1. What are NOAO's indirect cost rates and how do I apply them?

What are NOAO's indirect cost rates and how do I apply them?

In general, NSF requires NOAO to recover all costs (both direct and indirect) associated when performing work for outside organizations. Direct costs include such items as labor and benefits, materials and travel. Indirect costs include such items as administration (e.g., Accounting, Procurement, and Human Resources), facilities maintenance, utilities, office supplies, and computer networks.

Indirect cost rates are calculated annually, based on actual expenditures for the prior fiscal year. Rates are submitted to the NSF for review and approval in the current year and applied in the next fiscal year. Accordingly, rates charged to a given project are subject to change each fiscal year.

There are three main types of rates that apply to most outside funded programs:

• General & Administrative (G&A): Applied to Modifited Total Direct Costs (MTDC). MTDC is defined as expenditures by programs other than payments exceeding $25,000 in a fiscal year on indivdual purchase contracts.

• Labor Burden: Applied to direct labor costs including full benefits (see Labor Recharge Rate below). Burden rates include G&A, plus the additional costs of supervision, clerical support, miscellaneous materials, and the operating cost of building areas used by employees. 

• Labor Recharge Rate: Applied to the hourly pay rate of employees who charge time to projects or programs. The rate recoups the cost of employee benefits and paid time off (holidays, vacation, and sick leave). The costs are considered direct labor subject to indirect rates; therefore, each hour charged to a project will be increased by the appropriate labor recharge rate and that combined amount is subject to a labor burden rate.

• Kitt Peak Joint Use Fees: Applied to the square footage (footprint) of tenant buildings on Kitt Peak.
  • Basic Services Fee: The fee covers such items as grounds maintenance, routine road maintenance, security, first aid and safety, fire prevention and fighting, snow removal, rubbish removal, sewage system maintenance, and servicing of power lines. There is a 2,500 sq. ft. minimum charge to each tenant.
  • Shuttle Transportation Fee: This optional fee allows tenant employees to ride NOAO's buses and shuttle vehicles.
• Building Occupancy Fee: Applied to building space. This fee is charged when programs/projects occupy NOAO facilities but have no MTDC or direct labor to which NOAO can apply G&A or Labor Burden. The rate includes: utilities, custodial service, security, first aid/safety, basic telephone and network access, and similar costs associated with occupancy.

Location	Classification	Applied To	FY2008	FY2009	Proposed FY2010
Arizona	General & Administrative (G&A)	Non-payroll MTDC	7.2%	7.8%	8.2%
Arizona	Labor Burden	Payroll	21.4%	23.9%	25.2%
Arizona	Building Occupancy	Sq. Ft. occupied	$22.06	$24.29	$26.43
Kitt Peak Joint Use Fee	Basic Service (2,500 sq. ft. min.)	Sq. Ft. (Footprint)	$3.80	$4.10	$4.10
Kitt Peak Joint Use Fee	Shuttle Transportation	Sq. Ft. (Footprint)	$4.50	$4.40	$4.00
New Mexico	General & Administrative (G&A)	Non-payroll MTDC	14.7%	14.7%	14.4%
New Mexico	Labor Burden	Payroll	59.4%	54.2%	56.3%
New Mexico	Building Occupancy	Sq. Ft. occupied	$13.92	$13.45	$14.65
Chile	General & Administrative (G&A)	Non-payroll MTDC	13.3%	10.5%	13.1%
Chile	Labor Burden	Payroll	29.8%	32.0%	44.2%
Labor Recharge	U.S. Hires - Regular	Hourly Earnings	55.8%	57.8%	62.5%
Labor Recharge	U.S. Hires - Temporary	Hourly Earnings	16.1	12.2%	12.0%
Labor Recharge	Chileans	Hourly Earnings	80.5%	81.4%	81.0%

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