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Indirect Costs for Sponsored and Private Projects

Effective Date May 13, 2019

Indirect Costs for Sponsored and Private Projects

Indirect costs (IDC) are costs paid by sponsors to assist the university in supporting research. They represent the real costs for utilities, maintenance, libraries, staff support and other research infrastructure. IDCs are reimbursements to the university for costs incurred. They are not prospective payments. The base for these rates is modified total direct costs (MTDC) for a grant or contract. MTDC includes salaries, wages and benefits, materials and supplies, services, travel and all other items. MTDC specifically excludes tuition remission, scholarships and fellowships, participant support costs, the amount of any subcontract that exceeds $25,000, equipment, capital expenditures and rental costs.

The federal government has imposed arbitrary limitations on reimbursement for some elements that make up the basis for the IDC rate. Thus, the real IDC rate that would adequately support research activities is higher than that which the federal government permits for federal awards. This is not the case for other sponsors. In the case of grants or contracts directly from a federal agency or for grants or contracts where the ultimate source of funds is the federal government, the rate will be limited to the negotiated federal rate.

For all activities performed in facilities not owned by Florida Tech and to which rent is charged directly to the project(s), the off-campus rate will apply.  Grants or contracts will not be subject to more than one F&A cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.

There may also be instances where sponsors place additional limitations on reimbursement of indirect costs. In these cases, the Office of Research and Sponsored Programs must be provided with a copy of the sponsor’s policy. The senior vice president for research must approve deviations from the university’s IDC policy.

The calculated fringe benefit rate on eligible salaries is 31.14% for all sponsors at all times.

The table below shows the rates to be applied: 

Sponsor (source) On-Campus Rate Off-Campus Rate
Federal government (all agencies) 44.87% 28.45%
Non-federal sponsor (federal funds) 44.87% 28.45%