Dear Friends,

Well, those of you who know me know that I always have an opinion
about everything even if I don't have all the facts. I'm getting
concerned that folks are misunderstanding  this indirect cost
business on DOD contracts.

My facts might not be exact, but this is the scenario as I understand
it.  There was a provision in the current approriation legslation for
DOD which basically said, the 26% cap on the administrative cost
categories for college and universities indirect cost rates would not
apply to DOD contracts.  Remember, contracts only, not grants.  DOD
has been struggling on how they would administer this.  For the ONR
cognizant schools, our rates are determined and negotiated by specific
cost category, so if your administrative costs were, say, 32%, but
you only got 26% in your rate, then you are eligible for your full
(32% +) reimbursement on DOD contracts.

There was a meeting following the COGR meeting last Friday with DOD
officials to discuss their administration of this uncapping.  They
are going to do it; I think those of us with DOD contracts who are
affected by this will be hearing from them, but perhaps someone who
listed better than I (since we are not affected) could give the  whole
story.  Their doing it leads us back to the Federal Register
announcement which says they are going to do it.

My basic points here are two:

1.  This is a good thing for those of you who are above the cap and
have DOD contracts.

2.  This has nothing to do with the pause.

I hope that you folks are staying cool out there.  I think it's
90 (temp) and 90 (humidity) here today and we just ain't used to it!!!

Jane Youngers
University of Rochester
xxxxxx@mvs.cc.rochester.edu