University of Maryland Division of Research > Bioscience

DRIF Memorandum (21 July 2005)

MEMORANDUM

To: Council of Deans From: Jacques Gansler
Subject: Vice President for Research Priorities for Distribution of the DRIF
Date: July 21, 2005

Overview

• The Vice President for Research (VPR) has policymaking and oversight responsibilities for the research mission of the University of Maryland.
  
• The VPR leads, facilitates, and supports current research initiatives across the campus, advocates for research needs and resources, advocates for and supports technology transfer, enables development of new research areas and interdisciplinary efforts, and fosters programs that encourage economic development.
  
• Key to the VPR’s role is the strategic use of the Designated Research Initiative Fund (“DRIF”) to consolidate and elevate the University’s stature as a scholarly institution and to strengthen and enlarge the University’s research activities.

Priorities for VPR DRIF Support

With the goal of building a great research university and in response to the 2004 Report of the Task Group on Academic Incentives, Efficiencies, and Effectiveness, the VPR will strategically target the university-wide DRI funds more directly to the academic units in which indirect cost is generated through external research to support the following activities (see Appendix A for further explanation):

• Campus-wide research initiative priorities – high priority
• New, cross-disciplinary research activities and centers – high priority
• Joint Government-University Research Center initiatives – high priority
• Joint Industry-University research – high priority
• Mandatory matching research funds support – high priority
• Research Instrumentation – high priority
• Research Facility Renovation – medium priority
• Faculty recruitment and/or start up funds – lower priority

Criteria for Judging VPR DRIF Requests (in priority order)

• Project is significant in scope and strongly linked to campus research priorities
• Project includes significant support from department(s) and college(s)
• Project is ground-breaking and will lead to new areas of significant research
• Project is multi-disciplinary and includes faculty from more than one unit (incentive for projects that may not have a strong champion in any one college)
• Project is selected as campus proposal in limited-submission competition
• Project is seed money for future, enhanced funding
• Project is from a unit whose discipline has limited external funding sources

Cost Sharing Policy

• The current policy of the University is to assume a cost sharing commitment only when required by the sponsor or by the competitive nature of the award, and then to cost share only to the extent necessary to meet the explicit requirements mandated by the sponsoring agency in the written program guidelines. (see Appendix B for further information)
  
• The major source of funding for cash cost sharing by the University is the DRIF. A second source is waiver of some (or all) facilities and administrative costs (“F&A costs” or “indirect costs”). Since, under the current campus DRIF distribution formula, more than 50% of the available DRIF is allocated back to departments and colleges, the responsibility for cost sharing resides principally in the academic units.
  
• Generally the VPR will provide no more than 20% of the mandated minimum cash match, with the remainder of the matching funds coming from the department, college and/or Provost. If agency funding falls below the requested amount, the VPR’s matching fund commitment may be reduced proportionately.

Indirect Cost Waiver Policy

• Facilities and Administrative Costs (previously known as Indirect Costs) are real costs that benefit research in general but which cannot be specifically identified with any particular project.
  
• University of Maryland policy requires all proposals for sponsored research and development, training or other activities include all costs, both direct and indirect. The F&A cost rate used must be the rate set forth in the University/DHHS Negotiation Agreement, except as provided otherwise by Federal regulations.
  
• Failure to request full direct and indirect costs from a sponsor constitutes a University cost-sharing commitment and must be handled in accordance with those policies and procedures.
  
• Waivers should only be sought and will be granted (by the VPR, after an ORAA review) only in those cases where the acceptance of the award is considered vital to the campus and the prospect of the potential loss of the award is deemed more important than recovery of full costs. (see Appendix C for the waiver request process and criteria by which requests will be judged).
  
• Granting fewer waivers increases both the amount of direct DRIF return to academic units, and the pools of funds available to the VPR and Provost to return to academic units in support of strategic campus initiatives.

Appendix A

Office of the Vice President for Research
Research Funding Priorities

Campus-wide Research Initiatives
Currently there are a number of campus-wide, broad-based technology research initiatives are priority areas for investment such as Information Technology, Nanotechnology, Biotechnology, Earth and Environmental Sciences, Less-Commonly-Taught Languages, and Economic and Public Policy Issues. Funding requests, whether for seed funds or for required matching funds, that fall within these areas will receive high priority.

Cross-Disciplinary Research Centers
The Department of Homeland Security and several federal agencies (e.g. DoD, NSF) issue Broad Agency Announcements (BAAs) and/or Requests for Proposals (RFPs) to establish multi-disciplinary research centers at universities. In addition, NSF and NIH offer multi-disciplinary research funding programs such as MURI, MRSEC, and IGERT which require coordination of proposal submission as well as substantial cost sharing to be competitive. The VPR assumes responsibility, in concert with appropriate deans, for assistance in assembling the appropriate faculty and staff to respond as these opportunities arise. Required cost sharing, or required demonstration of university commitment in order to be competitive, will receive high priority.

Joint Government-University Research Centers
The University recently won a competition for a University Affiliated Research Center, the University of Maryland Center for the Advanced Study of Language, which jointly houses government and university researchers. The University is currently in early discussions with NASA, NIST and NOAA regarding establishment of a joint government-university research center as well. As with the Cross-Disciplinary Research Centers above, the VPR assumes responsibility, in concert with appropriate deans, for assistance in assuring the appropriate faculty and staff to respond to these opportunities. Required cost sharing, or required demonstration of university commitment in order to be competitive, will receive high priority.

Joint University-Industry Research Initiatives
There is an increased importance of corporate sponsorship and joint collaborative projects to the sponsored research initiatives of the University. The University will continue to encourage strategic alliances with key corporate partners. Support for joint research and development projects, infrastructure enhancement and student internship opportunities will receive high priority.

Required Matching Funds on Contract and Grant Proposals
Some federal agencies require matching funds (cost sharing) as part of the direct costs of the proposed research. A distinction must be made between cost sharing that is mandatory, and that cost sharing which is voluntary and represents negotiating a price. The University should not gratuitously offer cost sharing in hopes that it will make proposals more competitive. In doing so, we may simply be allowing agencies more flexibility to fund research at other, less generous institutions. Our goal is to maximize research growth which will result in increased indirect cost recovery. Matching funds will be considered by the VPR only if the matching funds are required by the agency in its RFP, or if the competitive nature of the award clearly requires a university commitment in order to be successful.

Generally the VPR will provide no more than 20% of the mandated minimum cash match for these high priority areas, with the remainder of the matching funds coming from the department, college and/or Provost. If agency funding falls below requested amount, the VPR’s matching fund commitment will be reduced proportionately. Required cost sharing will receive high priority.

Research Instrumentation
To remain at the state-of-the-art in research, there may be a need for investment in new instrumentation. Matching funds will be considered if matching funds are required by an agency, in the case of an instrumentation grant, or if a university commitment is necessary to enable purchase of the instrumentation.

Generally, the VPR will provide no more than 20% match with the remainder of the matching funds coming from the department, college, and/or Provost. Required cost sharing will receive high priority.

Research Facility Renovation/Modification and/or Equipment
Recruitment of excellent faculty and ability to perform cutting-edge research is dependent upon adequate laboratories and other facilities. It may be necessary to make renovations or modifications to existing facilities to enable certain types of research, especially as we move into new cross-disciplinary research areas.

Generally the VPR will provide no more than 20% of the total cost as a match with department, college and campus facilities funds to enable necessary modifications when coupled with a specific funded proposal that requires the modifications, or with a faculty recruitment package. Facility modification requests will receive medium priority.

Faculty Recruitment or Start-up Funds
Since research excellence can only come from hiring and supporting outstanding faculty, postdocs and graduate students, the VPR has a vested interest in assisting the Provost, Deans, and Department Chairs in efforts to enable new faculty to initiate their research on this campus. The financial assistance required varies widely depending on the discipline and seniority of the faculty member. It is expected that most of the start-up costs for new faculty will be borne by the department and/or college in which the faculty member is being hired as a cost of doing business. The VPR, however, will entertain requests for DRIF funds related to a new faculty hire as follows: for shared support of the costs of necessary research instrumentation and/or facilities renovation or modification (see above), for seed money for research that has the potential to attract significant external research support, or for cost share on a first proposal which will likely lead to significant future funding.

Generally the VPR will provide no more than 20% of the total cost. These requests will receive lower priority.

Appendix B

Office of the Vice President for Research
Cost Sharing

Cost Sharing Philosophy
The policy of the University is to assume a cost sharing commitment only when required by the sponsor or by the competitive nature of the award, and then to cost share only to the extent necessary to meet the explicit requirements mandated by the sponsoring agency in the written program guidelines. In some programs, however, cost sharing is more expectation than requirement. Agencies, trying to stretch their own funds, place pressure on universities to share as much of the cost of research as possible as do the perceived attitudes of the peer reviewers. University officials, at all levels, need to distinguish between mandatory cost sharing that is required for participation in certain programs, and voluntary cost sharing that represents a negotiating stance. Because the University’s resources for cost sharing are limited, they need to be used as strategically as possible. Therefore, the University should not gratuitously offer cost sharing where not required nor provide extra cost sharing above the published required minimum in hopes that it will make proposals more competitive. To the extent we offer more than is necessary, we only encourage an increase in agency expectations for cost sharing and, at the same time, encourage agencies to support research at other less generous institutions. This is a recognized problem to which the agencies have increasingly responded by prohibiting voluntary cost sharing in proposals or omitting such data when submitting the proposal to the review committees.

Appendix C

Office of the Vice President for Research
Facilities & Administrative (Indirect) Costs


F&A Philosophy
Facilities and Administrative Costs (previously known as Indirect Costs) are those real costs incurred in the conduct of research that benefit research in general but which cannot be specifically identified with any particular project. The costs result from shared services such as libraries, physical plant operation and maintenance, utility costs, general, departmental and sponsored projects administration, and depreciation or use allowance for buildings and equipment. F&A cost rates for all Federal grants and contracts are computed on the basis of actual costs incurred and regulations from the U.S. Office of Management and Budget (OMB) that define the cost categories that are eligible for reimbursement. Indirect cost reimbursement rates are periodically negotiated with our cognizant Federal audit agency, the Department of Health and Human Services (DHHS).

It is University of Maryland policy that all proposals for sponsored research and development, training or other activities include all costs, both direct and indirect. The F&A cost rate used must be the rate set forth in the University/DHHS Negotiation Agreement, except as provided otherwise by Federal regulations. Because F&A costs constitute real costs incurred by the University, a failure to request full direct and indirect costs from a sponsor constitutes a University cost-sharing commitment and must be handled in accordance with those policies and procedures.

F&A Costs Charges
It is the University policy to charge the maximum appropriate federally-negotiated F&A cost rate on all sponsored projects regardless of funding source unless a sponsoring agency’s written policy will not allow full recovery of indirect costs. This written policy and rate must be published and must be consistently applied by that organization to all of its outside grants and contracts with educational institutions. Where a solicitation or agency’s written guidelines specify an F&A cost rate less than the rate currently approved by DHHS, the rate is accepted as the maximum rate allowed by the funding agency.

F&A Waivers
In the past, the University faced a trend of increased F&A cost waiver requests. In fact, requests were as high as 178 in Fiscal Year 2002, a 46% increase from Fiscal Year 2001. This was an increase in dollars requested to be waived from approximately $6.5 million to $16.3 million, or a 74% increase. Waiver requests constituted a full 8% of all proposals submitted through the Office of Research Administration and Advancement. The sentiment seemed that investigators viewed F&A costs as expenses that were restricting the scope of the work they could accomplish if they were able to use all available dollars to fund direct costs.

There has been a concerted effort to discourage waivers by reminding Principal Investigators that while a waiver may be expedient, this is not an appropriate way to manage the University’s finances. The University has met some degree of success and, during these tight budget times, must continue to be vigilant. It can not be emphasized enough the detrimental effects F&A waivers have on the University as a whole. When cost sharing is accomplished by agreeing to waive the F&A costs collected, the amount of DRIF return to the academic unit receiving the waiver is proportionally affected and the total campus DRIF available for distribution is reduced accordingly. When the University agrees to return the collected overhead directly to the academic unit to use in support of the project, those costs are taken off the top of the DRIF pool, so all recipients included in the University DRIF formula are directly affected, while the unit requesting the return benefits.

Because of the hardship both types of waivers impose on the entire University community, requests for waivers should only be sought and will be granted only in those cases where the acceptance of the award is considered vital to the campus and the prospect of the potential loss of the award is deemed more important than recovery of full costs.

F&A Waiver Procedures
In the few instances where a waiver is appropriate, the request for either a partial or full waiver of F&A costs must be submitted in writing by the Principal Investigator, through the department and the office of the dean, in advance of proposal submission, to the Assistant Vice President for Research Administration and Advancement and must be approved by the Vice President for Research. The request should include the amount of the waiver and reason for the request, the significance of the proposed research and support, and the consequences of accepting or denying the waiver. A very strong justification must be provided for consideration.

Any indirect cost waiver, whether partial or full, constitutes investment in that particular project. Criteria for requesting a waiver include:

• The application of the full rate would result in an inequitable recovery as in the case of a conference or institute involving a short period of time;
  
• The program is part of an unusually important instructional or service role within the overall mission or service role within the overall mission of the University;
  
• Project is ground-breaking and will lead to new areas of significant research;
  
• The funding is seed money for a project which, if successfully carried out, subsequently will be funded to a much greater extent, including full indirect cost.

Factors that may be considered in determining if an indirect cost waiver is appropriate for any particular proposal include:

• The significance of the research to the principal investigator, department, and college, and the willingness of the responsible unit to cost share its portion of the indirect cost recoveries;
  
• Total proposed budget, amount of the waiver, and the precedent that may be set for the university unit, type of research, and/or sponsor category;
  
• Availability of support from other sources;
  
• History and anticipated future support from the sponsor;
  
• Nature of the support (e.g. student stipends, interim support between other projects, support which complements other projects or university priorities);
  
• Whether other universities involved in the proposed research project have accepted lowered indirect cost recoveries.