2025-03-03: New Facilities and Administration Rate Agreement, FY 2025-2026 Increase: On behalf of Scott Grafton, Interim Vice Chancellor for Research, Chuck Haines, Vice Chancellor & CFO, Finance & Resource Management
- Marc Miller
******************PLEASE GIVE WIDEST DISTRIBUTION*****************
March 3, 2025
TO: Contracts and Grants Community
FR: Scott Grafton, Interim Vice Chancellor for Research, Chuck Haines, Vice Chancellor & CFO, Finance & Resource Management
RE: New Facilities and Administration Rate Agreement, FY 2025-2026 Increase
Dear Contracts and Grants Community,
We write to share that a new campus Facilities & Administration (F&A) rate agreement has been finalized with our cognizant agency, the Department of Health and Human Services (DHHS). In a communication somewhat incongruous with national news, we received notification of the finalized agreement this Monday. The oddity of the timing is not lost on us, but this announcement is years in the making. For those unfamiliar with the process, F&A rates are determined through a rigorous review of all expenditures related to research activity on our campus. This agreement is the result of extensive data analysis and negotiations with DHHS over several years, ensuring that our institution continues to receive appropriate support for the infrastructure and administrative costs associated with research.
Application to New and Existing Contracts & Grants:
Effective immediately, all new proposal budgets, including supplemental proposals, should use the new F&A rates for the dates specified in the agreement dated December 23, 2024.
For existing awards, the application of the new F&A rate on federally-funded projects will depend on the terms and conditions of each specific award. In some cases, these new rates will be applied regardless if the previous F&A rates were budgeted. F&A rates escalate as defined in the rate agreement, unless restricted by an award.
Key Update:
The On-Campus Organized Research Rate is now 56.50%. This rate is applied to the period beginning July 1, 2025.
Updated details on other rate categories can be found in the attached and on our website.
What Remains Unchanged:
Composite Benefit Rates (CBR) has not yet been updated.
Modified Total Direct Cost (MTDC) remains the same for federally-funded awards.
Equipment purchases ($5,000+ per unit) and subaward amounts over $25,000 are still excluded from the MTDC base.
While the new Uniform Guidance (effective October 1, 2024) allows for increased thresholds for equipment and subawards, these changes are not included in this F&A rate agreement and should not be used.
If you have questions about the application of the rates, please reach out to the Sponsored Projects Office for guidance. Our websites are being updated with the new rate agreement information.
To learn more about the importance of Facilities & Administration costs and how they support the operations and mission of UCSB, these resources are available:
F&A Costs of Research developed by AAMC, AAU, APLU, AIRI, and COGR