Indirect Cost Rates

Federal
Non-federal
Applying rates
Specialized service facilities
Text of the Rate Agreement: Rate Agreement beginning July 2006 [pdf] [FinOps web]

The full recovery of indirect costs is expected on all grants or contracts. The indirect cost rate applicable to all research proposals submitted to federal agencies that anticipate funding in FY 2007 & 2008 is 52% (July 1, 2006 - June 30, 2008). If you have any questions about any rates shown below, contact the Division of Research Development and Administration at 764-5500 or the appropriate Project Representative.

Federal :: Fiscal 2007 & 2008 (7/1/2006 -- 6/30/2008)

Research: on campus: 52.0%; off campus: 26.0%

Instruction
: on campus: 54.0%; off campus: 26.0%

Other Sponsored Activity: on campus: 30.0%; off campus: 26.0%

The above rates are provisional after June 30, 2008 until new a new rate is negotiated

Non Federal Sponsors

Foundations & Public Charities:: All years, all activities: 20% or sponsor's published rate

State of Michigan:: All years, all activities: 20%

Clinical Trials:: All years: 25%

Industrial Sponsors :: Fiscal 2008 (7/1/2007 -- 6/30/2008)

Research: on campus: 52.0%; off campus: 26.0%

Instruction: on campus: 54.0%; off campus: 26.0%

Other Sponsored Activity: on campus: 30.0%; off campus: 26.0%

Applying Indirect Cost Rates

The indirect cost rates for federal projects and projects sponsored by industry are applied to a modified total direct cost (MTDC) base. The rates are applicable to all direct costs with the exception of the following:

Permanent equipment items with a unit value of $5000 or more and a life expectancy of two years. Nonexpendable items valued at less than $5000 or with less than a two-year life expectancy should be budgeted as materials and supplies.

Indirect cost rate is applied to only the first $25,000 of each subcontract or subgrant.

No indirect cost recovery is allowed on costs for alteration or renovations of facilities included in a proposed budget.

Tuition charges are excluded from the base on which indirect costs are calculated. Budget proposals should use a modified total direct cost (MTDC) base that excludes tuition charges.

Patient care costs.

The direct and indirect costs associated with Specialized Service Facilities must be included in a composite charge which reflect the surcharges shown below. These composite service charges, in turn, are excluded from the modified total direct cost (MTDC) base. The negotiated indirect cost rates are not applicable to these charges.

Is it an Off Campus Project?

To determine whether a project qualifies for the off-campus rate, read the off campus definition.

Research Vessels

The indirect cost rate for research vessels is 25.0%.

Specialized Service Facilities

In determining the appropriate costs to budget for Specialized Service Facilities, the following surcharges should be applied to the direct costs:

Michigan Memorial Phoenix Labs: 37.5% (effective 7/01/02)

Unit for Laboratory Animal Medicine (ULAM)39.5% effective 7/01/02

ULAM Quality Assurance Fee (non-federal projects using Medical School space):45.0%

The Unit for Laboratory Animal Medicine rate applies only to the animal care provided by ULAM and includes the daily per diem rate, animal treatment costs, and specialized services such as veterinary care, medical and surgical supplies, technical tests, and technical assistance. Animal care not provided by ULAM is treated as a routine direct expense and is subject to the prevailing indirect cost rate for the project.

The ULAM animal care rate also is applicable to nonfederal projects conducted outside the Medical School.

Animal purchases should be treated as normal operating expenses and should be included in the MTDC base on which indirect costs are assessed.

The 45% Quality Assurance Fee should be applied to both animal care and animal purchases for non-federal projects in the Medical School (or such projects that use Medical School space).

Cost-Sharing

If the University offers to cost share a portion of the direct costs of a project, the indirect costs associated with those direct costs may also be used for cost sharing. If the sponsor limits indirect costs, the difference between the full recovery of indirect cost and what is allowed by the sponsor may be shown as a University cost-sharing contribution.

Text of the Rate Agreement: Rate Agreement beginning July 2006 [pdf] [FinOps web]

FY2004-2006 indirect cost rates | FY2003 rates | FY2001-02 rates | FY1999 rates.

Old Rate Agreement: Rate Agreement through June 2006 [pdf] [FinOps web]

Reviewed: 06/08/2007