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. Some sponsors (private foundations, in particular) do place caps on the F&A rate they will pay. Some prohibit the application of any F&A rate to the project budget.
It is TTU policy to recover full F&A costs unless the sponsor explicitly limits or prohibits recovery. However, the Vice President for Research at TTU is authorized to approve reductions or waivers of established rates. Any request for a reduction or waiver of F&A should be approved by the appropriate dean or director before approaching the Vice President for Research.
Provide written documentation of a sponsor’s rate restriction when you submit your proposal to ORS. Also, make sure you receive written documentation of any approved reductions or waivers from the appropriate TTU official.
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.