I need some assistance in understanding the rationale behind conducting a
trial with a commercial sponsor at less than full cost recovery.  I just got off
the phone with a commercial sponsor who wants us to work without PI salary
and at 12% F&A recovery.  They will pay 8K for a grad student (but no
benefits) and they will pay $22,000 towards materials, reagents, media etc.
We will be testing their product on our chickens.  So we have admin costs, we
have animal subject compliance costs, we have sponsored programs costs, we
have PI time and we have chicken housing costs.  They said our F&A rate of
46% was the highest they had ever seen from a university in 30 years.  Just
this week they negotiated with 4 state funded universities for F&A rates of 0-
15%.  I understand that some insitutions have "clinical trial" rates but clearly
dont understand the logic behind the cost recovery there.  Do you also have
some sort of service rate that you use to "make up the difference".

This company is not headquartered (or located substantially) in our state.
Therefore aside from dealership and sales positions, they do not create jobs.
They get their product tested at taxpayer expense and then sell that same
product later to the same tax payer.  - theoretically....  They dont see it that
way.

Were the funds unrestricted, I could see us taking less than full recovery and
chalking it up to experience for the grad student as our benefit.  The tax
payers could possibly buy that argument but they want a contract that
addresses publication rights, ownership, and IP.  I haven't seen their language
yet because they wont send it to me until I agree to the reduced overhead.

I was talking with the attorney in charge of their patent portfolio so that tells
me something.

Were they located substantially in our state contributing to the health and
growth of our state's economy in a tangible way, I would probably back down
but as of this moment, I am too stupid to see the benefit to our university and
need some guidance from those of you out there who have agreed to reduced
overhead and why you do that.

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