Facilities & Administrative Costs (F&A)
Frequently Asked Questions
Q. What are Facilities and Administrative Costs?
A. Facilities and Administrative Costs (or indirect costs) are the expenses incurred by Texas Tech University to develop and maintain the facilities and administrative infrastructure necessary to support extramurally funded research and non-research activities. They include, but are not limited to, the costs of providing:
- Centralized and departmental grants and contracts administration;
- Research compliance functions (e.g., protection of human and animal subjects, environmental health and safety, etc.);
- Use of offices, labs, classrooms, conference rooms, and other facilities belonging to TTU;
- Related building and grounds maintenance and utilities; and
- Use of campus and departmental libraries.
Q. What is an F&A rate?
A. The F&A rate is the method used by the federal government to reimburse TTU and other research institutions for use of their facilities and administrative services to support federally funded projects and other sponsored activities. The actual rates are calculated in accordance with federal regulations and guidelines.
Q. What are the current F&A rates for TTU?
- Research – 49% of modified total direct costs(MTDC)
- Instruction – 49% of modified total direct costs(MTDC)
- Off-campus – 26% MTDC
- Other Sponsored Activity – 37% MTDC
- Intergovernment Personal Act – 14% MTDC
Q. Who determines the F&A rate for TTU?
A. Sponsored Programs Accounting and Reporting (SPAR) compiles and analyzes data on actual TTU operating costs and develops reports for TTU leadership and the federal government. Based on its analyses, TTU proposes and negotiates F&A rates with the federal government through its “cognizant agency.” The federal cognizant agency for TTU is the Dallas-based Division of Cost Allocation (DCA), an office of the U.S. Department of Health and Human Services.
In some cases, a special rate, called an “off campus rate” is calculated for work that will occur in facilities provided by the sponsor or a third party. It also includes projects that will occur predominately in the field or not at a TTU campus or TTU operated facility.
When the rates are approved, DCA sends signed rate agreements to the OVPR, and the rates are then communicated to the TTU community. These federally approved rates must be used in proposal budgets on all federally funded projects.
Q. Do F&A rates apply to non-federal awards?
A. Yes. However, it is up to TTU to determine whether and how the federal rates apply to non-federal awards or if other rates apply.
Q. If a sponsor won't agree to the TTU F&A rate, can I accept a lower rate for my project?
A. It is TTU policy to recover the full F&A costs allowed.
In the case of a non-profit sponsor (foundation, state or federal agency) with a published or otherwise well-documented policy on reduced F&A, the university will accept the lower rate. Provide written documentation of the sponsor's rate restriction when you submit your proposal to ORS.
In the case of a for-profit sponsor that will not agree to the university's negotiated rates, the reduced rate must be approved by the department chair, center or institute director or administrative head of the submitting unit; the dean; and the Vice President for Research. Submit the request for approval using the form Request for Reduction/Waiver of F&A*. By reducing the F&A for any project, the university is providing a subsidy of that project. Benefits to the university such as student support will be a consideration and should be addressed in the justification. In accordance with university policy (OP 65.01), reductions in F&A for projects funded by for-profit organizations will be granted only in extraordinary circumstances.
*If form does not display, download to your computer and then open.
Q. Will a high F&A rate undermine the competitiveness of my proposal?
A. It is uncommon for the F&A costs included in a proposal budget to be a consideration in the decision to fund a project. Also, the F&A rate at TTU is lower than the rates at many comparable universities.