Facilities & Administrative Cost (F&A) (a.k.a. Indirect Cost) Rates
(Some funding agencies still refer to this cost as "indirect" or "overhead".) Based on the University's rate agreement (approval date of September 21, 2009), with UofL's cognizant agency, the Department of Health and Human Services (DHHS), the current federally approved F&A cost rates for all new projects are as follows.
EFFECTIVE JULY 1, 2009 THROUGH JUNE 30, 2012:
EFFECTIVE JULY 1, 2012 THROUGH JUNE 30, 2013:
(1) Off-Campus Definition: For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off-campus rate will apply. Sponsored agreements may not be subject to more than one F&A cost rate. If 50% or more of a project is performed off-campus (exclusive of any subcontract performance sites), the off-campus rate will apply to the entire project.
(2) Modified Total Direct Costs (MTDC) consists of salaries and wages, fringe benefits, materials, supplies, services, consultants, travel, other costs, and the first $25,000 of each subgrant or subcontract. Modified Total Direct Costs excludes equipment ($5,000 or greater per item), capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships and fellowships, as well as the portion of each subgrant and subcontract in excess of $25,000.
(3) Total Direct Costs (TDC) apply to private for-profit/private non-profit/industry-funded clinical trials only. If federally funded (either when University has the prime award or University is a subcontractor to an entity that received federal funding, or “flowthrough”), the applicable federal MTDC rate applies. See also item B below.
Budgets for sponsored agreements must include the full appropriate amount for F&A costs unless reduced under one of the following exceptions:
A. The governmental or non-profit Sponsor has an established policy limiting the amount of F&A costs. Documentation must be attached to the clearance form (e.g. PCF or TRIA/MIRA) for consideration of reduction of the F&A costs.
* B. Proposals to companies that will not pay the appropriate on- or off -campus F&A cost rate must include as direct costs the difference between the company's rate and UofL’s rate. Proposals without these adjustments will not be accepted by the Office of Sponsored Programs Grants Administration - (formerly known as Grants Management), or Industry Contracts. Subaward proposals (including under SBIR & STTR programs) should contain the F&A rate applicable to the primary sponsor (i.e., the ultimate source of funds). For example, if the UofL activity is to be performed under a subaward from a company and supported with federal SBIR/STTR funds qualifies as on-campus organized research, the F&A rate applicable to that proposal/project would be 49%-50% MTDC.
C. Commonwealth of Kentucky proposals : All new proposals to agencies of the Commonwealth of Kentucky must include the full F&A cost rate allowed by the respective Cabinet. Any negotiations of the F&A cost rate must be handled by the Office of Sponsored Programs Grants Administration.
NOTE: The university will honor an F&A rate lower than our federally negotiated rate if the sponsoring agency publishes the cap within their guidelines. In these instances F&A will be calculated based upon total direct costs with no exclusions unless otherwise stated.
Any other exceptions to these established rates must be requested in writing to the Office of Sponsored Programs Grants Administration (OSPGA), or the Office of Industry Contracts (OIC), as appropriate.
If a Principal Investigator (PI) wishes to request an exception (e.g., accepting a lower F&A rate from a non-profit sponsor that does not have a written policy limiting the F&A), the PI must make a written request. The written request must indicate the rationale for the exception (e.g. why the department/University will benefit from performing the project without having full cost recovery) and be transmitted through his/her Chair and Dean to obtain their concurrence in the request. The request must be received by OSPGA or OIC at least one week prior to the sponsor's deadline date in order for the exception request to be considered by the Executive Vice President for Research.
As appropriate, the respective office will contact the potential sponsor to negotiate F&A rates. The institution reserves the right to refuse proposals with less than the approved F&A cost rate. Questions should be directed to Judy Bristow, Director of the Office of Sponsored Programs Grants Administration, Belknap Campus and HSC Campus, or Dave King, Director of Office of Industry Contracts.