This shared cost raises questions you will want to explore within your
institution.  Normally federally funded equipment cannot go into the cost
pools for setting your F&A rate, while institution-funded equipment
can.  Generally, split-funded equipment is treated as federally funded
because of significant problems dealing with that matter.  However, $350K
is significant!  So discuss this with the appropriate people in
house.  Also, it sounds like you will end up with the institution part of
the cost being voluntary committed cost sharing, which may affect the
problem above; VolCommitC/S goes into the F&A rate computations differently
from simple departmental research costs.

There are also problems in regard to "generating revenue".

Suggest you consider buying the equipment 100% institutionally, set up its
operation as a service center, and charge the grant through the service
center for enough to recover both the share of the capital cost over the
multi-year period of the grant and the operating costs.  Or give the grant
personnel a special rate because the grant supported personnel and supplies
will be used for that grant related use of the equipment.

I presume there is not a clear policy within the institution regarding this
unusual situation.

Also strongly recommend that whatever approach you take, you discuss with
the grants office of the Institute you plan to propose to, to be sure that
what you propose can be acceptable to that Institute.  You'd hate to have a
good proposal shot down for an administrative confusion.

Chuck

At 08:44 AM 11/25/2003, you wrote:
>We have a PI that has proposed to split-fund the purchase of a large piece
>of equipment (@$350,000).  One-half of the funding would come from an NIH
>grant, and the other half would be financed on a capital lease from
>institutional funds.  This piece of equipment is required for the project
>funded by the grant.  However, it will only be used at approximately
>½-capacity for the project.  The PI is proposing that the remaining
>capacity be used as part of a core facility that would bill for its use
>(and generate revenue).
>
>Has anyone encountered this scenario before?  Our initial interpretation
>is that this violates the NIH’s policy regarding equipment
>purchases.  Would your institution apply the same interpretation?
>
>Bethanne Giehl
>Assistant Director
>Research Funding Services
>UMASS Medical School
>
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