5 ms·

Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (la

Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (lab space, equipment, etc)? Even in the defense industry, a cost-plus contract with a 10% margin is a lot. And it’s a federal crime to include costs in the overhead amount that aren’t traceable to the actual project.

SJC_Hacker 2y ago
Its essentially a subsidy, and been abused for years. One clarifying point. Indirect is normally charged on top whatever the PI gets. So they don't "take out" 50% the total. They add 50% to the original grant. So if a researcher gets a $500k grant, 50% indirect would be $250k, and the total allocation is $750k.
- rayiner 2y ago
  That sounds similar to cost plus in the defense sector.
  - fraggleysun 2y ago
    It is different. Cost plus allows the contractors to charge for development and add a profit margin. The corporate equivalent would be a fixed price contract, which has overhead built in and far exceeds university rates.
insane_dreamer 2y ago
In the defense/other industries, everything is put under the "cost" part. There's just a lot more line items that cover all that stuff. The overhead simplifies this to a large extent in that the PI only needs to account, as a "direct" expense the cost of his team (salaries, and things not covered by the university such as compensation to human subject volunteers, etc.)
garden_hermit 2y ago
The indirect is a negotiated flat rate that covers costs that would be too numerous or difficult to account for in the direct costs. Like how would you as a researcher budget a fractionalized portion of access to a supercomputer cluster in each and every grant you need? You would need to hire new accountants just to handle this! The indirect rate is basically covering the whole infrastructure of research at a university. In theory all could be put into direct costs but…again…we get to tremendously difficult accounting

SJC_Hacker 2y ago

Its essentially a subsidy, and been abused for years. One clarifying point. Indirect is normally charged on top whatever the PI gets. So they don't "take out" 50% the total. They add 50% to the original grant. So if a researcher gets a $500k grant, 50% indirect would be $250k, and the total allocation is $750k.

rayiner 2y ago
That sounds similar to cost plus in the defense sector.
- fraggleysun 2y ago
  It is different. Cost plus allows the contractors to charge for development and add a profit margin. The corporate equivalent would be a fixed price contract, which has overhead built in and far exceeds university rates.

insane_dreamer 2y ago

In the defense/other industries, everything is put under the "cost" part. There's just a lot more line items that cover all that stuff. The overhead simplifies this to a large extent in that the PI only needs to account, as a "direct" expense the cost of his team (salaries, and things not covered by the university such as compensation to human subject volunteers, etc.)

garden_hermit 2y ago

The indirect is a negotiated flat rate that covers costs that would be too numerous or difficult to account for in the direct costs. Like how would you as a researcher budget a fractionalized portion of access to a supercomputer cluster in each and every grant you need? You would need to hire new accountants just to handle this! The indirect rate is basically covering the whole infrastructure of research at a university. In theory all could be put into direct costs but…again…we get to tremendously difficult accounting