Happy New Year to everyone!

This is a "how do you handle it" question. Our F&A rate has not changed in
quite some time so we haven't dealt with the situation referenced under "OMB
A-21" G-7, "Fixed rates for the life of the sponsored agreement."

We just signed our new F&A rate agreement (effective 10/1/00) and the
on-campus rate has increased. We have several large, multi-year,
incrementally funded awards which started prior to October 1st. I have heard
arguments for different interpretations of the G-7 subsection in A-21. One
is take it as stated -- those awards which began prior to October 1st must
use the "old" F&A rate for the entire 5 years of the agreement. If the
agreement is extended beyond the initial 5 years (original "competitive
segment"), we can use the "new" F&A rate beginning in year 6.

The other argument is that we will have to request the increments of funding
(during the five year period) with a budget justification and should use the
"new" F&A rate for these increments.

How have other institutions dealt with this situation and is there a good
argument for the second scenario?

Thank you . . .

Val Seaquist
Office of Research Administration
The University of Alabama in Huntsville

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