F&A costs are costs required to maintain a major research university. They are costs that cannot be specifically identified with a specific research project or activity, but do support the project or activity. They are calculated as a % of Modified Total Direct Costs (MTDC) or other base. The F&A rate you apply is dependent on the type of proposal you are submitting: new, continuing, or competing. 

Example

Utilities costs benefit many activities conducted  in a building. Separate utility meters could be installed in every room in the building to track power and water use, but that would be extremely expensive and impractical. Instead, utilities are allocated via the F&A cost rate.

Federal agencies use different terms to describe these costs. The terms F&A (Facilities & Administrative) costs and IDC (Indirect Costs) refer to the same thing. We will use the term F&A in this course.

The negotiated F&A (Facility and Administrative) rate is applied based on the type of activity described in the proposal and the location, on or off campus. The activities are listed below.

• Research
• Instruction
• Other sponsored activity
• Animal care
• Non-Federal clinical trial rate

The F&A rate is applied to a base. MTDC (Modified Total Direct Cost Base) is most commonly used. It is the total direct cost TDC (Total Direct Cost) minus exclusions. Exclusions are listed below.

• Capital equipment
• SLAC (Stanford Linear Accelerator) services
• Tuition/tuition allowance
• Cost of renting/leasing project space or equipment
• Portion of each subaward over $25K. The $25K threshold for subawards applies over the life of the award. Each new subaward is included in the MTDC base up to $25K
•  Student aid support (stipend)
• Participant Support Costs (after 12/26/14)
• Patient care costs
• Animal care/VSC costs. Animal Care costs are excluded from MTDC but carry a separate F&A cost rate
• Entire cost of renovation/construction projects over $50K

The program announcements indicates when the TDC (Total Direct Costs) base can be used. It is typically used when a reduced rate (other than the negotiated rate) is specified. This base includes all direct project costs with no exclusions.

Salaries and wages are specified in program announcements. This base is applied against only salary and wages.

Applying F&A Rates

• New Proposals: The negotiated F&A rate is used and applied to the appropriate F&A base.
• Continuation Proposals: The awarded F&A rate is fixed for the life of the project and is used in all continuation year proposals.
• Competitive Renewal Proposals: The negotiated F&A rate is used and applied to the appropriate base.