1. F&A Rate Mythbusting UNM RAN Meeting May 2016 Dr. Mindy S. Connolly, CPCM Office of Sponsored Projects

2. F&A Rate Myth #5  “UNM determines the F&A rates, so can choose which one applies.” Our F&A rates are negotiated with the cognizant federal officials and become a signed contract that applies to UNM contracts, grants, and other agreements where federal funds are involved. UNM is expected to apply the rates within that agreement fairly and consistently, using Definitions within that agreement, applicable federal regulations, and any interpretation from the UNM VPR.

3. F&A Rate Myth #4  “The rate stays the same over the life of the agreement.” UNM’s rates are either Predetermined (PRED) or Provisional (PROV). Predetermined rates aren’t adjusted. Provisional rates are adjusted. * As in past rate agreements, the future year rates are provisional. In our current rate agreement, rates proposed from 7/1/2017 forward are provisional. * - Subawardees usually have provisional and predetermined rates too.

4. F&A Rate Myth #3  “A PI can do fieldwork from their hotel room and the off-campus rate applies.” The Off-Campus rate definition has multiple elements. The primary determinant is a location to conduct the project, which is either paid as a direct cost by the Sponsor or made available by the Sponsor as part of the award. Lodging for fieldwork or intermittent data collection generally does not meet this criteria. OSP will consider off-campus rates on a case-by-case basis, in advance of the proposal submission process.

5. F&A Rate Myth #2  “The F&A rate is too high.” That appears applying a subjective, fixed-price approach to a rate that’s neither fixed, nor a price. F&A rates are appropriately evaluated for being comprised of allowable, allocable, and reasonable cost elements, which are largely auditable and objective criteria.

6. F&A Rate Myth #1  “A lower F&A rate makes my proposal more competitive.” The Merit or Technical evaluation typically done for Research doesn’t consider F&A rates. In that two-step process, when the budget or rates are considered, they are considered by contracts or grants officials who know how rates are supposed to be used and applied. Most federal sponsors use Cost Realism analysis, not Price analysis, for Research. Proposing rates lower than what UNM is directed to propose makes a proposal less realistic. * * - Cost realism applies to salary escalation too!

7. Questions?