Sponsored Projects Administration (SPA) is pleased to announce the successful negotiation of a new four-year F&A (“indirect cost”) Rate Agreement, dated October 30, 2007, with our federal cognizant agency (DHHS, Division of Cost Allocation). The new rates will improve the reimbursement the University receives for its F&A costs incurred during the performance of work on sponsored agreements. SPA’s Assistant Director for F&A Cost Analysis conservatively estimates these new rates will yield an incremental $3 million per year, or $12 million in additional F&A recovered over the life of the agreement.

The changes in individual rates are shown in the chart below. All rates are effective from FY 2008 through FY 2011, and will continue to be used after the end of FY 2011 until a new rate agreement is established.

New! For more information, view the Understanding F&A Costs brochure.

*New and renewal Title IV-E Instruction proposals are now included in the new 50.0% rate but non-competitive continuation, renewal or supplement proposals should utilize their former rate.

IMPLEMENTATION GUIDANCE

New and Renewal Proposals
Principal Investigators (PIs) and their staff are encouraged to begin using the new rates in new and renewal (competing continuation) proposals immediately. Competitive segments (i.e., the period of years approved by the funding agency at the time of the award, usually three to five years) that extend beyond FY 2011 should also reflect these rates. To ease the transition for proposals currently in later stages of development, SPA staff will temporarily continue to endorse proposals reflecting either the new or the former rates; however, all proposals submitted to SPA on or after January 1, 2008 must use the new rates.

New and Renewal Proposals Submitted but not Yet Awarded
To ensure that direct costs available to PIs are not adversely impacted by this rate change, awards received in response to previously submitted new or renewal proposals will, when necessary, be accepted using the F&A rate contained in the submitted proposal. SPA will, however, work with agencies to increase F&A costs to the new rates wherever possible. Whichever F&A rate is finally awarded will subsequently be used throughout the competitive segment of that award.

Existing Awards and their Non-Competitive Proposals
All existing awards and their associated non-competitive continuation proposals will continue to use the F&A rate in effect at the time of their initial award (or most recent renewal) throughout the remainder of their competitive segment. This is necessary because governmental regulations require fixed rates over the life of a sponsored agreement and define “life” as each new competitive segment.

To illustrate, new or competitive renewal on-campus research proposals submitted on or after January 1, 2008 must use the new 51.0 percent rate. However, non-competitive research continuations will continue to use the 49.5 percent rate included in their most recent new or renewal award until the end of their multi-year project period. If a renewal proposal is then submitted for that project, it should use the new rates. In most cases, proposals for additional funding on existing projects will also use the new rates. If you have any questions about which rate is appropriate for your proposal or your award, please contact your SPA Grant Administrator or call the SPA Help Desk at 612-624-5599.