Brian, there are several issues here.  First, the fact that an organization
is a non-profit organization has nothing to do with their ability to
receive a fee or earn a profit. Their non-profit status only requires
that no amount of the fee or profit or  whatever "inure to the
individual benefit of any individual officer, director, or stockholder".
 Second, the fee is not a cost and A-21 / A-122 generally are geared
toward addressing cost principles. Generally, most federal activities do
look at the cost priniple and infer that a fee is not permitted because no
mention is made of a fee.  In fact, when I did a review of the procurement
regulations several years ago, the only regulation that I found at that
time that speciffically addressed fees and educational institutions (not
non-profits as I recall) was the Energy Department procurement regs; a fee
was not permitted. A good number (most????) of non-profits can and do
receive fees.  In fact, there are a number of universities that have earned
fees under contracts (not grants or cooperative agreements that I am aware
of); some of these contracts restrict the uses to be made of the fees but
there are fees nontheless.

Yes, probably a CPFF contract.

Good Luck.

Norm Meeks
GLCC
 On Wed, 14 Jun 1995, Brian Prindle wrote:

> For Group Discussion:
>
> Recently I have received two subcontract proposals from Non-Profit
> Organizations who are under the cost principles outlined in OMB Circular A-122
.
> Both subcontractors have negotiated rate agreements with the feds. The
> subcontractors budgets are comprised of the traditional Direct Costs and
> Indirect Costs, but then a "Fee" is charged as a percentage of the Sub-total
> (in this case subtotal is the Direct Costs + Indirect Cost).
>
> I have had discussions with the subcontractors about the allowabilty of a Fee
> as a non-profit and both say it is allowable, there auditors have approved
> this, and its normal practice to include a fee in most propsoals going to a
> federal or non-federal source.
>
> My question for the group is:
>
> Can a Non-profit under OMB Circular A-122 include a Fee above and beyond Direc
t
> and Indiect Costs? Is this reasonable? If yes, why?. I see no where in A-122
> that indicates this is allowable, nor do I see where A-122 states is is not
> allowable.
>
> Certainly Non-Profits such as a University or Colleges which are covered by OM
B
> Circular A-21 cannot include a fee. So what is the difference here? The
> language of A-122 is very similar to A-21.
>
> If an award is made, and the fee remains would a cost plus fixed fee type
> subcontract be appropriate?
>
> Any feedback would be great.
>
> Brian Prindle
> Sponsored Programs
> Boston University
>
>
>
>
>
> -------