Facilities & Administrative (F&A) Cost Rates

Facilities and Administrative costs (previously referred to as indirect costs) are comprised of two main categories: Facilities costs and Administrative costs. (See definitions above.) The distribution base used to determine F&A Rates is the Modified Total Direct Cost (MTDC) as defined by OMB Uniform Administrative Requirements (2 CFR 200) . An F&A rate is expressed as a percentage multiplied times the appropriate cost base on the grant or contract to determine the amount of F&A cost to be charged. The F&A cost is billed to the sponsor along with direct costs.

Facilities and Administrative (F&A) rates are determined on an annual basis according to the provisions of OMB Uniform Administrative Requirements (2 CFR 200), Section 200.414, and audits by the Defense Contract Audit Agency (DCAA), with negotiation and approval of rates by the Department of Navy, Office of Naval Research (ONR). The Institute and ONR negotiate F&A rates to be used over a period of years, based on the audited rate proposal report.

The negotiated F&A rates are to be used on externally-funded grants and contracts. Other sponsors, including the State and private foundations, tend to limit, by their own policy, the F&A rate they are willing to pay. Federal training and fellowship grants, clinical trials and drug studies also limit the F&A rate.

Types of F&A Rates
Three F&A rate types and five standard F&A rates are in place and applicable to sponsored work performed by the academic units of Georgia Tech (excluding GTRI). The applicable rate types and standard rates are described as follows:

1. Organized Research
   Research and development activities financed by external sponsors that are separately budgeted and accounted for by the Institute.
   • Federal Capped Rate – Incorporates all administrative limitations imposed by the Federal government. Rate is applicable to all Federal awards, all Department of Defense (DOD) Grants, and to DOD contracts awarded before November 30, 1993.
   • Federal Uncapped Rate – Incorporates only the departmental administration limitation imposed by the Federal government. Rate is applicable to DOD Contracts awarded on or after November 30, 1993 in accordance with DFARS 231.303(1).
   • Industrial Rate – Fully-burdened without administrative limitations. Rate is applicable to industrial awards.
2. Instruction
   Conventional academic instruction and related activities financed by external sponsors that are separately budgeted and accounted for by the Institute. There is only one standard rate associated with this rate type.
3. Other Sponsored Activities
   Program and projects financed by external sponsors which involve the performance of work other than instruction and organized research. Among these activities are included programs designated as Community or Public Services. Examples include conferences, institutes, general advisory services, reference bureaus, consulting, and similar non-instructional services to particular sectors of the community. There is only one standard rate associated with this rate type.

Determination and Application of Federal F&A Cost Rates
F&A rates approved by ONR on a “Predetermined” or “Fixed” basis are treated as fixed rates throughout the competitive segment of the Federal sponsored agreement. A competitive segment is a period of years approved by the Federal funding agency at the time of the award. If negotiated rate agreements do not extend through the life of the sponsored agreement at the time of the initial award, the negotiated rate for the last year of the sponsored agreement is extended through the end of the life of the sponsored agreement.