Beware The Corrosive Consequences Of Indirect Costs

My baptism in the conflict between academic productivity and the acquisition of indirect costs occurred some years ago when my university unilaterally canceled a research grant made to my laboratory by the Rockefeller Foundation. The shock to my research program was hardly mollified by a vice president's explanation that the cancellation was necessary because the foundation had refused to pay indirect costs. The unpleasant possibility that the university administration might be more interested in collecting overhead dollars than in fostering academic productivity had not previously occurred to me. My second lesson about the tension between productivity and indirect costs came when a senior administrator in my university recommended to the Office of Management and Budget that it would be better to decrease the numbers of research grants than to limit the amount of indirect costs permitted in federal grants. Now the battle lines became more visible. The university administration expressed a clear preference for the growth of indirect costs over the nurturing of academic research. I hear academic administrators extolling the importance of good teaching in the university. But at the same time, excellent teachers, who have good but not outstanding success in obtaining research grants (with indirect costs), are being denied tenure. In some research departments, I hear academic administrators pointing to research quality as the primary objective for their administrative units. Yet their highest praise goes to faculty members who are accepting contracts for enormous amounts of money (and enormous indirect costs), even though those faculty members may be contributing minimally to the flow of quality research. Clearly, the tensions over dollars for administrative uses are increasingly severe. The funds available for basic research have been essentially constant for the past 15 years; during the same period the costs of running a university have been rising consistently. The result is an ever-increasing pressure on the university or research foundation to find ways of paying for its costs. I estimate that the university (or research institute) can add as much as 7 percent to 10 percent to its discretionary budget from collected indirect costs. Administrators have become predictably focused on this source of money. And, just as predictably, the arguments for higher and higher charges for indirect costs become increasingly baroque. The outcome: If a granting agency or foundation does not allow indirect costs, dump it. If better faculty research support could be achieved by placing limits on indirect costs, fight against it. If teachers don't bring in abundant research contracts, deny them tenure. If second-rate researchers bring in big contract bucks, praise them. The deleterious effects of limited funding for the academic community are exacerbated by the linkage of excessive reimbursements of indirect costs to the research contract. There is no question that research contracts add to the costs of academic administration. But major damage to the whole academic system results when the university warps its reward system into an overt demand for high levels of dollar returns via indirect costs. The essence of the problem is that the research faculty is being asked to shoulder more and more responsibility for recruiting discretionary university funds. It seem anomalous that the expenditures needed to keep a university great should have this dependence on the contracts recruited by the research faculty rather than on the academic quality of the university. A system of modest and uniform indirect costs associated with research contracts as suggested by biochemist Daniel Koshland in Science (248:645, 1990) seems sensible and appropriate. Then, if the federal system intends to support the general operation of fine universities, would it not be more logical to provide support for such purpose directly to the university, instead of as a rider on research contracts? The exploitation of the research faculty with claims for inflated indirect costs (which usually are to be used for the general operation of the university, and not for actual indirect costs of the research), presents a major threat to the integrity and quality of the university system. In short, then, I believe that administrative goals for academic quality are being displaced by administrative goals for indirect costs. I suggest that this deviation from the objectives of quality in research and teaching is having corrosive effects on our research and educational systems. The corrosive effect is most evident in the functioning of promotions, and in the sacrificing of outstanding teachers. It also draws the university into the hyperplasia of currently faddish subject areas, since those areas are richest in research funds (and indirect costs). Carl Leopold is W.C. Crocker Scientist at the Boyce Thompson Institute for Plant Research at Cornell University in Ithaca, N.Y.

Beware The Corrosive Consequences Of Indirect Costs

Interested in reading more?

Become a Member of