Ruth:

 A-21 Section G.7. says:

 a. Federal agencies shall use the negotiated rates for F&A costs in
effect at the
time of the initial award throughout the life of the sponsored agreement.
"Life" for the purpose of this subsection means each competitive segment of
a project. A competitive segment is a period of years approved by the
Federal funding agency at the time of the award. If negotiated rate
agreements do not extend through the life of the sponsored agreement at the
time of the initial award, then the negotiated rate for the last year of the
sponsored agreement shall be extended through the end of the life of the
sponsored agreement. Award levels for sponsored agreements may not be
adjusted in future years as a result of changes in negotiated rates.

 Note the plural "rates"

 So, if you submitted when your rate was, say,  45% and your award
arrived after your new 3 year rate agreement took effect and the first year
of the new agreement was at 44% with a one point reduction in the following
2 years and you got a five year award, the rates to be applied to the award
would be 44, 43, 42, 42, 42.  Those would be the rates (plural) in effect
throughout the life (i.e. competitive segment) of the award.

Charlie

Charles Kaars
Assistant Vice President
Sponsored Programs Administration
Suite 211 The UB Commons
Amherst, NY 14228
716-645-2977 ext. 101 (voice)
716-645-3730 (Fax)

-----Original Message-----
From: Ruth Tallman [mailto:xxxxxx@LEHIGH.EDU]
Sent: Thursday, February 20, 2003 10:45 AM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] Falling F&A Rate

Good Morning, O Wise Resadm-l'ers,

Twice in one day I found myself talking about new awards and using the
F&A rate that was in effect at the time of the award throughout the
project period (usually three years).

Would someone please direct me to the standard or circular in which this
is spelled out?  Drawing a blank.

One of the reasons this came up is because our rate is about to go down
by 4 percentage points effective July 1, 2003.  Would you please let me
know how you would deal with this at your institution?  Here are the
issues we've discussed:

For new awards (not continuations) that come in over the next four
months, should we re-negotiate the F&A rate before receiving the award?

Would your institution stand firm at the old rate for three years of a
new award?

What if... a proposal was submitted at the higher rate but is awarded
after 7/1/03 - would your institution set-up the new award at the old,
proposed rate or use the new rate and rebudget the funds into other
budget categories?

If you rebudget awards proposed at the old, higher rate using the new
lower rate, do you claim the difference as cost-sharing?

I think it would be required to cost-share the difference but then,
right now,  I don't know where to begin to look for the topic of keeping
the F&A rate constant for the life of the award!  (It's the stress of
digging out of 24 inches of snow during an orange alert.)

As always, your feedback would be most appreciated.

Ruth Tallman
Office of Research and Sponsored Programs
Lehigh University
526 Brodhead Avenue
Bethlehem, PA  18015
Phone:   (610)758-3024
FAX:      (610)758-5994
E-mail:   xxxxxx@lehigh.edu

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