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John,

Can I suggest an alternative to the method you have inherited.  the current
method of charging only 15% of the full $25,000 will recover $3,750 of your
indirect cost, and you have waived, lost, given away, relinquished,
abandoned,forsaken the remainder.  OK, so I am a little AR about losing indirect
cost reimbursement. They are, after all, REAL COSTS. If the goal of your
institution is to lessen the burden of the indirect cost to your PIs then you
may want to charge your full rate but to only a portion of the $25,000.

example:
using the same $3,750 recovery you are currently receiving, and assuming your
MTDC indirect cost rate is 50%, you would charge your 50% rate to only $7,500 of
your subcontract.  this would allow you to reduce or exclude the remainder of
the sub-contract expense from your MTDC base when you are doing the next
indirect cost proposal.  by doing this you would not dilute your current
indirect cost rate.  This alternative can keep all parties happy.

if you have any questions call me at my Chicago office 312-240-3429.

charlie tardivo

_______________________________________________________________________________
Subject: Subcontract Indirect Cost Rate
From:    Research Administration Discussion Group  <resadm-
xxxxxx@health.state.ny.us> at INTERNET
Date:    10/26/96  12:44 PM

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
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