I believe the language in the UG allows institutions to voluntarily waive or reduce F&A recovery, but the language was strengthened in the UG to keep us from being forced to accept a lower rate unless a sponsoring agency receives approval of our cognizant agency to make other exclusions (e.g. NIH's decision a few years ago to exclude from the base the costs of genomic arrays in excess of $75K a few years ago.  Such an exclusion could not be mandated under UG without cognizant agency approval). 

If an institution decided to waive voluntarily waive F&A on any or all costs, those direct costs would still have to be included in your MTDC base when the next F&A rate proposal is submitted.  An institutions decision to voluntarily waive collection of F&A revenue would not justify removing those direct costs from the MTDC base when  developing the F&A rate proposal.  I would also assert that the waived overhead costs should be considered committed cost share.  As such, they should be excluded from the numerator and added to the denominator when developing the next F&A rate.

A similar discussion is occurring right now on another higher ed list.  Another institution wanted to voluntarily waive F&A on a proposal to the State Department.  State initially interpreted the UG language to mean that they could not accept a voluntary waiver of F&A, but eventually relented and accepted that the institutions voluntary waiver of all F&A on that proposal.

David
-- 
David Hagen
Associate Director
Office of Sponsored Projects Administration
University of Minnesota
612-626-9895


On 5/22/2015 2:39 PM, Key, Diana wrote:

Andrew,

 

See the UG:

§200.68   Modified Total Direct Cost (MTDC).

MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

We have waived F&A on proposals where there was significant ship time cost.

 

Diana

 

 

From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Andrew M. Gray
Sent: Friday, May 22, 2015 1:58 PM
To: xxxxxx@lists.healthresearch.org
Subject: [RESADM-L] Reduced F&A on Larger Vendor Contracts

 

Hi folks,

Has your institution ever (as a regular practice, a waiver process, or other procedure) reduced F&A recovery on larger vendor contracts (things like large vessel charters, large fuel purchases, air support, etc.)?

In the past, our administration has entertained a waiver for these types of contracts that treats the F&A on them like a subaward (i.e. F&A only on the first $25K of the contract). While it doesn't change the true nature of the business arrangement as a vendor service contract, we do account for the F&A reduction internally like a subaward.

With the UG implementation, our system wide administration has ruled that this practice is no longer allowable, due to the clearer separation between what is a subaward and what is a vendor contract/procurement action.

As a disclaimer, I never thought the previous OMB Circular language was vague enough to allow any such loophole. I do agree with our controller that this should not be allowed, since it's contrary to what constitutes MTDC in keeping with our F&A rate agreement and the UG. I'm more curious if anyone else has experienced this or currently has a similar practice.

Thanks,

Andrew

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Andrew M. Gray  CRA, CPRA
Associate Director | Office of Grants & Contracts Admin.
907-474-1851 | xxxxxx@alaska.edu | www.uaf.edu/ogca
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