(F&A, indirect, or overhead) are used to recover additional expenses which are incurred by the University to administer sponsored projects, but that cannot easily be directly assessed to a specific award (e.g. facilities, human resources, departmental administration, office supplies, etc). The basic formula is direct cost base x indirect rate = indirect costs. The direct cost base is determined by the sponsor and is typically specified in the proposal guidelines.
Modified Total Direct Cost or "MTDC"
is the total of all direct costs of the project, with the following exclusions: equipment over $5,000, capital expenditures, charges for patient care, tuition remission, participant support costs, rental costs of off-site facilities, scholarships, and fellowships as well as that portion of each subgrant or subcontract issued in excess of $25,000. This basis is typically used when the University is collecting indirects at its full rate.
Total Direct Cost or "TDC"
is the total of all direct costs of the project with no exclusions. Note that when this method is used you must also calculate what indirect costs would be using the MTDC method and choose the lesser of the two. This basis is usually used when the University is accepting a restricted rate.
includes indirect costs in its calculation of indirects. To convert to TDC use the following formula: rate/(1-rate). Example: 20% Total Costs rate = 0.2/(1-0.2) = 0.25 or 25% of all direct costs. Again, a comparison must be made with the MTDC method to ensure that we are not charging more than our Federally-negotiated indirect cost rate.