Indirect Cost Rates

Jump to: Federal rates | Non-federal rates | Applying rates

The full recovery of indirect costs is expected on all grants or contracts.
If you have any questions about any rates, contact the Office of Research and Sponsored Programs at 764-5500 or the appropriate Project Representative.
PDFs of the Rate Agreements texts are maintained on the Sponsored Programs (Finance) website
Class Codes for Sponsored Projects provides definitions of "research," "instruction," "other sponsored activity," "clinical trial site activity" and the associated class codes.

Federal

Research: on campus: 55.5% | off campus: 26.0%

Instruction: on campus: 54.0% | off campus: 26.0%

Other Sponsored Activity: on campus: 30.0% | off campus: 26.0%
Rates are provisional after June 30, 2014 until a new rate is negotiated

Foundations, Public Charities& other Non-profits:

All years, all activities: 20% or sponsor's published rate

State of Michigan

Varies widely, depending on the specifics of individual projects. Contact the ORSP project representative for assistance with State of Michigan projects.

Industrial Sponsors

Research: On campus: 55.5% | off campus: 26.0%

Instruction: on campus: 54.0% | off campus: 26.0%

Other Sponsored Activity: on campus: 30.0% | off campus: 26.0%

Clinical Trial Site Activity

Established before July 1, 2012: 25%

As of July 1, 2012:

Federal Sponsors: Other Sponsored Activity rate (see above) based on Modfied Total Direct Cost

Industrial Sponsors: Other Sponsored Activity rate (see above) based on Total Cost (TC)

Foundations & Public Charities: 20% of Total Cost (TC) or sponsor's published rate

Applying Indirect Cost Rates

Class Codes for Sponsored Projects provides definitions of "research," "instruction," "other sponsored activity," and "clinical trial site activity."

MDTC: The indirect cost rates for federal projects and most projects sponsored by industry are applied to a modified total direct cost (MTDC) base. The rates are applicable to all direct costs with the exception of the following:

Permanent equipment items with a unit value of $5000 or more and a life expectancy of two years. Nonexpendable items valued at less than $5000 or with less than a two-year life expectancy should be budgeted as materials and supplies.

Indirect cost rate is applied to only the first $25,000 of each subcontract or subgrant.

No indirect cost recovery is allowed on costs for alteration or renovations of facilities included in a proposed budget.

Tuition charges are excluded from the base on which indirect costs are calculated. Budget proposals should use a modified total direct cost (MTDC) base that excludes tuition charges.

Patient care costs.

Is it an Off Campus Project?

To determine whether a project qualifies for the off-campus rate, read the off campus definition and hints provided there.

Research Vessels

The indirect cost rate for research vessels is 25.0%.

Specialized Service Facilities

As of 7/1/2010, the university no longer applies or recovers a Specialized Service Facility Fee (SSFEIDC) or Quality Assurance Fee (QAF) related to animal charges on sponsored projects (funds 20000, 25000). All animal purchase and housing for all external sponsors are now treated as any other supply or service cost with no change to the Indirect Cost recovery.

The QAF at 20 % will be applied to all animal charges on non-sponsored projects (funds 10000, 30000, 40000, 54010) within the Medical School.

Cost-Sharing

If the University offers to cost share a portion of the direct costs of a project, the indirect costs associated with those direct costs may also be used for cost sharing. If the sponsor limits indirect costs, the difference between the full recovery of indirect cost and what is allowed by the sponsor may be shown as a University cost-sharing contribution.

Text of the Rate Agreement: Rate Agreement beginning July 2011 Dated March 1, 2010; [pdf] [FinOps web]

Text of the Rate Agreement: Rate Agreement beginning July 2008 (FY09, 10, 11) [pdf] [FinOps web]

Text of the Old Rate Agreement: Rate Agreement beginning July 2006 [pdf] [FinOps web]

FY2007-2008 indirect cost rates | FY2004-2006 indirect cost rates

Reviewed: 07/02/2012

Find what you were looking for? Let us know at: UMresadmin-web@umich.edu

Office of Research & Sponsored Projects, 3003 S. State St., Ann Arbor, Michigan 48109-1274
Main Phone: 734-764-5500. | Hours: 8:00 a.m. - 5:00 p.m.
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