Indirect Costs



Federally Negotiated Rates

These are also commonly referred to as Overhead, Facilities and Administrative Costs (F&A), IDC, or Indirects. Overhead rates are typically negotiated with the Department of Health and Human Services (DHHS) every 4-5 years.

As of the most recent rate agreement (approved by the DHHS and dated March 13, 2015), University-area indirect rates are as follows:

Project Type Rate
On Campus Research 69%
Off Campus Research 26%
Other Sponsored Activities 34%

Details of federally negotiated rates and copies of the agreements  are posted on OSP's F&A Cost Rates pages. Indirect costs on federal awards are assessed on Modified Total Direct Costs. Common exclusions are equipment, tuition remission and subawards >$25,000. See below for the application of the indirect rate on non-federal awards.


FAS Guidance on On-Campus vs. Off-Campus Indirect Cost Rates


If you are applying for federal funding and believe that your project is eligible for the Off-Campus rate, be sure to review the OSP Policy Page for On-Campus or Off-Campus Indirect Cost Rates. In accordance with the policy, a project is considered on-campus or off-campus based on where the preponderance of time and effort will be expended, NOT where the majority of dollars will be spent.  If 50% or more of Harvard-budgeted effort is off-campus, the entire project may be considered off-campus and the off-campus rate may be used.  The same rate must be used over the entire project lifespan, as our federally negotiated indirect cost rate states that “each contract or grant is assigned only one indirect cost rate.” (i.e. one year cannot be off-campus and another year on-campus.)

If there is no Harvard-budgeted effort, then the considerations below may be taken into account.  Each point will be considered over the entire lifespan of the project to determine whether the preponderance of work performed is on or off campus.

  1. Harvard faculty time in the field
  2. Location for which Harvard’s direct costs, excluding capital equipment and subawards, will be spent
  3. Field work expenses, such as rent and per diems
  4. Non-PI personnel time in the field

Please note that the final determination on On-Campus versus Off-Campus is to be made by the RAS Sponsored Research Administrator. 

In order to prevent last-minute budget changes, please consult with RAS before moving forward on a budget containing either the Off-Campus or Other Sponsored Activities rates.

     
FAS Guidance on Other Sponsored Activities

Not all grants are for research. Some provide support for other sponsored activities: a conference or symposium, editing a series of papers, building a database, maintaining a collection of scientific specimens, etc.  These projects are eligible for the 34% Other Sponsored Activities rate.  Please note contracts and grants must each be assigned only one indirect cost rate, per our federally negotiated rate agreement. Proposal budgets may not utilize multiple rates under any circumstances.  It is sometimes unclear whether this rate applies to projects with complex scopes of work, so please consult with RAS before moving forward on a budget using this rate.



Non-Federal

The applicable indirect rate (see below) must be assessed on Total Direct Costs unless the sponsor publishes specific restrictions.



Overhead waivers

Only the FAS Dean has the authority to waive or reduce overhead.  Departments should read the FAS and SEAS Policy on Assessments on Current Use Gifts and Sponsored Awards and consult with their RAS Sponsored Research Administrator before requesting a waiver.