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Re: Subcontract Indirect Cost Rate Larry W. Hawse 26 Oct 1996 17:09 EST

Although I'm a little confused by the way the query is worded, here's what
we have done for nearly 20 years (at least up to 1994 when I left the
research office)::

We billed the funding agency for reimbursement of indirect costs on the
first $25,000 of each subcontract.  NIH reimbursed indirect cost
expenditures only on the first year of multi-year subcontracts. NSF
originally reimbursed for each year; however we were uncomfortable billing
two federal agencies different ways, so we shifted to the NIH method when
billing NSF grants for indirect costs reimbursement.

I didn't consider that we were "charging overhead  to subcontracts" since we
were on MTDC which limited our reimbursement of indirect costs associated
with each subcontract. We took a financial beating when  a subcontracts
represented 70-90% of an award.

When we were subcontracting grants/contracts with agencies that provided
less than the federal rate, we limited the subcontract to that rate.  That
is, we didn't allow reimbursement by a subcontractor for overhead at a rate
higher than we were receiving.

>We at the Desert Research Institute (part of the Univ. &
>Community College System of Nevada) are considering
>changing our current subcontracting overhead rate policy.
>Currently we charge 15% up to the Federal max as
>prescribed by A-21.  This is a lower rate than our
>negotiated Federal o/h rate.  This was established years
>ago by our VPF&A.
>
>I would like as much input as possible on the method or
>percent (%) other universities/colleges/research
>non-profits are using for charging overhead to subcontracts
>(where we are the prime).  I would like as many responses as
>possible in order to summarize what practices (or
>percents) are used across the country.  If you are using
>your full overhead rate up to $25K as prescribed in
>A-21, let me know that too.
>
>If anyone is interested in the results, let me know and
>I'll send the summary to you.
>
>Thank you in advance for you input.  I need this
>information by the end of the week.
>
>John Case
>Assistant Vice Pres. & Controller
>Desert Research Institute, Reno Nevada
>(702) 673-7396
>xxxxxx@maxey.dri.edu
>