Purpose

The National Institutes of Health (NIH) awards a large number of grants providing substantial federal funding for research purposes.  These grants include significant payments for “indirect costs,” defined as “facilities” and “administration.”  45 CFR 75.414(a). The “facilities” category is “defined as depreciation on buildings, equipment and capital improvements, interest on debt associated with certain buildings, equipment and capital improvements, and operations and maintenance expenses.”  Id.  And the “administration” category is defined as “general administration and general expenses such as the director’s office, accounting, personnel, and all other types of expenditures not listed specifically under one of the subcategories of ‘Facilities”’ (including cross allocations from other pools, where applicable).  Id.

In issuing grants, NIH generally uses the indirect cost rate negotiated by an “agency with cognizance for F&A/indirect

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