14.0 Research Policies and Public and Private Support
14.4 Office of Sponsored Programs
The Office of Sponsored Programs (OSP) has the immediate responsibility for the business administration aspects of research projects sponsored by the government, industry, or foundations in accordance with the established policies of the Institute.
Government-sponsored research is normally carried out under contracts, cooperative agreements, or grants, depending on which agency is sponsoring the work and, to some extent, on the nature of the program.
Although government grants and contracts are subject to differing statutory requirements and regulations, there is no significant difference between them in terms of MIT research policy and administrative procedures. Except for federal compliance programs or regulations, the administration of contracts from private organizations does not differ markedly from that of government grants, cooperative agreements, and contracts.
Grants from foundations, on the other hand, are usually more broadly defined, and administrative and contractual requirements are minimal. Frequently, the only intent of the sponsor or donor is to assist the Institute's program or to advance the state of the art in a given field.
14.4.1 Procedures for Establishing Contracts or Government Grants
The following procedures should be observed for a research program whether it is to be covered by a contract or grant and regardless of the potential sponsor:
- Preliminary negotiations may be carried out between a faculty member and a sponsor, but no proposals or commitments should be made.
- Faculty members seeking grants from industry, foundations, or individuals shall first clear any approach with the Vice President for Resource Development through the appropriate director responsible for each source of support. This is to ensure that there is no conflict with existing agreements or with other pending solicitations with the company, foundation, or other private sponsor involved.
- A faculty or staff member proposing a sponsored research project must first obtain approval from the head of the department concerned, who must be satisfied that
- the project is appropriate for the department to undertake as a part of its educational and research program
- senior staff are available and willing to supervise the research, and
- adequate space and facilities are available.
- The Committee for Review of Space Planning should be consulted as to available space, especially before entering into any space lease agreements. Proposals should include a budget based on advice from the OSP. Budgets for all grants and contracts should cover both direct and facilities and administrative costs at current rates.
- After departmental approval, the proposal should be submitted to the appropriate dean for endorsement and for evaluation of the project's suitability in relation to the entire Institute program of research. Proposals to be performed by an interdepartmental laboratory should be forwarded after review by the laboratory director to the Provost or the Vice President for Research, as appropriate.
- After review and approval, as outlined under paragraphs c) and d), the proposal is sent to the OSP for review and for forwarding to the sponsor, subject when necessary to the approval of the Vice President for Finance. If there is any underrecovery of costs, approval must also be secured from the Vice President for Research. In some cases, grant proposals to private sponsors or donors are, after OSP review, forwarded to the Resource Development Office for transmittal. This may simply involve an exchange of correspondence between the Institute and the sponsor or donor. If a more formal agreement is desired, however, it must be signed by an appropriate Institute official and reviewed carefully to ensure that the provisions are consistent with MIT policy and, when a gift is intended, that the research grant qualifies as such under the law.
- Renewals or extensions involving additional funds must be approved by the procedure outlined above.
- All contracts and grants are negotiated by the OSP and signed by an official of the Institute designated by the Executive Committee of the Corporation. When negotiations have been completed, the OSP will issue a project number; establish a corresponding account; notify the dean, department head, project supervisor; and appropriate administrative offices, and take whatever other steps are necessary so that the project supervisor may begin the research and make appropriate charges to project funds.
- Any correspondence proposing modification of the terms or conditions of a contract or grant, including changes in the scope of the work or the period of performance, or an increase or decrease in the total estimated costs, should be forwarded by the OSP.
14.4.2 Research Facilities and Administrative Costs
In sponsoring research at colleges and universities, the federal government and other sponsors reimburse the direct costs charged to specific projects as well as the facilities and administrative (F&A) costs that support research projects generally, such as those incurred in personnel administration, accounting, physical plant operations and maintenance, the libraries, etc.
Since most F&A cost categories consist of "shared" costs that jointly support both instructional and sponsored research activities, they must be allocated on some equitable basis to instructional programs on the one hand and to sponsored research projects on the other. The allocation process is governed by OMB Circular A-21, the federal "Cost Principles Applicable to Educational Institutions," and is implemented at MIT using procedures negotiated with the Institute's cognizant federal agency, the Office of Naval Research.
After a portion of each facilities and administrative cost category, or "pool," has been allocated to sponsored research as a whole for a given fiscal year, the total amount so allocated must be charged to (or collected from) each individual research project. This prorated charge is determined by applying a fixed percentage, or F&A cost rate, to certain direct costs charged to that project during the fiscal year. Any F&A costs not charged to a particular sponsored project are not absorbed by other projects, but must be funded by the Institute.
The direct costs to which the F&A cost rate is applied are referred to collectively as the "facilities and administrative cost base" or "collection base." The collection base required by OMB Circular A-21 is modified total direct costs (MTDC), i.e., all direct costs less certain exclusions such as equipment, subcontract costs exceeding $25,000, fellowship stipends and tuition, etc.
The fixed F&A cost rate applied in any given year is determined in advance of that year based on the Institute's budget projections. After the year is over and the final, audited F&A cost rate negotiated, the fixed rate may turn out to have been too high or too low. In that case, the overrecovery or the underrecovery of facilities and administrative costs is carried forward to a subsequent year, which lowers or increases the fixed rate for that year. Consequently, MIT receives no windfall in F&A cost recovery when research volume exceeds fiscal year budget estimates.
The negotiation of allowable F&A costs, the direct cost base, and the applicable F&A cost rate is the direct responsibility of the Controller.
Materials explaining the composition of facilities and administrative costs and the direct cost base, and how F&A cost rates are calculated are available from the Office of Sponsored Programs.