Industy-Sponsored F&A Cost Rate ChangeThe industry-sponsored facilities & administrative/indirect rates (F&A) will be changing effective July 1, 2008. This rate revision does not apply to industry-sponsored clinical trials - that rate will remain at 26% of total direct costs (TDC). The change does apply to all other projects sponsored by industry or for-profit entities, including clinical research not meeting the clinical trial definition. The University administration has approved the change in F&A rates for new industry-sponsored projects with a project start date on or after July 1, 2008. The new F&A rates will mirror the F&A rates for federally funded projects. Currently the University’s federal government-approved rates for on-campus projects are 48% of modified total direct costs (MTDC) for organized research, 41.1% MDTC for training/instruction and 33% MTDC for other sponsored activities (which typically includes "service" projects). For new industry- and for-profit-sponsored projects which will begin during the remainder of this fiscal year ( i.e., before July 1, 2008) but will not be completed until after June 30, 2008, the principal investigator (PI), in consultation with and approval of the Office of Industry Contracts (OIC), may elect to charge the revised F&A rate now. Consultation with OIC is needed during this period (Januay 1 - June 30, 2008) prior to quoting the new F&A rate to a sponsor to ensure consistency (e.g., to avoid charging different rates to the same sponsor.) In addition to recovering more of the University’s actual incurred indirect costs, this change should simplify the budget process by making it consistent with that used for federally funded projects. Instead of having to remember when to use federal or industry rates, one set of rates will apply to both. None of UofL’s benchmark institutions has a posted industry-sponsored (non-clinical trial) F&A rate less than its federal F&A rate. The OIC Non-clinical Industry Collaborations (NIC) division staff would be happy to attend departmental meetings or meet with groups of faculty/staff as needed to explain the new rate structure and to assist PIs and Unit Business Managers in budget development. Some sponsors may wish additional explanation or justification, and OIC NIC staff is available to explain to them this policy change and the University’s need to recover these costs. The currently applicable rate structure (updated as appropriate) can be found at http://research.louisville.edu/common/f&a.html.
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