Val,

The support that is used for this statement is in A-21 under section G -
Determination and Application of F & A cost rate or rates - is found in
section 1.a.3:

"Each institution's F&A cost rate process must be appropriately designed
to ensure that Federal sponsors do not in any way subsidize the F&A
costs of other sponsors, specifically activities sponsored by industry
and foreign governments."

The basis I use is - if we "waive" a rate (or give a lower rate to
industry or foreign governments), the support costs for research remain
the same and the other sponsors (mainly the Federal government) pick up
these unrecovered F & A expenses.  That violates the section in A-21
mentioned above.

I hope this helps (and I explained it clearly).  Any questions, please
call.

John Case
Assistant VP & Controller
Desert Research Institute
Reno Nevada
702 673-7396

Val Seaquist wrote:
>
> I am trying to locate the actual rule, citation, law, whatever for the following situation:
>
> I have a P.I. who wants us to lower (cost share) our normal indirect rate in a proposal going to a commercial firm. We have told him that we cannot do this because, if we charge the commercial firm a lower indirect rate (lower than what our negotiated rate agreement allows), then the Federal government could come in and demand the same privilege on all Federal contracts. Everyone is saying "yeah, that's right" but the P.I. wants to see it in writing and we are all drawing a blank as to the location of the rule. Can someone point me in the right direction. Thanks!
>
> Val Seaquist
> Office of Research Administration
> The University of Alabama in Huntsville