On 1 August, a new University policy covering Costing & Pricing of work with commercial and other external parties was introduced, primarily related to research, knowledge exchange, consultancy and continuing professional development services (CPD).
The new policy makes a clear distinction between the cost to the University to complete the activity (calculated using Full Economic Cost principles) and price - how much the University of Aberdeen requests from the external funder for that activity.
- Introduction of the Costing & Pricing Policy
- Costing and Pricing Policy, (including the recovery levels expected for different categories of activity)
FAQs
- According to the new Policy, cost information can no longer be shared with external partners. How will price information be shared and by whom?
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Your Research & Innovation contact will work with you using budget information provided through Worktribe to develop a price offer to the external partner, with a suitable quotation provided to them.
Funders that require a full financial breakdown (e.g. research councils, Innovate UK, NIHR, charities) will still be provided with the information they require.
- The Policy sets out target recovery rates for different types of activity, but also allows flexibility down to 75% fEC for industry-funded projects. Who is authorised to negotiate on the price and how will this happen?
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Individual academic and research staff are not permitted to negotiate on price on behalf of the University.
Your Research & Innovation contact will work with you to develop a price offer to the commercial partner using budget information in Worktribe; if the external organisation rejects the initial offer, then Research & Innovation will review the underlying cost information and will explore alternative pricing arrangements. If these do not meet the minimum price requirements outlined in the Costing & Pricing policy, then your Head of School will have to give their explicit approval. If price negotiations arrive at a point where the anticipated recovery rate on industry-funded research is less than 75% of the full economic cost, then approval will need to be sought from the Vice-Principal Regional Engagement and there is no guarantee that such approval will be granted.
- In future, if a potential commercial partner asks to see a breakdown of our costs for a project, what should I tell them?
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You should advise that the University does not share cost information with external organisations and that this is normal practice across the higher education sector. You should also advise that the University does not normally provide a breakdown of price information, unless this is explicitly required by the commercial partner (for example, on a financial information form); colleagues in Research & Innovation will advise on the presentation of price information to external parties.
- I am in early negotiations with a partner and have provided them with an indication of costs referencing the old policy. Should I now update them with a price based on the new policy?
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You should continue as before, as there is a grace period of 3 months (until 1 November 2024) to allow discussions that have already commenced to continue as per the previous arrangements. However, all new activity commencing on or after 1 August 2024 must adhere to the new Costing & Pricing policy.
- I am just about to sign off on an agreement with a partner that was negotiated over the last year or so. It does not comply with the new policy requirements; can I still go ahead?
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A grace period of 3 months (until 1 November 2024) will allow agreements already under negotiation with price already approved by the University and external partner to continue as per the previous arrangements. All activity commencing on or after 1 August 2024 must adhere to the new Costing and Pricing Policy.
If a price has already been fixed and agreed with the funder and contract negotiations are related to agreement terms unrelated to price, then the grace period may be extended by exception, through discussions with Research and Innovation.
- Is there a form/process for documenting wider benefits where fEC cannot be charged for consultancy work with Government, NGOs, Charities?
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Your Research and Innovation contact will provide you a simple proforma that can be used to outline the wider benefits and the justification for a lower price.
- My work is not strictly Academic-Initiated, but it is Collaborative Research. Is there scope to negotiate?
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In such cases, the target price will depend on the nature of the arrangements for ownership of outputs (including Intellectual Property); if these are owned by the University or there is a mixture of ownership arrangements, or the University has full publication rights, then the pricing arrangements for Academic-Initiated Collaborative Research will apply. If this is not the case, and the partner in the collaboration seeks to own all new Intellectual Property and results generated by the research, or to restrict publication rights, then contract research pricing shall apply.
- I want to apply for funding through a company’s open innovation platform and the terms and conditions of funding are not available to download. How will such an application be priced?
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This will be priced at a minimum of 100% fEC.
- A company has invited me to join an Innovate UK proposal where the funding rate is less than 100% fEC, but the results must be owned by the company. Do I need to seek approval?
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No approval is required in this case since the funder is Innovate UK (part of UKRI) rather than the company.
- I have a rolling agreement with a partner or partners and need to have sign off on a renewal or open-ended or long-term basis beyond one specific project. It seems that this is not possible anymore. What can I do?
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Arrangements for long-term or rolling agreements should be discussed directly with Research and Innovation – as there may be opportunities for price flexibility (depending on wider commercial and academic considerations).
- I have a project with a commercial partner that is of reputational importance and value to the University, but they cannot pay the revised rates. How can I demonstrate this and negotiate?
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A stated in the Policy, there is scope to negotiate on price as low as 75% of the full economic cost for Contract and Academic-Initiated Collaborative Research, subject to Head of School approval (and in some cases below 75% fEC, subject to Vice-Principal approval). In all such cases, the applicant will be expected to justify why a lower recovery rate is appropriate and the wider benefit to the University (for example, by supporting a REF impact case study).
For consultancy activities with government, NGOs and charities, pricing below fEC is permitted but expected wider benefits must be documented.
For other types of activity (consultancy with commercial organisations, CPD) there is an expectation that the minimum pricing requirements will be met.