Medical School Indirect Cost Recovery Policy

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The following describes the Medical School's expectations regarding the recovery of indirect costs (also referred to as IDC, F&A, Facility and Administrative, and overhead costs).


All projects to Federal sponsors are expected to recover the full, federally negotiated rate for the specific type of project. We recognize that specific programs (e.g. K, F, and T activity codes) have a mandated published rate that is applicable to all applicants. 


Industry sponsors are expected to follow the same guidelines as Federal sponsors. In cases of a published, competitive announcement in which all applicants are held to the same published rate, the Medical School will accept. 

Foundations and Non-Profits

The Medical School will accept a Non-Profit’s standard published rate as long as it is accessible in the terms and conditions, guidelines, and/or entity by-laws. If there is no published rate, it is expected that a minimum rate of 20% will be used.  

Note: The Medical School does NOT accept emails, phone calls, letters, or other announcements as indication of a lower than standard rate. In special circumstances, when sponsors are silent on the issue, conversations may be started with the Grants Office on the appropriateness of using an historical rate prior to budgeting. 

Standard Exceptions in IDC Recovery

    • Clinical Trial Site Activity (class code 31200) applies to human clinical trials where the protocol is authored by the sponsor. The IDC rate for OSA is used for this type of activity. 
          • As clarification under the contract scope of work, if the UM investigator works with the sponsor on protocol development or has additional responsibilities beyond performing the protocol, the project should be coded as research. If protocol development had been done as an independent contractor under a separate agreement, Clinical Trial Site Activity may still be appropriate for the clinical trial.
    • In the case of industry-sponsored, UM investigator-initiated interventional clinical trials where the protocol is created and held by UM, the on-campus research class code should be used, but a reduced IDC rate for OSA will be accepted. This is current policy and subject to regular review. 
    • The Medical School waives IDC recovery on Phase I SBIR/STTR projects. This is a standard waiver that does not require a waiver request, and is only for Phase I.  


All decisions on final use of non-standard rates will be made in conjunction with the administrative home department. 

In all cases, the Federal rate is the maximum rate that can be recovered. This is important to remember in situations when there is a sponsor that allows a higher rate. For example, if submitting an OSA project to a Foundation which allows 40%, the negotiated rate for OSA needs to be used, not 40%. 

If the standard expected rate is not used, a waiver should be requested prior to routing a PAF. Please see the Grants Office website for more information.