Happy New Year to all!

Val,

We had the same issue when we negotiated our rate for 7/1.  I talked to the
senior people at the Washington and San Francisco offices of the Division of
Cost Allocation (DCA) about this exact problem.  The implementation of this A-21
language with schools that have an increased rate is not simple.  This may have
created simplicity for the agencies when they fund multi-year awards (which I
understood was the intent when it was put into A-21), but it is detrimental to
schools since our costs have gone up to do research (increased F&A rate), yet we
are funded at an historical F&A rate.

We implemented it similar to your first argument.  The difficulties came when we
have proposals that must submit yearly budgets for funding.  We review these on
a case-by-case basis.

I hope this helps.  Please feel free to call me at the number below to further
discuss the issue.

John

Valerie Seaquist wrote:

> 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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--
F. John Case
Executive Director
Office of Contracts and Grants
University of North Carolina at Chapel Hill
CB #1350, 440 W. Franklin Street
Chapel Hill, NC 27599-1350
(919) 966-2542
(919) 962-3352 (fax)
xxxxxx@unc.edu

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