UTMB has negotiated a new Facilities and Administrative (F&A) Cost Rate (also known as Indirect Cost rate) Agreement with the Department of Health and Human Services. Effective September 1, 2025, the rate to be applied to organized research on campus is 61.5%, and the rate for off-campus research is 26%. The new rates are for use on grants, contracts and other agreements with the federal government, replacing the previous rates dated March 29, 2021 (formerly 60% on campus and 26% off campus).
Facilities and Administrative (F&A) Cost Rates
Organized Research
Research and development activities, including research training, that are sponsored by federal and non-federal agencies. | 61.5% |
Instruction
Teaching and training activities of an institution, whether they are offered for credits toward a degree or certificate or on a non-credit basis, and whether they are offered through regular academic departments or separate divisions, such as a summer school division or an extension division. | 42% |
Other Sponsored Activities
Programs and projects funded by federal and non-federal agencies and involves the performance of work other than organized research or instruction | 36.5% |
Off Campus
All activities conducted at an off-campus location. To qualify as off-campus, the nature of the work and requirements of the award require that it be performed off-campus (convenience or telecommuting are not justification), or buildings and administrative work areas will be leased or purchased through the sponsored project.
| 26% |
With the updated rate agreement, we are also implementing the new federal equipment threshold and the recoverable indirect cost on subaward that were updated by the Uniform Guidance (2 CFR Part 200) for new and competing renewal awards issued on or after October 1, 2024. This may require rebudgeting for awards that were submitted prior to September 1, 2025 but have not been awarded.
Updated Equipment Threshold
The threshold for capital equipment has been increased to $10,000. Items with a unit cost of $10,000 or more and a useful life of one year or more should be classified as equipment and excluded from F&A calculations.
Indirect Costs on Subawards
Subawards will now be subject to indirect costs on the first $50,000 of each subaward, in accordance with federal guidelines. This applies to each subawardee, per award, regardless of the subaward’s total amount or duration.
Please check out the website to download or view the new Indirect Cost Rate Agreement. If you have any questions, please reach out to your pre-award analyst.