Glossary of Commonly Referenced Terms

agency Any executive department, military department or defense agency, or other agency or independent establishment of the executive branch. {top}

allocable cost A cost that is assignable or chargeable to one or more cost objectives in accordance with the relative benefits received or other equitable relationships defined or agreed upon by contractual parties. {top}

allowable cost Project costs that are: eligible, reasonable, necessary, and allocable to the project under federal cost principles (eg., A21). {top}

approval A contracting officer's written notification to a contractor that the sponsor agrees with a proposed course of conduct. {top}

audit The systematic examination of records and other documents and the securing of evidence by confirmation, physical inspection, or otherwise for one or more purposes. {top}

authorized institutional official The designated representative of the grantee institution who signs and verifies (on behalf of the institution) both grant applications and required compliance assurances for federal and agency regulations, policies, and procedures. {top}

award Provision of funds or direct assistance in lieu of funds based on an approved appreciation and budget to provide general financial assistance to an agency or individual to carry out an activity or program. {top}

budget period The interval of time-usually 12 months-into which the project period is divided for budgetary and funding purposes. Also see project period. {top}

carryover The ability of grantees to use grant funds from one budget period to the next. {top}

closeout The process of settling all outstanding contractual issues to ensure that each party has met all of its obligations, and documenting the contract file accordingly. {top}

conference/symposium grant Awarded to conduct a meeting and usually included funds to publish the proceedings/results of the conference. {top}

continuation project A multiyear project for which funds have been committed only for the current budget period. A continuation proposal may or may not be required for future budget periods. {top}

contract A reciprocal agreement in which one or more parties agree to provide to one or more other parties certain goods and/or services in return for pre-arranged compensation. A contract can be for a specified fixed price or can provide for payment on the basis of reimbursement of expenses (cost-reimbursable basis) or a combination thereof. {top}

contracting officer (CO) An employee of the sponsor with the authority to legally bind
the sponsor by signing a contractual instrument. {top}

contracting officer technical representative (COTR) A technical employee of a contracting activity designated by a contracting officer to perform contract administration activities in regard to technical issues. {top}

contract number A number assigned by a contracting agency to identify a procurement action and provide the most efficient point of reference in correspondence dealing with the action. {top}

cooperative agreement A legal instrument used principally for transferring money, property, or services to a recipient in order to accomplish a public purpose of support or stimulation where substantial involvement is expected between the agency and the recipient. {top}

cost contract A cost-reimbursement contract in which the contractor receives no fee. {top}

cost reimbursement contract A contract that provides for payment to the contractor of allowable incurred costs to the extent provided in the contract. {top}

cost-sharing contract An explicit arrangement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract costs. {top}

defense contract audit agency (DCAA) A DoD organization that has the responsibility of performing contract audit services for the department. {top}

direct costs Clearly identifiable costs related to a specific project. General categories of direct costs include but are not limited to salaries and wages, fringe benefits, supplies, contractual services, travel and communication, equipment, computer use. {top}

discretionary funds Funds that may be spent at the discretion of an administrator. Usually used to provide a special emphasis to a program deemed important by that person. {top}

disallowance The refusal of the sponsor to recognize a cost as an allowable cost. {top}

disclosure statement A written description of a contractor's cost accounting practices and procedures that is filed with the cognizant administrative contracting officer, with a copy to the cognizant contract auditor. {top}

endowment A fund usually in the form of an income-generating investment, established to provide long-term support for faculty/research positions (endowed chair), a piece of equipment, an institution, a scholarship program, a project, or laboratory. {top}

equipment grant Provide for the purchase of new technology equipment, specialized facility equipment used for multiple purposes. {top}

extension Allows additional time to complete the original scope of work and to continue drawing on the original allotment of funds. No-cost extensions provide no additional funds and are generally granted provided there are good reasons for failure to meet the original termination date and request for extension is made early enough to be processed before the original grant period ends. {top}

facilities and administrative fee (F & A) Costs related to expenses incurred in conducting or supporting research or other externally-funded activities but not directly attributable to a specific project. General categories of facilities and administrative costs include general administration (accounting, payroll, purchasing, etc.) sponsored project administration expenses, depreciation or use allowance for buildings and equipment, and student administration and services. {top}

facilities Property used for production, maintenance, research, development, or testing. {top}

f &a rate The rate (expressed as a percentage of a base amount) established by negotiation with the cognizant federal agency on the basis of costs incurred by the institution in a previous year and distributed as prescribed in government regulations as set out in OMB Circular A-21. The facilities and administrative cost rate is charged on a set of direct costs known as an indirect cost base. {top}

fellowship Usually awards from industrial or foundations sources to provide advance study and training. The awards may specify the field and occasionally the individual receiving the funds. Fellowships may provide institutional allowances, which may include tuition, health insurance and supplies. {top}

fixed-price agreement A contract/grant for which one party pays the other party a predetermined price, regardless of actual costs, for services rendered. {top}

fraud An intentional perversion of the truth for the purpose of inducing someone to rely upon it and part with something of value or surrender a legal right. {top}

funding cycle The cycle in which proposals are considered for funding, in which deadlines at certain times of the year are followed by review meetings, and so on. Proposals received too late for one funding cycle are held over until the next one. {top}

general accounting office (GAO) A government agency that is part of the legislative
branch that investigates matters relating to the receipt, disbursement, and application of public funds. {top}

general funds State appropriated and tuition funds. {top}

gift Gifts and bequests are awards given with few or no conditions specified. Gifts may be provided to establish an endowment or to provide direct support for existing programs. Frequently, gifts are used to support developing programs for which other funding is not available. The unique flexibility, or lack of restrictions, makes gifts attractive sources of support. {top}

grant A financial assistance award to an organization in the name of a principal investigator to assist the organization in the conduct of research or other program as specified in an approved proposal. A grant-as opposed to a cooperative agreement-is used whenever the awarding office anticipates no substantial programmatic involvement with the recipient during the performance of the activities. {top}

grant/contract officer A designated individual within an agency officially responsible for the business management aspects of a particular grant, cooperative agreement, or contract. Serving as the counterpart to the business officer of the grantee/contractor organization, the grant/contract officer is responsible for all business management matters associated with the review, negotiation, award, and administration of a grant or contract and interprets the associated administration policies, regulations, and provisions. {top}

guidelines The part of a program description that describes how the program will be administered and the basis on which applications will be considered. They should be followed carefully if a proposal is to be seriously considered. {top}

incremental funding A method of funding a contract which provides specific spending limits below the total estimated costs. These limits may be exceeded only at the contractor's own wishes. Each increment is, in essence, a funding action. {top}

incurred costs A cost identified through the use of the accrual method of accounting and reporting, or otherwise actually paid. {top}

indirect costs see 'facilities and administrative' fee {top}

in-kind contributions Non-cash contributions provided by a performing contractor or a non-Federal third party who is participating. Contributions may be in the form of personal property, real property, or services. {top}

letter contract A written preliminary contractual instrument authorizing the immediate commencement of activity under its terms and conditions pending the defining of a pricing arrangement for the work to be done. {top}

letter of intent A letter customarily employed to reduce to writing a preliminary understanding of parties that intend to enter into a contract. {top}

matching gift A contribution made in response to another contribution. A common feature of many corporate organizations, matching gift programs often donate to approved charities a multiple of the sum given by the corporation's employees. {top}

matching grant A grant that requires a specified portion of the cost of a supported item of equipment or project be obtained from other sources. The required match may be more or less than the amount of the grant. Some matching grants require that the additional funds be procured from sources outside the recipient organization. Many matching grants are paid in installments, the payments coinciding with the attainment of pre-specified levels of additional funding. Matching grants are very common in the sciences, especially for equipment. They are standard practice in some government agencies. Grant rules apply to matching funds . {top}

modification Any written change in the terms of a contract. {top}

modified total direct costs (MTDC) A subset of direct costs, normally excluding equipment, alterations and renovations, and subcontract costs in excess of $25,000, on which indirect costs (F & A costs) may be charged. {top}

notice of grant award A method of acceptance of offer that is used to make an immediate award of a contract. {top}

obligation A commitment to spend appropriated funds. {top}

research incentive funds (formerly overhead return) A portion of the funds received by the University from sponsored grants and contracts for indirect costs (F & A) that usually are returned to the generating academic unit. The percentage of return is approved each year by the Budget Task Force. {top}

office of management and budget (OMB) A governmental office that serves as the President's principal arm for exercising the managerial functions of the presidency including the preparing of the annual budget. {top}

overhead Another name for facilities and administrative fee (F&A). {top}

overhead rate A percentage rate that is derived by dividing a contractor's indirect cost pool for an accounting period by the allocation base used to allocate direct costs to contracts performed during the period. {top}

overrun An amount representing the actual cost of performance that is greater than the amount estimated by the parties when the contract was entered into. {top}

patent A grant of some privilege, property, or authority made by the government to one or more individuals. It grants the inventor the exclusive right to make, use and sell an invention for 17 years. {top}

patent indemnification The promise of a contractor to reimburse the government for any amount it is required to pay an owner of a patent for the use of that patent during the performance of the contract. {top}

patent infringement Selling, making, or using a patented invention without the consent of the owner of the patent. {top}

peer review Judging of proposals by individuals technically qualified in the field of research and who are usually nonfederal researchers. {top}

pre-contract costs (pre-award costs) Costs incurred by a contractor before the effective date of the contract. {top}

principal investigator (PI), or project director The individual who will direct the project and who is designated by the institution as responsible for completing it as agreed to. {top}

prior approval The researcher must obtain approval from the funding agency in advance for issuing large subcontracts, for moving funds from one category to another in amounts larger than those previously agreed to, for an extension of time, for changing funds spent prior to formal receipt of the contract or grant, and so on. {top}

priority score A score that determines the ranking of the proposal for funding. Projects are usually funded according to their rank until funds are exhausted. The score is derived from the reviewers' ratings. {top}

project period The total time for which support of a project has been programmatically approved. A project period may consist of one or more budget periods. Also see budget period. {top}

proposal An offer submitted to a (potential) sponsor to enter into a contract, modification, or termination settlement. {top}

reasonableness of cost One of the elements in the determination of whether a cost is an allowable cost. {top}

request for applications (RFA) Announces a new grant program or the current funding cycle in an old one and requests submission of applications. Usually used to announce availability of funds on a particular topic. {top}

request for proposals (RFP) Announces the intent to award a contract and specifies the service or product to be delivered, the criteria to be used, applicant qualifications, person-years anticipated, and deadline. {top}

research grant The principle purpose is to transfer money to the recipient with no substantial involvement in the project by the sponsor. Grants have flexible terms and permit a purpose or scope of work that is broad for investigators (researchers) to explore a wide variety of promising research directions within the terms of the written agreement. Research grants may also be used to investigate teaching methods, conduct surveys, explore new areas, and many other research purposes. {top}

scope of work A statement of all work that was fairly and reasonably within the contemplation of the parties at the time the contract was made. {top}

sole source The only source known to be able to perform a contract, or the one source among others that, for justifiable reason, is found to be most advantageous for the purpose of contract award. {top}

statement of work The portion of a contract which describes the actual work to be done by the contractor by means of specifications, performance dates, and quality requirements. {top}

stop-work order A unilateral order of the contracting officer requiring the contractor to stop all or any part of the work called for under the contract. {top}

subcontract A contract entered into by a prime contractor for the purpose of obtaining supplies, materials, services. {top}

subcontract agreement A document written under the authority of, and consistent with the terms and conditions of a prime award (a grant, contract or cooperative agreement), that transfers a portion of the research or substantive effort of the prime award to another institution or organization. {top}

technology transfer The process where technology or know-how developed during the course of a research project can be conveyed to other areas and/or implemented on a commercial level. {top}

terms and conditions All the provisions of a contract. {top}

training grant Used to support teaching students at all educational levels to meet the sponsor's needs of a perceived shortage in a specific field. Training grants are usually more specific in the project purpose, students involved, and length of training support. Usually these grants provide direct support to student(s) who qualify, along with a modest amount of support, including tuition and fees. Many have lower F & A rates. {top}

unallowable cost A cost incurred by a contractor that is not chargeable to the contract. {top}

unliquidated obligation An expense on a project that is committed to but the money has not actually been spent. {top}

unrestricted Having no requirements as to the use or disposition. Grants, contracts, and cooperative agreements are considered to be restricted funds. Truly unrestricted grants are rare in research and sponsored programs-most require, at a minimum, that granted funds be used to pursue the stated purpose of the proposal. {top}

work statement The part of a research and development contract that describes work to be performed by the contractor. {top}