Below are the rates the Texas A&M Research Foundation (Foundation) will charge for processing proposals and administering research projects in FY09. The methodology for determining the rates was developed in FY 2007 through a series of meetings with representatives within The Texas A&M University System. The System members represented included Texas A&M University (TAMU) also representing Texas A&M at Galveston (TAMUG), Texas AgriLife Research (AgriLife), Texas Transportation Institute (TTI), The Texas A&M University Health Science Center (HSC).

Through these meetings, a fee for service cost model was developed that is based on core services and volume of activity handled by the Foundation for each System Member. As depicted in the table below, the rates vary by System Member with the higher volume customers of the Foundation being charged at a lower rate. In FY07 and FY08 the Foundation applied an effective rate calculated for each System Member to the total direct research expenditures for the System Member. The effective rate was a blended rate that covered the Foundation's pre and post award operations.

In FY09 the effective rate is eliminated and individual rates will be applied for proposal processing and post award operations. A proposal processing fee of $755 will be charged for each submission. Expenditures categorized as scholarships, tuition, equipment, and cash balance accounts will be charged at a flat fee of 2%, as fewer resources are required to manage these types of expenditures. With regard to sub awards, expenditures less than or equal to $500K per sub award will be subject to the post-award rate applicable to each System Member. Expenditures that exceed $500K per sub award will not be subject to the service fee. The remaining direct research expenditures will be charged at the rate applicable to each System Member and based on volumes.

Cost sharing activities are not included in the rate calculation. The Foundation's fees are not applied to cost sharing activities.

To determine the amount the Foundation will charge for administering research projects for each System Member, (1) multiply the direct expenditures for equipment, scholarships, tuition, and/or cash balance accounts by 2%, (2) multiply the total sub awards, up to the $500,000 maximum per sub award, by the rate shown for the System Member, (3) deduct direct expenditures for equipment, scholarships, tuition, cash balance accounts, and sub awards from the System Member's total direct expenditures and multiply the net expenditures by the rate shown for the System Member.
To determine the amount the Foundation will charge for proposal processing for each System Member, multiply the number of proposals by $755.

For example, assume total expenditures for TTI are $4,000,000 for the month of September. The $4,000,000 includes $850,000 for three sub awards ($100,000, $100,000, and $650,000), $150,000 for equipment, $1,000 for cash balance account expenditures and $28,000 in tuition payments for the month. The Foundation would charge TTI $294,323 to administer the research activity for the month.

Step 1:  Equipment, Scholarships, Tuition, Cash Balance Accounts
$150,000	=	equipment
1,000	=	cash balance accounts
28,000	=	tuition
$179,000	=	total direct expenditures to be charged at 2%
2.0%
$   3,580
Step 2:  Sub Awards
$100,000	=	Sub award 1   $100,000
100,000	=	Sub award 2   $100,000
500,000	=	Sub award 3   $650,000 ($500,000 maximum)
$700,000	=	Total sub award subject to fee
7.92%	=	FY09 Rate for TTI
$  55,440
Step 3:  Other Direct Expenditures
$4,000,000	=	Total direct expenditures
< 179,000>	=	$150,000 equipment + $28,000 tuition + 1,000 cash balance
< 700,000>	=	sub awards subject to fee
< 150,000>	=	sub award exempt from fee
$2,971,000	=	net direct expenditures
7.92%	=	FY09 Rate for TTI
$   235,303
$3,580 + $55,440 +235,303 = $294,323 monthly charge to TTI

If 25 proposals were processed during the month for TTI, the Foundation would charge TTI an additional $18,875 (25 x $755).

If you have any questions regarding the rate that the Foundation charges for a project, please contact your Project Administrator at the Foundation. We appreciate your business.