Cost Sharing Reminder

Revision of NSF Cost Sharing Policy

As of June, 2003, the NSF Grant Proposal Guide (GPG) has been updated to reflect the Important Notice 128, entitled, Revision of the NSF Cost Sharing Policy. This change reinforces the concept that, for proposals submitted in response to NSF program announcements, proposers should not include cost sharing amounts on Line M of the proposal budget. In cases where proposals are submitted in response to NSF program solicitations which specifically require cost sharing, proposers should not exceed the cost sharing level or amount identified in the solicitation.

This change in NSF’s cost sharing policy is significant and has implications for MIT proposals and awards. DLC’s should be aware of the following important points in the NSF policy governing proposals submitted and awards made under NSF program solicitations.

• Proposals submitted in response to NSF solicitations may be subject to special cost sharing requirements
• Proposers are advised not to exceed the cost sharing level or amount specified in the solicitation
• When cost sharing is required, it is considered an eligibility rather than a review criterion and NSF has modified the FastLane system to ensure that Line M is masked from peer reviewers during the review process
• All proposed cost sharing commitments, if incorporated into the award, are subject to audit
• When applicable, the estimated value of any in-kind contributions should be included on Line M
• An explanation of the source, nature, amount and availability of any proposed cost sharing also must be provided in the budget justification

Links to the NSF Importance Notice 128 and a list of Frequently Asked Questions on the NSF Cost sharing Policy follow:

Important Notice 128:
http://www.nsf.gov/bfa/dga/policy/docs/in128.pdf

NSF Cost Sharing Policy FAQs:
http://www.nsf.gov/bfa/dga/policy/docs/csfaqs03_1.pdf

The following is the section of the NSF Grants Management Guide that describes the NSF Cost Sharing policy. Questions on this policy should be directed to Tom Duff at 3-7086 or Bill Barrett at 3-0460.

NSF Grants Management Guide (GPG)
Chapter II (proposal budget) - Section C.2.g.(xii), Cost Sharing:

(xii) Cost Sharing (Line M on the Proposal Budget)
(a) Statutory Cost Sharing Requirement. In accordance with Congressional requirements (see GPM 330), NSF requires that each grantee share in the cost of research projects resulting from unsolicited proposals. In addition to proposals submitted solely in response to the Grant Proposal Guide, proposals submitted in response to NSF program announcements are considered unsolicited and are subject to the statutory cost sharing requirement.

The grantee may meet the statutory cost sharing requirement by choosing either of two alternatives:
• by cost sharing a minimum of one percent on the project; or
• by cost sharing a minimum of one percent on the aggregate costs of all NSF-supported projects requiring cost sharing.

The statutory cost sharing is not required for grants that provide funds solely for the following purposes (not considered to be support of "research"), although such awards may be subject to other cost sharing requirements identified in a specific solicitation:
• international travel;
• construction, improvement or operation of facilities;
• acquisition of research equipment;
• ship operations;
• education and training;
• publication, distribution and translation of scientific data and information;
• symposia, conferences and workshops; and
• special studies authorized or required by Subsections 3a(5) through 3a(7) of the NSF Act, as amended.

In accordance with Important Notice 128, Revision of the NSF Cost Sharing Policy, for unsolicited proposals submitted in response to the Grant Proposal Guide and for proposals submitted in response to NSF program announcements, only the statutory cost sharing amount (1%) is required. In such cases, proposers are advised NOT to identify cost sharing amounts on Line M of the proposal budget. A set of Frequently Asked Questions (FAQs) regarding the cost sharing issue is available for use by the proposer and awardee community on the NSF website.

(b) Cost Sharing Requirements Under NSF Program Solicitations. Proposals submitted in response to NSF solicitations may be subject to special cost sharing requirements. In cases where cost sharing is required, NSF has determined that proposals submitted in response to the solicitation provide a tangible benefit to the award recipient(s) (normally beyond the immediate term or scope of the NSF-supported activity). Benefit is defined in terms of capacity building, potential dollar revenues, time frames, or third party users. NSF-funded activities that are characterized by such benefits are awards for infrastructure-building purposes (instrumentation/equipment/centers/facilities) or for awards where there is clear potential to make profit or generate income (e.g. curriculum development). In accordance with Important Notice 128, proposers are advised not to exceed the cost sharing level or amount specified in the solicitation.

When cost sharing is required, it is considered an eligibility rather than a review criterion. In order to retain this concept, NSF has modified the FastLane system to ensure that Line M is masked from peer reviewers during the review process.
Proposers are advised that all proposed cost sharing commitments, if incorporated into the award, are subject to audit. When applicable, the estimated value of any in-kind contributions should be included on Line M. An explanation of the source, nature, amount and availability of any proposed cost sharing also must be provided in the budget justification. It should be noted that contributions derived from other Federal funds or counted as cost sharing toward projects of another Federal agency may not be counted towards meeting the specific cost sharing requirements of the NSF grant. Failure to provide the level of cost sharing reflected in the approved grant budget may result in termination of the NSF grant, disallowance of grant costs and/or refund of grant funds to NSF by the grantee.

Last updated 6/25/03