The document is a formal letter from the Council on Governmental Relations (COGR), representing major research universities, addressed to officials at the Office of Federal Financial Management within the Office of Management and Budget (OMB). The letter discusses the methodology for calculating the Utility Cost Adjustment (UCA) in the context of federal research funding, specifically critiquing and recommending changes to the “Relative Energy Use Index” (REUI) weighting factor used in allocating utility costs to university research laboratory space. COGR acknowledges the merits of the current Uniform Guidance in recognizing the higher utility demands of research space, but raises concerns that the methodology currently understates the true utility cost differential between research laboratories and other campus buildings.
COGR, supported by expert analysis, presents detailed reasoning showing that calculations for both the numerator (energy use in research labs) and denominator (energy use in other campus spaces) are outdated or based on unsound filters, thereby resulting in an REUI factor of 2.0 that does not reflect present realities. They recommend updating the numerator and denominator with more recent and appropriate data, and thereby adjusting the REUI weighting factor from 2.0 to 4.2. While recognizing the administrative advantages of a standardized approach, COGR argues that this adjustment would more accurately and equitably allocate utility costs for research laboratory space, benefiting the integrity of federal indirect cost recovery across all institutions. The letter concludes with a request for a meeting to discuss implementation details and expresses readiness to collaborate with OMB and cognizant agencies to recalibrate the REUI methodology accordingly.
