Principles for Applying Indirect Costs to Non-Federal Awards

The University provides schools with a set of guiding principles apply in order to ensure maximum indirect cost (IDC) recovery and consistent application of sponsor policy across Harvard. 

A full explication of these principles, summarized below, can be found at OSP's Principles for IDC to Non-Federal Awards. 

1) projects sponsored by non-profit entities should attempt to recover the indirect of the sponsored activity and projects sponsored by for-profit entities are expected to provide indirect cost recovery that equals what would have been recovered with the federal rate;

2) before an indirect cost recovery policy that limits reimbursement to zero or levels well below the negotiated federal rate can be applied to a sponsored budget, research administrators will seek to determine whether such a policy has been published by the sponsor in a medium that is reliable, authentic, and reasonably available.

3) maximum published indirect cost rate must be applied, and costs normally funded as indirect costs, must be included as direct costs wherever possible. The indirect cost rate should be applied to the total direct costs (TDC) of such a project, rather than the modified total direct costs (MTDC) basis used in federal awards, unless prohibited by the sponsor;

4)  research administrators collaborate across the University to ascertain a sponsor's history of funding indirect costs on other Harvard awards and ensure that the policy is applied consistently;

5) school should quantify the amount of foregone indirect cost on such awards and share this information on a periodic basis with other schools and with OSP so that there is a common understanding of the University's aggregate foregone recoveries of indirect costs on non-federal awards.

For the details of FAS practice with respect to these guidelines, see Indirect Costs.