The F&A rates are implemented by the Accounting Office as follows:
Federal Grants and Contracts
F&A rates for federal grants and contracts awarded prior to November 27, 2017 will remain fixed at the rate(s) in the original award notice for the total project period stated in the award notice.
The F&A rates are effective as of November 27, 2017, the date that the DHHS, Division of Cost Allocation, Western Region has signed this rate agreement will be input into the accounting system as each award notice arrives for all competitive federal grants and contracts awarded on or after November 27, 2017. Competitive federal grants and contracts include new, renewal, revision or competitive supplement awards. Should a competitive award notice be received which improperly utilizes expired F&A rates, OSR will contact the federal agency to obtain a corrected award notice. If the proposal was submitted using the expired rates, and the federal agencies do not provide additional funds to cover the new rates, the expired rates will be used. This instance of using the old rate will not require an indirect cost exception (aka waiver).
For competitive federal grants and contracts awarded on or after November 27, 2017, F&A rates will increase each July 1, in accordance with the terms of the F&A Cost Rate Agreement. For example, the F&A rates for an on-campus four year research award starting in January 1, 2018 will be 59.5% for the period 1/1/18 - 6/30/18, 60.0% for the period 7/1/18 - 6/30/19, 60.5% for the period 7/1/19 - 6/30/20 and then 61.5% until the end of the competitive period of the award.
Subcontracts Under Federal Grants and Contracts
F&A rates for subcontracts under federal grants and contracts with start dates prior to November 27, 2017 will remain fixed for the life of the prime agreement (i.e., through the competitive period of the prime award) at the earlier expired F&A rate agreement.
The new DHHS-negotiated F&A rates will be input into the accounting system for all new, renewal, revision or competitive supplements with start dates on or after November 27, 2017 as described above for federal grants and contracts. However, if a new subcontract award with a start date of November 27, 2017 or later is received which has been issued at an expired F&A rate, OSR will request the new DHHS rates from the subcontracting agency. Should the subcontracting agency deny the request, and the expired rates were used in the proposal, then the expired rates will be used until the end of the competitive period of the prime agreement. This instance of using the expired rate will not require an indirect cost exception (aka waiver).
Non-Profit Grants and Contracts
The rules for federal grants and contracts described above will apply to those awards which do not have an F&A waiver in place.