MANAGING U'S' UNIVERSITY RESEARCH WITHIN OMB RATES

1
MANAGING U.S. UNIVERSITY RESEARCH WITHIN OMB RATES

• Weldon Ihrig
• University of Washington
• July, 2008

2
UW Current FA Rates(effective July 1, 2007
June 30, 2009)

• Organized Research Rates
• On-campus 56
• Off-campus 26
• South Lake Union 66
• Regional Primate Center A (44) and AB (75)
• Applied Physics Laboratory 17
• Vessels 25 (salary base)
• Instruction Rates
• On-campus 58
• Off-campus 26

3
UW On-campus FA Rate Components
4
FA costs source of revenue

• For FY 2006-2007, awarded grant and contracts
  exceeded 1 billion(US).
• For FY 2006-2007, FA recovery was 189
  million(US)
• 48 distributed to pay facilities costs
• 31 distributed to fund departmental RCR
• 20 used for other general administrative and
  library costs
• (from Office of Research Facilities and
  Administrative Rate Primer http//www.washington.e
  du/research/4researchers/fa.php)

5
UW negotiated vs calculated FA rates

• Negotiated on-campus rate 56
• Calculated on-campus rate 61
  (administrative costs calculated 31 versus 26
  cap)
• If 61 rate applied in FY 2007, recovery
  estimated to have increased by almost 19
  million(US)

6
What works for universities?

• Competitive awards without politics
• Single Federal indirect cost rate applied to all
  agencies
• Rate based upon demonstrated prior indirect cost
  expenditures by the universities
• Research opportunities enhances graduate
  undergraduate student experiences

7
Areas for Improvement

• Remove 26 cap on administrative costs rate
• Prohibit attempts by Federal agencies to cap
  indirect costs they will pay
• Consistent interpretations of A-21 rules among
  regions reduce complexities
• Exclude university cost sharing in calculating
  rate
• Negotiations based upon cost components data, not
  bottom line target

8
Cautions for universities

• Indirect costs recovered are for expenditures
  incurred, not free money
• Risk of over investment in facilities assuming
  growth in research
• Universities must comply with the A-21 rules to
  avoid political interventions
• Growth in research requires investment in support
  services modernization of facilities
• Fully loaded charge-out rate option for private
  foundations/businesses