Facilities & Administrative Costs (Indirect Costs)

Facilities and Administrative costs (F&A), formerly called "indirect costs" or "IDCs" are actual costs to the University incurred when research, education, or outreach projects are performed at ISU. The F&A rate is negotiated at regular intervals with the U.S. Department of Health and Human Services (DHHS) and include facilities and administrative components across the University. Effective July 01, 2008 through June 30, 2012 the DHHS-negotiated IDC rate is 48.0% (22.0% derived from facilities costs and 26% capped by the federal government as the maximum allowable for the cost of administration). The rate for off-campus projects is 26%. Per the university’s facilities and administrative costs rate agreement, the off campus rate should be used for all activities performed in facilities not owned by the university and to which rent is directly allocated to the project(s). In addition, if more than 50% of the project is performed off campus, the off campus rate will apply to the entire project. F&A rates are applied to the modified total direct cost base (MTDC) of the project. Modified total direct costs include all direct costs except the costs of equipment, capital expenditures, patient care, tuition, rental costs of off-site facilities, scholarships and fellowships and subcontracts in excess of $25,000.

All sponsored projects are required to charge the full F&A rate, regardless of the sponsor, unless one of the exceptions below applies. This requirement to charge the full F&A rate rule applies to applications and proposals submitted to government agencies, private companies, industrial groups, foundations, or other organizations. For proposals that meet one of the following pre-approved circumstances, the explanation of the proposed rate must be submitted on the GoldSheet and appropriate documentation must be included to substantiate the exception. All other reductions/waivers not included in the list below must be approved through the department/center/institute, college, and Office of the Vice President for Research and Economic Development. The form for submitting an F&A (IDC) waiver request is found at: http://www.ospa.iastate.edu/forms/docs/IDC-Waiver-Request.doc.

Exceptions

The following exceptions will not be considered a "waiver" and will allow for the normal PI incentive to be distributed to the Investigators:

  1. In applications submitted to an external sponsor the published sponsor rate may be used without submitting a waiver request when the sponsor has a written policy that limits F&A recovery for all sponsored-project recipients that it applies equally to all potential awardees. Documentation of the sponsor policy must be included with the GoldSheet. Unilateral declarations or letters from sponsor administrators about their F&A rates will not be accepted. Corporations are expected to pay the full F&A rate of 48%.
  2. In most cases, the policy of permitting 8% of total direct costs (TDC) F&A from Iowa state government, county, and community agencies will be continued, unless a higher F&A rate has been agreed to, or when proposals are submitted jointly with a state, county, or community agency to a federal agency that allows a higher rate. In those cases, the maximum allowable rate should be used.
  3. To support the training of graduate and undergraduate students, an 8% TDC F&A rate may be used on all projects designated as "training grants." For this purpose, training grants are defined as awards made specifically to or for the benefit of a student or students independent of the investigator for whom they work, i.e., the award is not paying the student(s) salary to work on a specific research project under the direction of the investigator.
  4. To support the university's service mission, "Field Trial" projects may use an F&A rate of 15% TDC. For purposes of this policy, Field Trials are defined as evaluation of a sponsor's material in agricultural field, greenhouse, or growth chamber trials, where the sponsor provides both the material and the evaluation protocol. Field Trials do not include any other sponsor materials or products (i.e., equipment, etc.). Such Field Trials shall not include field trials conducted for the purpose or furtherance of basic research.
  5. In very exceptional cases of great importance to the University, a master agreement can be negotiated with a company. Part of the master agreement may include the waiver of part of the F&A rate. The Office of the Vice President for Research and Economic Development in collaboration with College or center/institute officials will be responsible for negotiating all master agreements. F&A rates negotiated as part of master agreements are considered 'full allowable' overhead by the University. Contact OSPA if in doubt about the existence of a master agreement.

Other projects may be considered for a waiver as determined by the Vice President for Research and Economic Development.

PIs, their departments, centers, institutes, or colleges are not approved to conduct negotiations related to F&A costs with companies, industrial groups, and other organizations unless a formal F&A waiver has been granted in advance.

Waivers

All requests for reductions or waivers of the full F&A rate that are not specifically included in the Exceptions above will require approval by routing the Indirect Cost Reduction or Waiver Form located on the VPRED website at: http://www.ospa.iastate.edu/forms/docs/IDC-Waiver-Request.doc. In all cases where a reduced rate has been approved through this waiver process, the PIs will not be eligible for the return of PI incentive funds.

Any questions may be directed to the Office of Sponsored Programs Administration (294-5225).