Facilities and Administrative Fundamentals
F&A/Indirect/Overhead Costs
Georgia Tech goes through an extremely rigorous process every two years to calculate the total of the current costs associated with research. These costs, often referred to as Facilities and Administrative (F&A), indirect, or overhead costs, must be covered for every research project. To streamline the payment of these costs, Georgia Tech negotiates specific rates with the federal government that apply to the majority of the projects sponsored by a federal agency.
Georgia Tech's Facilities & Administrative (F&A) rates are established and approved by the Office of Naval Research (ONR). The research capped rate applies to federal grants and contracts except Department of Defense (DoD) contracts (it does apply to DoD grants). Because the amount that we can recover for administrative costs is capped at 26%, this rate does not fully cover Georgia Tech’s costs for federal research projects. Therefore, Tech must contribute the difference on each project.
The research uncapped rate is the only rate under which the sponsor fully covers the cost of the research. This rate is applied to DoD contracts as well as projects with non-profit and industry sponsors, to ensure that we do not subsidize industry work with taxpayer dollars.
Myths and Truths about F&A:
Download COGR Waiver Presentation slides
The Council on Governmental Relations (COGR), released a report in 2019 entitled “Excellence in Research: The Funding Model, F&A Reimbursement, and Why the System Works.” The slides linked below, also prepared by COGR, are excerpted from that report.
F&A is complex, and many myths circulate about it. Listed below are common myths. Each link will direct you to the truth—a COGR resource that helps explain F&A:
Process for Requesting an F&A Rate Exception:
Every sponsored project has an F&A rate that is documented in the eRouting system. Any requests for unusual or reduced rates should be initiated in eRouting. Process details are as follows:
| Rate Requested | Approver | Instructions | Considerations |
| Other Sponsored Activities | OSP | Select “OSA” as the F&A rate in eRouting | Determined by SOW |
| Off-Campus | OSP | Select “Off-Campus” as the F&A rate in eRouting | See the Off-Campus F&A Rate Guidance available from this webpage here |
| Reduced Rate as Mandated by a Federal Sponsor | OSP | Select “Other” and then “Federally Mandated Published Rate” as the F&A Rate in eRouting | The rate must be published in the RFP and/or on the sponsor’s website and consistently applied to all funding recipients |
| Reduced Rate as Mandated by a Domestic Non-Profit Sponsor | OSP | Select “Other” and then “U.S. Non-Profit Published Rate” as the F&A Rate in eRouting | The rate must be published in the RFP and/or on the sponsor’s website and consistently applied to all funding recipients |
| Reduced Rate for Industry Sponsor | EVPR | Select “Other” and then “Other Rate” as the F&A Rate in eRouting | Waivers for corporate sponsors are almost never approved. GT cannot use state funds to subsidize industry research. |
| Reduced Rate for International Sponsor | EVPR | Select “Other” and then “Other Rate” as the F&A Rate in eRouting | Waivers for international sponsors are rarely approved. GT cannot provide services to a foreign sponsor at a lower rate than we charge the U.S. Government. |
| Reduced Rate for All Other Scenarios | EVPR | Select “Other” and then “Other Rate” as the F&A Rate in eRouting | All fields in the waiver request must be completed in detail for the request to be reviewed. |
Tips for Successfully Requesting an F&A Rate Exception
Please remember:
- All requests to apply for a reduced F&A rate must include a thorough explanation addressing elements detailed above.
- Upload or link to all relevant documentation, including the RFP, within eRouting to expedite your request.
- Correspondence directed solely to Georgia Tech from a sponsor does not constitute sufficient proof of a consistently applied standard policy.
- Include the actual unrecovered overhead as requested in eRouting, not a placeholder.
The following elements do not have any bearing on the institute’s ability to issue an F&A waiver:
Size of the proposal budget
Significance of the work
Potential for future funding
Authorization of a waiver for similar projects in previous years
The PI’s preference for allocating budget to direct costs rather than indirect costs
The sponsor’s policies on F&A rates (unless they are a federal or domestic non-profit
sponsor, in which case an F&A waiver is not necessary)
Please see the relevant policies:
Fringe Benefit Waivers
There is no such thing as a fringe benefit waiver. Fringe benefits are a cost that must be paid at the time the work is completed. Typically, if a sponsor will not cover fringe benefits, it is paid by the unit. Should the unit be unable to cover the fringe, it should initiate a Cost Share and Institutional Support Request.
Need Assistance?
- Please contact us (AVP-ROI@gatech.edu) with any questions.
- Looking for something else? See Researcher Resources Index
