My take on this is that if you have a negotiated F&A rate agreement that
stipulates those "step" increases by year, then you use those increases
in each year of your budget.  If you are preparing a budget that takes
you into the "provisional" period, then you use the rate of the last
predetermined year.  As an example, our rate is currently provisional
after 7/1/06 because our rate agreement only gives us predetermined
rates through 6/30/06.

Now, the one thing that hasn't been mentioned (yet) is how this plays
out in an award where you don't spend all of "year 1" money and the
higher rate goes into effect for year 2.  This can get tricky, but
hopefully your PIs do an excellent job of forecasting and there's very
little "residual" from year to year.

Pat

Patricia A. Hawk
Cost Analyst, Business Affairs
Oregon State University
306 Kerr Administration Building
Corvallis, OR  97331
(phone) 541-737-9585
(fax) 541-737-2069

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On
Behalf Of Val Kettner
Sent: Monday, July 19, 2004 11:56 AM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] A-21

Greetings!

Quick question...A-21 G.7. on Fixed rates for the life of the sponsored
agreement - if you have a negotiated indirect cost rate agreement that
provides for increases each year (example 41%, 41.5%, 42%, 42.5%), what
rate do you use for multi-year proposals? Can you use the rate that will
be
applicable for each year, or must you use the rate the will be
applicable
for the first year for all subsequent years?

I have heard this both ways...looking for clarification...

Thanks!

Val Kettner
Sponsored Programs Administration
North Dakota State University

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