Guide to Proposal Preparation

Sponsoring agencies generally have guidelines for proposal preparation. In an Request For Quote, Request For Proposal, or other type of formal request, these guidelines can be very detailed with specific forms required to accompany proposal text. Often there are limitations for page length, type size, title length, or supporting documents.

When no guidelines are provided, there are some general rules of thumb to follow. A cover page should always accompany the  proposal.  It should include space for approval signatures for Penn State and a list of items such as title, PI(s) name(s), submitting department, unit or campus, funding request, and performance period.

Page numbers are essential and a table of contents is helpful to the reviewers.

An abstract accompanying the proposal should be both concise and complete. Agencies often use abstracts in their annual reports.

The proposal text should include a clear statement of the project goals and objectives as well as a description of the proposed work. Preliminary studies or those by other investigators should be summarized. Care should be taken in the text to explain the need for unusual or large expenses such as equipment, special travel or use of facilities. References should be included and, when necessary, a full bibliography.

The budget is often reviewed separately from the proposal. Provide budget notes detailing the use of all funds requested, and identify the role of each person (including staff support) included in the project budget. This provides an opportunity to justify the funds requested.

GIFTS to the University support broad faculty activities. Three general features of gifts include:

• No deliverables are required from the activities supported
• No formal technical reports are required
• No formal financial reports are required

GRANTS are made to the University on behalf of faculty to perform a specific project. The sponsor generally supports the project as outlined in a proposal. Grant characteristics include:

• Project usually has stated goals and objectives
• The sponsor has expectations about how the funds will be spent
• Grant deliverables may include formal project reports
• A financial report is required

COOPERATIVE AGREEMENTS  are agreements in which the Federal Government provides funding or a thing of value authorized by public statue and the government plays a substantial role.

A cooperative agreement is a form of assistance.  It reflects a relationship between the US Government and a recipient.  Cooperative Agreements are used when the government's purpose is to assist the intermediary in providing goods or services to the authorized recipient rather than to acquire an intermediary's services, which may ultimately be delivered to a recipient. 

CONTRACTS are the most formal type of award made to the University.  Under a contract, the sponsor supports clearly defined activities. Contract characteristics include:

• Specific deliverables are stipulated
• Project performance is monitored by the sponsor
• Technical reports are required
• Detailed financial reports are required

All four types of awards must be reviewed by authorized University officials to ensure that Penn State will be able to comply with any sponsor-imposed terms and conditions.

Please review Policy RA04 for futher information regarding gifts, grants and contracts from private sources. 

SALARY compensation should be based on the percent of time the PSU employee will spend on the project.

• Example:  monthly salary rate x %  of effort x no. of months ($5,000 x 10% x 1 month =$500)

 If the project is multi-year, include the University approved inflation factor beginning each July 1 (some federal agencies require special justification for annual increases in excess of the current inflation factor for multi-year). Salary requests for non-University people should be listed under the category of “Purchased Services” or “Consultants.”

HOURS and/or hourly rates are occasionally a requirement for proposals. Always include the following note when reporting hours and/or rates:

"HOURS – The estimate of hours and/or hourly rates are furnished solely for the purpose of this proposal. It is understood that the University will not be required to maintain a record of hours of effort under any resultant award."

A similar note should be included in proposals that require a cost by task or project breakdown.

FRINGE BENEFITS are expenses directly associated with employment and are applicable to all University salaries and wages. The rate summary sheet contains all the current rates. If required by the sponsor, a more detailed breakdown can be supplied. Some sponsors also may request a copy of the current Fringe Benefits Rate Agreement.

FACILITIES AND ADMINISTRATIVE COSTS

(F&A) are expenses essential to the conduct of sponsored activities but which cannot be readily attributed and direct charged to specific individual projects. F&A costs are calculated based on the project’s Modified Total Direct Cost (MTDC). To calculate MTDC, use the following formula:

MTDC = Total Direct Costs, Excluding:

1. Graduate Assistant Tuition Remission
2. Portion of each subcontract/subaward over $25,000 (regardless of period)
3. Equipment Purchases (life > 2 yrs. and costing over $5,000)
4. Plant Construction
5. Building Amortization
6. Rental Costs
7. Scholarships and Fellowships

Industrial proposals without federal flow through funds have an additional 5% added to the current F&A rate.

Graduate Assistant Tuition Rates can be found on the rates summary sheet. Graduate Stipend rates can be found in GURU.

Current F&A rates can be found on the rate summary sheet and the current F&A rate agreement can be found here.

All budgets should contain a budget justification using the standard PSU Budget Notes.

NEGOTIATIONS

All awards received by faculty as members of Penn State are actually made to the University on the individual’s behalf. Penn State assumes all financial responsibility and guarantees that the project will be completed.

First, the Office of Sponsored Projects (OSP) receives notification that the sponsor wishes to support the project. OSP enters into formal negotiations with the sponsor by reviewing the award's terms and conditions. After all parties agree upon the contract’s content, the University accepts the award.

START DATE

Funds are not released to the University until after the project’s official start date is established. This date is predicated upon acceptance of all terms of the award by both parties.

Grant start dates are set by the sponsor in the award. Contracts are not as predictable since in some cases the start date is specified before both parties sign and in others it is determined by the final signature date. The final signatory may be the University or the sponsor, depending on the contract.

FUND NUMBERS

Once the start date is determined, the College/Unit/ FO requests a fund number from Research Accounting. Project expenditures are processed using this assigned unique code which identifies the correct fund.

SUBCONTRACTS/SUBAWARDS

If a subcontract is included in the project, the College/Unit must submit  a Subcontract/Subaward Request Form to OSP. OSP will then prepare a subcontract or subaward between Penn State and the third party with applicable terms and conditions.

EXPENDITURES

The PI, with the cooperation of the appropriate Finance Office, manages award funds and initiates all expenditures. The Research Accounting Office monitors expenses and submits any invoices and official financial reports to the sponsor as required.

For some sponsors, the PI will need to expend funds before the award process is completed. In these cases, your College/Unit/FO can generate an Advance Fund Number prior to an award’s acceptance if there is a solid commitment from the sponsor. The College/Unit assumes all risk in covering advance fund number expenditures should the award never become fully executed.

INVESTIGATOR'S RESPONSIBILITIES

The PI must maintain contact with the sponsor’s technical monitor and comply with all technical reporting requirements. The PI must also initiate correspondence with the sponsor’s administrative or contract monitor to request programmatic or budgetary changes. All such requested revisions should be routed through OSP for appropriate approval signatures.