I have worked at institutions with both a negotiated rate AND that charge actuals, and my current institution just switched over last fiscal year. Based on my experiences,

If we had a negotiated fringe rate, could we apply it to all sponsors including commercial? Yes, you would apply it across the board universally. Your institution may also choose to apply a second rate for non-federal sponsors that is closer to the actual rate if they want to.

What issues does a negotiated fringe rate solve? I have found that a negotiated rate solves the problem of having fringe rates that are all over the place, including what appear to be very high rates because you have a mid-level salary person (say $50k-ish) who is carrying insurance for an entire family of 6) potentially being questioned against people with really low rates (high earners who max out the social security contribution early and who's overall cost is a much lower % of their salary). It also solves the budgeting issue of not knowing what someone's actual rate might be--esp is the position/person is new. It also can solve the problem of sponsors who do not allow you to rebudget into fringe (few and far between, but....) It also tends to give you a defensible space when sponsors ask about your rates--here's my agreement with the feds--and often means that you're not having to provide the breakdown of the rates for them (which means not dealing with them saying, "oh, we won't cover x" sometimes.

What new issues might having a negotiated fringe rate cause? The issues that I have seen it bring up are that some sponsors will only allow a fixed %, and if your rate is over that, you have to figure out how to manage that. I've also had faculty, especially 9-month, get just irate about the fringe rate being fully charged in the summer when their benefits for summer were paid for in the spring (they think locally/me, instead of globally/the pool). And then since it changes year to year, I've seen that become an issue as projects have to be rebudgeted, and if it goes up, depending on the jump, faculty sometimes get fiesty about it.

Overall, even with the issues, I think a negotiated rate is easier and smoother for everyone. I think it streamlines things, and I think that it makes for project management. I think communicating how the pool and the rate work helps to mitigate some of the challenges.

Lindsey

LINDSEY DEMERITT, CRA

Director, Sponsored Projects, Dell Medical School Office of Research

***Contact Dell Med Sponsored Projects Administration at xxxxxx@austin.utexas.edu ***

Dell Medical School | The University of Texas at Austin

o: 512.495.5500 | c: 407.919.9556 | dellmedschool.utexas.edu

On Fri, Jul 26, 2019 at 10:29 AM Gloria Greene <xxxxxx@uah.edu> wrote:

Good day, fellow administrators,
We are exploring the pros and cons of a negotiated fringe rate. If you have one, will you please answer the following:

If we had a negotiated fringe rate, could we apply it to all sponsors including commercial?

What issues does a negotiated fringe rate solve?

What new issues might having a negotiated fringe rate cause?

Please feel free to communicate with me offline, however, I am sure some members other than myself might find this of interest.

Thank you and have a Great Day on Purpose!
Gloria
Gloria W. Greene, MA, CRA

Director, Office of Sponsored Programs

The University of Alabama in Huntsville
SRAI Board of Directors - At Large
SRAI Southern Section President-Elect

301 Sparkman Drive, VBRH E26

Huntsville, AL 35899

Phone: (256) 824-2657   Fax: (256) 824-6677

"The single biggest problem in communication is the illusion that it has taken place."   -- G.B. Shaw

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