At 09:56 AM 9/9/97 -0500, you wrote:
>The University of Connecticut has been asked by the USDA to sign off
>on a clause that states that program income related to projects
>financed in whole or in part with federal funds (including from
>royalties on patents or copyrights) shall be "Deducted from the total
>project or program allowable cost in determining the net allowable
>costs on which the Federal share of costs is based."

This is one of the options provided for in OMB Circular A-110, at  ___.24.
Note, however, that each agency implements these regulations in its own way.
I do not have on hand USDA's implementation, which is at 7CFR3019, to see if
USDA does things differently by exercising its options to depart from the
general cuidance.

HOWEVER, at __.24 (h), income from license fees and royalties are excluded
from the definition of "program income" unles the agency specifies otherwise
in the terms and conditions of the award.  So, you'll have to check BOTH
7CFR3019 and the exact language of the award which is troubling you.  Is
USDA in fact including licenses/royalties, or could you be confused by the
way they invoke the __.24 language of A-110?

Having recently made a similar mistake, I sought colleagues' help, and one
person who was involved in the late negotiations on A-110 pointed out that
(h) was a last minute addition to __.24, and that the rest of the language
was not "smoothed out".

>
>Although it appears as if all federal agencies, under OMB Circular
>A-133 can exercise this option, I have never seen it before.  Has
>anyone accepted this clause?   How does it really work; give any
>income received to USDA up to the amount of project funding?

Yes, if you accept it, all of the applicable program income can be used to
offset cash outlays from USDA to cover the award.  In fact, this is the
default use for program income.  But look carefully at the situation.  What
is the probability of program income being generated?  In most cases, it is
about the same probability that your salary will be doubled tomorrow, in
which case, it's not worth the fight to get the default clause changed.  On
the other hand, if there is a probability of program income being generated,
go for the jugular, and insist on acceptance of the option at __.24(b)(1)
[using, of course, USDA's 7CFR reference], which lets you use it to expand
the project.

Proposal time hint:  Raise the question of possible program income on you
proposal routing sheet, and if they say "yes", make the request for the
preferred option part of the budget request in the form of "the insititution
intends to use any program income in accoudance with xxx".  Most awards
include your proposal by reference, and so you will have your preferred
option unless explicitly rejected by the sponsor!
>
>I'd appreciate hearing from anyone who has had experience with this
>clause.

Didn't mean to preach, but this is a very useful, if somewhat obscure,
technique for assisting your P.I.'s

Chuck
>
>Thank-you.
>Phyllis A. Thomas
>Contracting Officer
>University of Connecticut
>Research Foundation
>Telephone: 860-486-3337
>FAX:        "    " 5381
>
Herbert B. Chermside, CRA
Director, Office of Sponsored Programs Admin.
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Voice:  (804) 828-6772
Fax:    (804) 828-2521
individual e-mail:   xxxxxx@vcu.edu
OFFICE e-mail:     xxxxxx@vcu.edu
OFFICE website:   http://views.vcu.edu/views/ospa/