PSU's Indirect Cost Rate Policy

Portland State University encourages faculty and staff to apply for external funding to both public agencies and private industries and foundations in support of individual, departmental or institutional programs. These funds are an important component in supporting and developing research, instructional and service activities. To facilitate the procurement of external funds and to support the activities of faculty and staff in the administration of projects supported by these funds, the University provides services and facilities that are supported entirely from indirect costs generated from these funded projects. In addition to supporting the administrative activities, a portion of the indirect costs are applied toward the maintenance, enhancement and development of the infrastructure required to carry out these activities. Indirect costs are therefore an important component in the ability of the University to support these activities.

The following policies apply to the indirect cost rates:

1. The University encourages the pursuit of external funding so all projects will be approved for submission regardless of the agency's policy on indirect costs.
2. For all projects with federal agencies or funded with federal dollars (including federal dollars passed through other agencies), the federally negotiated indirect cost rates will be applied with the exception of those programs where a lower rate is specified and published in the program announcement. In this latter case, the indirect cost rate required by the agency or in the specific program may be used (with documentation provided in conjunction with the proposal coordination and approval process). Federally negotiated rates are provided in the table below.
3. For projects with state and local agencies and private industry, a reduced rate indicated in the table below will be applied to the base of all direct costs. The exception is for projects that are publicly announced and for which the University is in direct competition with the private sector. In this latter case the federally negotiated indirect cost rate must be applied to avoid any state subsidy being used to unfairly compete with the private sector. In addition, there must be a demonstrated academic value to the project (e.g. graduate or undergraduate student training), all faculty and student time assigned to the project must be reflected in the proposal, the rates for student compensation, including tuition, must be consistent with rates paid to private sector employees performing similar tasks and all support staff, services and supplies and travel must be included explicitly. Since this reduced rate reflects a state and public contribution to the activity, publication and intellectual property rights may not become the exclusive property of the funding source.
4. For private foundations, an indirect cost rate indicated in the table below will be applied unless the foundation has a documented and established policy to the contrary.

Faculty and staff should be aware of these rates and consider them, along with all other costs including fringe benefits, when discussing projects with potential funding sources. Assistance in the preparation of project budgets is available in the Office of Research and Sponsored Projects, 6th floor, Unitus Building (4th & Lincoln).

Indirect Cost Rates

The current indirect cost rate agreement with DHHS is dated October 12, 2006. Note that this date, as well as the rates themselves, change periodically. Please contact ORSP for the current date and/or rates. The current rates are valid through June 30, 2010.