Pricing and costing applications
Before a grant application is submitted or agreement is reached with a commercial sponsor, you must first:
- Calculate the cost of the proposed research using full Economic Costing (fEC) methodology;
- Determine an appropriate price; and
- Gain institutional authorisation for that price.
This page will guide you through that process. Please remember to allow time for authorisations/approvals when planning for a deadline.
1. Calculate the cost
The budget for any research project is costed using full Economic Costing (fEC) methodology. This calculates the true cost of all the resources needed to undertake the project. There are many factors to consider, including costs for staff, travel, consumables, recruitment, equipment, facilities, biological services, research data management, impact, and open access to name a few. An understanding of the principles of fEC will help you to calculate the true cost of a research project, ensuring that you have the necessary financial resources required. The funder will also normally issue guidelines with the call for applications to help you determine which costs are eligible.
Information on the types of costs to consider when calculating a budget for your research project
The tools available for costing a project are:
||Use this to generate a quick rough and ready cost for a potential research project. Looking at different scenarios will help you determine what can be achieved for the available funding.
||Access the Cost Estimator
|Costing & Awards Tool
||All grant applications (including all Horizon 2020 projects except for Marie Curie) must be costed and internally approved using the Costing & Awards Tool. This has replaced URMS.
||Access the Costing & Awards Tool
|Marie Curie Costing Tool
||Due to the intricacies of Marie Curie funding it is not possible to cost projects using the Costing & Awards Tool. We have developed Excel tools for the costings.
||Access the Marie Curie Costing Tool
2. Determine a price
- Once you have calculated the fEC using the Costing & Awards Tool, the next step is to determine the price.
- Cost and price are not the same thing. The cost is a fact and will always remain the same regardless of the funder, whereas the price is the amount eventually paid by the funder.
- Different funders have different rules which dictate the price they are able or willing to pay. Some advice is available for the main funders.
The University has two approaches to the pricing of a research proposal:
|Funders with non-negotiable rules to pricing
- Many funders have non-negotiable rules regarding the pricing of research, which should be publicly available via their website or handbook and clearly set out their attitude to the different types of costs which make up a research proposal.
- For example, UK Research Councils pay 80% of the fEC. The Wellcome Trust will pay 100% of the directly incurred costs, a proportion of some of the directly allocated costs and 0% of the indirect costs.
- For some funders, the Costing & Awards Tool will automatically apply their rules and provide an accurate price. For others, the price multipliers will need to be set manually. Please contact the Pricing Team for help.
- The Costing & Awards Tool can then be submitted for approval.
|Funders with a negotiable attitude to pricing
- The price must be negotiated with funders without fixed rules, such as private sector organisations, and some government departments or overseas funders.
- A price equal to the fEC should be taken as the minimum starting point. A price above fEC can often be secured by comparison with the market rate in the private sector. Income secured over and above fEC will enter the Resource Allocation Model.
- The PI should notify the Research Services once a price equal to or above fEC has been agreed, and they will update the Costing & Awards Tool.
- If a price at least equal to fEC cannot be secured, then agreement by the relevant Head of Faculty is required before the price is agreed with the funder. The process is outlined below. Heads of Faculty will not consider unsolicited requests.
- The PI discusses the situation with their Head of Department, and together they complete and return the Price Below fEC form (available from Research Services on request).
- Research Services review the form, add information where necessary, and submit it to the Head of Faculty.
- If approved, the Pricing Team will update the Costing & Awards Tool and send the PI the correct budget for submission to the funder.
Industrial sponsors often require written quotations for research work. Research Services can generate a formal quotation for you.
Request a quotation
|Common research funder rules regarding pricing
- UK Research Councils will pay 80% towards the fEC of the project. The remaining 20% is assumed to be funded by HEFCE QR resources. This is the Government's 'Dual Support' system of Public funding of research. This does not affect individual PIs, who will have a budget of 100% of their directly incurred costs to spend (provided that the award at 80% covers this). 100% of the costs of any equipment over £50K will be paid, as will the full cost of any tied studentships.
- Other Government Departments (OGDs) are often concerned with short-term policy agendas and the research they commission is often to procure evidence to inform policy-making, rather than to enhance the national research base. Therefore, the majority of research projects undertaken on behalf of OGDs should be priced at or above fEC, in the same way as industrially funded research. Some government departments have largely adopted the Research Council's approach to funding research (e.g. the Department of Health and NIHR).
- UK Charities normally specify the costs that they are prepared to fund, which are usually less than fEC. In many cases they specify the 'eligible additional costs' that they will be prepared to fund and often will not pay anything towards the overhead costs or investigator salary costs. HEFCE supports research funded by charities within the block grant paid to universities. In order for the University to receive this supplementary funding, the charity concerned must meet certain criteria: essentially, the application must undergo a process of peer review and must have been available in open competition. Charities usually provide funding for the directly incurred costs specifically related to a research project e.g., research assistant(s), travel, and consumables. They rarely fund the cost of PI time or provide for indirect costs. They may be willing to pay for the cost of pool technicians or research facilities but the need for these resources has to be justified.
- EU Horizon 2020 is the main research funding programme for the EU. It does not use fEC and instead covers all direct research costs plus a 25% overhead. The EU funds some research outside of the Horizon 2020 programme under a Directorates-General (DG), and there are separate costing rules for each of these ad-hoc research calls. For current Horizon 2020 projects, the University must calculate the fEC of any proposal but the price included in the application is on the basis of an Additional Cost model.
- Industrial funders may have specific rules, but where the funder has a negotiable attitude then a price equal to the fEC should be taken as the minimum starting point. A price above fEC can often be secured by comparison with the market rate in the private sector.
3. Gain University authorisation for the price
The University's Financial Directives require all prices to be approved in the Costing & Awards Tool by both the Head of Department (HoD) and Research Services before the application is submitted. The process is outlined below. If urgent authorisation is required, contact the helpline on 21450.
- The PI or their departmental support press the submit button on the submission tab in the Costing & Awards Tool.
- The costing is sent to the relevant HoD or nominated delegate for approval. The project status will show as PENDING.
- Once the HoD approves the costing it is automatically sent to Research Services for review. It will be considered within the agreed target time of three working days, although in practice many are approved within the same day. The status will show as COSTING APPROVED.
- The price can be transferred to the application form, which may be paper-based or electronic. Please note that there is a further, separate, two-stage approval process for submission of the application.
The Costing & Awards Tool automatically calculates the correct price based for some funders based on the rates that they will fund.