When a company is awarded a Fixed Price award, specifically a fixed price NSF grant or SBIR grant, from the government, usually all the financial risk is on the contractor. This means the government is less interested in how the company does their accounting. The contractor is usually not burdened with audits of their accounting system, they do not need to calculate indirect billing rates and the type of accounting system is not a concern to the government. The burden of completing the work assigned for the price agreed upon is enough risk for the company to bear. Recently, there have been some incidences of items that might be of concern to a company with a fixed price grant from the NSF.
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The National Science Foundation (NSF) was the Federal Agency that gave birth to the Small Business Innovation Research (SBIR) program. They currently are the fifth largest agency for awarding money to the SBIR/STTR programs annually. The requirements in dealing with the NSF are slightly different from the requirements in dealing with the Department of Defense (DoD) which has the largest SBIR/STTR budget. Many times small business owners will begin dealing with one agency and not realize the differences. This can cause problems.