Subject:  Contract Language No.        98-2
Date:    April 6, 1998

(Note: This Important Notice is being sent to Account Managers, Chairpersons, Deans and Chancellors. Please forward to others who have a need to know.)

There is a difference between contracts and grants. For grants, funds are usually awarded with the expectation that research or other activity will be performed in a general framework but it does not specify exactly how the work is to be done. For contracts, there are generally deliverables and in many cases milestones or other steps to be taken in performing the work. There are also clauses in contracts that state that if the workscope is changed the amount of the contract can be adjusted up or down to meet the required changes by written notice to the contracting agency.

It is very easy for a project director working with technical people from the contracting agency to get into discussions that may change the workscope of the project but not get these changes documented in writing. There have been some unfortunate instances recently that have brought this point to light. In one case the contract specified certain steps to be taken to achieve an end goal. Because of circumstances it became easier to use computer modeling than go through the steps specified in the contract. There was a disallowance of part of the cost because all steps specified in the contract were not followed.

In another situation, the work statement outlined the work to be carried out to fulfill the contract. Through discussions between the project director and the technical people from the contracting agency, the workscope gradually became larger and larger. Unfortunately, nothing was put in writing and now there is a substantial amount of work yet to be performed with no funds left to do it.

If a project is supported by a contract, review the workscope and follow it. If the contracting agency asks for more than the contract requires in the workscope, please work with the appropriate research office for your campus. A letter should be sent to the contracting agency advising them that the work requested is over and above the workscope of the project and if it is to be done what cost adjustment will need to be made.