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Negotiated Indirect Rates

Rates at a Glance

The rates below are from the December 17, 2019 Federal Rate Agreement. If you have questions regarding the use of this rate agreement, please contact the Division of Research – Office of Contracts and Grants.

Negotiated Rates

Period Federal Non-Federal
9/1/2017 - 8/31/2020 53.00% (predetermined) 53.00% (predetermined)
9/1/2020 - 8/31/2023 55.00% (predetermined) 55.00% (predetermined)

 

Facilities & Administration Costs (formerly known as Indirect Costs)
The base for F&A Costs is the Modified Total Direct Costs (MTDC).

On-Campus Rates

Period On-Campus Research On-Campus Other Sponsored Activities
9/1/2019 - 8/31/2020 53.00%  33.00%
9/1/2020 - 8/31/2023 55.00% 33.00%

Off-Campus Rates

Period Off-Campus Research Off-Campus Other Sponsored Activities
9/1/2019 - 8/31/2023 26.00% 26.00%

*Clinical Trial Rates

Period On-Campus Research
2/1/2019 - 6/30/2021 31.00%

Modified total direct costs, consisting of all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000.

Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

*Clinical trial rate is applied to the Total Direct Cost; no budgeted item is excluded from the application of indirect costs. This rate applies regardless of whether a Clinical Trial is based on a sponsor-initiated, or an investigator-Initiated protocol.

Applying IDC on Proposal & Award at the Rates Established in the Negotiated Rate Agreement

According to 2 CFR 220, Appendix A, Section G.7.a. and 2 CFR Part 200, Appendix III, Section C.7, when identifying and computing indirect costs at Institutions of Higher Education, Federal agencies must use the negotiated rates in effect at the time of the initial award throughout the life of the award.  

For proposal budgets, the rate in effect at the beginning of each budget period should be used.   For actual award expenditures, the university will apply the rates (there may be more than one)  in effect at the time of the initial award throughout the life of the award.

For example, the university's fixed or predetermined Modified Total Direct (MTDC) cost rates on its current rate agreement dated December 17, 2019, are:

  • 53% effective 09/01/2019 – 08/31/2020
  • 55% effective 09/01/2020 – 08/31/2023.

For a five year proposal with the following budget periods, if awarded, the rates are the following:

Start Date

End Date

Proposal Rates

Rates applied to expenditure if awarded on the budgeted start date

04/01/2020

03/31/2021

53%

53%

04/01/2020 – 08/31/2020

04/01/2021

03/31/2022

55%

55%

09/01/2020 – 03/31/2025

04/01/2022

03/31/2023

55%

04/01/2023

03/31/2024

55%

04/01/2024

03/31/2025

55%

For five year proposals with the following budget periods, if awarded, the rates are the following:

Start Date

End Date

Proposal Rates

Rates applied to expenditure if awarded on the budgeted start date

04/01/2021

03/31/2022

55%

55%

09/01/2020 – 03/31/2026

04/01/2022

03/31/2023

55%

04/01/2023

03/31/2024

55%

04/01/2024

03/31/2025

55%

04/01/2025

03/31/2026

55%

FAQ about Budgeting and Charging IDC Rates

The Facilities and Administrative (F&A) rate is negotiated between the University of Houston (UH) and the Department of Health and Human Services (DHHS) Cost Allocation Services. Prior to the negotiation, UH submitted a required proposal documenting the actual costs incurred during a base year for items such as space, utilities, general-purpose equipment, administrative salaries, and benefits, etc. When costs in these categories significantly increase or decrease, rates changes.

Yes, per UH policy, the new rates apply to all externally-sponsored projects.

You should use the rate(s) found in the most current negotiated rate agreement.

You should use the provisional rate pending the new rate agreement. Then at the Just-In-Time or award negotiation period, submit the new rate agreement and a revised budget to the sponsor. Additional funds for increased IDC may be approved in an amount that does not exceed limitations in the proposal solicitation. Generally, once the award is issued, federal sponsors will not award additional IDC beyond those calculated in the approved budget.

For federal awards under the Uniform Guidance, the rate that will be applied to expenditures on the award is the rate(s) in effect at the time of the initial award, not the rate previously submitted in the proposal, if it is different.

This is a fairly unusual situation, but we will accept the amendment to the award that increased the award F&A rates and the overall budget. In this way, the IDC rate(s) applied to the actual award expense, based on the approved negotiated rate agreement, will have less of an impact on the direct cost of the award.

Budgets are estimates based on anticipated or actual spending. When the actual amount charged for IDC is more, due to a rate change as outlined in the approved negotiated rate agreement, federal sponsors generally will not award additional IDC beyond those calculated in the approved budget.

Competing renewal applications should use the appropriate IDC rate specified in the most current rate agreement, regardless of the previous segment rates.

For federal awards under the Uniform Guidance, the rate(s) that will be applied to expenditures on the existing award is the rate(s) in effect at the time of the initial award and will remain the same throughout the life of the award. The rate(s) will not change to align with the newly negotiated rate agreement.

When the supplement is new uncommtted supplemental funding, the F&A rate used can be the current rate in effect unless the sponsor requires the use of the F&A rate approved at the time of the initial award. The National Science Foundation requires the university to use the rate in effect at the time of the initial award for supplemental funding.

The University award number will remain the same, but supplement funds will be set up in a separate project cost center under the award with the agreed-upon IDC rates applied.