Facilities and Administrative (Indirect Cost) Waivers

The F&A funds received from external sponsors support the facilities and administrative costs associated with applying for, housing, and administering UC Berkeley’s grants and contracts. These are real costs. When these funds are not recovered from existing sponsored projects, it affects Berkeley’s ability to adequately support the administrative services and facilities needed to carry out the University’s research, instruction and public service mission in the future.

Waiver of all or part of the University’s federally negotiated F&A rates is therefore a serious step for the University and must be evaluated carefully. The following guidance describes the three ways an F&A waiver may be granted on the UC Berkeley campus. Note: Reductions in indirect cost rates for industry, other for-profit, and foreign governmental entities will require a campus exception from the AVC-RAC. See #3 below for guidance in obtaining this exception.

  1. If a domestic non-profit sponsor has a formal written public F&A policy of paying less than the appropriate campus federally negotiated campus rate, SPO will accept this rate without additional input from the principal investigator (PI). This written public F&A policy should be uploaded by the BRS/Department RA as part of the Phoebe Proposal Record that is submitted to SPO.

  2. If a domestic non-profit sponsor does not have a formal written public F&A policy and indicates that it will not accept the appropriate campus negotiated F&A rate, it will be necessary for the PI to obtain a written statement about the sponsor’s F&A policy from an authorized representative of the sponsor. This statement should be uploaded by the BRS/Department RA as part of the Phoebe Proposal Record that is submitted to SPO. This written documentation must:
    • Be provided by an authorized representative of the sponsor on the sponsor’s letterhead or via direct email from the sponsor representative to SPO.
    • Include the specific F&A rate and the base it is based upon. For example, 15% of total direct costs (TDC). If the sponsor provides an F&A range (such as 12% to 15%) the higher percentage always will be applied.

    Note: After receiving this information, the sponsor’s response will be vetted by SPO and reported/approved by UCOP. Note: Approval of the F&A rate may not be granted by UCOP even with written sponsor documentation and special conditions may apply to foreign governmental agencies.

  3. If the sponsor cannot provide either a formal written policy governing F&A or an acceptable written explanation of their F&A policy, or the sponsor is a for-profit or foreign governmental entity, the University’s appropriate federally negotiated F&A rate will be applied unless the PI has a compelling reason for asking for a “campus exception.” Situations appropriate for a campus exception may include, but are not limited to:
    • Small seed grants which may attract future larger awards that will result in standard indirect cost recovery;
    • Awards which include contributions of equipment or building renovation funds;
    • Awards for a community relations interest vital to the campus;Supplements for a student services activity which the campus must provide;
    • Supplements for library holdings or public exhibits.

    To obtain a campus exception for a F&A rate that differs from the University’s federally negotiated rate, the PI will need to:
    • Compose a letter to the Assistant Vice Chancellor — Research Administration and Compliance (AVC) justifying why the AVC should approve an exception to the campus’ negotiated indirect cost rate on behalf of the campus.
    • The justification should be specific to the proposed project related to one or more of the situations listed above. If the waiver is requested for any other reason, the justification should clearly demonstrate why such a waiver is necessary to the campus as a whole.
    • The PI’s justification should be uploaded by the BRS/Department RA in Phoebe Proposal and sent to SPO.
    • SPO will submit the PI’s request (along with the amount of waived F&A that will result) to the AVC via UCOP’s online system for tracking F&A exceptions. PIs should not submit the waiver request directly to the AVC for Research Administration and Compliance or the VCR. This will only delay the decision-making process.
    • If approved at the campus level, final approval from the UC Office of the President also may be required.

    Note: When F&A is waived by exception, the reduction in F&A charged to the sponsor may be used as cost sharing, however, in no circumstances will an F&A exception be approved for the sole purpose of meeting cost-sharing requirements.

Resources

UC Berkeley Procedures for Cost Sharing and Matching (includes procedures for Waivers or Reductions of Facilities and Administrative (F&A) Rates)

UCOP Contract and Grant Manual:

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