Guidance on F&A/IDC

Importance of recovering full F&A

Indirect costs (IDCs or F&A) reimburse the university for services rendered in support of sponsored projects. The recovery of IDCs is critical to our research enterprise because IDCs support overhead costs like building operations and maintenance, libraries, legal support, administrative personnel and other essential systems (such as procurement, finance and accounting, and information technology). These costs cannot be readily allocated to any single project or training program. Recovered IDCs may also be reinvested into school and departmental support or to expand PI research programs through Research Enhancement Incentive Awards (REIA) or other mechanisms - depending on each school’s policies.

It is the university’s policy to request the full and appropriate F&A rate for all sponsored projects regardless of the funding source, as allowable by GW’s Negotiated Indirect Cost Rate Agreement (NICRA) with the federal government.

The F&A rates and fringe benefit rates outlined in the NICRA have been negotiated with the federal government. The NICRA also outlines which base costs are applicable when calculating F&A rates on a sponsored project.

IDC Exception

Exceptions from the GW policy of charging full F&A costs are granted as follows:

to non-profit sponsors when the sponsor has an explicit, published IDC policy and guidance for how to calculate the F&A rate, as recorded on the OVPR list (GW Login required).
for specific funding programs or mechanisms when special F&A rates are published in the sponsor funding opportunity announcement (FOA) or solicitation.
to specific small foundations/associations when OVPR has approved funding practices related to IDC based on cultivated relationships, as recorded on the OVPR list (GW Login required).

Sponsor emails and letters are not acceptable documentation to justify an exception on their own; more documentation, Pod or central office direct contact with sponsor and approval of school Associate Dean for Research (ADR) may be needed. Any other request to use an F&A rate not outlined in GW’s NICRA requires an IDC waiver request.

IDC Waiver

An F&A cost waiver is an institutional decision that F&A costs will be applied at a rate lower than the university’s negotiated agreement. A waiver is granted only under exceptional circumstances and only when the programmatic benefit to the university is compelling and outweighs the institutional benefit of recovering the full cost of conducting the project. IDC waivers must be discussed with the ADR and/or department equivalent and submitted to the Office of the Vice Provost for Research (OVPR) well in advance of preparing the proposal budget. IDC waivers and/or budgets with reduced IDC should not be discussed with or presented to sponsors without both ADR and OVPR approval. This includes any plans to use unrecovered indirect cost to meet mandatory cost sharing requirements, which will require an IDC waiver request and approval in advance. Any approved IDC waiver shall have a one-time effect and shall not apply to any subsequent situations regardless of their similarity.

IDC waiver requests will consider:

Impact on student support
Strategic partnerships
Public/community engagement
Seed grants which may lead to larger awards (these waivers are approved with the stipulation that all future funding on the project will carry full F&A according to the university’s NICRA)

IDC waivers are unlikely to be granted on the following considerations:

Solely to increase the competitiveness of the award
Enabling a larger scope of work than the sponsor’s funding can cover
To balance project budget deficits for total direct costs
The Principal Investigator having an arrangement/agreement for a lower F&A rate without receiving prior ADR and OSP approvals
Proposal submission to the sponsor without proper routing for OSP approval
Research being sponsored by for-profit (profit-making) or foreign organizations, where there is a “work for hire” arrangement, or where the research involves any limitation of rights on the part of the sponsor with respect to publications, intellectual property (patents trademarks, copyrights, or trade secrets)
Where granting the waiver might appear to establish a precedent for future projects

Note: In the event that the sponsored project does not apply full F&A rates according to the university’s NICRA, F&A are calculated on Total Direct Cost (TDC) base unless there is a published sponsor policy about Indirect Costs and specific guidelines on how they should be calculated.

Please see the FAQ's on F&A/IDC and Determination of F&A Rate for more information.