Sponsors occasionally limit the amount of indirect costs, or Facilities and Administrative Costs (F&A), that we may charge to a sponsored project. Whenever a government or non-profit sponsor caps indirect costs at a level below our federally negotiated rate, or disallows the charging of indirect costs altogether, an Indirect Cost (IDC) Addendum is required in accordance with CU Boulder policy.

Fellowships, which usually have a lower IDC rate than our federally-negotiated rate, are excluded from the IDC addendum requirement.

Your Proposal Analyst will help you to complete the budget tab for the IDC Addendum. The Principal Investigator (PI) includes a justification explaining how the proposed research would directly benefit the CU Boulder campus. A strong justification is essential given that CU Boulder will lose indirect cost (F&A) dollars if the project is funded. Either the Department Chair or Institute Director and Associate Dean for Faculty and Research (ADR) will be required to approve the IDC Addendum, and the PI’s justification will help the approver determine the potential value of the proposed project to the CU Boulder campus and to the department/institute as no recovery of Indirect Costs is realized by the department/institute in cases where a reduction is approved.

Sponsors occasionally specify a limit on indirect costs but do not clarify whether the indirect cost base should be Modified Total Direct Costs (MTDC) or Total Direct Costs (TDC). Whenever this occurs, OCG’s default is to apply the limited indirect rate to MTDC for Federal sponsors and TDC for non-Federal sponsors. If a sponsor does specify the base, OCG always follows sponsor guidelines. Your Proposal Analyst will help you choose the appropriate indirect cost base and calculate “computed loss” on your IDC Addendum.

Industry sponsors also occasionally limit the amount of indirect costs that may be charged on a project. If this rate is not due to federal flow through terms and conditions, your Proposal Analyst will guide you through the next steps of working with this sponsor and your budget, and taking additional steps as needed depending on the circumstances

See CU Boulder’s Waivers and Reductions Policy Statement for additional details.