NOAO and NSO Indirect Cost Rates

What are NOAO and NSO’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.

Other rates used by NOAO include:

  • 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.

The current rates are:

Location   

   Classification   

   Applied To   

   FY2014

FY2015

 

FY2016

 

FY2017

Arizona   

 General & Administrative  (G&A)

 Non-payroll MTDC

8.4%

10.7%

10.5%

12.0%

Arizona

 Labor Burden

 Payroll 

30.3%

31.9%

33.8%

36.0%

Arizona   

 

 

Building Occupancy

 Tucson

 Kitt Peak

 Sq. Ft. occupied

 

$33.15

 

 

$30.31

$36.71

 

 

$34.39

$37.55 

 

 

$35.00

$30.88

Kitt Peak Joint Use Fee   

 Basic Service

 (2,500 sq. ft. min.)

 Sq. Ft. (Footprint)

$4.12

$4.27

$4.60

$5.27

 

Kitt Peak Joint Use Fee   

 Shuttle Transportation

 Sq. Ft. (Footprint)

 $4.05  

 $4.27  

 $4.95  

$5.12

New Mexico   

 General & Administrative    (G&A)

 Non-payroll  MTDC

13.9%

10.7%

10.0%

9.0%

New Mexico   

  Labor Burden

 Payroll 

 44.6%

 35.8%

 35.5%

0.00%

New Mexico   

 Building Occupancy

 Sq. Ft. occupied

$21.30

$21.74

$21.28

 

Chile   

 General & Administrative  (G&A)

 Non-payroll  MTDC

15.6% 

 

  12.1%  

  12.3%  

12.0%

 

Chile   

 Labor Burden

 Payroll

36.3%

31.4%

30.9%

40.0%

Labor Recharge   

 U.S. Hires - Regular

 Hourly Earnings

 62.0%

 62.1%

 63.0%

61.0%

Labor Recharge   

 U.S. Hires - Temporary

 Hourly Earnings

20.8%

11.1%

12.3%

18.0%

Labor Recharge   

 Chileans

 Hourly Earnings

 83.3%

 82.3%

82.64%

83.0%