The document, prepared by COGR (Council on Governmental Relations) and presented by Cindy Hope, addresses concerns regarding the limitations imposed by federal agencies on Facilities and Administrative (F&A) cost recovery in federally sponsored research, service, and educational programs. It highlights COGR’s recommendations to the A-21 Task Force, emphasizing the need for consistency, fairness, and simplicity in the enforcement of F&A recovery rules. Specifically, COGR advocates for federal agencies to fully reimburse institutions at negotiated F&A rates unless prohibited by statute, and calls for prohibiting arbitrary restrictions on F&A cost recovery, especially regarding bulk purchases and high-volume transactions. The document critiques these arbitrary limitations, noting that they can lead to significant financial losses for research institutions, undermine facility investments, and create inequities, especially when cost sharing requirements are also enforced.
Using case examples such as the University of Alabama’s experience—where contractual interpretations limited F&A recovery on substantial subawards—the document illustrates the broader negative impacts of inconsistent and restrictive agency practices. It argues that F&A costs represent real and necessary expenses, and that the process for determining and applying rates should be transparent, rational, and equitable. The summary also mentions the complexities in calculating modified total direct cost (MTDC) bases and the repercussions of exclusions on institutional finances. Overall, the document calls for clearer federal policies and updated guidance to ensure that institutions are fairly compensated for the indirect costs of federally sponsored activities.
