The easiest way to explain this is your "request to use a predetermined cost rate, it appears that C.F.R. Part 200, Appendix III (c)(4) provides that 41 U.S.C. 4708 authorizes "the use of predetermined rates in determining the 'indirect costs' applicable under research agreements with educational institutions." The cited statute above states that only a "cost-type research and development contract (including a grant) . . . may provide for payment of reimbursable indirect costs on the basis of predetermined fixed-percentage rates . . ."
Finally, the NICRA that *University* attached to their email does contain predetermined rates applicable to work other than research, however, the sentence immediately preceding the chart of rates states "The rates approved in this agreement are for use on grants, contracts and other agreements with the Federal Government, subject to the conditions in Section III."
Section III of the NICRA provides in pertinent part "The rates in this Agreement are subject to any statutory or administrative limitations and apply to a given grant, contract or other agreement . . ." In other words, 41 U.S.C. 4708 limits predetermined rates to research and development contracts / grants and if *Program removed* is not a research and development grant then *University* cannot use their predetermined rate."
In conclusion, your sub award is not a research or development grant so the use of a predetermined rate is for budgetary purposes only. However since the award package has not been executed, you have options. You can make the adjustments and remove the indirect rate or you can move forward with the sub-award you have submitted, If you chose to move forward with this sub-award package please note we will not be able to make payment until a actual rate has been approved.
I would recommend that they talk to CAS (the HHS rep who is listed at the end of the agreement), who should point out that these are the rates approved on behalf of the federal government, unless limited by law, solicitation, or contract that they should be applied accordingly.
Jeffrey A. Silber, Senior Director
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