Principal Investigators,
The Office of Sponsored Programs (OSP) has some exciting news about working with industry sponsors. OSP and the Office of Technology Transfer (OTT) have coordinated with several businesses, State Risk in the Idaho Department of Administration, and many Boise State University offices to develop new industry-friendly agreement templates and associated processes that support our Strategic Plan and industry sponsors’ needs. The updated templates and processes are described below.
1 – “Opt-In” to Use the New Industry-Sponsored Research Agreement Templates
As described in Admin Council and Deans’ Council presentations earlier this year, the new agreement templates provide industry-sponsors with four new upfront/pre-negotiated commercial intellectual property licenses (i.e., the licenses are not negotiated after intellectual property is created as per historical practices). While we believe these new intellectual property licenses will drive more industry-sponsored work, including more royalty-generating inventions and creative works, we want to ensure that faculty and staff working on sponsored projects understand the nuances of these new agreements. Consequently, during proposal submission, we will be asking PIs, Co-PIs, and project staff to “opt-in” with an opportunity to receive more detailed information. Initially, we will do this manually in Frevvo, but it will be incorporated into InfoEd at a later date.
2 – Applicable F&A Rates
OSP has reviewed applicable policies on Facilities and Administrative (F&A) Cost Rates and determined that changes are needed to the proposal submission process to assure compliance with the Idaho State Board of Education Governing Policies and Procedures Section V.N.3., which states:
“For grants and contracts with private entities, whether for-profit or non-profit, indirect cost recovery shall be charged at the full indirect cost recovery rate proposed to the federal government at the last rate negotiation . . . .” (emphasis added)
Beginning on January 2, 2023, all proposals to private entities, whether for-profit or non-profit, will use Boise State’s proposed F&A cost rates. These proposed rates were included in Boise State’s most recent proposal to Health and Human Services that is used to set F&A rates in Boise State’s negotiated indirect cost rate agreement. The following rates (Modified Total Direct Costs (MTDC)) will apply to all private entities:
| Category | On-Campus | Off-Campus |
|---|---|---|
| Organized Research | 42.6% | 26.0% |
| Other Sponsored Activities | 42.1% | 26.0% |
| Instruction | 49.1% | 26.0% |
Boise State’s currently approved negotiated F&A rate agreement will still apply to all Federal and Federal Flow-Through proposals, as well as for other sponsors. Further, OSP will continue to accept written policies from private non-profit entities that cap the applicable F&A rate.
3 – Include Fee/Profit in Project Budgets
Even when Boise State recovers its proposed F&A rates from industry sponsors, we are still not recovering all of the costs the university incurs to support these research and creative activities. This is because our proposed F&A rates to the federal government require the university to “cap” its administrative costs (e.g., costs for college, departmental, and central office administration, including financial, human resources, legal, compliance, procurement, and research administration functions). Considering that we have limited resources and that Boise State isn’t permitted to provide gifts to private enterprises (see, e.g., Idaho Constitution Article VIII, Section 2(1)), we believe it’s prudent to add a fee (based on our estimated costs at the proposal stage) to industry agreements that’s above the sum of direct costs and associated F&A. This fee would not be part of the base for F&A calculations; instead, it would work as follows:
| Budget Category | Estimated Cost |
|---|---|
| Total Direct Costs
[Sum of salary, fringe benefits, materials and supplies, travel, student costs, participant support, subawards, and other direct costs] |
$100,000 |
| Base for Indirect Calculation
[Direct costs minus required exclusions like student tuition remission, equipment, participant support, and subawards over $25,000] |
$90,000 |
| F&A (42.6% MTDC)
[Multiplies the Base for Indirect Calculation by the applicable F&A rate. Recovered F&A is allocated per Policy 6100.] |
$38,340 |
| Total Estimated Costs
[These are our Total Estimated Costs.] |
$138,340 |
| Fixed Fee (e.g., 10%)
[There is not necessarily a fee minimum or ceiling, but some considerations include what the market can bear and any other benefits we’re receiving, such as student experiential opportunities. The Federal Acquisition Regulation 15.404-4(c)(4) provides some examples that the federal government believes are fair and reasonable (e.g., fees ranging from 6% for certain services to 15% for research and development). Recovered fees are allocated using the same approach as F&A.] |
$13,834 |
| Total Estimated Costs Plus Fixed Fee
[This is the price that we’d quote the customer.] |
$152,174 |
We recognize that charging a fee for sponsored projects is very different from historical practices and that it’s not available for most of our research and creative activities (e.g., federal grants and cooperative agreements). However, as Boise State grows and we have other contracting opportunities with private industry and the federal government, it would be helpful to have worked through these details beforehand. Additionally, funding from fees could help support other college, departmental, and central office activities.
4 – Industry Partnerships Webpage
We developed a new “Industry Partnerships” web page to share how we’ve adapted our approach. We believe these actions will facilitate new and expanded industry partnerships.
Questions?
Contact us at osp@boisestate.edu or (208) 426-4420. If you have a question about how any of the above applies to a current or upcoming proposal, please contact your assigned Pre-Award Research Administrator at preaward@boisestate.edu.