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What's New

IDC (F&A) Incentive Model FY 2005
(concurrent to FY 2006 & 2007)

 

Download a detailed IDC (F&A) Incentive Model Description

 

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As discussed at the January 4, 2005 Department Heads meeting, and outlined in the material handed out in December 2004 and January 2005, we have implemented an incentive-based system for indirect cost allocation. Since the principles have been outlined previously, only the basic elements are described here. A more detailed description of the IDC model can be downloaded above.

  • Indirect cost allocations will be tied to total research space occupied.
  • A benchmark has been set as a target for dollars of indirect cost expenditures per net square foot ($IDC/NSF) recovered for research space. This benchmark is $100/NSF, representing an average of a 33.3% IDC recovery rate for the $400/NSF benchmark of total costs/NSF (i.e., $300 DC + $100 IDC). This benchmark of $400 has been set for space allocation within the CoM.
  • The pool for distribution within the CoM includes the entire 30% of total indirect costs returned to the CoM.
  • An allocation of 5% of total IDC generated by a unit will be allocated to that unit for administration irrespective of the amount of research space occupied.
  • On top of 5% administration allocation, there will be an incentive-based allocation that is driven by the relationship between indirect costs recovered by the unit, research space occupied and the benchmark. The choice of this specific graph was made at the January 2005 Departments Head meeting.

In order for this to be a true incentive-based system, the target for indirect cost recovery must be set ahead of time and fixed for a long enough period of time to allow units to make progress relative to the benchmark. Therefore, we will keep the benchmark the same for at least the next three years.