Facilities and Administrative (Indirect Cost) Waivers
The Berkeley campus grants waivers or reductions of F&A costs (indirect costs) for most individual agencies that have formal written public policies dictating an F&A rate different from the campus’ federally negotiated campus rates. These waivers are handled by SPO without additional input from the principal investigator (PI).
However, there also are sponsors that do not publicize their policy regarding payment of F&A costs. Before developing a project budget for such sponsors, Principal Investigators (PIs) are encouraged to contact the sponsor and obtain written guidance on the sponsor’s F&A policy from an authorized representative of the sponsor. SPO will need to see/confirm this documentation before the proposal can be submitted with a rate that differs from the University’s federally negotiated F&A rate.
This written documentation must:
- Be provided by an authorized representative of the sponsor on sponsor 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). Note: If the sponsor provides an F&A range (such as 12% to 15%) the higher percentage always will be applied.
After receiving this information the sponsor’s response will need to be vetted by SPO and reported/approved by UCOP. Note: Approval of the F&A rate may not be granted even with written sponsor documentation, and special conditions may apply to foreign governmental agencies.
If the sponsor cannot provide either a formal written policy governing F&A or an acceptable written explanation of their F&A policy, the University’s appropriate federally negotiated F&A rate will be applied. If the PI has a compelling reason for asking that the campus’ federally negotiated rate be waived, the PI will need to request that the Assistant Vice Chancellor (AVC) approve an exception to the campus’ negotiated indirect cost rate on behalf of the campus. If approved at the campus level final approval from the UC Office of the President also may be required.
Exception to Campus’ F&A Rate
Situations appropriate for a waiver of the campus’ F&A rate may include, but are not limited to:
- Small seed grants which may attract future larger awards;
- Cases of hardship for a new investigator;
- 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.
Requesting an F&A Waiver
To request an exception to the campus’ F&A rate, the PI should develop a written justification for the waiver that is 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 sent to the SPO Contract and Grant Officer who will forward the request (along with the amount of waived F&A that will result) to the AVC. Do not submit the waiver request directly to the AVC.
The SPO Contract and Grant Officer will convey the AVC’s decision regarding the waiver of F&A to the PI.
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.
UC Berkeley Procedures for Cost Sharing and Matching (includes procedures for Waivers or Reductions of Facilities and Administrative (F&A) Rates)