F&A Rates and Costs
What are Facilities and Administrative Rates and Costs?
The Facilities and Administrative Rate (F&A Rate) is the mechanism used to reimburse the University for the infrastructure support costs associated with sponsored research and other sponsored projects. The F&A rate is essentially an overhead rate. It is calculated as a percentage of overhead associated with, an allocable to, sponsored research and other activities, divided by the direct costs of sponsored research and other activities. To collect F&A, the University adds the negotiated F&A rate to invoices or other billing instruments submitted to sponsors.
F&A costs are defined in OMB Circular A-21 (formally known as CFR 2 Part 220) as costs that are "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity." F&A costs are sometimes referred to as indirect costs. Examples of F&A costs include:
- Depreciationi and interest cost associated with the University’s physical plant
- Operating and maintenance costs such as utility costs, security costs, and custodial costs
- Common administrative functions such as payroll and purchasing
Because it is impractical to account separately for such costs, F&A costs are normally not charged directly to sponsored agreements.
How are Facilities and Administrative Rates Determined by the University?
The University negotiates F&A rates with its cognizant agency—the Department of Health and Human Services (DHHSi), Division of Cost Allocation (DCAi), San Francisco office. Rates are developed and negotiated approximately every four to six years. Eight specific rates are negotiated:
- On-campus organized research (which includes UW Seattle, UW Bothell, and UW Tacoma)
- Off-campus organized research
- South Lake Union organized research
- Applied Physics Lab organized research
- Regional Primate Center organized research
- Vessel operations (which are then added to daily Vessel rates)
- Instructional sponsored research
- Other sponsored activities
For additional information on how rates are calculated, please refer to GIM 13, Facilities & Administrative (F&A) Rates. For additional information about rates currently in effect, please refer to the GIM 13 Supplement. A copy of the University’s current F&A rate agreement is also available.
How are Facilities and Administrative Rates Determined for Individual Grants and Contracts?
Although the University negotiates F&A rates, not all sponsors reimburse the University for F&A costs at the negotiated rates.
- The actual F&A rate for most Federally-sponsored research is the standard rate referred to in the University’s overall F&A rate agreement.
- Statutory limitations prevent some Federal sponsors from reimbursing F&A costs at the Federally-negotiated standard rates.
- In addition, many non-Federal sponsors reimburse the University at rates less than the Federally-negotiated standard rates.
The F&A rate applied to individual awards is determined by the Office of Sponsored Programs (OSPi) during the final negotiation of an award or contract with the awarding sponsoring agency. Rates are based on:
- Standard F&A rates outlined in the University's F&A rate agreement,
- Published sponsor policy, or
- Statutory limitations.
The F&A rate applied to individual awards remains in effect throughout the entire competitive cycle of the award.
In determining total cost share contributions:
- The University will apply the applicable Federally-negotiated rates to cost sharing expenses unless prohibited by the sponsor.
- This is true even if the actual rate funded by the sponsor on an individual award differs from the Federally-negotiated rates (i.e., actual rate is less than the negotiated rate).
F&A is not charged on:
- Gifts (after 1987)
- University funded research, such as awards made through the Royalty Research Fund or on bridge funding
How are Facilities and Administrative Rates Applied to Individual Grants and Contracts?
F&A costs are charged to individual awards as direct costs are paid. The University does not recover F&A costs from sponsors until direct costs of the awards are incurred. F&A is normally applied to modified total direct costs (MTDCi) of awards. This is referred to as the “F&A Base” and is the same base on which the University calculates and negotiates rates with DCA.
The F&A base is shown on both the funding action from OSP and in the University’s accounting system.
MTDC represents the total direct costs of a sponsored agreement less the cost of equipment and other capital expenses; alterations/renovations; space rental costs; stipends, tuition remission, scholarships and fellowships; hospital and other patient care costs; vessel charges; and the portion of each subgrant/subcontract in excess of $25,000 within a competing segment of an award. Example:
A researcher buys supplies on an award
The actual F&A rate on the award is
The sponsor is invoiced for direct costs plus F&A overhead
The project budget is reimbursed for direct costs
The University is reimbursed for overhead (F&A) costs