I think the principle is clear, but someone pointed-out one loophole for our organization whose indirect rate was negotiated in a pass-thru situation; it is a federally recognized rate, but it was not, "negotiated between the subrecipient and the Federal Government.

From: Research Administration List [xxxxxx@lists.healthresearch.org] on behalf of David Hagen [xxxxxx@UMN.EDU]
Sent: Friday, May 15, 2015 9:32 AM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] recognition of F&A rate

Hi Wayne,

There is a lot of information within that section.  I have copied the relevant subsections and underlined the specific parts:

"All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes:"

"(4) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimis indirect cost rate as defined in §200.414 Indirect (F&A) costs, paragraph (f) of this part."

The COFAR FAQ on the topic also references 200.331, and says the following:
This section states that pass-through entities are expected to honor a subrecipient’s negotiated F&A rate agreement, or use a 10% MTDC de minimis rate,or negotiate an F&A rate with the subrecipient. Is it acceptable to require a subrecipient to accept a rate lower than 10% MTDC via negotiation, or in lieu of their negotiated F&A rate?  If a subrecipient requests to establish a rate via negotiation, does the pass-through entity have to establish the rate via negotiation?

If the subrecipient already has a negotiated F&A rate with the Federal government, the negotiated rate must be used. It also is not permissible for pass-through entities to force or entice a proposed subrecipient without a negotiated rate to accept less than the de minimis rate. The cost principles are designed to provide that the Federal awards pay their fair share of the costs recognized under these principles. (See section 200.100(c).) Pass-through entities may, but are not required, to negotiate a rate with a proposed subrecipient who asks to do so.

David

On 5/15/2015 8:35 AM, Wayne R. Glass wrote:
David, from which clause in 200.331 are you drawing this conclusion?  I don’t disagree – that is how we interpret the F&A issue.  But I don’t see specific language in 331 that says it is the case that all pass-through entities must honor an approved F&A rate.

But then, it is still early and my eyes aren’t focusing well.

Wayne

Wayne Glass
Tel: 618-453-4540
Fax: 618-453-8038

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From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of David Hagen
Sent: Thursday, May 14, 2015 4:16 PM
To: xxxxxx@lists.healthresearch.org<mailto:xxxxxx@lists.healthresearch.org>
Subject: Re: [RESADM-L] recognition of F&A rate

Tammy,

With respect to the IDCR, if the funds are federal flow-through you can refer them to 200.331, which states that all pass-through entities must honor an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government.  The requirement is not limited to federal agencies.  It applies to all federal funds, including pass-through funding, and there is not an exemption provided for state agencies.  If the funding is not federal pass-through funding, then the UG does not apply and they are not obligated to accept your rate agreement.

I thought this statement interesting: "would not be applicable to the procurement contracts of our grantees".   They refer to you as a "grantee", but refer to the agreement into which you are entering as a procurement contract.  As Kris wrote, they can't have it both ways.  I don't know what the agreement looks like or what services you will be providing, but if the funding is federal flow-through I would refer you (and them) to UG section 200.330<http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=42f5abb8f6e783e83b42b1faecb28ef8&mc=true&n=sp2.1.200.d&r=SUBPART&ty=HTML#se2.1.200_1330> and the COFAR FAQs<https://cfo.gov/wp-content/uploads/2014/11/2014-11-26-Frequently-Asked-Questions.pdf> on this topic.

Good luck!

David

--

David Hagen

Associate Director

Office of Sponsored Projects Administration

University of Minnesota

612-626-9895

On 5/14/2015 2:17 PM, Duryea, Kristina wrote:
Interesting.  Especially since they deny acceptance to one part and come back and claim applicability to another.  Can’t have it both ways.  I think the point they’re trying to make is that they are not a federal agency.  Now…if they are using federal money to make the award, then the institution should be given the full IDC allowed under that federal program.  I can’t tell if that’s the case.  What I don’t see is any reference to their IDC policy – do they have one?

Kris

Kristina Duryea, MA, GCRA, CRA
Grants Administrator
Office of Sponsored Programs
Cold Spring Harbor Laboratory
One Bungtown Road
Cold Spring Harbor, NY  11724
xxxxxx@cshl.edu<mailto:xxxxxx@cshl.edu>
516-367-5410

From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Tammy Freeman
Sent: Thursday, May 14, 2015 2:30 PM
To: xxxxxx@lists.healthresearch.org<mailto:xxxxxx@lists.healthresearch.org>
Subject: [RESADM-L] recognition of F&A rate

Hello:

We just received the interpretation below regarding the recognition of our F&A rate in a contract. Do you agree with it? Is there a pathway to appeal?

While the Uniform Guidance at 2 CFR 200 does not officially go into effect for our vocational rehabilitation (VR) awards until October 1, 2015, and 2 CFR 225 is still applicable, we have checked within the Department and have these thoughts regarding your inquiry, which is whether or not a VR agency is required to accept an institute of higher education's (IHE) approved negotiated Federal indirect cost rate (IDCR).

The requirement at 2 CFR 200.401(a) states, in part, that:

(a)    General. These principles must be used in determining the allowable costs of work performed by the non-Federal entity under Federal awards. These principles also must be used by the non-Federal entity as a guide in the pricing of fixed-price contracts and subcontracts where costs are used in determining the appropriate price.

Throughout part 200, the term “award” appears to be used as a substitute for the term “grant agreement” or “cooperative agreement.”  Thus, “award” is limited to grants and cooperative agreements under the applicability section for the cost principles.  We believe the cost principles – and the IDCRs negotiated under them – would not be applicable to the procurement contracts of our grantees.  While the requirement at §200.414(c)(1), related to Federal agency acceptance of negotiated IDCRs, states that:

 The negotiated rates must be accepted by all Federal awarding agencies,

VR grantees are designated State agencies, primarily under which designated State units carry out the authorized VR activities.  As such, VR grantees are non-Federal entities that do not constitute Federal awarding agencies; therefore, VR grantees are not required to accept an IHE's negotiated IDCR.

Alternatively, we think that State VR agencies could rely on Appendix III to Part 200, paragraph C. 3, which states that “a negotiated fixed amount in lieu of indirect (F&A) costs may be appropriate for self-contained, off-campus, or primarily subcontracted activities where the benefits derived from an institution's indirect (F&A) services cannot be readily determined,” to insist that the contracted IHE must establish a lower IDCR for VR contracts that excludes many of the charges the IHE includes in its negotiated IDCR, that may not benefit the VR program.

--
Tammy Freeman, CRA
Grants Manager
Truckee Meadows Community College
775-337-5650
xxxxxx@tmcc.edu<mailto:xxxxxx@tmcc.edu>

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David Hagen

Associate Director

Office of Sponsored Projects Administration

University of Minnesota

612-626-9895

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A link directly to helpful tips: http://tinyurl.com/resadm-l-help ======================================================================

--
David Hagen
Associate Director
Office of Sponsored Projects Administration
University of Minnesota
612-626-9895

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 subscription information and a web-searchable archive, are available
 via our web site at http://www.healthresearch.org (click on the
 "LISTSERV" link in the upper right corner)

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