Guidance on Distinguishing Sponsored Projects from Fee-for-Service Agreements

While both sponsored projects and fee-for-service activities involve external funding to the University in exchange for work performed by University personnel, they differ significantly in purpose, scope, and administrative requirements. Proper classification is essential for ensuring compliance with University policy and sponsor expectations.

If you are uncertain about how to classify a specific proposal, project, or agreement, please contact RchAcctg@Rice.edu for guidance and final determination.

Sponsored Projects

Sponsored projects are scholarly activities that directly support Rice University’s mission in research, teaching, and public service. These agreements—typically structured as grants, contracts, or cooperative agreements—require substantive intellectual input from Rice personnel and are subject to sponsor terms and conditions.

Sponsored projects must be processed through the Office of Sponsored Projects (OSP) and submitted via Cayuse.

Common characteristics of sponsored projects include:

1. The project requires significant intellectual or scholarly contribution by Rice personnel.
2. A formal proposal or award agreement is submitted and typically requires institutional approval or endorsement.
3. The budget is itemized and may include sponsor-imposed restrictions on spending or rebudgeting.
4. Cost-sharing or matching funds may be required.
5. There is a specified level of effort or commitment from project personnel.
6. Financial, technical, or progress reports—and sometimes audits—are required by the sponsor.
7. The agreement outlines ownership or disposition of tangible or intangible property, such as data or inventions.
8. Any unspent funds may need to be returned to the sponsor at the project’s end.
9. The agreement includes terms for compliance with federal, state, or institutional policies (e.g., human subjects, export control, conflict of interest).

Fee-for-Service Activities

Fee-for-service activities involve providing routine, defined services using established methods or procedures, often under the direction or specifications of the external entity. These activities do not involve research, scholarly inquiry, or significant intellectual contribution and are not expected to generate new knowledge or result in publications.

Fee-for-service activities typically have these characteristics:

1. The work involves routine, repetitive, or standardized services.
2. Rice personnel provide minimal intellectual or scholarly input.
3. No new intellectual property or research findings are expected to result from the work.
4. There is no scientific uncertainty or hypothesis being tested—the deliverables are clearly defined.
5. Data collected is provided without interpretation, and there is no expectation for publication or analysis by Rice personnel.

This guidance is intended to assist faculty and staff in appropriately classifying externally funded activities and ensuring that proper administrative and compliance protocols are followed. For case-by-case questions or complex situations, please reach out to RchAcctg@Rice.edu.

Relevant Policies
Policy for the Submission and Administration of Sponsored Projects https://policy.rice.edu/301

Signature and Approval Authority
https://policy.rice.edu/810