NO!
For profits do indirects very differently from universities, and it is a
part of their cost structure.  They are unlikely to have approved rates
unless they work with federal agencies.  Their accounting standards allow
things like billing X hours of an engineer's time, plus an indirect that
includes the secretary time, etc., that backed up the engineer's work.
Industries consider this a good way of pricing the engineer's
time.  However, you should ask if they have done federal work and if they
have submitted cost accounting standards information to the feds.  If so,
these indirects should be in the disclosure, and you might ask to see
it.  If not, you need some guidance as to the likelihood that the quoted
indirects are their standard (price list?), or get some guidance from your
Business School.   An industry's profit is written into their cost as "Fee".

At 03:07 PM 3/2/2005, you wrote:
>On a somewhat related issue. How do you handle subcontracts to for-profits
>who quote an indirect rate in their budget, but have no federally negotiated
>rate agreement?   I am inclined to tell them to back it out?
>
>Lauren G. Oshana
>Associate Director
>Research Services
>University of Pennsylvania
>P221 Franklin Bldg.
>3451 Walnut Street
>Philadelphia, PA 19104-6205
>215.573.6710 (ph)
>215.898.9708 (fx)
>URL: http://www.upenn.edu/researchservices/
>
>
>
>
>-----Original Message-----
>From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On Behalf Of
>Anne Habel
>Sent: Tuesday, February 22, 2005 3:32 PM
>To: xxxxxx@HRINET.ORG
>Subject: Re: [RESADM-L] setting an F&A rate
>
>Bill:
>
>I have discussed this issue with Bob Aaronson from the New York Office of
>DHHS. DHHS will not negotiate a rate until the entity has a federal grant
>directly funded to them.
>
>We are a non-profit agency that receives funding from a federal grant but
>are not directly funded. Per the regulations the agency that is directly
>funded should negotiate our rate (the feds may offer assistance). In
>addition, there is no requirement that we receive our full overhead rate.
>
>Anne
>
>-----Original Message-----
>From: Michael Fish [mailto:xxxxxx@CALPOLY.EDU]
>Sent: Tuesday, February 22, 2005 2:05 PM
>To: xxxxxx@HRINET.ORG
>Subject: Re: [RESADM-L] setting an F&A rate
>
>Bill,
>NSF has a format for calculating IDC for organizations without a negotiated
>rate:
>http://www.nsf.gov/bfa/dias/caar/indirect.jsp
>Regards,
>
>Michael Fish
>Director, Grants Development Office
>California Polytechnic State University
>San Luis Obispo, CA 93407
>(805) 756-2982
>xxxxxx@calpoly.edu
>
>
>-----Original Message-----
>From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On Behalf Of
>Bill Campbell
>Sent: Monday, February 21, 2005 12:01 PM
>To: xxxxxx@HRINET.ORG
>Subject: [RESADM-L] setting an F&A rate
>
>RESADMers--
>
>I'm on the board of a non-profit that is in process of pursuing grants from
>federal agencies.  We have never had an IDC or F&A rate; I think it's time
>to establish one, but I don't know how to go about it.  Can anyone give me
>some guidance?  I know there have been conversations about this on the list
>in the past, but I can't find the thread in the archive.
>
>I've browsed around the HHS site a little and it's very confusing.  Some NIH
>sites say 'don't apply for a rate until you get a grant,' but we're looking
>at other agencies.  But those other agencies refer non-profits to HHS for
>F&A rates.
>
>I know that there is now a simple algorithm small universities can use to
>determine an F&A rate to propose; is there something similar for
>non-profits?  Is this something the average bozo like me can do, or do we
>have to hire a consultant?
>
>Thanks and regards, Bill
>
>--
>Bill Campbell
>Director, Grants & Research
>University of Wisconsin-River Falls
>410 S. 3rd St.
>River Falls, WI 54022
>715/425-3195
>FAX 715/425-0649
>
>
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Herbert "Chuck" Chermside, CRA
Director Emeritus, VCU Sponsored Programs
Executive Director, Research Administrators Certification Council
1915 Robindale Rd.
Richmond, VA 23235-3931
804-320-5502
xxxxxx@verizon.net

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