The University expects external sponsors to pay the actual costs of conducting the sponsored project. These costs include both the direct and the indirect (also know as facilities and administrative) cost obligations incurred by the University in the conduct of a project. The direct costs, that is, those costs that are clearly identified with and benefit a specific research project, include salaries, fringe benefits, equipment, supplies, travel, and other expenses. The indirect costs are those institutional research infrastructure costs that cannot be readily attributed to an individual project or monitored on an individual basis and include building and equipment use, operations, maintenance and utilities, general, departmental and sponsored projects administration, library, and capital improvements.

Each sponsored project is expected to pay its proportional share of these research infrastructure costs. This payment is based on the facilities and administrative cost rate that is negotiated annually (or multiple years) between the University and the U.S. Department of Health and Human Services. Since the facilities and administrative cost rate is based on the level of existing indirect costs associated with research, the facilities and administrative cost income received by the University (and all other institutions of higher education) is a reimbursement for actual costs incurred.

All research project budgets should include facilities and administrative costs as determined by this federally negotiated facilities and administrative cost rate. Exceptions to this policy may be considered if the sponsor has an established, written policy applicable to all potential proposers which deviates from these rates. All deviations are subject to UTD administrative approval in advance.

The following link contains information concerning the University’s rate agreement.