[jacket3ree]

After a very cursory look online, while 15% seems tight, 54% to 69% is ridiculous. Pretty clear how colleges are funding all their growth, Stanford's facilities are absolutely stunning, with all the granite and sandstone. . . .

Clearly I don't understand federal science funding, because those overhead rates seem ridiculously low to me. At least compared to what I am used to in the private public works sector. Many contracts are cost plus fee, subject to FAR audited indirect cost recovery. We self-audit every year and obtain periodic audits from various agencies. We are in line with industry expectation and rent Class B space, although our SF office has marble galore. 

I understand we don't operate in the same realm as universities and terms vary but our break even overhead (no profit sharing  - discounting safe harbor for ease of calculation, no bonuses) breaks down as 43% fringe benefits (VSH, insurance, payroll tax), 34% overhead, and 35% general and administrative (rent and the cost of operating, which is primarily non-billable labor), for a total ICR of 112%. Then we are typically allowed to add a 10% fee (profit) for a labor multiplier of 2.33. Crazy lean and mean. I won't take that job.

Fortunately profit sharing and bonuses are allowed under FAR. Because we've had good years with profit and bonuses, this pushes us to 56% fringe and 102% G&A for a total ICR of 192% and with the 10% fee, our labor multiplier is 3.21 and no one bats an eyelash.  

Like I said, I clearly don't understand how NIH and university funding works, but it seems to me the NIH is getting a deal. If NIH has private companies do the same work, does anyone know what the fee structure is for that?

[jacket3ree]

After a very cursory look online, while 15% seems tight, 54% to 69% is ridiculous. Pretty clear how colleges are funding all their growth, Stanford's facilities are absolutely stunning, with all the granite and sandstone. . . .

Clearly I don't understand federal science funding, because those overhead rates seem ridiculously low to me. At least compared to what I am used to in the private public works sector. Many contracts are cost plus fee, subject to FAR audited indirect cost recovery. We self-audit every year and obtain periodic audits from various agencies. We are in line with industry expectation and rent Class B space, although our SF office has marble galore. 

I understand we don't operate in the same realm as universities and terms vary but our break even overhead (no profit sharing  - discounting safe harbor for ease of calculation, no bonuses) breaks down as 43% fringe benefits (VSH, insurance, payroll tax), 34% overhead, and 35% general and administrative (rent and the cost of operating, which is primarily non-billable labor), for a total ICR of 112%. Then we are typically allowed to add a 10% fee (profit) for a labor multiplier of 2.33. Crazy lean and mean. I won't take that job.

Fortunately profit sharing and bonuses are allowed under FAR. Because we've had good years with profit and bonuses, this pushes us to 56% fringe and 102% G&A for a total ICR of 192% and with the 10% fee, our labor multiplier is 3.21 and no one bats an eyelash.  

Like I said, I clearly don't understand how NIH and university funding works, but it seems to me the NIH is getting a deal. If NIH has private companies do the same work, does anyone know what the fee structure is for that?