPT process has been completed and the Bid Price approved. It is one of the responsibilities of the Research and Regional Development Division to negotiate contracts. When doing so, we work closely with principal investigators to ensure, as far as possible, that the terms fit the nature of the proposed project, are fair and reasonable, and will meet the expectations of principal investigators and the University, as well as meeting the reasonable expectations of sponsors. VAT Bid Prices should always be quoted to sponsors as being exclusive of output VAT. Declaration Form and Full Proposal When you have completed the PCPT process for a project, you should print out, complete, and sign the Declaration Form and also print out a copy of the PCPT Full Proposal. These forms are available from the 'Printed' section of the Proposal map. They must be stapled together, with the PCPT Full proposal on the top, and submitted, together with any sponsor's own application forms, to your dean for approval and signature. Only after the dean's approval has been obtained should you electronically submit the proposal to the Research and Regional Development Division by clicking on the 'Proposal Submission' button. The signed, hard copy documentation must then also be submitted to the principal investigator's Research Support Officer in the Research and Regional Development Division for final approval. Only when all these processes have been completed will a bid be authorised for submission to the potential sponsor and will it be loaded onto the Research Database. 16th October 2006
For help with Sussex Direct, please consult the BIS FAQ or contact the IT Service Desk. Page created by: Helen Moore (last modified 03/06/21 14.51.19)

Cpt Guidance

What are the icons in the table header for?

General Guidance on the Project Costing & Pricing Tool

General Guidance - Project Costing & Pricing Tool

(Please refer to your School's Research Support Officer in the Research and Regional Development Division for further advice and guidance.)

Introduction

In response to the Government's Transparency Review (TRAC), from 1st September 2005, the Research Councils' funding rules changed so as to provide grants at a higher rate than previously. At the same time, HEFCE requires all universities to calculate their research costs on a Full Economic Cost (FEC) basis for all projects irrespective of the sponsor. As a result, many sponsors will pay a more economically sustainable price for research than before. Further background about TRAC/FEC is available at http://www.sussex.ac.uk/about/trac_fec.html.

General Principles

The University Council has agreed (March 2001) that no project may normally be priced below its FEC except where the potential sponsor is either: a) a UK Research Council, The Royal Society, The Royal Academy of Engineering, The British Academy, or similar publicly funded body, a UK charity or The European Union, which organisations have non-negotiable overhead rates and rules limiting the costs they will accept; or b) any other public body whether in the UK or elsewhere which has publicly announced rules limiting the costs it will meet. Proposals to all other organisations, in particular to industry and government bodies, must not normally be priced below the FEC of the work. Where a dean of a school feels that a subsidy by the University of a project can be justified by pricing below the FEC, then the dean must provide a written justification after confirming with the school accountant that the funding gap can be internally managed.

The general approach to pricing a project should be to recover the FEC of the work, including Estates Directly Allocated Costs and Indirect Costs. Where a sponsor imposes certain limitations on the costs that may be charged, it is important to take care to charge out all applicable allowable costs, including some costs which might otherwise have been recovered in the Estates Directly Allocated Costs or the Indirect Costs, so as to mitigate as far as possible the shortfalls incurred by the University in undertaking a project under such financial limitations. It is important that investigators take care to identify all the costs associated with a project. The fact that there may be certain sponsors, whose rules preclude charging out the FEC, does not detract from the need to fully cost a project.

If a sponsor says they cannot afford to pay the FEC of a project, our initial response must be to ask them what parts of the project they would like to cut out or reduce. We should not offer to do the same project for less than FEC.

Definition of full Economic Costs

Under TRAC/FEC, costs are divided into four types:

'Directly Incurred Costs' are those separately identifiable costs (staff, resources, services) incurred by the University undertaking a project and which would not otherwise be incurred but for the project.
'Directly Allocated Costs' are those separately identifiable costs relating to the use of established staff and other existing departmental or school resources or services which have not been specifically obtained for the project. Included in this category is a pooled technician charge for lab-based departments.
'Estates Costs' are those premises costs, e.g. maintenance, utilities, rates, building depreciation, cleaning, security, that are associated with research.
'Indirect Costs' are those overhead costs representing residual infrastructure and services that are not charged under any of the other cost headings.

Estates Costs and Indirect Costs

The Estates Costs and the Indirect Costs are calculated on a Ł per FTE basis. For calculating the Estates Costs there is a higher, lab rate (for predominantly lab-based subjects) and a lower, non-lab rate (for predominantly non lab-based subjects) but for calculating Indirect Costs there is a single University rate. Under this method, for each project year, or part thereof, the total FTE of academic and research staff working on a project is multiplied by the ŁFTE rate. The PCPT does this calculation automatically.

The following departments/schools attract Estates Cost at the higher rate per FTE, as well as a Pooled Technician cost : Biology & Environmental Sciences, Biochemistry, BSMS, Chemistry, Engineering & Design, Geography, Genome, Informatics, Physics and Psychology. All other departments/schools attract an Estates Cost at the lower rate per FTE.

Indirect Costs:
All non-estates overheads are recovered through an indirect charge (calculated on a per FTE basis) that applies to all departments/schools.

These rates are updated at the end of January every year, with any changes taking effect for new proposals submitted after 1st February.

How it Works

The PCPT is designed to help investigators to calculate the FEC of projects. For the most common sponsors (e.g. UK Research Councils, UK charities, industry, UK Government), the PCPT will automatically apply the appropriate funding rules to generate a 'Should be' Price. The PCPT works on the basis that investigators must estimate the FEC of projects in order to identify the costs that should be included in bid prices to sponsors. Where there is only one sponsor, then a 'Should be' Price is calculated automatically by the PCPT, applying the sponsor’s rules on the eligibility of the different types of cost identified by the investigator. Where there is more than one sponsor of a project, investigators must identify which cost is allocated to which sponsor. If there is more than one sponsor sharing a particular item of cost, for example consumables, investigators must identify the financial contribution each sponsor is making to meet that particular cost item. At the end of this process, a 'Should be' Price based on the allocation of costs to sponsors will be created. The normal expectation is that a Bid Price will equal the 'Should be' Price. If, however, it is decided to charge a Bid Price that is different from the 'Should be' Price, this may be entered using the 'Amend Bid Price' table and an explanation should be provided by the principal investigator that also confirms that the amendment has the dean’s approval.

Inflation Factor

Under the TRAC/FEC rules, all projects have to be costed to include inflation. You must enter all costs on a current cost basis (that is, without inflation) and the PCPT will automatically add on inflation when calculating the FEC. Where a proposal has to be submitted on a current cost basis (for example to a UK Research Council or a UK Charity ), that is, where the sponsor will supplement any grant to take account of future pay awards, the PCPT will automatically remove inflation from the 'Should be' Price. The inflation factor used by the PCPT is agreed by the University annually and maintained on the PCPT by the Research and Regional Development Division.

Achieving the Correct Bid Price

The PCPT automatically calculates the 'Should be' Price according to the rules of certain types of sponsor. For UK Research Councils and UK Charities, the 'Should be' Price will reflect the specific rules of those sponsors. For all other sponsors, including NHS Trusts, Government departments other than the Department of Health, and industry, the 'Should be' Price will equal the FEC. The PCPT cannot automatically produce the correct 'Should be' Bid Price for all sponsors, not least because of the sheer variety of sponsors with special rules. To accommodate this, you should use the 'Amend Bid Price' table to amend the 'Should be' Price. This table allows you, for example, to amend the price to reflect the terms of a specific deal, or to provide for the inclusion of Professional Fees in the Bid Price. The 'Amend Bid Price' table may also be used to take account of a specific sponsor's rules not accounted for by the 'Should be' Price mechanism. For example, the 'Should be' Price for bids to the Department of Health will have to be amended to reflect the fact that, exceptionally for Government departments, this department will apply the 80% of FEC funding rules of the UK Research Councils. Also for EU projects, the ŁFTE Indirect Cost rates will not apply and the 'Amend Bid Price' table will have to be used to amend the Indirect Cost for EU projects to 20% of all Directly Incurred Costs excluding any sub-contractor costs and audit fees. The 'Amend Bid Price' table should also be used to include Student Registration (tuition) fees in the Bid Price (see below).

Support Staff Costs and Postgraduate Supervision Costs

Support Staff: When considering whether to separately cost directly allocated technician or other directly allocated support staff involvement in a project, please remember that the University's overhead costs include:
ŁFTE Pooled Technician Costs (for lab-based departments); and
ŁFTE Indirect Costs which cover, amongst other costs - IT Services, Library, School/Department Administrative staff.

Therefore a proportion of these costs will be recovered in the overheads applied to the FEC cost calculation. If, however, a research project is expected to utilise a particularly high level of dedicated support from such services, i.e. one which would be above and beyond their normal level of service, then a specific cost provision should to be included under Directly Allocated Costs.

Postgraduate Supervision: For directly allocated staff, if a proportion of time to be spent on the project relates to postgraduate student supervision, the time and cost of that supervision must be separately identified. To do this, under 'Directly Allocated Costs', select 'Salaries'. Then select 'New' in the 'Add Staff' table. In the 'Staff Type' drop-down list select 'Academic Staff'. Enter information for them. Then select 'New' again. This time you must select 'Student Supervision' from the 'Staff Type' drop-down list. This is because time spent on supervision does constitute part of the FEC of the project, but the cost of that time will not, at present, be met by certain types of sponsors, for example the Research Councils.

Directly incurred staff costs should normally be calculated on an actual cost basis using the current salary scales contained in the PCPT. Directly allocated staff costs should normally be calculated on a daily or hourly rate.

Investigators must choose the hourly salary option to cost their time to a project. It is University policy to use the banding option for salaries to keep personal salaries confidential.

The PCPT does not link to any salary record of existing members of staff, as this would constitute a breach of the Data Protection Act.

Calculating your time

TRAC/FEC has established a standard number of hours/days/weeks across the HE sector for calculating PI time spent on a project and the associated salary rate. When inputting staff time into the PCPT, you must bear in mind the following maximum productive hours/days/weeks per annum:

1650 hours per annum
220 days per annum
44 weeks per annum
7.5 hours in a day

So if you wish to record that you are going spend 20% of your time on a project then, using the agreed TRAC/FEC formula, this would be 330 hours per year (or 8.8 weeks).

Student Registration (Tuition) Fees

Tuition fees for our students do not represent a real cost to the University as they are income and are, therefore, not part of the FEC. Sponsors, including the Research Councils, will, however, pay them in full. For example, exceptionally, the Research Councils will not apply their 80% funding rule. Where tuition fees are to be charged in the Bid Price, they must NOT be included in the FEC. The following procedure should be followed. Under 'Directly Incurred Costs', select 'Other Costs' and then select 'Student Registration Fees' from the 'Other Costs' drop-down list and enter a value of Ł0 for each applicable year. After the project 'Should be' Price has been calculated, use the 'Amend Bid Price' table to enter the full tuition fee figure for each applicable year.

Equipment Purchases

Equipment purchases are entered in the 'Other Costs' option, which is located under 'Directly Incurred Costs'. In order for the PCPT to calculate the correct 'Should be' Price, equipment purchases must be entered in the following manner. Firstly, the total amount of all the equipment purchases should be calculated. If the total purchase amount is £50,000 or less, then select 'Equipment Purchase - First GBP50,000 of Purchase(s)' from the drop-down list and enter the amount in the appropriate year. If, however, the total purchase amount is greater than £50,000, then details of the purchase must be entered in 2 stages: (1) select 'Equipment Purchase - First GBP50,000 of Purchase(s)' from the drop-down list and enter '50,000' in the appropriate year; (2) select 'Equipment Purchase - the Excess above GBP50,000' from the drop-down list, and enter the total purchase amount less £50,000 in the appropriate year.

Professional Fees

Where the rules of a sponsor do not prohibit it and where it has a dean's approval, investigators may include a personal professional fee in the Bid Price. Typically the only sponsors to whom professional fees are likely to be chargeable are industry sponsors. Professional fees are not part of the FEC or the 'Should be' Price. Professional fees may not be charged unless the FEC of the project is being charged in the Bid Price and is subsequently recovered in the award price. The number of days charged for professional fees may not be greater than the number of days of investigator's time being charged and in no case can the number exceed 220 days per annum, but the fee rate may be whatever rate the investigator wishes to charge, always remembering that it will increase the Bid Price. Money received as professional fees will be paid through the payroll where payment is to the individual, in which case it will be subject to tax, National Insurance and any other statutory deductions. Professional fees may also be transferred to a residue account in the investigator's name.

In order to include professional fees in a Bid Price the following procedure should be followed. Under 'Directly Incurred Costs', select 'Other Costs' and then select 'Professional Fees' from the 'Other Costs' drop-down list and enter a value of Ł0 for each applicable year. After the project 'Should be' Price has been calculated, use the 'Amend Bid Price' table to enter the professional fee figure for each applicable year and explain how the figure has been calculated in the 'Reason for Amendment' field.

Joint Proposals

If a joint proposal is being submitted with other organisations, the information to be entered on the PCPT should be the information relating to the University only but including any costs to the University of using sub-contractors or external consultants.

Foreign Currency Proposals

If a bid is being proposed to a foreign sponsor, even if the bid itself has to be expressed in a foreign currency, the PCPT must be completed in Ł Sterling. Wherever possible, unless specifically excluded by the rules of a foreign sponsor, Bid Prices should be expressed in Ł Sterling to avoid subsequent potential losses arising from future exchange rate movements. If a Bid Price has to be quoted in a foreign currency then, where permissible, build in a contingency to cover subsequent adverse movements in exchange rates. Advice on whether this is permissible, and what would be an appropriate provision, may be obtained through your Research Support Officer in the Research and Regional Development Division.

Contracts and Tenders

Either the Research and Regional Development Division or the sponsor may draft the contract for a project. Where a project is subject to contract negotiations, the way a price is presented to a sponsor may be crucial to achieving acceptable terms. There is no single best way of quoting a price, it will depend on the sponsor. As a general rule, however, initially quote a single figure representing the total price. Alternatively, quote loaded daily or hourly rates. Try to avoid giving a detailed breakdown of costs. Always negotiate on price and not on cost. Negotiations should focus on the overall price to be charged and the value of the work to be done. It is important not to underestimate the value of the expertise and skills that investigators bring to a project as well as the value of University background intellectual property that may be used to carry out a project. On no account should any special reference or emphasis be given to overheads or indirect costs. These represent real costs that have to be met. They are not eliminated if we do not charge them.

Tenders need to be treated carefully because the terms of any future contract are usually part of the conditions of tender. Tender procedures usually allow a request to amend the prospective contract terms by a specific date in the tendering timetable but, for reasons of fair play, they are often not subject to negotiation after a tender has been awarded. It is important, therefore, that you immediately pass copies of an invitation to tender to your Research Support Officer in the Research and Regional Development Division. The terms of tender may also have a bearing on the Bid Price.

Authorised Signatures

Investigators are reminded that they are not authorised to sign applications or contracts on behalf of the University. Authorised signatures must be obtained through the Research and Regional Development Division. Even if an application form does not require an authorised signature on behalf of the University, an application must not be submitted until the PCPT process has been completed and the Bid Price approved.

It is one of the responsibilities of the Research and Regional Development Division to negotiate contracts. When doing so, we work closely with principal investigators to ensure, as far as possible, that the terms fit the nature of the proposed project, are fair and reasonable, and will meet the expectations of principal investigators and the University, as well as meeting the reasonable expectations of sponsors.

VAT

Bid Prices should always be quoted to sponsors as being exclusive of output VAT.

Declaration Form and Full Proposal

When you have completed the PCPT process for a project, you should print out, complete, and sign the Declaration Form and also print out a copy of the PCPT Full Proposal. These forms are available from the 'Printed' section of the Proposal map. They must be stapled together, with the PCPT Full proposal on the top, and submitted, together with any sponsor's own application forms, to your dean for approval and signature. Only after the dean's approval has been obtained should you electronically submit the proposal to the Research and Regional Development Division by clicking on the 'Proposal Submission' button. The signed, hard copy documentation must then also be submitted to the principal investigator's Research Support Officer in the Research and Regional Development Division for final approval. Only when all these processes have been completed will a bid be authorised for submission to the potential sponsor and will it be loaded onto the Research Database.

16th October 2006