42 CFR §137.336

1. (a)Cost-reimbursement agreements generally have one or more of the following characteristics:
   1. (1)Risk is shared between IHS and the Self-Governance Tribe;
   2. (2)Self-Governance Tribes are not required to perform beyond the amount of funds provided under the agreement;
   3. (3)Self-Governance Tribes establish budgets based upon the actual costs of the project and are not allowed to include profit;
   4. (4)Budgets are stated using broad categories, such as planning, design, construction project administration, and contingency;
   5. (5)The agreement funding amount is stated as a “not to exceed” amount;
   6. (6)Self-Governance Tribes provide notice to the IHS if they expect to exceed the amount of the agreement and require more funds;
   7. (7)Excess funds remaining at the end of the project are considered savings; and
   8. (8)Actual costs are subject to applicable OMB circulars and cost principles.
2. (b)Fixed Price agreements generally have one or more of the following characteristics:
   1. (1)Self-Governance Tribes assume the risk for performance;
   2. (2)Self-Governance Tribes are entitled to make a reasonable profit;
   3. (3)Budgets may be stated as lump sums, unit cost pricing, or a combination thereof;
   4. (4)For unit cost pricing, savings may occur if actual quantity is less than estimated; and,
   5. (5)Excess funds remaining at the end of a lump sum fixed price project are considered profit, unless, at the option of the Self-Governance Tribe, such amounts are reclassified in whole or in part as savings.