F&A (Facilities and Administrative) cost rates (also known as overhead or indirect costs) are established by negotiation with the U. S. Department of Health and Human Services and cover a specified period.

F&A Costs (Indirect Costs) Definition

These are costs that cannot be uniquely associated with a particular project but which are nonetheless incurred by the university due to the project. They include costs such as departmental accounting and clerical support, network support, equipment depreciation, building and facilities operation and maintenance, library, general and sponsored projects administration. These costs are budgeted and charged as a percentage of some of the direct cost elements.

F&A Indirect Cost Brochure

MTDC Calculation of F&A

F&A costs should appear as a separate budget category and show the base and percentage used to determine the amount. Oregon State University uses a Modified Total Direct Cost (MTDC) base for charging F&A costs.

Exclusions or Exceptions to MTDC Calculation

  • Subawards in excess of $25,000
    • Subawards are limited to charging the appropriate F&A rate on the first $25,000 of the subaward, regardless of the number of years or the amount of money for that subaward. If the sponsor caps the F&A rate or if the Total Direct Cost base is used rather than the Modified Total Direct Cost, OSU will consistently charge only the first $25,000 of the subaward at the rate allowed by the sponsor.
    • If a proposal is charging both the on- and off-campus rates, the subaward should be written on the on-campus portion and the on-campus rate is applied to the subaward.
    • If OSU is a subaward recipient from another organization, OSU's appropriate negotiated rate is charged on the direct costs incurred and billed to the awarding entity.
  • Equipment (including lease purchased equipment) with a unit acquisition cost of $5,000 or more; see Direct Costs for definition
  • All building and land rentals and leases
  • Alterations and renovations to permanent structures
  • Tuition for graduate teaching and research students on appointment
  • Student or postdoc fellowship and traineeship stipends; see Budget-Direct Costs for definition
  • Participant support costs; see Direct Costs for definition

Facilities and Administrative Rate Definitions

Organized Sponsored Research Definition

Research is a systematic study directed toward fuller knowledge or understanding of the subject studied. Basic research is activity specifically organized to produce outcomes. Applied research utilizes the outcomes or theory in practice; i.e. toward the production of useful materials, devices or systems. This category includes training of individuals in research techniques.

All Other Sponsored Activities Definition

Activities that involve the performance of work other than research fall into this category. Examples are: sponsored instruction and workshops, course development, non-research training activities, public service activities, cooperative extension outreach, health service projects, and community service programs. This category also includes academic support of libraries, educational media services, student services, and others.

On-Campus Definition

The On-Campus rate is applicable to projects or activities that take place in facilities owned or leased by OSU. Included are: Hatfield Marine Science Center (HMSC) including the NOAA building, Cascades Campus, regional Agriculture Experiment Stations, farms and other research facilities. The on-campus rate is not used when rent of facilities is directly allocated to the project as an approved direct cost.

Off-Campus Definition

The Off-Campus rate is applicable to sponsored projects performed in facilities which are not owned or leased by OSU, or when rent of facilities is directly allocated to the project as an approved direct cost. Where a project occurs both at on-campus and off-campus locations, the on-campus and off-campus locations, the off-campus component must consist of an activity period a minimum of 90 consecutive days away from the institution.  The appropriate rate will be applied to each portion.

If a split is justified, it will be necessary to provide a budget showing the on-campus and off-campus costs.  Each budget should identify the activities, related costs, and application of the appropriate indirect cost rates for each location. Activities at an off-campus location for less than 90 consecutive days are included in the on-campus budget and should use the appropriate on-campus rate.

The following locations and buildings qualify to use the off-campus rate in a sponsored project proposal, regardless of the 90-day rule for off-campus activities

  • Environmental Protection Agency Building
  • Forest Sciences Lab
  • Oregon Natural Heritage Information Center (Portland)
  • Extension offices located in non-OSU owned or leased facilities, i.e., in County office buildings

F&A Rates Less Than OSU Established Rate

If the sponsor has published rates that restrict recovery to less than OSU's negotiated rates, attach a copy, or weblink, of the sponsor's published rates as appears in their guidelines to the Cayuse proposal and apply the sponsor's rate in your budget.

When the sponsor caps the F&A rate, and they do not specify how the rate is to be applied, OSU policy is to charge the capped rate to total direct costs (rather than modified total direct costs, or MTDC).

When this method of calculating indirect costs is used, continue to use the limitation of assessing indirect cost on only the first $25,000 of a subaward

Master Cooperative Agreements Between OSU And A Sponsor

If OSU and a sponsoring agency have entered into a master agreement that allows for recovery of less than full F&A Costs, include the Master Cooperative Agreement number from which the task order or work order is to be written within the notes section of the Cayuse proposal. All conditions of the Master Cooperative Agreement must be met in order to use the F&A associated with that agreement.

State of Oregon Agencies

Use the State of Oregon Agency rate, regardless of the original source of the funds.

When F&A Cost Is Based On Both On- And Off-Campus Activities

When the activity contains on- and off-campus aspects, the budget should reflect the appropriate F&A rate for each type of activity. Budgets typically break line items into on- and off-campus categories to allow correct applications of the F&A rate.

When F&A Cost Is Based On The Total Award

When the sponsor specifies that F&A cost be based on the total award, the calculation of F&A cost is based on both direct and F&A cost (or the total award cost). For example: 10% of $200,000 total award is $20,000. This means that $180,000 is available for direct costs. The correct F&A rate to apply to total direct costs is 11.11%

When this method of calculating indirect costs is used, continue to use the limitation of assessing indirect cost on only the first $25,000 of a subaward

Always check to confirm that the sponsor's F&A rate is the most restrictive after calculations are done using the sponsor's capped rate and the published OSU rate. Sometimes it may "appear" that the sponsor's rate is more restrictive than OSU's, but when the F&A rate is actually applied, OSU's rate results in less indirect cost. An example would be as follows:

In cases where OSU's appropriate negotiated F&A rate calculates at less than the sponsors allowed rate, OSU's negotiated rate must be used. This occurs most often when the off campus rate applies to a project and the sponsor allows a rate of 20% or more of total direct costs.

Voluntary Reduction of F&A Costs

If a sponsor allows F&A costs but the PI wants to request a waiver of these costs, a Request for Waiver of F&A Costs form must be submitted to Office of Sponsored Research and Award Administration with a full copy of the proposal. These requests are reviewed by the Director of Sponsored Research and Award Administration on a case-by-case basis and are only approved under special circumstances.

Continuation Proposals Using the Previous F&A Cost Rate

All currently awarded projects will continue to have the F&A rate applied under which the award was made. This rate will be used until the award expires. This includes non-competing continuation requests when the continuation year for which you are requesting funds was awarded in the original award document.

For questions about application of the new rates to future proposals, contact the Office of Sponsored Research and Award Administration at 7-4933.

Supplemental Funding

When a request is made for supplemental funding, the F&A rate used should be the current rate in effect unless the sponsor requires use of F&A rate approved at the time of the initial award. The National Science Foundation requires OSU to use the rate in effect at the time of the initial award.

January 2019 F&A Rate Agreement Implementation Guidance

OSU received a new F&A rate agreement in January 2019 that has increased rates based on OSU's fiscal years.  In order to prepare budgets that implement these increased rates, the following table is offered as a guide for projects categorized as organized research. 

The rate for projects categorized as on-campus organized research, the rate that is effective at the beginning of the budget period (typically 12 months) should be used for that budget period. See below for different examples that illustrate two possible start dates.

Proposal A
Proposed Start date May 1, 2019 (during FY2019)

F&A Rate

Proposal B
Proposed Start date October 1, 2019 (during FY2020)

F&A Rate

Budget Year 1
5/1/2019 - 4/30/2020

47%

Budget Year 1
10/1/2019 - 9/30/2020

47.5%

Budget Year 2
5/1/2020 - 4/30/2021

47.5%

Budget Year 2
10/1/2020 - 9/30/2021

48.5%

Budget Year 3
5/1/2021 - 4/30/2022

48.5%

Budget Year 3
9/1/2021 - 8/31/2022

48.5%

Budget Year 4
5/1/2022 - 4/30/2023 *

48.5%

Budget Year 4
9/1/2022 - 8/31/2023 *

48.5%

Budget Year 5
5/1/2023 - 4/30/2024 *

48.5%

Budget Year 5
9/1/2023 - 8/31/2024 *

48.5%

*OSU's F&A rate will be on a provisional basis until a new F&A rate agreement is negotiated.

OSU's F&A rate agreement has a different rate structure for awards made under DOD contracts.  Many DOD-funded projects use a broad agency announcement as the funding opportunity announcement (FOA).  If the FOA is a broad agency announcement, OSU's process is to use the DOD contract F&A rates in the proposal.  If the award is made as a grant or cooperative agreement, OSRAA will set up the award using the rate appropriate for grants and cooperative agreements.  Any differential will be budgeted into supplies.  See below for different examples that illustrate two start dates.

Proposal A
Proposed Start date May 1, 2019 (during FY2019)

F&A Rate

Proposal B
Proposed Start date October 1, 2019 (during FY2020)

F&A Rate

Budget Year 1
5/1/2019 - 4/30/2020

47.7%

Budget Year 1
10/1/2019 - 9/30/2020

48.2%

Budget Year 2
5/1/2020 - 4/30/2021

48.2%

Budget Year 2
10/1/2020 - 9/30/2021

49.2%

Budget Year 3
5/1/2021 - 4/30/2022

49.2%

Budget Year 3
9/1/2021 - 8/31/2022

49.2%

Budget Year 4
5/1/2022 - 4/30/2023 *

49.2%

Budget Year 4
9/1/2022 - 8/31/2023 *

49.2%

Budget Year 5
5/1/2023 - 4/30/2024 *

49.2%

Budget Year 5
9/1/2023 - 8/31/2024 *

49.2%

*OSU's F&A rate will be on a provisional basis until a new F&A rate agreement is negotiated.