Poorly understood, much maligned, and yet central to the work of research, indirect costs are due for a partial, but welcome, revamping under changes expected to be published this week by the Office of Management and Budget (OMB), according to university administrators and association officials. Indirect costs represent that part of a federal research grant that reimburses the sponsoring institution for its contribution to a project, through support facilities and administrative overhead.
To calculate rates for indirect costs--that portion of a federal research grant used to pay for facilities and administrative costs--university accountants sit down with their ledgers and representatives from one government agency, their so-called cognizant agency, to negotiate. Together, they arrive at a rate, unique to each school, that is then honored by all other federal agencies awarding grants to that university. Most institutions negotiate with the Department of Health and Human Services (HHS), but a number of ...
