New VUMC F&A Rate for Commercial/Industry Research Contract Activity

Please note that, starting August 1, 2019, VUMC has a new indirect cost rate (also known as a facilities and administrative [F&A] rate) for commercial/industry research contract activity: Clinical trials for drugs, vaccines, devices, and all other forms of clinical trial investigation sponsored by industry: Previous Rate: 29% of Total Direct Costs New Rate: 35% of Total Direct Costs Other industry-sponsored research projects that are conducted in academic/medical center space: Previous Rate: 60% of Total Direct Costs New Rate: 70% of Total Direct Costs Implementation is as follows: All new agreements should utilize these rates, effective August 1, 2019. Users should utilize a Total Direct Cost (TDC) methodology when applying these rates. Any contracts currently in negotiation and pending final signatures (i.e., budget has been finalized with the industry partner) and all active commercial/industry contractual agreements budgeted at previous rates are grandfathered in at the originally agreed-upon rates (29%/60%). Recovery of indirect costs is necessary to support institutional infrastructure and

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New Coeus Indirect Rate-Type: Foundation

VUMC’s Office of Sponsored Programs (OSP) recognizes that foundations who sponsor VUMC projects may not award budgets inclusive of our full indirect costs. In such situations we accept either the foundation’s published policy or, in the absence of published policy, a minimum of 15% indirects on total direct costs. Pursuant to this approach, on Monday April 22, Coeus will debut a new indirect cost rate option that will charge TDC 15% by default for foundations. Of course, users can override this rate to match the foundation’s published policy if needed. This might be a good time for a review: Modified Total Direct Costs (MTDC): VUMC and the federal government periodically negotiate indirect cost rates applicable to federally funded projects. Not all direct charges receive corresponding indirects. Equipment, patient care, and subcontract costs over $25,000 are excluded from MTDC. In Coeus, several indirect rate-types qualify as MTDC, including ‘Research,’ ‘Sponsored Training,’ and ‘Other Sponsored Activities.’ Coeus automatically excludes these costs for

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Unique Budgeting Scenario: IDC (Indirect Cost) Recovery

Recently OSP encountered an unusual application budgeting scenario most often related to foundation applications. According to the foundation’s budgeting guidelines, applicants were permitted to request 20% IDC recovery, albeit with a special stipulation for those proposals including subrecipients (i.e., VUMC subcontracting with a secondary party): “Note: indirect costs for the subcontract budget may be claimed by either the primary or the secondary institution, but not both.” Because VUMC flows down the sponsor’s IDC recovery rate to our collaborating sites in order to allow these organization to collect their share of IDC (in this case 20%), VUMC would not collect IDC in this example. VUMC budget calculations must then exclude the FULL estimated subcontract budget from our IDC cost calculation base.  As a result, VUMC would only apply the 20% rate to “our” direct costs. Had this stipulation not been included in the provided guidelines, the budget and associated IDC recovery would have been assembled and processed via VUMC’s normal IDC recovery practices. This is just another

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User-Submitted Question: Calculating Indirect Cost Recovery

VUMC requires grant applicants to include indirect cost (IDC) recovery in accordance with sponsor guidelines. It is important to carefully read the sponsor’s funding opportunity announcement (FOA) regarding its budgetary guidelines when determining your budget calculation with IDC recovery. Calculating IDC recovery will look different depending on what method you use to determine your budget. The two main types of calculations used to determine budgets include: Modified Total Direct Cost (MTDC) Total Direct Cost (TDC) MTDC is the calculation used for almost all federal grants. This budget method omits some direct costs from the indirect cost calculation: these are known as “exclusions.” Exclusions include the following items: capital expenditures, equipment, tuition remission, each subcontract portion over $25,000, rental costs of off-site facilities, participant support costs, patient care charges, and fellowships/scholarships. VUMC’s IDC federal rate agreement can be found on the homepage of OSP’s website under “Forms” or by clicking here. Calculating MTDC to determine IDC recovery: While the total direct

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The More You Know: Indirect Costs and Foundation Awards

OSP often receives questions regarding indirect costs on foundation awards. If a foundation does not allow indirect costs, OSP requires a copy of the sponsor’s published policy before submission. VUMC Finance will also request this documentation when a center request is submitted. Departments must provide a center for the mandatory 5% IDS before the center request can be processed.