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An Indirect Costs or Facilities and Administrative (F&A) Costs Waiver is a formal exception granted by a university or research institution to reduce or eliminate the indirect costs typically charged on sponsored projects. These costs—also known as overhead—cover general infrastructure and administrative expenses that support research but are not directly attributable to a specific project (e.g., building maintenance, utilities, and central services).
Effective April 1, 2015, UW-IT research storage, compute, and contracted cloud services are no longer subject to Indirect Costs, also known as Facilities & Administrative (F&A) charges for sponsored research expenditures.
This waiver applies to the following UW-IT services:
Extending the F&A waiver to these UW-IT services allows Principal Investigators (PIs) in a sponsored research program to choose the most appropriate solution to meet their needs, whether it be research storage, compute, contracted cloud services through UW-IT, or purchasing equipment directly, without having to consider the inclusion of indirect costs. Prior to this change, UW-IT services were subject to indirect (F&A) costs, resulting in artificially high costs for those solutions, especially when compared to purchasing equipment directly.
With the F&A rate waiver, PIs can purchase exactly what they need through UW-IT, including research storage, compute, or contracted cloud services, with the ability to expand or shrink capacity as needed.
This change includes the following benefits for researchers, PIs and the UW:
Currently, expenditures on sponsored research for equipment/hardware are included in a waiver from the F&A rate. Prior to this waiver, UW-IT services, including research storage, compute, or contracted cloud services, were subject to the F&A rate, resulting in costs that were more than 50 percent higher to the PI. This cost difference often resulted in PIs choosing a solution based on cost rather than efficiency.
For example, PIs may purchase their own equipment with more capacity than is needed, or enough equipment to meet “peak” loads, ultimately utilizing only a fraction of the capacity they paid for. This resulted in a higher cost to their budget and a proliferation of small, inefficiently used systems and higher costs to the University overall.
The waiver allows PIs the alternative of purchasing exactly what is needed through UW-IT, including research storage, compute, or contracted cloud services, with the ability to shrink or expand capacity as needed.
Although the F&A waiver will not be applied retroactively, all new charges on existing sponsored research will not be subject to the indirect costs. And new sponsored research proposals may exclude indirect costs for these services.
The new policy is reflected in the updated UW Grants Information Memorandum 13. A new UW expenditure object code, 03-04, Rsrch Strg, Compt&Cloud, has been established and UW-IT will use this new code in all future billing of these services.
Learn more about UW-IT services to support research.