Hi Martha,

Here is the link to our contract and grant manual that talks about out
classification and criteria of indirect cost rate exceptions.

http://www.ucop.edu/raohome/cgmanual/chap08.html#8-633

We have seen quite a few requests lately for for-profit entities asking
for reduced IDC, typically for fellowship and "community grant" type of
awards (where there are likely to be no IP language in the agreement
anyhow for us bargain with or worry about).

Just got off the phone with UCLA, where this issue of IDC reductions for
clinical trials was on my radar yesterday.  Here is a link to their
guidance about the application of 26% IDC rate to all clinical trials:

http://www.research.ucla.edu/ocga/memos/CT_Definition_Memo.pdf

The 26% rate is used at all five UC medical campuses...and in the rare
case you would see a clinical trial at our non-medical campus, maybe the
26% rate could be applied as well.

Oh, and Wendy Streitz says hi!  I work on her team here at the UC Office
of the President.   She was reminiscing about you and Auburn when I told
her about your listserv post.

Take care!

Mike

Michael Joseph Kusiak
Research Policy Analyst
University of California, Office of the President
Email: xxxxxx@ucop.edu
Phone: 510-987-0659

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@hrinet.org] On
Behalf Of Martha Taylor
Sent: Wednesday, May 05, 2010 7:59 AM
To: xxxxxx@hrinet.org
Subject: [RESADM-L] Reduced F&A with Industry sponsored projects

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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