To:         Stanford Research Community

 

From:          Sara Bible and Thomas Wong

               Co-Directors, Cost and Management Analysis

 

Date:           July 29, 2002

 

Subject: FY2003/FY2004 Provisional Facilities & Administrative and Fringe Benefit Rates

 

    

Stanford and the Office of Naval Research (ONR) have agreed on Facilities and Administrative (Indirect Cost) rates for University fiscal years 2003 and 2004 and Fringe Benefit rates for fiscal year 2003. These rates are effective beginning September 1, 2002 and are applicable as described below.  To implement these rates Stanford and ONR have executed a provisional rate agreement dated July 27, 2002. The final rate agreement is expected to be completed soon with no change to the rates listed below.  The provisional rates are as follows:

 

 

FY2004

FY2003

On-Campus Organized Research

58%

60%

Off-Campus Organized Research

 

30%

30%

On-Campus Sponsored Instruction

43%

43%

Off-Campus Sponsored Instruction

 

27.3%

27.3%

Other Sponsored Activities

 

33%

33%

Animal Care Indirect Cost Rate

 

77%

77.5%

Fringe Benefits

 

 

   Regular Employees

24.8%

 

     Tuition Grant Program (Note 1)

1.2%

 

   Post Doc Research Affiliates

14.8%

 

   Contingent Employees

8.1%

 

   Graduate Assistants (Note 2)

 

3.3%

 

                                                            

Note 1:  An additional 1.2% is charged against the Regular Benefits Eligible Employee salaries for non-government projects only.  The 1.2% contributes to the University's fund for continuation of the Tuition Grant Program.

 

Note 2: The fringe benefits rates for FY03 include a Graduate Assistants rate for the first time.  The new rate will be used to pay for the newly-implemented health insurance benefit for graduate assistants.  There have been various communications regarding the new rate including an article in the Stanford Report dated April 10, 2002. If you have additional questions please contact Ann George or Nancy Walsworth.

 

The increases in the Organized Research rates are due to the cost of new research facilities being completed in the latter half of calendar 2003.

 

The Facilities & Administrative and Fringe Benefit rates become our "forward pricing" rates, and all new and competing proposals currently being prepared for FY2003 and FY2004 should use the negotiated rates above.  All new and competing proposals currently being prepared for years beyond FY2004 should use the negotiated FY2004 rates (For Fringe Benefits the FY2003 rates should be used for years beyond FY2003.).

 

Awards currently in force will not be effected by these rate changes unless (or until) a competitive segment is awarded. For currently pending proposals to non-government sponsors that will be effected by these rate changes, Principal Investigators should submit revised budgets, or be prepared to delay the start of the project until revised F&A rates and associated budgets are negotiated after the award is made.

 

Application of $5,000 Equipment Capitalization Threshold for FY2004

As announced on April 1, 2002, all proposals currently being prepared for FY2004 and beyond should use the new $5,000 equipment capitalization threshold.  Proposals should include an application of indirect costs for items below the $5,000 threshold (up to $4,999).  Previously submitted proposal budgets that include equipment purchases for FY2004 will also be subject to the new equipment capitalization threshold.  If necessary, Principal Investigators should submit revised budgets to sponsors.

 

Indirect costs will be applied to equipment expenses below the $5,000 threshold beginning September 1, 2003.  At that time, there will be no waiver of indirect costs on equipment that costs less than $5,000. Until this change takes effect equipment costing $1,500 or more must continue to be recorded in CAMS and tracked as capital equipment.

 

Application of FY2003/FY2004 Facilities & Administrative Rates

In 1999 the University revised its guidance on Changes in Indirect Cost Rates in response to a revision to OMB Circular A-21.  Please refer to Chapter 3 of the Research Policy Handbook to read the January 15, 1999 memo from Charles Kruger that further explains the rate application.  Following are scenarios for application of the new rates (Numbers 1 and 2) and prior rates (Numbers 3 - 6).

 

Performance start date: July 27, 2002 - August 31, 2002

1.   For projects with period of performance start dates between July 27, 2002 (the date of the FY03/FY04 rate agreement) and August 31, 2002, and their non-competitive continuations, the FY02 rate (for example, 57% for on-campus research) applies to expenditures during FY02.  Expenditures in subsequent years are subject to the FY03 and FY04 rates.

Example: For a project that begins on or after the date of the FY03/FY04 rate agreement (July 27, 2002), but before September 1, 2002, and continues through FY03, FY04 and FY05, 57% would be used for the remainder of FY02, 58% would be used for FY03, and 60% would be used for FY04 and FY05 (because we do not have a rate in place for FY05).  The rate remains in effect for the entire awarded period until the next competitive submission.

 

Performance start date: September 1, 2002 - August 31, 2004

2.  Proposals for new awards or competitive segments awarded with a period of performance start date in FY2003 or FY2004 (September 1, 2002 - August 31, 2004) will use the negotiated rate (for example, 58% for FY2003 and 60% for FY2004 for on-campus research) in effect at the time of award from the start of the project.

Example: For a project that begins in FY03 and continues through FY04 and FY05, 58% would be used for FY03 and 60% would be used for FY04 and FY05 (because we do not have a rate in place for FY05). The rate remains in effect for the entire awarded period until the next competitive submission.

 

Performance start date: September 1, 2000 - July 27, 2002

3.  For projects with period of performance start dates between September 1, 2000 and July 27, 2002 (the date of the FY03/FY04 rate agreement), and their non-competitive continuations, the FY01/FY02 rate (for example, 57% for on-campus research) applies and remains in effect for the entire awarded period until the next competitive submission.

 

Performance start date: September 1, 1999 - August 31, 2000

4.  For projects with period of performance start dates between September 1, 1999 and August 31, 2000, and their non-competitive continuations, the FY2000 rate (for example, 56.4% for on-campus research) applies and remains in effect for the entire awarded period until the next competitive submission.

 

Performance start date: September 1, 1998 - August 31, 1999

5.   For projects with period of performance start dates between September 1, 1998 and August 31, 1999, and their non-competitive continuations, the FY99 rate (for example, 55.3% for on-campus research) applies and remains in effect for the entire awarded period until the next competitive submission.

 

Performance start date: Prior to September 1, 1998

6.   For awards in existence prior to September 1, 1998, and their non-competitive continuations, the FY98 rate (for example, 55% for on-campus research) applies and remains in effect for the entire awarded period until the next competitive submission.