Does foregoing indirect costs to provide cost sharing have any effect on our subsequent indirect cost proposal? For example: We are preparing a proposal to a state agency that requires cost sharing. They are willing to accept foregone indirect costs as a form of cost sharing.  So, we will only charge an indirect cost rate of 10% MTDC, which is well below the rate negotiated with our cognizant federal agency.

So far, so good. However, the question has arisen here internally as to whether this form of cost sharing has any effect on the next indirect cost proposal we prepare for our cognizant federal agency. One view is that since we promised these foregone indirect costs as cost sharing to the state agency, we must deduct the amount of indirect cost recovery foregone from our stated indirect costs in the next proposal to the cognizant federal agency.  The other view is that since no actual indirect costs are involved in the cost share, only foregone revenue, the cost share has no effect on the subsequent indirect cost proposal.

We are in the process of tracking down information to enlighten our internal debate, and would appreciate input from you experts who inhabit this list!  Thanks for any help.

Mr. Dan Snyder
Administrative Director
Patrick Center for Environmental Research
Academy of Natural Sciences
1900 Ben Franklin Parkway
Philadelphia, PA  19103-1195

Phone: (215) 299-1065
FAX: (215) 299-1079

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